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 Iowa, a land contract is a legal agreement where the buyer agrees to purchase a specific piece of land from the seller through installment payments, which may include interest and a balloon payment. This type of contract is often used when the seller provides financing, but it can also involve traditional lenders. Upon completion of the agreed payments, the seller is obligated to transfer the title to the buyer. If a bank or other lender is involved, financing for undeveloped land typically carries a higher interest rate and shorter term compared to a standard home mortgage. A balloon payment is often required, and developers may seek a takeout loan to secure better financing terms once development has begun, enhancing the land's value. It's important to note that land contracts must comply with Iowa's real estate laws, and both parties should consider consulting with an attorney to ensure the contract meets legal requirements and adequately protects their interests.