A contract for deed, also known as a land contract or installment sale agreement, is a type of real estate transaction where the buyer makes payments directly to the seller, instead of obtaining a traditional mortgage from a lender.

The question of whether a contract for deed is considered a sale is a matter of legal interpretation. In general, most courts and legal experts consider a contract for deed to be a type of sale, albeit with some unique features.

Under a contract for deed, the seller retains legal ownership of the property until the buyer has fulfilled all the terms of the agreement, including paying the purchase price in full. This means that the buyer does not receive a deed to the property until the contract is complete.

However, the buyer does have an equitable interest in the property, which means they have the right to use and occupy the property as if they were the legal owner. This is often referred to as “equitable title”.

From a legal and tax perspective, a contract for deed is generally treated as a sale. The buyer may be able to deduct mortgage interest and property taxes on their income tax returns, just as they would with a traditional mortgage.

It`s important to note that there can be some legal complexities with a contract for deed, particularly in terms of foreclosure and eviction proceedings if the buyer defaults on the agreement. For this reason, it`s important to consult with a real estate attorney if you are considering entering into a contract for deed.

In conclusion, a contract for deed is generally considered a type of sale, with some unique features that differentiate it from a traditional mortgage. If you are considering a contract for deed transaction, it`s important to understand the legal implications and consult with a professional before proceeding.