Contracts
A land contract (contract for deed) is an installment sale arrangement in which:
AThe buyer receives legal title immediately and pays the seller in installments
BThe seller retains legal title until the purchase price is paid in full✓ Correct
CA third-party lender finances the transaction
DThe property is held in escrow until the final payment
Explanation
In a land contract (contract for deed), the seller retains legal title to the property while the buyer takes possession and makes installment payments. The seller conveys legal title only after the purchase price has been paid in full.
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Key Terms to Know
Escrow
A neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
DeedA written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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