Explication:
The transfer process requires delivery and acceptance to be complete. Recording presumes delivery
and acceptance since the recorded deed is mailed to the grantee.
Explication:
First, determine the amount of the capital gain or loss. 750,000 purchase + 300,000 improvements =
1,050,000 adjusted basis. Asale price of 950,000 creates a 100,000 capital loss. However, capital
losses are not permitted on a primary residence.
Explication:
A deed does not need to be recorded to be valid, but must be recorded to give constructive notice.
Explication:
Answer uLandscaping expenses” is the only option that is not tax deductible for owner-occupied
residences.
Explication:
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.
Explication:
All other answers except sell real estateare not covered under real estate licensure.
Explication:
“Recurring" means costs that will repeat. In this question, only impounds are recurring.
Explication:
A principal in the transaction cannot perform as an escrow agent in the same transaction as they are
not impartial or neutral.
Explication:
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.
Explication:
Depreciation can only be taken on the improvements (80%) portion of the purchase price. In this
example: 80% x 750,000 2 600,000 (improvement portion of the original basis). 600,000 x 0.02 (2%)
= 12,000 per year x 5 years = 60,000 (accrued depreciation). Then, subtract the accrued
depreciation from the original cost basis. 750,000 (original cost basis) - 60,000 (accrued
depreciation) = 690,000 (depreciated cost basis). Finally, add 50,000 for the new swimming pool
improvement + 690,000 (depreciated cost basis) = 740,000 (adjusted cost basis).
Explication:
This is an example of one question delivering the answer to a different question. Another question ir
this section defines the chain of title as a written summary of public records.
Explication:
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.
Explication:
A probate court will only consider a subsequent bid that is raised by an amount equal to 10% of the
first 10,000 (1,000), plus 5% on the balance (44,500).
Explication:
Ad valorum is the tax assessor’s valuation for real estate.
Explication:
Escrow can be cancelled by mutual agreement between both principals, not unilaterally by one
party- The broker is not a party to the escrow, therefore, they cannot authorize termination. In the
event of the death of either party, their estate is still responsible for performing.
Explication:
All other answer selections are true of a tenancy in common, as distinct from a community interest
such asjoint tenancy. However, a tenant in common may will their interest in the property to others
on their death.
Explication:
On April 5th 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.
Explication:
A grant deed is valid whether or not it is recorded.
Explication:
Transfer stamps come in multiples of 0.55.
Explication:
Only this answer choice fits the requirements for adverse possession. The period of possession
must be at least five years, not two. This is why answer choice ”they have been in posseeion...” is
incorrect.
Explication:
A bill of sale is used to transfer personal property.
Explication:
The quitclaim deed is the exception here. There are no guarantees or warranties with a quitclaim
deed.
Explication:
This is an example of a contingency in an escrow. This contingency favored the buyer and allowed
them to void the sale since the loan balance was not as previously stated.
Explication:
A sheriff’s sale will cause a writ of execution to be drawn and recorded.
Explication:
All of these will differ between a contract and a deed.
