When does the title convey in an agreement for sale?

When does the title convey in an agreement for sale?

• A. When the buyer has 50% equity
• B. As agreed upon in the contract
• C. As agreed upon in the note
• D. Upon the last payment

Answer: (D)

The correct answer highlights that in an agreement for sale, the title is conveyed to the buyer upon the last payment. This is a fundamental principle in real estate transactions known as a contract for deed or land contract. In this type of arrangement, the seller retains legal title to the property until the buyer has fulfilled all conditions of the contract, typically including making the complete payment. Once the final payment is made, the seller is obligated to transfer the title to the buyer. This approach protects the seller from default, as they maintain ownership until the full purchase price is paid. Other options refer to various aspects of equity, contractual agreements, or payment schedules but do not accurately reflect the moment of title transfer in an agreement for sale. The focus here is on the contractual obligation that explicitly defines the title transfer upon the completion of payment.

The correct answer highlights that in an agreement for sale, the title is conveyed to the buyer upon the last payment. This is a fundamental principle in real estate transactions known as a contract for deed or land contract.

In this type of arrangement, the seller retains legal title to the property until the buyer has fulfilled all conditions of the contract, typically including making the complete payment. Once the final payment is made, the seller is obligated to transfer the title to the buyer. This approach protects the seller from default, as they maintain ownership until the full purchase price is paid.

Other options refer to various aspects of equity, contractual agreements, or payment schedules but do not accurately reflect the moment of title transfer in an agreement for sale. The focus here is on the contractual obligation that explicitly defines the title transfer upon the completion of payment.