Land Contract: How to Write One and What to Include (Free Template)

A land contract is a seller-financed deal where the buyer moves in and pays in installments while the seller keeps the title until the final payment. To write one, include the purchase price, down payment, interest rate, monthly payment, property description, and transfer terms, then sign it in front of a notary. This guide walks through every clause and compares land contracts with mortgages.

Land Contract: How to Write One and What to Include (Free Template)

How to Write a Land Contract (Step by Step)

A complete land contract is a plain-language document with a handful of mandatory sections. Follow these steps to draft one that protects both sides:

1. Name the parties and the property. List the legal names of buyer and seller, then describe the land with its full legal description, not just the street address.

2. Set the price and payment terms. State the purchase price, down payment, interest rate, and monthly payment amount, plus the due date each month and where payments are sent.

3. Define the contract period. Write the number of payments or the final payoff date, and add a prepayment clause so the buyer can settle early without penalties.

4. Allocate taxes, insurance, and upkeep. Specify who pays property taxes, who carries insurance, and who handles repairs during the contract period.

5. Add default and forfeiture terms. State what happens on late payment, how many days of grace are allowed, and what the buyer loses after default.

6. Sign, notarize, and record. Both parties sign and date the contract; a notary witnesses the signatures, and recording the contract protects the buyer's interest publicly.

The template below shows the core sections every land contract needs, from price to signature:

Land contract template payment sections

Land Contract vs Mortgage: Which Financing Works for You

The two financing paths differ in who lends the money and who holds the title. Compare them before you commit:

• Land contract. The seller acts as the lender. The buyer gets possession immediately, the seller keeps the title until the balance is paid, and there is usually no bank, no credit check, and no closing costs. The interest rate is negotiated directly and is often higher than a bank loan.

• Mortgage. A bank or lender funds the purchase and holds a lien on the property. The buyer receives the title at closing, then repays the loan with interest over 15 to 30 years, and default triggers foreclosure through the courts.

• Land contract risk. If the buyer misses payments, the contract usually allows the seller to cancel and keep the installments already paid. Mortgages offer stronger legal protections and clearer credit reporting for the buyer.

The comparison below summarizes the two options side by side:

Land contract versus mortgage comparison

The Best Free Alternative: WPS Office

WPS Writer is a free, Microsoft-compatible word processor for drafting and editing land contracts, with ready-made contract templates, track changes, and a PDF toolkit for sharing signed copies. It opens .docx files without conversion, so contracts received from a lawyer or a title company stay exactly as designed. For a related sale scenario, see the WPS guide to a real estate contract for sale by owner.

WPS Office document editing interface with AI

FAQs

What is a land contract?

A land contract is a seller-financed agreement in which the buyer takes possession and pays in installments, while the seller keeps the title until the final payment is made.

Who holds the title in a land contract?

The seller holds the title during the payment period. Ownership transfers to the buyer only after the final payment, usually through a deed recorded at the county office.

Is a land contract the same as a mortgage?

No. A mortgage uses a bank as lender and gives the buyer the title at closing; a land contract uses the seller as lender and keeps the title with the seller until the balance is paid.

What happens if the buyer misses a payment in a land contract?

The contract usually allows a grace period, then cancellation; the seller keeps the property and may keep the installments already paid. State laws vary, so the default clause must be written clearly.

Where can I find a free land contract template?

WPS Writer includes contract templates, and state bar associations and county recorder offices publish free residential and vacant-land contract forms that fit local law.