David Saks: Land Contracts : We Don't Need No Stinkin' Mortgages ! :-)

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Land Contracts : We Don't Need No Stinkin' Mortgages ! :-)


When the seller provides the primary financing for the buyer the buyer can use an alternative type of financing instead of a deed of trust or a mortgage which we refer to as the land contract.

Is a land contract a popular type of financing?

You betcha !

Land contracts are still very popular ways to carry out seller financing in various parts of the country, especially down on the farm and in rural America.

Land contracts are also known by other names throughtout the fifty states and may be referred to as bonds for deeds, real estate contracts, contracts for deeds, installment sales contracts, and conditional sales contracts.

Can you think of any other names for the land contract?

The land contract is always used to secure repayment of the debt, however, and while the seller or a third party lender can finance the purchase of the land with a deed of trust or a mortgage, only the seller can use a land contract.

The distinction with this type of contract is that the buyer has the right to use and possess the property, but not as the legal owner.

The buyer's (or vendee's) interest in the property is what we refer to sometimes as equitable title.

The seller (or vendor) will deliver the title when the price stated in the contract has been paid in full.

How does the land contract work in your state and how have you seen it applied? What are some other things to consider when using a land contract?

David Saks

Time&Temp Memphis

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Comment balloon 7 commentsDavid Saks • June 14 2010 12:41PM


In our Wisconsin office, we see land contracts all the time.  Usually they're of short duration, sometimes eighteen months to three years before they balloon.

Posted by Eric Kodner, Wayzata Lakes Realty: Twin Cities, Madeline Island (Wayzata Lakes Realty: Eric Kodner Sells Twin Cities Homes) about 12 years ago

In Hawaii we usually refer to land contracts as Agreements of Sale. They were very popular in the early nineties, but surprisingly almost unheard of at present.

Posted by Michael S. Mackey, REALTOR ABR, CRS, GRI, RSPS (CENTURY 21 All Islands) about 12 years ago

There called in soon, Eric. The quality of the contract means it's working in Wisconsin, hopefully. Thanks for posting.

Posted by David Saks ((retired)) about 12 years ago

Wonder why they're diminishing in popularity, Michael ? Thanks for posting.

Posted by David Saks ((retired)) about 12 years ago

David, We still use "Contract for Deed" in Texas however most have gone to useing , Note, Deed and Deed of Trust.  It is a cleaner process for the Buyer and Seller without  much more trouble if it goes to foreclosure.

Posted by Don Eichler (Eichler Properties) about 12 years ago

As Don says Land Contract or Contract for Deed are still used in Texas.  The law was changed a few years ago to provide a buyer more protection or lost because of missing one payment.

We have no contracts available for a contract for deed so an attorney would need to be retained to prepare a contract for this type sale.

Posted by Richard Weeks, REALTOR®, Broker about 10 years ago

The deed of trust expedites the foreclosure process if it comes down to that, Don. The classic rights of disposition are extracted.

With all of the complexities an experienced attorney is the best resource, Richard.

Posted by David Saks ((retired)) about 10 years ago

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