What does “I am buying on a land contract” mean?

A land contract is a Purchase Agreement between the Seller and the Buyer. The Seller carries the note (no bank is involved) and the Buyer makes payments directly to the Seller. The Buyer does not receive the deed from the Seller (which would grant the Buyer ownership of the property) until the Seller has received the final payment, which satisfies the Buyer’s financial obligation to the Seller. In our records, ownership is not transferred until we receive a deed. The Buyer of a land contract arrangement may instead apply for the tax credit if the Purchase Agreement has been filed and recorded in the Circuit Clerk’s Office.