Podcast
Questions and Answers
Which scenario best exemplifies constructive notice?
Which scenario best exemplifies constructive notice?
- A real estate agent sends an email to their client detailing recent changes in local zoning laws.
- A homeowner is directly informed by a neighbor about plans for a new construction project on an adjacent property.
- A potential buyer reviews publicly recorded property documents, revealing an existing easement on the land. (correct)
- A seller verbally discloses a known defect in the property to a prospective buyer during a private showing.
In accounting, which of the following is typically recorded as a credit?
In accounting, which of the following is typically recorded as a credit?
- The purchase of new office equipment.
- An increase in the cash balance of a company.
- An increase in a company's debt. (correct)
- A decrease in accounts payable.
During a real estate closing, what does proration primarily ensure?
During a real estate closing, what does proration primarily ensure?
- That property taxes are assessed at a lower rate for the new owner.
- That the seller is reimbursed for all repair costs incurred before the sale.
- That the buyer receives a discount on the purchase price.
- That expenses like taxes and insurance are fairly divided between the buyer and seller. (correct)
What is the primary purpose of the HUD-1 Statement (now replaced by the Closing Disclosure in many transactions) in a real estate transaction?
What is the primary purpose of the HUD-1 Statement (now replaced by the Closing Disclosure in many transactions) in a real estate transaction?
Which action is most likely to be regulated by the Real Estate Settlement Practices Act (RESPA)?
Which action is most likely to be regulated by the Real Estate Settlement Practices Act (RESPA)?
Flashcards
Constructive Notice
Constructive Notice
Knowledge of a fact one could discover through reasonable diligence and inquiry, as determined by law.
Actual Notice
Actual Notice
Direct communication that ensures the recipient has been informed about a specific matter.
Credits
Credits
An accounting entry that decreases assets or expenses, or increases liabilities, equity, or revenue.
Debits
Debits
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Proration
Proration
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Study Notes
- Constructive Notice: Legal imputation of knowledge of a fact because it could have been discovered through proper diligence and inquiry.
- Actual Notice: Notice delivered with legally sufficient assurance that actual knowledge of the matter has been conveyed.
- Credits: Bookkeeping entry on the right side of an account.
- Records reduction/elimination of an asset or expense and creation/addition to a liability, equity, or revenue.
- Debits: The amount charged as due or owing from one person to another.
- Proration: Adjustments of interest, taxes, and insurance on a pro rata basis as of the closing date.
- It is also the allocation of closing costs and credits to buyers and sellers.
- HUD-1 Statement: An itemized listing of funds payable at closing.
- RESPA: Real Estate Settlement Practices Act.
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Description
Explanation of real estate terms like constructive notice, actual notice, credits, debits, and RESPA. It also describes HUD-1 statement and proration. These terms are important for understanding real estate transactions and legal aspects.
