In most transactions financed with a land contract, what happens to legal title?

In transactions financed with a land contract, legal title typically remains with the vendor, or seller, until the buyer fulfills the terms of the contract, which usually means making all required payments. This arrangement is significant because it protects the seller's interest in the property until the buyer has completed the payment obligations.

This method allows the buyer to take possession of the property and use it while making payments, but it does not transfer full ownership (legal title) until the seller has been fully compensated. The structure of a land contract is designed to facilitate a gradual transfer of ownership, emphasizing buyer responsibility for payments while still securing the seller's legal interest in the property.

The other choices do not accurately reflect how land contracts typically function. Immediate transfer of title would undermine the protective intent of a land contract for the seller. Splitting legal title doesn't align with the principle that one party retains rights until obligations are fulfilled, and involving a neutral third party for holding title is not a standard practice in land contracts. Thus, choice B accurately captures the nature of legal title in land contract transactions.