Accounting /Real Estate Notes PSI Exam Prep: Transfer of Title Part 2
Real Estate Notes PSI Exam Prep: Transfer of Title Part 2
This deck covers key concepts related to the transfer of title in real estate, focusing on terms, processes, and legal requirements involved in property transactions.
may be a broker, title representative, escrow officer, or attorney, though the most common is likely to be a title company representative. This individual is also called the closing agent
The escrow agent
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Key Terms
Term
Definition
may be a broker, title representative, escrow officer, or attorney, though the most common is likely to be a title company representative. This individual is also called the closing agent
The escrow agent
these are shared expenses that either party owes at closing are prorated (divided between) the parties depending on when closing occurs
Prorations
these are items the seller owes on closing day but that will eventually be paid by the buyer (unpaid current property taxes, for example) and appear in the seller’s debit column and the buyer’s credit column.
Accrued expenses
these are those already paid by the seller but that the buyer should pay a portion of (such as prepaid real estate taxes, utilities paid in advance). These items are credited to the seller and debited to the buyer.
Prepaid expenses
are Closing Disclosure (CD) and loan estimate require for home equity lines of credit (HELOCs), seller financing, or reverse mortgages?
NO!
How many days are required to provide disclosure forms BEFORE loan application and BEFORE closing days?
3 days
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| Term | Definition |
|---|---|
may be a broker, title representative, escrow officer, or attorney, though the most common is likely to be a title company representative. This individual is also called the closing agent | The escrow agent |
these are shared expenses that either party owes at closing are prorated (divided between) the parties depending on when closing occurs | Prorations |
these are items the seller owes on closing day but that will eventually be paid by the buyer (unpaid current property taxes, for example) and appear in the seller’s debit column and the buyer’s credit column. | Accrued expenses |
these are those already paid by the seller but that the buyer should pay a portion of (such as prepaid real estate taxes, utilities paid in advance). These items are credited to the seller and debited to the buyer. | Prepaid expenses |
are Closing Disclosure (CD) and loan estimate require for home equity lines of credit (HELOCs), seller financing, or reverse mortgages? | NO! |
How many days are required to provide disclosure forms BEFORE loan application and BEFORE closing days? | 3 days |
Governments like property taxes as a revenue base because | they’re a stable, reliable revenue source |
Transfer tax rates vary by location, but the rate is usually a percentage of the total sale price or a dollar amount per | $1,000 of the sale price. |
There are property tax implications for real property owners at each stage of the property ownership lifecycle | acquisition, ownership, and sale (reversion). |
When a non-U.S. resident (foreign person) sells real property in the U.S., the Foreign Investment in Real Property Tax Act (FIRPTA) requires that buyers withhold | 15% of the gross sales price at closing. |
it is a property that is being sold by the lender due to the buyer’s default. The lender will usually sell the property at auction after proper notice has been provided, and often after allowing the borrower the right to cure the default. | foreclosure |
it is a property that the seller, with the lender’s permission, is selling for less than the seller owes against the property. | short sale |
In this type of sale, ownership has reverted to the lender because of a failed foreclosure sale or because the borrower surrendered ownership of the property to the lender through a deed in lieu of foreclosure are called | real estate-owned (REO). |
it may permit previous owners to buy the property back during a certain period of time after the foreclosure sale. This isn’t an issue with short sales. | Individual states’ redemption processes |
construction warranties cover structural damage or major construction defects (such as foundation issues) for | 10 years |
Major systems (heating, air conditioning, electrical, etc.) may also be covered for a period of time, such as | two to five years. |
Both the FHA and VA require new-home builders to provide a | Warranty of Completion of Construction |
The first course of action for disputed home warranty claims is typically | mediation, then arbitration |
A deed states, “For love and affection, the receipt and sufficiency of which is hereby acknowledged.” What does this statement represent in the deed? | Consideration |
Few states require an abstract of title when conveying property. YES OR NO | YES |
Which of these would void a deed intended to convey property? | he grantor must be mentally competent and of legal age, though neither of these is essential for the grantee. The grantor is required to sign the deed, and the grantee must provide some sort of consideration. |
Why does the closing agent review the purchase contract? | To gather closing-related information agreed to in the contract |
The primary purpose of the Real Estate Settlement Procedures Act is to ensure that buyers . | Know all settlement costs up front |
Meg is considering a move to a foreign country and wants to deed her property to her son, Christian, who’s 16. Which of these must occur to make this transfer legal? | Meg must sign the deed and have her signature acknowledged. |
What’s the relationship between TILA, RESPA, and TRID? | The Dodd-Frank Act requires that lenders use the TILA-RESPA Integrated Disclosures (TRID). |
Lynette purchased a property under a bargain and sale deed. Which statement best describes the covenants Lynette's deed provides? | A bargain and sale deed may come with or without covenants of warranty. Generally, however, it's known for not containing warranties. |
Which of these statements about the homeowner's right of redemption is true? | Because of the length of time it takes to process a property after the foreclosure sale, the homeowner's redemption period may have expired before the lender puts the REO on the market. |