Real Estate - Prep Edge 10 & 11

John and Amy purchased a builder's home warranty when they bought their home. They have a problem with the footers that could lead to serious problems with their home. How many years does a builder's home warranty typically cover this type of damage?

10 A footer issue is a foundation issue, which means a structural problem. Structural issues are typically covered for 10 years in builder's warranties.

John and Amy purchased a builder's home warranty when they bought their home. They have found structural damage that could be a detriment to their home. On average, how many years does a home warranty cover structural damage?

10 years

What's the minimum number of business days prior to closing that lenders have to provide borrowers with the Closing Disclosure form?

3

Related to title insurance, what is "subrogation"?

A covered party grants permission to the title company to pursue the party who caused a claim or loss.

What is the best description of a deed?

A document to transfer ownership/interest in real estate

Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place? An affidavit from the resident Approval from the current owner A public record of tenancy A tenant add-on insurance policy

A public record of tenancy

Which of the following is a way in which property taxes could impact your clients? A sale in the area may prompt a reassessment, impacting new buyers. Neighbors may be jealous about favorable tax rates. Tax abatements could harm buyers financially. Tax refunds are not possible if property tax deductions are taken.

A sale in the area may prompt a reassessment, impacting new buyers.

How might the lengthy purchase process for a short sale or foreclosure impact a buyer's financing?

An existing interest rate lock may expire before the transaction is ready to close.

Why is a foreclosure more likely to have title issues than a non-foreclosure?

Borrowers who can't afford loan payments may have taken out other loans against the property. Borrowers who are unable to pay the mortgage may also have been unable to make property tax and secondary mortgage payments.

Connor was the seller and Duke was the buyer when Connor sold his property. Who conveyed the title?

Connor, as grantor

When the Browns first purchased their home, the area was primarily agricultural. But over the years, as more homes were built, the area has undergone some major changes. What was once a quiet neighborhood is now on the corner of a major busy intersection with lots of traffic, noise, and light pollution throughout the night. What type of depreciation has the Browns' home undergone?

External depreciation External depreciation (or economic obsolescence) is a loss in value caused by an undesirable or hazardous influence offsite.

Stu is buying Freddie's property. What must occur for the transfer of title to take place? Freddie and Stu must sign the deed. Freddie must intend to convey the property to Stu. Stu must convey the deed. Stu must sign the deed.

Freddie must intend to convey the property to Stu.

When appraisers look past how a property is being used to determine a more optimal function, what are they determining?

Highest and Best Use Highest and best use looks past the current use (if there is one) to determine if there is another use that provides a higher value.

Kevin's lender just ordered an appraisal on the five-unit apartment building he's contracted to purchase. He's especially interested in hearing about the estimated rate of return the property could pull. What type of value is he interested in?

Investment value An investment value can tell a consumer about the expected rate of return for a property.

Which of these statements about title marketability standards is correct? Insurable title carries a higher standard of assurance than marketable title. Marketable title can only be achieved if there are no title defects or broken links in the title chain. Marketable title carries a higher standard of assurance than insurable title. Marketable title guarantees that there are no known or unknown title defects.

Marketable title carries a higher standard of assurance than insurable title.

Most often, what's the first course of action for disputed home warranty claims?

Mediation

Murphey's farm has been in his family for generations, since his great-great-great-grandfather received it as a land grant in 1862. What's the beginning point of this property's chain of title?

Murphey, the current owner Chain of title always begins with the current owner and goes back in time, so the chain of title on Murphey's farm begins with Murphey, the current owner.

Joshua just got a copy of the preliminary report from his title company and is surprised to see that there's a mechanic's lien against his property. What does he have to do to clear this lien?

Pay the bill that resulted in the mechanic's lien.

Which document is used to give a buyer an overview of the title history and information about what is or isn't covered in an insurance policy?

Preliminary report Title insurance companies issue a preliminary report with the current title history and any liens or encumbrances. It outlines what the insurance company will or won't cover on its forthcoming insurance policy if the title is found to be acceptable.

Which of the following is a characteristic of an abstract of title? Provides an attorney's opinion of the title Provides information about the payoff amount Provides information about the property location Releases an existing lien

Provides an attorney's opinion of the title An abstract of title documents the chain of title research and provides an attorney's opinion of the state of the title.

Kristin has been unable to make her mortgage payments. Her property went to auction, but the lender didn't accept the high bid. What stage of the foreclosure process is this property now in?

Real Estate owned

Two essential elements of a deed are the ______.

Signature of the grantor and the habendum clause

John and Michelle received a general warranty deed when they purchased their house from Ted. A couple of months after they moved in, their neighbor, Bryant, drove his four-wheeler across their property to access the lake front. John discovered that Ted and Bryant agreed to an easement over Ted's property several years earlier. Which general warranty deed covenant does this represent?

The covenant against encumbrances

Which covenant requires the grantor to execute any necessary legal documents (within his power) necessary to fix title defects discovered after closing?

The covenant of further assurances

What does an REO on a lender's assets mean?

The lender owns real estate after a foreclosure sale.

Your buyer is worried that after she closes on her property, she'll find out someone else has a claim to its ownership. What can reassure her?

Title insurance

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form? To detail all costs Jennings will owe at closing To disclose the distribution of commissions that will occur at closing To estimate closing costs To estimate the seller's net proceeds

To detail all costs Jennings will owe at closing

Lawrence is a buyer closing on a home purchase for which he's obtaining financing. He receives a Loan Estimate from his lender. What's the purpose of this document?

To detail the estimated closing costs for Lawrence's loan

What's the purpose of a chain of title?

To establish history of past ownership

Your client is purchasing a single-family home using a VA-guaranteed loan. The sales price is $150,000. Is an appraisal by a certified appraiser required?

Yes, and since the purchase is being financed with a VA-guaranteed loan, the appraiser must be VA certified. A VA loan requires an appraisal by a VA-certified appraiser, who must also be licensed or certified by the state.

Aldrich is conveying marketable title to a property buyer. Should he also furnish a title insurance policy?

Yes, because title defects not revealed in a title search can crop up even with marketable title.

When you're representing a client in a real estate transaction, what's your responsibility regarding tax advice?

You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.

Steve is preparing a market analysis for the Jones's and has selected three comparables. What's the maximum number of adjustments Steve should make to the Jones's property?

Zero Only the comparable sales price is adjusted. If it is inferior, adjust upward. If it's superior, adjust downward.

The seller and ______ must approve a short sale.

the seller's lender

"I don't understand why I'd want a home warranty," says your buyer, Ted. "The home inspection said there weren't any problems." How should you respond to Ted?

"It's absolutely your decision. But the inspector can't predict problems that haven't happened yet." The home inspection is a snapshot in time. Home warranties are a type of insurance which lasts for a given period of time, so they cover conditions that didn't exist at the time of the inspection.

Juan purchased a property for $420,000 and financed $336,000 of it. The assessed value of the property is $387,000. The property appraisal came in at $432,000. Which of these amounts is used in calculating the property tax?

$387,000

How would you calculate the transfer tax if it's $.35 per $1,000 of the sales price ($400,000)?

(400,000 ÷ 1,000) x .35

Lynette purchased a property under a bargain and sale deed. Which statement best describes the covenants Lynette's deed provides? A bargain and sale deed does not come with any covenants of warranty. A bargain and sale deed may come with or without covenants of warranty. A bargain and sale deed provides the same covenants as a general warranty deed. The bargain and sale deed includes all covenants except the covenant of warranty.

A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties.

Lamar closes on his new home next week. It's a 37-year-old split level, so his agent asked if he's interested in purchasing a home warranty. "Why would I need a warranty?" he wondered. "Didn't the home inspection identify all of the issues?" What's the agent's best response to Lamar's question? A home warranty covers things the inspection didn't address, like appliances, as well as structural issues that occur within the first year. Buying a home warranty almost guarantees you won't have any issues! If you purchase a home warranty and something breaks, you can sue the seller. The inspection is only as good as the inspector, and there is no guarantee that the inspector found all potential issues.

A home warranty covers things the inspection didn't address, like appliances, as well as structural issues that occur within the first year.

Jerrica is set to close on the property she's buying on Friday. Because of other delays in the closing date, Jerrica's interest rate as of the day of closing will increase by 1/4 of a percent. What impact does this have on the closing?

A new Closing Disclosure must be issued at least three days before the closing date.

Roy purchased a newly constructed home with a warranty that covers major structural defects for 10 years, and systems (HVAC, electrical, plumbing) for three years. After living in the home a few months, Roy notices the following defects and submits them all. Which one will likely be covered by the warranty? A baseboard with paint drips A light fixture that doesn't match other light fixtures in the home A split ceiling joist in the basement A tear in the carpet

A split ceiling joist in the basement

Which of these is excluded on a title insurance policy on Martha's property because of the schedule of exceptions? A mechanic's lien recorded by A1 Siding and Windows A verbal lease agreement Martha has with her neighbor who leases Martha's garage Last year's unpaid property taxes The current year's unpaid property taxes

A verbal lease agreement Martha has with her neighbor who leases Martha's garage The title policy doesn't exclude property taxes (assuming they're properly recorded), though the taxes must be paid before the policy is issued. The verbal lease agreement is excluded since it's not shown in public records.

Stu is buying Freddie's property. What must occur for the transfer of title to take place? A. Freddie must deliver the deed to Stu. B. Stu must sign the deed. C. Stu must convey the deed. D. Freddie and Stu must sign the deed.

A. Freddie must deliver the deed to Stu. Property is conveyed when the grantor delivers a properly executed deed to the grantee. Freddie must sign the deed and deliver it to Stu.

Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spring, she started seeing traffic on the path to her dock and discovered that the previous owner had always allowed the locals to use his path to get to the lake. What covenant may have been breached?

Against encumbrances The previous property owner failed to disclose to Li Meng that there was an easement (which is an encumbrance) across the property.

Which of these situations might be addressed by limitations or a subject to clause in the deed Jane is using to convey property to Moira? An easement runs across the property, permitting Jane's neighbors to access the neighborhood boat dock. Jane has given Moira 24 hours to accept delivery of the deed. Jane wants to limit her liability for any title defects that may occur. Moira's acceptance of the deed is subject to receiving her financing

An easement runs across the property, permitting Jane's neighbors to access the neighborhood boat dock. A great example of deed limitations is the restrictions that may be placed on a property by an owners association. A subject to clause may refer to an easement held by a neighboring property to get to a road or water source.

Through the divorce process, Gail was granted ownership of the couple's vacation timeshare. Gail is ready to sell the timeshare but discovers that her ex-husband Daniel's name is still on the deed, creating a cloud on the title. What should Gail do?

Ask Daniel to sign a quitclaim deed to release his ownership share.

Margot and Steve owned several rental properties at the time of their divorce. The divorce decree gave ownership to Margot in return for a cash payment by Steve. Fast forward six years, and Margot is ready to sell the properties. She soon discovers, though, that Steve's name is still on the title. What's her best course of action?

Ask Steve to generate quit-claim deeds on the properties.

How might the lengthy purchase process for a short sale or foreclosure impact a buyer's financing? A. Lenders won't lock in an interest rate because of the distressed nature of the sale. B. An existing interest rate lock may expire before the transaction is ready to close. C. The lender may not be willing to finance a short sale or foreclosure. D. The purchase price may increase over time.

B. An existing interest rate lock may expire before the transaction is ready to close. Interest rate locks are only viable for a short period of time. The transaction time to close a distressed property sale may be longer than the interest rate lock period, forcing the buyer to lock the rate again and potentially increase loan fees.

A closing agent has several duties to perform before the closing, as well as several after. Which of the following is a task the closing agent must complete after the closing? A. Perform a title search. B. Arrange payoff of the existing loan. C. Prepare a closing statement. D. Obtain title insurance.

B. Arrange payoff of the existing loan. The title search, closing statement preparation, and title insurance purchase must all be completed prior to closing. After closing, the closing agent makes arrangements to pay off the seller's existing loan with the proceeds from the buyer. "We're recorded and funded" is music to a licensee's ears.

What information would the Loan Estimate NOT provide to buyers under the TRID-required disclosures law? A. Estimated closing costs B. Final closing costs C. Loan fees D. Projected payment schedule

B. Final closing costs Lenders provide the Loan Estimate (LE) within three days of the borrower's application. The LE includes an estimate of the borrower's mortgage-related costs.

Which of these statements accurately represents one of the required elements in a deed? A. The grantee must sign the deed and provide consideration. B. The deed language includes an act of conveyance and may include a habendum clause. C. The grantee must be legally competent. D. The grantee must be of legal age.

B. The deed language includes an act of conveyance and may include a habendum clause. The grantor is the seller; the grantee is the buyer. The grantor must sign the deed, be of legal capacity, and be positively identified. The deed must include an act of conveyance and may include a habendum clause.

Which option is true if a deed is not recorded after closing? A. The title never changes hands to the buyer. B. The legal ownership of the property can be challenged. C. The entire closing is void. D. The buyer must pay a fine to the seller.

B. The legal ownership of the property can be challenged. If a deed isn't recorded after closing, legal ownership of the property can be challenged. Recording isn't required, but it's difficult for a property owner to prove ownership without public recordation of the deed.

Tracy is looking in the MLS and sees a listing marked "REO." Which of these statements regarding REOs is correct? An REO property is one that the lender is trying to help the owner sell before beginning foreclosure proceedings. Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions. REOs are properties that the lender has given permission to sell for less than the loan amount. REOs refer to investment properties a bank owns.

Banks acquire REOs through failed foreclosure sales or deed in lieu of foreclosure actions.

Robin, the appraiser of the Birkenstock's property, wants to make sure her computations of adjustments on their home are valid. She's using the sales comparison approach, so she'll prioritize the ______ as the highest priority. A. Location B. Market conditions C. Conditions of sale D. Physical characteristics

C. Conditions of sale The elements considered in the sales comparison approach are applied in a specific order: financing terms and cash equivalency, conditions of sale, market conditions at the time of contract and closing, location, and physical characteristics.

Margo's accountant tells her that she's eligible to deduct the property taxes she paid on her residence. Select the statement about this deduction that's true. A. Margo has to be an investor to be eligible to deduct property taxes. B. Margo can only deduct the property taxes charged back to her at closing. C. Margo is in the ownership stage of the property ownership lifecycle. D. Margo is in the reversion stage of the property ownership lifecycle.

C. Margo is in the ownership stage of the property ownership lifecycle. In general, both investors and homeowners may be eligible to deduct annual property taxes. Investors deduct them as a business expense; homeowners deduct them if they are able to itemize deductions.

Marsha's title insurance policy was issued on closing day, which was June 18. The policy lists standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions? A. Smith and Martin Building and Rehab files a mechanic's lien on June 18. B. Karen has an unrecorded lease on the property. C. Marsha's second mortgage on the property, which was properly recorded in January. D. The local cable company's unrecorded easement through the property for underground wiring. Marsha disclosed this to the title company

C. Marsha's second mortgage on the property, which was properly recorded in January. Title insurance typically covers events or claims filed on the public record before the title insurance policy's effective date but excludes disclosed and undisclosed easements.

Jennings has received a Closing Disclosure from his lender. What's the purpose of this form? A. To estimate closing costs B. To estimate the seller's net proceeds C. To detail the costs Jennings will owe at closing D. To disclose the distribution of commissions that will occur at closing

C. To detail the costs Jennings will owe at closing The Closing Disclosure (aka settlement statement) is provided at least three days before closing and details the buyer's closing costs as well as other loan terms, such as the projected monthly payment.

Margaret has received her Closing Disclosure from the lender. To best protect her interests, what should she do with it? Compare it to the Loan Estimate. File it with her mortgage papers. Take it to the closing. Use the information to compare loan costs with those of other lenders.

Compare it to the Loan Estimate.

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

Correlation Through a correlation process, the most weight may be given to one or two comparables, or equal weight may be given to all. The term reconciliation is often synonymous with correlation.

Which of these guarantees is offered by a general warranty deed but NOT a special warranty deed? A. The seller owns the property (title). B. The seller is legally allowed to sell the property. C. The property is free of debt or other claims taken on during the grantor's period of ownership. D. The seller will defend against all claims against the property's title.

D. The seller will defend against all claims against the property's title. Special warranty deeds are guaranteed to be free from any encumbrances brought about during the grantor's ownership of the property, but not before that. So if someone else comes forward with a claim outside of the time the grantor owned the property, the grantee is on his or her own to fight it.

What special concern do foreclosed properties often present? A. The homeowners may or may not have property insurance. B. The property sale may be subject to additional fees that will be passed to the new buyer. C. There may be tax implications due to buying the property at a discount. D. There could be hidden title issues.

D. There could be hidden title issues. The most common concern when purchasing a foreclosure is the state of the title. An unclear chain of ownership can make future sale of the property difficult.

Danette hasn't paid her property's water bill for the first quarter, which was due on April 1. She's closing with her property's buyer, Jason, on April 1. What type of expense is this and how will it appear on the settlement statement? A. This is a prepaid expense and will appear as a buyer debit and a seller credit. B. This is an accrued expense and will appear as a buyer debit and a seller credit. C. This is a prepaid expense and will appear as a seller debit and a buyer credit. D. This is an accrued expense and will appear as a seller debit and a buyer credit.

D. This is an accrued expense and will appear as a seller debit and a buyer credit. Because this bill is due but hasn't been paid, it's an accrued item and will appear as a buyer credit and seller debit at closing.

Darren and Natalie are first-time buyers who have decided to purchase a newly built townhouse. Their agent, Jenner, tells them that the builder must provide a one-year home warranty. Which of the following conditions must be true? Darren and Natalie are getting a USDA rural development loan. Darren and Natalie are using an FHA-insured loan. Darren and Natalie are using conventional financing. Darren and Natalie made an all-cash offer.

Darren and Natalie are using an FHA-insured loan.

Which of the following is an instrument of conveyance? Deed Mortgage Promissory note Title insurance policy

Deed

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title? As long as the chain of title is traceable for at least the past 30 years, Mario will have marketable title. Depending on his state's laws, Mario may have marketable title. Mario will have to perform his own research to find information necessary for repairing the broken link. Unless the chain of title can be tracked back to its beginning, Mario won't have marketable title.

Depending on his state's laws, Mario may have marketable title. If a link in the chain of title is broken, the attorney performing the search will branch out from public records to try to mend the link. State laws dictate how far back the chain must be unbroken for a title to be marketable.

Which task is NOT the responsibility of an escrow officer? Determine how earnest money is to be distributed in case of a dispute. Manage transaction documents from all parties. Prepare closing documents and manage the closing meeting. Verify funding of the buyer's loan.

Determine how earnest money is to be distributed in case of a dispute. The escrow officer is responsible for distributing the earnest money as outlined by the parties or the courts in case of dispute but doesn't have the authority to determine how it should be distributed.

Select the statement that accurately describes an abstract of title. A title company representative must certify the abstract of title. Few states require an abstract of title when conveying property. The chain of title documents the information found during the title abstract process. Title abstracts provide data for the title company's title search.

Few states require an abstract of title when conveying property.

What's the purpose of title insurance?

It protects the buyer against loss resulting from previously unreported title defects.

When property changes hands, the deed is recorded. There's a fee for recording. What is the benefit to the grantee of having the deed recorded?

It puts the public on notice regarding ownership.

Which of these statements about a deed's habendum clause is true? It describes any easements or liens against the property. It's a description of the act of conveyance. It's required in all deeds. It's the full legal property description.

It's a description of the act of conveyance.

What's the relationship between the Loan Estimate and the Closing Disclosure? Lenders issue the Loan Estimate to verify the figures detailed on the Closing Disclosure. Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate. Loan Estimate figures should match Closing Disclosure figures exactly. The Closing Disclosure outlines the lender's responsibilities to the borrower.

Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate.

Marsha's title insurance policy was issued on closing day, June 18. The policy lists the standard exclusions as well as requirements for the company to issue the policy, such as paying off existing recorded liens. Which of these will NOT be addressed in the schedule of exceptions? Karen has an unrecorded lease on the property. Marsha's second mortgage on the property, which was properly recorded in January. Smith and Martin Building and Rehab files a mechanic's lien on June 18. The local cable company's easement through the property for underground wiring. Marsha disclosed this to the title company.

Marsha's second mortgage on the property, which was properly recorded in January. Title insurance typically covers events or claims filed on the public record before the title insurance policy's effective date but excludes disclosed and undisclosed easements.

Joshua just got a copy of the preliminary report from his title company and is surprised to see that there's a mechanic's lien against his property. What is the first step he should take to clear this lien?

Pay the bill that resulted in the mechanic's lien. In order to file a mechanic's lien, the lienholder must provide notice to the property holder of the lien. Joshua needs to pay the bill that resulted in the lien OR prove that the bill was indeed paid.

On a closing statement, ______ will go into the seller's credit column and the buyer's debit column. Loan fees Prepaids Taxes Utility costs

Prepaids

Most of the homes in Betty's new neighborhood are valued between $400,000 and $450,000. All of the homes in the neighborhood are very beautiful, the lots are large, and everyone's yard has impeccable landscaping. If Betty's home were in another neighborhood only a few miles away, it might only be valued at $300,000, due to its smaller size. But her home is valued at $400,000 in her neighborhood due to the desirability of the area. Why is her home in this neighborhood worth significantly more?

Progression Think about it this way: In real estate, it's better to be the worst house in a nice neighborhood than the nicest house in a bad neighborhood. A property's value increases if it's surrounded by higher-valued homes and decreases if it's surrounded by lower-valued homes. Betty's home is in a very desirable neighborhood, helping increase the value of her home. This is the principle of progression.

What's a typical prepaid item that will go into a seller's credit column and a buyer's debit column on a closing statement? Broker fees Loan fees Property taxes Recording fees

Property taxes

When a buyer finances a newly built home with a Federal Housing Administration loan, FHA requires the builder to ______.

Purchase a third-party home warranty to protect the buyer

Cheng is selling his property to Jericho. What's the best method Jericho can use to ensure his interest in the property? Ensure that Cheng signs the deed. Ensure that he signs the deed. Purchase title insurance. Record the deed in his name.

Record the deed in his name. Recording provides constructive notice of Jericho's purchase. Failure to record makes it possible for others to record interests in the future. Title insurance protects Jericho from claims from the past, but the title search limits that concern.

Melisa's mother gave her house to Melisa, along with a signed copy of the deed granting ownership to Melisa. Years later, Melisa decides to downsize by selling the property. The title company shows that the property is still in Melisa's mother's name. What does Melisa have to do to clear this up?

Record the signed deed.

Which statement most accurately describes the type of notice provided by recording a change of ownership document? Recording the deed provides actual notice of the property sale. Recording the deed provides constructive notice of the property sale. Recording the new owner's title policy serves as constructive notice of the sale. Recording the promissory note provides constructive notice of the property sale.

Recording the deed provides constructive notice of the property sale. Recording a document provides constructive notice; recording the deed provides constructive notice of property ownership.

Which of these statements about the homeowner's rights of redemption is true? Homeowner right of redemption applies to foreclosures, short sales, and REOs. Only foreclosures are subject to homeowner's redemption rights. Right of redemption timelines are longer for foreclosures than they are for short sales. Rights of redemption with REOs may be less of a problem than with other distressed properties

Rights of redemption with REOs may be less of a problem than with other distressed properties Because of the length of time it takes to process a property after the foreclosure sale, the homeowner's redemption period may have expired before the lender puts the REO on the market.

Your buyer client, Christine, asks you when she'll have to pay the transfer tax. What do you tell her?

She'll pay it at closing.

David lost his job and can no longer afford the payments on his home. His sister suggested a short sale. Since you were his real estate agent when he bought the house, he called you to find out as much as he can about short sales. Which of the following is a true statement? A short sale will help improve his credit rating. He can proceed with a short sale without the lender's approval. He will receive the full amount due on the loan as a result of the sale. Short sales are sometimes used as an alternative to foreclosure, but could negatively impact his credit rating.

Short sales are sometimes used as an alternative to foreclosure, but could negatively impact his credit rating.

Katherine is purchasing a second home as an investment/vacation property. She has a large down payment, and the seller is financing the rest of the purchase. Which of these statements is true? The CFPB provides forms similar to the Closing Disclosure and Loan Estimate for seller/financers to use. The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction. The seller is required to provide the same disclosure forms to Katherine as a standard lender would provide. The seller will provide the Closing Disclosure and Loan Estimate to Katherine but has a longer timeframe to do so than a traditional lender would have.

The Closing Disclosure and Loan Estimate aren't required in a seller-financed transaction. In a seller-financed transaction, the Closing Disclosure and Loan Estimate aren't required. Some other form of statement may be prepared to show the buyer and the seller their respective closing figures.

Trinity has applied for a home equity line of credit to perform some upgrades on her home. Within what timeframe must her lender provide the Closing Disclosure? At closing The Closing Disclosure isn't required for a HELOC. Three days before closing Three days from her loan application date

The Closing Disclosure isn't required for a HELOC. Home equity lines of credit aren't subject to TRID disclosures, so Trinity's lender isn't obligated to provide a Closing Disclosure, though other disclosure forms may be required.

Select the statement that correctly exemplifies the covenant term. The covenant against encumbrances is the grantor's guarantee that he or she owns the property being conveyed. The covenant for further assurances assures the grantee that there are no undisclosed encumbrances on the property. The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on. The covenant of warranty promises that the grantor has the capacity to convey title.

The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on. The covenant of quiet enjoyment promises that the grantee won't have his enjoyment of the property hampered by claims against the title.

Which of these statements accurately represents one of the required elements in a deed? The deed includes an act of conveyance and may include a habendum clause. The grantee must be legally competent. The grantee must be of legal age. The grantee must sign the deed and provide consideration.

The deed includes an act of conveyance and may include a habendum clause.

Carly's closing on an REO property was suddenly delayed due to an internal audit. What does this mean?

The lender has requested a title audit to ensure that the foreclosure was properly handled.

When purchasing a short sale or foreclosure, what's one of the biggest frustrations buyers face?

The length of time it takes to purchase a distressed property

Farquhar bought a house at a foreclosure auction. A few weeks later, he was notified that he couldn't take possession of or title to the property. What likely happened?

The previous owners redeemed the property by paying all mortgage payments and fees.

Quad City National Bank has several REO properties on its books. Why does the bank own these properties?

The properties went through the foreclosure process and didn't sell at auction.

Jorge accepted a seller's offer of insurable title. The transaction hasn't reached closing, and a previously unknown title defect has been revealed. What happens now? Jorge has to take steps to remove the defect before he can close. The seller is still required to clear the title defect before closing. The seller may not be required to attempt to clear the defect before closing. The title insurance company is required to cover the title defect.

The seller may not be required to attempt to clear the defect before closing. The seller may not be required to clear the defect before closing; depending on the type of defect (e.g., an easement) it may not impact closing. Other types of defects may require action before closing.

Which of these guarantees is offered by a general warranty deed but not a special warranty deed? The property is free of debt or other claims taken on by the grantor during the ownership period. The seller is legally allowed to sell the property. The seller owns the property (title). The seller will defend against all claims against the property's title.

The seller will defend against all claims against the property's title.

Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection: ______.

Title insurance Title insurance protects the buyer from title defects covered by the policy. If a defect is found, and it's covered, the insurance policy will reimburse the buyer for losses, up to the amount specified in the policy.

A quitclaim deed does which of these? Transfers a property with only the covenant of warranty Transfers the property with full covenants Transfers without warranty any interest or title the grantor has when conveying it Transfers with warranty any interest or title the grantor has in the property when conveying it

Transfers without warranty any interest or title the grantor has when conveying it

Which of the following is a typical accrued adjustment? Heating oil in the tank Prepaid taxes Unpaid real estate taxes Utilities billed and paid in advance

Unpaid real estate taxes

When does a transfer tax become payable?

Upon recording of the deed

Ray purchased a new home and soon discovered an issue with one of the windows. He filed a claim with the warranty provider, but it was denied. After mediation, the issue still remains unresolved. What is the most common next step?

arbitration

What can buyers do to protect themselves from title issues when purchasing property?

purchase title insurance

Ari owned acreage in a rural area. He sold a small portion of it to a neighbor in an informal transaction but made no record of the sale or change of ownership. A developer offered Ari several million dollars for the entire acreage, and Ari eagerly accepted the offer. What covenant is Ari in danger of violating?

seisin