FINC 371 Pre Test 2 (Peterson)
Questions With Guaranteed Pass
Solutions.
Ch. 5 - Answer Deeds and Titles
All RE contracts must be in ______ - Answer writing
6 Essential Elements of a Deed - Answer 1. Grantor [Giver]
2. Grantee [Receiver]
3. Consideration [something of economic value]
4. Legal Description [metes/bounds, plats, etc]
5. Signatures [once have both, then it is considered executed]
6. Delivered [title not transferred UNTIL delivery to Grantee, filed with county]
Covenants vs Warranties - Answer Covenant: agreement or promise [4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - Answer 1. Against Encumbrances [no other encumbrances than
ones disclosed]
2. Seisin or Ownership [assurance grantor is able to sell the RE]
3. Quiet Enjoyment [promise to protect rights for quiet enjoyment against anyone who might
claim title to property later]
4. Further Assurances [backup/prove you now own the property; requires seller to take
affirmative steps to cure any defects in title]
1 Traditional Warranty: - Answer 1. Warranty Forever [guarantee statements are true]
,-Grantor promises ALL 4 covenants and 1 warranty
-Grantor promises to DEFEND title conveyed
-> Owner takes responsibility
2. Special Warranty Deed [backing up for everything during present ownership] - Answer -
Limits warranties to events occurring DURING grantor's period of ownership
-does NOT protect prior encumbrances
3. Bargain & Sale Deed [aka "warranty deed w/o covenants"] - Answer -Implies grantor has
title to property and rights to convey it
-does NOT contain express covenants as to title validity
ex) used when bank selling title in an auction
4. Quitclaim Deed [worst protection] - Answer -Transfers any interest grantor may have in
property but does NOT imply grantor has any valid interest
-worst protection of all deeds
ex) most commonly used to clear defects in title to property
GOOD Title = - Answer -Marketable [Free and Clear of Claims]
-Insurable [Reputable Title]
-Perfect of Record [No defects in title]
Title Examination: - Answer Discovering Possible Defects
1. Title Opinion [lawyer statement] - Answer A statement by a lawyer summarizing findings by
a search that may relate to title
2. Title Insurance [policy providing protection @ time of title transfer] - Answer A policy that
insures the title received by grantee against any deficiencies that may have been in existence at
time title was transferred
, Video: Common Mistakes: - Answer 1. error in public records
2. unknown liens
3. missing heirs
4. forgeries
5. surveyor boundary issues
Title Abstract [does not require lawyer] - Answer -A written summary of chain of title of RE
-lawyer may hire a title abstract company to do research and then he will sign it to save time
and money
->summarization of title history
Torrens System [similar to a car title] - Answer -provides landowner with a title certificate
[British system]
-obtained through legal proceedings
-transferring title:
old: returned to registrar
new: issued to new owner
Ch. 6 - Answer Contracts and Title Closings
Necessary Elements to a Contract: - Answer 1. Offer
2. Acceptance
3. Consideration
4. Parties Capacity
5. Lawful Purpose
1. Offer - Answer -A statement that specifies position of the maker of offer [offeror]
-Receiving party = offeree
-> Offer becomes valid when contract is ACCEPTED by receiving party but has right to take back
BEFORE accepted
Questions With Guaranteed Pass
Solutions.
Ch. 5 - Answer Deeds and Titles
All RE contracts must be in ______ - Answer writing
6 Essential Elements of a Deed - Answer 1. Grantor [Giver]
2. Grantee [Receiver]
3. Consideration [something of economic value]
4. Legal Description [metes/bounds, plats, etc]
5. Signatures [once have both, then it is considered executed]
6. Delivered [title not transferred UNTIL delivery to Grantee, filed with county]
Covenants vs Warranties - Answer Covenant: agreement or promise [4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - Answer 1. Against Encumbrances [no other encumbrances than
ones disclosed]
2. Seisin or Ownership [assurance grantor is able to sell the RE]
3. Quiet Enjoyment [promise to protect rights for quiet enjoyment against anyone who might
claim title to property later]
4. Further Assurances [backup/prove you now own the property; requires seller to take
affirmative steps to cure any defects in title]
1 Traditional Warranty: - Answer 1. Warranty Forever [guarantee statements are true]
,-Grantor promises ALL 4 covenants and 1 warranty
-Grantor promises to DEFEND title conveyed
-> Owner takes responsibility
2. Special Warranty Deed [backing up for everything during present ownership] - Answer -
Limits warranties to events occurring DURING grantor's period of ownership
-does NOT protect prior encumbrances
3. Bargain & Sale Deed [aka "warranty deed w/o covenants"] - Answer -Implies grantor has
title to property and rights to convey it
-does NOT contain express covenants as to title validity
ex) used when bank selling title in an auction
4. Quitclaim Deed [worst protection] - Answer -Transfers any interest grantor may have in
property but does NOT imply grantor has any valid interest
-worst protection of all deeds
ex) most commonly used to clear defects in title to property
GOOD Title = - Answer -Marketable [Free and Clear of Claims]
-Insurable [Reputable Title]
-Perfect of Record [No defects in title]
Title Examination: - Answer Discovering Possible Defects
1. Title Opinion [lawyer statement] - Answer A statement by a lawyer summarizing findings by
a search that may relate to title
2. Title Insurance [policy providing protection @ time of title transfer] - Answer A policy that
insures the title received by grantee against any deficiencies that may have been in existence at
time title was transferred
, Video: Common Mistakes: - Answer 1. error in public records
2. unknown liens
3. missing heirs
4. forgeries
5. surveyor boundary issues
Title Abstract [does not require lawyer] - Answer -A written summary of chain of title of RE
-lawyer may hire a title abstract company to do research and then he will sign it to save time
and money
->summarization of title history
Torrens System [similar to a car title] - Answer -provides landowner with a title certificate
[British system]
-obtained through legal proceedings
-transferring title:
old: returned to registrar
new: issued to new owner
Ch. 6 - Answer Contracts and Title Closings
Necessary Elements to a Contract: - Answer 1. Offer
2. Acceptance
3. Consideration
4. Parties Capacity
5. Lawful Purpose
1. Offer - Answer -A statement that specifies position of the maker of offer [offeror]
-Receiving party = offeree
-> Offer becomes valid when contract is ACCEPTED by receiving party but has right to take back
BEFORE accepted
