Land Contract

In depth

Land contract is the term most often used in Midwestern states like Michigan, Ohio, Indiana, and Minnesota for what is legally a contract for deed. The buyer takes possession, pays property taxes and insurance, and makes monthly installments to the seller, who retains recorded title as security. Once the final payment is made, the seller delivers a warranty deed to the buyer. Misconception: many people think land contracts are only for raw land. They are used for any real estate, including single-family homes and small commercial properties. Practically, land contracts let sellers reach buyers banks reject, command above-market interest, and avoid the costs of foreclosure if state law permits forfeiture. Buyers benefit from flexible underwriting and direct negotiation, but should always record a memorandum and confirm the seller has clear title before signing.