A land contract purchase is a legal agreement between a seller and a buyer, where the buyer agrees to purchase the property from the seller over a set period of time. Also known as a “contract for deed" or “installment sale agreement," this type of real estate transaction is commonly used when traditional financing options are not available, or when the buyer wishes to avoid the scrutiny and red tape of the traditional mortgage process.

The land contract purchase process typically starts with a negotiation of the purchase price and other terms of the agreement, such as the length of the payment period, interest rate, and payment schedule. Once the terms are agreed upon, the buyer typically puts down a down payment, and both parties sign the land contract agreement.

Under a land contract purchase, the seller retains legal ownership of the property until the buyer has fully paid off the purchase price and any interest owed. The buyer typically takes possession of the property and makes payments directly to the seller, who then uses the payments to pay off any existing mortgage or liens on the property, as well as to earn interest on the balance of the purchase price.

One of the benefits of a land contract purchase for the buyer is that it offers more flexibility than traditional financing options. For example, the buyer may be able to negotiate a lower interest rate than what is offered through traditional lenders. Additionally, because the seller retains legal ownership of the property until the buyer has fully paid off the purchase price and any interest owed, the buyer may be able to avoid paying the full purchase price upfront.

For sellers, a land contract purchase offers the potential for a steady stream of income, as well as a potential source of interest income through the payment of interest on the purchase price. Additionally, because the seller retains legal ownership of the property until the buyer has fully paid off the purchase price and any interest owed, the seller may be able to avoid the risks associated with selling a property outright.

However, there are also potential risks associated with a land contract purchase, particularly for the buyer. For example, if the seller fails to make payments on any existing mortgage or liens on the property, the property may be foreclosed upon, even if the buyer has made all payments on time. Additionally, if the buyer is unable to make payments on the land contract agreement, they may be subject to legal action by the seller.

Overall, a land contract purchase can be a viable option for both buyers and sellers, particularly when traditional financing options are not available. However, it is important for both parties to carefully consider the risks and benefits of this type of real estate transaction, and to work with experienced legal professionals to ensure that the agreement is legally sound and protects their interests.