Transfer of Property

Question 1

abstract of title

Answer 1

a. A summary or digest of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show continuity of ownership and indicate any possible impairments to title.A summary or digest of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show continuity of ownership and indicate any possible impairments to title. (Real Estate Principles). b. A summary or digest of all recorded transfers, conveyances, legal proceedings, and any other facts relied on as evidence of title to show continuity of ownership and indicate any possible impairments to title. (Real Estate Practice). c. A copy of all recorded documents dealing with a property. Attorneys give title opinions based on abstracts. (Real Estate Law).

Question 2

accretion

Answer 2

a. Accession by natural forces, such as alluvion. (Real Estate Principles). b. Accession by natural forces, such as alluvion. (Real Estate Practice). c. The gradual buildup of land by natural causes (generally by action of water). (Real Estate Law). d. Land buildup resulting from the deposit by natural action of sand or soil washed up from a river, lake, or sea. (Fundamentals of Real Estate Appraisal).

Question 3

acknowledgment

Answer 3

a. A formal declaration made before an authorized person by a person who has executed a written instrument, stating that the execution of the instrument is the person’s own act. (Real Estate Principles , Real Estate Practice). b. A notarization on a legal document attesting to the validity of the signatures affixed thereto. (Real Estate Finance). c. A statement made before a notary or court officer that the signing of a document was the signer’s own free act. (Real Estate Law). d. A declaration of an act to give it legal validity; the signature of a person executing a legal document is acknowledged by the signor to the notary or official who verifies the signature. (Fundamentals of Real Estate Appraisal).

Question 4

actual notice

Answer 4

a. Notice that has been expressly given and is known to a party. (Real Estate Law). b. In a real estate transaction, a presumption of knowledge (e.g., tenants in possession of house being sold). (Real Estate Finance).

Question 5

adjusted costs basis

Answer 5

a. Purchase price of property plus cost of specified improvements, less any depreciation deductions taken on the property. (Real Estate Principles) b. The value on the books of a taxpayer, which is original cost plus improvements less depreciation. (Real Estate Economics)

Question 6

ad valorem

Answer 6

a. A Latin phrase meaning “according to value” that is used to describe a tax charged in relation to the value of the property taxed. (Real Estate Principles, Real Estate Practice). b. A Latin term meaning “to value” or “in proportion to the value.” Used to describe taxes where the amount of tax is based on the value of the thing taxed. (Real Estate Economics). c. According to value (Latin); generally used to refer to real estate taxes that are based on assessed property value. (Fundamentals of Real Estate Appraisal).

Question 7

ALTA policy

Answer 7

American Land Title Association title insurance policy; the most comprehensive form.

Question 8

avulsion

Answer 8

a. The tearing or washing away of land along the bank of a body of water by natural forces. (Real Estate Principles, Real Estate Practice). b. The sudden removal of land by action of water, such as a river changing its course. (Real Estate Law). c. A sudden separation of land caused by flooding, earthquake, or other physical disruption; affects the fixity of real estate. (Real Estate Finance).

Question 9

bills of sale

Answer 9

a. Written instrument that conveys title to personal property. (Real Estate Principles, Real Estate Practice). b. The document by which personal property ownership is transferred. (Real Estate Finance).

Question 10

boot

Answer 10

a. Cash received in an exchange of property in addition to the property. (Real Estate Principles). b. Money or property given to make up any difference in value or equity between two properties in an exchange. (Real Estate Economics). c. In an exchange, something of value given in addition to like-kind property, e.g., “this acre and cash to boot.” (Real Estate Finance).

Question 11

capital expenditures

Answer 11

Investments of cash or liability incurred for additions or betterments: usually land, buildings, machinery, and equipment.

Question 12

chain of title

Answer 12

a. The history of the conveyances and encumbrances affecting the present owner’s title to property, as far back as records are available. (Real Estate Principles, Real Estate Practice). b. History of recordings against a specific property. (Real Estate Finance). c. The record of land ownership that establishes the present owner of the property as the grantee of a deed from the previous owner, that owner as the grantee in an earlier deed, et cetera in an unbroken line going back to the first legally recognized document of title. (Fundamentals of Real Estate Appraisal).

Question 13

cloud on title

Answer 13

a. Any claim, condition, or encumbrance that impairs title to real property. (Real Estate Principles, Real Estate Practice). b. An outstanding encumbrance that, if valid, would affect or impair the owner’s property title. (Real Estate Finance).

Question 14

condemnation

Answer 14

a. See eminent domain. (Real Estate Principles, Real Estate Practice). b. See eminent domain. (Real Estate Finance). c. Taking private property for public use through court action, under the right of eminent domain, with compensation to the owner. (Fundamentals of Real Estate Appraisal). d. A judicial or administrative proceeding to exercise the power of eminent domain, through which a government agency takes private property for public use and compensates the owner. (Real Estate Economics).

Question 15

constructive notice

Answer 15

a. In a real estate transaction, matters of public record. (Real Estate Finance). b. Notice imputed by law although not necessarily actually known (recording, as well as possession by another provides constructive notice to a purchaser of other interests). (Real Estate Law).

Question 16

credit

Answer 16

The use or possession of goods and services without immediate payment.

Question 17

deeds

Answer 17

a. Written instrument that, when properly executed and delivered, conveys title to real property from a grantor to a grantee. (Real Estate Principles, Real Estate Practice). b. A document used to transfer ownership of real property. (Real Estate Finance). c. The transfer instrument for real property. (Real Estate Law). d. A written instrument that conveys title to or an interest in real estate when properly executed and delivered.(Fundamentals of Real Estate Appraisal).

Question 18

eminent domain

Answer 18

a. The right of the government to acquire title to property for public use by condemnation; the property owner receives compensation—generally fair market value. See also inverse condemnation. (Real Estate Principles, Real Estate Practice). b. The government’s sovereign power of condemnation over private property for the benefit of the community; an example of police power. (Real Estate Finance). c. The power of the government to take private property for the public good. Consideration must be given for the property taken. (Real Estate Law). d. The right of a federal, state, or local government or public corporation, utility, or service corporation to acquire private property for public use through a court action called condemnation, in which the court determines whether the use is a necessary one and what the compensation to the owner should be. (Fundamentals of Real Estate Appraisal). e. The right of a government or municipal quasi-public body to acquire property for public use through a court action called condemnation, in which the court decides that the use is a public use and determines the compensation to be paid to the owner. (Real Estate Economics).

Question 19

escheat

Answer 19

a. The reverting of property to the state when there are no heirs capable of inheriting. (Real Estate Principles, Real Estate Practice). b. The reversion of property of a decedent who died intestate (without a will) and without heirs to the state or county as provided by state law. (Fundamentals of Real Estate Appraisal). c. A reversion of property to the state when a person dies without a will or heirs. (Real Estate Law).

Question 20

escrow

Answer 20

a. The deposit of instruments and/or funds (with instructions) with a neutral third party to carry out the provisions of an agreement or a contract. (Real Estate Principles, Real Estate Practice). b. The closing of a transaction through a disinterested third person called an escrow agent or escrow holder, who holds funds and/or documents for delivery on the performance of certain conditions. (Fundamentals of Real Estate Appraisal). c. Neutral depositories to carry out the closing function of a real estate transaction. (Real Estate Law). d. A third-party agent that receives, holds, and/or disburses certain funds or documents upon the performance of certain conditions; the closing agent in a real estate transaction. (Real Estate Finance).

Question 21

escrow instructions

Answer 21

a. Written instructions to the escrow holder specifying the terms under which the escrow is to be conducted, including the contract or other requirements that are to be fulfilled as part of the escrow proceeding; change in the escrow instructions requires agreement of both parties to the underlying contract. (Real Estate Principles). b. The instructions given to the escrow agent by the buyer and seller. (Real Estate Law).

Question 22

grant deed

Answer 22

a. A limited warranty deed using a granting clause—the word grant or words to that effect—assuring the grantee that the estate being conveyed is free from encumbrances placed on the property by the present owner (the grantor), and that the grantor has not previously conveyed the property to anyone else. (Real Estate Principles, Real Estate Practice). b. A type of deed in which grantors warrant that they have not previously conveyed the estate being granted to another, have not encumbered the property except as noted in the deed, and will convey to the grantee any title to the property the grantors may later acquire. (Fundamentals of Real Estate Appraisal). c. Most common deed used in California to convey title. The grant deed warrants that the seller has not conveyed title previously and the grantor knows of nothing against the property that has not been disclosed. (Real Estate Law).

Question 23

impounds

Answer 23

Fund set up by a lender to collect and hold monthly payments from the borrower for taxes and hazard insurance until they are due.

Question 24

intestate succession

Answer 24

a. Statutory method of distribution of property that belonged to someone who died intestate (without having made a valid will). (Real Estate Principles, Real Estate Practice) b. The succession of property to the heirs when the deceased died without a will. (Real Estate Law).

Question 25

inverse condemnation

Answer 25

a. A legal action brought by the owner of land when government puts nearby land to a use that diminishes the value of the owner’s property. (Real Estate Principles, Real Estate Practice) b. An owner’s forcing a governmental unit to take property by eminent domain when the government’s actions resulted in the owner’s inability to use the property. (Real Estate Law).

Question 26

marginal rate tax

Answer 26

In a progressive income taxation system, such as we have in the United States, there is a point when the next dollar of income earned might be the one that places the taxpayer into a higher tax bracket. The tax that applies to the next dollar of income earned is the marginal tax.

Question 27

preliminary title report

Answer 27

A report of the condition of title given by a title insurer prior to issuance of a title policy. The preliminary title report does not provide any insurance of title.

Question 28

quiet title action

Answer 28

A court proceeding brought to establish title to real property.

Question 29

quitclaim deed

Answer 29

a. A deed that conveys any interest the grantor may have in the property at the time of the execution of the deed, without any warranty of title or interest. (Real Estate Principles, Real Estate Practice). b. A conveyance by which a grantor’s interest in the land is transferred, without warranties or obligations. ( Fundamentals of Real Estate Appraisal). c. A deed that conveys whatever interest the grantor has without claiming any specific interest. (Real Estate Law).

Question 30

sale-leaseback

Answer 30

a. A transaction in which at the time of sale the seller retains occupancy by concurrently agreeing to lease the property from the purchaser.(Real Estate Principles, Real Estate Practice). b. Financing arrangement whereby an investor purchases real estate owned and used by a business corporation then leases the property back to the business; may include a buyback option. (Real Estate Finance).

Question 31

short rate

Answer 31

Increased premium charged by insurance company on early cancellation of policy to compensate insurer for the fact that the original rate was calculated on the full term of the policy.

Question 32

standard policy

Answer 32

Policy of title insurance that protects against fraud or other challenges to the owner’s title that would not be discovered by an examination of the property or title records.

Question 33

successor’s liability

Answer 33

Liability of business purchaser for unpaid sales tax of prior owner.

Question 34

tax deferred exchange

Answer 34

Transfer of property held for productive use in a trade or business or for investment in exchange for like-kind property in a transaction that meets the requirements of Section 1031 of the Internal Revenue Code.

Question 35

tax shelter

Answer 35

In real estate, allowable investment losses that can be used to reduce income tax liability.

Question 36

title insurance

Answer 36

a. Insurance to protect a real property owner or lender up to a specified amount against certain types of loss affecting title or marketability. (Real Estate Principles, Real Estate Practice). b. Required to protect lender’s position. (Real Estate Finance). c. A policy that insures the marketability of title. The insurance contract indemnifies the insured against losses not excluded by the policy, up to the policy amount. (Real Estate Law).