Chapter 14 Section 4

Question 1

abstract continuation

Answer 1

-the seller is normally expected to provide either title insurance or an abstract accompanied by an opinion of title as evidence of a marketable title
-seller cannot require the buyer to use a specific title company if the buyer is paying for title insurance

Question 2

title insurance

Answer 2

-if the title proves to be defective, the seller would need to take the necessary legal action to clear the title before conveying the property to the buyer
-the buyer’s lender requires title insurance to be placed on the property to protect the lender’s interest in the unpaid balance of the loan
-the buyer’s interest can also be included in the policy
-title insurance is never prorated

Question 3

state documentary stamp tax on the deed

Answer 3

-before a deed can be recorded in the public records, documentary stamps are purchased from the clerk of the circuit court
-the tax on the deed is calculated at the rate of $0.70 per $100 of value

Question 4

State documentary stamp tax on a note

Answer 4

-$0.35 per $100 or fractional part thereof on the total amount of the note
-paid on both new and assumed notes
-tax is not payable if title is taken subject to the mortgage

Question 5

state intangible tax on mortgages

Answer 5

-paid on all new mortgages only
-calculated at the rate of 2 mills (.002) on the total amount of a new mortgage

Question 6

attorney fees

Answer 6

-each party must pay their own attorney for services provided

Question 7

brokerage fees

Answer 7

-either party can pay the brokerage fee
-the seller usually pays this fee in residential transactions