Transfer of Title

Question 1

A judgment against a seller has been recorded on the public record. A buyer is interested in purchasing the seller's property but does not know about the judgment. The buyer is said to have:
A  »  actual notice
   B  »  preventive notice
   C  »  corrective notice
   D  »  constructive notice

Answer 1

D » constructive notice

Question 2

With the exception of real estate taxes, liens generally are repaid at a foreclosure sale based on the:
A » dollar amount of the lien
B » actual need of the creditors involved
C » recording date of the lien
D » original date of the agreement that led to the lien being filed

Answer 2

C » recording date of the lien

Question 3

In order for a deed to be valid, there must be a(n):
A » notarized signature of the seller
B » legal or complete description of the property
C » signature of the grantor and grantee
D » actual price paid for the property documented on the deed itself

Answer 3

B » legal or complete description of the property

Question 4

A title insurance policy lists:
A » all recorded defects against the title
B » all owners
C » any transaction that affected the title
D » any mortgage ever against the property

Answer 4

A » all recorded defects against the title

Question 5

What does a standard title insurance policy insure against?
A » Water rights
B » Questions of survey
C » Adverse possession claims
D » Any recorded title defects or liens

Answer 5

D » Any recorded title defects or liens

Note: Water rights, questions of survey and adverse possession claims are normally covered under an extended title policy.

Question 6

What does a standard title insurance policy cover?
A » Questions of survey
B » Rights of parties in possession
C » Unrecorded liens
D » Recorded title defects and liens

Answer 6

D » Recorded title defects and liens

Note: An extended policy may cover questions of survey, rights of parties in possession and unrecorded liens.

Question 7

What document would be a condensed history of all records that affect the title?
A  »  A survey
   B  »  An abstract
   C  »  An affidavit of title
   D  »  A chain of title

Answer 7

B » An abstract

Note: A chain of title is just a list of the owners.

Question 8

An assumed loan in a real estate transaction would appear on the closing statement as a:
A » credit to the buyer only
B » debit to the buyer, credit to the seller
C » debit to the seller, credit to the buyer
D » neither a debit nor credit to the seller

Answer 8

C » debit to the seller, credit to the buyer

Note: Debit person owes the money. Credit person receives the money.

Question 9

All of the closing documents should be prepared in accordance with the terms of the:
A  »  listing contract
   B  »  sales contract
   C  »  right of first refusal contract
   D  »  title policy

Answer 9

B » sales contract

Question 10

How would a loan origination fee normally show up on a closing statement?
A » Debit buyer - credit seller
B » Debit seller - credit buyer
C » Debit seller - no entry to buyer
D » Debit buyer - no entry to seller

Answer 10

D » Debit buyer - no entry to seller

Question 11

A purchase agreement was accepted with earnest money given as part of the contract. The broker deposited the earnest money in the broker’s escrow account. How would the earnest money appear on the closing statement?
A » Debit buyer, no entry for seller
B » Credit buyer, no entry for seller
C » Debit buyer and credit seller
D » Credit seller, no entry for the buyer

Answer 11

C » Debit buyer and credit seller

Question 12

Why should a listing agent be aware of all the ownership documents that will be used in a real estate transaction?
A » So the agent can know which documents the seller and buyer will have to sign to complete the transaction
B » So the agent can give both parties advice on vesting
C » So the agent can give the seller capital gains advice
D » So the agent can give both parties inheritance advice

Answer 12

A » So the agent can know which documents the seller and buyer will have to sign to complete the transaction

Note: The listing agent is responsible for closing

Question 13

How would prepaid taxes, with a midyear closing, show up on a closing statement?
A  »  Debit buyer, credit seller
   B  »  Debit seller, credit buyer
   C  »  Credit seller only
   D  »  Debit buyer only

Answer 13

A » Debit buyer, credit seller

Note: Since the seller has pre-paid taxes for the year and we have a mid-year closing, the buyer will owe the seller for the buyer`s fair share - hence we debit the buyer and credit the seller.

Question 14

Which statement would be true regarding a deed?
A » A deed must be signed by the grantor and grantee
B » The purpose of a deed is to convey title
C » The grantee must be of legal age
D » Acknowledgment and recording of a deed are required

Answer 14

B » The purpose of a deed is to convey title

Question 15

Which of the following deeds would give the seller the LEAST amount of liability?
A  »  Bargain and sale
   B  »  Quitclaim
   C  »  Special warranty
   D  »  General warranty

Answer 15

B » Quitclaim