You can acquire residential real estate by buying it outright, by having a lease with a purchase option, or you could have a contract for deed. A contract for deed is where the buyer of the property is paying payments either directly to the current owner of the property or to some other person or entity, such as a bank, who has a mortgage on it. For a specified period, there may or may not be regular monthly payments or regular other periodic payments, with a larger amount at the end. Alternatively, there may be a series of equal payments for a specified term until you finally make those payments.
What makes a contract for deed different from an outright purchase is that you do not own the property until you have made all the payments. As with all agreements on real estate, this has to be in writing. According to USLegal, there has to be a written agreement to provide for this sale by contract for deed. The next thing that will occur is that you should record that document. That way, anyone else who was looking or had an interest in that property will know that you are buying that property. The next thing that should occur is there should be an escrow agent set up where the person who is selling it under the contract for deed fills out in deed from themselves to you, the buyer. The escrow agent will hold this deed. You should do this at the initial closing and the signing of the contract for deed.