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Arizona School of Real Estate > All Chapter Summaries > Flashcards

All Chapter Summaries Flashcards

1
Q

what are the ORs and EEs for a Deed

A

grantor

grantee

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2
Q

what are the ORs and EEs for a mortgage

A

mortgagee - lender

mortgagor - buyer

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3
Q

what are the ORs and EEs for a deed of trust

A

Trustor

trustee

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4
Q

what separates land use in different areas. they can dictate lot size, building, height, setbacks etc

A

zoning ordinances

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5
Q

what is an advalorem tax

A

a tax based on the value of real property

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6
Q

what is a property’s assessed value

A

the value placed on land and the building by a city, town, or county assesor for use in levying annual real estate taxes

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7
Q

What is the highest form of land ownership?

A

Fee simple is the highest form of land ownership.

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8
Q

What warrants title by the seller for them and under them only?

A

Special Warranty Deed

Under a special warranty deed the seller only warrants the property for time they owned it (under them), and not before

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9
Q

A real estate investment business organized as a trust best describes a/an:

A

REIT

Corporations, partnerships, and LLC ownership interest are not required to have a specified number of individuals. The REIT must have at least 100 investors.

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10
Q

Jones deeded a parcel of property to Billings for the life of James. who holds life estate? who is in reversion?

A

Jones is the grantor and as such has an estate in reversion, Billings is the life tenant and holds the life estate, James is known as a pur autre vi (life of another) the one whose life is on the line.

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11
Q

When a condition is placed in a deed it would most likely refer to which of the following?

A

Defeasible Fee

This is a condition where the property could revert back to the grantor because of the actions or inactions of the grantee. The other choices are not conditions listed in a deed.

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12
Q

Which is not properly included in the concept of the power of eminent domain:

A

The right of government to confiscate property from the owner

This right falls under police power because confiscation doesn’t allow for just compensation and eminent domain is a power with just compensation.

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13
Q

When a city buys real estate they would take title as:

A

Sole and separate

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14
Q

Rank the order of liens highest to lowest: IRS, Assessements, Property Taxes, Mortgage Lien

A

Property taxes, assessments, mortgage lien, IRS

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15
Q

What is always personal property?

A

Trade fixtures are personal property of the tenant.

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16
Q

What has an interest in real property but not an estate?

A

Mortgage

A mortgage holder has a lien against the property but no leasehold or ownership interest in the property. All the other answers are leasehold or ownership and therefore an estate.

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17
Q

The principle of ________ affirms that value is created by expected benefits to be derived in the future. Which of the following is the correct insertion?

A

Anticipation

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18
Q

In appraising commercial property, what would an appraiser not need?

A

Original cost

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19
Q

What is the adjusted gross income and how do you arrive at it?

A

Total rents less vacancies and credit losses

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20
Q

When a buyer is considered a customer the salesperson would owe the buyer all of the following EXCEPT:

A

Fiduciary

The salesperson owes his or her customer ethics, truthfulness, and disclosure of material facts. Only the client receives fiduciary duties.

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21
Q

The listing agent discriminates against a minority buyer. If the seller were to be held responsible for the actions of the agent, it would be an example of:

A

Vicarious liability

Vicarious liability occurs when a client is held liable for the actions of his/her agent.

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22
Q

The seller tells the broker they would like to sell their property furnished. The agent should do all of the following EXCEPT:

A

Add the personal property to the deed

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23
Q

A broker has earned a commission when:

A

: The broker secures a willing and able buyer making an offer meeting the seller’s terms

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24
Q

What is an essential element of a real estate contract?

A

Consideration

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25
Q

Under what conditions would the buyer most likely be refunded the earnest money?

A

Failure to qualify for financing

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26
Q

If the seller retains the buyer’s earnest money due to a contract breach, this would be called

A

Liquidated damages

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27
Q

Sellers sign an exclusive agency agreement with a broker and then sell the property themselves. What is true regarding the commission?

A

No commission will be paid

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28
Q

The listing agent is informed by the seller that the basement gets wet when it rains. The agent says nothing to the buyer. Who is liable for the failure to disclose the latent defect?

A

seller

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29
Q

Wetlands would come under:

A

Wetlands would fall under government police power.

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30
Q

Which of the following IS a protected class under the Equal Credit Opportunity Act but NOT under Fair Housing laws?

A

Marital status is only an ECOA protected category.

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31
Q

A man may take depreciation for income tax purposes on all of the following EXCEPT:

A

Land held for future profit

The IRS does not allow for the depreciation of land

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32
Q

What is blockbusting

A

Prohibited act of inducing, for profit, any person to sell or rent property based on representations made regarding entry into the neighborhood of persons of a particular race, color, religion, sex or national origin.

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33
Q

What is a forebeance

A

Forebearance is where the lender agrees to temporarily reduce, postpone or suspend the mortgage payment and not proceed with foreclosure if the borrower brings the loan current with in the specified time.

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34
Q

Proration accomplishes what?

A

Allocates expenses between buyer and seller

Because the seller pays expenses up to and through the day of closing, taxes and hazard insurance must be prorated to establish which party pays what portion of an item.

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35
Q

Prorated taxes would be shown on the settlement statement as a:

A

Credit to buyer, debit to seller

Prorated taxes are a credit to the buyer and a debit to the seller. The seller is responsible for taxes payable through the date of closing. Since (in most states) homeowners pay taxes in arrears of one year, the seller would have to bring the taxes current and give that money to the buyer as a credit.

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36
Q

If the buyer is assuming an existing loan on the property, which of the following is prorated at closing?

A

Interest Only

If the buyer is assuming an existing loan on the property, only the interest will be prorated.

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37
Q

When would IRS form 1099S be used?

A

Report sales price

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38
Q

A note that calls for periodic payments of principal only, with a balloon payment at the end of the loan term is called a/an:

A

Installment note

An installment note calls for periodic payments of principal only, with a balloon payment at the end of the loan term. A straight note calls for interest-only payments with a balloon payment at the end of the loan term. In an amortized note, principal and interest are paid together. An adjustable rate note permits the lender to periodically adjust the rate of interest according to fluctuations in the cost of money (interest).

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39
Q

A borrower applying for a FHA loan would be required to:

A

Pay a mortgage insurance premium

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40
Q

Which of the following conventional loan to value ratios would not need private mortgage insurance?

A

80%-20%

Traditionally on a conventional loan, the buyer makes a 20% down payment. They lost ground to FHA-insured and VA-guaranteed loans because of the disparity in down payments. This dilemma was solved in 1972 with the creation of MIP insurance. It enables lenders to make conventional loans without requiring 20% down.

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41
Q

The law that requires buyers and sellers be given an itemization of all costs and expenses of the buying and selling of a home is:

A

RESPA

The Real Estate Settlement Procedures Act requires that a thorough listing of the debits and credits due a buyer and seller be issued at the time of closing. Truth-in-Lending applies only to the borrower; it provides the borrower a disclosure of the costs of getting a loan.

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42
Q

In a lease situation, A leases to B and B leases to C. Who is responsible for the rent?

A

B to A

Ultimately the rent is due to the owner, and the lease is between the owner A is to tenant B. B is still responsible to A. Correct Answer: B

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43
Q

A property management account can earn what?

A

A property management trust account can earn interest that gets paid to the property owner.

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44
Q

In real estate terms, an estate for years also may be called:

A

A Leasehold

An estate for years is a lease that begins and ends on a specific date. A fee is the ownership of real property, and joint tenancy is co-ownership of the same property by two or more people at the same time.

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45
Q

Commingling is one of the greatest single causes for loss of license. Which of the following would not be considered commingling?

A

Holding an un-cashed deposit check until acceptance of an offer when directed to do so by both the offeror and the offeree

According to A.R.S. Sec. 32-2151 (A): unless otherwise provided in writing by all parties to a transaction, a broker must immediately place all trust funds entrusted to the broker in either a neutral escrow depository or in the broker’s trust account. Note the words “unless otherwise provided in writing by all parties to a transaction.” This means that if the parties to a transaction direct the broker to hold an un-cashed check until acceptance of an offer, the broker can do as directed without the action being considered “commingling.” In fact, this is common practice.

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46
Q

An easement cannot be extinguished by:

A

Decision of the property owner (servient tenement)

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47
Q

What is true when Bill moves into a cooperative?

A

Bill may have to make a larger payment if the other parties do not make their payments

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48
Q

A life tenant leases a property for 25 years to a major corporation. The life tenant dies ten years later. What is the status of the lease?

A

Lease is terminated

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49
Q

An owner of a two-acre lot separates it and wants to give away one of the newly formed lots. What would they have to provide?

A

Easement by necessity

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50
Q

Water table is defined as:

A

Level of which water will be located.

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51
Q

The two classifications of water in Arizona are:

A

Ground and surface

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52
Q

A section of land may be described as:

A

a section is 5,280 feet x 5,280. 4,280 / 3 = 1,760 yards

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53
Q

What determines the north and south boundaries in a government survey?

A

baselines

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54
Q

The Arizona Affidavit of Disclosure would not include

A

The affidavit of disclosure applies only to residential zoned property

The Affidavit of Disclosure allows for a 5-day rescission right, applies to all land zoning, and is recorded with the grand deed.

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55
Q

When a buyer purchases a parcel of unimproved land, there exists a right to rescind. How long do they have?

A

The buyer has a 7 day unilateral right to rescind if he has seen the property

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56
Q

Arizona law defines a subdivision as land that is divided or proposed to be divided for sale or lease into:

A

6 or more lots of less than 36 acres

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57
Q

The difference between the actual value of a property and the total amount of liens against the property would be:

A

The owner’s equity

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58
Q

is marketable title a perfect title?

A

There is no such thing as a perfect title, there always something on the title such as property taxes, etc.

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59
Q

When purchasing a piece of property in which your spouse is not to have any interest, which deed would be used to relinquish any rights to the property?

A

Disclaimer deed

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60
Q

Who places deed restrictions on real estate?

A

The Grantor

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61
Q

The rules of the Real Estate Commissioner have what kind of effect

A

Have the force and effect of law

The rules of the Real Estate Commissioner are not a part of statutory real estate law. The rules have the force and effect of law to licensees only.

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62
Q

A real estate licensee gets contracted with a large bank to handle all of their local BPO’s. Who can the bank make payment to the BPO for?

A

Only the licensee’s broker

All compensation for a licensee must go through the licensee’s broker.

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63
Q

When a broker’s license is revoked, the licenses of the salespeople in the brokerage agency are:

A

Automatically suspended

When a broker’s license is revoked, the licenses of the salespeople in the brokerage agency are suspended or inactive until they get a new broker. You must have an active broker in order to participate in real estate activities.

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64
Q

An authorization to sell consists of a mutual agreement between broker and seller and is considered:

A

It is a contract for personal services

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65
Q

Bob and Mary have decided to purchase a house from a real estate auction. what do they need in order to do this

A

The auctioneer needs a license.

To auction any real property, business or timeshare a real estate license is required

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66
Q

What is the maximum amount of personal money a broker can keep in his trust account?

A

The maximum amount of personal money a broker can keep in his trust account is $3,000.

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67
Q

What is the statutory redemption period on a tax lien foreclosure sale?

A

The statutory redemption period for a tax foreclosure is 3 years.

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68
Q

What would NOT be a lien?

A

An easement in gross is not a lien.

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69
Q

In using the income approach to value, an appraiser would not care about:

A

The cost to cure a leaky roof

In using the income approach to value, an appraiser would not care about the cost to cure a leaky roof because the indication of value using the income approach is based solely on the property’s ability to generate income in whatever state of repair the property is at the time of the appraisal.

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70
Q

A trustor lists his property for sale on May 1. On May 2 he was notified of default on the trust deed, which default had occurred 45 days prior to notification. The trustor, under these conditions:

A

The homeowner may sell the property within the 90-day reinstatement period.

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71
Q

The premium for a lender’s title insurance policy is based upon the:

A

Amount of new financing

The premium for a lender’s title insurance policy is based upon the amount of new financing. Customarily, it is the buyer who pays for this policy. This policy is then put in the lender’s name, and it insures up to the amount borrowed.

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72
Q

A property management company hires employees to supervise residential units. The company is covered in the event the employees steal or misappropriate monies. What would best describe that type of coverage?

A

No. An occupancy limitation of two persons per bedroom residing in a dwelling unit is presumed reasonable according to Arizona law

According to A.R.S. Sec. 33-1317 (F): an occupancy limitation of two persons per bedroom residing in a dwelling unit shall be presumed reasonable.

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73
Q

If there is a material non-compliance by a landlord or a tenant with the rental agreement, the non-breaching party may deliver a written notice to the breaching party specifying the acts and omissions constituting the breach and the rental agreement will terminate as follows:

A

If there is no effect upon the health and safety of the tenant, the rental agreement will terminate upon a date not less than ten days after the receipt of the notice if the breach is not remedied within ten days

According to A.R.S. Sec. 33-1361: if there is a material noncompliance by the landlord with the rental agreement…the tenant may deliver a written notice to the landlord specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than ten days after receipt of the notice if the breach is not remedied in ten days. If there is a noncompliance by the landlord…materially affecting health and safety, the tenant may deliver a written notice to the landlord specifying the acts and omissions constituting the breach and that the rental agreement will terminate upon a date not less than five days after receipt of the notice if the breach is not remedied in five days

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74
Q

a residential tenant with a month to month lease enjoys which leasehold estate?

A

periodic tenancy

it automatically renews itself from period to period

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75
Q

in real estate terms, an estate for years may also be called

A

fee simple conditional

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76
Q

to be enforeable a lease must be in writing if the term is

A

longer than 1 year

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77
Q

when a claim is paid by the real estate recovery fund, the status of the licensee’s license is

A

terminated

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78
Q

how long must the landlord give notice if they were to terminate a month to month lease

A

30 days

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79
Q

what is an essential element for an Arizona deed

A

signature of grantor

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80
Q

the statute of frauds was brought into being to prevent

A

perjury

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81
Q

an affidavit of value would be used in what circumstance

A

to assist the assessor in determining property taxes

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82
Q

what is an irrevocable right

A

an easement

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83
Q

what ownership requires probate

A

tenancy in common.

a tenancy that includes rights of survivorship does not require probate. Tenancy in common is not rights of survivorship and your property passes to your heirs

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84
Q

when a husband and wife own real estate as community property and the husband dies without a will, what happens to the property

A

goes to the heirs

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85
Q

if you hold a long-term proprietary lease you would have an interest in

A

cooperative

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86
Q

when two or more parties own real property as co-owners with right of survivorship, what is the tenancy called?

A

joint tenancy

when parties specify and preserve the unities of possession, interest, time and title with the right of survivorship their tenancy is a joint tenancy.

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87
Q

when a new residential development is taking place in an Active Management Area, the developer would be required to provide what?

A

assured water supply

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88
Q

radon gas would be found primary in what substance

A

underground minerals

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89
Q

how many townships are contained in a government survey “check”

A

16

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90
Q

what sections are contiguous to section 6?

A

1 and 7

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91
Q

government checks are 24 miles square and are defined by which of the following

A

standard parallels and guide meridian.

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92
Q

a subdivision public report is not required on what type of property

A

commercial lots.

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93
Q

if you buy an unimproved land in a subdivision “sight unseen” you have how to rescind the contract

A

6 months

7 days if seen

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94
Q

what is a good way to describe a second mortgage

A

a junior lien on real estate. second = junior

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95
Q

the difference between the actual value of property and the total amount of liens agains the property would be

A

the owners equity

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96
Q

when a person wishes to enforce a judgement they would exercise

A

a writ of execution

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97
Q

who places deed restrictions on real estate

A

the grantor

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98
Q

an interest in title to real property, not gov. owned, obtained by action at law based on adverse possession best describes

A

prescription

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99
Q

define subrogation

A

the substitution of one claimant or creditor for another with the substituted party succeeding to the legal rights and claims of the original claimant.

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100
Q

define subordination

A

a written agreement between lienholders on a property to change the priority of mortgages, judgements, and other liens

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101
Q

when the buyer is getting a new loan, the interest proration on the closing statement will reflect

A

debit to the buyer

102
Q

adverse possession is gained by

A

living open and hostile on property for 10 years

103
Q

what action would terminate a purchase oontract

A

eminent domain

104
Q

a subordination clause is most often used in a

A

trust deed

105
Q

what would not be a lien?

A

easement in gross

106
Q

if a buyer wants to purchase property with an FHA Insured loan you would refer him to

A

the primary market

107
Q

a non-recourse loan would not provide for which of the following

A

deficiency judgement

108
Q

the sellers proceeds would show on the closing statement in the following manner

A

debit seller only

any money that seller takes out of escrow account is a debit against the account.

109
Q

permanent finance payments would include which of the following

A

principal and interest `

110
Q

when a new FHA loan is required the mortgage insurance premium

A

is up front and monthly premium

111
Q

what charge would be paid at closing on a high-risk conventional loan

A

PMI

112
Q

a trust deed is signed by the

A

trustor

113
Q

what association is not a part of the secondary market

A

federal universal mortgage assosiation

114
Q

the “escape clause” in FHA insured finance of a home purchase is the

A

right of the buyer to withdraw if the appraisal is lower than the contract price

115
Q

If you live along a steam and have water rights, these rights are called

A

riparian

116
Q

what deed would contain 3 promises and 2 warranties

A

warranty deed

117
Q

if the tenant abandons the property and leaves personal property behind how long does the landlord hold the tenants property

A

14 days

118
Q

property management companies are required to retain a copy of all residential rental agreements for a period of ____ from the date of expiration

A

1 year

119
Q

by definition, “a property management firm” means any corp, partnership or LLC or a designated broker that manages rental property

A

under a written agreement and for compensation

120
Q

if there is a material noncompliance by a tenant, the landlord may deliver a written notice to the tenant to fix. If breach is not remedied within ____ the landlord may terminate the rental agreement

A

10 days

121
Q

what warrant indicates that the grantee is the owner of the property

A

seizin

122
Q

what is taken into consideration when calculating the effective gross income

A

vacancy and loss of credit

123
Q

what is NOT an operating expense

A

vacancies and loss of credit

124
Q

what would be considered functional obsolescence

A

five bedrooms and one bath

125
Q

in real estate matters, “open housing” means

A

prevention or elimination of discrimination in housing

126
Q

if the seller breaches the purchase contract the buyer may seek

A

specific performance

127
Q

which term best describes reducing the degree or intensity of, or eliminating pollution

A

abatement

128
Q

which term best describes any substance that can cause or aggravate cancer

A

carcinogen

129
Q

what is the primary reason asbestos was used prior to our knowlege of the health risks

A

fire resistance

130
Q

Federal Emergency Management Agency (FEMA) is responsible for

A

flood area maps

131
Q

when a person has suffered a violation of the Fair Housing Law they have ____ to file a claim

A

12 months or a year

132
Q

what is not part of a tax deferred exchange

A

highest and best use

133
Q

RESPA Requirements would not apply in which of the following situations

A

a conventional loan that would not be sold on secondary mortgage markets

134
Q

who picks the title insurance company

A

the seller

135
Q

RESPA regulations would not apply to:

A

a transaction financed solely by a purchase money mortgage taken by the seller

136
Q

which would a buyer prefer: land installment contract or purchase money mortgage

A

purchase money mortgage

137
Q

a home seller would purchase title insurance for a buyer. What type of insurance would a buyer purchase for a lender?

A

mortgagee title insurance

138
Q

real estate taxes are prorated as of the day of closing. the real estate taxes are

A

a debit to the seller and a credit to the buyer

139
Q

the broker must give his client an accounting of the property management account every ____

A

6 months

140
Q

the broker’s property management account must

A

be accessible by the property manager/broker

141
Q

when the court orders property to be sold as a result of a judgement is called

A

execution

142
Q

in AZ the Doctrine of Water Usage is known as

A

prior appropriation

143
Q

Littoral rights would refer to

A

property boarding lakes and oceans

144
Q

when a party owns land on a non-navigable stream, it is said that they hold title to

A

low water mark

145
Q

there are how many standard sections in a townshp

A

25

146
Q

land described by lots and blocks

A

are described by reference to the recorded plat of a subdivision

147
Q

what can a developer do without a public report

A

lot reservations

148
Q

a subdivider must be able to give the purchaser

A

permanent access

149
Q

if a buyer buys a parcel of land in which a public report was required but was not issued, the buyer may void the sale within

A

3 years

150
Q

a buyer of a lot located within a subdivision may rescind the sale if the lot does not have

A

permanent ingress and egress

151
Q

how long does a developer keep a receipt of having given a public report to the buyer

A

5 years

152
Q

how many parcels can a tract of land be divided into without requiring a public report

A

5

153
Q

what is maximum deposit allowed with a lot reservation

A

$5,000 fully refundable

154
Q

improved subdivided property is defined as

A

a parcel of land on which a structure has been build

155
Q

An area or easement that restricts use and preserves the land in an undeveloped state is an

A

Natural Area Open Space

156
Q

An employer wants to be protected against employee’s dishonesty, the employer should ask for a

A

fidelity bond

157
Q

what is a life estate pur autre vie

A

for the life of another,

life estate measured by the life of another

158
Q

what are the ways to terminate a homestead

A

sale or transfer of property
they move out of AZ
abandon prop for 2 years+
moves to different primary residence

159
Q

how much does the homestead exemption cover and how often can if be used

A

up to $150,000 of property equity

a person can have ony one homestead exemption at one time

160
Q

what is a turnkey

A

when a new tenant can use a commercial space without making changes or improvements

161
Q

what is a lease option

A

a lease agreement that gives tenant the choice to purchase the property

162
Q

the provisions of Section 121 of the taxpayer relief act of 1997 can be invoked only once every

A

2 years

163
Q

what is protected under the civil rights act 1866

A

discrimination against race, religion, sex, national origin (ancestry)

164
Q

what is the limit if there is a violation of the civil rights act

A

there is no limit to punitive damages

165
Q

what does the fair housing act protect

A

race color religion or national origin of residential property

166
Q

what are the 3 requirements to be exempt from the federal fair housing act

A

owns no more than 3 such homes at a time

no discriminatory ads are used

no real estate broker is used

167
Q

what are the added protected classes protected in the fair housing laws

A

in 1974, added sex and gender

in 1988 added familial status and disability

168
Q

an individual can file a civil lawsuit within _____ after discriminatory incident or after the conclusion of a HUD hearing

A

2 years

169
Q

what are the days a lease can terminate under ALTA if a tenant breaches? a landlord if unhealthy?

A

10 days of noncompliance for tenant to remedy

5 days if noncompliance for landlord if affecting health/safety.

170
Q

how many days can tenant terminate lease if dwelling has fire or casualty damage

A

14 day written notice

171
Q

what are emblements

A

farm crops that require annual cultivation, which may be removed by a tenant farmer if the owner sells land; considered to be personal property and so emblements are transferred through a bill of sale

aka fructus industriales

172
Q

what warrants title by the seller for them and under them only

A

special warranty deed

Under a special warranty deed the seller only warrants the property for time they owned it (under them), and not before.

173
Q

Buyer purchases property and has a $90,000 title policy. The title company is required to pay a claim, but the payoff is higher than the original policy amount. This is due to:

A

An inflation clause in the title policy

174
Q

what is an encumbrance and a lien

A

deed of trust

175
Q

Under the _________ , the grantor warrants that at the time of delivery, he or she has the right to convey legal title.

A

Covenant of seizin

176
Q

An instrument that conveys a grantor’s interest is called a:

A

deed

177
Q

what does “tacking” refer to when following easements

A

prescription easement

178
Q

having an improvement on a land shows that someone has what in that property

A

interest

ie, a fence is an improvement and shows interest in the property

179
Q

what lists an interest in real property by not an estate

A

a mortgage

180
Q

A legitimate reason for appraising a property as of some date in the past is:

A

To settle an estate

181
Q

The rule that says an item is only worth what it contributes in value to the property best describes:

A

The rule of contribution

182
Q

Seller and buyer sign a purchase contract. The buyer wishes to give it to another party. This action is called:

A

Assignment

183
Q

Seller accepts a sales contract, with a close of escrow in 90 days. What is the buyer’s position?

A

Equitable title

184
Q

what is equitable title

A

any present right to acquire legal title to property

185
Q

When any broker can sell a listing and receive a full commission, this is called

A

Open

186
Q

An expanded agency, which does not require the additional consent of the principal for the agent to act is a/an:

A

Agency by necessity

An expanded agency, which does not require the additional consent of the principal for the agent to act is a/an agency by necessity. This typically happens in an emergency situation. You are showing a house to a buyer and it is on fire you should contact the proper authorities even though you don’t represent the seller.

187
Q

When a buyer and seller agree to cancel a contract, under normal conditions who would receive the earnest money?

A

buyer

188
Q

What purpose does the Superfund serve?

A

It allows the EPA to clean up abandoned waste sites and requires the responsible party to cover the costs of doing so

189
Q

Which is the environmental program established to address abandoned hazardous waste sites?

A

Superfund

190
Q

A lender is limited in the amount of reserves they may hold in a residential real estate transaction. This is governed by:

A

RESPA

191
Q

What is RESPA

A

Real Estate Settlement Procedures Act (Regulation X)

to protect consumers by requiring lenders to disclose actual closing costs in a timely manner

applies to residential property designed for 1 - 4 families

192
Q

When does RESPA not apply

A

loans used to finance the purchase of 25+ acres

loans for purchase of vacant land

certain loan assumptions

commercial or business loans

temporary financing, such as construction loans.

193
Q

what is Regulation Z

A

Regulation Z implemented The Truth in Lending Act (TILA)

lending institution discloses to the borrower the actual, total costs involved in acquiring credit

does not set limits on interest rates or other finance charges, regulates disclosure of the items

enforced by Consumer Financial Protection Bureau

194
Q

When does TILA apply

A

to all real estate loans made to consumers for personal, family, or household purposes if loan is subject to finance charge or payable by written agreement in more than 4 installments

195
Q

When does TILA not apply

A

business, commercial

less than 4 installment payments

loans without finance charges

loans made to corp, partnerships, associations, and agencies

196
Q

what are some examples of trigger terms for regulation z

A

4% interest rate

$500 down payment

$350 monthly payments

197
Q

How many times in 10 years could a single person sell their personal home and receive, tax-free, a gain of $250,000?

A

5 times

You can tax a tax exempt gain every 2 years as long as it was your primary residence. It has to be a primary residence 2 of the last 5 years and it’s not required that they are consecutive.

198
Q

When land is offered interstate it would be regulated by the Office of Interstate Land Sales Registration. What number of lots must be offered for the regulation to take place?

A

100 or more

199
Q

When a lender’s advertising is considered bait and switch it would be regulated by:

A

Truth in Lending

Truth in Lending states that advertising must be truthful and not deceptive

200
Q

A survey is the process of:

A

: Determining the size and boundaries of a piece of property

Unlike the location survey which determines encroachments, the survey is concerned with size and boundaries of the property.

201
Q

What is a bringdown search (fee)?

A

Updates the title prior to close of escrow

202
Q

On a closing statement, the amount of the sales price would be:

A

Debit buyer, credit seller

203
Q

In a blanket mortgage, which special clause would you most likely find?

A

Release Clause

provides for the release of parcels out of a blanket mortgage

204
Q

who has title on a land contract

A

vendor

205
Q

In what type of installment agreement does the buyer make payments for the right to possession, but does not recieve the title until most or all of the terms have been met?

A

Land contract

206
Q

In real estate terms, an estate for years also may be called:

A

a leasehold

207
Q

What term does the law use to describe a holdover tenant?

A

tenancy at sufferance

208
Q

What document is evidence of the relationship between property owner and property manager?

A

Property management agreement

209
Q

In a listing of property for sale, what is not necessary for a valid exclusive listing

A

a legal description

A legal description is not required in a listing – an adequate description is acceptable.

210
Q

If a branch manager is a licensed salesperson the salesperson may, when dealing with branch office transactions:

A

Be a signer on the broker’s trust account and property management trust account

211
Q

For purposes of real estate law, “knowingly” or “with knowledge” includes engaging in any prohibited conduct if the subject person actually knew or should have known:

A

The falsity of any statement or representation

212
Q

Four widowers decided to buy a home and live together. They took title in equal shares, but agreed that as each of them died, his share would pass to the remainder of the group until only one was left who would then own the entire property. The men took title to the home as:

A

Joint tenants

213
Q

When land is in an AMA, what is happening?

A

Overdraft of the underground water supply may be occurring.

AMAs are heavily populated areas where there has been significant depletion of mined groundwater referred to as overdraft.

214
Q

What determines the east and west boundaries in a government survey?

A

meridian

215
Q

When a quarter section is nonstandard as a result of lakes, mountains, and/or streams this is called a:

A

government lot

216
Q

The Affidavit of Disclosure includes what type of property

A

The affidavit of disclosure applies only to residential zoned property

217
Q

Who is able to file a mechanic’s lien

A

Mechanic’s liens are put on the property by someone who performed work on the real property or provided materials and who ha snot been paid.

218
Q

You would discover a ‘cloud on title’ by reviewing:

A

Schedule B

219
Q

If a broker in AZ is giving another broker in CA a $500 fee for a buyer moving to AZ. Who does this information have to be disclosed to?

A

One broker giving a referral fee to another licensed broker does not have to be disclosed.

220
Q

What is a wraparound loan

A

allows a mortgage or trust deed to wrap around the existing mortgage.

the seller agrees to remain obligated to pay the exisiting loan(s) and the buyer purchase the property “subject to” with the existing loans remaining as encumbrances against the buyer’s title interest

then buyer makes single payment to amortize the loan

221
Q

Why would the APR be higher than the interest rate on the note?

A

The lender charges discount points

222
Q

When a mortgage is in default what action would the lender take?

A

Court action

223
Q

At what time would a warranty deed be given to a buyer under a land contract?

A

only when paid in full

224
Q

When a property manager repairs a malfunctioning pool pump, the type of maintenance is called:

A

corrective

225
Q

You do not need to hold a real estate license to:

A

Act as a residential leasing agent if you work at only one location during any given workday

226
Q

Before the mortgage foreclosure is held the mortgagor can redeem the property. This is called:

A

equitable period of redemption

time frame by which the mortgagor can redeem the property

227
Q

a promissory note is

A

evidence of the debt

228
Q

the redemption period on a deed of trust following the trustee’s sale is

A

non existent.

reinstatement is 90 days PRIOR to trustee’s sale. Following, the deed is given to the successful bidder.

229
Q

who authorizes the use of the “power of sale” in a deed of trust

A

The truster (borrower) authorizes the use of the power of sale clause when they sign the Deed of Trust. The beneficiary (lender) initiates the use of the power of sale clause when the truster is in default.

230
Q

A timeshare representative is offering a gift to all prospective buyers. When would the buyer receive the gift?

A

after the sales presentation

231
Q

When a person sends unsolicited fax advertising the fine can be up to:

A

$16,000

232
Q

A selling broker may present an offer directly to the seller without the listing broker if he tried to reach the listing broker for how many hours?

A

24

233
Q

A salesperson prepares an offer on a property of another listing broker. The salesperson cannot contact the listing broker within 24 hours. What may the salesperson do?

A

request the seller give written authorization to present the offer

234
Q

when a lot is sold outside of a subdivision what must appear in the deed

A

no ingress or egress exists

235
Q

How long does a developer keep a receipt of having given a public report to the buyer?

A

5 years

236
Q

What is required when a Public Disclosure is not required

A

An Affidavit of Disclosure

237
Q

What is an Affidavit of Disclosure

A

a mini public report

must meet the following:

property is an unincorporated area

five or fewer parcels are involved in the transaction

The buyer has the right to rescind within 5 days of receipt and must be recorded along with the deed

238
Q

If a structure is built within 2 years what is the right of rescission period

A

if there is a structure built within .2 years it is considered improved land. THere is no right of rescission on improved, subdivided property

239
Q

what is considered an exempt domestic well

A

one with a maximum pumping capacity of 35 gallons per minute

240
Q

the two classifications of water in AZ are

A

ground and surface

241
Q

What agency oversees Active Management Areas

A

ADWR

it’s mission is to ensure long term water supplies

242
Q

In AZ, the Doctrine of Water Usage is known as

A

Prior Appropriation

243
Q

what is not considered a grandfathered water right

A

exempt domestic well

244
Q

littoral rights would refer to

A

property boarding lakes and oceans

245
Q

Name all the parties in a deed of trust

A

beneficiary - lender

trustee - 3rd party who holds bare naked title

trustor - borrower creating the trust

246
Q

what is a testator

A

maker of a will

247
Q

what is an estate at will

A

when owner permits another to occupy the property

248
Q

what is an estate at sufferance

A

the lowest type of leasehold. the holder of this tenant is called a holdover tenant. basically trespassing.

249
Q

what is a gross lease

A

common residential lease where tenant pays the same rent each month and landlord pays building expenses

250
Q

what is a net lease

A

used in most commercial properties. tenant pays base rent and a share of the building’s expenses

251
Q

what is a percentage lease

A

typically used for retail business.

tenant pays base rent and landlord receives a percentage of the tenant’s gross profits.

Arizona School of Real Estate (11 decks)

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