What is the term for a form of land owner financing where the owner retains the title until the purchase price is paid?

The term that describes a situation where the property owner retains the title until the purchase price is fully paid is known as a contract for deed. This financing arrangement allows buyers to take possession of the property and make payments over time, but the seller maintains legal ownership until the terms of the contract are fulfilled—typically until all scheduled payments have been made.

This method can benefit both the buyer and seller; the buyer may not need to secure traditional financing, which can be especially advantageous for those who might have difficulty qualifying for a mortgage. The seller, on the other hand, retains the title and can keep the property if the buyer defaults on payments.

In contrast, options such as leasehold agreements, option contracts, and purchase agreements do not involve the retention of title in the same way. A leasehold agreement typically allows the tenant to occupy the property without ownership, an option contract grants the buyer the right to buy the property at a later time without any immediate purchase commitment, and a purchase agreement is a contract to buy and sell that transfers title upon satisfaction of its terms, usually at closing. Therefore, a contract for deed uniquely encapsulates the arrangement where ownership is held by the seller until payment is complete.