FREE CLA/CP Real Estate Transactions Questions and Answers

Question 1

Which of the following documents is MOST commonly used to formally transfer ownership of real property from one party to another?

Accepted Answer

A deed

Answer

A mortgage

Answer

A promissory note

Answer

A lease agreement

Question 2

A buyer and seller have signed a purchase agreement for a residential property. Before closing, the buyer discovers a previously undisclosed easement running across the backyard. This easement was not mentioned in the property disclosures. What legal concept is MOST relevant to the buyer's potential remedies?

Accepted Answer

Breach of contract

Answer

Eminent domain

Answer

Adverse possession

Answer

Zoning variance

Question 3

What is the primary purpose of conducting a title search during a real estate transaction?

Accepted Answer

To identify any existing liens, encumbrances, or defects in the property's ownership history.

Answer

To determine the current market value of the property.

Answer

To calculate the property taxes due at closing.

Answer

To verify the buyer's creditworthiness for a mortgage loan.

Question 4

Which of the following statements BEST describes the role of an escrow agent in a real estate transaction?

Accepted Answer

The escrow agent is a neutral third party who holds funds and documents until all conditions of the sale are met.

Answer

The escrow agent acts solely as an advisor to the buyer.

Answer

The escrow agent primarily provides legal representation to both the buyer and the seller.

Answer

The escrow agent is responsible for marketing the property and finding potential buyers.

Question 5

In a typical residential real estate transaction, what is 'earnest money' primarily intended to do?

Accepted Answer

Demonstrate the buyer's serious intent to purchase the property.

Answer

Cover the seller's moving expenses.

Answer

Serve as a non-refundable payment to the real estate agent.

Answer

Pay for the property appraisal.

Question 6

A buyer is obtaining a loan to purchase a home. Which document legally obligates the buyer to repay the loan and sets out the terms of repayment?

Accepted Answer

The promissory note

Answer

The deed

Answer

The purchase agreement

Answer

The mortgage or deed of trust