Real Estate Sales Exam Real Estate Sales Transfer of Title 1 — Questions and Answers
Question 1: For a deed to legally transfer title, which of the following is absolutely required?
- The deed must be recorded in the county recorder's office
- The deed must be delivered to and accepted by the grantee (Correct answer)
- The deed must state the exact purchase price paid
- The deed must be witnessed by two independent parties
Correct answer: The deed must be delivered to and accepted by the grantee
Delivery and acceptance are the essential acts that transfer title. A deed may be properly signed and notarized, but if it is never delivered to and accepted by the grantee, no title passes — even if it is later recorded.
Question 2: When a deed is recorded in the public records, it provides what type of notice to the world?
- Actual notice
- Constructive notice (Correct answer)
- Implied notice
- Equitable notice
Correct answer: Constructive notice
Recording a deed gives constructive notice, which means the law presumes everyone is aware of the transfer even if they have not personally seen the document. Actual notice requires someone to have direct knowledge of the fact.
Question 3: Which type of title insurance policy is specifically designed to protect the buyer's ownership interest in a property?
- Mortgagee's policy
- Lender's policy
- Owner's policy (Correct answer)
- Binder policy
Correct answer: Owner's policy
An owner's title insurance policy protects the buyer's equity interest against covered title defects. A lender's (mortgagee's) policy only protects the lender's financial interest up to the loan balance.
Question 4: What is the legal term for the voluntary transfer of real property from one owner to another?
- Alienation (Correct answer)
- Escheat
- Eminent domain
- Foreclosure
Correct answer: Alienation
Alienation refers to the voluntary act of transferring ownership of real property. Escheat, eminent domain, and foreclosure are all forms of involuntary transfer where the owner does not freely choose to convey the property.
Question 5: Under a land contract (contract for deed), when does the buyer typically receive legal title to the property?
- At the time the contract is signed
- After the first scheduled payment is made
- When all required payments have been completed (Correct answer)
- At the time the contract is recorded
Correct answer: When all required payments have been completed
In a land contract, the buyer holds equitable title during the repayment period while the seller retains legal title as security. Legal title is only transferred to the buyer after the final payment is made and the deed is delivered.
Question 6: A sheriff's deed is most commonly issued to transfer title in which of the following situations?
- A standard voluntary sale between a willing buyer and seller
- A property conveyed to heirs through a last will and testament
- A court-ordered foreclosure sale of a property (Correct answer)
- A gift of property between immediate family members
Correct answer: A court-ordered foreclosure sale of a property
A sheriff's deed is used to convey title when a court orders the forced sale of a property, most commonly in a foreclosure action. It is an involuntary transfer issued by a public official rather than the property owner.
Real Estate Sales Exam Real Estate Sales Transfer of Title 1
For a deed to legally transfer title, which of the following is absolutely required?