Chapter 8

Question 1

The weakest type of deed for a buyer

Answer 1

Quitclaim Deed

Question 2

A form of conveyance in which any interest the grantor possesses in the property described in the deed is conveyed to the grantee without warranty of title.

What kind of deed does this?

Answer 2

Quitclaim Deed

Question 3

A deed containing, or having implied by law, some but not all of the usual covenants of title; esp., a deed in which the grantor warrants that he or she (1) has not previously conveyed the estate being granted, (2) has not encumbered the property except as noted in the deed, and (3) will convey to the grantee any title to the property acquired after the date of the deed

Answer 3

Grant Deed

Question 4

When this type of deed is used, the grantor does not expressly warrant the title as being free and clear of all encumbrances and does not even warrant that he or she is the owner of the property.

Answer 4

Grant Deed

Question 5

This deed makes no claims or warrants to the quality of the title. It is used frequently in situations such as tax sales

Answer 5

Quitclaim Deed

Question 6

Example:

A property is claimed by a county or town for non-payment of taxes. The municipality advertises and sells off the property for whatever it can get. They make no investigation of the title and make no guarantees. It is strictly caveat emptor (Latin for “buyer beware”)!

This is an example of what kind of deed?

Answer 6

Quitclaim

Question 7

A deed that conveys real estate from a seller to a buyer but does not guarantee clear title; used by court officials and fiduciaries to convey property they hold by force of law, but to which they do not hold title

Answer 7

Bargain and Sale Deed

Question 8

This deed is the next step up the ladder from a quitclaim deed

Answer 8

Bargain and Sale Deed

Question 9

An example of this deed might be a sheriff’s deed, which is given to the purchaser of a property at a court-ordered sale.

Answer 9

Bargain and Sale Deed

Question 10

This deed does not guarantee that there is a clear title, but at least the seller (grantor) implies that they do hold title to the property.

Answer 10

Bargain and Sale Deed

Question 11

Most of these deeds do not have covenants or warranties; however in some states a seller is allowed to add covenants to this type of deed.

Answer 11

Bargain and Sale Deed

Question 12

A deed that conveys title to a property purchased at a tax sale; may or may not convey absolute title, free of all prior claims and liens, depending on state law.

Answer 12

Tax Deed

Question 13

This deed is essentially a bargain and sale deed, but is used specifically for tax sales where properties have been taken over for non-payment of real estate taxes.

Answer 13

Tax Deed

Question 14

A deed that conveys to the grantee title to the property free and clear of all encumbrances, except those specifically set forth in the document.

Answer 14

Warranty Deed

Question 15

This is the best and most powerful type of deed.

Answer 15

Warranty Deed

Question 16

The grantor warrants or guarantees that the title being conveyed is free and clear of all encumbrances in what type of deed?

Answer 16

Warranty Deed

Question 17

If, at a later date, a cloud on the title appears or someone else makes a claim against the title, the grantor must make it right.
What type of deed is this?

Answer 17

Warranty Deed

Question 18

A legal instrument similar to a mortgage document, except that three parties are involved in securing the debt: the borrower, a lender, and a trustee who holds property title when the deed of trust is executed and delivered. The trustee transfers title to the lender if the borrower defaults and to the borrower if the note is repaid.

Answer 18

Deed of Trust

Question 19

This is similar to a mortgage and is the method used in some states to encumber properties in lieu of recording a mortgage. Title is vested in a third party, the trustee, until the mortgage lien is satisfied.

Answer 19

Deed of Trust

Question 20

This is an alternative document that is a security instrument for a lender. In some states, lenders prefer this deed because, in the event of mortgage default, the trustee is able to sell the property without going through a lengthy and expensive foreclosure process.

Answer 20

Deed of Trust

Question 21

Passing of title to real property back to the original owner; e.g., in a deed of trust arrangement, upon liquidation of the debt the property is reconveyed from a third-party trustee to the trustor (borrower).

Answer 21

Reconveyance

Question 22

If a deed of trust is recorded and then the loan is paid off, the __________ document passes title back to the borrower.

Answer 22

Reconveyance

Question 23

True or false? Deeds do not have to be recorded to be valid.

Answer 23

True

Question 24

A legally binding agreement between two or more persons that represents their promise to do or not to do a particular thing. In many jurisdictions statutes of frauds, or their equivalent, may render a real property contract voidable if it does not consist of a signed, written agreement

Answer 24

Contract

Question 25

an agreement with specific terms between two or more persons or entities in which there is a promise to do something.

Answer 25

Contract

Question 26

An agreement to do or not to do something. Must involve at least two people.

Answer 26

Contract

Question 27

a firm agreement to perform an act, refrain from acting or make a payment or delivery.

Answer 27

Promise

Question 28

__________ are promises that the law will enforce. The law recognizes the promise as a duty and provides remedies if a promise is broken.

Answer 28

Contracts

Question 29

Every state has a ____________ that requires certain documents to be in writing.

Answer 29

Statute of Frauds

Question 30

A manifestation of willingness to enter into a bargain, which creates in the offeree the power of acceptance.

Answer 30

Offer

Question 31

a specific proposal to enter into an agreement with another.

Answer 31

Offer

Question 32

A manifestation of willingness to be bound by the terms of an offer made in a manner invited or required by the offer.

Answer 32

Acceptance

Question 33

_________ may occur as an express act or an implied act.

Answer 33

Acceptance

Question 34

the existence of the contract and its terms are stated in words or the writings of the parties in what kind of contract?

Answer 34

Express Contract

Question 35

The existence of the contract and its terms are inferred or implied from the conduct of the parties. The contract is created by the actions of the parties who perform the terms of the contract.

Answer 35

Implied Contract

Question 36

A _________ contract is one in which both parties have made promises to each other.

Answer 36

Bilateral

Question 37

Does a deed have to be recorded in order to be valid?

Answer 37

No

Question 38

Which is the best type of deed for the buyer? warranty deed grant deed bargain and sale deed tax deed

Answer 38

Warranty Deed

Question 39

In a real estate transaction, who is the grantee? seller buyer agent lender

Answer 39

Buyer

Question 40

Which type of deed is similar to a mortgage document? grant deed bargain and sale deed trust deed warranty deed

Answer 40

Trust Deed

Question 41

From the buyer's standpoint, what is the weakest type of deed? warranty deed quitclaim deed bargain and sale deed deed of trust

Answer 41

Quitclaim

Question 42

In a trust deed state, title to a property is vested in the __________ until the mortgage lien is satisfied. mortgagor grantee grantor trustee

Answer 42

Trustee

Question 43

Which is the best type of deed for the buyer? warranty deed grant deed bargain and sale deed tax deed

Answer 43

Warranty Deed

Question 44

An ______ contract is one that has been fully performed. The promises have been fulfilled according to the terms of the contract, and there is nothing left to be done.

Answer 44

Executed

Question 45

An example of this type of contract would be a real offer to purchase after all contingencies have been met and the closing has occurred. File it away!

Answer 45

Executed Contract

Question 46

An _______ contract is one that is not been fully performed or completed. Something is still left to be done.

Answer 46

Executory

Question 47

A good example of a ______ contract is a listing contract. A real estate agent tries to sell the property during the term of the contract. A mortgage would also be considered an ________ contract until it is finally paid off or satisfied.

Answer 47

Executory

Question 48

A _______ contract is one that is binding and enforceable on all parties. It contains all the valid elements of a contract and is still in force.

Answer 48

valid

Question 49

A ______ contract is one that has no legal force or effect even though it contains the elements of a valid contract.

Answer 49

Void

Question 50

A ________ contract is one that results from the failure of the parties to meet some legal requirement.

Answer 50

Voidable

Question 51

An _________ contract is one that appears to be valid but would not be enforceable in court. For example, if one party tries to enforce an otherwise valid contract after the statute of limitations has expired, that contract would be ________

Answer 51

Unenforcable

Question 52

``` Competent parties Mutual agreement Consideration Lawful objective In writing and signed ``` These are all...

Answer 52

Elements of a contract

Question 53

in general, able to act in the circumstances, including the ability to perform a job or occupation, or to reason or make decisions.

Answer 53

Competent Parties

Question 54

the mental ability to understand the general effect of a transaction or document.

Answer 54

Competency

Question 55

For a contract to become binding, the parties must enter into it voluntarily and with a full understanding of the terms. They are coming to a...?

Answer 55

Mutual Agreement

Question 56

Lack of mutual agreement could be evidenced by such things as:

Answer 56

``` Fraud Misrepresentation Mutual Mistake Undue Influence Duress ```

Question 57

Feebleness on one side, overpowering strength on the other

Answer 57

Duress

Question 58

An agreement must be based on good and valuable __________; something of value. This could be: Money Property A promise of performance or a promise to pay Forbearance: a promise to refrain from doing something

Answer 58

Consideration

Question 59

any act or forebearance which is of benefit to the promisor or detriment to the promisee.

Answer 59

Consideration

Question 60

The _________ rule states that written contracts take precedence over oral agreements.

Answer 60

Parol Evidence RUle

Question 61

Contracts can be terminated or discharged by:

Answer 61

Agreement of the parties Performance of the contract Impossibility of performance Operation of law

Question 62

to give up a right as releasing one from his/her obligation to perform under a contract, or to relinquish a right to an interest in real property. 2) v. to give freedom, as letting out of prison. 3) n. the writing that grants a release

Answer 62

Release

Question 63

the act of transferring an interest in property or some right (such as contract benefits) to another. It is used commonly by lawyers, accountants, business people, title companies and others dealing with property.

Answer 63

Assignment

Question 64

agreement of parties to a contract to substitute a new contract for the old one.

Answer 64

Novation

Question 65

a phrase often used in contracts which in effect says: the specified time and dates in this agreement are vital and thus mandatory, and ‘we mean it.' Therefore any delay - reasonable or not, slight or not - will be grounds for canceling the agreement.

Answer 65

Time of the essence clause

Question 66

The application of law may change the rights and liabilities of the parties, without their consent. Contracts can be terminated by _________ under: Bankruptcy Statute of limitations Alteration of contract

Answer 66

Operation of Law

Question 67

A ________ contract is binding and enforceable on all parties. unenforceable valid void voidable

Answer 67

Valid

Question 68

Contracts for the sale of real estate must be __________ in order to be enforceable. signed by at least one party voidable with a minor in writing

Answer 68

In writing

Question 69

The general rule of contracting with minors is that a contract with a minor is illegal and unenforceable voidable at the minor's option null and void valid and fully enforceable in most states

Answer 69

Voidable at the minor's option

Question 70

Which of these is NOT necessary in creating a valid contract that would be binding and enforceable on all parties? competent parties reasonable price lawful objective consideration

Answer 70

Reasonable Price

Question 71

Failing to perform any term of a contract, written or oral, without a legitimate legal excuse. This may include not completing a job, not paying in full or on time, failure to deliver all the goods, substituting inferior or significantly different goods, not providing a bond when required, being late without excuse, or any act which shows the party will not complete the work

Answer 71

Breach of Contract

Question 72

the cancellation of a contract by mutual agreement of the parties.

Answer 72

Rescission

Question 73

the correction or change of an existing document by court order upon petition of one of the parties to the document.

Answer 73

Reformation

Question 74

writ (order) issued by a court ordering someone to do something or prohibiting some act after a court hearing.

Answer 74

Injunction

Question 75

the right of a party to a contract to demand that the defendant (the party who it is claimed breached the contract) be ordered in the judgment to perform the contract.

Answer 75

Specific Performance

Question 76

damages recovered in payment for actual injury or economic loss, which does not include punitive damages

Answer 76

Compensatory damages

Question 77

damages claimed and/or awarded in a lawsuit which were caused as a direct foreseeable result of wrongdoing.

Answer 77

Consequential Damages

Question 78

An amount of money agreed upon by both parties to a contract which one will pay to the other upon breaching (breaking or backing out of) the agreement or if a lawsuit arises due to the breach

Answer 78

Liquidated Damages

Question 79

damages awarded in a lawsuit as a punishment and example to others for malicious, evil or particularly fraudulent acts.

Answer 79

Punitive damages

Question 80

something of value given by a buyer to a seller to bind a bargain.

Answer 80

Earnest money

Question 81

What needs to be in a contract?

Answer 81

``` Sale Price Date of Sale Sale Concessions (making repairs, paying closing costs) Owner of Record Legal Description Personal Property included in sale price ```

Question 82

A contract in which the rights to use and occupy land, space, or structures are transferred by the owner to another for a specified period of time in return for a specified rent.

Answer 82

Lease

Question 83

a lease with a specified level of rent that continues throughout the lease term.

Answer 83

Flat Rental Lease

Question 84

A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed expenses; also called full-service lease

Answer 84

Gross Lease

Question 85

A lease in which the landlord passes on all expenses to the tenant.

Answer 85

Net Lease

Question 86

A lease that provides for specified changes in rent at one or more points during the lease term, e.g., step-up and step-down leases, or leases with a set percentage adjustment.

Answer 86

Graduate Rental Lease

Question 87

A lease, usually for a long term, that provides for periodic rent adjustments based on the change in an economic index

Answer 87

Index Lease

Question 88

A lease that provides for periodic rent adjustments based on the market rental rate of the space.

Answer 88

Revaluation Lease

Question 89

A lease that allows for the lessor to seek reimbursement of operating expenses after specific criteria have been met

Answer 89

Escalator Lease

Question 90

A lease in which the rent or some portion of the rent represents a specified percentage of the volume of business, productivity, or use achieved by the tenant.

Answer 90

Percentage Lease

Question 91

The percentage rent paid over and above the guaranteed minimum rent or base rent; calculated as a percentage of sales in excess of a specified breakpoint sales volume.

Answer 91

Overage Rent

Question 92

In most appraisals for residential mortgage lending transactions, personal property items are - included in the real property appraisal - valued in a separate appraisal report - not included in the real property appraisal - required to be removed from the premises before the appraiser arrives

Answer 92

Not included in the real property Appraisal

Question 93

What type of lease requires the landlord to pay all of the property's operating and fixed expenses? gross lease net lease net-net-net lease step-up lease

Answer 93

Gross Lease

Question 94

True or false? Punitive damages are commonly awarded in breach of contract cases.

Answer 94

False

Question 95

A seller enters into an agreement to sell his property, but later changes his mind and decides not to complete the sale. The buyer sues the seller and a judge orders the seller to complete the sale. This is an example of rescission novation mutual assent specific performance

Answer 95

Specific Performance

Question 96

A seller enters into an agreement to sell his property, but later changes his mind and decides not to complete the sale. The buyer sues the seller and a judge orders the seller to complete the sale. This is an example of rescission novation mutual assent specific performance

Answer 96

Specific Performance

Question 97

Breach of contract is also known as novation default assumption statutory fraud

Answer 97

default

Question 98

A deed that conveys real property from a seller to a buyer but does not guarantee clear title; used by court officials and fiduciaries to convey property they hold by force of law, but to which they do not hold title is the definition of a ____________deed. bargain and sale warranty trust quitclaim

Answer 98

bargain and sale

Question 99

"The correction or change of an existing document by court order upon petition of one of the parties to the document" is the definition of rescission reformation injunction novation

Answer 99

reformation

Question 100

If a seller defaults in a real estate contract, the buyer may take all of these actions EXCEPT rescind the contract and recover the earnest money deposit file a suit calling for specific performance, to force the seller to sell the property sue the seller for compensatory damages sue the seller for punitive damages

Answer 100

sue the seller for punitive damages

Question 101

The mental ability to understand the general effect of a transaction or document" is the definition of ethics stability competency adulthood

Answer 101

competency

Question 102

"A manifestation of willingness to enter into a bargain, which creates in the offeree the power of acceptance” is the definition of a(n) promise acceptance offer willfulness

Answer 102

offer

Question 103

Every ____________ has a statute of frauds. municipality county state taxing jurisdiction

Answer 103

state

Question 104

“A lease in which the landlord receives stipulated rent and is obligated to pay all of the property’s operating and fixed expenses” is a _____________ lease. net gross index net net

Answer 104

Gross

Question 105

The seller of a property is called the grantor grantee legatee landlord

Answer 105

grantor

Question 106

"The act of transferring an interest in property or some right (such as contract benefits) to another” is the definition of assignment novation codicil acceptance

Answer 106

assignment

Question 107

A reconveyance may be employed if there is a grant deed deed of trust sheriff’s deed quitclaim deed

Answer 107

deed of trust

Question 108

“A form of conveyance in which any interest the grantor possesses in the property described in the deed is conveyed to the grantee without warranty of title” is the definition of a ________________ deed. trust quitclaim sheriff’s warranty

Answer 108

Quitclaim

Question 109

"The cancellation of a contract by mutual agreement of the parties” is the definition of breach of contract revision novation rescission

Answer 109

Recission

Question 110

The amount stated in a deed is called the rescission fee consideration tender

Answer 110

consideration