Transfer Of Property Questions

Prorated taxes

1. Property taxes/HOA dues 2. fuel (property/oil tank) 3. Water/sewer

The Simpsons are buying the Martins' house for $415,000, and closing is set for March 15. The Martins have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Simpsons will owe the Martins at closing. Assume February has 28 days this year. The sellers own the day of closing. Topic: Transfer of PropertySubtopic: Escrow A. $1,997.62 B $3,113.46 C. $604.95 D. $792.54

A. $1,997.62; 1.write months down with day 2. Determine how many days seller paid taxes 3.identify prorated expenses (property taxes,HOA fees, propane/oil tank/water sewer expenses) 4. Divide to find daily rate (/365 calendar/360 statutory) 5. Subtract total from expenses paid

Buyer Maria and seller Doug are closing on June 1. Maria's mortgage loan payment is $927.86, and $871.86 of that amount will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what Maria's prepaid interest cost be at closing? Topic: Transfer of PropertySubtopic: Escrow A. $842.74 B.$871.80 C.$896.97 D. $927.90

A. $842.74, Calculate the daily interest rate for 30 days ($871.86 ÷ 30 = $29.06). Because Doug owns the closing day, Maria will pre-pay interest for 29 days, June 2 - 30, so $842.74 ($29.06 x 29).

Stan is buying a home in Temecula. The escrow officer asks him how he wants to hold ownership. He doesn't plan to share ownership with anyone, and he's a single man, so what's his most likely choice? A. Estate in severalty B. Joint tenancy C. Tenancy in common D. Tenancy by the entirety

A. Estate in severalty

Which term describes the newly formed land mass built up by the deposits of sediments on a property that belongs to the owner? Topic: Transfer of PropertySubtopic: Special Processes A.Alluvion B.Avulsion C.Erosion D.Reliction

A.Alluvion-Newly formed land, created by deposits of water, action called accretion - reliction; addition of dryland when water recedes permanently -accession- property has been extended due to natural or man-made causes -avulsion, change in watercourse or action of water washing land away

In a California real estate transaction, which of these individuals would require a license to act as the escrow agent? Topic: Transfer of PropertySubtopic: Escrow A.Barbara, an associate broker who works for Zack B.Lulu, a real estate salesperson representing the buyer C.Nadia, an attorney engaged by buyer Lulu D. Zack, a real estate broker representing the seller

A.Barbara, an associate broker who works for Zack, Since Zack, Lulu, and Nadia are all exempt based on the fact that they're already representing principals in the transaction, only Barbara would need to have an escrow agent's license to

According to RESPA, what must the lender give to the borrower in the days immediately prior to settlement? Topic: Transfer of PropertySubtopic: Escrow A.Closing Disclosure B.Freddie Mac borrower disclosure C.Loan Estimate D. TIL Statement

A.Closing Disclosure

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar. Topic: Transfer of PropertySubtopic: Escrow A.Credited $1,207 B.Credited $742 C.Debited $1,207 D.Debited $742

A.Credited $1,207;The seller is required to cover the property taxes for January 1 through May 19, which is 139 days. The seller will be credited $1,207, because $1,949 ÷ 365 = $5.34, and $5.34 × 226 days (the number of days the buyer will own the property and have to cover property taxes) = $1,206.84. That's $1,207 when rounded to the nearest whole dollar.

Which of the following is an instrument of conveyance? Topic: Transfer of PropertySubtopic: Deeds A.Deed B.Mortgage C.Promissory note D.Title insurance policy

A.Deed

Bob is the grantor of a deed, and is in the final stages of transferring a deed to the new owner, Frank. What must Bob do in order to satisfy delivery and acceptance of the deed to Frank? Topic: Transfer of PropertySubtopic: Deeds A.Deliver the deed to Frank, his agent or attorney, or the title company issuing the title B.Get Frank's signature on the official acceptance letter notarized and recorded at the county clerk's office. C.Send the deed via certified mail so that the shipment is officially tracked D.Submit delivery and acceptance paperwork to the Board of Submission and Acceptance

A.Deliver the deed to Frank, his agent or attorney, or the title company issuing the title

When you're working with clients in California, how will you explain the grant deed to them? Topic: Transfer of PropertySubtopic: Deeds A.It includes implied warranties from the grantor, and is commonly used in California. B.It includes six express covenants from the grantor, but is rarely used in California. C.It's used in transactions where no consideration or consideration of "love and affection" is given in exchange for the property. D.It's used to convey title when the property is used as security for a loan.

A.It includes implied warranties from the grantor, and is commonly used in California. The grant deed is used to convey title in most transactions in California. It includes an implied warranty that the property is free from encumbrances

Marsha's title insurance policy was issued on closing day, which was 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 one of these will NOT be addressed in the schedule of exceptions? Topic: Transfer of PropertySubtopic: Title Insurance A.Marsha's second mortgage on the property, which she plans to get next January B.Marsha's unrecorded lease on the property C.Smith and Martin Building and Rehab's mechanic's lien, which was filed on June 18 D.The local cable company's unrecorded easement through the property for underground wiring. Marsha disclosed this to the title company

A.Marsha's second mortgage on the property, which she plans to get next January

What may an escrow agent disclose to outside parties to a transaction as a limited agent to both parties to a transaction? Topic: Transfer of PropertySubtopic: Escrow A.Nothing B.The closing date of the escrow C.The conditions of the escrow D.The purchase price of the property

A.Nothing

What is the requirement for escrow instructions provided by principals to a transaction in California, regardless of the location within the state? Topic: Transfer of PropertySubtopic: Escrow A.The instructions must be clear and unambiguous. B.The instructions must be issued bilaterally. C.The instructions must be issued unilaterally. D.The instructions must be signed by all parties and their agents, if represented.

A.The instructions must be clear and unambiguous.;Escrow instructions must be clear and unambiguous. They're typically issued bilaterally in northern California, and unilaterally in southern California. They must be signed by the principals, but not by their agents.

Jeff has filed a quiet title suit against Roger. What's the purpose of this suit? Topic: Transfer of PropertySubtopic: Transfer Through Court Supervision A.To clear up a cloud on title B.To clear up a property line dispute C.To exercise his right to quiet enjoyment of the property D.To prohibit the seller from releasing the buyer's name

A.To clear up a cloud on title

What is the purpose of the title search? Topic: Transfer of PropertySubtopic: Title Insurance A.To collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances B.To ensure the current owner has the title to give to the buyer C.To ensure the title is on the record at the local clerk recorder's office D.To insure the owner against any financial loss due to a defect in the title

A.To collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances The purpose of the title search is to collect evidence that the title is a marketable title, meaning it's clear and free of encumbrances.

The Davises pay the annual property tax of $1,825 on their lake house every January. On a whim, they sell the lake house to the Bennets to buy a Winnebago and travel the country. Closing is set for July 31, and the buyers own the day of closing (pay prorated expenses through the day of closing). Using the calendar year proration method (assume that it's not a Leap year), how much of the pre-paid property tax was the Davises' responsibility? Topic: Transfer of PropertySubtopic: Escrow A. $1,050 B. $1,055 C.$1,064.70 D. $1,069.77

B. $1,055;The daily tax rate is $5 ($1,825 ÷ 365). The Davises owe taxes for January 1 through July 31 (212 days), minus the closing day (paid by buyers). Therefore, the Davises owe for 211 days, which is $1,055 ($5 x 211).

Jerry's client Carla has successfully closed purchasing a home. The deed shows she's taken sole ownership of the property. Which of these actions is necessary before the escrow agent can have the deed recorded? A. The title company must issue a standard policy that validates the deed. B. The grantor's signature must be acknowledged. C. Carla must state her acceptance of the deed. D. Carla must name a beneficiary.

B. The grantor's signature must be acknowledged. While a deed doesn't require acknowledgement to be legally valid, the county clerk does require that the grantor (the seller) complete this step before the deed is eligible for recording. Acknowledgement and recording help protect Carla's interests in the property.

How may a buyer's title be vested through escrow? Topic: Transfer of PropertySubtopic: Types of Vesting A.As a cash reconciliation B.As an estate in severalty or co-ownership C.As an interpleader D.As an officiate of the state

B.As an estate in severalty or co-ownership

Which document establishes path and proof of ownership? Topic: Transfer of PropertySubtopic: Title Insurance A.Abstract of title B.Chain of title C.Deed D.Title insurance

B.Chain of title

Which type of property ownership has a buyer vested his title if he is the only owner of the property? Topic: Transfer of PropertySubtopic: Types of Vesting A.Community property B.Estate in severalty C joint tenancy D.Tenancy in common

B.Estate in severalty

What might Trina's mother have bequeathed to Trina? Topic: Transfer of PropertySubtopic: Transfer Through Court Supervision A.Her interest in an oil drilling operation B.Her jewelry and fine china C.Her primary residence DHer vacation property A bequest or legacy is a gift of personal property. In this case, Trina is the legatee (recipient).

B.Her jewelry and fine china;A bequest or legacy is a gift of personal property. In this case, Trina is the legatee (recipient).

Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom (with permission from Lucas, Chad, and Trace). Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death? Topic: Transfer of PropertySubtopic: Types of Vesting A.Lucas B.Lucas and Tom C.Lucas, Monique, and Amy D.Lucas, Tom, Amy, and Monique

B.Lucas and Tom Joint tenants are allowed to sell their interests, so Tom became a property owner when Ivan sold his interest. However, joint tenancy is not inheritable but instead includes the right of survivorship. Trace's and Chad's interests passed to Lucas and Tom

The daily property tax rate is $1.23 and closing is August 31. Assuming the buyer owns the property on closing day, and the seller hasn't made any payments, what will the seller owe at closing using the calendar year proration method? Round to the nearest whole dollar. A. $151 B. $242 C. $298 D. $449

C. $298;The seller owes $298. The seller owns the property for 242 days of the year, and 242 days × $1.23 = $297.66, or $298 if rounded to the nearest whole dollar.

What's true about the documentary transfer tax in California? A. The documentary transfer tax is collected by the state, although cities may add an additional tax. B. The documentary transfer tax, when used, is always paid by the buyer since the new deed is recorded on the buyer's behalf. C. All counties in the state charge a documentary transfer tax of 55 cents per $500 of sales price, and some cities add an additional transfer tax. D. Most real estate transactions in California don't incur a documentary transfer tax

C. All counties in the state charge a documentary transfer tax of 55 cents per $500 of sales price, and some cities add an additional transfer tax. -The documentary transfer tax is charged at the county level. Some cities add an additional transfer tax. Although the state sets the basic county tax level of 55 cents per $500 of sales price, it's collected by the county.

Eileen died intestate and without any living relatives. She owned 17 acres of pristine forest bordering a national park. What will happen to the property? A. It will be awarded by the court according to intestate succession laws. B. It will be granted to the national park through the laws of accession. C. It will be taken by the state through escheat. D. It will be deeded to the federal government through eminent domain

C. It will be taken by the state through escheat.

Marie owns a home. Her right to bequeath the property to her best friend's daughter is limited by ______. A. The way she acquired the property B. The executor she appoints in her will C. The way her title is vested D. The doctrine of escheat

C. The way her title is vested

When co-owners of a property decide to partition the property, what does it mean? Topic: Transfer of PropertySubtopic: Transfer Through Court Supervision A.One co-owner is foreclosing on another. B.They're dividing the property into parcels and maintaining co-ownership of each parcel proportionally. C. They're dividing the property proportionally so that each co-owner becomes sole owner of a portion. D. They're selling additional interests in the property, in essence adding co-owners.

C. They're dividing the property proportionally so that each co-owner becomes sole owner of a portion.; Partitioning is one way to terminate a tenancy in common. It involves dividing the property proportionally so that each co-owner becomes sole owner of a share.

Which document is used to establish proof of ownership? Topic: Transfer of PropertySubtopic: Deeds A.Abstract of title B.Chain of title C.Deed D.Title insurance

C.Deed

Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building? Topic: Transfer of PropertySubtopic: Types of Vesting A.As a joint tenant with rights of survivorship B.As a tenant in common with Oliver's heirs C.In severalty D.In trust

C.In severalty When there are only two joint tenants, the death of one dissolves the joint tenancy. Rhonda is now the sole owner of an estate in severalty.

Wilma died without a will. How will her heirs be determined? Topic: Transfer of PropertySubtopic: Transfer Through Court Supervision A.committee appointed by the court B.Intestate bequest C.Intestate succession D.The process of escheat

C.Intestate succession

Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned? Topic: Transfer of PropertySubtopic: Types of Vesting A.It's a joint tenancy. B.It's held as a tenancy in common. C.It's owned as an estate in severalty. D.There isn't enough information to tell.

C.It's owned as an estate in severalty. Corporations are legal entities and hold property similar to the way a sole proprietor or an individual does: in severalty.

June specified in her will how title to her home would transfer. At her death, alternate conveyance occurred. What likely happened? Topic: Transfer of PropertySubtopic: Transfer Through Court Supervision A. Fraud B.Intestate hereditary C.Operation of law D.Testate succession

C.Operation of law

At the start of the escrow process, the escrow agent delivers the ______ from the title insurance company to the buyer for review. Topic: Transfer of PropertySubtopic: Escrow A.Deed B.Escrow instructions C.Preliminary report D.Title insurance policy

C.Preliminary report

Todd conveyed title to his out-of-state property to Brad using a general warranty deed. A few months later, Brad discovered that the legal description of the property on the deed was incorrect, and his property was only half the size he thought he'd purchased. He sued Todd based on Todd's promises of ______ in the deed. Topic: Transfer of PropertySubtopic: Deeds A.Consideration and compensation B.Habendum and fair dealing C.Quiet enjoyment and further assurances D.Seisin and right to convey

C.Quiet enjoyment and further assurances

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? Topic: Transfer of PropertySubtopic: Deeds A.Against encumbrances B.Quiet enjoyment C.Seisin D.Warranty

C.Seisin-The grantor holds title and possession of the property

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

C.The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.

Kevin and Regina sold their property to Vickey using a general warranty deed. Which one of these statements is true? Topic: Transfer of PropertySubtopic: Deeds A.Either Regina or Kevin can convey the property. B.Kevin and Regina are the grantees. C.Vickey is the grantee. D.Vickey is the grantor.

C.Vickey is the grantee.

You're working with a couple who are in the market for their first home. They're full of questions, and today they're asking about how homeownership will affect their tax burden. Of course, you answer within the scope allowed by your license. Which of these taxes would you mention to your clients as relevant to homeownership? A. First-time homebuyer income tax credit based on purchase price of property B. Capital gains credit for purchase of a property priced below market value C. Deduction of most closing costs on income tax for the year of purchase D. Possible income tax deductions for prepaid interest on a loan

D. Possible income tax deductions for prepaid interest on a loan f your buyer clients will prepay interest on their loan (in the form of points), this can be a deduction on their income tax return. Closing costs aren't eligible as tax deductions. Since tax rules change frequently, make sure you're up to date on any information you provide to clients, and always advise them to seek professional financial advice.

Sasha accepted an offer for her duplex. The purchase price will be enough to cover the principal remaining on her existing mortgage, plus make her a tidy profit. Who is responsible for contacting her lender to establish the payoff amount for her loan? A. Sasha's attorney B. Sasha's real estate agent C. Sasha D. The escrow agent

D. The escrow agent

Shelly is an escrow agent in a transaction in which Bill is buying Jose's property. Who does Shelly represent? Topic: Transfer of PropertySubtopic: Escrow A.Bill and Jose B.Bill only C.Jose only D.Neither Bill nor Jose

D.Neither Bill nor Jose; A limited agent, such as an escrow agent, does not represent the parties but merely acts on their behalf in a limited capacity.

What type of deed are you likely to receive if you purchase a California property with cash at a foreclosure auction? Topic: Transfer of PropertySubtopic: Deeds A.Bargain and sale deed B.Executor's deed C.Full covenant and warranty deed D.Trustee's deed upon sale

D.Trustee's deed upon sale

When you're representing a client in a real estate transaction, what's your responsibility regarding tax advice? Topic: Transfer of PropertySubtopic: Tax Aspects A.You must be able to advise your clients on the best way to minimize their tax liability related to a purchase or sale. B.You must not address tax aspects of a transaction in any way, since this would be working outside your area of expertise. C.You're obligated to answer all questions the clients have regarding property taxes and general tax advice. D.You should tell clients the typical ways that taxes will apply and encourage them to seek advice from a tax professional.

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

The Shermans are buying the Berenstains' house for $415,000, and closing is set for March 15. The Berenstains have a loan balance of $230,000 at a rate of 4.7%, and have prepaid property taxes ($2,506) and insurance ($1,400). They also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Shermans will owe the Berenstains at closing. Assume February has 28 days this year. The sellers own the day of closing. A. $1,997.62 B. $508.38 C. $792.54 D. $3,113.46

Yes! Let's confirm the calculation. First, calculate daily rates for the taxes to be prorated: $2,506 ÷ 365 = $6.87. The Shermans pay the first 74 days (January 1 through March 15): 74 × $6.87 = $508.38. The balance is owed by the Berenstains: $2,506 - $508.38 = $1,997.62. The information in the question about the Shermans' mortgage balance and insurance isn't needed to answer the question.