-
What is a legal description of real property?
It is the accurate location and identity of the boundaries of the subject parcel to a degree acceptable by courts of law in the state where the property is located.
-
Name some of the primary uses of legal descriptions.
public recording, creating deeds and leases, mortgage documents, other legal documents
-
Give a simple description of the metes and bounds method of description.
Starting at a point of beginning, it traces an enclosed space by following measured lines around an area and returning to the point of beginning.
-
What are the main elements of the rectangular survey system?
Longitudes, latitudes, township grids, ranges, tiers, sections, fractions of sections
-
What is a meridian and how many principal meridians are in the national survey?
Meridians are the north-south longitudinal lines on the survey grid. There are 36 principal meridians in the national survey.
-
In the rectangular survey method, why is it necessary to have guide meridians, standard parallels, and quadrangles?
Because of the curvature of the earth, a rectangle drawn on the earth's surface using longitudinal lines as sides will be narrower on the side farther from the equator than on the side nearer the equator; thus, townships would become smaller and smaller as one moved farther north of the equator. The guide meridians, standard parallels, and quadrangles limit this variance caused by the earth being round.
-
Why is it necessary for a complete legal description to include the county and state?
Principal meridians and base parallels extend through more than one county and state; naming the county and state in the description provides extra protection against misreading a description as applying to two different properties.
-
Name the components of a description using the recorded plat method.
Lot number, block identifier, subdivision name, section location, township, county, state.
-
Explain how a datum or benchmark is used to describe the elevation of a property in a legal description.
A datum or benchmark has an established elevation. A property description will state that the property is a number of feet above or below the datum or benchmark.
-
accurately locates and identifies the boundaries of the subject parcel to a degree acceptable by courts of law in the state where the property is located.
legal description of real property
-
The three accepted methods of legally describing parcels of real estate are
- metes and bounds,
- rectangular survey system or government survey,
- and recorded plat or lot and block.
-
Describes property perimeter by landmarks, monuments, distances, angles.
From point of beginning (POB), describes perimeter and returns to POB; usable within rectangular survey system.
METES AND BOUNDS
-
The federal government developed the_______, or government survey method, to simplify and standardize property descriptions as a replacement for the cumbersome and often inaccurate metes and bounds method.
rectangular survey system
-
The survey grid
Meridians:
north-south lines six miles apart; one principal meridian per jurisdiction; guide meridian every 24 miles east and west of principal.
-
The survey grid
Parallels:
east-west lines six miles apart; one base parallel for each principal meridian; standard parallel every 24 miles north and south of principal.
-
Survey grid
Check or quadrangle:
24x24-mile square created by intersection of guide meridians and standard parallels.
-
Survey grid
Ranges:
north-south strips of area between meridians.
-
Survey grid
Tiers:
east-west strips of area between parallels.
-
Survey grid
Townships:
the area representing the intersection of a range and a tier, consisting of six-mile by six-mile squares of land.
-
The rectangular survey system divides a township into____ squares called____. Each side of a section is ____in length. Thus the area of a section is___ square mile, or___ acres.
- thirty-six
- sections
- one mile
- one
- 640
-
is legally described by indicating its size and location within successively larger quarters or halves of the section. In other words, the description proceeds from the smallest unit to the largest.
fraction of a section
-
When converting section fractions to acres, formula;
multiply denominators of section fractions; divide product into 640.
-
The recorded plat method, also called the________, is used to describe properties in 3______ subdivisions.
- lot and block system
- Residential, commercial, industrial
-
Under this system, tracts of land are subdivided into lots. The entire group of lots comprises the subdivision. In a large subdivision, lots may be grouped together into____for ease of reference.
- Recorded plat method
- blocks
-
In recorded plat method The surveyor then incorporates the survey data into a_____or ___, which must comply with local surveying standards and ordinances.
plat of survey, or subdivision plat map
-
The description of a recorded plat property first presents the_____, then the____ and the_____.
- property's lot number or letter
- block identifier
- subdivision name
-
Because real property legally includes the space above land as well, owners have the option to partition it just as they do the surface. These partitions are known as
air lots.
-
Datum:.
Benchmark:
- a standard elevation reference point
- elevation marker officially surveyed and registered
-
Accepted methods of legal description do not include;
Lot and block
Metes and bounds
Rectangular survey
Block and tackle
Block and tackle
-
The critical characteristic of a metes and bounds system is that it
Describes the complete closed perimeter of the parcels boundaries
-
A plat survey is best described as
A survey of an entire subdivision
-
The essential criterion for an acceptable legal description is that it
Accurately locates the parcel so that the surveyor can find it
-
A parcel's street address is an insufficient legal description because
It lacks permanence and sufficient data for surveyor to find it
-
The legal description of a recorded plat is incomplete if it lacks
A point of beginning and ending
The subdivisions location in a section an township
A calculation of each lots acreage
A description of landmarks
The subdivisions location in a section an township
-
What is a datum in a legal description?
A standard elevation reference point
-
A full legal description in a recorded plat must include;
The lots acreage
The subdivisions zip code
The subdivisions location within a section, township, county, a state
The plat owners legal mailing address
The subdivisions location within a section, township, county, a state
-
How are directions described in a metes and bounds survey?
In terms of degrees east or west of an imaginary north south axis
-
A range is defined by
2 consecutive meridians
-
How far apart are common parrellells
6 miles
-
A check or quadrangle is defined by the intersection of pairs of
Guide meridians and standard parallels
-
What method of legal description was the first one used in America?
Metes and bound system
-
The fundamental components of the metes and bounds system are
Reference points, angles, and distances
-
What happens at the title closing?3
- The buyer completes his or her financing arrangements (referred to as closing the loan).
- The seller transfers the title.
- Both the buyer and seller pay the necessary taxes, fees and other charges.
-
What is the difference between a face-to-face closing and an escrow closing?
Face-to-face – one meeting with all involved parties assures the promises made in the sales contract are fulfilled, the buyer's loan is finalized, and the lender disburses the funds.
Escrow closing – parties never meet, but closing is handled by a disinterested third party who is authorized to act as an escrow agent and coordinate the closing activities on behalf of the buyer and seller.
-
What is the broker's role for a closing?
The broker may order inspections, surveys, or appraisals; can help buyer find a lender; can schedule needed repairs; check on progress of activities necessary for closing; conduct final walkthrough of property; may or may not be present at closing.
-
What does a title search reveal?3
- The legal description of the property.
- The owners of record.
- Any outstanding liens or encumbrances on the property.
-
Who needs title insurance and why?
Both the buyer and the lender need title insurance. Insurance for the buyer ensures a clear title and protects his or her investment. Insurance for the lender protects the lender's interest in the property.
-
What is escrow?
The process in which a disinterested third party holds all money and documents relating to a transaction until all of the terms and conditions of the escrow instructions have been satisfied.
-
During the escrow period, a number of activities will be taking place. Activities include:6
- Getting an appraisal – The appraisal report will be sent to the lender. If the buyers or sellers want to know the results, their agents must contact the lender.
- Ordering pest control and other inspection reports – Reports will be sent to the buyers through their agent, who may provide a copy to the lender. If repairs are needed, the buyers and sellers may have to negotiate – as we discussed when we talked about contingencies in an earlier chapter. If the lender required any repairs, the sellers will have to prove to the lender they were made.
- Arranging and approving financing – When the lender approves the buyers' loan, the lender will outline the exact terms of the loan and set an expiration date for the loan commitment. The lender will also give the buyers an estimate of their closing costs using the Loan Estimate Form. The lender will send all of the documents to the escrow agent who will set up a time with the buyers to review and sign the documents, which will then go back to the lender to arrange the funding.
- Ordering the complete title search and title insurance – As we mentioned earlier, the escrow agent will order a preliminary report, which will be sent to the lender and the buyers for approval.
- Obtaining property insurance – The escrow agent will verify that the property is insured up to its replacement value.
- Getting all paperwork in order – The escrow agent will prepare the final settlement statements for the closing meeting.
-
What does TRID Rule require lenders to give to borrowers?4
The booklet “Your home loan toolkit,” a Loan Estimate, a Mortgage Servicing Disclosure Statement, and a Closing Disclosure
-
RESPA does not apply to what kinds of loans?
Seller-financed loans or loan assumptions (unless the lender has changed the terms of the assumed loan or charges more than $50 for the assumption).
-
What right does the TRID Rule give to buyers?
The right to review the completed settlement statement (Closing Disclosure) three business days prior to closing.
-
RESPA allows business relationships among real estate firms, mortgage brokers, title insurance firms, and other such companies involved in a transaction providing what?
Providing the relationships are disclosed in writing to the consumer, the consumer is free to go elsewhere for the relevant service, and the companies do not exchange fees for referrals
-
What does a settlement statement include?
A list of debits and credits for both the buyer and seller.
-
Seller costs6
- Transfer taxes (state and local)
- Broker commission
- Attorney fees
- Recording documents to clear the title
- Satisfaction of existing liens
- Special fees, such as coop or condo fees
-
What disclosures are required before closing?2
- Affiliated Business Arrangement Disclosure
- Closing Disclosure given to the buyer three days before actual settlement
-
What disclosures are required at closing?2
- Closing Disclosure
- Initial Escrow Statement
-
What disclosures are required after closing?
- Annual Escrow Statement
- Servicing Transfer Statement
-
Who is responsible for reporting the real estate sale to the IRS?
The responsibility for filling out and submitting the form generally falls to the person who conducted the closing.
-
Both the ___and ___ should have title insurance.
buyer and the lender
-
is defined as the process in which a disinterested third party holds all money and documents relating to a transaction until all of the terms and conditions of the escrow instructions have been satisfied.
Escrow
-
A_____ oversees the preparation and recording of all the legal documents, determines the settlement costs, prepares the settlement statements, and completes various other tasks.
closing agent
-
Most buyers condition the sale on one or more _____of the property by one or more experts. So inspections and their results are an important aspect of the closing process.
inspections
-
requires that the parties to certain transactions receive the correct figures pertaining to their closing costs.
The Real Estate Settlement and Procedures Act (RESPA)
-
RESPA applies to purchases:3
- Of residential property
- Involving first or second mortgages
- Financed by a federally-related loan
-
specifically prohibits any payment or receiving of fees or kickbacks when a service has not been rendered.
RESPA
-
requires lenders to use the Closing Disclosure to detail the costs that the buyer and seller will pay at closing. TRID also requires lenders to supply applicants with the booklet “Your home loan toolkit,” a Loan Estimate, and a Mortgage Servicing Disclosure Statement. Also gives buyers the right to review the completed settlement statement three business days prior to closing.
TRID
-
requires specific disclosures before, at, and after closing. (Organization)
CFPB
-
How does the buyer know how much money to bring to closing?
The escrow agent will subtract the total of the buyer’s credits from the total debits and the result is what the buyer needs to bring.
-
Which document itemizes the estimated taxes, insurance premiums, and other charges anticipated to be paid from the Escrow Account during the first twelve months of the loan?
Initial Escrow Statement
-
What form does TRID require to be used for itemizing closing costs?
Closing Disclosure form
-
The buyer's primary function at closing is to
pay the purchase price for the property.
-
Money that the buyer or seller needs to pay at closing is called what?
DEBIT
-
TRID gives the buyer the right to review the completed settlement statement how long before closing?
3 CALENDAR DAYS
-
Which step in the escrow process includes signing and transferring all documents and distributing the funds?
Escrow closing
-
Who is the "disinterested third party" in a closing?
ESCROW AGENT
-
Which of the following information will the escrow agent NOT need?
Commissions
Legal description of property
Earnest money deposit
Buyers credit report
Buyers credit report
-
What type of closing consists of all parties in the transaction meeting at one time?
Face to face
|
|
