CLA Real Estate, Part 4

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Sale of land; title searches, title insurance, land financing

listing agreement

A contract between an owner of real property and a real estate agent under which the agent is retained to secure a purchaser for the property at a specified price, for a commission.

merchantable title

Title that is without cloud or defect

clouds of title

defects to title

deed

a legal document signed and sealed and delivered to effect a transfer of property and to show the legal right to possess it: must be in writing; must identify the grantor and grantee; must state type of ownership (fee simple jt. ten; etc.); words of conveyance; sufficient legal description. No consideration need be stated; title transfers on date it is delivered to grantee, even if it is never recorded

grantor

a person who makes a grant in legal form

grantee

the person to whom property is transferred by deed.

metes and bounds

Legal description that begins at a well marked point and follows the boundaries around the tract, back to the place of beginning; distances and directionsk&4

survey

plot a map of (land)

retangular survey system

Takes into consideration base lines and meridians, townships and sections. Townships are located in Ranges, One township is 36 section. Each section contains 640 acres, which is 1 sq mi. Each acre contains 43,560 sq. ft.

principal meridian

North-south lines separating townships

principal base lines

The east-west lines of the grid used in the rectangular survey system.

township

A square normally 6 miles on a side

section

one mile square; contains 640 acres

half section

one-half of 640 acres = 320 acres

quarter section

one-quarter of 640 acres = 160 acres

1/2 of 1/4 section

80 acres

subdivision plat

A map of a town, section or subdivision indicating the location and boundaries of individual properties; includes easements, covenants, setback descriptions, sidelot requirements, or lot measurements

signature

(deed) signed by each grantor; need not be signed by grantee(s)

deed poll

deed signed by only the grantor

indenture

deed signed by both grantor and grantee

seal

wax impression; L.S. locus sigilli (the place of the seal)

delivery and acceptance

when the grantor delivers the deed and the grantee accepts the deed. this is necessary for conveyance of title.

attestation

act of witnessing the signing (execution) of a document

acknowledgment

formal witnessing by public official (notary public); that grantor's declaration that his/her execution was free and voluntary act

warranty deed

a deed in which the seller promises clear title to the property

covenants of title

covenants of seisin; right to convey; covenant against encumbances; covenant of quiet enjoyment; covenant of warranty; etc.

covenant of seisen

grantor warrants that they own the interest in the land that they are purporting to convey and has right and power to transfer it

encumbrance

Anything - such as a mortgage, tax or judgment lien, an easement, a restriction on the use of the land, or an outstanding dower right -that may diminish the value or use and enjoyment of a property

liens against property

monetary obligations against a property; e.g., mortgages, taxes, special assessments; judgments

interests in land

attachments to the land, e.g leaseholds, life estates, and licenses

restrictions

Limits the use of the property such as deed restrictions, easements, or restrictive covenants.

covenant of quiet enjoyment

Covenant that promises that grantee will enjoy quiet and peaceful possession of the property.

warranty and further assurances

Grantor will defend grantees title against lawful claims existing at the time of transfer

special warranty deed

aka limited warranty deed: contains all same warranties as a warranty deed but covers only defects that were created or came into existence while the grantor was the owner of the property

quitclaim deed

deed without warranty, which passes only that title which the grantor has

merger

doctrine which buyer's acceptance of the deed extinguishes his/her rights under the purchase contract as the right relates to title.

recordation

Process of recording a deed or other document showing an interest in land with the Office of the County Recorder

constructive notice

The recording of a document or an instrument in the public records designed to give adequate notice to all; has no bearing on the legal effectiveness of instrument

devise

real property given via will

title search

an examination of chronological documents recording title to the property to ensure the owner has a clear title

chain of title

Succession of conveyances from some accepted starting point, whereby the present hold of title derives the title, there should be no "breaks" in the succession

marketable title acts

done to settle title disputes, require title searcher to go back 40 years. If 40 years reveal cloud free title, it is marketable. Extinguishes older claims.

unbroken chain of title

free from forgery, minority or other incapacity of grantor, failure of delivery; misrepresentiton of marital status, free from claim by omitted person or heir.

abstract of title

A chronological summary of all official records and recorded documents affecting the title to a parcel of real property.

title insurance

Policy insuring the owner or mortgagee against loss by reason of defects in the title of a parcel of real estate

Torrens system

A system for registration of land under which a court issues a certificate of title that states the status of the title

pure race statute

Statute under which the buyer who wins the "race" to the courthouse and records the deed first is the buyer who prevails.

pure notice statute

When a subsequent buyer takes title without acqual knowledge of a prior, unrecorded conveyance, and records her deed, she shall prevail.

race-notice statue

Under a race-notice statute, a later purchaser not only must be bona fide but also must record the deed before other purchasers.

mortgage

a conditional conveyance of property as security for the repayment of a loan; real estate given as collaeral

mortgagee

the person who accepts a mortgage

mortgagor

the person who gives a mortgage in return for money to be repaid

amortization

gradual extinction of a monetary obligation by periodic payments that usually includes interest

deed of trust

An instrument used to create a mortgage lien by which the borrower ‎conveys title to a trustee, who holds it as security for the benefit of the ‎note holder (the lender); also called a trust deed

title theory

on full payment of the mortgage debt the borrower becomes the landowner

lien theory

the borrower retains legal title to the property and grants a lien to the lender as security for repayment of the loan

deficiency

occurs when mortgaged property is worth less than underlying debt

release of mortgage

a document signed by the lending institution when a mortgage has been satisfied in full.

deed of reconveyance

Document recorded by Trustee under the Deed of Trust, when the secured obligation has been paid in full.

subordination agreement

A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.

assume underlying debt

new buyer "assumes" the mortgage of seller

novation

Substituting a new obligation for an old one or substituting new parties to an existing obligation

due-on-sale clause

a clause in a promissory note that requires the borrower to repay all amounts due immediately upon transferring the property to a new owner

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