What is meant by equitable title in real estate?

Equitable title in real estate refers to the interest that a buyer holds in a property once a valid sales contract has been executed but before the actual closing and transfer of legal title. When a buyer enters into a contract to purchase property, they obtain equitable title, which gives them certain rights and benefits associated with ownership, even though the deed has not yet been transferred. This means that while the buyer does not have full legal title— which would be established at closing—they do have a claim and an interest in the property, and they are entitled to the benefits of ownership, such as the right to possess the property and to benefit from any increase in its value.

This concept is particularly important as it establishes the buyer's legally recognized interest in the property and can provide certain protections in case of disputes prior to closing. It distinguishes between those rights and the legal title, which is transferred formally through a deed during the closing process.

Other options, while relevant concerns regarding property rights, do not accurately describe equitable title. The concept focuses specifically on the rights arising from a sales contract, not the complete transfer or other types of ownership.