When the full purchase price has been paid including any interest, the seller is obligated to convey (to the buyer) legal title to the property.
Some states, such as Minnesota, issue contracts without an acceleration clause, which, in the case of a default leaves the seller in a position to cancel the contract, discharging any principal deficiency, as in the case of deprecation, or to litigate for 18 months or more while the buyer, if not a corporation, is allowed to retain its rights to the property while collection attempts are made, when the buyer will often qualify for bankruptcy, making the contract, when it lacks said acceleration clause, effectively an installment option, when the buyer has no other lienable assets.
[1] Although most land contracts can be used for a variety of reasons, their most common use is as a form of short-term seller financing.
Land contracts are sometimes used by buyers who do not qualify for conventional mortgage loans offered by a traditional lending institution for reasons of unestablished or poor credit or an insufficient down payment.
[citation needed] Land contracts are also used when the seller is eager to sell and the buyer is not given enough time to arrange for conventional financing.
It may also be the seller's position that if the buyer requires any of those services, he could pay for the costs and make arrangements himself.
Easy financing and a simple sale transaction may be a good selling point for a seller to offer a buyer.
[3] Historically, contract-for-deed arrangements were popular in mid-20th-century Chicago, and buyers, frequently black families shunned from government-insured mortgage loans, "didn’t accumulate equity, and faced a long and precarious path to ownership".