Oregon 30-Hour Real Estate Law Practice Test

Which type of contract allows a buyer to legally possess the property after all terms and conditions have been met?

1. Lease agreement

2. Option contract

3. Sale agreement

4. Assignment contract

The correct answer is: Sale agreement

A sale agreement is a legally binding contract in which the buyer and seller agree on the terms of a property transaction. Upon fulfilling all terms and conditions outlined in the sale agreement, such as securing financing and passing inspections, the buyer gains legal possession of the property. This transition typically culminates in the closing process, where ownership is officially transferred from the seller to the buyer along with the deed. In contrast, while a lease agreement allows one party to occupy a property, it does not transfer ownership; instead, it grants temporary possession with set terms regarding duration and rental payments. An option contract provides the buyer the right to purchase a property at a later date but does not constitute ownership or possession until the option is exercised and a sale agreement is executed. An assignment contract involves the transfer of rights or obligations under a contract to another party and does not relate to property ownership or possession directly. Thus, the sale agreement is the only contract type that culminates in ownership transfer and allows the buyer legal possession after meeting all the specified conditions.