What is a Land Purchase Contract?

A land purchase contract, like any other contract, is an agreement between two parties, one the buyer and the other the seller, for a property deed. The deed to a land forms the consideration of this contract. We can think about it is a 'loan' given by the seller of the land, which the buyer will repay within the specified time, with the specified amount. Simply speaking, a land purchase contract is like a lease agreement, except that the buyer gets the deed of the land at the end of the lease period. The vendee has to pay a down payment on the property as well. So while the ownership of the land remains with the vendor, the vendee, for consideration, enjoys the use of the property and has to pay the necessary dues for maintenance.

Entering into a Land Contract Agreement
The seller and buyer enter into a contract stating that the seller will agree to transfer the deed of property to the buyer, specified in the contract, after the buyer has paid the required agreed-upon amount, in the form of installments, for the required period of time. It is always beneficial to both parties to have their land contract forms examined by certified real estate attorneys to avoid any legal discrepancies, or if some terms of the contract are not in agreement with the law of the state. The exact laws governing the sale of land on contract vary from state to state, so it is always beneficial to employ an attorney. The amount specified in the contract would be inclusive of rent for the use of the land, along with the interest. The vendee also has to pay the down-payment on the contract. A land contract provides protection to the vendor. In case the vendee defaults on regular payments, the vendor can rescind the contract.