How does Contract For Deed Work?
Definition: A land contract (sometimes known as a “contract for deed” or an “installment sale agreement”) is a contract between the owner of a property and a person who wants to buy the property for an agreed-upon purchase price. Under a land contract, the seller retains the legal title to the property, while permitting the buyer to take possession of it for most purposes other than legal ownership. The sale price is typically paid in periodic installments. When the full purchase price has been paid, the seller is obligated to deliver legal title to the property to the buyer. This is a legally binding contract, and is recorded on the county title records of the property. It is common for the installment payments of the purchase price to be similar to mortgage payments in amount and effect. The amount is often determined according to a mortgage amortization schedule. In effect, each installment payment is partially payment of the purchase price and partially payment of interest on the u
