Posted by Jeff on February 06, 2002 at 17:32:17:
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Contract for Deed vs. Lease Option - Posted by Jeff
Posted by Jeff on February 04, 2002 at 12:31:25:
I was wondering what the pros and cons are of doing a Contract for Deed vs. Lease Option to sell a house I have just fixed up. I have it listed with a realtor but want a contingency plan if it doesn’t sell quickly. My realtor is very willing and would prefer to do a Contract for Deed but said she feels the Lease Option is borderline unethical since a lot of people do this knowing that the buyer won’t be able to buy for the option price.
What are the benefits to me of a CFD vs. L/O? I think the loan interest is deductible to the buyer if I do a CFD, etc. I will probably do either through a realtor since I don’t have a lot of time to look for buyers, answer ads, etc.
Re: Contract for Deed vs. Lease Option - Posted by William Bronchick
Posted by William Bronchick on February 05, 2002 at 09:42:23:
Generally, a CFD will allow you to get more money down and a higher monthly payment, since you are giving “equitable ownership” to the buyer. This means the buyer has the tax benefits, but mentally he feels more like an owner than a tenant. A lease/option means less money down for you and a lower monthly payment. However, a lease/option gives you the benefit of appreciation if the tenant does not exercise his option to buy. It is usually easier to evict a tenant than a CFD buyer in most states.