Unit 8 Real Estate Principles Courses Review

Metes and bounds
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Terms in this set (56)
Metes and bounds
Land description that delineates boundaries and measures distances between landmarks to identify property.
Escrow holder
Acts as a neutral agent of both buyer and seller.
Vesting
The way title will be taken.
Calendar year
Begins on January 1 and continues through December 31 of the same year.
Abstract of title
Written summary of all useful documents discovered in a title search.
Assessment roll
A list of all taxable property showing the assessed value of each parcel; establishes the tax base.
Property taxes
Taxes used to operate the government in general.
Preliminary report
An offer to issue a policy of title insurance in the future for a specific fee.
Escrow
A small and short-lived trust arrangement.
Marketable title
Good or clear saleable title reasonably free from risk of litigation over possible defects.
Ad valoremA Latin phrase meaning according to value.Fiscal yearStarts on July 1 and runs through June 30 of the following year; used for real property tax purposes.Completed escrowAll terms of the escrow instructions have been met.ProrationThe division and distribution of expenses and/or income between the buyer and seller of property as of the date of closing or settlement.SectionAn area of land, one square mile, or 640 acres; 1/36 of a township.Impound accountA trust account set up for funds set aside for future costs relating to a property.Plat mapMap of a subdivision indicating the location and boundaries of individual lots.Special assessmentsTaxes used for specific local purposes.Title Insurance PolicyAn insurance policy that protects the insured against loss or damage due to defects in the property's title.Beneficiary statementA statement of the unpaid condition of a loan and describes the condition of the debt.Escrow instructions must be: a. chartered. b. executed. c. notarized. d. recorded.executed2. The reason for using an escrow when a deed of trust is conveyed is to: a. comply with the Civil Code. b. ensure that the conditions and instructions of the agreement are satisfied. c. allow for recordation of the deed. d. provide for third-party liability.ensure that the conditions and instructions of the agreement are satisfied.3. Which of the following best describes completed escrow? a. It is equivalent to a perfect escrow. b. The escrow holder has ceased being an agent for both parties. c. All escrow instructions have been carried out. d. All services of the escrow holder are involved.All escrow instructions have been carried out.4. Which of the following statements concerning escrow is correct? a. A perfect escrow exists when the buyer's closing statement and the seller's closing statement are exactly identical. b. In order for the escrow to be able to close, the buyer may be required to pay more than the amount stated in the escrow instructions. c. The amount in the final closing statement must be the same as the amount in the escrow instructions. d. None of the aboveIn order for the escrow to be able to close, the buyer may be required to pay5. Which of the following statements regarding escrow procedures is correct? a. A broker may hold an escrow for compensation for other parties if the broker has no interest in the transaction. b. When the escrow requirements have been met, the escrow agency changes from being agent of both parties to an agent of each party. c. When the escrow holder is in possession of a binding contract between the buyer and seller, it is said to be a complete escrow. d. The escrow officer acts as an arbitrator of disputes between buyer and seller.When the escrow requirements have been met, the escrow agency changes from being agent of both parties to an agent of each party.6. An escrow agent is authorized to: a. give the buyer advice about available financing. b. change the escrow instructions when asked to do so by the listing broker. c. call for funding of the buyer's loan. d. authorize a pest control company to make corrective repairs.call for funding of the buyer's loan.7. If an escrow holder receives pest control reports from two different companies, the escrow officer should: a. submit the estimate requiring the most work. b. contact both inspectors and determine which of the two reports should be accepted. c. contact the brokers to ask for instructions from the buyer and seller. d. contact the broker to ask for instructions from the seller.contact the brokers to ask for instructions from the buyer and seller.8. Which of the following items would most likely appear as a credit in the seller's closing statement? a. Prepaid taxes b. Delinquent assessment lien c. An assumed loan d. Title insurance premiumprepaid taxes9. If a buyer assumes an existing loan when purchasing a single-family residence, the settlement statement at close of escrow would show the assumption of the loan as: a. a debit to the buyer. b. a debit to the seller. c. a credit to the lender. d. neither a credit nor a debit.a debit to the seller10. How would a loan for the purchase of a residence appear on the buyer's closing statement? a. Credit to buyer, debit to seller b. Debit to buyer, credit to seller c. Credit to buyer d. Debit to buyercredit to buyer11. Which of the following is regarded as a recurring cost in a closing statement? a. Escrow fees b. Recording fees c. Impound accounts d. Premiums for title insuranceimpound accounts12. A buyer who wishes to insure title to real property when it is purchased should secure a(n): a. guarantee of title. b. abstract of title. c. certificate of title. d. title insurance policy.title insurance policy13. Which of the following title insurance policies protects against all risks? a. Standard policy b. Extended policy c. A.L.T.A. policy d. No policy insures against all risks.no policy insures against all risks14. When buying a home, a purchaser was given a grant deed and a standard policy of title insurance. Which of the following is warranted by the seller but is not covered by the standard policy of title insurance? a. The grantor is legally competent. b. The grantor actually signed the deed. c. The grantor has placed no undisclosed liens against the property. d. There are no forged deeds in the chain of title.the grantor has placed no undisclosed liens against the property15. Which of the following is not covered by title insurance? a. A zoning ordinance, regulation, or plan b. Loss due to a missing signature of a spouse on a deed to community property c. Unpaid county property tax not shown in the policy d. Incompetence of a former sellera zoning ordinance, regulation, or plan16. Which system of land description employs meridians and baselines? a. Metes and bounds b. Public Land Survey system c. Subdivision system d. Lot, block, and tract systemPublic Land Survey system17. County governments levy taxes through: a. property taxes. b. special assessments. c. transfer taxes. d. all of the above.all of the above.18. An example of an ad valorem tax would be: a. income tax. b. estate tax. c. bridge toll. d. property tax.property tax.19. How do special property tax assessments differ from annual property tax assessments? a. Annual assessments have priority over special assessments. b. Special assessments are imposed only by local authorities. c. Judicial foreclosure is required for unpaid special assessments. d. Special assessments provide for local improvements.Special assessments provide for local improvements.20. After a property is declared tax-defaulted for failure to pay property taxes, the occupant of the property: a. must vacate immediately. b. must pay rent to the State of California. c. may continue to reside on the property unhindered. d. is freed of tax obligations immediately.may continue to reside on the property unhindered.Who licenses an escrow company? a. Board of Realtors b. Real Estate Commission c. C.A.R. d. Commissioner of Business OversightCommissioner of Business OversightWhich of the following became the measure for assessing property in California? a. Proposition 13 b. Subdivided Lands Law c. California Land Title Act d. American Land Title ActProposition 13A lot, block, and tract system can be called all of the following, except a: a. lot and block system. b. subdivision system. c. recorded map system. d. landmarks and unique identifier system.landmarks and unique identifier systemThe terms "range lines" and "township lines" are associated with which legal description? a. Geodetic Survey System. b. Lot, block, and tract system c. Metes and bounds system d. Public Land Survey SystemPublic Land Survey systemAn escrow may be directed by real estate brokers: a. only when they are a principal. b. only when they are incorporated. at no time. c. only as a part of their normal d. business operations if they represent the principals.only as a part of their normal business operations if they represent the principalsA unilateral change in escrow instructions may be made by: a. neither the buyer nor the seller. b. either the buyer or the seller. c. the escrow holder. d. the escrow agent.neither the buyer nor the sellerLandmarks, such as trees and fences are known as: a. liens. b. townships. c. monuments. d. ranges.monumentsA special assessment would be imposed to pay for which of the following? a. Freeway repairs b. Education c. State park services d. Neighborhood street lightsneighborhood street lightsAn extended coverage title insurance policy covers all of the following, except: a. outstanding mechanic's liens. b. unpaid credit card payments. c. unrecorded physical easements. d. rights of parties in possession.unpaid credit card paymentFor property tax purposes, how much is the California homeowner's exemption? a. $3,000 b. $5,000 c. $7,000 d. $2,000$7000Which of the following may license an escrow company? a. Commissioner of Business Oversight b. C.A.R. c. Real Estate Commission d. Board of REALTORS®Commissioner of Business OversightWho must sign escrow instructions? a. Buyer b. Buyer and seller c. Escrow holder d. Brokerbuyer and sellerhe buyer's and seller's agreement is indicated in the: a. trust deed. b. escrow instructions. c. settlement. d. closing account.escrow instructionsAn escrow may be directed by real estate brokers: a. only when they are a principal. b. only when they are incorporated. c. at no time. d. only as a part of their normal business operations if they represent the principals.only as a part of their normal business operations if they represent the principals.For income tax purposes, which expense is deductible to a homeowner for a primary residence? a. Capital improvements b. Property taxes c. Maintenance expenses d. Depreciationproperty taxesA new roof, swimming pool, or other cosmetic addition to property is known as: a. homeowner's exemptions. b. special assessments. c. capital improvements. d. taxable gains.capital improvements