Seller financing is essentially the same thing as “lending money” to the person who is buying your property. In essence, you are becoming the bank when you finance the sale of real estate in this way.
This kind of seller financing can go by several different names. Some call it “land contract,” “contract for deed,” “deed of trust,” “mortgage,” and even a “lease purchase.” These can be interpreted as a form of seller financing (depending on how the deal is structured).
What Is a Land Contract?
A land contract is an agreement between a buyer and seller pertaining to a specific tract of land. Developers advertise and sell tracts of land similar to the process of selling a real estate property. Land contracts can be broad in scope and may include both the land and real estate on the land. Many land contracts involve seller-financed purchases. Some borrowers buying land may also choose to finance the purchase through a bank loan.
Land Contract Explained