Land contracts are commonly used in Detroit as a way to buy and sell homes without traditional financing. This website and resources are here to help inform potential land contract buyers about how to inform and protect themselves in this process, and connect them to professional resources.
The Land Contract Buyer Guide is a tool to equip prospective home buyers with information to protect and advocate for themselves throughout the land contract process. This guide includes information, do-it-yourself checklists, and guidance on risks for whichever part of the land contract process a buyer is in. This guide is not a replacement for real estate guidance, legal advice, or housing counseling. Accompanying the guide are one-pagers for each step of the land contract process.
Stage 1:
Stage 2:
Stage 3:
Stage 4:
The guide was born out of the City of Detroit’s participation in the Cities for Financial Empowerment Fund’s Local Consumer Financial Protection Initiative and a grant from the Center for Financial Empowerment.
The guide was co-authored by the City of Detroit, Enterprise Community Partners, and University of Michigan Poverty Solutions. The guide was also shaped with input and collaboration from legal experts, housing advocates, communication experts, and residents via meetings, focus groups, and listening sessions. Special thanks to the following groups for their guidance and feedback on the contents of this resource.
The Detroit Housing Network * The Detroit Justice Center * Lakeshore Legal Aid
Michigan Legal Services
Michigan Department of Insurance and Financial Services * Michigan Poverty Law Program * United Community Housing Coalition
United Way for Southeastern Michigan
A land contract is a real estate transaction in which the buyer pays the seller for the purchase of a property over time. A land contract purchaser is not a renter, but has partial ownership while they are making payments. The seller holds the deed until the purchase is fully paid, and the buyer has most of the other rights and responsibilities of ownership throughout the payment period. It is a legally binding agreement.
Land contracts are most often used by people who want to buy a home but cannot qualify for a mortgage or pay in cash all at once. Land contracts are also used for homes that a bank might not approve a mortgage for due to low value or repair issues.
Land contracts can be risky because buyers have many of the costs and responsibilities of ownership while the seller still holds the deed. Compared to home buyers with a mortgage, land contract buyers have a greater burden to educate themselves, because most do not have the benefit of a bank, title company, or real estate agent to review or regulate the purchase. It is important that buyers understand their contract, verify that it is fair, and know how to fulfill the requirements of the contract. With good information, research, and resources, land contract buyers can succeed in becoming homeowners.
The process of buying a home on land contract can be broken up in 5 stages. Buyers, review one-pagers with this information and helpful step-by-step lists for the stage you are in.