Core Concepts and Principles Flashcards

What is the purpose of a title commitment (preliminary title report)?

Answer: To show ownership, liens, and exceptions before title insurance is issued

The title commitment shows vesting, liens, and exceptions that must be cleared or accepted before closing.

A lender's appraisal comes in below the purchase price. Which contingency most directly protects the buyer?

Answer: Appraisal contingency

An appraisal contingency lets the buyer renegotiate or cancel if the value comes in low.

Which federal law prohibits kickbacks and unearned fees for settlement service referrals?

Answer: Real Estate Settlement Procedures Act (RESPA)

RESPA Section 8 bans kickbacks and unearned fees for referring settlement services.

A TC is coordinating a file for a client who wants a different deal for a buyer of a certain religion. What should the TC do?

Answer: Refuse to participate and escalate to the broker, since it violates fair housing law

The Fair Housing Act prohibits discrimination based on religion, so the TC must not take part.

What is the main reason a TC keeps a complete, organized transaction file after closing?

Answer: To satisfy broker and state record-retention requirements and support audits

States and brokers require transaction records to be kept for a set period for compliance and audits.

What is a 'clear to close' notification from the lender?

Answer: Confirmation that underwriting conditions are satisfied and the loan can fund

Clear to close means underwriting has signed off and closing documents can be prepared.

When a TC represents the listing side, who is the TC's primary point of contact for decisions?

Answer: The listing agent and, through them, the seller

A TC works under the agent who hired them, and decisions flow from that agent and their client.