Real Estate FAQ – JMV Insurance Services, Inc.

The “Standard title policy” is another name for the California Land Title Association (CLTA), which ins’t explicitly provided as an option. When confronting a difficult question, remember to eliminate all the wrong or incomplete answers

A standard policy of title insurance covers:

b) incompetence of any of the parties

b- Only the American Land Title Association (ALTA) policy will give additional coverage, such as for encroachments and prescriptive easements. Incompetence of any of the parties is covered by both standard and extended policies.

A standard policy of title insurance does not cover:

a, b, c, unrecorded liens, easements and liens on the property not revealed by the public records, rights of parties in possession (d) all of the above are not covered)

d- Only the American Land Title Association (ALTA) policy will give additional coverage, such as for encroachments and prescriptive easements. Incompetence of any of the parties is covered by both standard and extended policies.

On April 1, 2016, an escrow agent opened preliminary title report order for the sale of a property. The Seller purchased the home in 1998, financing it with Federal Housing Administration (FHA) loan on which they are currently making payments. A preliminary title report dated April 5, 2016 will.

b) show a deed of trust with the seller as trustor.

b- On April 5 the seller will still be the owner and the trustor on the Federal Housing Administration (FHA) loan. Thus, answer choice B is the only correct answer.

An American Land Title Association (ALTA) policy of title insurance goes beyond the protection afforded by California Land Title Association (CLTA) policy in guarding against:

c) The location of property lines according to a formal survey

c- Anwer selection C is one of the extended benefits of an American Land Title Association (ALTA) policy.

When the public records have been examined, a written summary of the chain of title is known as :

a) Abstract of title

a- Note the words “chain of title” in the question , which is something that may also be covered in another question. The record of title is summarized in the abstract of title.

A deed is recorded and indexed based on:

c) The grantor and grantee names alphabetically

c- The names of both parties to the transfer are named and indexed accordingly.

Recording is not required for a:

d) Grant deed

d- A grant deed is valid whether or not is recorded.

Which of these is most correct concerning delinquent taxes and redemptions rights?

a) The effect of a “sale of the state” by the tax collector is to start the redemption period running.

a- The redemption period begins with the sale.

The annual property taxes an owner of a home needs to pay are determined by :

a) assesing the land and improvements separately, then multiplying the total by one tax rate.

a- The land and improvements are valued separately though the tax rate is the same.

Which of the following is an ad valorem tax?

c) Real estate tax

c- Ad valorum is the tax assesor’s valuation for real estate.

During a sales escrow, the escrow officer receives two structural control pest reports. THe escrow officer is to :

c) Notify the buyer and seller of the discrepancy and obtain written instructions as to which report to use.

c- Remember, only the principals can make decisions about transactions terms to escrow.

The instrument used to transfer title to personal property is the :

b) bill of sale

b- a bill of sale is sued to transfer personal property.

All of the following may be added to the original cost basis of real property to arrive at an adjusted basis for federal income tax purposes, execpt:

exection: The monthly mortgage payment

All of these can be added

a) Miscellaneous sale expenses b) The real estate brokerage commission earned on the sale

c) The cost of improvements

d) Mortgage payments are the exception. The other three answers selections have similarities and may be added to the original cost basis of real property to arrive at an adjusted basis for federal income tax purposes.

Federal income tax laws allow which of the following as tax deductible items for an owner occupied single family dwelling:

d) All of them

a) Mortgage interest payments. b) A mortgage prepayment penalty that was incurred. c) Property taxes.

All of the following items contained in a closing statement are generally prorated, except:

d) exception ( delinquent interest)

a) property insurance b) property taxes and assessments c) impounds

d) Delinquent interest is a seller expense and not prorated for the buyer

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Which of the following would be an incorrect amount for documentary transfer tax stamps?

d) 111.00 is incorrect

a) 110.00 b) 55.00 c) 220.00 are correct

d) Transfer stamps come in multiples of $0.55

At a tax foreclosure sale, the winning bidder receives a:

a) Tax deed

A deed

d) does not have to be recorded to transfer title.

d) This question runs parallel to Question 19. A deed does not need to be recorded to be valid, but must be recorded to give constructive notice( Anwer selection A)

Implied warranties are not included in a :

a) Quitclaim deed

a) The quitclaim deed is the exception here. There are no guarantees or warranties with a quitclaim deed.

A grant deed has been executed once it has been:

d) signed by the grantor

d) a Signature completes the execution. The transfer process requires delivery and acceptance to be complete.

Recorded title to a parcel of real property is vested in the name of Jennifer Baker, a single woman. After her marriage to Colin Matthews. She executes a deed to the property only in the name of Jennifer Matthews, a married woman. The discrepancy in the grantor’s name is:

c) a cloud on the tittle.

c) an inconsistency in the names of the title holder and grantor on the deed will require clarification, creating a cloud on title until this has been accomplished.

A land contract, when compared to a grant deed transfer, is different in the:

d) all are correct

a) interest conveyed.

b) signatures of the principal parties

c) designation of purchase price.