Which type of sales contract requires the buyer to pay for property in multiple installments and allows the seller to hold the title until fully paid?

The type of sales contract that requires the buyer to pay for property in multiple installments while allowing the seller to retain the title until the purchase price is fully paid is known as a contract for deed. This arrangement is particularly beneficial for buyers who may not qualify for traditional financing options, as it allows them to make payments directly to the seller over time.

In a contract for deed, the seller effectively acts as the lender. The buyer gains equitable title to the property and the right to possess it, but the legal title remains with the seller until all payments are made according to the agreement. This arrangement creates a clear incentive for the buyer to fulfill their payment obligations, as they will only secure full ownership upon completion of the contract.

This structure contrasts with alternatives like conventional loans, where a financial institution holds the mortgage and the buyer receives immediate ownership upon purchase. Similarly, contingency clauses pertain to conditions that must be met in real estate transactions, and conversion typically refers to transforming properties rather than a specific sales contract type. Thus, a contract for deed effectively combines elements of both financing and property ownership in a way that meets the needs of certain buyers and sellers.