A closing on a land contract involves the purchase agreement, making the necessary down payment, signing the contract and filing a memorandum that serves as a public notice of the buyer's intent to purchase the property, states Nolo. Once the terms of the contract are met, the closing statement is prepared, title insurance is obtained, and the deed and other closing documents are filed to confirm the official transfer of the property.
A land contract is a legal agreement that details the transaction between a seller and buyer of a piece of property, as Nolo explains. A land contract contains the address, a full legal description, monthly payment amounts and other conditions. The buyer is generally treated like the property owner and is responsible for insurance, utility bills and taxes.
When the closing takes place, additional forms are filed for the buyer to take legal title to the property, explains Nolo. These forms include the deed, which is prepared at the time of the purchase agreement and held in escrow until closing, and a property transfer affidavit for tax purposes. At this time, the buyer can file an exemption that gives him a tax break for using the property as his principal residence.