Texas Real Estate Finance Questions and Answers Graded A+

Texas Real Estate Finance Questions and Answers Graded A+ REAL ESTATE the land and everything permanently attached to it that is owned as part of a person's estate ESTATE everything a person owns - all assets, whether real property or personal property and liabilities 2 classifications of estate 1. Freehold 2. Leesehold Freehold Estate indefinite ownership of estate with full bundle of rights Leasehold Estate limited ownership of estate with limited rights, right to use. Type of Freehold Estates Fee Simple Estate Lif Estate Fee Simple Estate - Complete ownership - Can be inherited - Ha no restrictions on the bundle of rights Life Estate - dependent on the life span of owner - Upon death of owner, property reverts to the original transferor or other designee - Can be mortgaged, leased or sold during holder's lifetime Common leasehold estates 1. Estate for Years : set with a specified timeframe, no renewal. Most common with commercial and some apartment leases 2. Estate period to period : set with expire date, but can be renewed, notice for termination must be given Less common leasehold estates 1. Estate at Will : tenant stays in property without proper lease agreement or agreement of payment. Usually done with family 2. Estate at Sufferance: tenant wrongfully stays beyond expired lease without given notice and payment. If landowner knows and extends lease, tenant becomes estate period-period. Marketable Title a title free from plausible or reasonable objections. - free of encumbrances - free from the risk of litigations over possible defects Assurance that title is good and marketable 1. Deeds: Provide a warranty as part of the deed 2. Abstract and Opinion: Search recorded documents for any problems that might affect title 3. Title Insurance: Purchase title insurance to cover any unexpected problems GENERAL WARRANTY DEED - offers complete warrant about the quality of the property - owner claims title is free and clear of all encumbrances (except what is listed) - if title fails, grantor will compensate grantee for any losses "I own and will defend" SPECIAL WARRANTY DEED - similar to general warrant deed - grantor only warrants against what occurred during his ownership of title "I own and will defend only mine" QUITCLAIM DEED - deed only conveys the rights, interest and title that the grantor - Offers no or any warranty about the quality of the title. "i own and will not defend" ABSTARCT AND OPINION TWO STEPS