What is defined as a "land contract"?

A "land contract" refers to a specific type of legal agreement that allows the seller to retain the title to a property while granting the buyer possession and the right to use the property. This arrangement typically involves the buyer making periodic payments to the seller over time, after which the title will eventually transfer to the buyer once all payments have been made. This type of contract is useful in situations where a buyer may not have sufficient funds for a down payment or may face difficulties securing traditional mortgage financing.

The key feature of a land contract is that it benefits both parties: the seller continues to hold legal title to the property, thereby having a secured interest until the contract terms are fulfilled, while the buyer can begin to occupy and use the property, often building equity as they make their payments. This arrangement also can provide a pathway for buyers who might be considered higher risks to secure ownership in a more flexible manner.

The other options present different types of agreements or arrangements in real estate but do not accurately capture the essence of a land contract. For instance, a mutual agreement for the sale of real estate does not inherently imply the unique structure of title retention or possession by the buyer. Similarly, a document to transfer ownership of property immediately describes a traditional sale rather than a