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Real Estate License Exam > Modern Real Estate Practice: Unit 4 > Flashcards

Modern Real Estate Practice: Unit 4 Flashcards

1
Q

Policies and procedures that regulate recording are established by…

A

state law (these determine who is responsible for organizing or maintaining recorded docs)

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2
Q

Recording does not prove…

A

the validity of the document

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3
Q

Recording process…

A
  1. Note the date and time document if filed
  2. Assign recording number
  3. Copy the document into public record
  4. List the docs in grantor/grantee indexes
  5. Return the original doc to indicated party
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4
Q

System allows docs to be posted for public (legal) notice gives…

A

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

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5
Q

Inspect property for visible claims and…

A

actual notice (encroachments, parties in possession)

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6
Q

Inspect public records for…

A

constructive/legal notice (liens / persons on title)

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7
Q

Part of buyer’s due diligence is to…

A

inspect both property (home inspection) and public record (title search)

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8
Q

A deed that is not recorded lacks…

A

constructive or legal notice of ownership

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9
Q

Subordination is a clause in the mortgage/deed of trust in which…

A

the lender permits a subsequent mortgage to take or change priority (allows mortgages to maintain their original position)

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10
Q

Marketable title is…

A

ownership free from reasonable doubt

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11
Q

Brokers must know the requirement to make docs valid…

A
  1. what makes title marketable
  2. how ownership issues may impact transfer of title
  3. the essential elements of contracts and deeds
  4. who is required to sign
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12
Q

Title search…

A
  1. Examiner reviews public records on property
  2. Search fro present to original source (land grat or us patent)
  3. The process is used to establish a CHAIN OF TITLE
  4. If error or missing docs (broken chain) said to be clouded - seller needs to clear title
  5. Many states have title searches to only go back to a certain amount of time
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13
Q

Abstract of title and attorney’s opinion of title…

A

is a historical summary of all recorded documents affecting title created through title search

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14
Q

After tracing the chain of title, the attorney…

A

renders a title opinion: shows current status of rights, lists objections, and is often called certificate of title

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15
Q

Title insurance is…

A

best method for insuring marketable title, title search performed by examiner and title report and commitment

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16
Q

The title report states…

A

the current condition of the title and commitment to insure (does not show history)

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17
Q

Types of title insurance policies…

A
  1. Standard owners policy (protects owners/buyers)
  2. Mortgage/lender’s policy protects the mortgage/lender
  3. Extended owners policy (protection against problems not on public record)
18
Q

A standard coverage policy protects against…

A

all problems found after closing and covers errors

19
Q

Extended owner’s coverage adds protection against…

A

problems that are not a mater of public record but discovered through inspection (parties in possession, encroachments, gap period)

20
Q

Policy premium for title insurance is…

A

paid only once, when the policy is issued at closing

21
Q

Suit to quiet title…

A

court hearing to determine ownership to recognize valid claims and “quiet” invalid claims. (clears clouded title and establishes ownership under adverse possession)

22
Q

Lis pendens…

A

the recorded notice of a pending lawsuit

23
Q

EPA

A

Environmental Protection Agency (oversees environmental issues)

24
Q

Real estate professionals should have a working understanding of…

A

environmental issues (be familiar with issues, look for signs of contamination, and inform but never advise)

25
Q

Environmental issues are considered…

A

material facts that must be disclosed

26
Q

Asbestos…

A

mineral used in building that can cause respiratory disease

27
Q

Asbestos is harmful only if…

A

the fibers are friable (broken)

28
Q

Abatement…

A

removal by a professional before demolition

29
Q

Encapsulation…

A

sealing in place, often a better choice for less of a risk of exposing fibers

30
Q

Federal law requires sellers of housing built before Jan 1, 1978…

A

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

31
Q

Sellers are not required to do a…

A

lead inspection of pay for removal

32
Q

Real estate brokers must sign the lead-based paint disclosure…

A

in the purchase contract and are responsible for making sure all parties are in compliance

33
Q

Radon is naturally occurring…

A

odorless, radioactive gas

34
Q

Radon is typically…

A

mitigated by adding a ventilation system to move the gas outside

35
Q

Carbon monoxide…

A

odorless gas that is a byproduct of combustion that can lead to death with improper ventilation, and can be detected with CO detector

36
Q

Toxic mold is created…

A

by excess humidity/moisture. may require remediation (removal) of mold

37
Q

State laws determine if or when… issues may be disclosed

A

stigmatized properties (murder, suicide, criminal activity, etc)

38
Q

The escrow agent or title company closer is a…

A

disinterested third party who assists in carrying out the transaction according to the terms of the purchase contract.

39
Q

Closing statement…

A

detailed accounts of each party’s debits and credits

40
Q

Prorations…

A

certain costs are divided between the buyer and seller as of the date of closing

41
Q

Proration calculation…

A

amount for the billing period / days in the billing period x days the person owns

Real Estate License Exam (5 decks)

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