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 Maryland, a land contract, also known as a contract for deed, is a form of seller financing where the buyer makes payments to the seller for the purchase of land over time. The contract typically includes terms such as the interest rate and a schedule of payments, which may culminate in a balloon payment. 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, as the buyer does not obtain legal title until the full purchase price is paid, potentially leading to loss of investment if the buyer defaults. Financing for land purchases can also be obtained through banks or other lenders, often at higher interest rates and shorter terms compared to traditional mortgages. Developers may use a takeout loan to secure better financing terms once the land is partially developed. It's important for both buyers and sellers to understand the terms of a land contract and to consider seeking advice from an attorney to ensure their interests are protected and the contract complies with Maryland's real estate laws.