Plain-English Land Contract and Deed Summary

What a good one includes

• A clear breakdown of the exact purchase price, interest rate, payment schedule, and any balloon payment deadlines.
• A detailed list of any easements, rights-of-way, or access rights that affect who can enter or use your property.
• An explicit summary of restrictive covenants, detailing what you can and cannot build or do on the land.
• A timeline of critical deadlines, including tax payments, insurance renewals, and default grace periods.
• A dedicated red flags section highlighting unusual clauses, such as prepayment penalties or harsh forfeiture terms.
• A plain-language explanation of what happens if either party defaults on the agreement.

Common mistakes to avoid

• Confusing a land contract with a traditional mortgage, which can lead to losing the property quickly without foreclosure protections if you miss a payment.
• Overlooking utility or access easements, resulting in unexpected construction restrictions or neighbors crossing your land.
• Failing to verify who actually pays the annual property taxes and insurance during the contract term.
• Ignoring the local deed recording requirements, which can leave your ownership interest unprotected against future claims.

Frequently asked questions