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 Colorado, a land contract is a form of seller financing for the purchase of real estate, where the buyer makes payments to the seller according to the terms agreed upon in the contract. This type of agreement allows the buyer to make installment payments, often including interest, and may include a balloon payment at the end of a specified term. Upon completion of the payments, the seller is obligated to transfer the title to the buyer. Land contracts can involve undeveloped land or property with existing structures. When financed by banks or other lenders, loans for undeveloped land typically carry higher interest rates and shorter terms compared to traditional mortgages, and may also require a balloon payment. Developers may use takeout loans to refinance these initial loans, potentially obtaining better terms once the land has been developed and the loan is secured by the improvements made to the property. It's important for both buyers and sellers to understand the specific regulations and legal implications of land contracts in Colorado, and they may benefit from consulting with an attorney to ensure their rights and interests are protected.