Unit 5: Transfer of Property
A man appointed by the court to settle the estate of a person who has died intestate is called a(n): a) devisee. b) testator. c) executor. d) administrator.
d) administrator.
A federal income tax advantage can be realized by: a) depreciating income property. b) an installment sale. c) exchanging. d) all of these.
d) all of these.
A recorded deed: a) gives constructive notice. b) creates presumption of delivery. c) must have been acknowledged. d) all of these.
d) all of these.
Te be recorded, a deed must have: a) the signature of the grantee. b) a mention of consideration. c) a seal. d) an address where tax bills should be mailed.
d) an address where tax bills should be mailed.
A broker can, without being licensed as an escrow, handle the escrow on transactions where he or she: a) acts as a principal. b) represents the buyer. c) represents the seller. d) any of the above.
d) any of the above.
Shortly after a valid escrow is established, both the buyer and seller die. What should the escrow agent do? a) return all monies. b) cancel the escrow. c) let the agents decide. d) continue with the escrow.
d) continue with the escrow.
Susan owns an apartment house and deducted $10,000 from the gross income for depreciation on her federal income tax return. For income tax purposes, the basis of the property is: a) adjusted only when sold. b) unaffected. c) increased by $10,000. d) decreased by $10,000.
d) decreased by $10,000.
When using a grant deed, title transfers at the time of: a) signing. b) acknoledgment. c) recording. d) delivery.
d) delivery.
Escrow instructions should be: a) certified. b) notarized. c) recorded. d) executed.
d) executed.
A will written in the testator's own handwriting is called a: a) sealed will. b) gift certificate. c) nontransferable will. d) holographic will.
d) holographic will.
What does the term "short rate" refer to? a) loan interest rate. b) real property taxes. c) stock portfolios. d) homeowner's insurance.
d) homeowner's insurance.
A lender uses an impound account to protect against non-payment of all of the following, EXCEPT: a) assessments. b) property taxes. c) insurance premiums. d) mortgage interest payments.
d) mortgage interest payments.
Mr. Jones sells his personal residence for $800,000 that he purchased only 12 months ago for $900,000. For tax purpose he has. a) a $100,000 loss. b) a tax deferred loss. c) a $100,000 capital gain. d) no loss or gain.
d) no loss or gain.
What type of title insurance policy covers all risks? a) extended policy. b) ALTA policy. c) standard policy. d) no policy covers all risks.
d) no policy covers all risks.
Which of the following automatically terminates an escrow? a) death of the buyer. b) deather of the seller. c) death of the broker. d) none of these.
d) none of these.
Mr. Johnson, a single man age 50, sells his personal residence for $600,000. He originally purchased it 9 years ago for $550,000. If Mr. Jones does not purchase a new home after selling this one, what portion of the sales price is taxable? a) $600,000. b) $550,000. c) $50,000 d) none.
d) none.
A home was purchased on February 1st with the understanding that property taxes had been paid for the fiscal tax year. The buyer received a tax bill anyway known as a: a) new homeowner tax bill. b) delinquent tax bill. c) reassessment tax bill. d) supplemental tax bill.
d) supplemental tax bill.
The document issued to a person as a receipt for paying delinquent taxes on a property owned by another is called a: a) deed of reconveyance. b) certificate of deposit. c) lien release. d) tax certificate.
d) tax certificate.
The signed escrow instructions disagree with the purchase contract. As to the disagreement, which of the following is TRUE? a) the true intent of the parties must first be discovered. b) the courts would have to decide the matter. c) the purchase contract previals. d) the escrow instructions prevail.
d) the escrow instructions prvail.
An exception in a grant deed: a) makes the deed invalid to future grantees. b) gives the grantee special privileges. c) has no effect on the property value. d) withdraws a portion of the property from the grant.
d) withdraws a portion of the property from the grant.
An escrow agent discovers there is no specified date of closing. In this case escrow should close: a) within 30 days. b) within 60 days. c) within 90 days. d) within a reasonable time.
d) within a reasonable time.
By Proposition 13, the annual real estate tax on a parcel of property in California is limited to: a) 1% of its assessed value. b) 1.5% of its assessed value. c) 2% of its assessed value. d) 2.5% of its assessed value.
a) 1% of its assessed value.
The second property tax installment is due and delinquent on: a) February 1st - April 10th. b) November 1st - December 10th. c) December 31st - June 30th. d) March 1st - July 1st.
a) February 1st - April 10th.
Which of the following is required for the existence of a valid escrow? a) a binding contract and conditional delivery. b) the services of a licensed real estate broker. c) a complete chain of title. d) complete escrow instructions.
a) a binding contract and conditional delivery.
Which of the following may NOT engage in the escrow business? a) an individual who is not a real estate broker or attorney. b) bank. c) domestic corporation. d) foreign corporation.
a) an individual who is not a real estate broker or attorney.
Property taxes are assessed: a) annually. b) twice-annually. c) every 2 years. d) once upon purchase.
a) annually.
A will is said to be ambulatory because it can be: a) changed. b) recorded. c) witnessed. d) transferred.
a) changed.
Who is responsible for reporting a sale to the IRS? a) escrow. b) buyer. c) seller. d) broker.
a) escrow.
Which of the following would protect a buyer against a right of party in possession? a) extended-coverage policy. b) standard policy. c) either (a) or (b). d) neither (a) nor (b).
a) extended-coverage policy.
A quitclaim deed conveys only the present right, title and interest of the: a) grantor. b) servient tenement. c) grantee. d) property.
a) grantor.
A deed has a provision regarding racial and religious descrimination. The deed may be changed: a) if the restrictions are discriminatory or offensive. b) if the restrictions are pre-1978. c) if a title compnay agrees te wording is disciminatory or offensive. d) by court action.
a) if the restrictions are discriminatory or offensive.
Which of the following is most likley to pay property taxes? a) income property owner with negative cash flow. b) churches. c) chartiable organizations. d) non-profit state colleges.
a) income property owner with negative cash flow.
The most important element of propert and effective delivery of a deed is: a) intent of the grantor. b) recording. c) acknowledgment of grantor's signature. d) knowledge of its existence by grantee.
a) intent of the grantor.
When there is a substantial discrepancy between the dates for close of escrow and the new owners occupying the property, the agent must prepare a(n): a) interim occupancy agreement. b) addendum. c) sale-leaseback agreement. d) none of the above.
a) interim occupancy agreement.
Which of the following represents one of the essentials of a Grant Deed? a) parties capable of receiving the grant. b) offer and acceptance. c) acknowledgement. d) recordation.
a) parties capable of receiving the grant.
A document that describes the property and any existing encumbrances is called a(n): a) preliminary report. b) abstract of title. c) title plant. d) binder.
a) prelimnary report.
Which of the following is considered an ad valorem tax? a) real property tax. b) unit tax. c) use tax. d) death tax.
a) real property tax.
The term title plant refers to: a) records of a title insurance company. b) records of lender. c) records of a brokerage. d) all of these.
a) records of a title insurance company.
Homebuyers are most likely to purchase: a) standard insurance. b) extended insurance. c) ALTA policy. d) an abstract of title.
a) standard insurance.
The Street Improvements Act of 1911 allows the inssuance of bonds to raise funds for subdivision improvements on: a) streets and sewers. b) land and structures. c) off-suite utilities. d) anything.
a) streets and sewers.
An interest in real property acquired by prescription is: a) the right to use another's land. b) a possessory title. c) an equitable interest. d) a private grant.
a) the right to use another's land.
A deed is presumed to be delivered when: a) the seller handed the deed to the buyer, but the buyer did not record it. b) the escrow officer mailed the deed which had been acknowledged by the seller, but delivery was made after the seller died. c) the escrow compnay delivered the deed to the buyers prior to the buyer meeting all the terms of escrow. d) the deed was delivered to the grantee after the death of the grantor in accordance with instructions the grantor left with his money.
a) the seller handed the deed to the buyer, but the buyer did not record it.
A standard policy of title insurance covers all of the following EXCEPT: a) unrecorded liens. b) incorrectly given martial status. c) incompetent grantor. d) forged deed.
a) unrecorded liens.
A broker is acting as the agent of the seller in a transaction in which the seller carried back a second trust deed. The broker must cause the deed of trust to be recorded or advise the seller to record the trust deed: a) within one week after close of escrow. b) one business day after close of escrow. c) 30 days after close of escrow. d) none of the preceding as this is not the responsibility of the agent.
a) within one week after close of escrow.
An escrow prorates based on a: a) 300 day year. b) 360 day year. c) 365 day year. d) none of these.
b) 360 day year.
If a property owner believes that the assessed value of his or her property has been set too hight, the owner could file a request seeking reduction from the: a) County Board of Supervisors. b) Assessment Appeals Board. c) Tax Collector. d) State Board of Equalization.
b) Assessment Appeals Board.
Baker sells a property to Davis and executes a grant deed in favor of Davis. Davis then takes the deed and places it in a safety deposit box. Baker then sells the same property to Charles who subsequently records it. Whcih of the following is correct: a) Davis can sue Baker for fraud. b) Charles is the legal owner of the property. c) Davis is the legal owner of the property. d) any loan on the property would be void.
b) Charles is the leagal owner of the property.
Pest control reports which contain information concerning wood destroying insects are ketp on file with the: a) Department of Wood-Destroying Control. b) Structural Pest Control Board. c) Environmental Protection Agency. d) United States Department of Insect Control.
b) Structural Pest Control Board.
A title officer of a title insurance company is familiar with an "Abstract of Title" and would know that it is: a) where the legal description of the property is found in the title policy. b) a written summary of the various recorded documents relating to the title of the subject property. c) a standard form of title insurance that is used by most title companies. d) an opinion of the title officer as to the condition of the title.
b) a written summary of the various recorded documents relating to the title of the subject property.
Which of the following describes a "perfect escrow?" a) all documents submitted to escrow have been proofed for errors. b) all documents, funds, and instructions needed to close the transaction are in the hands of the escrow agent. c) the title search has taken place and the policy of title insurance has been issued. d) all financial settlements have taken place and the documents are recorded.
b) all documents, funds, and instructions needed to close the transaction are in the hands of the escrow agent.
The recording of an instrument gives: a) actual notice. b) constructive notice. c) positive notice. d) passive notice.
b) constructive notice.
When a vaild grant deed is prepared, title passes when: a) acknowledged. b) delivered. c) signed. d) recorded.
b) delivered.
All of the following will terminate an escrow EXCEPT: a) agreemnt of the parties. b) demand of the broker. c) inability to meet a contingency. d) none of these.
b) demand of the broker.
When a person dies intestate and ne heirs claim his/her property, it reverts to the state by: a) patent. b) escheat. c) deed. d) will.
b) escheat.
The redemption period for unpaid real property taxes is: a) five years from the assessment date. b) five years from the tax default date. c) five years from the sale by state at public auction. d) five years from loss of possession.
b) five years from the tax default date.
A reservation in a deed. a) cancels the deed. b) is a retention of an interest. c) prevents the transfer. d) guarantees the transfer.
b) is a retention of an interest.
What usually happens to a person's property who died intestate? a) it escheats to the state. b) it is distributed to his/her heirs. c) it is distributed according to his/her will. d) none of the above.
b) it is distributed to his/her heirs.
Which of the following is required for a couple to qualify for the universal exclusion? a) continuous occupancy for two years. b) live in their permanent residence for at least two years during the preceding five years. c) both (a) and (b). d) neither (a) nor (b).
b) live in their permanent residence for at least two years during the preceding five years.
How often should a trust fund account be reconciled? a) once-a-week. b) once-a-month. c) semi-annually. d) once-a-year.
b) once-a-month.
Personal income taxes are structured using rates that are: a) regressive. b) progressive. c) equal. d) level.
b) progressive.
The doctrine of "first in time, first in right" refers to: a) first right of refusal. b) recording rights. c) date and time one signs a contract. d) first right in judgment lien.
b) recording rights.
Holographic wills cannot be: a) written with colored ink. b) signed with an "X." c) written in anything other than ink. d) all of the above.
b) signed with an "X."
Which of the following is TRUE with respoect to reserves in an escrow? a) the lender holding the reserves pays the same interest rate on funds that savings and loans pay on savings accounts. b) they benefit both the trustor and the beneficiary. c) the maximum amount cannot exceep five percent of the annual disbursements. d) reserves are required on all homes.
b) they benefit both the trustor and the beneficiary.
Money in an impount account belongs to the: a) escrow company. b) trustor. c) trustee. d) beneficiary.
b) trustor.
The marginal tax rate is the tax rate: a) that will be used when you enter the next higher tax bracket. b) which is used for the last dollar of taxable income earned. c) applied to the highest tax bracket. d) applied to the lowest tax bracket.
b) which is used for the last dollar of taxable income earned.
When a real estate licensee accepts trust funds from his/her client in connection with the puchase of real property, the licensee must place these funds in: 1) a neutral escrow depository; 2) the hands of the offeree or owner; or 3) a trust account. The licensee must place these funds into one of these three authorized places: a) by the next working day following receipt. b) within three business days following receipt. c) by midnight of the current day. d) by midnight of the second day.
b) within three business days following receipt.
How much of a broker's personal funds may be contributed to a client's trust fund bank account to offset any bank service charges? a) $25.00 b) $100.00 c) $200.00 d) nothing
c) $200.00
An owner occupied residence qualifies for a homeonwer's exemption of: a) $1,000 b) $4,000 c) $7,000 d) none of these.
c) $7,000
All escrow companies must be incorporated and licensed by the: a) Real Estate Commissioner. b) Insurance Commissioner. c) CA Department of Corporations Commissioner. d) Securities and Exchange Commission.
c) CA Department of Corporations Commissioner.
Which of the following dates represents the final date the property owner may file for the State Homeowner's Property Tax Exemption? a) March 1st. b) April 15th. c) December 10th. d) June 30th.
c) December 10th.
Real Property taxes become a lien on: a) November 1st. b) February 1st. c) January 1st. d) July 1st.
c) January 1st.
A valid deed must contain: a) evidence of recordation. b) a date. c) a granting clause. d) the signature of the grantee.
c) a granting clause.
Ad valorem is best defined as: a) added value. b) fixed value. c) according to value. d) at replacement value.
c) according to value.
A property owner builds a swimming pool at his apartment building in order to attract more tenants. For tax purposes, he can: a) deduct the cost of the pool, dollar-for-dollar, frim his income tax. b) deduct the cost of the pool from his vacancy losses. c) add the cost of the pool to his book value and depreciate it. d) none of the above.
c) add the cost of the pool to his book value and depreciate it.
How would a taxpayer adjust the tax basis of his/her personal residence for Federal tax purposes? a) property taxes. b) accrued depreciation. c) addition of a concrete patio. d) none of these.
c) addition of a concrete patio.
Buyer's and seller's closing statements are: a) always the same. b) always executed. c) always different. d) always equal.
c) always different.
When does the broker's commission get paid? a) when the broker obtains an offer and communicates acceptance. b) when the buyer's deposit is logged into escrow. c) at close of escrow. d) none of the above.
c) at close of escrow.
Without any agreement on a specific date, physical possession should be given: a) one week prior to close of escrow. b) one week after close of escrow. c) at close of escrow. d) upon the buyers request.
c) at close of escrow.
For tax purposes, points paid by the seller would: a) increase the cost basis. b) be treated as a selling expense. c) both (a) and (b). d) neither (a) nor (b).
c) both (a) and (b).
A deed is recorded and indexed: a) by location. b) by recording day and time. c) by grantor and grantee names alphabetically. d) all of these.
c) by grantor and grantee names alphabetically.
An exact historty of cenveyances and encumbrances affecting the title of a property is called a(n): a) title search. b) abstraction c) chain of title. d) abstract of title.
c) chain of title.
The Office of Interstate Land Sales Registration (OILSR) applies to: a) cemetery lots. b) slaes to developers. c) development of 100 or more unimproved lots for sale. d) trucking.
c) development of 100 or more unimproved lots for sale.
The legal seizure of property for sidewalks by the government is referred to as: a) zoning. b) escheat. c) eminent domain. d) lis pendens.
c) eminent domain.
An exception in a grant deed: a) cancels the deed. b) is idential to a reservation. c) excludes part of the property from the grant. d) prevents the transfer.
c) exclused part of the property from the grant.
During escrow, if an unresolved dispute should arise between the seller and buyer preventing the close of escrow, the escrow holder may legally: a) arbitrate the dispute as aneutral party. b) rescind the escrow and return all documents and monies to the respoctive parties. c) file an interpleader action in court. d) do any of the above.
c) file an interpleader action in court.
With reference to an escrow, recurring costs mean: a) closing fees. b) tax calculations. c) impound accounts. d) realtor fees.
c) impound accounts.
Deed restrictions are valid: a) for 10 years. b) for 50 years. c) in perpetuity. d) until the property is sold.
c) in perpetuity.
When a real estate broker speaks of "tax shelter" he/she is referring to: a) principal payments. b) net income. c) income tax. d) real property taxes.
c) income tax.
an ALTA policy of title insurance protects the: a) buyer. b) seller. c) lender. d) all of these.
c) lender.
During a sales escrow, the escrow officer receives two structural pest control reports. The escrow officer should: a) contact the inspection companies to determine which one is most recent. b) send the report that requires the most work to the buyer and obtain his/her approval. c) notify the broker and obtain written instructions from the buyer and seller concerning the reports. d) request the broker to find out from the seller which report to use.
c) notify the broker and obtain written instructions from the buyer and seller concerning the reports.
The term impound refers to: a) personal property. b) clarity of title. c) reserves. d) trust funds.
c) reserves.
Which of the following can a property owner expect after sewer lines are installed in front of his/her property? a) supplemental assessment. b) general assessment. c) special assessment. d) all of these.
c) special assessment.
Tax delinquent real property not redeemed by the owner during the five year statutory redemption period is deeded to: a) city. b) county. c) state. d) school district.
c) state.
To adjust for any increase in tax liability due to a reassessment after the property was purchases, the tax authority would issue a: a) new tax bill. b) property tax postponement. c) supplemental assessment. d) replacement lien notice.
c) supplemental assessment.
The California sales tax is a(n): a) ad valorem tax. b) tax paid on real estate. c) tax paid on tangible personal property. d) tax paid on all personal property.
c) tax paid on tangible personal property.
They buyer and seller agree on a 60-day escrow. As the closing date approaches, it becomes obvious that it will not close on time. Which of the following is TRUE? a) the escrow can close as originally scheduled. b) the escrow is automatically terminated after 60 days. c) the buyer and seller must agree to extend the escrow or it is cancelled. d) the escrow agent has the authority to extend the escrow.
c) the buyer and seller must agree to extend the escrow or it is cancelled.
When is the title insurance premium paid? a) on the date of possession. b) the date escrow is opened. c) the date escrow is closed. d) the date the preliminary title report is issued.
c) the date escrow is closed.
Owner Bob owns and aprtment complex which is managed by Broker X. Owner Bob wants to sell his apartments and Broker X is the listing broker. Who distributed the security deposit? a) the seller. b) the broker. c) the escrow company. d) the lender.
c) the escrow company.
Which of the following is NOT necessary to establish title by adverse possession? a) possession open and notorious for five years. b) paying taxes for five years. c) use of the entire property. d) against the true wishes of the owner.
c) use of the entire property.
A Standard Policy of Title Insurance covers all of the following EXCEPT: a) a forgery and matters of record. b) lack of signature of either husband and/or wife. c) zoning laws. d) capacity of parties.
c) zoning laws.