Session 16

Question 1

Affidavit of value

Answer 1

A sworn statement under oath that indicates the purchase price paid by the buyer in a transaction; must be filed with the deed and signed by both buyer and seller.

Question 2

Bring down endorsement

Answer 2

An extension of a title search to verify that no liens have been filed against the property between the time of the original search and the recording of the deed or mortgage. Also called: continuance

Question 3

Closing disclosure

Answer 3

Settlement statement prepared by the lender or closing agent itemizing all expenses and costs paid by the buyer and seller needed to close the real estate transaction as required for RESPA - related transactions.

Question 4

Constructive notice

Answer 4

Notice given by publication in a newspaper, recording, or other method.

Question 5

Deed

Answer 5

A written instrument transferring the grantors ownership of, or interest in, real property.

Question 6

Escrow

Answer 6

A system in which things of value are held on behalf of the parties to a transaction by a disinterested third-party until the specified conditions have all been met.

Question 7

Escrow company

Answer 7

A neutral clearinghouse through which title to real property is closed and or escrow funds are held in trust. Also called: escrow agent.

Question 8

Escrow officer

Answer 8

The person in charge for coordinating the activities and documentation necessary for completing a real estate transaction; usually the one who assists in preparing the settlement statement and conducting the closing. Also called: closing officer, settlement officer, or closing agent.

Question 9

FIRPTA (Foreign investment in real property tax act of 1980) -

Answer 9

Federal law that imposes income tax on foreign person selling or otherwise disposing of their interest in real property. To ensure payment of this tax, the internal revenue service requires buyers to withhold a specific percentage of the sales price, with some exceptions.

Question 10

IRS form 1099S

Answer 10

A tax form indicating the seller’s proceeds from the sale or transfer a real estate that a settlement officer submits to the Internal Revenue Service.

Question 11

Kickbacks

Answer 11

Fees or other compensation given for services not performed, but as a means of undisclosed commission for business referrals. Kickbacks are prohibited by RESPA.

Question 12

Levy

Answer 12

The legal seizure of an individual’s property to satisfy an IRS tax debt.

Question 13

Real estate settlement procedures act (RESPA)

Answer 13

The federal statute requiring disclosure of certain costs and prohibiting certain acts in the sale of 1 to 4 unit residential property it is financed by a federally regulated lender. Respirators in force by the consumer financial protection bureau.

Question 14

Settlement services

Answer 14

Any service provided in connection with a perspective or actual settlement of a real estate transaction, including, but not limited to, those provided by lenders, title companies, real estate brokers, property inspectors, attorneys, appraisers, etc.

Question 15

Title

Answer 15

The right to or ownership of land.

Question 16

Title company

Answer 16

A company that examines and insures title claims for real estate purposes through a thorough examination of property records.

Question 17

Title insurance

Answer 17

Insurance that indemnifies the policyholder against Losses resulting from undiscovered title defects and encumbrances.

Question 18

Title report

Answer 18

A report issued by a title company disclosing the condition of the title to a specific piece of property.

Question 19

Arrears

Answer 19

Owing payment on things for which one has the use but has not yet paid for, such as property taxes that are paid in, or the state of being in arrears with a debt obligation. Also called: accrued expenses.

Question 20

Calendar year

Answer 20

365 days

Question 21

Closing disclosure

Answer 21

A settlement statement prepared by the lender or closing agent itemizing all expenses and costs paid by the buyer and seller need to close the real estate transaction as required for RESPA related transactions.

Question 22

Credit

Answer 22

A sum of money to be received

Question 23

Debit

Answer 23

Any sum of money owed; a charge on a closing statement

Question 24

Pro ration

Answer 24

The allocation of expenses, real estate taxes, or rent between buyer and seller in proportion to their actual use of an item.

Question 25

Statutory year

Answer 25

360 days, 30 days per month.

Question 26

Marketable title

Answer 26

Title to real property that is reasonably free of defects and encumbrances, may require an unbroken chain to record a title going back for a statutory number of years.