CHAPTER 9 QUIZ

Question 1

Title searcher Harold works in Eastern County. A buyer in Western County asks Harold to search a title for a property located in Northern County. The seller lives in Southern County. Where is Harold most likely to find the land records for the property?

Answer 1

In Northern County, where the property is located.

Question 2

Which item in the land records is least likely to render a title unmarketable?

Answer 2

An easement

Question 3

What information is found in a lien?

Answer 3

Name of lien holder, name of debtor, amount of lien.

Question 4

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

Answer 4

Mechanic’s lien

Question 5

Who is responsible for recording the mortgage process?

Answer 5

A title agency will likely handle it, but the responsibility is the lenders.

Question 6

What is recorded by the county in a real estate transaction?

Answer 6

Mortgages and title transfers are documented, but promissory notes are not.

Question 7

Amanda’s home equity lender is going through the subordinate process. What does that mean?

Answer 7

This lender wants to take priority over other lenders in the event of a foreclosure.

Question 8

Are special assessments on a ‘for sale’ property of concern to the real estate agent?

Answer 8

Special assessments are paid first at the time of the home’s sale, above the mortgage. Buyers may need to pay enough to cover all of these debts.

Question 9

John bought a parcel of real estate and a title insurance policy. After the closing, John finds that there was an unpaid tax lien on title from before the closing. What does he do?

Answer 9

Make a claim on his title insurance policy to pay off the lien.

Question 10

Generally, how many land record offices will a title searcher have to visit to search a title?

Answer 10

One

Question 11

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

Answer 11

Convey ownership and prove ownership of real property.

Question 12

What is the grantor of a deed?

Answer 12

The party selling or conveying the property.

Question 13

What power does a court use to involuntarily convey real property?

Answer 13

Equity power.

Question 14

What is a Deed Under Power?

Answer 14

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

Question 15

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?

Answer 15

Warranty deed

Question 16

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?

Answer 16

Foreclosure. Deed Under Power.

Question 17

Seldom, Inc. is selling a factory. They want to convey their rights of ownership to the new owner, but are concerned that they may get sued for something about the property that they did not know about before. They’re willing to make sure all liens are paid off. What type of deed should they use?

Answer 17

Limited Warranty Deed

A limited warranty deed makes no promises about the overall condition of the title and only guarantees that there are no claims place against the property during the grantor’s ownership.

Question 18

Stan sold his real property to Bella by Warranty Deed. A day later, Stan sold his real property again to Len. Who owns the property?

Answer 18

Bella

Question 19

What are the two purposes of a deed?

Answer 19

To convey property and tell the world who owns real estate.

Question 20

What controls the definition of marketable title in a real estate transaction?

Answer 20

Local law

Federal or state law will not define marketable title. This comes from the local laws.

Question 21

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

Answer 21

By recording the deed in the county real estate records.

All deeds must be recorded to “put the world on notice” of the transfer of ownership of a property.

Question 22

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?

Answer 22

No. The grantee must be named.

Question 23

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?

Answer 23

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