What does a land contract typically involve?

A land contract is a type of real estate transaction where the seller retains the title to the property while allowing the buyer to occupy and make periodic payments towards the purchase price. This arrangement enables the buyer to gradually pay for the property over time, often in monthly installments, similar to a mortgage but without formally securing a loan through a bank.

Throughout the duration of the land contract, the buyer builds equity in the property, and once all payments are completed, the seller is obligated to transfer the title to the buyer. This method can make homeownership more accessible for buyers who may not qualify for traditional financing options.

In contrast, the immediate transfer of property title upon signing refers to standard sales processes where ownership changes hands right away, which is not the case with a land contract. A one-time full payment would describe a cash sale scenario, not reflective of a land contract's structure. Lastly, a lease agreement with an option to buy is a different type of contract that involves renting the property with the possibility of purchase, diverging from the periodic payments structure characteristic of land contracts.