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FINC 371 TEST 2 (PETERSON) NEWEST ACTUAL
2025/2026 WITH COMPLETE QUESTIONS AND
ANSWERS .VERIFED/GRADED A+
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]
, 2
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]
Types of Deeds [4 degrees of deeds] - (ANSWER)Varying Degree of Protection
1. Warranty Deed [protects for everything past and present] - (ANSWER)-
Broadest type of deed
-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
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
, 4
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
3. Title Search [reveal ownership history] - (ANSWER)Reveals ownership history
or chain of title
-> recording system: goal is to protect potential interest holder (in county
courthouse))
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]
FINC 371 TEST 2 (PETERSON) NEWEST ACTUAL
2025/2026 WITH COMPLETE QUESTIONS AND
ANSWERS .VERIFED/GRADED A+
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]
, 2
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]
Types of Deeds [4 degrees of deeds] - (ANSWER)Varying Degree of Protection
1. Warranty Deed [protects for everything past and present] - (ANSWER)-
Broadest type of deed
-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
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
, 4
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
3. Title Search [reveal ownership history] - (ANSWER)Reveals ownership history
or chain of title
-> recording system: goal is to protect potential interest holder (in county
courthouse))
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]
