Alabama Real Estate Practice Exam

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Prepare for the Alabama Real Estate Exam. Utilize flashcards and multiple-choice questions, each coupled with hints and explanations. Ace your upcoming test!

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What is true about land sales contracts?

Full title is given with down payment
It is only for commercial properties
Vendee pays part of the price initially
It cannot include installment payments

The correct answer is: Vendee pays part of the price initially

A land sales contract is a form of seller financing for purchasing real estate property in which the buyer makes payments directly to the seller until the agreed upon price is paid in full. With this type of contract, the Vendee (buyer) pays part of the price initially as a down payment and continues to make installment payments to the vendor (seller) until the full amount is paid off. Option A is incorrect because full title is not given with the down payment, the buyer only has equitable title until the full amount is paid. Option B is incorrect because land sales contracts can be used for residential or commercial properties. Option D is also incorrect because it is common for land sales contracts to include installment payments until the full price is paid off.