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 Michigan, a land contract is a legal agreement where the buyer makes payments to the seller for a piece of land over time, which may include both undeveloped land and any structures on it. The buyer typically makes monthly payments, which include interest, and possibly a balloon payment at the end of a specified period. Once all payments are made according to the contract, the seller must transfer the title to the buyer. Land contracts can be seller-financed or may involve traditional financing through banks or other lenders. Loans for undeveloped land usually carry higher interest rates and shorter terms, potentially ending with a balloon payment. Builders or developers may use a takeout loan to pay off the initial loan, hoping for better loan terms due to the increased value from developed land. Michigan law governs the execution and enforcement of land contracts, and it is important for both buyers and sellers to understand their rights and obligations under such agreements.