In a contract for deed, what benefit does the vendor retain?

In a contract for deed, the benefit that the vendor retains is the retention of naked title to the property until the contract is fully paid. This means that while the vendee (the buyer) has equitable interest and is making payments towards the property, the legal title remains with the vendor (the seller) until all terms of the contract are fulfilled, typically through full payment.

The significance of this arrangement is that it provides the vendor with an extra layer of security. If the vendee defaults on their payments, the vendor can retain control over the property and potentially reclaim possession without going through the lengthy foreclosure process typical of conventional mortgages.

This structure contrasts with other options provided. For instance, retaining possession and title would imply that the vendor is actively living in or using the property, which does not align with the terms of a contract for deed, as possession typically goes to the buyer once the contract is executed. The option stating that the vendor has possession but not title inaccurately suggests that the vendor has some form of control or occupancy, which is contrary to the intended structure of this agreement. Lastly, the idea of having equitable title until the contract is paid also misaligns with the concept, as equitable title is primarily a benefit of the vendee