Contracts
A land contract (contract for deed) in New Mexico is an arrangement where:
AThe buyer receives title immediately upon signing
BThe seller retains legal title until the buyer completes all payments✓ Correct
CThe lender holds title until the loan is paid
DThe title company holds title until closing
Explanation
In a land contract or contract for deed, the seller retains legal title while the buyer receives equitable title. The buyer takes full legal title only after completing all payments.
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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).
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
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