Real Estate Transactions
Real estate work covers the purchase contract, title, closing, and recording. ACP-level questions focus on the statute of frauds, deed warranties, priority under recording statutes, and the disclosures and timing rules that attach to a federally related mortgage loan.
Core rules to hold
- Contracts for the sale of land must be in writing and signed by the party to be charged; the doctrine of part performance can remove the case from the statute.
- Deed covenants: general warranty warrants title against all claims, including those arising before the grantor owned the property; special warranty covers only claims arising through the grantor; quitclaim conveys whatever interest exists with no warranty.
- Recording acts resolve priority: race states protect the first to record; notice states protect a later purchaser without notice; race-notice states require both good faith and first recording.
- Mortgages and deeds of trust secure debt; a lis pendens gives constructive notice of pending litigation affecting title.
- Under RESPA/TRID, the Loan Estimate must be delivered within 3 business days of application, and the Closing Disclosure at least 3 business days before consummation.
Worked example
Owner sells to Buyer A, who takes delivery of the deed but does not record. Owner then sells to Buyer B, who pays value, has no actual or constructive notice, and records first. In a notice state, B prevails because B took without notice. In a race-notice state, B also prevails because B recorded first without notice. A, who took without recording, loses.
Traps that cost marks
Confusing race with race-notice; treating a quitclaim deed as carrying warranty covenants; assuming a title commitment is the same as a title policy; and counting the closing date itself as one of the three business days before consummation.