Contracts and Closing Overview

Question 1

a set of legally binding promises between two informed parties that must be performed and for which, if a breach occurs, the law provides a remedy.

Answer 1

contract

Question 2

is a physical or environmental problem with the property, or anything that would directly negatively affect its value, which must be disclosed if known.

Answer 2

adverse fact

Question 3

is intentional deception in such a way as to take advantage or harm another person.

Answer 3

fraudulent act

Question 4

is when licensees should have known that incorrect statements were being relied upon as material fact.

Answer 4

Negligence

Question 5

is two contracts from the same buyer on the same property. One of the offers is used to purchase the property, while the other is used to finance the property. The purpose of dual contracts is to enable the buyer to obtain a larger loan than the true sale price or to enable the buyer to qualify for a loan that the buyer otherwise could not obtain. Thus, the lender is deceived.

Answer 5

Dual Contract

Question 6

is a property the public has branded as undesirable because of various reasons such as a felony was committed there, it is perceived to be haunted, a sex offender lives in close proximity, or the owner died of AIDS.

Answer 6

stigmatized

Question 7

legal title (minus possession) is given up by the buyer to the lender or someone appointed by the lender to hold title on the lender’s behalf. Foreclosure in title theory states is nonjudicial.

Answer 7

title theory

Question 8

the buyer receives legal title at closing and retains it. Foreclosure in lien theory states is judicial.

Answer 8

lien theory

Question 9

Owners of a new home may operate a septic system by obtaining a septic permit issued by

Answer 9

the Division of Groundwater Protection.

Question 10

The public has a right to use water, rivers, and lakes, as long as they do NOT

Answer 10

obstruct the flow of it

Question 11

What type of rights do property owners whose land borders nonflowing water, such as a lake, have?

Answer 11

littoral rights

Question 12

In order for a contract to be a binding agreement, there must be

Answer 12

a meeting of the minds

Question 13

A non-isolated wetland is

Answer 13

one connected to a water source

Question 14

What is defined as a set of legally binding promises between two informed parties?

Answer 14

contract

Question 15

Under what type of rights does a property owner’s land ownership extend to the average high-water mark?

Answer 15

littoral rights

Question 16

In Tennessee, the conveyance tax or transfer tax is

Answer 16

a state tax

Question 17

Under littoral rights, a property owner’s land ownership extends to

Answer 17

average high water mark

Question 18

Which of the following is an example of an exemption to residential property condition disclosure?

Answer 18

A divorce sale of interest from one spouse to the other

Question 19

A legal description that is used only in a small portion of southeastern Tennessee is

Answer 19

rectangular survey.

Question 20

Any contract that transfers an interest in real estate must be in writing to be

Answer 20

enforceable.

Question 21

Upon there being a binding agreement between buyer and seller, the buyer receives

Answer 21

equitable title

Question 22

Property that requires property condition disclosure includes

Answer 22

the sale of residential one- to four-family residences.