Pearson Vue National exam prep Real Estate, Questions And Correct Answers With Complete Verified Solutions

Pearson Vue National exam prep Real Estate, Questions And Correct Answers With Complete Verified Solutions Appurtenance including rights, privileges, and fixture Fixtures items attached to improvements with the intent to become real estate. Evident by the following: attachment/annexation, adaptation, or agreement. Transfer via a deed UNLESS they contract excludes them Emblements (crops) are exceptions. Trade fixtures are also exceptions Land and all appurtenances transfer via deed unless excluded Personal Property Transfers via bill of sale if included in contract Riparian rights Incidental to ownership of land abutting flowing water Littoral rights Incidental to ownership of land abutting water that is NOT flowing Accretion Increase in an owner's land from deposits of soil by the action of water Avulsion Sudden loss of land, from being washed away or through a violent act Doctrine of prior appropriation First user diverting to beneficial use has the first claim on the water Metes and bounds Description of land using distances and compass degrees moving in a set direction Starts and ends at point of beginning (POB) Measure clockwise Rectangular survey/Government survey Uses meridians, townships, ranges, tiers, and sections to locate land parcels Township has 36 sections Section- 640 acre or 1 mile by 1 mile Acre - 43,560 ft Recorded plat (lot, block, subdivision) Create a plat map via a survey showing lots and boundaries Next record the map which is done by obtaining building permits Freehold estates Indefinite duration of ownership Includes Fee simple absolute, Qualified fee/Fee simple defeasible, and Life estate Fee simple absolute Lasts forever and features the maximum rights of ownership Qualified fee/Fee simple defeasible Last "so long as" the deed condition is met Holder of reversionary interest would be able to try to acquire title if the conditions are broken Life estate Life tenants have ownership. Upon death whoever has the reversionary or remainder interest will own a fee simple absolute estate at death. Lien Claim that attaches to and is binding on property to secure debt repayment Property tax/Special assessments lien Specific lien Takes priority over all other liens, even those previously recorded, such as a mortgage Mechanics Lien Specific lien If one is found before closing, the seller is responsible for clearing the lien License Revocable permission to use the land w/o creating an estate in land Lis Pendens Recorded document that gives constructive notice of a pending lawsuit about title Sole ownership/Estate in severalty When property is owned by one person or entity Tenants in common Co-ownership with NO right of survivorship Interest passed to heirs or devisees upon death If no form of ownership indicated, law presumes tenancy in common May have unequal share of ownership Each tenant responsible for the taxes as an individual or as a group Joint tenants Co-ownership WITH the right of survivorship Interest passed to co-owners upon death w/o going through probate Overrides a will Four unities of title Possession, Interest, Time, and Title (PITT) required in some state Tenancy by the entirety Applies exclusively to married couples in some state Condominiums and Town homes Purchasers own and finance their own units Transferred by deed Cooperatives Ownership of the building by a corporation, which in turn leases space to share holders who own stock in the corporation Buyers receive corporate bylaws, shares of stock, and proprietary lease for their unit and their share of the common elements Because their is no ownership of the unit, the buyer does not receive a deed Owner pays assessments and association fees Time shares Common interest ownership form in which multiple owners have interest in a property Deeds (Key Points) Purpose is to transfer title between owner/grantor and the receiver/grantee Seller of real property will always have to provide a written deed Difference between deeds are the extent of the promises given by the grantor to the grantee Deeds do not guarantee or prove ownership Deeds do not have to be recorded for title to transfer; title passes upon acceptance of the grantee Recording a deed gives constructive notice of ownership Types of deeds in private grants (Voluntary alienation) Warranty deed/General warranty deed (best for grantee) - five covenants and a guarantee of title 1) Covenant of seisin - grantor has right to convey 2) Covenant of quiet enjoyment - grantee will not be disturbed by others 3) Covenant against encumbrances - there are no unspecified encumbrances 4) Covenant of further assurance - cooperation in signing additional documents 5) Warranty forever - guarantee of defense Limited (Special) warranty deed Warrants only those defects and encumbrances that occur during the grantor's period of ownership Quitclaim deed (Best for Grantor) Used as problem solver and to terminate deed restrictions; no promises, no guarantees No liability for the grantor and gives the grantee no right to future claims Bargain and sale deed Contains only implied warranties that the grantor hold the title and possessions of the property Public grant Government transfers ownership by a land patent to a private party 7 Essential Elements of a valid deed 1) Competent grantor 2) Executed by grantor(s) 3) Identifiable grantee 4) Delivered and accepted by grantee(s) - title and possession of property (unless otherwise agreed) pass at this point 5) Legal description 6) Consideration - money or something of value 7) Words of conveyance - granting clause Conveyance after death Probate is the process of distributing all of a deceased's assets -- A will must go through probate for real and personal property to be distributed Devise is the act of transferring the deceased's interest in REAL ESTATE to another by a will (hook to deed) Bequest is the act of transferring a deceased interest in PERSONAL PROPERTY to another (hook to bill of sale) If a person dies intestate (w/o a will), the laws of descent and intestate succession will determine the heirs/descedants Other ways of transferring title (Involuntary Alienation) Adverse possession -is ownership granted by the courts due to open, continuous, actual, notorious (hostile), and exclusive possession of another's land for a minimum statutory period Easement by prescription/prescriptive easement -easement prescribed by the courts due to open, continuous, actual, and notorious (hostile) use of another's land for a minimum statutory period O.C.E.A.N. - possession or use must be Open (visible), Continuous, Exclusive (distinct), Actual, and Notorious (hostile) If all parties recognize, accept, and permit the possession of the property or use of the easement, it can't be adverse possession or easement by prescription -- Hostile implies that it is w/o the owner's permission Recording NOT required for validity Determines priority (first in time, first in right) - A deed that doesn't get recorded creates the risk that a later interest could take priority - An unrecorded deed does not have constructive notice of ownership Recorded deeds/mortgages must be executed by grantor/mortgagors Documents must be dated Signatures should be acknowledged (notarized) - A signature is required in most states to record - Acknowledgment (notarizing) shows the signature is genuine and was not made under duress Title insurance A) Buyer's goal is to obtain marketable (merchantable) title B) Abstract with a title opinion - Abstract of title is a historical summary of all conveyances and encumbrances against the property - Done by an attorney after reviewing the abstract C) Title insurance - best way to insure marketable title - The title commitment/report lists the current title status and title defects (mortgages, easements, etc.) but doesn't have a history of documents - Standard title insurance policy protects against defects discovered in the title after closing, not before closing - If problem found, it has to be cleared or the buyer can terminate (or accept clouded title) Types - Owner's policy: protects owner (buyer) and heirs while they have an interest - Mortgagee's policy: protects lender giving them title coverage D) Quiet title action - Used to clear title problems found in the abstract or title report - A quiet title action is a legal action Governments right in land - Police Power - Eminent Domain - Collect property taxes and special assessment - Escheat Police Power - Enacts and enforces laws governing land use - Ex: zoning, building codes, planning, and safety codes - Enforced by requiring building permits, building inspections, and certificates of occupancy Eminent domain - Right to "take" private land for public use - Condemnation is the process - Fair compensation includes the property value plus the damages - Inverse condemnation is when an owner initiates a court action for fair compensation from the government Property Taxes Ad valorem based on assessed value, NOT current market value Special assessments - Lien against specific properties that benefit from a public improvement - Paid with property taxes and enforced by a lien Property taxes and Special Assessment Take priority over other liens Escheat Governments reversionary right - Abandoned property or property of intestate owners with no heirs may revert to the state Government Controls based in police power - Zoning controls - set at local level - Building codes or standards and certificates of occupancy - Private controls on land use - Application of rules Zoning Controls 1) Master plan used to control growth 2) Zoning determines type of use - Special land (floodplains, coastal preservation, and other special-use classifications) are regulated by county, state, or federal 3) Buffer zone is an area of land that separates two drastically different land use zones 4) Rezoning or amendments is a zoning change for an entire area 5) Nonconforming use allows an owner to continue to present use that no longer complies with current zoning 6) Setbacks restrict and limit improvements in relation to the boundaries 7) A variance is used when a property owner wants to vary or deviate from building codes or build into a setback to prevent economic hardship 8) Special (conditional) use (also called special exception) allows a different use - Allows owner to deviate from zoning regulations, NOT from deed restrictions or building codes Building codes or standards and certificates of occupancy - Deal with structural integrity and safety of a building - Certificate of occupancy is issued when a new building is ready for occupancy; met standards Private controls on land use 1) Deed restrictions or covenants: privately created controls on land use 2) May NOT violate fair housing laws (e.g., cannot refuse to sell based on race or national origin) Application of rules When there is an issue between government and private restriction, the strictest applies Appraisal - Defined - Licensing - Competitive market analysis/Broker's price opinion/Broker's opinion of value Defined 1) estimate or opinion of market value, done by licensed appraiser 2) Required for all federally related loan programs, such as FHA, VA, and conventional loans Principles of Value 1) Market value 2) Market Price