North Dakota Real Estate Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

A contract for deed, also known as a land contract or installment sale agreement, is a unique type of seller financing arrangement where the seller retains the title to the property while allowing the buyer to take possession and make payments over time. This arrangement allows the buyer to gradually pay off the purchase price, often over several years, while the seller holds the legal title until the full amount is paid. Once the buyer completes the payment, the seller is obligated to transfer the title to the buyer.

This method can be advantageous for buyers who may not qualify for traditional financing through a bank or other lending institutions. It enables them to enter into homeownership without requiring immediate full financing. The seller benefits from regular payments and still has a stake in the property until the terms of the agreement are fulfilled.

In contrast, a lease agreement concerns rental arrangements without any transfer of ownership, a mortgage involves a bank where the borrower secures a loan against the property, and a listing agreement pertains to a real estate agent's contractual relationship with a seller regarding selling their property. Understanding the distinctions among these concepts is essential for anyone involved in real estate transactions.