Jim Green has agreed to sell his home to Pam and Paul Able. Pam and Paul will pay Jim the $15,000 in cash they received at their wedding reception. They will also pay Jim $8,000 a year at 7% interest for 10 years. Jim and the Ables have entered into what kind of agreement?

LAND CONTRACT.

Explanation:

A land contract is a type of real estate transaction where the seller provides financing to the buyer. The buyer will then pay the agreed upon sales price in installments over a specific period of time. The payments made to the seller are made up of a combination of both principal and interest, similar to a typical mortgage.

One of the primary reasons why a land contract may be used to facilitate a real estate transaction is because the buyer may want to purchase a property, but be unable to obtain a bank loan.

The seller agrees to accept payments for the property from the buyer. Once the loan for the property is paid off, the seller transfers the title of the deed over to the buyer.

Therefore, the kind of agreement Jim and the Ables have entered into is A LAND CONTRACT.

b. Land contract

Explanation: this agreement is known as a land contract agreement which is a type of seller financing allowing Pam and Paul to buy the house directly from Jim over a period of time rather than making an upfront payment.

In this type of contract, Jim determines the duration of the contract, the interest rate required and any down payments to be made while holding on to the title of ownership until full payment is made. At this time, he transfers the title of ownership to Pam and Paul Able.

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