What is a land contract?

A land contract is indeed a real estate installment agreement. In this type of agreement, the buyer purchases a property by making installment payments directly to the seller instead of through a traditional mortgage with a lending institution. The seller retains the title to the property until the buyer has made all the necessary payments as agreed upon in the contract. This arrangement allows buyers who may not qualify for conventional financing to purchase a home.

The structure of a land contract typically includes specifics such as the sale price, the amount of the down payment, the payment schedule, and the responsibilities of each party regarding maintenance and property taxes. It is an important mechanism in real estate transactions, particularly in situations where buyers may face challenges securing traditional financing.

In contrast, a lease of commercial property pertains to rental agreements, not ownership transfer. An agreement for rent payments is similar as it refers to rental situations without any intent to purchase. Lastly, a purchase agreement for a vehicle is entirely unrelated to real estate transactions, dealing instead with the sale of motor vehicles.