A basic land contract form, also known as a contract for deed, allows a property owner to act as the financing party for the sale of the property rather than a bank or other lending institution. It allows the buyer to live on the land and make payments for the full sale price. The contract includes terms for the loan, details about any accompanying interest, the names of all parties and the exact address of the land for sale.
During the normal sale of real property, the buyer typically provides payment for the land in full at the time of sale, either with personal funds or from a loan through a third party lender. A land contract allows the owner of the property to act as the lender for the sale, requiring the buyer to make payments until he covers the full cost of the land. The contract typically begins by listing the full names of the owner and all parties buying the land, as well as the full address of the property and any accompanying aspects.
The document allows the owner to retain the legal right to ownership while essentially creating a payment plan for the buyer, including details about the total amount of interest due in addition to the base price of the property. It also includes sections outlining fees for late payments, details on accelerating the payment process, and legal actions the owner can take if the buyer fails to comply with the contract.