class 14 property

Question 2

What is the first step in the real estate transaction timeline?

Answer 2

The Buyer and Seller sign the contract.

Question 3

What period follows the signing of the contract in a real estate transaction?

Answer 3

EXECUTORY PERIOD

Question 4

What is examined during the executory period?

Answer 4

The Seller’s title is examined.

Question 5

What must the Buyer obtain during the executory period?

Answer 5

Financing from the Lender.

Question 6

What is opened to consummate the transaction?

Answer 6

An escrow.

Question 7

What types of documents are prepared during the executory period?

Answer 7

Deed, mortgage, promissory note, and escrow instructions.

Question 8

What is the final step in the real estate transaction timeline?

Answer 8

The transaction closes.

Question 9

What happens during the closing of a real estate transaction?

Answer 9

The Buyer pays the purchase price to the Seller.

Question 10

What must the Buyer execute for the Lender during closing?

Answer 10

A mortgage and promissory note.

Question 11

What does the Lender do during the closing process?

Answer 11

Advances the loan funds.

Question 12

How does the Seller transfer title to the Buyer?

Answer 12

By delivering the deed.

Question 13

What is recorded in public land records after closing?

Answer 13

The deed and mortgage.

Question 14

What type of insurance policies are issued during a real estate transaction?

Answer 14

Title insurance policies.

Question 15

What is the general rule under the Statute of Frauds regarding oral agreements for the sale of real property?

Answer 15

An oral agreement for the sale of an interest in real property is not enforceable.

Question 16

What are the essential terms required in a written contract?

Answer 16

Identities of the parties, the price, and the property description.

Question 17

What must the writing of the contract be signed by?

Answer 17

The party sought to be bound.

Question 18

What are acceptable property descriptions under the Statute of Frauds?

Answer 18

Government Survey, Metes and Bounds, Subdivision Maps.

Question 19

What is one defense under the Statute of Frauds?

Answer 19

Part Performance.

Question 20

What must a buyer do to enforce an oral contract under Part Performance?

Answer 20

Take possession, pay part of the purchase price, and make improvements.

Question 21

What is marketable title?

Answer 21

Title reasonably free from doubt as to its validity.

Question 22

What are the three rules for unmarketable title?

Answer 22

1. Seller’s property interest is less than what she purports to sell. 2. Seller’s title is subject to an encumbrance. 3. Reasonable doubt about either (1) or (2).

Question 23

What is an encumbrance?

Answer 23

A claim or liability attached to property that may lessen its value.

Question 24

What do public encumbrances do to marketability of title?

Answer 24

They do not make title unmarketable.

Question 25

What typically causes title to be unmarketable?

Answer 25

Almost any private encumbrance.

Question 26

When is marketable title required?

Answer 26

The seller is not required to produce marketable title until the closing.

Question 27

What is the doctrine of equitable conversion?

Answer 27

Places the risk of loss on the buyer once the contract is signed.

Question 28

What happens if the buyer or seller dies before closing under equitable conversion?

Answer 28

The contract is still valid and enforceable by heirs.

Question 29

What does the historical default rule of caveat emptor imply?

Answer 29

The seller had no duty to disclose defects.

Question 30

What is the modern default rule regarding seller's disclosure?

Answer 30

The seller must disclose defects that materially affect value and are not readily discoverable by the buyer.

Question 31

What constitutes a basis for rescission in nondisclosure?

Answer 31

A condition created by the seller that materially impairs value and is within the seller's knowledge.

Question 32

What is an 'as is' clause?

Answer 32

A clause stating the property is sold in its current condition, but it does not shield the seller from liability for misrepresentation.

Question 33

What is the significance of the case Stambovsky v. Ackley?

Answer 33

It highlights the duty of sellers to disclose material defects.

Question 34

What is the burden on a homebuyer regarding property research?

Answer 34

The burden is on a homebuyer to do their homework on a property.

Question 35

What specific inquiries does Bonnevie recommend buyers make about properties?

Answer 35

Buyers should ask specifically about fuel tanks and solar panels.

Question 36

What clause does Bonnevie recommend including in purchase agreements?

Answer 36

Include a clause stating that buyers are not bound by any contracts after the sale.

Question 37

What occurs during the 'EXECUTORY PERIOD'?

Answer 37

* The Seller’s title is examined * The condition of the property is evaluated * The Buyer obtains financing from the Lender * An escrow is opened to consummate the transaction * Various documents are prepared

Question 38

What happens during 'CLOSING' of a real estate transaction?

Answer 38

* The Buyer pays the purchase price to the Seller * The Buyer executes a mortgage and promissory note for the Lender * The Lender advances the loan funds * The Seller transfers title to the Buyer by delivering the deed * The deed and mortgage are recorded in public land records * Title insurance policies are issued

Question 39

What is the role of an escrow agent?

Answer 39

A neutral third party who receives documents and funds to consummate the transaction.

Question 40

When is a deed considered effective?

Answer 40

A deed is only effective when it is delivered.

Question 41

What must a grantor manifest for a deed to be effective?

Answer 41

An intention to immediately transfer title to the grantee.

Question 42

In Rosengrant v. Rosengrant, what was the conclusion regarding the delivery of the deed?

Answer 42

The deed was not delivered to the nephew.

Question 43

What is the presumption regarding manual transfer of a deed?

Answer 43

The manual transfer of the deed to the grantee creates a presumption that the deed has been delivered.

Question 44

What is the Statute of Frauds requirement for a deed?

Answer 44

* Must be in writing * Contain essential terms * Signed by the grantor

Question 45

What is acceptance in the context of a deed?

Answer 45

A deed is effective only if it is delivered and accepted.

Question 46

What is specific performance in real estate transactions?

Answer 46

An equitable remedy requiring the breaching party to perform the contract.

Question 47

Under what conditions will specific performance be granted?

Answer 47

Only if monetary damages are inadequate.

Question 48

What is the definition of marketable title?

Answer 48

Title reasonably free from doubt as to its validity.

Question 49

What are the rules for unmarketable title?

Answer 49

* Seller’s property interest is less than what she purports to sell * Seller’s title is subject to an encumbrance * Reasonable doubt about either of the above

Question 50

What is required for part performance under the Statute of Frauds?

Answer 50

* Buyer takes possession * Pays part of the purchase price * Makes improvements to the property

Question 51

What are the Seller's duties regarding property defects?

Answer 51

Obligated to disclose defects that materially affect value and are not known to or readily discoverable by a buyer.

Question 52

What constitutes valid delivery of a deed?

Answer 52

A deed must be delivered to be effective.

Question 53

What is the outcome if a grantor retains control of a deed?

Answer 53

The deed is considered undelivered and conveys nothing.

Question 54

What is the effect of a buyer's actions under equitable/promissory estoppel?

Answer 54

An oral contract may be enforced if one party acts to their detriment in reliance on another's oral promise.

Question 55

What happens if a seller dies before closing the transaction?

Answer 55

Under equitable conversion, the contract is still valid and can be enforced by heirs.

Question 56

What is the significance of the case Vasquez v. Vasquez?

Answer 56

It illustrates that a deed is only effective when delivered and accepted.