In real estate contracts, what is the term for the interest held by a buyer before closing that obligates the seller to maintain the property in its current condition?

• A. Legal title
• B. Equitable title
• C. Fee simple title
• D. Marketable title

Answer: (B)

The key idea is the buyer’s interest before closing, called equitable title. When a real estate contract is in place but the deed hasn’t yet transfered, the buyer has equitable title—the right to obtain full ownership by completing the contract. This status also means the seller must preserve the property in its current condition, since the buyer’s future ownership is being protected and the property shouldn’t be allowed to deteriorate or be wasted before transfer. Legal title, by contrast, remains with the seller until closing, and the buyer only gains ownership (often as fee simple) after the deed is delivered. Marketable title refers to the quality of title at the time of transfer, not the buyer’s pre-closing interest.