### What does the term "Cloud on Title" refer to in real estate? - [ ] A type of mortgage loan program - [ ] A strategy for lowering property taxes - [x] An apparent encumbrance on real estate property - [ ] A market condition where property prices fall > **Explanation:** "Cloud on Title" refers to any apparent encumbrance or issue discovered during a title search that could impair or invalidate the transfer of property from the seller to the buyer. These issues must be cleared before a property can be sold. ### What are common problems uncovered in a title search? - [ ] Issues with zoning laws - [ ] Disputes with neighbors over fencing - [x] Liens, old mortgages with no record of pay-off, improper previous deeds, and unresolved levies by a government agency - [ ] Errors in building permits > **Explanation:** Common problems that can constitute a cloud on title include liens, old mortgages without proof of pay-off, improper previous deeds, and unresolved levies by government agencies. These issues must be resolved to ensure a clear title transfer. ### What must the seller do before the property sale can go through when a cloud on title is discovered? - [x] Clear up the clouds on title - [ ] Reduce the asking price of the property - [ ] Provide additional insurance to the buyer - [ ] Have the property re-appraised > **Explanation:** The seller must clear up any clouds on title before the sale can proceed. This involves taking actions like settling liens and levies, getting a quitclaim deed signed, or filing for a quiet deed. ### Which of the following actions can a seller take to resolve a cloud on title? - [ ] Lower the property value - [x] Settle liens and levies, get a quitclaim deed signed, or file for a quiet deed - [ ] Contact the local homeowners' association - [ ] Offer a home warranty > **Explanation:** To resolve a cloud on title, the seller might need to settle any outstanding liens and levies, obtain a quitclaim deed from any parties with a potential interest in the property, or file for a quiet deed to eliminate the cloud. ### What is the purpose of obtaining title insurance in real estate transactions? - [ ] To insure the structural integrity of the property - [x] To ensure the property title is clear of any clouds and to protect against potential title issues - [ ] To cover tenant damages - [ ] To provide flood insurance > **Explanation:** Title insurance is obtained to ensure that the property title is clear of any issues or clouds that could impair the ownership transfer. It also protects against potential title disputes that may arise in the future. ### In some cases, unresolved clouds on title may... - [x] prevent a sale from going through within the sales and purchase agreement time frame - [ ] significantly increase property taxes - [ ] require tenant approval - [ ] result in criminal charges > **Explanation:** Unresolved clouds on title can sometimes delay or even prevent the property sale from closing within the sales and purchase agreement time frame, as these issues must be addressed first. ### Why is a thorough title search necessary in most real estate transactions? - [ ] To estimate the property's market value - [x] To uncover any possible title issues that could impede the transfer of ownership - [ ] To evaluate the condition of the house - [ ] To replace old building permits > **Explanation:** A thorough title search is necessary to identify any potential title issues that could impede the transfer of ownership from the seller to the buyer. This process is critical for ensuring a clear and marketable title. ### What is one of the steps a buyer might require before purchasing a property? - [ ] Conducting a market analysis - [ ] Verifying homeowner's insurance - [x] Obtaining a title search - [ ] Checking neighboring property values > **Explanation:** One of the essential steps before purchasing a property is obtaining a title search to ensure there are no outstanding issues or clouds on the title that could affect ownership rights. ### What is an encumbrance in real estate terminology? - [x] Any claim or issue that affects the title to the property - [ ] A measure to increase property value - [ ] An assessment to check property damages - [ ] A tool used for property inspection > **Explanation:** An encumbrance in real estate is any claim, lien, charge, or liability attached to and binding real property. It affects the title to the property and must be settled before transferring ownership. ### What document might be required to resolve an improper previous deed? - [ ] An amended mortgage statement - [ ] A new property survey - [x] A quitclaim deed - [ ] An approval letter from the Homeowner's Association > **Explanation:** A quitclaim deed can be used to correct or resolve issues related to an improper previous deed. It transfers any interest the grantor might have in the property without warranties, often used to clear title ambiguities.