My question is. I am purchasing a home on a land contract. I have been doing so since October 2009. I have made all the payments on time since then. I owe a balloon payment as of oct 2, 2012 for $4000.00. I don't have the money to pay them. I have ask to continue making the $450 payment thur June 1st 2013 at that time it will be paid off. They have refused. Can they just come in and take the place back or do they have to go through a regular foreclosure as if they are a regular bank... I plan on continuing to pay them the $450. They have already received over $40000.00. And if they do go through the regular process and I continue to make the payments what will happen. I don't want to lose my place over $4000.00 and I can not borrow from anyone or a bank.

Without reading your specific contract no one can tell you.

But this is how they normallly work.

Once you are in default, and not paying the 4000 is in default, they declare it officially in defaut, normally they will have to give you notice and a chance to fix it. ( often 30 days) if not paid within the 30 days, the contract is cancelled and it converts to a rental. If you pay after that point, it is just rent, you lost the house.

There is no court needed. They still owe the property, and your contact is void the minute it is in default.

So yes, if you don't pay that 4000. What you paid in the past does not matter, paying them monthly means nothing, if they don't agree.

Once in default and once it converts to a rental, they can raise the montly rent to reasonable rent in the area, and/or just evict you.

Since you don't owe the property, since you don't have a loan on property, no foreclosure is needed

In fact most sellers on contact for deed, want you to default, that is how I make all of my money. I love to sell the same house over and over. You get a large down payment, and they pay often a year or two, ( some more) but normally they can never make that ballon payment, and that catches them.

You should, if there is time, try to get a loan for 4000 to buy the home then the back loans you the money and then the bank has a lien on the property when you close on the home.

The first piece of advice is to read your contract. What happens in case of default is spelled out in the contract.

But as Chuck said, if the contract says that you have to pay a balloon payment and you don't, then you are in default and the seller can do whatever the contract says they can do.

Surely you realize that this close to the end, you would be extremely foolish to fail to come up with 4,000, and will borrow at whatever rate you can get to pay that off. If you can borrow 4,000 for a term of something like 2 years, it should be a monthly amount you can afford, even at super high rates.
It's too bad you weren't putting aside 100/mo to pay this off.