Idaho Real Estate Practice Exam

In a land sale contract, who holds the title while the buyer is making payments?

1. The buyer

2. The seller

3. A third-party trustee

4. The lender

The correct answer is: The seller

In a land sale contract, the seller retains the title to the property while the buyer makes payments. This arrangement allows the seller to maintain ownership until the buyer fulfills their payment obligations, which is typically outlined in the contract. The seller's retention of title serves as a form of security, ensuring that if the buyer defaults on the payment terms, the seller can reclaim the property without going through a foreclosure process. The buyer, on the other hand, has the right to possess and use the property during the term of the contract but does not hold legal title until all terms of the agreement are satisfied. This ensures that the seller has a vested interest in the buyer’s compliance with the payment schedule. The involvement of a third-party trustee or lender does not apply directly in this scenario; their roles are distinct and typically tied to other types of financing agreements, such as mortgages. In a land sale contract, the dynamics are primarily between the seller and the buyer, with the seller maintaining title until the buyer completes the purchase.