• A land contract is entered into by a seller and a buyer. The buyer agrees to pay a set dollar amount each month that will be applied toward the down payment of the property when the land contract time line is met. The seller retains the title to the property until the buyer fulfills the obligation or takes a loan on the property to buy out the seller.
  
  

Buyer Advantages

• The land contract allows buyers to purchase property without having to apply for and qualify for a mortgage. When the buyer does apply for a loan after the contract time has ended, the qualifying process is shortened and the closing cost can be lower. When money is tight or credit issues prevent the buyer from applying for a loan, the land contract helps with property ownership until said time a loan can be obtained.
  
  

Seller Advantages

• The seller will have some type of tax relief because of the installment sale of the property. The seller will retain the title to the property until the buyer completes the contract and/or obtains a loan for the remainder of the money. When times are slow in the housing market, a land contract is a way to sell a property and generally get the amount of the sale that the seller needs.
  
  

Benefits in a Slow Market

• When the market is slow or interest rates are high, a land contract allows the seller and the buyer to enter into an agreement and wait out the market and interest rates. The buyer can find financing when the interest rates are lower and the seller benefits by having the property spoken for with a monthly deposit being paid toward the purchase of the property.
  
  

Owning the Property

• The buyer that enters into the land contract can consider the property his own. Buyers can make improvements to the property with the knowledge that the hard work and money put into the property will benefit them when the sale is finalized.