Contracts
In Illinois, an installment land contract (also called a contract for deed) is a form of seller financing where:
AThe seller transfers title to the buyer immediately and receives payments over time
BThe buyer makes installment payments to the seller, but the seller retains legal title until the loan is paid in full✓ Correct
CThe buyer obtains a bank loan and pays the seller in full at closing
DA third-party trustee holds the title until closing
Explanation
In an installment land contract (contract for deed), the buyer takes possession and makes payments to the seller, but the seller retains legal title until the full purchase price is paid. Upon final payment, the seller must execute and deliver a deed to the buyer.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Math Concepts
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