What is commonly true about the down payments in land contracts compared to conventional mortgages?

Down payments in land contracts tend to be lower compared to those in conventional mortgages. A land contract is a type of seller financing where the seller retains the title to the property until the buyer completes all payments. Because of this arrangement, sellers are often willing to accept smaller down payments as they have an ownership interest in the property throughout the contract term. This makes land contracts more accessible for buyers who may not have sufficient funds for a larger conventional down payment, which is often a significant percentage of the property's purchase price.

In contrast, conventional mortgages typically require larger down payments, often ranging from 5% to 20% of the home's price, reflecting the lender's need to mitigate risk and the buyer's investment in the property. This difference makes land contracts an attractive alternative for buyers with limited cash for upfront costs.