What characterizes a "contract for deed"?

A "contract for deed" is characterized by a transaction where the buyer pays in installments while occupying the property. In this arrangement, the seller retains the title to the property until the buyer has made all the required payments, at which point the title is transferred to the buyer. This means the buyer has the right to live in and use the property while they are making payments, but legally, they do not own the property until the contract is completed.

This method of financing allows buyers who may not qualify for traditional financing options to purchase a home. The structure is similar to a mortgage, but rather than involving a bank, it typically occurs directly between the buyer and seller. The seller, in this case, has the advantage of receiving regular payments and maintaining an interest in the property until the payment terms are satisfied.

The other options describe different types of real estate agreements that do not align with the unique characteristics of a "contract for deed." A mortgage with a fixed interest rate involves a lender and a borrower with a more formalized structure and ownership transfer at closing. A rental agreement with an option to buy later suggests a leasing situation rather than a direct installment purchase arrangement. A lease that includes maintenance responsibilities pertains to rental arrangements and does not involve installment payments toward