Delaware Real Estate Law Final Exam Questions and Answers

Delaware Real Estate Law Final Exam Questions and Answers Loan to Value Ratio - Answer️️ -Amount of the loan vs value of real estate Who is the Devisee under a Will? - Answer️️ -Devisee under will is person who receives property under a will (maker of will is devisor) What are the Requirements for a valid deed in DE - Answer️️ -The deed has to be in writing The deed has to describe property with specificity The deed must have the name of grantor and grantee The deed must be signed and must be acknowledged(notarized) What are the advantages vs. disadvantages of investing in Real Estate? - Answer️️ - Disadvantage - investment is not liquid (there is no cash out advantage) Advantage - ability to control investment (sole decision maker of what happens with property) What is a Subordination Agreement? - Answer️️ -An agreement that changes lien priority Who gets the money left over after a mortgage foreclosure sale? - Answer️️ -The person who took out the loan is entitled to remaining balance if property sale amount exceeds existing mortgage owed What is equity in a property? - Answer️️ -the difference between amount of debt on the property and the value of the property What title does the buyer have when the buyer and seller have a fully signed agreement of sale? - Answer️️ -equitable title What does rescind mean? - Answer️️ -It means to cancel (rescinded offer = cancelled offer) What is an Executory contract - Answer️️ -A contract that has a number of conditions that have to be satisfied - you don't have a fully executed contract until all conditions are fulfilled What is Power of Attorney? - Answer️️ -One person designates another person to represent and sign documents on their behalf Who signs the deed? - Answer️️ -Only the Grantor(seller) signs the deed What is joint Tenancy? - Answer️️ -(has the right of survivorship) If 2 people own property and one dies, other owner automatically gets ownership interest of the dead person Both people own 100% of property (no fractional control) - 1 joint tenant can sell or lien their interest without the consent of the other person What is Tenancy by the Entirety? - Answer️️ -(has right of survivorship) Husband and Wife one spouse CANNOT sell or lien without the consent of their partner What are the continuing education requirements for Real Estate Agents in DE? - Answer️️ -21 hours biannually (every 2 years - 12 must be completed in first year of license) must be completed by April 30th What is Leverage? - Answer️️ -Using others money to acquire real estate -if property is 100k and you borrow 100k you are 100% leveraged - The higher the leverage the riskier the loan is What are the elements of a valid real estate contract? - Answer️️ -A valid contract must: Be a voluntary agreement between two competent parties Be supported by consideration to perform some legal act (consideration = compensation) What is an Encumbrance? - Answer️️ -Any right of a third party over your property (judgement, deed restriction, mortgage) What is the lien priority of unpaid real estate taxes? - Answer️️ -- Real estate taxes are always first in terms of lien priority - Real estate taxes are super priority lien- How is commission on a real estate transaction determined? - Answer️️ -Commission is determined by a negotiation between broker and client What is Lien theory vs. Title theory, as it relates to mortgages? - Answer️️ -Delaware records mortgage as lien against property -DE is a lien theory state - Title theory is a deed of trust, where the lender owns the property. You have right of possession until you pay back loan, at which time the bank conveys the property back with a trustee deed How are taxes prorated on a settlement sheet? (credit v. debit) - Answer️