Definition
A land contract is seller financing where the buyer makes installment payments to the seller (who retains legal title) until the contract is satisfied. The buyer gets equitable interest (possession and control) but not legal ownership until final payment.
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Land contracts (also called contracts for deed) are common in some regions and are a form of seller financing. The buyer occupies and uses the property but the seller retains legal title until the contract is satisfied. Land contracts are often used for land sales or when traditional financing isn't available. Key distinctions from mortgages: the seller retains legal title and can foreclose more quickly if the buyer defaults (sometimes without court proceedings). Buyers have equitable title and can refinance with a traditional mortgage if they qualify, at which point the seller is paid off.
Pro Tip
Land contracts offer access to property without bank qualification; understand that the seller retains legal title and rights during the contract period.
Example
A buyer purchases 10 acres through a land contract with 10% down and monthly payments over 15 years; once payments are complete, the seller transfers legal title.