Contract for Deed (Land Contract)
A contract for deed, or land contract, is an installment sale where the buyer makes payments directly to the seller and takes possession, but the seller keeps legal title until the contract is paid in full.
The buyer receives equitable title and possession while the seller retains legal title as security — different from a standard sale using a deed of trust, where title actually transfers to the buyer at closing.
California treats land contracts as a financing device, and courts have required sellers to follow judicial foreclosure-like or unlawful detainer procedures rather than simple eviction once a buyer has built meaningful equity or made payments over time. That's a significant risk sellers often don't anticipate.
A contract for deed can help sell land or rural property to a buyer who can't qualify for a mortgage, but the seller inherits collection and possession complexity if payments stop. Have the agreement drafted by a real estate attorney, with clear recording and default provisions, rather than relying on a downloaded template.
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