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Installment Sales Contract

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Definition: An installment sales contract is any type of contract that calls for periodic payments, but in real estate, it is generally referred to as a land contract, contract for deed or contract for sale.

The installment sales contract spells out the sales price, amount of down payment, interest rate, amount of monthly (or periodic) payments and the duties of each of the parties. It covers such responsibilities as who will maintain the home, pay for insurance and property taxes -- which is generally the buyer. The contract will include a recourse for the seller in the event the buyer stops making the installment payments.

It is considered wise to let a real estate lawyer review an installment sales contract before entering into an installment sales contract to buy or sell.

Also Known As: land contract, contract for deed, contract for sale
Common Misspellings: instalment sale contract

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