www.stuvia.com/doc
FINC 371 Test 2 (Peterson) Exam
with complete solutions latest
version
Ch. 5 - CORRECT ANSWER-Deeds and Titles
All RE contracts must be in ______ - CORRECT ANSWER-writing
6 Essential Elements of a Deed - CORRECT 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 - CORRECT ANSWER-Covenant: agreement or promise
[4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - CORRECT 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: - CORRECT ANSWER-1. Warranty Forever [guarantee
statements are true]
Types of Deeds [4 degrees of deeds] - CORRECT ANSWER-Varying Degree of
Protection
1. Warranty Deed [protects for everything past and present] - CORRECT
ANSWER--Broadest type of deed
, www.stuvia.com/doc
-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] -
CORRECT 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"] - CORRECT
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] - CORRECT 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 = - CORRECT ANSWER--Marketable [Free and Clear of Claims]
-Insurable [Reputable Title]
-Perfect of Record [No defects in title]
Title Examination: - CORRECT ANSWER-Discovering Possible Defects
1. Title Opinion [lawyer statement] - CORRECT 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] - CORRECT
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] - CORRECT ANSWER-Reveals
ownership history or chain of title
-> recording system: goal is to protect potential interest holder (in county
courthouse))
Video: Common Mistakes: - CORRECT ANSWER-1. error in public records
2. unknown liens
3. missing heirs
4. forgeries
5. surveyor boundary issues
Title Abstract [does not require lawyer] - CORRECT ANSWER--A written summary
of chain of title of RE
, www.stuvia.com/doc
-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] - CORRECT 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 - CORRECT ANSWER-Contracts and Title Closings
Necessary Elements to a Contract: - CORRECT ANSWER-1. Offer
2. Acceptance
3. Consideration
4. Parties Capacity
5. Lawful Purpose
1. Offer - CORRECT 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
2. Acceptance - CORRECT ANSWER--Expresses satisfaction with an offer
-Must mirror exact terms and conditions of the offer
Counteroffer - CORRECT ANSWER-original offerer and offeree switch legal
positions, indicated by signatures of all parties
3. Consideration - CORRECT ANSWER--Required by law for contract to be
enforceable
-each party must give up something
4. Capacity of Parties - CORRECT ANSWER--All parties must have "contractual
capacity"
-> ALL must have mental capability to known what contract represents and
understand terms
Lack Capacity:
1. Mentally Incompetent
2. Minor
5. Lawful Purpose - CORRECT ANSWER--A valid contract must be legal
-> statute of frauds: must be in writing before a court will enforce
FINC 371 Test 2 (Peterson) Exam
with complete solutions latest
version
Ch. 5 - CORRECT ANSWER-Deeds and Titles
All RE contracts must be in ______ - CORRECT ANSWER-writing
6 Essential Elements of a Deed - CORRECT 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 - CORRECT ANSWER-Covenant: agreement or promise
[4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - CORRECT 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: - CORRECT ANSWER-1. Warranty Forever [guarantee
statements are true]
Types of Deeds [4 degrees of deeds] - CORRECT ANSWER-Varying Degree of
Protection
1. Warranty Deed [protects for everything past and present] - CORRECT
ANSWER--Broadest type of deed
, www.stuvia.com/doc
-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] -
CORRECT 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"] - CORRECT
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] - CORRECT 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 = - CORRECT ANSWER--Marketable [Free and Clear of Claims]
-Insurable [Reputable Title]
-Perfect of Record [No defects in title]
Title Examination: - CORRECT ANSWER-Discovering Possible Defects
1. Title Opinion [lawyer statement] - CORRECT 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] - CORRECT
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] - CORRECT ANSWER-Reveals
ownership history or chain of title
-> recording system: goal is to protect potential interest holder (in county
courthouse))
Video: Common Mistakes: - CORRECT ANSWER-1. error in public records
2. unknown liens
3. missing heirs
4. forgeries
5. surveyor boundary issues
Title Abstract [does not require lawyer] - CORRECT ANSWER--A written summary
of chain of title of RE
, www.stuvia.com/doc
-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] - CORRECT 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 - CORRECT ANSWER-Contracts and Title Closings
Necessary Elements to a Contract: - CORRECT ANSWER-1. Offer
2. Acceptance
3. Consideration
4. Parties Capacity
5. Lawful Purpose
1. Offer - CORRECT 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
2. Acceptance - CORRECT ANSWER--Expresses satisfaction with an offer
-Must mirror exact terms and conditions of the offer
Counteroffer - CORRECT ANSWER-original offerer and offeree switch legal
positions, indicated by signatures of all parties
3. Consideration - CORRECT ANSWER--Required by law for contract to be
enforceable
-each party must give up something
4. Capacity of Parties - CORRECT ANSWER--All parties must have "contractual
capacity"
-> ALL must have mental capability to known what contract represents and
understand terms
Lack Capacity:
1. Mentally Incompetent
2. Minor
5. Lawful Purpose - CORRECT ANSWER--A valid contract must be legal
-> statute of frauds: must be in writing before a court will enforce
