Chapter 7

Question 1

Tax Deed

Answer 1

The deed given to a purchaser at a public sale of land held for nonpayment of taxes. It conveys to the purchaser only such title as the defaulting taxpayer had.

Question 2

Tax Sale

Answer 2

Sale of property after a period of nonpayment of taxes.

Question 3

Actual Notice

Answer 3

Express or implied knowledge of a fact

Question 4

Constructive Notice

Answer 4

A fact, imputed to a person by law, which should have been discovered because of the person’s actual notice of circumstances and the inquiry that a prudent person wold have been expected to make.

Question 5

Promissory Note

Answer 5

A written promise to pay a debt as set forth in the writing Also known as a “Note”

Question 6

Mortgage

Answer 6

An instrument by which a property is hypothecated to secure the payment of a debt

Question 7

Mortgagor

Answer 7

The borrower in a mortgage loan who executes and delivers a mortgage to the lender

Question 8

Judicial Foreclosure

Answer 8

A court proceeding requiring that property be sold to satisfy a mortgage lien

Question 9

What are the three Parties in a Deed of Trust

Answer 9

Trustee
Beneficiary
Trustor

Question 10

If the borrower does not pay

Answer 10

The lender can foreclose on the property without going through the courts. This is down as a Non-Judicial Foreclosure

Question 11

Non-Judicial Foreclosure

Answer 11

favors the lender and offers the following advantages:
Less Costly
Quicker Process

Question 12

Insurance

Answer 12

A contract between the insurer and the insured

Question 13

Title Insurance

Answer 13

Insurance to protect a real property owner or lender up to a specified amount against certain types of loss (ex: defective or unmarketable title)

Question 14

Escrow

Answer 14

The deposit of instruments and/or funds with instructions with a third neutral party to carry out the provisions of an agreement or contract.

Question 15

Bankruptcy

Answer 15

A legal proceeding by an individual or company who are no longer able to pay their respective debts

Question 16

Probate

Answer 16

The official proving of a will. The legal process wherein the estate of a dependent is administered.

Question 17

Contract

Answer 17

An agreement to do or not to do a certain thing. It must have four essential elements: parties capable of contracting, consent of the parties, a lawful object, and consideration. A contract for sale of real property must also be in writing and signed by the party or parties to be charged with performance.

Question 18

Express Contract

Answer 18

A contract that has been put into words, either spoke or written.

Question 19

Implied Contract

Answer 19

An agreement that has not been put into words, but is implied by the actions of the parties

Question 20

Bilateral Contract

Answer 20

A contract in which each party promises to do something

Question 21

Unilateral Contract

Answer 21

When on party promises to do something if the other party performs a certain act, but the other party does not perms to perform itL the contact is formed only if the other party does perform the requested act.

Question 22

Voidable

Answer 22

That which is capable of being adjudged void, but is not void unless action is taken to make it so.

Question 23

Valid Contact

Answer 23

A contact that is legally binding and enforceable

Example:
Any contact that includes ALL too the essential elements of a valid contact.  This includes:
Purchase Contact
Listing Contract 
Independent Contractor Agreement

Question 24

Void Contract

Answer 24

A contact that has no legal force or effect

Example:
Any contact that is missing One or More of the essential elements of a valid contract.
A contract is void if it is missing ANY of the following:
Lawful Objective
Consideration
Offer and Acceptance
Legally Capable Parties

Question 25

Voidable Contract

Answer 25

A contact that may be voided by the parties without legal consequences.

Example:
A typical valid sales contact can become voidable if it includes contingency. A contingency can include:
Mortgage contingency (the buyer must obtain a mortgage in order to close on the transaction)
Inspection Contingency (the buyer may back out of the contract if they find significant defects during the property inspection.)
Property Sale Contingency (the buyer cannot close on the transaction until they sell their existing property.)

Question 26

Enforceable Contract

Answer 26

A contract in which the parties may be legally required to perform

Example:
Any valid contact that offers a legal remedy in the event that the contact is not fulfilled, such as a typical purchase contract.

Question 27

Unenforceable Contract

Answer 27

A contract that appears to meet the requirements for validity but would not be enforceable in court

Example
An oral contact used to purchase a property is unenforceable since the Stature of Frauds requires all real estate purchase contracts to be in writing

Question 28

Consideration

Answer 28

Anything given or promised by a party to induce another to enter into a contract, ex:personal services or even love and affection. It may be benefit conferred upon one party or a detriment suffered by the other.