Ace the PSI Virginia Real Estate Exam 2026 – Step Up to Your Future in Style!

A promissory note is a crucial legal document in real estate transactions that represents a borrower’s commitment to repay a loan under specific terms. It includes details such as the loan amount, interest rate, repayment schedule, and any penalties for late payments. This document is binding, meaning that the borrower is legally obligated to fulfill the promise contained within it, thereby giving the lender security regarding repayment.

While the other options touch on important aspects of real estate transactions, they do not accurately define what a promissory note is. The declaration of property ownership involves documents like a deed, while contracts for selling property focus on the transfer of title rather than loan repayment promises. As for the application for financing, this is a pre-loan step that does not pertain to the actual commitment to repay money borrowed, which is the essence of a promissory note.