Transfer of Title — Real Estate License practice questions

A general warranty deed provides which of the following features?

1. It conveys real property with absolutely no warranties whatsoever
2. It only takes effect after the grantor's death (a testamentary act)
3. It conveys with the broadest warranties — seisin, encumbrances
4. It is not legally enforceable in any U.S. state under state law

Answer: C — It conveys with the broadest warranties — seisin, encumbrances

A) That would be a quitclaim. B) That would be a testamentary transfer. C) Correct — general warranty gives the full covenants. D) General warranty deeds are enforceable.

Which type of deed provides the buyer with the strongest title warranties?

1. Quitclaim deed, transferring only whatever interest is held
2. Special warranty deed, covering only the grantor's ownership
3. General warranty deed, warranting title against all past claims
4. Bargain and sale deed, implying title but giving no warranties

Answer: C — General warranty deed, warranting title against all past claims

A) Quitclaim gives no warranties. B) Special warranty covers only the grantor's period. C) Correct — general warranty is the strongest form. D) Bargain and sale implies but does not warrant title.

In a contract for deed (installment land contract), which is TRUE?

1. Buyer gets legal title; gives mortgage
2. Seller keeps title until buyer pays
3. Title vests 50/50 during installment
4. Buyer default forfeits equity always

Answer: B — Seller keeps title until buyer pays

A) Ordinary purchase, not contract. B) Correct — seller retains title. C) No fractional title. D) Many states require process.

A general warranty deed provides the grantee with:

1. No warranties whatsoever regarding the state of the title
2. Warranties only for the period the grantor actually owned
3. Warranties covering the entire chain of prior owners' title
4. A limited right to rescind the sale within a 30-day period

Answer: C — Warranties covering the entire chain of prior owners' title

A) Wrong - that is quitclaim. B) Wrong - that is special warranty. C) Correct - broadest protection. D) Wrong - no rescission right.

Title insurance in a real estate transaction protects which of the following?

1. The lender only, and never protects the buyer of the real property
2. Against future losses from pre-existing title defects — owner + lender
3. Only the listing broker's commission earned on the transaction today
4. Any future appreciation in the value of the property after closing

Answer: B — Against future losses from pre-existing title defects — owner + lender

A) Owners can also obtain owner's policies. B) Correct — covers pre-existing hidden defects. C) Not commission insurance. D) Does not cover market value changes.

A special warranty deed warrants title:

1. Against all defects, whenever they arise
2. Only that deed itself is notarized
3. Nothing at all about existing title
4. Only against defects during grantor tenure

Answer: D — Only against defects during grantor tenure

A) That is general warranty. B) Not warranty. C) That is quitclaim. D) Correct — grantor tenure only.

Mortgage assumption by a buyer means the buyer:

1. Is automatically approved without any lender review at all
2. Takes over the seller's mortgage, typically with lender approval
3. Terminates the seller's mortgage on the day of transaction closing
4. Substitutes the recorded warranty deed for the mortgage note

Answer: B — Takes over the seller's mortgage, typically with lender approval

A) Wrong - usually needs approval. B) Correct - VA/FHA often assumable. C) Wrong - loan continues. D) Wrong - deed and note separate.

A "deed of trust" differs from a mortgage in that title is:

1. Held by the lender bank always
2. Eliminated as loan collateral
3. Held by trustee until paid off
4. Transferred to lender for security

Answer: C — Held by trustee until paid off

A) Trustee, not lender. B) Property is collateral. C) Correct — trustee holds. D) Lender does not hold.

The Statute of Frauds in real estate requires which of the following?

1. Oral contracts for land sales are enforceable in every state now
2. Notarization by a licensed notary for every valid transaction
3. Title insurance policy issued for every deed executed in the U.S.
4. Real estate sale contracts to be in writing and signed to enforce

Answer: D — Real estate sale contracts to be in writing and signed to enforce

A) Oral land sale contracts are generally unenforceable. B) Notarization is separate. C) Title insurance is not a Statute of Frauds requirement. D) Correct — writing + signature required.

Maintaining separate trust records for all client escrow funds is:

1. Discretionary best-practice choice
2. Legally required duty of brokers
3. Optional bookkeeping preference
4. Federally-only statutory requirement

Answer: B — Legally required duty of brokers

A) Not discretionary. B) Correct — legal duty. C) Not optional. D) State law also.

What are the four unities required in joint tenancy?

Time, Title, Interest, and Possession (TTIP). Acquired at the same time, by the same deed, with equal shares and equal rights to use the entire property.

What is a sheriff's deed?

A deed given to the buyer at a judicial foreclosure sale. Usually conveys only whatever interest the defaulting borrower had.