A land contract—also known as a contract for deed, an installment land contract, or a land sales contract—is an agreement between a buyer and seller for the sale and purchase of a specific piece of land. Land contracts may consist of undeveloped land or include both land and building structures located on the land.

Land contracts are often completed with seller financing in which the buyer pays the seller in monthly payments or installments that include an agreed interest rate and a lump sum balloon payment after a certain number of years. When the buyer has made the monthly payments for the required number of years, plus any balloon payment, the seller is required to transfer the title (evidence of ownership) to the buyer, as provided by the land contract.

Land contracts may also be financed by banks or other lenders—often with traditional deed of trust or mortgage agreements. Bank and other lender loans for undeveloped land will often be financed at a higher interest rate and for a shorter term (with a balloon payment) than a traditional home mortgage, for example.

When the balloon payment to the bank or lender comes due a builder or developer may get a takeout loan to replace the existing loan—with the expectation of securing better terms (interest rate, etc.) because the land will be developed (at least in part) and the loan will be better secured by the value of the development (building structures, etc.) on the land.

In Arkansas, a land contract, also known as a contract for deed, is a legal agreement where the buyer agrees to pay the seller for a property in installments, including interest, and possibly a balloon payment at the end. This type of contract is often used when the seller provides financing, but it can also involve bank or other lender financing. The buyer does not receive the title to the property until all payments have been made as per the contract terms. Arkansas state statutes govern the execution and enforcement of land contracts, ensuring that the rights and obligations of both parties are clearly defined and protected. For bank-financed purchases of undeveloped land, interest rates may be higher and terms shorter compared to traditional mortgages. Developers may use takeout loans to secure better financing terms once development has increased the land's value. It is important for both buyers and sellers to understand their rights and obligations under a land contract and to ensure that the contract complies with Arkansas state law. An attorney can provide guidance on the specifics of land contracts and help draft or review the agreement to ensure legal compliance and protect the interests of the parties involved.