Brief Study Notes & Facts Flashcards
Property taxes are a lien starting?
January 1st
Nothing comes ahead of a property tax lien
which makes it what type of lien?
Primary lien
Property taxes are based on the ________ _____
of a property.
Assessed Value
To calculate the assessed value, the rates
used for residential and land are?
Residential 10%
Land 16%
How often are property taxes levied?
Annually
When are the 1st half of property taxes due?
October 1st
When are the 2nd half of property taxes due?
March 1st
When do the 1st half of property taxes become delinquent?
November 1st
When do the 2nd half of property taxes become delinquent?
May 1st
In Arizona are property taxes paid in advance or in arrears?
Arrears
Property taxes will appear on a closing statement as:
debit seller, credit buyer
1st half taxes are pro-rated using?
The Prior Year’s figures
When a property tax sale is held,
the low interest bidder receives a
Certificate of Purchase
How long is the period of redemption which a certificate
of purchase holder must give the owner before
a foreclosure can begin?
3 years
When pro-rating property taxes at close of escrow
a calendar year has how many days?
360 days
Property taxes are pro-rated at close of escrow
and the day of COE goes to the?
Buyer
Close of escrow is the buyer’s day!
The buyer is most likely to accept title with a…
property tax lien for the current year’s taxes.
Arizona property tax liens being primary liens,
would be ahead of…
IRS lien
Deed of Trust
Which of the deeds have the best warranties?
General Warranty
Who receives title through a deed of conveyance?
Grantee
Deed restrictions that run with the land & liens are called?
Encumbrances
An Escrow company works for?
Buyer & Seller
A deed is legally enforceable if it is
Recorded
What is the purpose of a closing statement?
Show all monies/costs involved in a transaction.
Who signs the settlement sheet?
Buyer, Seller & Escrow agent
The Covenant of Seisin promises
The grantor has the right to convey the property.
How does Title Insurance affect property value?
It has no impact on property value.
When an abstract of title is completed
It indicates that a title search was completed.
When a conventional loan is greater than 80%…
PMI (Private Mortgage Insurance) must be paid at time of closing.
Owner’s Title Insurance is for the protection of the?
Buyer
What payments would never show on a closing statement?
Principal payments
When taxes are prorated at close of escrow they would read?
Debit Seller Credit Buyer
The difference between debits and credits…
Is the amount needed to close the escrow and balance.
When the buyer is buying a rental property…
The security deposits are not prorated.
Owner’s Title Insurance Policy would not cover…
Parties in Possession
When the escrow company turns the matter over to the court to settle a dispute, this is called…
Interpleader
It must be stated in the deed if a property is sold with…
No ingress or egress.
The document that is recorded along with the deed is the…
Affidavit of Value
To help the assessor determine property value for taxation…
An affidavit of value is used by the county assessor.
The point when the docket and page number are assigned is…
Recordation
On the topic of how to take title, a Real Estate agent…
Should NOT give advice.
When property is sold in Arizona…
It does not have a transfer tax.
An extended policy of title insurance would cover…
Encroachments
Arizona property taxes would always be in first lien position.
Property taxes would be ahead of an IRS lien or a deed of trust.
In order to record a deed it must be…
Signed & Acknowledged.
When a party is given a life estate based on the life of another person this is called…
Pur Autre Vie
“For the life of another”
Gives the appearance of title, but is not…
Color of title
If a buyer gives earnest money and signs a contract, then decides not to complete the terms of the contract, the seller may?
Retain the Earnest Money!
When one party has the right of rescission in a contract, it is called?
Voidable
If a buyer can’t qualify for a loan, what clause in a purchase contract would benefit the buyer?
Contingency clause
When a purchase contract is signed by the buyer & seller, what is not required?
Notarized Signatures
All contracts must have?
Consideration
When a contract is made between a competent party and a minor it is…
Voidable by the minor
When an offer is written on another broker’s listing, the selling agent is required to…
Contact the Listing Broker
When a purchase contract has handwritten and preprinted language…
The handwritten language would have priority.
All contracts are required to be in writing per the…
Statute of Frauds
When a contract is based on fraud it is…
Voidable by the party the fraud was committed against.
A unilateral contract would be…
Option, First Right of Refusal, Reward Poster
A contract is not considered valid until there is an…
Offer & Acceptance
When a contract is for an illegal act or purpose it is…
Void
Q makes an offer to Y… the offer is signed by Y who makes a counter and dies before Q accepts, what is the contract status?
Unenforceable
The court action to compel a buyer or seller to carry out the terms of a contract is called?
Specific Performance
When a contract is signed by someone other than the seller it would most likely be…
An Attorney in Fact
When a contract has pre-printed language, the agent should…
Review and Alter if Necessary
Which agent has the original contract and the earnest money?
Selling Agent
When an option to buy is exercised, the option is…
Unilateral Executed
When an option to buy is exercised, the new contract is…
Bilateral Executory
A real estate agent may modify a contract…
Only if it is signed by the buyer and seller.
When a real estate transaction is set to close escrow, what is not recorded?
Purchase Contract
A buyer would get the earnest money deposit back if the contract contained a…
Contingency Clause
When a buyer defaults on a purchase contract, and the seller keeps the earnest money, this is called?
Liquidated Damages
W makes an offer to X, all parties sign, and then X dies, you have…
A valid contract
When a buyer enters into a lease-purchase, the buyer is…
Obligated to buy the property on a specific date.
When a salesperson has a buyer sign this type of agreement, it must have a beginning and ending date.
A buyer brokerage agreement
A false statement made with the intention of inducing another party…
Intentional misrepresentation
If this is included in a sale the salesperson should take an inventory.
Personal Property
If a sales contract is signed only by one spouse the status is…
Unenforceable against both.
When a purchase contract is signed under duress it is…
Voidable
An illusory contract would be…
Unenforceable
Agency law is comprised of…
Tradition, common law & court cases
In a listing agreement the seller is also known as the…
client or principal
What does an agent owe their client or principal?
Fiduciary duties
A third party in a real estate transaction is known as the…
customer
A customer is owed…
**honesty & full disclosure **of all material facts.
Which type of listing gives the broker the least protection?
Open listing
What type of contract is an open listing?
Unilateral contract
Which type of listing gives the broker the greatest protection?
Exclusive Right to Sell
What must all listings have?
A beginning and ending date.
The term used to describe legal exaggeration.
Puffing
A listing between the broker (agent) and seller (principal) is a…
Personal Service Contract
When the brokerage company represents both the buyer and seller in the same transaction this is called?
Dual Agency
Dual agency is legal as long as all parties…
Agree in writing
During the course of a listing this cannot be used by the agent at a later date even if the listing has expired…
Confidential information
Owner hires one broker but may sell the property for sale by owner and not pay a commission. What type of listing is this?
Exclusive agency listing
In an exclusive agency listing…
a commission would be paid to MLS agents and sub-agents.
A net listing is illegal in some states because…
the broker may undervalue the property.
If an agent tells a buyer - best house in the area!
This is an example of what?
Puffing
If an agent makes a person think they’re their agent, this is an example of…
Implied Agency
A listing would be terminated by…
bankruptcy
A broker speaks for a seller without authority…
ostensible
Fiduciary duties include…
Care, obedience, loyalty, accountability, confidentiality, & disclosure
Would places of worship in the area be included on a listing agreement?
No they would not!
When a brokerage company is sold -
all listings must be re-signed in the name of the new company.
When a salesperson leaves “Company A” and now works for “Company B” they may be paid…
commissions on any previous contracts directly from “Broker A”
The broker’s right to a commission is established by the…
Listing agreement
Two agents from different branches of the same company represent the buyer and seller in a transaction - This creates dual agency and…
Fiduciary would be owed to the buyer and seller.
If a listing agent gives confidential information to another broker, this would be a…
Breach of fiduciary duties.
Mechanic’s Liens takes priority starting…
the day the work began.
How long after Notice of Completion does a General Contractor as well as the Subcontractor, have to file their lien?
120 days
This will not protect the new owner against a Mechanic’s Lien that is recorded after close of escrow.
A Standard Owner’s Policy of title insurance
How long is a Mechanic’s Lien valid?
Six months from the day of recordation.
A lawsuit must be filed within six months for the lien to remain valid.
Once a Judgment is awarded…
The Judgment has the same priority as the original Mechanic’s Lien.
A Mechanic’s Lien may be filed by…
A General Contractor; Subcontractor; Architect; Engineer
**or provider of materials. **
The homestead exemption will not protect a property owner against…
A Mechanic’s Lien
If a tenant improves a property and fails to pay the contractor, the Mechanic’s Lien will…
encumber the tenant’s leasehold interest
Arizona Homestead Exemption will protect the equity in a personal residence up to…
$150,000
A Homestead will…
Protect a person’s equity against an unsecured creditor.
Homestead will not protect a person against any action they…
**Voluntarily entered into, secured liens, or rights **
of government
Homestead protection is lost when…
the person sells or moves out of the property.
You may only have…
One Homestead Exemption at a time.
You homestead the…
property, NOT the people.
How long are judgments valid?
5 years
Judgments may be renewed…
within the last 90 days of the five years.
Judgments from another state may be recorded in Arizona
as a…
Foreign Judgment
Where would judgments appear?
On a title report, credit report and in the
county recorders office
Judgments attach to real and personal property and are
considered what type of lien?
General Lien
What factor would not be used in a market analysis of an
income producing property?
Asking sales price
Utility, scarcity, transferability are used to determine…
Value
When conducting a neighborhood analysis, the appraiser
is interested in…
Economic Depreciation
What is an example of external (economic) obsolescence?
Air pollution; Noise
The CAP rate and Capitalized value are based on…
Net Income
When smoke and dust in an area are harming the nearby
properties this is an example of…
Economic Obsolescence
When appraising a special usage property (church),
the appraiser would use the…
Cost approach
Appraisers are paid based on…
Time, travel & work
When an appraiser is studying an area for growth and decline,
this is called…
Integration and Disintegration
[Development, Stability & Decline]
The period of time a building is profitable to operate is called…
Economic Life
When appraising an apartment building, the best
approach is…
Income
A house with 4 bedrooms, 1 bathroom
is an example of…
Functional Obsolescence
If a building has a poor floor plan, this is
an example of…
Functional Obsolescence
The market approach does not…
Consider the original purchase price.
When CAP rate goes up…
Value goes down.
When appraising land, the appraiser uses…
The Market Approach
The appraiser is to..
Estimate Value
When appraising a 35-year old school building,
the appraiser uses…
The Cost Approach
When appraising an old residential home,
the appraiser uses…
The Market Approach
Operating expense would not include…
Vacancies and loss of credit
When using the market approach, the appraiser
does not use…
Building permits
The difference between replacement value and
present value is…
Depreciation
When using the market approach, all would be used but…
Original Cost
When the appraiser uses all three approaches,
the final step is…
Reconciliation
When using the market approach, the least
important factor is…
Property In Foreclosure
In the income approach, the most important income is…
Net Operating Income
The appraisers first objective is to…
Define the Problem
At the end of the economic life, you have…
Salvage Value
The highest price a property will demand is called…
Market Value
Economic depreciation is always…
Incurable
The comps in the area have less features than
the subject property…
The appraiser would add a dollar value
to the comp property.
Replacement cost and Reproduction costs
are the same as…
Using today’s materials and designs vs. new replica
When a property is in need of repair due to neglect it is…
Deferred Maintenance
A successful new home builder would
be subject to conformity or…
Competition
A 100-year old building with modern fixtures
is an example of…
Replacement** not reproduction**
If a 100-acre subdivision is broken into five-acre lots,
the property owners would have an easement…
appurtenant
Square footage of residential property is based on…
exterior measurements
The benefits of one property when compared
to another is called…
Substitution
When a lessee pays upfront deposits and
then cancels the lease, the landlord can keep the…
Security Deposit
Security deposits may not exceed…
One and one-half month’s rent
If a tenant fails to pay rent, the first step the
landlord takes is to give the tenant a…
5-Day Notice
A notice of eviction must be given to a tenant
prior to the eviction process. How many days
is the notice of eviction?
5-Day Notice
The landlord has to return any security
deposit due the tenant within how many days?
14 Days
Who may sign checks written on a property
management trust account?
The Broker, licensee, or an employee of the company.
Can a property owner be a signor on a
property management trust account?
NO. A property owner MAY NOT be a signor
on a property management trust account.
Can tenants’ security deposits be placed
in interest bearing accounts?
Yes. Tenant security deposits MAY BE
deposited in interest bearing accounts.
How much notice must a landlord give a
tenant before entering a dwelling?
48 hours
A broker must keep a copy of all rental
contracts for no less than?
One Year
When a tenant moves out of a property because
it is no longer livable, this is called?
Constructive Eviction
How many days written notice must a tenant give
a landlord to repair any defects before the tenant
can repair such items?
10 days written notice
What is the self-help for minor defects amount?
One-half the month’s rent or $300, whichever is greater.
A property manager fails to give a full accounting of the
security deposit within 14 days. The landlord can then be
held liable for up to what amount?
Twice the amount wrongfully held.
Though illegal in many instances, this clause gives a
landlord the right to seize a tenant’s belongings for
rents in arrears.
Distraint Clause
When subdividing lots the legal description used is?
Lot & Block
What items are permanent and
attached to real property?
Fixtures
If a salesperson is not an employee of a broker for tax
purposes but works for the broker, the salesperson is an?
Independent Contractor
(If answer not available, use Subagent)
A public report will be denied on a subdivision if…
The developer can’t show ownership
or title to the property.
When a person acts with intent to harm
someone and suffer a loss, this is called?
Fraud
Before a public report is issued,
a developer may…
Take lot reservations.
A licensee has a right to prepare all
real estate documents according to?
Arizona Constitution, Article XXVI
If a subdivision is sold with no
ingress or egress, the sale would be?
Voidable by the Buyer.
A public report is required when
you sell more than how many lots?
Five lots
What is the primary purpose of a public report?
Inform and protect the Buyer.
How many years must a broker
keep a copy of the public report?
5 Years
If a public report is required but the buyer was not issued
one; how long does the buyer have to rescind the contract?
Within 3 years without cause.
When a person buys a timeshare,
how long do they have to rescind the contract?
7 days to rescind without cause.
An improved lot is defined as?
One that has a struture or a contract is written
for a structure to be built within two years.
When is a public report to be presented to the Buyer?
Before signing the contract!
A public report is not…
An endorsement by the Department of Real Estate.
When advertising a subdivision, what claim is
the developer prohibited from saying?
The Property has no risk.
If a buyer buys unimproved subdivided property
sight unseen, how long do they have to rescind the sale?
6 months to rescind the sale
How long does a licensee have to notify the
real estate department of a conviction of a felony
or misdemeanor?
Within 10 days!
The designated broker or delegated associate broker
must initial all contracts within how many days?
Within 10 days
Arizona environmental policies are controlled by?
Arizona Department of Environmental Quality (ADEQ)
A salesperson is protected from _______ or _______
action taken against them for failure to disclose a
murder, death, suicide or felony act that
ocurred on or in the property.
Civil or Criminal Action
The seller is responsible to give to the buyer all
documents regarding the homeowner’s association
if there are less than ____ units?
Less than
50
units
The homeowner’s association is responsible to give the
buyer all documents regarding the association if there
are ____ units or more.
50
units or more
A temporary broker’s license will not be issued for an
extended leave of absence, but wil be issued for
_______, _______ or ______.
Death, insanity, or Disability
Community Property with Right of Survivorship can only
be held by?
Husband & Wife
With Community Property with Right of Survivorship -
upon the death of the spouse, the other receives the
entire property value - this is also known as?
Step up in basis.
(T/F)
All disclosures of material facts must be in writing
according to the rules.
TRUE
Arizona “Superfund” Sites are called _____ _____
_____ _____ _____ areas?
Water Quality Assurance Revolving Fund (WQARF)
A variance in zoning would be an…
exception of the zoning law.
Revocable permission to use the property for
weekends only for summer camp would be a?
License
When does the seller receive the buyer’s
earnest money?
At Close of Escrow (COE)
What does the salesperson do with the
earnest money check?
Turn it over to the Broker.
What is similar to medical malpractice insurance?
Errors and Omissions Insurance
Fair dealing is the same as?
Honesty
How long is a broker required to keep rejected offers?
1 year
A timeshare presentation may not last
more than?
120 minutes
(2 hours)
When borrowed money is used to buy
real estate, this is called?
Leverage
A limited partnership is closest in
similarities to a?
Syndicate
Homeowners’ association fees are paid by?
All owners of property in the association.
A master planned community is defined as?
Two or more platted subdivisions with CC&R’s.
When a Lender charges a fee for paying off a loan
before its time, the fee is called a?
Pre-Payment Penalty
Regulation Z shows all costs of
borrowing money except for?
Document Preparation Fees
What are the particulars of an
Adjustable Rate Mortgage (ARM)?
Rates and Terms can change
with market conditions.
An interest only payment loan
is called a?
Term Loan
What type of lien is a mortgage?
Voluntary Lien
What is the name of the legislation
which outlawed price fixing?
Sherman Anti-Trust Act
An agreement between real estate companies not to
do business in each others areas, would be in
direct violation of what federal act?
Sherman Anti-Trust Act
If a residential property was built before 1978, the
buyer or tenant is to receive what specific information?
Lead Based Paint Disclosure & Booklet
Secondary Market is the same as?
Re-sale Mortgage Market
When a buyer obtains a loan, the lender charges a fee
to cover their overhead, what is this fee called?
Origination Fee
Note: Deed of Trust
Who are the parties involved in a
Deed of Trust transaction?
Trustor = Borrower
Beneficiary = Lender
Trustee = Holds Legal Title “Bare & Naked”
Note: Mortgage
Who are the parties involved in a
Mortgage transaction?
Mortgagor = Borrower
Mortgagee = Lender
Note: Agreement for Sale
Who are the parties involved in an
Agreement for Sale transaction?
Seller = Vendor
Buyer = Vendee
Arizona water law is based on the concept of?
Prior Appropriation
What are the two water classifications in Arizona?
Ground & Surface
Arizona water usage is regulated by?
The Department of Water Resources
This law was the first to prohibit any
type of discrimination by race.
Civil Rights Act of 1866
Which agency is the administrator for
the Fair Housing Law?
Department of Housing & Urban Development
(HUD)
This landmark Supreme Court decision
abolished “separate but equal”.
Brown v Board of Education
What law addresses the rights of individuals with
disabilities in employment and public accommodations?
Americans with Disabilities Act
(ADA)
This section of the ADA requires employers to make
reasonable accommodations that enable an individual
with a disability to perform a job.
ADA Title I
Encouraging people to sell their homes, because a
protected class is moving in and saying it will have
a negative impact on values, is known as?
Blockbusting
Deciding for a protected class where they should
live instead of showing all properties available is
known as?
Steering
Limiting loans or insurance to a geographical
area is know as?
Redlining
A principal who is HIV positive is
protected under which law?
Fair Housing Act of 1988
