Modern Real Estate Practice: Unit 4 Flashcards
Policies and procedures that regulate recording are established by…
state law (these determine who is responsible for organizing or maintaining recorded docs)
Recording does not prove…
the validity of the document
Recording process…
- Note the date and time document if filed
- Assign recording number
- Copy the document into public record
- List the docs in grantor/grantee indexes
- Return the original doc to indicated party
System allows docs to be posted for public (legal) notice gives…
constructive or legal notice, establishes priority of interests (first in time is first in right), and a deed does not have to be recorded to be valid
Inspect property for visible claims and…
actual notice (encroachments, parties in possession)
Inspect public records for…
constructive/legal notice (liens / persons on title)
Part of buyer’s due diligence is to…
inspect both property (home inspection) and public record (title search)
A deed that is not recorded lacks…
constructive or legal notice of ownership
Subordination is a clause in the mortgage/deed of trust in which…
the lender permits a subsequent mortgage to take or change priority (allows mortgages to maintain their original position)
Marketable title is…
ownership free from reasonable doubt
Brokers must know the requirement to make docs valid…
- what makes title marketable
- how ownership issues may impact transfer of title
- the essential elements of contracts and deeds
- who is required to sign
Title search…
- Examiner reviews public records on property
- Search fro present to original source (land grat or us patent)
- The process is used to establish a CHAIN OF TITLE
- If error or missing docs (broken chain) said to be clouded - seller needs to clear title
- Many states have title searches to only go back to a certain amount of time
Abstract of title and attorney’s opinion of title…
is a historical summary of all recorded documents affecting title created through title search
After tracing the chain of title, the attorney…
renders a title opinion: shows current status of rights, lists objections, and is often called certificate of title
Title insurance is…
best method for insuring marketable title, title search performed by examiner and title report and commitment
The title report states…
the current condition of the title and commitment to insure (does not show history)
Types of title insurance policies…
- Standard owners policy (protects owners/buyers)
- Mortgage/lender’s policy protects the mortgage/lender
- Extended owners policy (protection against problems not on public record)
A standard coverage policy protects against…
all problems found after closing and covers errors
Extended owner’s coverage adds protection against…
problems that are not a mater of public record but discovered through inspection (parties in possession, encroachments, gap period)
Policy premium for title insurance is…
paid only once, when the policy is issued at closing
Suit to quiet title…
court hearing to determine ownership to recognize valid claims and “quiet” invalid claims. (clears clouded title and establishes ownership under adverse possession)
Lis pendens…
the recorded notice of a pending lawsuit
EPA
Environmental Protection Agency (oversees environmental issues)
Real estate professionals should have a working understanding of…
environmental issues (be familiar with issues, look for signs of contamination, and inform but never advise)
Environmental issues are considered…
material facts that must be disclosed
Asbestos…
mineral used in building that can cause respiratory disease
Asbestos is harmful only if…
the fibers are friable (broken)
Abatement…
removal by a professional before demolition
Encapsulation…
sealing in place, often a better choice for less of a risk of exposing fibers
Federal law requires sellers of housing built before Jan 1, 1978…
to make disclosure to buyers about any known lead-based paint, copy of any report on the home, copy of EPA pamphlet on lead poisoning, 10-day opportunity to have home tested
Sellers are not required to do a…
lead inspection of pay for removal
Real estate brokers must sign the lead-based paint disclosure…
in the purchase contract and are responsible for making sure all parties are in compliance
Radon is naturally occurring…
odorless, radioactive gas
Radon is typically…
mitigated by adding a ventilation system to move the gas outside
Carbon monoxide…
odorless gas that is a byproduct of combustion that can lead to death with improper ventilation, and can be detected with CO detector
Toxic mold is created…
by excess humidity/moisture. may require remediation (removal) of mold
State laws determine if or when… issues may be disclosed
stigmatized properties (murder, suicide, criminal activity, etc)
The escrow agent or title company closer is a…
disinterested third party who assists in carrying out the transaction according to the terms of the purchase contract.
Closing statement…
detailed accounts of each party’s debits and credits
Prorations…
certain costs are divided between the buyer and seller as of the date of closing
Proration calculation…
amount for the billing period / days in the billing period x days the person owns
