North Dakota Real Estate Practice Exam 2026 – Comprehensive All-in-One Guide for Exam Success!

In a contract for deed arrangement, the seller retains legal title to the property until the buyer has made all the required payments according to the terms of the contract. This means that the seller has a vested interest in ensuring that the buyer adheres to the payment schedule, as the seller will not transfer ownership until all terms are fulfilled.

This structure serves to protect the seller's interests, as they remain on the title and can potentially reclaim the property if the buyer defaults on the payment obligations. The buyer, on the other hand, generally holds equitable title and may gain possession and use of the property, but does not legally own it until the contract is fully satisfied. This system is designed to facilitate financing for buyers who may not qualify for traditional mortgage loans while providing a level of security for the seller.

The other options do not accurately reflect the nature of a contract for deed. The buyer does not hold title until the final payment is made; the bank is not involved in this scenario unless financing is secured through them; and the government does not directly hold title in a private transaction such as this.