What is a 'contract for deed'?

A 'contract for deed' is fundamentally an agreement to sell and purchase real estate. It represents a unique financing arrangement where the seller retains the legal title to the property while the buyer makes payments over time. Once the buyer completes all payments stipulated in the contract, they receive the title to the property. This type of agreement allows buyers to secure a property without obtaining traditional financing, making it an appealing option for those who may not qualify for a conventional mortgage.

In contrast, the other options do not accurately represent the nature of a contract for deed. A temporary rental agreement focuses on leasing property, lacking the long-term purchasing aspect inherent in a contract for deed. A warranty deed, meanwhile, pertains to the legal transfer of ownership rather than the financing or agreement process. Lastly, an insurance policy for property ownership protects against loss, which is unrelated to the buying and selling mechanics of a contract for deed. Therefore, option B rightly encompasses the essence of a contract for deed as an agreement to sell and purchase real estate.