Dating Contracts: Sign the Deal Now, Record It Later
Sometimes a seller wants to do the deal but not right now. Maybe they don’t trust you yet. Maybe closing this year would hand them a brutal tax bill. Maybe the deal needs to become something else before it’s final. The instinct is to wait — but as the saying in this business goes, time kills deals. A seller who is ready today may be gone, or sold to someone else, by the time the “right” moment arrives.
A dating contract is the tool for that gap. You and the seller sign all the paperwork now — the promissory note, the deed, the whole closing package — fully executed and binding. But the contract holds one lever back: you are not allowed to record the documents until a future date or condition is met. An attorney or escrow holds the signed papers in a drawer until the agreed moment, then records them. The deal is locked; only the timing of the public, final step is deferred.
The name is the metaphor: don’t get married yet — date first. It’s a term the investor and educator Pace Morby uses, and it layers on top of the structures you already know — seller financing, subject-to, and the land contract. This article explains what it is, the three situations it solves, and — because deferring a legal recording has real consequences — where it can bite.
- A dating contract fully executes a sale now but defers the recording of the documents to a future date or condition. The paperwork is signed and binding; an attorney or escrow holds it until the trigger, then records it.
- It solves three problems: (1) trust — the seller lets you prove yourself for 6–18 months before the transfer is recorded; (2) tax timing — the seller wants the sale to land in next year’s tax return, not this one; (3) conversion — a deal that will change form later (e.g., an executory contract converting to subject-to when a balloon or restriction expires).
- It is not a lease option. A lease option gives you a right to buy later; a dating contract is an already-completed sale with the recording postponed. That distinction matters legally and is exactly why some attorneys prefer it.
- The core risk: an unrecorded interest is a vulnerable interest. Until the documents are recorded, the public record still shows the seller as owner — which raises questions about lien priority, third-party claims, and what happens if the seller dies, divorces, or takes on debt in the meantime.
- Two professionals are non-negotiable: a real estate attorney to draft it (with void/null stipulations) and a tax advisor — because deferring the recording does not automatically defer the taxable event.
What a Dating Contract Actually Is
Start with what “recording” means. When you buy real estate, the deed and any liens are filed with the county recorder. Recording is what makes your ownership public — it puts the world on notice that the property changed hands and establishes the order (priority) of claims against it. Signing transfers the deal between you and the seller; recording announces it to everyone else.
A dating contract separates those two steps in time. Everything is signed and executed at the closing table — a completed transaction between you and the seller. But by agreement, the documents are held (typically by the drafting attorney or an escrow agent) and not recorded until a specified future date or a specified condition is satisfied. The deal exists; it just hasn’t been announced to the county yet.
Signing binds the two of you. Recording tells the world. A dating contract does the first now and the second later.
Because the sale is genuinely complete on paper, a well-drafted dating contract also spells out what voids it — the “if these things don’t happen, the deal is null and void” clauses. Those stipulations protect both sides during the waiting period and define exactly what unwinds the transaction if the trigger is never met.
The Three Reasons to Use One
Pace Morby describes a few “iterations” of the same core idea. They share the mechanic — sign now, record later — but solve different problems.
1. Building trust: a trial period
A seller agrees to finance the sale for you but doesn’t fully trust you yet — reasonable, since their name may stay attached to the property or the loan. Instead of walking away, you propose a dating contract: sign everything today, but the attorney holds the documents and does not record the transfer until you’ve made, say, 6, 12, or 18 months of on-time payments. You’re proving yourself during the “dating” period. Once you’ve shown you do what you say, the documents record and the sale is fully public and final.
Trust cuts both ways in this version. The seller is protected — nothing records until you perform. But you are exposed: you’re making payments (and maybe improvements) on a property whose transfer to you isn’t yet on the public record. If the trial period is long, that exposure is real. This is the version where your own protections — held documents, clear void clauses, ideally a recorded memorandum — matter most.
2. Deferring the seller’s tax year
This is the most common use. A seller is ready to sell now, but they’ve already had a high-income year — maybe they sold other properties — and closing this year would stack a large capital-gains hit on top. They’d rather the sale count in next year’s return, when their income resets. The problem: if they wait, the deal might fall apart. Time kills deals.
The dating contract locks it now and defers the recording into the new year. Pace’s own version: his attorney drafts the full package, everyone signs, the attorney holds the completely executed documents at the office, and roughly six months later — in the new tax year — records them.
Deferring the recording does not automatically defer the tax. This is where you need a tax professional, not a YouTube video. For federal tax purposes, a sale is generally recognized when the benefits and burdens of ownership transfer — which the IRS judges by substance, not by the recording date. If you’ve taken possession, control, and the economic risk of the property, the taxable event may have already occurred regardless of when the county files the deed. A dating contract can support a later tax year, but only if the substance of the deal genuinely supports it. Confirm the treatment with a CPA or tax attorney before you promise a seller anything about their taxes.
3. Converting one structure into another later
The third use is deferred conversion. A deal starts as one structure because something blocks the cleaner one today, with a plan to convert once that block clears. Pace’s example: a house bought where a down-payment-assistance program (or a balloon on an executory contract / land contract) prevents an immediate clean transfer. You structure it so that when the restriction or balloon expires — say, a two-year balloon on a land contract — the deal converts to subject-to. The dating-contract mechanic holds the executed conversion documents until that future trigger, then records them.
Why It’s Not a Lease Option
When Pace first asked his attorney to build this, the attorney’s response was telling: he could structure it as a lease option, but he’d rather not. He preferred a structure where the property is sold on paper now, with recording deferred — so there’s no option to execute later. That distinction is the whole point.
| Lease option | Dating contract | |
|---|---|---|
| What you hold | A right to buy later | A completed sale, recording postponed |
| Is the sale done? | No — you can still walk | Yes — it’s executed and binding |
| The future action | You must exercise the option | The documents simply record |
| Risk of the deal not happening | Higher — an option can expire | Lower — the sale already exists |
With a lease option, the purchase hasn’t happened yet — you have to take a future action to make it real, and until you do, it can fall through. With a dating contract, the sale is done; the only thing waiting is the recording. For a buyer who wants certainty that the deal is locked, that’s a meaningful difference — and for a seller who wants the tax or trust benefit without gambling on whether you’ll actually go through with it, it’s cleaner too.
The Real Risks
A dating contract is a legitimate tool, but “we’ll just record it later” hides real hazards. The site you’re reading won’t wave them away.
An unrecorded interest is a vulnerable interest
This is the big one. Until the documents are recorded, the public record still shows the seller as the owner. That gap creates exposure:
- Intervening liens. If the seller has a creditor, a tax lien, or a judgment attach during the waiting period, it can cloud the title before your deed records.
- The seller could sell or borrow again. In the worst case, a bad-faith seller could try to convey or mortgage the property to someone else who records first.
- Death, divorce, bankruptcy. If the seller dies, divorces, or files bankruptcy before recording, the property can get tangled in probate, a marital estate, or a bankruptcy estate — and unwinding that is expensive and slow.
Mitigations exist — holding the documents with a neutral attorney or escrow, and sometimes recording a memorandum of agreement that puts the world on notice of your interest without recording the full transfer. But a recorded memorandum can partly defeat the tax-timing purpose, so this is a genuine trade-off to work through with your attorney.
The tax benefit is substance, not paperwork
Covered above, but worth repeating because it’s the most oversold part: the recording date is not automatically the sale date for taxes. Don’t promise a seller a tax deferral you haven’t cleared with a tax professional.
The underlying deal’s rules still apply
A dating contract is a timing wrapper around a real transaction. Whatever the underlying structure is — seller financing, subject-to, a land contract — its own rules still apply: the due-on-sale clause on any existing mortgage, Dodd-Frank consumer-protection rules if you’re selling on terms to an owner-occupant, state-specific requirements. Deferring the recording doesn’t suspend any of that.
Draft it with a real estate attorney — every time. Pace uses one; so should you. A dating contract is a custom instrument with a deferred recording and void/null stipulations. The gap between “the seller and I have a handshake understanding” and “an enforceable, held, properly-conditioned set of executed documents” is exactly where these deals go wrong. This is not a template to freelance.
Frequently Asked Questions
What is a dating contract in real estate?
It’s a creative-finance transaction that is fully signed and executed now, but whose documents are deliberately not recorded until a future date or condition. An attorney or escrow holds the executed paperwork and records it when the trigger is met. The metaphor: date before you marry — commit to the deal now, make it public and final later.
Why would a seller want to record the sale later instead of now?
Three common reasons: to build trust (they let the buyer prove themselves with months of on-time payments before the transfer records), to defer their tax year (a sale recorded in January instead of December may land in a lower-income tax year — subject to a tax advisor’s confirmation), or to convert the deal into a different structure once a restriction or balloon expires.
Is a dating contract the same as a lease option?
No. A lease option gives you the right to buy later — the sale hasn’t happened and you still have to exercise the option. A dating contract is an already-completed sale with only the recording postponed. Some attorneys specifically prefer the dating-contract structure because it avoids the uncertainty of an option that must still be exercised.
Does delaying the recording delay the taxes?
Not automatically. For tax purposes, a sale is generally recognized when the benefits and burdens of ownership transfer — the IRS looks at the substance of the deal, not the recording date. A dating contract can support a later tax year only if the deal’s substance genuinely supports it. Always confirm with a CPA or tax attorney before making any tax representation to a seller.
What’s the biggest risk to the buyer?
That your interest isn’t recorded yet. Until it is, the public record shows the seller as owner, so an intervening lien, a second sale, or the seller’s death, divorce, or bankruptcy can jeopardize your position. Hold the documents with a neutral third party, use clear void stipulations, and discuss recording a memorandum of agreement with your attorney.
Do I still need an attorney if the deal seems simple?
Yes. A dating contract is a custom instrument — a fully executed transaction with a deferred recording and specific conditions that void it if the trigger fails. Drafting it correctly, and holding the documents properly, is precisely what makes it safe rather than a lawsuit waiting to happen.
A dating contract isn’t a new way to buy — it’s a way to time one you already understand. Layer it over seller financing, subject-to, or a land contract when the deal is right but the moment isn’t. For the bigger map of creative structures, start at the creative finance overview or no money down.
This guide is educational and is not financial, tax, legal, or investment advice. Programs, lender policies, and tax rules change. Consult a licensed attorney, CPA, and lender before acting.