Real Estate Fundamentals Chapter 7 Quiz
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Questions and Answers

Which of these can convey property through a deed?

  • Only individuals
  • Any person (correct)
  • Any entity (correct)
  • Only corporations

    • What type of lien is automatically placed on property for unpaid assessments?

    Statutory lien

    What is the abstract of title?

    The written report of the chain of title

    What is an example of a voluntary lien?

    <p>Mortgage</p> Signup and view all the answers

    What is the problem if there is a break in the chain of title?

    <p>There is a break in the chain of title</p> Signup and view all the answers

    Is the real estate transaction valid if the grantee is not named in the deed?

    <p>False</p> Signup and view all the answers

    Which lien would be filed by a drywall contractor doing a renovation on a house?

    <p>Mechanic's lien</p> Signup and view all the answers

    What is the grantor of a deed?

    <p>The party selling or conveying the property</p> Signup and view all the answers

    What do we call the collection of rights the owner of real property can exercise?

    <p>Bundle of rights</p> Signup and view all the answers

    Which of these deeds offers the least amount of protection for the buyer?

    <p>Quitclaim Deed</p> Signup and view all the answers

    When is an attorney's lien filed?

    <p>When the owner of property owes money to their attorney for legal services</p> Signup and view all the answers

    What is the legal description on a deed?

    <p>A written explanation of the boundaries of the property</p> Signup and view all the answers

    Which of these deeds conveys the most rights?

    <p>Warranty deed</p> Signup and view all the answers

    What is the closing attorney looking for in the abstract of title?

    <p>To ensure property is passed in order without breaks</p> Signup and view all the answers

    How do real estate owners let the world know they own the property?

    <p>By recording their deed in the county real estate records</p> Signup and view all the answers

    Which of these can cause title to not be marketable?

    <p>All of the above</p> Signup and view all the answers

    Aside from the title history, what else is contained in the abstract?

    <p>Liens and easements</p> Signup and view all the answers

    Is the transaction valid if the grantor does not own the property?

    <p>False</p> Signup and view all the answers

    What is the chain of title?

    <p>The order of deeds to ownership of the property</p> Signup and view all the answers

    What is intestacy?

    <p>When a person dies without a will</p> Signup and view all the answers

    How does a corporation convey real estate through a deed?

    <p>By designating a representative to sign on the corporation's behalf</p> Signup and view all the answers

    In what circumstances will a Sheriff's Deed be issued?

    <p>When a court orders real property to be sold</p> Signup and view all the answers

    What is the problem if there is no cancellation of a mortgage?

    <p>There is still a lien on the property</p> Signup and view all the answers

    What is marketable title?

    <p>When a reasonable buyer would buy the property</p> Signup and view all the answers

    How is real property typically conveyed to heirs when a person dies without a will?

    <p>By administrator's deed according to state law</p> Signup and view all the answers

    What is an example of a statutory lien?

    <p>Condominium homeowners association lien</p> Signup and view all the answers

    Who owns the property if two deeds are issued for the same property?

    <p>Bella</p> Signup and view all the answers

    What is the simplest way to determine the owner of real estate?

    <p>Look for the last grantee in the chain of title</p> Signup and view all the answers

    What power does a court use to involuntarily convey real property?

    <p>Equity power</p> Signup and view all the answers

    What is the purpose of title insurance?

    <p>To cover losses from problems with real estate title after closing</p> Signup and view all the answers

    How does a judgment lien cause involuntary alienation?

    <p>Property is sold by judgment creditors to pay off debt</p> Signup and view all the answers

    What type of deed should be used when selling property with a mortgage lien?

    <p>Quitclaim deed</p> Signup and view all the answers

    What type of deed should be used if the seller guarantees clear title?

    <p>Warranty deed</p> Signup and view all the answers

    Which bank has the highest priority mortgage?

    <p>Second State Bank, it was recorded first</p> Signup and view all the answers

    What is probate?

    <p>The court process of verifying a will and distributing property</p> Signup and view all the answers

    What type of deed should Seldom, Inc. use to protect against unknown legal issues?

    <p>Limited Warranty Deed</p> Signup and view all the answers

    What are the warranties in a deed?

    <p>Promises regarding ownership and title to the property</p> Signup and view all the answers

    What is the purpose of a notary seal on a deed?

    <p>To verify the identity of the person signing the deed</p> Signup and view all the answers

    What should Jim do to ensure his daughter gets his property when he dies?

    <p>Draft a will that instructs the property to go to Sally</p> Signup and view all the answers

    What type of lien will the bank use when lending money for home renovations?

    <p>Voluntary lien</p> Signup and view all the answers

    How is the chain of title constructed?

    <p>By reviewing each deed in the county real estate records</p> Signup and view all the answers

    What information is typically found on a lien?

    <p>Name of lien holder, name of debtor, amount of lien</p> Signup and view all the answers

    What is the purpose of a lien?

    <p>To ensure a creditor gets paid</p> Signup and view all the answers

    Who owns the property if Jessica wrote a deed but did not deliver it?

    <p>Jessica still owns it</p> Signup and view all the answers

    What does a standard title insurance policy cover?

    <p>Mistakes made during the real estate closing</p> Signup and view all the answers

    What is special about a tax deed?

    <p>A tax deed is superior in the chain of title</p> Signup and view all the answers

    What are the two purposes of a deed?

    <p>To convey property and inform ownership</p> Signup and view all the answers

    What may cause a break in the chain of title?

    <p>A seller who was never a buyer in a prior deed</p> Signup and view all the answers

    What process and deed will First State Bank use if Bill has not been paying the mortgage?

    <p>Foreclosure. Deed Under Power</p> Signup and view all the answers

    What is the Habendum clause?

    <p>Describes the interest conveyed by the deed</p> Signup and view all the answers

    What does a general lien cover?

    <p>All real estate owned by the debtor</p> Signup and view all the answers

    What happens to real estate when the owner dies?

    <p>Property passes to the owner's estate</p> Signup and view all the answers

    When might a court issue an equitable lien?

    <p>When property is held by a third party for a judgment debtor</p> Signup and view all the answers

    Is the real estate transaction valid if Bill does not have the authority to sign?

    <p>Likely not</p> Signup and view all the answers

    Is a deed valid if it is not signed by the grantor?

    <p>False</p> Signup and view all the answers

    Is a deed valid if it lacks a notary seal?

    <p>False</p> Signup and view all the answers

    Who may file an involuntary lien?

    <p>A judgment creditor</p> Signup and view all the answers

    What is escheat?

    <p>When a person dies without heirs to take property</p> Signup and view all the answers

    Study Notes

    Property Conveyance and Ownership

    • Property can be conveyed by any person or entity through a deed.
    • The grantee in a deed must be specifically named for a valid transaction.
    • The grantor is the party conveying or selling the property.
    • The grantee is the party receiving title to the property.

    Types of Liens

    • Statutory liens arise by law, e.g., a homeowner's association lien for unpaid assessments.
    • Mechanic's liens are filed by contractors, such as a drywall contractor performing renovations.
    • Voluntary liens, like mortgages, are created by agreement, while involuntary liens can be filed by judgment creditors.

    Title and Abstracts

    • The abstract of title is a written report detailing the chain of title of a property.
    • A break in the chain of title can occur if a deed is missing or invalid, affecting marketability.
    • Marketable title means a buyer would reasonably purchase the property given its title conditions.

    Types of Deeds

    • A warranty deed conveys the most rights and protections to the buyer.
    • A quitclaim deed provides the least protection, as it only transfers the grantor's current interest without guarantees.
    • A limited warranty deed offers some assurances about the property title, but with limitations.

    Real Estate Transactions

    • All parties in a transaction must have proper authority; a deed signed by an unauthorized person is invalid.
    • Property transfers must be recorded in county real estate records to provide constructive notice of ownership.
    • Title insurance protects against losses from defects in title discovered after closing.

    Specific Scenarios

    • If a property owner dies without a will, the estate is settled via intestacy laws, typically by administrator's deed.
    • A tax deed holds superior status in the chain of title over most other interests.
    • The chain of title is constructed by reviewing recorded deeds that link past owners to the current one.
    • Probate is the legal process for verifying a will and distributing property.
    • Foreclosure can occur when a debtor defaults, using a Deed Under Power as part of the process.
    • An equitable lien may be issued by a court over property held by a third party for a debtor.

    Ownership Transfer and Notification

    • To notify the world of property ownership, owners must record their deed.
    • The Habendum clause in a deed specifies the interest conveyed, such as fee simple or life estate.
    • After a property owner's death, the estate must be managed and distributed according to state laws regarding heirs.

    Miscellaneous

    • A general lien affects all real estate owned by the debtor within a county.
    • Common failure points for real estate transactions include missing signatures or notary seals on deeds.
    • If a party's debts exceed their assets, escheat laws may allow the state to claim the property.

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    Description

    Test your knowledge on real estate concepts with this quiz focused on Chapter 7. Explore key terms such as deeds, liens, and abstract of title, and enhance your understanding of property laws and regulations. Perfect for students or professionals in the field of real estate.

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