CHCP Real Estate Transactions & Documentation 2

Question 1

A buyer wants to cancel a purchase agreement due to an unsatisfactory home inspection. Which clause specifically grants them this right?

Accepted Answer

Inspection contingency

Answer

An inspection contingency allows buyers to cancel or renegotiate if the home inspection reveals unacceptable conditions.

Question 2

What document transfers the seller's rights and interest in a property to the buyer at closing?

Accepted Answer

Deed

Answer

A deed is the legal instrument that conveys ownership (title) from the seller to the buyer.

Question 3

Which federal law requires lenders to provide borrowers with a Loan Estimate within three business days of a loan application?

Accepted Answer

TILA-RESPA Integrated Disclosure (TRID)

Answer

TRID (the TILA-RESPA Integrated Disclosure rule) mandates delivery of the Loan Estimate within three business days of application.

Question 4

In a real estate transaction, what does 'proration' at closing typically address?

Accepted Answer

Allocation of recurring costs like taxes and HOA fees between buyer and seller

Answer

Proration allocates ongoing expenses such as property taxes, HOA dues, and prepaid rents between buyer and seller based on the closing date.

Question 5

A 'chain of title' examination is conducted primarily to:

Accepted Answer

Identify any breaks or defects in the history of ownership

Answer

A chain of title review traces consecutive transfers of ownership to ensure there are no gaps, conflicts, or defects that could cloud title.

(CHCP) Certified Home Closing Professional Practice Test