Land contract
Land contract (a.k.a. contract for deed) is
a contract commonly used to convey equitable
title of real property to a purchaser, while
the seller retains legal title to the real property
until a pre-determined agreement has been met
(e.g. payment of a certain percentage of the
principal balance due).
Equitable title, for all intent and purposes,
makes the purchaser the "owner" of
the property. There are several "land contract
friendly" states in the US , while other
states make it extremely difficult to sell or
purchase real property by means of a land contract.
Land contract verbiage comes in many shapes
and forms and will differ widely amongst various
parties and/or states. Sellers of a land contract
are commonly referred to as "vendor"
, while purchasers are commonly referred to
as "vendee's".
Although land contracts can be used for a variety
of reasons, it is commonly used as a means of
short term seller financing on real property.
Usually, but not always, land contracts will
include balloon payments which force a purchaser
to either refinance the loan or pay a lump sum
payment at a pre-determined time or event.
