What’s A Land Contract?
August 28th, 2008 By Peter G. Miller
A “land contract” or “contract for deed” or “agreement for sale” is an installment sale — you buy today but only get title after some or all of the payments are made. If you miss a payment, you could lose some or all your equity. Because title has not been transferred, there is nothing to foreclose. Some states, however, have special provisions protecting those who buy property with a land contract.
Be careful in a land contract situation to look at financing. Do lenders require that sellers keep some of the monthly rental payment in an escrow account before it can be credited toward the purchase?
State rules regarding land contracts vary extensively and such arrangements should be reviewed by an attorney or legal clinic before acceptance.
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