Real Estate Course 3 Lessons 9-12

RESPA was first passed in...?

1974

Which of the following gives the lender the power to declare all sums owed to the lender immediately due and payable upon the sale of the property...?

Acceleration clause

The process of gradual growth or increase over a period of time from naturally occurring events, resulting in additional layers of matter is known as...?

Accretion

A formal declaration made before an authorized person by a person who has executed an instrument stating that the execution was his or her free act, is referred to as a/an...?

Acknowledgement

A method of acquiring title to real property by conforming to statutory requirements is known as...?

Adverse possession

A neutral third party who listens to each party's position and makes a final binding decision is known as...?

Arbitration

If two parties cannot resolve their dispute through mediation, they will most likely go to...?

Arbitration

Which of the following forms of ADR are closest to litigation...?

Arbitration

Which of the following is a benefit of choosing arbitration over litigation...?

Arbitration is less expensive Arbitration leads to a quicker resolution Arbitration utilizes an expert decision maker D) All of the above

An arbitrator's final decision is called a/an...?

Award

The acronym BATNA stands for...?

Best Alternative to a Negotiated Agreement

In a closing statement, money to be received or credit given for money or an obligation given is referred to as a...?

Credit

In a closing statement, an expense or money received against a credit is referred to as a...?

Debit

A written instrument, which when properly executed and delivered, conveys title to real property from one person to another is referred to as a/an...?

Deed

Voluntary alienation is primarily done through a...?

Deed

There are two types of title insurance, standard coverage and...?

Extended coverage

RESPA is a State law...?

FALSE

The right of any political body to enact laws and enforce them, for the order, safety, health, morals and general welfare of the public is known as...?

Police power

The charge payable to a lender by a borrower under the terms of the loan agreement if the borrower pays off the outstanding principal balance of the loan prior to its maturity is known as a...?

Prepayment penalty

The official proving of a will is referred to as...?

Probate

Which of the following items gets prorated between the buyer and seller...?

Property taxes

Which of the following documents shows all of the buyers' and sellers' closing expenses...?

Settlement statement

A deed in which the grantor warrants or guarantees the title only against defects arising during grantor's ownership of the property and not against defects existing before the time of grantor's ownership is referred to as a...?

Special warranty deed

Witnessed will must be notarized...?

TRUE

Having made a valid will before one dies is referred to as...?

Testate

One who makes a will is referred to as the...?

Testator

Who is typically responsible for calculating the prorations at closing...?

The escrow agent

Which of the following authorizes the escrow agent to carry out the escrow instructions...?

The escrow agreement

Which of the following typically serves as the escrow instructions in a residential transaction...?

The purchase contract

Transfer of title freely by the owner is known as...?

Voluntary alienation

A written, legal declaration of a person expressing his or her desires for the disposition of that person's property after his or her death is referred to as a...?

Will

Which of the following is required for a valid escrow...?

A legally binding contract A valid deed The escrow instructions must be signed by all parties D) All of the above

A mortgage loan which bears interest at a rate subject to change during the term of the loan, predetermined or otherwise, is known as a/an...?

Adjustable rate mortgage

The acronym ADR stands for...?

Alternative Dispute Resolution

The resolution of disputes by various means including, but not limited to negotiation, mediation, and arbitration is referred to as...?

Alternative dispute resolution

Escrow terminates after which of the following occurs...?

Both the deed and funds are transferred

Title which is not encumbered or burdened with defects is known as...?

Clear title

Title that is encumbered or burdened with defects is known as...?

Clouded title

Which of the following is the largest closing expense for the seller...?

Commissions

The taking of private property for public use, with fair compensation to the owner, is known as...?

Condemnation

One who receives a gift of real property by will is referred to as a...?

Devisee

One who disposes of real property by will is referred to as a...?

Devisor

The right of the government to acquire property for necessary public or quasi-public use by condition is known as...?

Eminent domain

The reversion of the State of property in event the owner thereof abandons it or dies, without leaving a will and has no distributes to whom the property may pass by lawful descent, is known as...?

Escheat

This refers to any transaction wherein one person, for the purpose of affecting the sale of real property to another person, delivers any written instruments, money, or evidence of title to the property to a third person, to be held by such third person until the happening of a specified event...?

Escrow

A person named in a will to carry out its provisions as to the disposition of the estate of a deceased person is referred to as a...?

Executor

A broker is never allowed to serve as an escrow agent in a transaction...?

FALSE

A decision made by a mediator is final and binding...?

FALSE

An arbitrator does not have the authority to subpoena a witness...?

FALSE

An escrow account does not have an expiration date...?

FALSE

Arbitration proceedings are public record...?

FALSE

If two disputing parties go to non-binding arbitration, the decision of the arbitrator is final...?

FALSE

Rents collected on an investment property are not prorated at closing...?

FALSE

The buyer and seller are required to equally pay for the escrow...?

FALSE

The escrow account for a residential transaction is typically opened by the buyer's agent...?

FALSE

This is a procedure whereby property pledged for a debt is sold to pay the debt in event of default in payments or terms...?

Foreclosure

Which of the following is an example of involuntary alienation...?

Foreclosure Adverse possession Condemnation D) All of the above

A real estate agent may have their license suspended or revoked for which of the following actions...?

Fraud Misrepresentation Commingling D) All of the above

Escrow may be handled by which of the following...?

Insurance companies Title companies Banks D) All of the above

Which of the following types of negotiation aims for a win/win outcome...?

Integrative negotiation

A person who dies having made no will is said to have died...?

Intestate

Which of the following is not considered an ADR...?

Litigation

Which of the following is the largest closing expense for the buyer...?

Loan origination fees

Court order arbitration is also known as...?

Mandated arbitration

Title which a reasonable purchaser, informed as to the facts and their legal importance and acting with reasonable care, would be willing and ought to accept is known as...?

Marketable title

The date by which a loan is to be paid in full is referred to as the...?

Maturity date

A form of alternative dispute resolution in which the parties to a lawsuit meet with a neutral third-party in an effort to settle the case is known as...?

Mediation

If two parties cannot resolve their dispute through negotiation, it will most likely go to...?

Mediation

Which of the following helps facilitate a voluntary agreement between two disputing parties...?

Mediator

Which of the following is an example of a non-adjudicative alternative...?

Negotiation

Which of the following is the least expensive form of ADR...?

Negotiation

The division of certain settlement costs between a buyer and seller is referred to as...?

Proration

A deed to relinquish any interest in property which the grantor may have, without any warranty of title or interest, is known as a...?

Quitclaim deed

An escrow agent who buys gifts for a real estate broker may be in violation of what Act...?

RESPA

Which of the following prohibits kickbacks and referral fees that unnecessarily increase the costs of obtaining a loan...?

RESPA

Which of the following is used by older people who need additional income and want to take advantage of the equity in their homes...?

Reverse annuity mortgage

An agreement by the holder of an encumbrance against real property to permit that claim to take an inferior position to other encumbrances against the property is known as a/an...?

Subordination agreement

A broker is entitled to a commission if they find a ready, willing and able buyer...?

T (True)

A decision through arbitration is typically final and binding...?

TRUE

A distributive negotiation typically leads to a win/lose outcome for the parties involved...?

TRUE

A due on sale clause is also known as an alienation clause...?

TRUE

A judge in California may require two parties to go to mediation or arbitration prior to going to court...?

TRUE

A mediator must serve as a neutral party during the mediation...?

TRUE

A mediator often looks for a compromise between the disputing parties...?

TRUE

A promissory note serves as evidence of debt...?

TRUE

All deeds must be in writing...?

TRUE

An escrow account must be extended by mutual agreement between the parties...?

TRUE

Arbitration is a quicker process than litigation...?

TRUE

Arbitration is an example of an adjudicative alternative...?

TRUE

Binding arbitration leads to a final decision by the arbitrator...?

TRUE

Escrow may be terminated by mutual agreement...?

TRUE

Homeowners insurance typically gets prorated between the buyer and seller at closing...?

TRUE

In Northern California, title and escrow are typically handled within the same company...?

TRUE

Prorations are documented on the closing settlement statement...?

TRUE

Real estate contracts encourage mediation over litigation...?

TRUE

Stated income is no longer used by lenders when qualifying a borrower for a loan...?

TRUE

The listing agent must sign the purchase contract, in addition to the buyer and seller...?

TRUE

Insurance against loss or damage resulting from defects or failure of title to a given parcel of real estate is known as...?

Title Insurance

A deed used to convey real property which contains warranties of title and quiet possession, and the grantor thus agrees to defend the premises against the unlawful claims of third persons, is referred to as a...?

Warranty Deed