land contract

Land contract

A method of real estate financing; a mortgage-holding seller finances a buyer by taking a down payment and subsequent payments in installments, but holds the title until the mortgage is fully repaid.

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Land Contract

A contract in which a buyer agrees to purchase real property from the seller for a certain price and on a certain payment schedule, but in which the seller retains title to the land until all payments have been made. A land contract may or may not amortize payment evenly, so that it may require a large balloon payment at some point in order to transfer title. Land contracts are most common either for buyers who would not qualify for a normal mortgage or for purchases made for investment purposes. In the United States, different states have different regulations and restrictions on land contracts. See also: Lease with an option to buy, Rent-to-own.

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land contract

Also called a bond for title, land sale contract or contract for deed. It is a financing arrangement for real property,in which the seller holds the financing and the legal title and does not give the buyer a deed until all payments have been made in full.For many people with the inability to secure financing, it is the only practical way for them to own a home. The practice is perilous, though, and could result in the loss of the property, and substantial money spent over the years, simply because of one late payment.