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 Washington State, a land contract is a form of seller financing for the purchase of real estate. This contract stipulates that the buyer makes payments to the seller over time, which may include interest and a balloon payment at the end of a specified period. Upon completion of the agreed payments, the seller is obligated to transfer the title to the buyer. While land contracts can be beneficial for buyers who may not qualify for traditional financing, they also carry risks, such as the potential for forfeiture if the buyer defaults on payments. It's important to note that the terms of land contracts can vary widely and should be carefully reviewed by both parties. Additionally, buyers should be aware that financing for undeveloped land typically comes with higher interest rates and shorter terms compared to traditional mortgages. Developers often use takeout loans to secure better financing terms once the land is partially developed and the value has increased. Washington State law requires that real estate transactions, including those involving land contracts, be in writing and include specific terms to be enforceable. Buyers and sellers considering a land contract should consult with an attorney to ensure that the contract complies with state laws and adequately protects their interests.