Practice of Real Estate and Real Estate Calculations Practice Test

The situation describes seller financing, where the vendor acts as the lender to the vendee. In a land contract for deed, the seller provides the financing and keeps legal title to the property while the buyer makes installment payments toward the purchase price. The buyer gains equitable title and possession, and once all payments are made, the deed is transferred and recorded, giving full ownership. This is different from a mortgage or deed of trust, where a lender provides a loan and holds a security interest while the borrower typically has the title. It’s also not a lease with an option, which is mainly renting with a potential future purchase and doesn’t involve the seller directly financing the sale. So the arrangement described best fits a land contract for deed.