In real estate, a land contract is a way to purchase real property without qualifying for a mortgage. Also known as an “installment land contract” or a “contract for deed,” this type of house contract occurs solely between the buyer and seller, where the seller agrees to finance the sale of the property until such time as the buyer pays the sale price off in full.
Though contracts for deed have largely fallen out of favor in the last few years, this type of seller financed home purchase is usually thought to be a viable option for buyers with poor credit, who would otherwise be unable to qualify for a traditional mortgage. However, in addition, those who face the possibility of higher interest rates if they were to go the conventional financing route may also want to consider land contract homes as a more affordable alternative.
As a seller, you may want to consider entering into a land contract if you live in a market where it is hard to find a buyer who qualifies for traditional financing.