Moseley Real Estate Chapter 2

When the grantor of a deed swears that he is conveying title of his own free will, this action is referred to as:

Acknowledgement

Gus the Mechanic knew of an individual, Josh, who was interested in buying a house in the area. Gus told a broker who was very familiar with real estate options in that area. Upon referral by Gus, the broker sold a house to Josh and received a $600,000 commission. Under RESPA, the broker may give Gus: Select one: A. $500 for referring him to Josh B. A ticket to the upcoming basketball game C. A thank you D. 1% of the commission he received

C. A Thank You

The purpose of a recording act is to: Select one: A. Ensure title is marketable B. Raise revenue C. Create a local public record D. Protect property owners

C. Create a local public record

Chris defaults on his house loan and the lender wants to auction the property (which secures the loan) in order to satisfy his debt. This is known as: Select one: A. Short sale B. Forfeiture C. Foreclosure D. None of the above

C. Foreclosure

Jill agrees to sell a three-bedroom ranch to Jason. Per the sales agreement, Jill deposits the deed to the ranch in escrow. Subsequently, Jill dies. The ranch will most likely: Select one: A. Pass to Jill's heirs, provided she left a valid will B. Pass to the estate because the escrow terminates C. Pass to Jason, provided he satisfies the terms of the sales agreement D. Pass to Jason if he is an heir of Jill's

C. Pass to Jason, provided he satisfies the terms of the sales agreement

Pete purchased a home from Tony. He did not record his deed, but took immediate possession. Tony died a few months later and according to the terms of his will, the property was to go to his nephew, Bob. Bob knew his friend Angela was interested in buying a house. They inspected the property and Angela agreed to buy it from Bob. Angela recorded her deed. Who owns the property? Select one: A. Angela, because she recorded the deed B. Bob, because Tony died testate C. Pete, because he purchased it from Tony D. Pete, due to the relation-back doctrine

C. Pete, because he purchased it from Tony

A house sold for $109,000 with the buyer making a 20% down payment. The grantor's tax is based on the: Select one: A. Down payment B. Loan amount C. Selling price D. None of the above

C. Selling price

Gill had a bad year. In September 2014, Gill's vacation home had a 1st mortgage, a mechanic's lien, and a special assessment filed against it. Later, in May 2015, a second mechanic's lien was filed against the property. Which lien has priority? Select one: A. Mortgage B. 1st mechanic's lien C. Special assessment D. 2nd mechanic's lien

C. Special Assessment

Which of the following actions is required to transfer title to property by deed? Select one: A. The deed must be recorded in the public record B. The deed must be signed by the buyer C. The deed must be signed by the grantor D. Both B and C

C. The deed must be signed by the grantor

Which of the following policies provides compensation for defects? Select one: A. Homeowner's insurance B. Private mortgage insurance (PMI) C. Title insurance D. Both B and C

C. Title insurance

A court action to remove a cloud from the title is called an action or suit: Select one: A. For specific performance B. For title insurance C. To quiet title D. Of legal injunction

C. To quiet title

Who pays excise taxes? Select one: A. Grantor B. Grantee C. Broker D. Both A and B

D. Both A and B

Sam sells property to Sally. After the transfer, Sally discovers a defect in the title. However, this defect can be remedied if Sam were to file a correction deed. Which of the following covenants would best justify Sally's request that Sam execute the correction deed? Select one: A. Covenant of warranty forever B. Covenant against encumbrances C. Covenant of seisin D. Covenant of further assurances

D. Covenant of further assurances

If a seller deposits the deed with an escrow agent, but dies before it is delivered to the purchaser, the transfer of title becomes effective on the date the deed was deposited into escrow due to the: Select one: A. Party's consent B. Law of contracts C. Parole evidence rule D. Doctrine of relation-back

D. Doctrine of relation-back

Larry sells property to David and the deed contains the following covenants: seisin, quiet enjoyment, against encumbrances, and further assurances. Following the transfer, David discovers utility poles on the property that lead to a nearby transformer. Larry failed to list the utility poles in the deed. Larry's failure to identify such encumbrances violates: Select one: A. The covenant of quiet enjoyment B. The covenant against encumbrances C. The covenant against grantor's acts D. None of the above

D. None of the above

Bill and Sue want to purchase the home that is occupied by their grandparents. However, they want to take title in such a way that will result in the least amount of income tax liability for themselves. How should a real estate sales agent advise them? Select one: A. Take title as tenants-in-common with their grandparents B. Acquire title as joint tenants with each other C. Take title as tenants-in-common, but each with an equal interest D. Refer Bill and Sue to an attorney or tax advisor

D. Refer Bill and Sue to an attorney or tax advisor

A deed where the grantor only promises against claims that arose during his property ownership is referred to as a: Select one: A. Quitclaim deed B. Bargain and sale deed C. General warranty deed D. Special (limited) warranty deed

D. Special (limited) Warranty Deed

Dan has a loan secured by his home through Bank Trust Company (BTC). Dan has failed to make several mortgage payments and, as a result, BTC has begun to send collection notices. If Dan files for bankruptcy, BTC must: Select one: A. Send Dan a notice of acceleration before it can continue the collection efforts B. Send Dan a notice of foreclosure before it can proceed with foreclosure C. Send Dan a notice of forfeiture D. Stop all collection activity during the pendency of Dan's bankruptcy petition

D. Stop all collection activity during the pendency of Dan's bankruptcy petition

All of the following circumstances are examples of insurable title defects, except: Select one: A. Forged documents B. Undisclosed heirs C. Mental incompetence D. Unrecorded easements

D. Unrecorded Easements

All of the following persons may act as escrow agents except: Select one: A. Brokers B. Neutral third persons C. Salespersons D. Attorneys

C. Salespersons

Which of the following statements is NOT true about a title search? Select one: A. It is an examination of public records B. The purpose is to determine any defects in the chain of title C. The title searcher goes back at least 100 years D. It is usually performed by a title company or title abstractor

C. The title searcher goes back at least 100 years

Escrow may be used in which of the following situations? Select one: A. When property is purchased and secured by a deed of trust B. In an exchange of property C. With a contract for sale D. All of the Above

D. All of the Above

A quitclaim deed may be used to: Select one: A. Transfer ownership of a fee simple estate B. Transfer interest in a life estate C. Terminate an easement D. Any of the above

D. Any of the Above

Bill sells real property to Betty through an escrow closing. Bill relinquishes control of the deed, but Betty does not receive it. What most likely happened to the deed? Select one: A. It was stolen B. Bill placed it in a safe deposit box C. Bill gave it to his wife to hold D. Bill delivered it to an escrow agent

D. Bill delivered it to an Escrow Agent

Deed restrictions apply to: Select one: A. Current owners B. Subsequent owners C. All property owners in a neighborhood D. Both A and B

D. Both A and B

If a deed transferring legal title from one party to another is NOT recorded in the public record, which of the following statements is correct? Select one: A. The deed is valid B. The grantor gives up all rights to the property conveyed C. The transfer is not valid D. Both A and B

D. Both A and B

Smith is interested in purchasing a parcel of land, but wants to first examine any recorded documents relating to the parcel. Smith must have authorization from: Select one: A. The current owner B. The civil court having jurisdiction C. A magistrate D. No one

D. No one

All of the following statements are true about valid restrictive covenants except: Select one: A. The covenant runs with the land B. The covenant may be removed without legal action C. The covenant does not need a termination date D. The covenant may be at variance with Fair Housing laws

D. The covenant may be at variance with Fair Housing Laws

A deed delivered in escrow is given to: Select one: A. A neutral third party B. The mortgagee C. The buyer's attorney D. The seller's attorney

D. The seller's attorney

All of the following situations represent a transfer of real property upon the death of an owner, except: Select one: A. Escheat to the state B. Transfer by devisee C. Transfer by descent D. Transfer by eminent domain

D. Transfer by Eminent Domain

What are fees charged for the privilege of buying or selling property in a particular jurisdiction?

Excise Taxes

In the event of any conflict, which clause would best state the extent of ownership?

Premises

Quincy sold a piece of property to Ralph, and transferred title through a quitclaim deed. Later, a court determined that Quincy did not own the property. Which of the following statements is true in this situation?

Ralph has no Interest in the Property

What is the covenant in a deed where a grantor guarantees that no one has any other interest that might disturb the grantee's possession?

The Covenant of Quiet Enjoyment

Who would not usually perform title searches?

A Real Estate Sales Person

What is NOT a cloud on title? Select one: A. A valid first mortgage B. A recorded contract for deed under which the buyer's rights have been judicially terminated C. A recorded option contract whose option period has expired D. A recorded mortgage that has been paid in full, but a satisfaction has never been recorded

A. A valid first mortgage

Which of the following deed clauses is most likely to state the names of the parties? Select one: A. Premises B. Habendum C. Testimonium D. None of the above

A. Premises

Which of the following transfers is an example of involuntary alienation? Select one: A. Property transferred by descent B. Property transferred by a will C. Property transferred by a trust D. Property transferred by a deed

A. Property transferred by descent

Which of the following amounts is NOT prorated between buyer and seller at closing? Select one: A. Recording fees B. Real estate taxes C. Rents D. Homeowner's insurance premiums

A. Recording fees

The covenant in a deed where the grantor guarantees that she owns the property and has the right to sell it is known as: Select one: A. Seisin B. Against encumbrances C. Warranty forever D. Quiet enjoyment

A. Seisin

Tax assessment of real property according to value is known as: Select one: A. Appraisal B. Ad valorem C. Replacement cost D. Accretion

B. Ad valorem

What is the result of recording a deed in the public office? Select one: A. Title will pass to the new owner on the date of recording B. Constructive notice C. Actual notice D. Both B and C

B. Constructive notice

Which of the following clauses is least likely to be included in a mortgage? Select one: A. Acceleration B. Habendum C. Alienation D. Defeasance

B. Habendum

Which of the following statements is NOT true about title insurance? Select one: A. The policy will include a list of exclusions B. It serves many of the same functions as homeowner's insurance C. It will insure the owner against losses arising from title defects D. It will generally include exclusions for unrecorded easements

B. It serves many of the same functions as homeowner's insurance

A title insurance policy reimburses the title holder for: Select one: A. Loss of property through foreclosure B. Loss as a result of a superior claim C. Damage caused by a fire D. Flood damage

B. Loss as a result of a superior claim

Which act regulates the closing procedures in a real estate transaction? Select one: A. ECOA B. RESPA C. FIRPTA D. Lead Act

B. RESPA

Bob the Bigot imposes a deed restriction on his property, which prohibits the sale of his home to anyone from France. Bob's deed restriction is: Select one: A. Voidable B. Void C. Enforceable D. Irrelevant

B. Void

An individual, appointed by the court to handle the affairs of someone who died intestate, is exempt from the State of Order's License Law. This person is called a(n): Select one: A. Executor B. Testator C. Administrator D. Trustee

C. Administrator

What is a written instrument or thing of value that is held by a disinterested third party, but which must be handed over upon satisfaction of specified conditions? Select one: A. A bond B. A mortgage C. An escrow closing D. An assignment

C. An escrow closing

Title passes from the grantor to the grantee after a deed is: Select one: A. Signed B. Acknowledged C. Delivered D. Recorded

C. Delivered

All of the following transfers would be considered involuntary alienation, EXCEPT: Select one: A. Foreclosure B. Eminent domain C. Devise D. Adverse possession

C. Devise

Which of the following deeds creates the most liability for a seller? Select one: A. Special warranty deed B. Universal warranty deed C. General warranty deed D. Quitclaim deed

C. General warranty deed

In a foreclosure sale, what kind of deed does the mortgagor receive? a. Sheriff's Deed b. Executor's Deed c. Quitclaim Deed d. None of the Above

d. None of the Above

For closed real estate transactions, a report must be filed with the IRS on form 1099-S. Required information includes the seller's name, social security number, and: Select one: A. The buyer's name and social security number B. The selling price of the property C. The name of a mortgage lender D. A description of the property

B. The selling price of the property

What should Sally Salesperson do with an earnest money check she received from Billy Buyer? Select one: A. Deposit it in her escrow account B. Give it to her broker C. Attach the check to the contract and file it D. Give it to the seller

B. Give it to her broker

A homeowner may claim which of the following items as deductions on his federal tax return? Select one: A. Principal payments on the mortgage loan B. Interest payments on the mortgage loan C. Repairs and maintenance on the house D. Improvements made to the property

B. Interest Payments on the Mortgage Loan

When a property sells, who pays to record a satisfaction or release of the existing deed of trust? Select one: A. Buyer B. Seller C. Lender D. Broker

B. Seller