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[Listing Price and Terms -- Types of Financing]
A buyer bought a house on an installment land contract, also called a contract for deed. Which statement about this transaction is TRUE?
Suggested Answer: B
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In an installment land contract (contract for deed), the buyer receives equitable title upon signing and possession of the property. Legal title remains with the seller until the full purchase price is paid or the contract conditions are met. The buyer typically takes possession and lives in the property during the installment period. This is a form of seller financing covering both land and improvements. Therefore, the correct answer is B.
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30 comments · newest first
SE
Sena
6 months ago
I feel confident about B too. It’s a common scenario in contracts.
BR
Brianne
6 months ago
D is tricky. It’s about both land and house in most cases.
SH
Shawna
6 months ago
C is definitely wrong. Legal title comes later.
FI
Filiberto
6 months ago
A is misleading. Buyers usually occupy the property.
BE
Bettye
6 months ago
Agreed! B makes sense. They can live there while paying.
MO
Mozell
7 months ago
D seems misleading; they usually finance both land and house, right?
HO
Holley
7 months ago
A is definitely false; buyers can live there during the contract.
KA
Kassandra
7 months ago
Wait, are you sure about that? I thought they had to wait for legal title.
LI
Lili
8 months ago
Totally agree, B is the right answer!
MA
Markus
8 months ago
B is true! The buyer gets equitable title.
MA
Marci
8 months ago
B) The buyer holds equitable title to the property. Easy peasy, lemon squeezy!
RA
Raelene
8 months ago
I'm going with B. Installment land contracts are all about the buyer getting equitable title, not legal title right away.
MI
Michel
8 months ago
B is the correct answer. The buyer has equitable title, which means they have the right to possess and use the property.
EL
Elbert
8 months ago
Definitely B. The buyer has a beneficial interest in the property, even if the legal title is still held by the seller.
DE
Detra
9 months ago
B) The buyer holds equitable title to the property.
RO
Rochell
9 months ago
I remember discussing that the buyer is financing both the land and the house, so option D seems incorrect to me.
MA
Margurite
9 months ago
I practiced a similar question, and I believe that option C is definitely wrong since legal title usually transfers only after full payment.
ME
Melda
9 months ago
I'm not entirely sure, but I feel like the buyer can actually live in the property even if they haven't paid the full price yet.
RI
Richelle
9 months ago
I remember learning about land contracts in class. The buyer has equitable title but not legal title, so B is the correct statement.
LI
Ligia
9 months ago
For a land contract, the buyer doesn't get legal title right away, so C is definitely wrong. I'm leaning towards B as the best answer.
CE
Celestina
10 months ago
I think option B is correct because I remember that in an installment land contract, the buyer gets equitable title while making payments.
TA
Tawny
10 months ago
I think B is the right answer. The buyer has equitable title.
RO
Rory
10 months ago
I'm a little confused on the details of a land contract. Let me re-read the question and think through the options carefully.
LO
Louann
11 months ago
Okay, I've got this. The buyer holds equitable title, so B has to be the right answer.
VA
Vanesa
11 months ago
Hmm, this seems like a tricky one. I'll need to think through the key differences between a land contract and a traditional mortgage.
MA
Mariann
5 months ago
So, it looks like B is the best choice here!
WI
Willodean
5 months ago
D is misleading too. They’re buying the whole property, not just land.
FA
Fatima
6 months ago
I think B is the right answer. The buyer has equitable title.
MA
Malcom
10 months ago
C is definitely wrong. Legal title comes later.
OD
Odelia
10 months ago
Agreed! The buyer can live there while paying.