What does a “contract for deed” entail?

A "contract for deed," also known as a land contract, is a type of seller financing arrangement where the buyer agrees to make payments directly to the seller in exchange for taking possession of the property. Unlike traditional mortgages through a bank, in a contract for deed, the seller retains the legal title to the property until the buyer has made all required payments, at which point the title is transferred to the buyer. This method is beneficial for buyers who may struggle to secure a mortgage from a financial institution, as it offers an alternative pathway to homeownership that can often involve more flexible terms.

In this arrangement, specific terms, including the purchase price, payment schedule, and interest rates, are outlined in the contract, providing both parties with clear expectations. This setup allows the seller to maintain a degree of control over the property until the buyer fulfills the payment obligations, offering security for the seller while facilitating ownership for the buyer.