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WRA - Chpt. 8 Quiz
Terms in this set (36)
Title insurance offers coverage for:
A: special assessments levied after a seller and buyer close on a property
B: judgment liens recorded against a property
C: use-value assessments
D: losses sustained because of defects in the title other than those excepted by the policy
D - Title insurance protects buyers and lenders in the event that certain title defects develop after the title has been researched prior to a sale.
A property has a market value of $120,000 and is assessed at 60% of market value. What is the property's tax bill if the tax rate is 30 mills?
C - $120,000 x .60 = $72,000 assessed value 30 mills = 30/1000 = .03 $72,000 x .03 mills = $2,160 tax bill.
Who pays for the primary title insurance policy?
A: The lender
B: The seller
C: The listing firm
D: The buyer
B - The primary title insurance policy is the buyer's insurance on the property's title. The seller pays for this policy. A lender will also want insurance on the property's title. The buyer pays for this policy.
Peter has a fenced lot and the fence extends one foot over his lot line onto the property of a neighbor. What is the effect of the fence on the neighbor's property?
A: It creates lien rights for Peter.
B: It creates and easement for Peter.
C: It encumbers the property.
D: It causes a loss of title for the neighbor.
Which of the following is used to secure payment for specific municipal improvements?
A: A special assessment
B: A utility lien
C: A construction lien
D: An ad valorem
A - A special assessment is a tax or levy customarily imposed against only those specific parcels of realty that will benefit from a proposed public improvement.
How is a transfer fee calculated and paid?
A: The seller calculates and pays the transfer fee based on the listing price.
B: The seller calculates and pays the transfer fee based on the selling price.
C: The buyer calculates and pays the transfer fee based on the selling price.
D: The buyer calculates and pays the transfer fee based on the listing price.
B - The transfer fee is based on the selling price rounded up to the nearest $100 and the seller is responsible for paying it.
How does a party give notice that a parcel of real estate is the subject of a lawsuit?
A: File a notice of foreclosure
B: File a lien
C: File a writ of attachment
D: File a lis pendens
D - A lis pendens is a notice of a possible future litigation involving the real estate.
A house is valued at $125,000 and assessed at 90% of its value. The tax bill is $3,937.50. What is the tax rate per $100 of assessed value?
B - $125,000 x .90 = $112,500, assessed value $3,937.50/$112,500 = .035, .035 x 100 = $3.50 $3,937.50 / $112,500 = .035 or $3.50
After Desmond had purchased his house and moved in, he discovered that his neighbor regularly used Desmond's driveway to reach a garage located on the neighbor's property. Desmond's attorney explained that ownership of the neighbor's real estate includes an easement over the driveway. What is Desmond's property?
A: A tenancy
B: The dominant estate
C: The servient estate
D: A leasehold
C - The servient estate is the parcel over which an easement runs.
An $89,000 property is assessed at 100%. The mill rate is .030. What is the tax bill for the property?
A - $89,000 x .030 = $2,670
A parcel of real estate has a market value of $80,000 and is assessed for tax purposes at 85% of market value. The tax rate for the county in which the property is located is 30 mills. What is the tax bill?
D - $80,000 x .85 = $68,000 $68,000 x .030 = $2,040.
The assessed value of property:
A: determines the transfer tax when sold
B: may be updated using building permit records, on-site evaluations, and transfer tax records
C: is a fixed amount and cannot be challenged by a property owner
D: is determined by the same formula throughout the state
B - Local government determines assessed value. Reevaluation may be triggered by applications for building permits that may indicate owner improvement to the property.
The assessed value of a property is 95% of the appraised value, which is $89,000. What is the assessed value?
C - $89,000 x .95 = $84,550.
Where should a party record a real estate conveyance?
A: The register of deeds in the county where the buyer resides
B: The clerk of court in the county where the property is located
C: The register of deeds in the county where the property is located
D: The title insurance company
Determine the responsible party and the transfer fee for a property that sold for $64,350.
A: The seller pays $193.20
B: The buyer pays $193.05
C: The seller pays $193.05
D: The buyer pays $193.20
A - To calculate the transfer fee, round the selling price up to the nearest $100. Multiply that amount by .003 to calculate the fee, which is 30 cents for every $100 of value transferred. $64,400 x .003 = $193.20. The fee can also be calculated by dividing the purchase price by 100 and multiplying that answer by 30 cents. $64,400/ 100 = 644. 644 x .3 = $193.20. The seller is responsible for paying the transfer fee.
Which of the following is NOT true?
A: The transfer tax is 30 cents for each $100 in value
B: A party must pay the transfer fee when selling a by land contract
C: The buyer pays the transfer fee
D: A party must fill out the transfer fee form and pay to record a buyer's deed
Which one of the following statements best explains why instruments affecting real estate are recorded with the register of deeds in the county where the property is located?
A: Recording gives constructive notice to the world of the rights and interests in a particular parcel of real estate
B: The law requires that such instruments be recorded
C: Recording proves the execution of the instrument
D: The instruments must be recorded to comply with the terms of the statute of frauds
Which deed creates the least liability for a grantor?
A: A special warranty deed
B: A bargain and sale deed
C: A quitclaim deed
D: A general warranty deed
C - A quitclaim deed transfers only the interest owned by the grantor. It does not warranty the grantor's interest.
What interest does a quitclaim deed convey?
A: The grantee's interest
B: The entire property
C: The grantor's interest
D: The claimant's interest
C - A quitclaim deed is a grant of the grantor's interest in the property. It does not warrant title or possession.
Which of the following deeds provides the highest guarantee of title?
A: Quitclaim deed
B: Executor's deed
C: General warranty deed
D: Personal representative's deed
Which type of lien can attach to all real and personal property of a debtor?
A: Voluntary lien
B: General lien
C: Involuntary lien
D: Specific lien
What happens when a party records a deed?
A: The party passes title to the new owner
B: The recording party guarantees the title
C: Recording a deed insures the title
D: Recording a deed gives constructive notice of ownership
Which of the following insures and gives evidence of marketable title?
A: Warranty deed
B: Title insurance
C: Quitclaim deed
D: Abstract of title
B - Deeds transfer title and, in some cases, warrant the condition of title but do not give evidence of title. To prove clear title one would need title insurance or an abstract of title.
From what does a warranty deed protect a grantee?
B: Defective title
C: Significant defects in the property
D: Unenforceable contracts
B - A warranty deed is the most protective of all deeds and it protects a grantee from receiving a defective title to the property.
When does a construction lien establish priority for payment?
A: When an attorney prepares an abstract of title
B: When the first visible work commenced
C: When a judge orders a writ of execution
D: When it is filed in public records
Writs of Attachment are used to:
A: create general liens on mortgaged property
B:create appurtenant easements on servient estates
C: transfer encumbered property from a seller to a buyer
D: place property in the custody of courts to prevent a debtor from transferring the property
D - Writs of attachment are used to prevent a property owner from disposing of property that is currently the subject of litigation.
What is a chain of title?
A: An instrument or document that protects the insured parties, subject to specific exceptions, against defects in the examination of the record and hidden risks such as forgeries, undisclosed heirs, and errors in the public records
B: The succession of conveyances from some starting point whereby the present owner derives title
C: A history of the documents appearing in the public record
D: Proceedings affecting a specific parcel of land
B - The chain of title is a chronological record of a property's ownership. Each owner should be linked to subsequent owners.
X hands Y a deed with the intent to pass title. X asks Y NOT to record the deed until X dies. When is the deed valid?
A: When X dies
C: When Y records the deed
D: When X delivers the deed
D - A deed is valid when all of the requirements for validity have been satisfied. A valid deed will successfully transfer title. A deed will not however protect the titleholder from the claims of third parties unless it is recorded in public records.
Nancy is the owner of a dominant estate that has an easement that runs with the land. Tom has the servient estate for the easement. Which of the following circumstances would NOT terminate the easement?
A: Tom purchases and merges Nancy's property with his own.
B: Nancy sells the dominant estate to Gretchen.
C: Nancy abandons the use of the easement.
D: Tom's property is destroyed.
B - Because the easement runs with the land, transfer of title will not terminate the estate. Abandonment will terminate the easement as will destruction of the property and merger of the dominant and servient estates.
The Bowman's home on Lombard Street is valued at $95,000. Property in their area is assessed at 60% of its value, and the local tax rate is $2.85 per hundred dollars. How much do the Bowman's owe for this year's property taxes?
B - $95,000 x .60 = $57,000 assessed value $2.85 / 100 = .0285 $57,000 x .0285 = $1,624.50
Evelyn buys a property from Jimmy but does not record the deed. Jimmy dies and through honest error, his estate sells the property to Donna who acts in good faith and promptly records her deed. Who is the recognized owner of the property?
A: Evelyn is the recognized owner.
B: There is no recognized owner and the parties must go to court to decide ownership.
C: Evelyn is the recognized owner but Donna has a lien on the property.
D: Donna is the recognized owner.
D - By recording her deed, Donna is the recognized owner. She has given constructive notice of her ownership and Wisconsin statutes recognize the owner on record.
The order in which liens are paid depends on:
A: the property owner who decides which debts will be satisfied first
B: the age of the lien with the newest claim being paid first
C: the kind of lien and when it was recorded
D: the size of the lien with the largest debts being paid first
C - Order and payment of liens is determined by Wisconsin statutes. Some liens can take precedence to dates prior to recording.
A property has just sold for $125,000. It is currently assessed at $95,000. If the property is reassessed at 95% of market value what is the tax bill if the tax rate is 25 mills?
B - $125,000 market value x .95 = $118,750 assessed value. 25/1000 = .025 mills. $118,750 x .025 mills = $2,968.75.
Which of the following is true of a buyer's title insurance policy?
A: It provides protection for one year from the date of closing.
B: It is not an absolute guarantee that the title is free from defects.
C: It insures against all title defects.
D: It precludes the need for a buyer's attorney.
B - Title insurance does not guarantee that the title the buyer is obtaining is free from all possible defects. If title defects arise after the effective date of a title insurance policy, the title insurance will provide coverage to the buyer for all potential defects covered by the policy.
What happens when a property has been assessed under the use-value system?
A: In addition to the penalties imposed for change of use there are deed conditions that control future uses of the property.
B: The owner who changes the use of the land to something other than agricultural must pay a penalty to the state.
C: The seller of the property must pay a penalty to the state upon transfer of title.
D: Buyers of agricultural land are required to complete a search of public records for penalties assessed under the use-value system prior to closing.
B - Use-value applies to land that is devoted primarily to agricultural use. Owners who change the use of agricultural land subject to the use-value assessment to a non-agricultural use must pay a penalty.
Who examines an abstract and prepares an opinion of title?
A: A firm
B: The buyer
C: The abstract company
D: An attorney
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