AYPO REAL ESTATE LAW OF CONTRACTS REAL EXAM
BANK | CURRENTLY TESTING AND FREQUENTLY TESTED
QUESTIONS WIT VERIFIED ANSWERS AND RATIONALES |
EXPERT VERIFIED FOR GUARANTEED PASS | LATEST
UPDATE | 2025/2026
1. An advantage to buyers in a lease-purchase option is which of the following?
A. It usually requires a higher down payment
B. It can be easier for a difficult-to-qualify buyer to purchase a home with a lower down payment
C. It avoids the need for any future financing
D. It guarantees the buyer ownership
Correct Answer: B. It can be easier for a difficult-to-qualify buyer to purchase a home with a
lower down payment
Rationale: Lease-purchase agreements let buyers occupy the home while improving credit or
saving money. They typically require less upfront cash and allow time to qualify for financing,
though they don’t guarantee ownership.
2. Eminent domain in Texas may NOT be used for which of these purposes?
A. Public highways
B. Public schools
C. Private party uses
D. Utility easements
Correct Answer: C. Private party uses
Rationale: Eminent domain is limited to public uses such as infrastructure, schools, and utilities.
It cannot be exercised for private benefit.
,3. Graduated and index leases are what types of leases?
A. Fixed
B. Variable
C. Gross
D. Percentage
Correct Answer: B. Variable
Rationale: Both allow rent adjustments. Graduated leases increase on a schedule, and index
leases fluctuate based on an index such as CPI.
4. A "mirror" will is a:
A. Will that cannot be contested
B. Reciprocal will
C. Will made only by an attorney
D. Holographic will
Correct Answer: B. Reciprocal will
Rationale: Mirror wills are reciprocal wills, usually between spouses, that leave assets to each
other or the same beneficiaries.
5. Under a land sales contract, which of the following statements is accurate?
A. Title passes immediately to the buyer
B. Seller finances the property and retains legal title until the contract is fulfilled
C. Buyer gains equitable title during the contract
D. All of these are accurate
Correct Answer: D. All of these are accurate
Rationale: In a land contract, the seller finances and holds legal title, while the buyer gains
equitable title. Final ownership transfers when the contract is satisfied.
,6. Which type of listing agreement is the only one to guarantee the broker a commission in the
event of a successful sale?
A. Exclusive-right-to-sell
B. Open listing
C. Exclusive-agency
D. Net listing
Correct Answer: A. Exclusive-right-to-sell
Rationale: This agreement ensures the broker receives a commission regardless of who procures
the buyer, offering the strongest protection.
7. A Deed of Trust allows for what type of foreclosure?
A. Judicial
B. Non-judicial
C. Strict foreclosure
D. Redemption foreclosure
Correct Answer: B. Non-judicial
Rationale: A trustee holds the property and can foreclose without court involvement, creating a
faster, non-judicial process.
8. Once the offer to purchase and all details and contingencies are agreed upon, and all parties
have signed, which of these should happen next?
A. Escrow should be opened
B. Earnest money should be deposited
C. Inspections and due diligence should begin
D. All of these
Correct Answer: D. All of these
, Rationale: After execution, escrow is opened, earnest money deposited, and inspections/due
diligence begin in parallel.
9. A title search includes a search of public records to determine these issues, except for:
A. Liens on the property
B. Easements
C. Ownership history
D. Credit history of the potential buyer
Correct Answer: D. Credit history of the potential buyer
Rationale: Title searches focus on property-related matters such as liens and ownership, not the
buyer’s creditworthiness.
10. Which of these might a certificate of title include?
A. Recorded liens
B. Easements
C. Chain of ownership
D. Any of these
Correct Answer: D. Any of these
Rationale: Certificates of title summarize legal status, including liens, easements, and ownership
history.
11. Contingencies are best described by which of the following?
A. Specific events or conditions that must occur or be removed for the offer/purchase agreement
to be valid
B. Optional addenda
BANK | CURRENTLY TESTING AND FREQUENTLY TESTED
QUESTIONS WIT VERIFIED ANSWERS AND RATIONALES |
EXPERT VERIFIED FOR GUARANTEED PASS | LATEST
UPDATE | 2025/2026
1. An advantage to buyers in a lease-purchase option is which of the following?
A. It usually requires a higher down payment
B. It can be easier for a difficult-to-qualify buyer to purchase a home with a lower down payment
C. It avoids the need for any future financing
D. It guarantees the buyer ownership
Correct Answer: B. It can be easier for a difficult-to-qualify buyer to purchase a home with a
lower down payment
Rationale: Lease-purchase agreements let buyers occupy the home while improving credit or
saving money. They typically require less upfront cash and allow time to qualify for financing,
though they don’t guarantee ownership.
2. Eminent domain in Texas may NOT be used for which of these purposes?
A. Public highways
B. Public schools
C. Private party uses
D. Utility easements
Correct Answer: C. Private party uses
Rationale: Eminent domain is limited to public uses such as infrastructure, schools, and utilities.
It cannot be exercised for private benefit.
,3. Graduated and index leases are what types of leases?
A. Fixed
B. Variable
C. Gross
D. Percentage
Correct Answer: B. Variable
Rationale: Both allow rent adjustments. Graduated leases increase on a schedule, and index
leases fluctuate based on an index such as CPI.
4. A "mirror" will is a:
A. Will that cannot be contested
B. Reciprocal will
C. Will made only by an attorney
D. Holographic will
Correct Answer: B. Reciprocal will
Rationale: Mirror wills are reciprocal wills, usually between spouses, that leave assets to each
other or the same beneficiaries.
5. Under a land sales contract, which of the following statements is accurate?
A. Title passes immediately to the buyer
B. Seller finances the property and retains legal title until the contract is fulfilled
C. Buyer gains equitable title during the contract
D. All of these are accurate
Correct Answer: D. All of these are accurate
Rationale: In a land contract, the seller finances and holds legal title, while the buyer gains
equitable title. Final ownership transfers when the contract is satisfied.
,6. Which type of listing agreement is the only one to guarantee the broker a commission in the
event of a successful sale?
A. Exclusive-right-to-sell
B. Open listing
C. Exclusive-agency
D. Net listing
Correct Answer: A. Exclusive-right-to-sell
Rationale: This agreement ensures the broker receives a commission regardless of who procures
the buyer, offering the strongest protection.
7. A Deed of Trust allows for what type of foreclosure?
A. Judicial
B. Non-judicial
C. Strict foreclosure
D. Redemption foreclosure
Correct Answer: B. Non-judicial
Rationale: A trustee holds the property and can foreclose without court involvement, creating a
faster, non-judicial process.
8. Once the offer to purchase and all details and contingencies are agreed upon, and all parties
have signed, which of these should happen next?
A. Escrow should be opened
B. Earnest money should be deposited
C. Inspections and due diligence should begin
D. All of these
Correct Answer: D. All of these
, Rationale: After execution, escrow is opened, earnest money deposited, and inspections/due
diligence begin in parallel.
9. A title search includes a search of public records to determine these issues, except for:
A. Liens on the property
B. Easements
C. Ownership history
D. Credit history of the potential buyer
Correct Answer: D. Credit history of the potential buyer
Rationale: Title searches focus on property-related matters such as liens and ownership, not the
buyer’s creditworthiness.
10. Which of these might a certificate of title include?
A. Recorded liens
B. Easements
C. Chain of ownership
D. Any of these
Correct Answer: D. Any of these
Rationale: Certificates of title summarize legal status, including liens, easements, and ownership
history.
11. Contingencies are best described by which of the following?
A. Specific events or conditions that must occur or be removed for the offer/purchase agreement
to be valid
B. Optional addenda
