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 North Carolina, a land contract, also known as a contract for deed, is a form of seller financing for the purchase of real property. Under this arrangement, the buyer makes payments to the seller according to the terms agreed upon in the contract, which typically includes monthly installments, an interest rate, and possibly a balloon payment after a certain period. The seller retains legal title to the property until the buyer completes all payments, at which point title is transferred to the buyer. If the buyer defaults, the seller may have the right to cancel the contract, retain all payments, and regain possession of the property. It's important to note that land contracts can be complex and involve significant risks, so both parties should consult with an attorney to ensure their rights are protected. Additionally, financing for undeveloped land through banks or other lenders usually comes with higher interest rates and shorter terms compared to traditional mortgages. Developers may use takeout loans to secure better financing terms once the land is partially developed and the value has increased. North Carolina state statutes and federal laws will apply to these transactions, and it is advisable for parties to be aware of the specific legal requirements and protections in place under these laws.