Maryland Home Improvement PSI Practice Exam

A contract promising to convey title upon payment is known as?

1. A purchase option

2. An installment agreement

3. A contingent agreement

4. An option to purchase

The correct answer is: An option to purchase

A contract promising to convey title upon payment is most accurately described as an option to purchase. This type of agreement grants the buyer the right, but not the obligation, to purchase a property for a specified price within a certain time frame. In this context, payment serves as a condition for transferring ownership; therefore, the contract centers on the promise of eventual title conveyance contingent upon the buyer fulfilling the terms of the payment. In contrast, other options describe different contractual arrangements. A purchase option entails a right to buy but may not necessarily lead to a title transfer upon payment without fulfilling certain conditions or timelines. An installment agreement typically involves regular payments over time but may have different implications for title ownership or equity accumulation. A contingent agreement usually involves various conditions that must be met before the transaction can transpire, which doesn’t directly pertain to the act of conveying title based on payment. Thus, the term that best encapsulates the concept of conveying title strictly upon payment is indeed an option to purchase.