RE Unit 4

Jacobson deeds property to Keene, who neither records her deed nor takes possession of the property. Jacobson later deeds the same property to Linder, who records his deed and takes possession. Linder is not aware of the earlier conveyance to Keene. Who holds the legal title to the property?

Linder, because his deed was recorded first.

Which of the following would give a buyer the MOST protection against losses resulting from title defects?

Owner's title insurance policy

A second mortgage can be distinguished form a first mortgage by the date the mortgage was

Recorded. Priority of rights is determined by the date of public notice. The most accepted form of public notice is document recordation

Which of the following is true about the recording of documents?

Recording real estate documents provides constructive notice of their contents to the public.

Who bears the obligation to disclose lead-based paint in residential properties built before 1978?

Seller and all brokers (Federal law requires this disclosure before a prospective buyer is obligated under contract to purchase the home)

A lender making a loan secured by a mortgage will probably require the borrower to buy

a mortgagee's title insurance policy

A document that summarizes all recorded interests affecting title to a given parcel of land is an ___

abstract of title

In MOST cases, for a deed to be recorded, it must be

acknowledged. Deeds need to be acknowledged by the grantor(s) to be recorded

Defects in title are covered only if they are found ____ closing

after

A title search follows documents from the current to the first known source. In doing so, the examiner is following or creating the

chain of title

All the documents that comprise the history of the title are the ______________________.

chain of title

A deed that has not been recorded may NOT provide

constructive notice.

A new loan will show on the closing statement as a buyer ___.

credit

An item paid in arrears will be a ___ to the buyer

credit

When prorating, an item paid in advance will be a ___ to the buyer.

debit

An item that has been paid in advance typically shows on the closing statement as

debit buyer, credit seller

Monthly OA dues of $900 were paid in advance on the first of the month with the seller owning the day of closing. For a closing on October 20, using a 360-day year, the dues would be prorated as

debit buyer, credit seller $300 (items paid in advance will be a buyer owes seller (BOS). $900 / 30 total days x 10 days the buyer owns the property = $300)

The sales price of the property will show on the closing statement as

debit buyer, credit seller. The sales price is a debit from the buyer, who agreed to pay the price, and a credit to the seller

A prorated item that has been paid in arrears typically shows on the closing statement as

debit seller, credit buyer

In many cases it is better to ___ asbestos than to ___ it.

encapsulate, abate

Standard coverage title insurance protects against all of the following except

encroachment

A defect or problem that is not covered by standard or extended title insurance is an ___

exception

Before closing on the purchase of a duplex, the buyer asked his attorney to render a title opinion. The attorney's title opinion will do all of the following EXCEPT

guarantee the buyer obtains marketable title

A mortgagee's title insurance policy protects the

lender (mortgagee) requires the borrower to purchase a mortgagees title insurance policy to protect the lender's security interest in the property

A recorded notice stating that a pending lawsuit may affect title to a particular property is a ___

lis pendens

The obligation of real estate professionals in a transaction involving a property built before 1978, which therefore may have lead-based paint, is to 1. give the buyer the disclosure 2. make sure the seller inspects the property and removes all lead-based paint 3. make sure all parties are in compliance with the law 4. give the buyer an EPA booklet and have the buyer sign the disclosure

make sure all parties are in compliance with the law

Most deeds to be recorded must be _____________________.

notarized

Title insurance premiums are paid

once, at the time the policy is issued (typically paid at closing)

A chain of title is a

property history of successive conveyances and recorded interests

Shared items, such as property taxes and water bills, will be ___________________ between the buyer and the seller.

prorated

The priority of a recorded instrument is determined by the date of ___

recording

All of the following would be prorated at closing EXCEPT 1. rents 2. taxes 3. security deposits 4. water bill

security deposits

When a buyer records the deed from the seller, the legal consequence is to

serve as constructive notice of the buyers ownership interest

The requirements for recording are determined by

state law

Legal action taken on a title claimant's behalf to resolve all clouds on title is known as a

suit to quiet title

Before closing, a cloud on the title was found. Which of the following should the seller use to clear the title? 1. Abstract with a title opinion 2. Title commitment 3. Title insurance 4. Suit to quiet title

suit to quiet title (these determine ownership, recognize other valid claims and "quiet" invalid claims)

Which of the following would benefit most from and therefore be most concerned with, recording a mortgage?

the mortgagee (lender) wants to make certain that the mortgage is recorded, to provide notice of the mortgagee's lien against the property

Protection against incomplete or defective records of the title to land can best be obtained by securing ___

title insurance

When an attorney or title insurance company traces the ownership of a parcel of land to the beginning of its recorded history, the process is known as a___

title search

The BEST way for a seller to prove marketable title to real property is

to buy an owner's title policy for the buyer

An example of a stigmatized property is one that

was the site of a suicide. State law determines whether it may be disclosed.