Ch 11 Quizzes Flashcards
T/F: It is not always necessary for the parties to sign escrow instructions.
False
The purchase agreement may contain a set of instructions or the parties may sign a separate document with the instructions. Either way, it is a contract that both parties must sign.
T/F: The main advantage of the escrow process is that it’s more difficult for parties to back out of the transaction.
True
Escrow makes it less likely that one party will back out of the transaction, because once the deed and/or funds have been deposited into escrow, they cannot be recovered.
T/F: Real estate brokers may not provide escrow services for a transaction in which they have no other involvement, unless they have complied with escrow licensing requirements.
True
Brokers are only exempt from the escrow licensing requirements for transactions they are handling.
T/F: A real estate broker may not charge an extra fee for providing escrow services in a transaction he is handling.
False
A broker may charge an additional fee for providing escrow services.
T/F: A bank or savings and loan must be licensed as an escrow agent in order to provide escrow services.
False
Lending institutions are among the exemptions from escrow agent licensing requirements.
T/F: An appraiser gives a copy of the appraisal report to the lender, not to the buyer.
True
The lender, not the buyer, is the appraiser’s client, so the lender receives a copy. The lender will usually pass a copy along to the buyer, though.
An inspection that focuses on settling or drainage problems = ___
Soil
soil inspection will be performed to assess if the soil may develop problems with settling or drainage.
The process of valuing a property through comparison to similar properties that have sold recently =__
Appraisal
An appraisal is similar to a CMA but involves a more rigorous comparison process. An appraiser values a property using comparable properties that have sold in recent months.
A ____ inspection focuses on the foundation, frame, and materials used to build the house.
Structural
A structural inspection looks for problems in the structural elements of the building, such as the foundation and frame.
Completed reports from a ___ inspection must be filed with the state.
Pest control
A completed report from a pest control inspection must be filed with the state Structural Pest Control Board, and a copy of the report must be kept for two years
Obtaining _____ = The process of choosing a lender, submitting a loan application, and undergoing an underwriting analysis.
Financing
The buyer may have gotten preapproved for a loan. If not, the buyer will need to apply for financing as part of the closing process.
___ insurance = Insurance that protects homeowners against damage to the property from natural or accidental causes.
Hazard
A hazard insurance policy will reimburse a homeowner for damage caused by most natural or accidental circumstances.
___ insurance = Insurance that protects lenders or buyers against outstanding liens or other potential legal problems affecting ownership of the property.
Title
A title insurance policy will include a title report, which shows any unpaid liens or other title defects that are on the record. Some policies will also cover problems revealed by a physical survey, such as encroachments.
__ = type of title insurance Either the seller or the buyer may pay for insurance to protect the buyer.
Homeowner’s coverage
The owner’s title insurance is typically a homeowner’s coverage policy. The buyer typically pays the premium for this policy in northern California; in southern California, the seller typically pays.
The type of title insurance the buyer will purchase to protect the lender = __
Extended coverage
Extended coverage title insurance, sometimes called an ALTA policy, protects against matters that could be discovered by inspection of the property, as well as title defects.
