land contract

Definition

A seller-financed agreement where the buyer makes payments directly to the seller but doesn't receive the deed until paid in full. It's layaway for houses, with all the same risks.

Example Usage

Unable to qualify for a mortgage, they purchased the farmhouse through a land contract with 10% down and monthly payments to the owner.

Origin

Alternative financing method that predates modern mortgage banking, formalized in 19th century

Fun Fact

Land contracts are popular in economically distressed areas where traditional financing is scarce, though consumer protections vary wildly by state.

Source: Alternative financing and real estate contracts terminology

Related Terms

Intermediate

dual agency

When one agent represents both buyer and seller in the same transaction, creating a conflict of interest wrapped in a commission opportunity. It's like having the same lawyer represent both parties in a divorce.

🏠 Real Estate

Intermediate

joint tenancy

A form of property ownership where two or more parties hold equal, undivided interest with right of survivorship, meaning the property automatically transfers to surviving owners upon one's death. It's estate planning that bypasses probate court, assuming everyone stays friendly.

🏠 Real Estate

Advanced

Foreclosure

When the bank decides it wants its house back, like a toddler reclaiming a toy it forgot about until someone else started playing with it. One person's financial tragedy is another person's "investment opportunity."

🏠 Real Estate

Intermediate

subject property

The specific property being appraised, analyzed, or discussed, as opposed to all those comparison properties. It's like referring to the guest of honor at a party—everyone else is just there for context.

🏠 Real Estate

Intermediate

prepayment penalty

A fee charged for paying off a mortgage early, compensating lenders for lost interest income. It's the bank's way of punishing you for financial responsibility and denying them years of interest payments.

🏠 Real Estate

Intermediate

alligator property

An investment property with carrying costs that exceed the rental income, effectively eating the owner alive month by month. Named because it takes bigger and bigger bites out of your bank account.

🏠 Real Estate

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sydm

shut your damn mouth...