NJ REAL ESTATE REVIEW EXAMS PREP
QUESTIONS AND ANSWERS SURE A+
✔✔BONA FIDE PURCHASER FOR VALUE - ✔✔A person who purchases real property
in good faith for valuable consideration, without knowledge of any claim to interest in the
real property by any other party.
✔✔CONSTRUCTIVE NOTICE - ✔✔Notice that is deemed to be given because the facts
to which it relates are readily available; or would be obvious from inspection; or could
reasonably have been determined by prudent injury; by the public records; legal
presumption of notice given by the public records. - Once an instrament has been
recorded all persons are leagally presumed to know of it's existence, whether they
actually do or not. - Also called legal notice.
✔✔AMERICAN LAND TITLE ASSOCIATION (ALTA) - ✔✔A national association of
more than 2,000 land title companies established to encourage uniformity and quality in
title insurance policies.
✔✔CHAIN OF TITLE - ✔✔A sequential history of the conveyances, encumbrances and
records of ownership to a piece of property through the years from the original grant to
present, as revealed through the public records. - A chain of title will be run which will
attempt to trace an unbroken chain of former owners back for 60 years
✔✔COMMITMENT - ✔✔A promise such as that by a title insurer to write a specific
policy of title insurance in favor of a named insured in a specific amount, subject to the
requirements, exceptions, conditions and stipulations contained in the form. - Also
called a title report
✔✔COUNTY CLERK'S OFFICE - ✔✔- The office located in the county seat of NJ
counties where important documents such as deeds, mortgages, and releases are
registered on the public record to protect against subsequent claimants.
- A branch of government that maintains and keeps all recording acts, like deeds and
other legal instruments affecting title.
,✔✔DONEE - ✔✔A person to whom a gift is made.
✔✔MORTGAGE OR LOAN POLICY - ✔✔Title policy that insures the interest of a
mortgage or lender to the title or real property.
✔✔NOTARY PUBLIC - ✔✔An officer of the court who is authorized to take
acknowledgements to certain documents, such as deeds and mortgages, and before
whom affidavits may be sworn.
✔✔OWNER'S TITLE POLICY - ✔✔Policy of title insurance that insures an owner's title
in real property; also called a "fee" policy.
✔✔QUIET TITLE PROCEEDING - ✔✔A court action brought to establish title or to
remove a cloud on the title; an action clearing tax titles based upon adverse possession.
✔✔RECORDING - ✔✔- The entrance of written instruments into the public record to
serve as constructive notice to all persons their existence.
- Often called "constructive notice or legal notice).
✔✔SUBROGATION - ✔✔The substitution of one person in place of another with
reference to a lawful claim, demand or right, so that he succeeds to such rights of the
other.
✔✔TITLE INSURANCE - ✔✔A policy of insurance which indemnifies the holder for loss
sustained by reason of a defect in the title, provided the loss does not result from a
defect excluded by the policy provisions.
✔✔EXCLUSIONS & EXCEPTIONS ON TITLE INSURANCE - ✔✔- Title insurance is not
without limitations. Each policy contains exclusions & exceptions which exclude liability
with regard to certain defects, liens or other encumbrances.
- Exclusions are those matters the the policy expressly indicates are not within the
coverage provided.
- Examples: Governmental police power, including building and zoning ordinances and
other land use regulations. The right to take land by condemnation, title risks created
allowed or agreed to by the insured, defects known by the insured but not the agent,
risks that result in no loss to the insured, and risks that arise after the policy date.
✔✔TITLE SEARCH - ✔✔An examination of public records to determine if the seller of
real estate holds the interest that he alleges to hold and to ascertain the quality of title.
✔✔ASSIGNMENT - ✔✔The method or manner by which a right or contract such as a
lease or mortgage is transferred from one person to another
✔✔BILATERAL CONTRACT - ✔✔A contract by which both parties have reciprocal
obligations toward each other.
,✔✔BINDER - ✔✔An agreement to cover a down payment for the purchase of real
estate as evidence of good faith on the part of the purchaser; shows the receipt of a
deposit and outlines the basic terms of the transaction.
✔✔BREACH OF CONTRACT - ✔✔Violation of any of the terms or conditions of a
contract; default; non performance.
✔✔CLOSING - ✔✔The time when a transaction is consummated or the equal signing
over the documents and delivery of the deed; the time after signing when the
documents are recorded.
✔✔COMPENSATORY DAMAGES - ✔✔The amount of money actually lost; the amount
that will be awarded by a court in the event of default.
✔✔COMPETENT PARTIES - ✔✔Those that are qualified or mentally competent to
enter into a contract.
✔✔CONSIDERATION - ✔✔Valuable consideration, a promise or an act of legal value
bargained for and received in return for a promise; good consideration, love and
affection.
✔✔CONTINGENCY - ✔✔A condition in a contract which could void it, or otherwise
change its terms, if not met.
✔✔CONTRACT - ✔✔A legal agreement between competent parties for a consideration
to perform or refrain from performing certain acts.
✔✔CONTRACTUAL CAPACITY - ✔✔All parties must be of age, and sound mind and
body for the contract to be valid. - Must not be a minor, insane persons, and/or
intoxicated persons. - If a minor, insane person or intoxicated person enters into a
contract it can be voided by the minor or incompetent party only.
✔✔COUNTER OFFER - ✔✔A new offer made in response to an earlier offer.
✔✔DAMAGES - ✔✔The indemnity recoverable by an injured party as compensation for
the loss suffered through the act or default of another.
✔✔DEFAULT - ✔✔Failure to meet an obligation or promise when due. - Example is a
default on a loan, not making mortgage payment, etc...
✔✔DEPOSIT - ✔✔Money given by one to another as evidence of good faith; evidence
or security for performance of a contract.
, ✔✔DURESS - ✔✔Unlawful constraint or action against a person, forcing him to perform
some act against his will.
✔✔EARNEST MONEY - ✔✔Initial payment made by a purchaser of real estate as
evidence of good faith. - It is standard practice in re-sale transactions.
- They may be held by a broker, an attorney, a financial institution, a title company, or
the owner of the property.
✔✔EQUITABLE TITLE - ✔✔Title of a purchaser under a contract of sale or agreement
of sale.
✔✔EXECUTED CONTRACT - ✔✔A contract that is fully signed or performed.
✔✔EXECUTORY CONTRACT - ✔✔A contract NOT yet fully performed, not fully
signed.
✔✔LAND CONTRACT - ✔✔Written agreement in which buyer agrees o buy certain
realty and seller agrees to sell upon terms and conditions set forth therein.
- Title remains with the seller until terms and conditions are fulfilled; buyer has equitable
title.
✔✔LIQUIDATED DAMAGES - ✔✔An amount predetermined by the parties to an
agreement that will be fortified as compensation for breach of contract.
✔✔MARKETABLE TITLE - ✔✔Title free and clear of objectionable liens or
encumbrances; title which is free from reasonable doubts or defects, which can be
readily sold or mortgaged.
✔✔MEETING OF THE MINDS - ✔✔A condition that must exist for the formation of valid
contract.
✔✔NOVATION - ✔✔A 3 party agreement under which 1 party is released and another
is substituted.
✔✔OFFER - ✔✔- In a real estate sales contract, the offer to purchase reality according
to certain stipulated terms and conditions. - A promise by one party to act in a certain
manner provided the other party would act in the manner requested.
✔✔OPTION - ✔✔A right given for consideration to purchase or lease a property upon
specified terms within a specified time.
✔✔OPTIONEE - ✔✔The one obtaining the option right.
✔✔OPTIONOR - ✔✔The one granting the option to another.
QUESTIONS AND ANSWERS SURE A+
✔✔BONA FIDE PURCHASER FOR VALUE - ✔✔A person who purchases real property
in good faith for valuable consideration, without knowledge of any claim to interest in the
real property by any other party.
✔✔CONSTRUCTIVE NOTICE - ✔✔Notice that is deemed to be given because the facts
to which it relates are readily available; or would be obvious from inspection; or could
reasonably have been determined by prudent injury; by the public records; legal
presumption of notice given by the public records. - Once an instrament has been
recorded all persons are leagally presumed to know of it's existence, whether they
actually do or not. - Also called legal notice.
✔✔AMERICAN LAND TITLE ASSOCIATION (ALTA) - ✔✔A national association of
more than 2,000 land title companies established to encourage uniformity and quality in
title insurance policies.
✔✔CHAIN OF TITLE - ✔✔A sequential history of the conveyances, encumbrances and
records of ownership to a piece of property through the years from the original grant to
present, as revealed through the public records. - A chain of title will be run which will
attempt to trace an unbroken chain of former owners back for 60 years
✔✔COMMITMENT - ✔✔A promise such as that by a title insurer to write a specific
policy of title insurance in favor of a named insured in a specific amount, subject to the
requirements, exceptions, conditions and stipulations contained in the form. - Also
called a title report
✔✔COUNTY CLERK'S OFFICE - ✔✔- The office located in the county seat of NJ
counties where important documents such as deeds, mortgages, and releases are
registered on the public record to protect against subsequent claimants.
- A branch of government that maintains and keeps all recording acts, like deeds and
other legal instruments affecting title.
,✔✔DONEE - ✔✔A person to whom a gift is made.
✔✔MORTGAGE OR LOAN POLICY - ✔✔Title policy that insures the interest of a
mortgage or lender to the title or real property.
✔✔NOTARY PUBLIC - ✔✔An officer of the court who is authorized to take
acknowledgements to certain documents, such as deeds and mortgages, and before
whom affidavits may be sworn.
✔✔OWNER'S TITLE POLICY - ✔✔Policy of title insurance that insures an owner's title
in real property; also called a "fee" policy.
✔✔QUIET TITLE PROCEEDING - ✔✔A court action brought to establish title or to
remove a cloud on the title; an action clearing tax titles based upon adverse possession.
✔✔RECORDING - ✔✔- The entrance of written instruments into the public record to
serve as constructive notice to all persons their existence.
- Often called "constructive notice or legal notice).
✔✔SUBROGATION - ✔✔The substitution of one person in place of another with
reference to a lawful claim, demand or right, so that he succeeds to such rights of the
other.
✔✔TITLE INSURANCE - ✔✔A policy of insurance which indemnifies the holder for loss
sustained by reason of a defect in the title, provided the loss does not result from a
defect excluded by the policy provisions.
✔✔EXCLUSIONS & EXCEPTIONS ON TITLE INSURANCE - ✔✔- Title insurance is not
without limitations. Each policy contains exclusions & exceptions which exclude liability
with regard to certain defects, liens or other encumbrances.
- Exclusions are those matters the the policy expressly indicates are not within the
coverage provided.
- Examples: Governmental police power, including building and zoning ordinances and
other land use regulations. The right to take land by condemnation, title risks created
allowed or agreed to by the insured, defects known by the insured but not the agent,
risks that result in no loss to the insured, and risks that arise after the policy date.
✔✔TITLE SEARCH - ✔✔An examination of public records to determine if the seller of
real estate holds the interest that he alleges to hold and to ascertain the quality of title.
✔✔ASSIGNMENT - ✔✔The method or manner by which a right or contract such as a
lease or mortgage is transferred from one person to another
✔✔BILATERAL CONTRACT - ✔✔A contract by which both parties have reciprocal
obligations toward each other.
,✔✔BINDER - ✔✔An agreement to cover a down payment for the purchase of real
estate as evidence of good faith on the part of the purchaser; shows the receipt of a
deposit and outlines the basic terms of the transaction.
✔✔BREACH OF CONTRACT - ✔✔Violation of any of the terms or conditions of a
contract; default; non performance.
✔✔CLOSING - ✔✔The time when a transaction is consummated or the equal signing
over the documents and delivery of the deed; the time after signing when the
documents are recorded.
✔✔COMPENSATORY DAMAGES - ✔✔The amount of money actually lost; the amount
that will be awarded by a court in the event of default.
✔✔COMPETENT PARTIES - ✔✔Those that are qualified or mentally competent to
enter into a contract.
✔✔CONSIDERATION - ✔✔Valuable consideration, a promise or an act of legal value
bargained for and received in return for a promise; good consideration, love and
affection.
✔✔CONTINGENCY - ✔✔A condition in a contract which could void it, or otherwise
change its terms, if not met.
✔✔CONTRACT - ✔✔A legal agreement between competent parties for a consideration
to perform or refrain from performing certain acts.
✔✔CONTRACTUAL CAPACITY - ✔✔All parties must be of age, and sound mind and
body for the contract to be valid. - Must not be a minor, insane persons, and/or
intoxicated persons. - If a minor, insane person or intoxicated person enters into a
contract it can be voided by the minor or incompetent party only.
✔✔COUNTER OFFER - ✔✔A new offer made in response to an earlier offer.
✔✔DAMAGES - ✔✔The indemnity recoverable by an injured party as compensation for
the loss suffered through the act or default of another.
✔✔DEFAULT - ✔✔Failure to meet an obligation or promise when due. - Example is a
default on a loan, not making mortgage payment, etc...
✔✔DEPOSIT - ✔✔Money given by one to another as evidence of good faith; evidence
or security for performance of a contract.
, ✔✔DURESS - ✔✔Unlawful constraint or action against a person, forcing him to perform
some act against his will.
✔✔EARNEST MONEY - ✔✔Initial payment made by a purchaser of real estate as
evidence of good faith. - It is standard practice in re-sale transactions.
- They may be held by a broker, an attorney, a financial institution, a title company, or
the owner of the property.
✔✔EQUITABLE TITLE - ✔✔Title of a purchaser under a contract of sale or agreement
of sale.
✔✔EXECUTED CONTRACT - ✔✔A contract that is fully signed or performed.
✔✔EXECUTORY CONTRACT - ✔✔A contract NOT yet fully performed, not fully
signed.
✔✔LAND CONTRACT - ✔✔Written agreement in which buyer agrees o buy certain
realty and seller agrees to sell upon terms and conditions set forth therein.
- Title remains with the seller until terms and conditions are fulfilled; buyer has equitable
title.
✔✔LIQUIDATED DAMAGES - ✔✔An amount predetermined by the parties to an
agreement that will be fortified as compensation for breach of contract.
✔✔MARKETABLE TITLE - ✔✔Title free and clear of objectionable liens or
encumbrances; title which is free from reasonable doubts or defects, which can be
readily sold or mortgaged.
✔✔MEETING OF THE MINDS - ✔✔A condition that must exist for the formation of valid
contract.
✔✔NOVATION - ✔✔A 3 party agreement under which 1 party is released and another
is substituted.
✔✔OFFER - ✔✔- In a real estate sales contract, the offer to purchase reality according
to certain stipulated terms and conditions. - A promise by one party to act in a certain
manner provided the other party would act in the manner requested.
✔✔OPTION - ✔✔A right given for consideration to purchase or lease a property upon
specified terms within a specified time.
✔✔OPTIONEE - ✔✔The one obtaining the option right.
✔✔OPTIONOR - ✔✔The one granting the option to another.
