Idaho Real Estate Practice Exam

When does the buyer obtain title to the property in a land sale contract?

1. Upon signing the contract

2. When a down payment is made

3. When the last payment is made

4. At the start of the contract

The correct answer is: When the last payment is made

In a land sale contract, the buyer obtains title to the property when the last payment is made. This arrangement allows the buyer to occupy and use the property during the term of the contract while the seller retains legal title until all payments are completed. This structure is designed to protect the seller's interests in the event the buyer defaults on the contract. During the term of the contract, the buyer typically has equitable title, which grants them certain rights to use the property, but not full ownership rights until they fulfill all contractual obligations, including making the final payment. Once the last payment is made and any other conditions of the contract are satisfied, legal title transfers to the buyer, completing the sale process and allowing them to fully own the property. This distinction is important in understanding how ownership is conveyed in such agreements, especially in the context of real estate transactions.