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Fundamentals of Real Estate > Chapter 7 > Flashcards

Chapter 7 Flashcards

1
Q

What do we call the collection of rights the owner of real property can exercise?

A

Answer: Bundle of rights

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2
Q

What is a Deed Under Power?

A

Answer: A deed used by a mortgage lender after foreclosure to convey real estate.

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3
Q

What is special about a tax deed?

A

Answer: A tax deed is superior in the chain of title to nearly all other types of interests.

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4
Q

Stella wants to convey all of her rights to her house and land to Brenda. She’ll guarantee that the title is clear of liens. What type of deed should Stella use to convey the property?

A

Answer: Warranty deed

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5
Q

Larry and Dave have a dispute regarding the boundary of their adjacent properties. What will they ask the court to do to resolve the dispute?

A

Answer: Use the court’s equity power to establish the correct boundary.

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6
Q

Who is the grantor on the deed?

A

Answer: The person or entity conveying title to the property.

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7
Q

Who is the grantee on the deed?

A

Answer: The person or entity taking title to the property, usually the buyer.

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8
Q

What is considered legal capacity in relation to a deed?

A

Answer: The ability to sign the deed as the owner or on behalf of the owner.

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9
Q

What is the habendum clause?

A

Answer: Describes the interest conveyed by the deed, for example, fee simple or life estate.

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10
Q

What is the legal description on a deed?

A

Answer: A written explanation of the boundaries of the property in relation to neighboring real estate.

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11
Q

How does the world know that property is transferred through a deed?

A

Answer: By recording the deed in the county real estate records.

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12
Q

Gary is selling his real estate to Jim. Gary wrote a deed with the title, date, and legal description of the property. But, he did not sign it. He gave the paper to Jim. Is this a valid real estate transaction?

A

Answer: No. A deed must be signed by the grantor.

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13
Q

Bill wrote a deed for real estate, conveying all of his title and interest to Susan. But Bill does not own that property. Is this a valid real estate transaction?

A

Answer: No. The grantor must have capacity and be the owner of the real estate.

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14
Q

Greg wrote a deed conveying his real estate to Otto. The deed has all of the required elements. However, Greg was in a rush and did not have a notary public witness his signing, and the deed does not contain a notary seal. Is this a valid real estate transaction?

A

Answer: No, the notary seal makes it legal.

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15
Q

What causes a person to lose their real estate in bankruptcy?

A

Answer: Trustee takes the property to pay off debts.

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16
Q

What is escheat?

A

Answer: When a person dies without heirs to take property from the estate.

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17
Q

What is probate?

A

Answer: The court process of verifying a will and distributing property according to the will.

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18
Q

What is intestacy?

A

Answer: When a person dies without a will, and the process of distributing property of the estate.

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19
Q

What is one universal requirement for all deeds to be recorded?

A

Answer: The deed must be signed by the grantor.

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20
Q

First State Bank loaned money to Bill and put a lien on his real estate, and recorded that mortgage document in the county real estate records on June 1. Second State Bank also loaned money to Bill and put a lien on his real estate, and recorded the mortgage document on May 15. Which bank has the highest priority mortgage?

A

Answer: Second State Bank, it was recorded first.

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21
Q

Which lien would be filed by a drywall contractor doing a renovation on a house?

A

Answer: Mechanic’s lien

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22
Q

When is an attorney’s lien filed?

A

Answer: When the owner of property owes money to their attorney for legal services.

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23
Q

When might a court issue an equitable lien?

A

Answer: When property is held by a third party for a judgment debtor.

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24
Q

Jim needs money to renovate his home. He goes to the bank, and they’re willing to give him a loan, but want the house as collateral. Jim agrees to this. What type of lien will the bank use?

A

Answer: Voluntary lien.

25
Q

What is one thing that all parcels of real estate have in common?

A

Answer: They all have a title history.

26
Q

How is the chain of title constructed?

A

Answer: By reviewing each deed in the county real estate records in order to link buyer to seller.

27
Q

What is the closing attorney looking for in the abstract of title?

A

Answer: To make sure that property is passed in order from buyer to seller without any breaks.

28
Q

Which of these can cause title to not be marketable?

A

Answer: All of the answer choices provided are correct.

29
Q

What does a standard title insurance policy cover?

A

Answer: Mistakes made during the real estate closing, like things missed in a title search.

30
Q

What does an extended coverage title insurance policy cover?

A

Answer: Matters not found in a search of the written title records.

31
Q

Stella wants to convey all of her rights to her house and land to Brenda. She’ll guarantee that the title is clear of liens. What type of deed should Stella use to convey the property?

A

Answer: Warranty deed

32
Q

Bob is interested in buying a parcel of real estate, but he’s not sure if the title is free and clear of liens. What should he ask for in the conveying deed?

A

Answer: Warranties

33
Q

First State Bank has a mortgage lien on Bill’s real estate. Bill has not been paying the mortgage. What process and deed will First State Bank use to resolve this problem?

A

Answer: Foreclosure. Deed Under Power.

34
Q

What are the two main purposes of a deed to real property?

A

Answer: Convey ownership and prove ownership of real property.

35
Q

What is considered legal capacity in relation to a deed?

A

Answer: The ability to sign the deed as the owner or on behalf of the owner.

36
Q

To make the transfer of property complete, what must be done with the deed?

A

Answer: It must be handed to the grantee.

37
Q

What is consideration?

A

Answer: Something of value exchanged for the deed.

38
Q

What is the grantor of a deed?

A

Answer: The party selling or conveying the property.

39
Q

What is the purpose of a notary seal on a deed?

A

Answer: The notary makes sure that the person signing the deed as the grantor is actually the person listed as the grantor.

40
Q

Glen wrote a deed to convey his property that says, “Gary sells the property to whoever he gives this deed to.” Gary signed the deed and put all of the other required terms into the deed. Gary hands the deed to Sam. Is this a valid real estate transaction?

A

Answer: No. The grantee must be named.

41
Q

Jessica wrote a deed to convey her real estate to Steve. The deed had all of the required elements. However, Jessica placed the deed in a locked box after signing it for safe keeping. Who owns the property?

A

Answer: Jessica still owns it. The deed must be given to the grantee to change title.

42
Q

ABC Corporation owns a factory. They are selling the factory to Amalgamated Corp. The lawyer for ABC Corporation writes the deed with all of the required elements, and it is signed by Bill Smith. Bill is the president of ABC Corporation, but it doesn’t say so on the deed, nor is there a corporate seal. Is this a valid real estate transaction?

A

Answer: Likely not. There is no indication that Bill Smith had the authority or capacity to sign on the corporation’s behalf.

43
Q

What causes a person to lose their real estate in bankruptcy?

A

Answer: Trustee takes the property to pay off debts.

44
Q

How does a judgment lien cause involuntary alienation?

A

Answer: Property is sold by judgment creditors to pay off debt.

45
Q

Under what circumstances can the government exercise eminent domain?

A

Answer: For the public good, after paying the owner fair value.

46
Q

Which of these can convey property through a deed?

A

Answer: Any person or entity.

47
Q

What is intestacy?

A

Answer: When a person dies without a will, and the process of distributing property of the estate.

48
Q

How do real estate owners let the world know they own the property?

A

Answer: By recording their deed in the county real estate records.

49
Q

What is constructive notice?

A

Answer: By recording a deed in the public land records, everyone is deemed to have notice of the recording of the deed, even if they physically don’t see it.

50
Q

What are the warranties in a deed?

A

Answer: Promises regarding ownership and title to the property made by the owner.

51
Q

What is the purpose of a lien?

A

Answer: To make sure a creditor gets paid either by the debtor or when the property is sold.

52
Q

When is an attorney’s lien filed?

A

Answer: When the owner of property owes money to their attorney for legal services.

53
Q

A mortgage is an example of a/an…?

A

Answer: Voluntary lien

54
Q

What is one thing that all parcels of real estate have in common?

A

Answer: They all have a title history.

55
Q

What is marketable title?

A

Answer: When a reasonable buyer, knowing the condition of title, would buy the property.

56
Q

Jeff is selling his real estate. A title search revealed that 100 years ago, there was a mortgage lien on the property that was not canceled on record. The terms of the mortgage and state law say that the mortgage is no longer enforceable. Is title marketable?

A

Answer: Yes. Title does not have to be perfect to be marketable.

57
Q

What is the purpose of title insurance?

A

Answer: To cover losses that result from problems with real estate title after closing.

58
Q

What does a standard title insurance policy cover?

A

Answer: Mistakes made during the real estate closing, like things missed in a title search.

Fundamentals of Real Estate (12 decks)

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