FINC 371 Test 2 (Peterson)Questions & Answers (RATED A+)
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Course
FINC 371
Institution
FINC 371
Ch. 5 - ANSWERDeeds and Titles
All RE contracts must be in ______ - ANSWERwriting
6 Essential Elements of a Deed - ANSWER1. Grantor [Giver]
2. Grantee [Receiver]
3. Consideration [something of economic value]
4. Legal Description [metes/bounds, plats, etc]
5. Signatures [once have both, t...
FINC 371 Test 2 (Peterson)Questions & Answers (RATED A+)
Ch. 5 - ANSWERDeeds and Titles
All RE contracts must be in ______ - ANSWERwriting
6 Essential Elements of a Deed - ANSWER1. 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 - ANSWERCovenant: agreement or promise [4]
Warranty: guarantee statements are true [1]
4 Traditional Covenants: - ANSWER1. 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: - ANSWER1. Warranty Forever [guarantee statements are true]
Types of Deeds [4 degrees of deeds] - ANSWERVarying 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
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: - ANSWERDiscovering Possible Defects
1. Title Opinion [lawyer statement] - ANSWERA statement by a lawyer summarizing findings by a
search that may relate to title
2. Title Insurance [policy providing protection @ time of title transfer] - ANSWERA 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] - ANSWERReveals ownership history or chain of title
-> recording system: goal is to protect potential interest holder (in county courthouse))
Video: Common Mistakes: - ANSWER1. 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]
-obtained through legal proceedings
-transferring title:
old: returned to registrar
new: issued to new owner
Ch. 6 - ANSWERContracts and Title Closings
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. 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
Necessary Elements to a Contract: - ANSWER1. Offer
2. Acceptance
3. Consideration
4. Parties Capacity
5. Lawful Purpose
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