Under a contract for deed, once signed by both parties, the buyer immediately receives which type of title?

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Study for the Washington Real Estate Fundamentals Rockwell Exam. Utilize flashcards, multiple choice questions with hints and explanations. Prepare thoroughly for your real estate career!

Multiple Choice

Under a contract for deed, once signed by both parties, the buyer immediately receives which type of title?

Explanation:
In a contract for deed, the buyer gains equitable title as soon as the contract is signed. Equitable title means the buyer has the right to obtain full ownership once they complete the terms of the contract (usually paying the purchase price in full) and to possess and use the property in the meantime. The seller, meanwhile, keeps legal title as security for the payment, so the public record still shows the seller as the owner until the contract is fulfilled and a deed is delivered. Once the buyer completes the payments, the seller conveys legal (fee simple) title to the buyer via a deed and records it.

In a contract for deed, the buyer gains equitable title as soon as the contract is signed. Equitable title means the buyer has the right to obtain full ownership once they complete the terms of the contract (usually paying the purchase price in full) and to possess and use the property in the meantime. The seller, meanwhile, keeps legal title as security for the payment, so the public record still shows the seller as the owner until the contract is fulfilled and a deed is delivered. Once the buyer completes the payments, the seller conveys legal (fee simple) title to the buyer via a deed and records it.

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