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In a contract for deed, the buyer's title status is classified as conditional ownership until the property is fully paid for. This arrangement means that even though the buyer has an equitable interest in the property and is typically allowed to reside in it, they do not receive full legal title until all payments have been made according to the terms of the contract. The seller retains the legal title as a form of security until the buyer fulfills their payment obligations, which is a crucial aspect of understanding the nature of a contract for deed.

This conditional ownership allows the buyer to benefit from the property, such as using it and potentially building equity, but also comes with the risk that failing to meet the payment terms could result in losing the invested amount and the property itself. Recognizing this status is essential for both buyers and sellers to understand their rights and responsibilities throughout the transaction.