objective 1: identify the issues of particular interest to the buyer and seller as a real estate transaction closes

Question 1

What are the 2 major events involved in closing?

Answer 1

1) promises made in the sales contract are fulfilled
2) the mortgage funds are distributed to the buyer

Question 2

Promises made in the sales contract are fulfilled during ___

Answer 2

closing

Question 3

when are mortgage funds distributed to the buyer?

Answer 3

during closing

Question 4

Both buyers & their lenders must be sure that the seller can deliver the title that was promised in the purchase agreement and that the property is now in essentially the same condition it was in when the buyers and the sellers agreed to make the sale. This involves inspecting which 6 things?

Answer 4

1) title evidence
2) seller’s deed
3) any documents demonstrating the removal of undesired liens and encumbrances
4) the survey
5) the results of any required inspections (e.g. termite, structural, required repairs, etc)
6) any leases (if tenants reside on the premises)

Question 5

The pamphlet “For Your Protection: Get a Home Inspection” is required ONLY for ___.

Answer 5

FHA loans

Question 6

Which pamphlet emphasizes the difference between an appraisal and a home inspection?

Answer 6

For Your Protection: Get a Home Inspection

Question 7

The pamphlet “For Your Protection: Get a Home Inspection” emphasizes the difference between ___ and ___.

Answer 7

an appraisal and a home inspection

Question 8

In the real estate contract, the ___ usually reserves the right to make a final inspection shortly before the closing takes place

Answer 8

buyer

Question 9

In the real estate contract, the buyer usually reserves the right to make a(n) ____ shortly before the closing takes place

Answer 9

final inspection

Question 10

In the real estate contract, the buyer usually reserves the right to make a final inspection shortly before ___ takes place

Answer 10

closing

Question 11

Also called a walk-through

Answer 11

Final inspection

Question 12

Shortly before closing, the buyer accompanied by the licensee will make a(n) ___ to verify that necessary repairs have been made, the property has been well maintained, all fixtures are in place, and no unauthorized removal or alteration of any part of the improvements has taken place.

Answer 12

final inspection

Question 13

The final inspection is NOT an opportunity to…

Answer 13

reopen negotiations

Question 14

The ___ specifies who will pay for the survey

Answer 14

sales contract

Question 15

Typically, the ___ indicates the location of all buildings, driveways, fences, and other improvements located on the premises.

Answer 15

Survey

Question 16

The ___ also notes any improvements located on adjoining property that may enroach on the premises being bought.

Answer 16

Survey

Question 17

The ___ should set out, in full, any existing easements and enroachments.

Answer 17

survey

Question 18

The survey should set out, in full, any existing ___ and ___

Answer 18

easements and enroachments

Question 19

A survey is frequently required by ___

Answer 19

Lenders

Question 20

Relying on old ___ is not a good idea, and the property should be ___, whether or not the title company or lender it.

Answer 20

Survey
Resurveyed

Question 21

A current ___ confirms that the property purchased is exactly what the buyer wants.

Answer 21

Survey

Question 22

Both the buyer and seller, both accompanied by their attorneys, will want to inspect the ___ to make sure that all monies involved in the transaction have been accounted for properly.

Answer 22

closing statement

Question 23

Licensees may discuss with clients the approximate expenses involved in closing at the time the ___ or ___ is entered into but NOT later than the time when the ___ is signed.

Answer 23

listing agreement or buyer agency agreement
sales contract

Question 24

Lenders require ___ in the event any “clouds” on the title (encumbrances on the real estate or claims on the title) should come up during the course of ownership

Answer 24

Title insurance

Question 25

___ is not issued until it is clear that such encumbrances from the past are unlikely

Answer 25

Title insurance

Question 26

Title insurance is not issued until it is clear that ___ from the past are unlikely

Answer 26

encumbrances

Question 27

a major goal of title procedures is for the new owner to obtain a clear and valid "___"

Answer 27

Owner's title policy

Question 28

Which policy comes as close as any document can to providing evidence of ownership of a property that is unencumbered by any past liens or potential claims?

Answer 28

Owner's title policy

Question 29

as a first step toward a new owner's title policy, before closing and establishment of the new owner's title, the seller is usually required to produce a current ___ or ___ from the title insurance company

Answer 29

abstract of title or title commitment

Question 30

When a(n) ___ is used, the purchaser's attorney examines it and issues an opinion of title.

Answer 30

Abstract of title

Question 31

when an abstract of title is used, the purchaser's attorney examines it and issues a(n) ___.

Answer 31

opinion of title

Question 32

The ___ issued by the purchaser's attorney is a statement of the status of the seller's title

Answer 32

opinion of title

Question 33

the opinion of title issued by the purchaser's attorney is a statement of...

Answer 33

the status of the seller's title

Question 34

The ___ issued by the purchaser's attorney discloses all liens, encumbrances, easements, conditions, or restrictions that appear on the record and to which the seller's title is subject

Answer 34

opinion of title

Question 35

the date when the sale is actually completed

Answer 35

the date of delivery of the deed

Question 36

On the date when the sale is actually completed, the buyer has a(n) ___ or a(n) ___ that was issued several days or weeks before the closing.

Answer 36

abstract of title or title commitment

Question 37

How many searches of public records are there normally?

Answer 37

Two

Question 38

The first search of public records shows the ___ on the date of the first search, and is usually paid for by the ___.

Answer 38

status of the seller's title seller pays

Question 39

The second search of public records (bring-down) is made ___ and is generally paid for by the ___.

Answer 39

Made after closing Purchaser pays

Question 40

During the second search (bring-down), the seller may be required to execute a(n) ___.

Answer 40

Affidavit of title

Question 41

The ___ promises that no unrecorded deeds or contracts have been made, no repairs or improvements have gone unpaid, and no defects in the title have arisen that the seller knows of.

Answer 41

Affidavit of title

Question 42

The ___ affirms that the seller is in possession of the premises

Answer 42

Affidavit of title

Question 43

In some areas, an affidavit of title is required before the ___ will issue a(n) ___ to the buyer

Answer 43

title insurance company will issue an owner's policy

Question 44

The affidavit of title gives the title insurance company the right to ___ if the statements in the affidavit are incorrect

Answer 44

sue the seller

Question 45

In IL, the title insurance agent or independent escrowee acting as the closing agent may not make disbursements at closing when the amounts held for disbursement include funds from any single party in excess of $50,000, unless those funds (called good funds) are wired funds unconditionally held by and credited to the ___.

Answer 45

Closing agent

Question 46

In IL, the title insurance agent or independent escrowee acting as the closing agent may not make disbursements at closing when the amounts held for disbursement include funds from any single party in excess of $50,000, unless those funds (called good funds), are in the form of a check issued by ___, ___, or ___.

Answer 46

State of IL The USA political subdivision of IL or the USA

Question 47

In IL, the title insurance agent or independent escrowee acting as the closing agent may not make disbursements at closing when the amounts held for disbursement include funds from any single party in excess of $50,000, unless those funds (called good funds) have been received by the ___ and are finally settled and credited to the account of the ___

Answer 47

closing agent closing agent

Question 48

In IL, if a party to the transaction brings funds to the table for closing, the good funds would include a personal check not exceeding $___ as long as there are reasonable grounds to believe that sufficient funds are available to back the check

Answer 48

$5,000

Question 49

In IL, cash monies up to $____ can be provided at closing by a party and be considered good funds

Answer 49

$49,999.99

Question 50

In IL, cash monies LESS than $50,000 can be provided at closing by a party and be considered ___

Answer 50

good funds

Question 51

IL, cashier's checks or certified checks drawn on or issued by a financial institution chartered by any state in the USA up to $49,999.999 will be considered ___

Answer 51

good funds

Question 52

It is always best to check with the ___ to see what form they will allow funds to appear at closing.

Answer 52

title company

Question 53

Title companies are often reluctant to take ___ of any amount

Answer 53

personal checks

Question 55

In IL, a subsequent amendment to the Title Insurance Act clarified that money coming from a brokerage need not be wire transferred UNLESS...

Answer 55

it is greater than $50,000

Question 56

Whether the purchaser pays cash or obtains a new loan to purchase the property, the seller's ___ is paid in full and satisfied on record

Answer 56

Existing loan

Question 58

In a transaction in which the buyer assumes the seller's existing mortgage loan, the buyer will want to know the ___ as of the closing date

Answer 58

exact balance of the loan

Question 58

In some areas, it is customary for the buyer to obtain a(n) ___ from the lender that certifies the amount owed on the mortgage loan, the interest rate, and the last interest payment made.

Answer 58

Mortgage reduction certificate

Question 58

Licensees often assist in ___ as part of their service to customers

Answer 58

pre-closing arrangements

Question 58

In some states, licensees are required to advise the parties of the ___ involved in closing when a real estate sales contract is signed.

Answer 58

approximate expenses

Question 59

In some states, licensees have a statutory duty to ___ and ___ closing activities

Answer 59

coordinate and supervise

Question 60

Aside from state laws, a licensee without a specific role in the closing may still be the person with the ___, which is why many licensees feel it is part of their fiduciary duty to be present at a face-to-face closing

Answer 60

most knowledge of the transaction