Before you read
Test yourself first: 5 questions
Question 1 of 5
A seller and buyer agree to cancel their signed purchase contract and return the earnest money, signing a mutual release. This is an example of terminating a contract by:
Answer: B. When both parties voluntarily agree to cancel and unwind the contract, it is terminated by mutual rescission, returning them to their prior positions.
Question 2 of 5
Once a buyer and seller sign the purchase contract, the buyer holds:
Answer: A. Signing gives the buyer equitable title; legal title transfers by deed at closing.
Question 3 of 5
A purchase agreement in which both parties promise to perform is a:
Answer: B. A bilateral contract is a promise for a promise (buyer to buy, seller to sell). A unilateral contract is a promise for an act (e.g., an option).
Question 4 of 5
If a seller breaches a valid purchase contract, the buyer may seek:
Answer: A. Remedies for breach include specific performance (force the sale), monetary damages, or rescission (cancel and restore the parties).
Question 5 of 5
A buyer signs a purchase agreement only after the seller threatens the buyer's family with harm unless the buyer signs. With respect to validity, the contract is:
Answer: B. Genuine assent is required for a valid contract. Consent obtained through duress is not genuine, so the contract is voidable at the option of the coerced party.
Keep the streak going with more questions like these, each with a full rationale.
What you need to know
A PURCHASE-MONEY MORTGAGE is seller carry-back financing: the seller takes a note and mortgage at closing and the buyer gets the deed immediately. A WRAPAROUND wraps a new, larger loan around an existing one the seller keeps paying — only workable when the underlying loan has no due-on-sale clause.
Seller Financing: Contract for Deed & Purchase-Money: FAQs
Is Seller Financing: Contract for Deed & Purchase-Money on the real estate exam?
Yes. Financing & Lending is a scored domain on the real estate licensing exam, and this topic appears in the national portion.
Is this cheat sheet free?
Yes — every page on Cinna RE's resource library is free to read, print and share. The app adds practice questions, mock exams and a readiness score.
