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 New Jersey, 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 buyer may make monthly payments, which can include interest, and often 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, as the buyer does not receive the title until all payments are made, and may lose their investment if they default on the contract. New Jersey law requires that real estate transactions, including land contracts, be in writing to be enforceable under the Statute of Frauds. It is important for both buyers and sellers to have a clear understanding of the terms of the contract and to consider having the contract reviewed by an attorney to ensure it complies with all applicable laws and adequately protects their interests. Additionally, when financing is obtained from banks or other lenders, higher interest rates and shorter terms are common for undeveloped land compared to traditional home mortgages. Builders or developers may seek a takeout loan to secure better terms once the land is partially developed and the loan is better secured by the value of the development.