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 York, a land contract is a private agreement where the buyer agrees to pay the seller for land in installments, often including a final balloon payment. This type of contract is an alternative to traditional real estate transactions and may be used when the buyer cannot obtain a mortgage or prefers not to. The seller retains legal title to the property until the buyer completes all payments, at which point the seller is obligated to transfer the title to the buyer. If the land contract is financed by a bank or another lender, it may carry a higher interest rate and shorter term compared to a standard mortgage, reflecting the higher risk associated with undeveloped land. Upon the balloon payment's maturity, the borrower may seek a takeout loan, potentially with better terms, especially if the land has been developed, increasing its value. It's important to note that land contracts can be complex and carry risks for both parties, so it's advisable to consult with an attorney to ensure that the contract is legally sound and that both parties' interests are protected.