Land Contract-Installment Land Contract
A Transaction in which the seller finances the sale of his or her own property. In a Contract for Deed sale...the buyer agrees to pay the purchase price of the property in monthly installments...the buyer finances the purchase with assistance from the seller rather than a third party lender...who retains a security in the property. Because of recent credit tightening...some home buyers may be less likely to qualify for mortgages than they were as recent as a few years ago. One alternative is the "Contract for Deed". The buyer immediately takes possession of the property while the seller retains the legal title to the property until the contract is fulfilled. The buyer has the right of occupancy. The Contract for Deed is a much faster and less costly transaction...eliminating origination fees...formal applications...high closing and settlement costs. It is important to note that despite the risks involved and negative associations...contracts for deed are not bad...they can be a great fit for some buyers and sellers! In these financial times, a contract for deed may be a win-win solution!
