Land Sale Contract Explained

Standardized Legal Documents Land Sale Contract Explained

Buy Property Without Third-Party Finance Using a Land Sale Contract

Buying and selling property is a complicated business, particularly when it comes to securing a mortgage. Getting finance is becoming ever more difficult, and many people are looking at alternatives, such as land sale contracts.

A land sale contract is a way for the seller to finance the deal, meaning that the buyer doesn’t have to pay the full purchase price in one go.

DoNotPay can help you understand what a land sale contract involves and how to buy property using this method.

What Is a Land Sale Contract?

A land sale contract is a legal document that allows a buyer to purchase a property by installment.

In most real estate deals, the buyer is expected to pay the seller the full purchase price before taking ownership of the property. Unless it’s a cash deal, the buyer has to arrange a mortgage, which can be difficult and time-consuming.

With a land sales contract, the seller agrees to an installment plan, and the buyer commits to paying the agreed installments until the full purchase amount has been settled. The buyer can take possession of the property as soon as the deal is signed, but the seller retains legal ownership until the final installment has been paid.

Who Needs a Land Sale Contract?

As an alternative way of financing property, a land sale contract is attractive to both buyers and sellers.



BuyerA buyer who has a bad credit record may find it difficult to obtain a traditional mortgage through a bank or finance house, and a land sale contract makes this unnecessary
SellerA seller can attract more potential buyers by offering a land sale contract and even ask for a higher purchase price by taking over the financing of the deal. The deal may also include substantial cash down payment

How Does a Land Sale Contract Work?

Securing a deal using a land sale contract is a step-by-step process that can benefit both the buyer and the seller. The steps you should follow are:

  1. Find a property
  2. Negotiate the land sale contract terms
  3. Inspect the property
  4. Sign the contract
  5. Take possession of the property
  6. Register the contract
  7. Pay regular installments
  8. Transfer the deeds

Find a Property

Many properties are advertised as being available for land sale contract purchase, and there are specialized agencies that list such opportunities. A buyer can also approach a seller and enquire whether a land sale contract would be of interest.

Negotiate the Land Sale Contract Terms

The buyer and the seller negotiate the full price, the repayment terms, the contract duration, and any other details about the property, such as what fixtures and fittings are included in the deal.

Inspect the Property

The buyer arranges to have the property inspected to determine its condition and any issues that may influence the final property price.

Sign the Contract

The contract is signed by both parties and notarized to make it legally binding.

Take Possession of the Property

The buyer moves into the property and becomes the de-facto owner, although the deed remains in the name of the seller until the final installment has been paid. The buyer is responsible for all the ongoing costs related to the property—such as insurance, running costs, and property tax—from this point onwards.

Register the Contract

The buyer registers the land sale contract with the county in which the property is located, although this is not mandatory in every state.

Pay Regular Installments

The buyer must keep to the installment plan detailed in the contract. Failure to do so can result in the seller being able to repossess the property and may end in foreclosure for the buyer. State law offers some protection for the buyer if they miss a payment, but the land sale contract is legally binding and must be honored. Generally, if the buyer misses payments, the law will recognize an equitable interest in the property and attempt to facilitate a resolution.

Transfer the Deed

Once the final installment has been paid, the seller initiates the transfer of the property deed with the local authority, typically the county register of deeds. Once the registration is complete, the buyer is the legal owner of the property.

What Needs To Be in a Land Sale Contract?

As with any contract, there are a few things that need to be in a land sale contract:

Contract Element


Buyer and seller detailsThe buyer’s and seller’s details, address, and contact information
Property descriptionA description of the property, including physical address, plot size, building dimensions, and number of rooms
ContingenciesAny contingencies that would affect the sale of the property, such as the results of the property inspection or the buyer’s ability to refinance the deal if necessary
Property inspectionA full inspection of the property should be carried out by a qualified building inspector to determine the condition of the property and identify any faults
Fixtures and fittingsA list of the fixtures and fittings that are included in the property
Purchase price, installment amounts, and number of installmentsThe full purchase price of the property, the amount of each installment, the frequency of installment payments, and the number of installments
Deposit amountThe deposit amount to be paid by the buyer upon commencement of the contract
Closing costsAny closing costs that must be paid—such as deed registration—and who should pay them
Proposed contract end dateThe date of the final installment
Terms of possessionThe date on which the buyer will take possession of the property. This normally takes place when the land sale contract is signed

What Help Can DoNotPay Offer With Legal Documents?

You can write a land sale contract yourself using the guidance above. You should remember that it must be signed by both parties and notarized to make it legally binding.

We understand that not everybody knows how to write a contract, so DoNotPay has a wide range of legal documents that can help you in many situations.

You can get access to all our legal documents and contract templates in our app, and here’s how:

  1. Navigate to DoNotPay in your web browser
  2. Search for the document you require
  3. Give us the details needed
  4. Wait a short time while we generate your customized document

What Other Documents Does DoNotPay Have?

We are developing legal documents all the time, and our list of solutions is growing every week. Here are some examples of what we can already offer you:




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