transfer of title #1 Flashcards
Title insurance
protects buyers and lenders agains any financial loss that might be incurred beacause of title defects discoverd after closing
Abstract of title
is a summary of thee title history.e
chain of title.
history of ownership which shows conveyances and encumbrances. the chain beguins with the current owner and works backwards
markatable titile
is a clean title has no deffects or clouds to which a reasonable buyer would object. it is not necesseraly a perfect title.
insurable title
its one agains there may be known deffects such as easment, but the title compays have notify the parties of the defect and has a greed to insure against it
a clound on the title (aka title defect)
is any encumbrances, such as a lien or inheritance claim, that prevent the seller from having a clear, marketable title.
mechanics lien
A lien created by statute for the purpose of securing priority of payment for the price or value of work performed and materials furnished in construction or repair of improvements to land, and which attaches to the land as well as the improvements.
property tax liens
A tax lien is a legal claim against the property of an individual or business that fails to pay taxes owed to the government
covenant of seisin
the grantor holds title and possession of the property. he has legal Rights that he owns it. The grantor’s warrants that there are no encumbrances and is free of liens
convenient of right to convey
the grantor has the right to convey both titles to and possession of the property
convenant agains encombranses
the grantors assure the grantee that there are no encumbrances against the title other than those identified in public records or the deed itself
the real property owner is called…?
grantor
the new owner of a house is called …?
grantee
convenient of further assurances
the grantor promises to take whatever actions necessary within his power to correct any title defects
convenient of warranty or warranty forever
its the most important convenant, the grantor promises to protect and defend the title against lawful claims made by others.
general warranty
seller warrants or guarantees the title against defects that may have arisen during
the entire life of the property
special warranty
seller only warrants or guarantees the title against defects that may have arisen during the period of ownership of the property.
QUITCLAIM deed
transfers the title of a property from one person to another, with little to no buyer protection. The grantor, the person giving away the property, gives their current deed to the grantee, the person receiving the property. The title is transferred without any amendments or additions.
deed releasing a person’s interest with no warranties. Typically in non-sale situations
special warranty deed
offers protection to the buyer through the seller’s guarantee that the title has been free and clear of encumbrances during their ownership of the property.
bargain a sale deed
indicates that only the seller of a property holds the title and has the right to transfer ownership. This type of deed offers no guarantees for the buyer against liens or other claims to the property, so the buyer could be responsible for these issues if they turn up.
habendum clause
states the property is transferred without restrictions. This means the new owner has absolute ownership of the property upon satisfying their conditions (usual payment in full) and has the right to sell or bequeath the property to an heir and so on.
acknowledgment
means that the party signing the deed indicates that the signature is their own and they signed voluntarily
constructive notice
Signifies that a person should have known as a reasonable person would have.
actual notice
is when a person actually knows about the existence of a fact.
real estate settlement procedures act (RESPA)
ensures that buyers receive an estimate of closing cost at least 3 business days before closing
the closing disclosure (CD)
is a five-page form that provides final details about the mortgage loan you have selected. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage (closing costs). lenders must provide this at least 3 days before closing
Loan Estimate (LE)
a three-page form that you receive after applying for a mortgage. The Loan Estimate tells you important details about the loan you have requested. The lender must provide you a Loan Estimate within three business days of receiving your application
Prorations
share expenses that either party own at closing are prorated ( divided between) the parties depending on when closing occurs
foreclosure
is a property being sold by the lender due to buyers default
debit is a …?
the charge that a party must pay
credit is a …?
a charge that a party has already paid, an amount that will be reimbursed, or an amount that is promised
property taxes are calculated based on…?
properties assessed value
the first course of action for disputed home warranty claims is typical…?
meditation
if it is unsuccessful the course of action for disputed homes to go through meditation, disputed claims will go to…..?
arbitration
short sale
is a property that the seller, with the lender’s permission, is selling for less than the seller owes against the property
acceleration clause
maybe in effect once a borrower defaults. this clause allows the lender to make the entire loan amount due immediately.
real estate owned (REO)
is the term for a property owned by a lender because it failed to sell in a foreclosure auction after the borrower defaulted on their mortgage
accrued expenses
items that the seller owes on the closing day but that will eventually be paid by the buyer and appears in the seller debit column and the buyer’s credit column
prepaid expenses
are those already paid by the seller but that the buyer should pay a portion of .these items are credited to the seller and debited to the buyer.
Convenient of right to convey
Grantor has the title to convey
Convenient against encumbrances
Title has no encumbrances excepted for those specified
Survey
Shows boundaries and proves no encroachment exist
Bargain and sale deed
Implied good title but no warranties to protect the grantee
A legal description can contain
3 primary types of legal description are
Metes and bounds, lot and block and rectangular government survey system
(description of real estate that identifies its precise location, boundaries and any easements for the purpose of a legal transaction, such as a transfer of ownership
A testator
Person who drafts a will
Recording provides
Constructive notice
Schedule of exceptions
The list of items a title insurance policy does not cover
Tax relief act of 1997
Allows buyers to use retirement funds for closing costs in certain circumstances
Tax relief program are available for
First time Maryland home buyers
What does property taxes pay for?
They pay for schools, police, roadways basically everything that keeps a town running
For incoming producing residential property, the investor would use the _____ years depreciation schedule
27.5
For incoming producing COMERSIAL property, the investor would use the ____ year depreciation schedule
39 years
What forms the boundaries of a township?
Township lines and range lines
What type of value is of interest to taxing authorities?
Assessed value
What are the two types of physical depreciation?
Curable nad incurable
Local authorities lack police power over which of the following?
Federal government construction projects
When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?
The lender hold the mortgage and the note
The ____ lients take priority over all other liens
HOA
Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 states that its purpose, in part, is to require that real estate appraisals used in connection with federally related transactions be performed ______.
In writing and in accordance with the uniform standard
a valuation is another term for a _______ appraisal
Formal appraisal
Mortgage value
The price of lender believes a property will bring at a foreclosure sale
Insured value
The cost to replace a destroyed building
Investment value
Expected rate of return on an investment property
Value in use
What a property’s Worth to the person using it
Assessed value
What the local taxing authority thinks it’s worth
Market value ( also called fair market value)
The price at wish a buyer and seller will agree to under usual market conditions
Indirect cost
Fees and administrative cost
Direct cost
Labor and materials
Value
What the property is worth
Price
What the seller accepts and the buyer pays
Cost
What will take to recreate the property
Demand
How attractive and move in ready is the property, are there more buyers and sellers or more sellers than buyers
Utility
Low utility = lower demand = downward pressure on value, and vice versa
Scarcity
Related to the man, and reflects the supply or lack of supply of property
Transferability
How easily a property can be transferred to another, if a property can be easily transferred, it’s value falls
The replacement cost
Reflects the cost to build a functionally equivalent improvement
The reproduction cost
Is the cost to build an exact replica of the subject, with the same materials and deficiencies
Physical depreciation
Is a loss and value caused by deterioration and physical condition, may be curable or incurable
Wear and tear
Functional obsolescence
Is a loss and value caused by defects in the sign, such as poor floor plan or A typical or incompetent sizes/types of rooms
External depreciation or economic obsolescence
Is it loss and value caused by an undesirable or hazardous influence of sight
A CMA comparative market analysis determines the ____
Appropriate listing price range
If a listing reads “cash sell only” it’s likely the home____
Can’t be financed because it needs major repairs
Appraiser Independence requirements (AIR)
to insure that no person applies any pressure on the appraiser to report a value other than the fair market value opinion developed and reported by the appraiser.
The uniform standard of professional appraiser practice (USPAP) use 4 steps which are ….
- State the problem
- Identified data needed
- gather and analyze data
- Determine highest and best use
Curable depreciation
Refers to an item of physical deterioration or functional options where the cost to cure the item is less than or the same as the anticipated increase in the properties value after the item is cured
Is the cost to correct the condition or defect is less than the amount of value restore
The reproduction cost
Approach determines the cost to build an exact replica of the property with the same materials and deficiencies
The replacement value
Approach bases value on the cost to build a functionally equivalent property
Incurable depreciation
Includes items not practical to correct
Capitalization rate or cap rate
It’s an annual rate of return from an income producing property. Used by a pricers to estimate value of rent generating properties.
Bracketing
Refers to selecting properties with features that are inferior, similar, and superior to the subject property to determine a probable range of values for property
The principal of regression
It’s a decline in value due to the decline in value of neighboring properties
The principal substitution
A reasonable person will not pay more for a property if a comparable one can be had for less
The principal of assemblage
The process of combing the parcels
The principle of progression
The increase in value from increased surrounding property values
The principle of anticipation
isa method used by an appraiser where the appraiser uses the income approach to determine the value of a property. The appraiser will estimate the present worth of future benefits for the property.
Real estate licenses perform comparative Market analysis CMAs to help client ____
Make price decision
A miner can transfer a title but, such a transfer can only be voidable by….
The minor
