Real Property, Real Estate Auctions, and Conveyancing Basics
What the exam tests
Real Property, Real Estate Auctions, and Conveyancing Basics tests real estate auction practice and basic conveyancing. The exam expects you to separate real property from UCC goods, know the writing requirement, and follow the contract-to-closing sequence.
Core rules
- Real estate auctions are governed by real property law, not UCC Article 2. The Statute of Frauds requires a writing signed by the party to be charged, so the auction terms and real estate purchase contract must be documented.
- The auction may be absolute or subject to seller confirmation/reserve. 'Absolute' should mean no reserve and no seller confirmation; 'subject to confirmation' preserves the seller's right to reject the high bid.
- Disclosures matter: lead-based paint for pre-1978 housing, known property conditions required by state law, flood-zone status, easements, zoning, and title issues.
- Conveyancing basics: earnest money, title commitment, survey, deed type (general warranty, special warranty, quitclaim), closing or settlement, prorations, and recording.
- The auctioneer should disclose agency, buyer's premium, earnest money terms, closing costs, and whether financing or inspection contingencies apply.
Worked example
A property is advertised as an absolute auction. The high bid is $150,000, but the seller says it is too low and refuses to sign. If the auction was truly absolute and the auctioneer had authority to bind the seller, the seller's refusal is a breach; the buyer may seek remedies. If the ad said 'subject to seller confirmation,' the seller could reject the bid and earnest money would be returned under the terms.
Traps
Do not apply UCC auction rules to land. Do not treat an online high bid as a completed conveyance without the required writing and closing. Do not confuse a reserve with an opening bid. Do not ignore disclosure and title defects.