FINC 371 TEST 2 (PETERSON) EXAM
QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
Ch. 5 - Deeds and Titles
All RE contracts must be in ______ - ANS writing
6 Essential Elements of a Deed - ANS 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 - ANS Covenant: agreement or promise [4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - ANS 1. Against Encumbrances [no other encumbrances than ones
disclosed]
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,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: - ANS 1. Warranty Forever [guarantee statements are true]
Types of Deeds [4 degrees of deeds] - ANS Varying Degree of Protection
1. Warranty Deed [protects for everything past and present] - ANS -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] - ANS -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"] - ANS -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
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, 4. Quitclaim Deed [worst protection] - ANS -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 = - ANS -Marketable [Free and Clear of Claims]
-Insurable [Reputable Title]
-Perfect of Record [No defects in title]
Title Examination: - ANS Discovering Possible Defects
1. Title Opinion [lawyer statement] - ANS 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] - ANS 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] - ANS Reveals ownership history or chain of title
-> recording system: goal is to protect potential interest holder (in county courthouse))
Video: Common Mistakes: - ANS 1. error in public records
2. unknown liens
3. missing heirs
4. forgeries
5. surveyor boundary issues
3 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
QUESTIONS WITH 100% CORRECT
ANSWERS | LATEST VERSION 2025/2026.
Ch. 5 - Deeds and Titles
All RE contracts must be in ______ - ANS writing
6 Essential Elements of a Deed - ANS 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 - ANS Covenant: agreement or promise [4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - ANS 1. Against Encumbrances [no other encumbrances than ones
disclosed]
1 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,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: - ANS 1. Warranty Forever [guarantee statements are true]
Types of Deeds [4 degrees of deeds] - ANS Varying Degree of Protection
1. Warranty Deed [protects for everything past and present] - ANS -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] - ANS -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"] - ANS -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
2 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, 4. Quitclaim Deed [worst protection] - ANS -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 = - ANS -Marketable [Free and Clear of Claims]
-Insurable [Reputable Title]
-Perfect of Record [No defects in title]
Title Examination: - ANS Discovering Possible Defects
1. Title Opinion [lawyer statement] - ANS 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] - ANS 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] - ANS Reveals ownership history or chain of title
-> recording system: goal is to protect potential interest holder (in county courthouse))
Video: Common Mistakes: - ANS 1. error in public records
2. unknown liens
3. missing heirs
4. forgeries
5. surveyor boundary issues
3 | Page @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
