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AZ Real Estate Exam > Brief Study Notes & Facts > Flashcards

Brief Study Notes & Facts Flashcards

1
Q

Property taxes are a lien starting?

A

January 1st

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2
Q

Nothing comes ahead of a property tax lien
which makes it what type of lien?

A

Primary lien

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3
Q

Property taxes are based on the ________ _____

of a property.

A

Assessed Value

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4
Q

To calculate the assessed value, the rates
used for residential and land are?

A

​Residential 10%

Land 16%

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5
Q

How often are property taxes levied?

A

Annually

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6
Q

When are the 1st half of property taxes due?

A

October 1st

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7
Q

When are the 2nd half of property taxes due?

A

March 1st

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8
Q

When do the 1st half of property taxes become delinquent?

A

November 1st

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9
Q

When do the 2nd half of property taxes become delinquent?

A

May 1st

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10
Q

In Arizona are property taxes paid in advance or in arrears?

A

Arrears

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11
Q

Property taxes will appear on a closing statement as:

A

debit seller, credit buyer

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12
Q

1st half taxes are pro-rated using?

A

The Prior Year’s figures

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13
Q

When a property tax sale is held,
the low interest bidder receives a

A

Certificate of Purchase

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14
Q

How long is the period of redemption which a certificate
of purchase holder must give the owner before
a foreclosure can begin?

A

3 years

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15
Q

When pro-rating property taxes at close of escrow
a calendar year has how many days?

A

360 days

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16
Q

Property taxes are pro-rated at close of escrow
and the day of COE goes to the?

A

Buyer

Close of escrow is the buyer’s day!

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17
Q

The buyer is most likely to accept title with a…

A

property tax lien for the current year’s taxes.

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18
Q

Arizona property tax liens being primary liens,
would be ahead of…

A

IRS lien

Deed of Trust

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19
Q

Which of the deeds have the best warranties?

A

General Warranty

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20
Q

Who receives title through a deed of conveyance?

A

Grantee

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21
Q

Deed restrictions that run with the land & liens are called?

A

Encumbrances

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22
Q

An Escrow company works for?

A

Buyer & Seller

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23
Q

A deed is legally enforceable if it is

A

Recorded

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24
Q

What is the purpose of a closing statement?

A

Show all monies/costs involved in a transaction.

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25
Q

Who signs the settlement sheet?

A

Buyer, Seller & Escrow agent

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26
Q

The Covenant of Seisin promises

A

The grantor has the right to convey the property.

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27
Q

How does Title Insurance affect property value?

A

It has no impact on property value.

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28
Q

When an abstract of title is completed

A

It indicates that a title search was completed.

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29
Q

When a conventional loan is greater than 80%…

A

PMI (Private Mortgage Insurance) must be paid at time of closing.

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30
Q

Owner’s Title Insurance is for the protection of the?

A

Buyer

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31
Q

What payments would never show on a closing statement?

A

Principal payments

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32
Q

When taxes are prorated at close of escrow they would read?

A

Debit Seller Credit Buyer

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33
Q

The difference between debits and credits…

A

Is the amount needed to close the escrow and balance.

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34
Q

When the buyer is buying a rental property…

A

The security deposits are not prorated.

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35
Q

Owner’s Title Insurance Policy would not cover…

A

Parties in Possession

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36
Q

When the escrow company turns the matter over to the court to settle a dispute, this is called…

A

Interpleader

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37
Q

It must be stated in the deed if a property is sold with…

A

No ingress or egress.

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38
Q

The document that is recorded along with the deed is the…

A

Affidavit of Value

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39
Q

To help the assessor determine property value for taxation…

A

An affidavit of value is used by the county assessor.

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40
Q

The point when the docket and page number are assigned is…

A

Recordation

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41
Q

On the topic of how to take title, a Real Estate agent…

A

Should NOT give advice.

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42
Q

When property is sold in Arizona…

A

It does not have a transfer tax.

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43
Q

An extended policy of title insurance would cover…

A

Encroachments

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44
Q

Arizona property taxes would always be in first lien position.

A

Property taxes would be ahead of an IRS lien or a deed of trust.

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45
Q

In order to record a deed it must be…

A

Signed & Acknowledged.

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46
Q

When a party is given a life estate based on the life of another person this is called…

A

Pur Autre Vie
“For the life of another”

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47
Q

Gives the appearance of title, but is not…

A

Color of title

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48
Q

If a buyer gives earnest money and signs a contract, then decides not to complete the terms of the contract, the seller may?

A

Retain the Earnest Money!

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49
Q

When one party has the right of rescission in a contract, it is called?

A

Voidable

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50
Q

If a buyer can’t qualify for a loan, what clause in a purchase contract would benefit the buyer?

A

Contingency clause

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51
Q

When a purchase contract is signed by the buyer & seller, what is not required?

A

Notarized Signatures

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52
Q

All contracts must have?

A

Consideration

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53
Q

When a contract is made between a competent party and a minor it is…

A

Voidable by the minor

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54
Q

When an offer is written on another broker’s listing, the selling agent is required to…

A

Contact the Listing Broker

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55
Q

When a purchase contract has handwritten and preprinted language…

A

The handwritten language would have priority.

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56
Q

All contracts are required to be in writing per the…

A

Statute of Frauds

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57
Q

When a contract is based on fraud it is…

A

Voidable by the party the fraud was committed against.

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58
Q

A unilateral contract would be…

A

Option, First Right of Refusal, Reward Poster

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59
Q

A contract is not considered valid until there is an…

A

Offer & Acceptance

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60
Q

When a contract is for an illegal act or purpose it is…

A

Void

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61
Q

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?

A

Unenforceable

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62
Q

The court action to compel a buyer or seller to carry out the terms of a contract is called?

A

Specific Performance

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63
Q

When a contract is signed by someone other than the seller it would most likely be…

A

An Attorney in Fact

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64
Q

When a contract has pre-printed language, the agent should…

A

Review and Alter if Necessary

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65
Q

Which agent has the original contract and the earnest money?

A

Selling Agent

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66
Q

When an option to buy is exercised, the option is…

A

Unilateral Executed

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67
Q

When an option to buy is exercised, the new contract is…

A

Bilateral Executory

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68
Q

A real estate agent may modify a contract…

A

Only if it is signed by the buyer and seller.

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69
Q

When a real estate transaction is set to close escrow, what is not recorded?

A

Purchase Contract

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70
Q

A buyer would get the earnest money deposit back if the contract contained a…

A

Contingency Clause

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71
Q

When a buyer defaults on a purchase contract, and the seller keeps the earnest money, this is called?

A

Liquidated Damages

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72
Q

W makes an offer to X, all parties sign, and then X dies, you have…

A

A valid contract

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73
Q

When a buyer enters into a lease-purchase, the buyer is…

A

Obligated to buy the property on a specific date.

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74
Q

When a salesperson has a buyer sign this type of agreement, it must have a beginning and ending date.

A

A buyer brokerage agreement

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75
Q

A false statement made with the intention of inducing another party…

A

Intentional misrepresentation

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76
Q

If this is included in a sale the salesperson should take an inventory.

A

Personal Property

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77
Q

If a sales contract is signed only by one spouse the status is…

A

Unenforceable against both.

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78
Q

When a purchase contract is signed under duress it is…

A

Voidable

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79
Q

An illusory contract would be…

A

Unenforceable

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80
Q

Agency law is comprised of…

A

Tradition, common law & court cases

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81
Q

In a listing agreement the seller is also known as the…

A

client or principal

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82
Q

What does an agent owe their client or principal?

A

Fiduciary duties

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83
Q

A third party in a real estate transaction is known as the…

A

customer

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84
Q

A customer is owed…

A

**honesty & full disclosure **of all material facts.

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85
Q

Which type of listing gives the broker the least protection?

A

Open listing

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86
Q

What type of contract is an open listing?

A

Unilateral contract

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87
Q

Which type of listing gives the broker the greatest protection?

A

Exclusive Right to Sell

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88
Q

What must all listings have?

A

A beginning and ending date.

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89
Q

The term used to describe legal exaggeration.

A

Puffing

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90
Q

A listing between the broker (agent) and seller (principal) is a…

A

Personal Service Contract

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91
Q

When the brokerage company represents both the buyer and seller in the same transaction this is called?

A

Dual Agency

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92
Q

Dual agency is legal as long as all parties…

A

Agree in writing

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93
Q

During the course of a listing this cannot be used by the agent at a later date even if the listing has expired…

A

Confidential information

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94
Q

Owner hires one broker but may sell the property for sale by owner and not pay a commission. What type of listing is this?

A

Exclusive agency listing

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95
Q

In an exclusive agency listing…

A

a commission would be paid to MLS agents and sub-agents.

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96
Q

A net listing is illegal in some states because…

A

the broker may undervalue the property.

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97
Q

If an agent tells a buyer - best house in the area!

This is an example of what?

A

Puffing

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98
Q

If an agent makes a person think they’re their agent, this is an example of…

A

Implied Agency

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99
Q

A listing would be terminated by…

A

bankruptcy

100
Q

A broker speaks for a seller without authority…

A

ostensible

101
Q

Fiduciary duties include…

A

Care, obedience, loyalty, accountability, confidentiality, & disclosure

102
Q

Would places of worship in the area be included on a listing agreement?

A

No they would not!

103
Q

When a brokerage company is sold -

A

all listings must be re-signed in the name of the new company.

104
Q

When a salesperson leaves “Company A” and now works for “Company B” they may be paid…

A

commissions on any previous contracts directly from “Broker A”

105
Q

The broker’s right to a commission is established by the…

A

Listing agreement

106
Q

Two agents from different branches of the same company represent the buyer and seller in a transaction - This creates dual agency and…

A

Fiduciary would be owed to the buyer and seller.

107
Q

If a listing agent gives confidential information to another broker, this would be a…

A

Breach of fiduciary duties.

108
Q

Mechanic’s Liens takes priority starting…

A

the day the work began.

109
Q

How long after Notice of Completion does a General Contractor as well as the Subcontractor, have to file their lien?

A

120 days

110
Q

This will not protect the new owner against a Mechanic’s Lien that is recorded after close of escrow.

A

A Standard Owner’s Policy of title insurance

111
Q

How long is a Mechanic’s Lien valid?

A

Six months from the day of recordation.

A lawsuit must be filed within six months for the lien to remain valid.

112
Q

Once a Judgment is awarded…

A

The Judgment has the same priority as the original Mechanic’s Lien.

113
Q

A Mechanic’s Lien may be filed by…

A

A General Contractor; Subcontractor; Architect; Engineer

**or provider of materials. **

114
Q

The homestead exemption will not protect a property owner against…

A

A Mechanic’s Lien

115
Q

If a tenant improves a property and fails to pay the contractor, the Mechanic’s Lien will…

A

encumber the tenant’s leasehold interest

116
Q

Arizona Homestead Exemption will protect the equity in a personal residence up to…

A

$150,000

117
Q

A Homestead will…

A

Protect a person’s equity against an unsecured creditor.

118
Q

Homestead will not protect a person against any action they…

A

**Voluntarily entered into, secured liens, or rights **

of government

119
Q

Homestead protection is lost when…

A

the person sells or moves out of the property.

120
Q

You may only have…

A

One Homestead Exemption at a time.

121
Q

You homestead the…

A

property, NOT the people.

122
Q

How long are judgments valid?

A

5 years

123
Q

Judgments may be renewed…

A

within the last 90 days of the five years.

124
Q

Judgments from another state may be recorded in Arizona

as a…

A

Foreign Judgment

125
Q

Where would judgments appear?

A

On a title report, credit report and in the

county recorders office

126
Q

Judgments attach to real and personal property and are

considered what type of lien?

A

General Lien

127
Q

What factor would not be used in a market analysis of an

income producing property?

A

Asking sales price

128
Q

Utility, scarcity, transferability are used to determine…

A

Value

129
Q

When conducting a neighborhood analysis, the appraiser

is interested in…

A

Economic Depreciation

130
Q

What is an example of external (economic) obsolescence?

A

Air pollution; Noise

131
Q

The CAP rate and Capitalized value are based on…

A

Net Income

132
Q

When smoke and dust in an area are harming the nearby

properties this is an example of…

A

Economic Obsolescence

133
Q

When appraising a special usage property (church),

the appraiser would use the…

A

Cost approach

134
Q

Appraisers are paid based on…

A

Time, travel & work

135
Q

When an appraiser is studying an area for growth and decline,

this is called…

A

Integration and Disintegration

[Development, Stability & Decline]

136
Q

The period of time a building is profitable to operate is called…

A

Economic Life

137
Q

When appraising an apartment building, the best

approach is…

A

Income

138
Q

A house with 4 bedrooms, 1 bathroom

is an example of…

A

Functional Obsolescence

139
Q

If a building has a poor floor plan, this is

an example of…

A

Functional Obsolescence

140
Q

The market approach does not…

A

Consider the original purchase price.

141
Q

When CAP rate goes up…

A

Value goes down.

142
Q

When appraising land, the appraiser uses…

A

The Market Approach

143
Q

The appraiser is to..

A

Estimate Value

144
Q

When appraising a 35-year old school building,

the appraiser uses…

A

The Cost Approach

145
Q

When appraising an old residential home,

the appraiser uses…

A

The Market Approach

146
Q

Operating expense would not include…

A

Vacancies and loss of credit

147
Q

When using the market approach, the appraiser

does not use…

A

Building permits

148
Q

The difference between replacement value and

present value is…

A

Depreciation

149
Q

When using the market approach, all would be used but…

A

Original Cost

150
Q

When the appraiser uses all three approaches,

the final step is…

A

Reconciliation

151
Q

When using the market approach, the least

important factor is…

A

Property In Foreclosure

152
Q

In the income approach, the most important income is…

A

Net Operating Income

153
Q

The appraisers first objective is to…

A

Define the Problem

154
Q

At the end of the economic life, you have…

A

Salvage Value

155
Q

The highest price a property will demand is called…

A

Market Value

156
Q

Economic depreciation is always…

A

Incurable

157
Q

The comps in the area have less features than

the subject property…

A

The appraiser would add a dollar value

to the comp property.

158
Q

Replacement cost and Reproduction costs

are the same as…

A

Using today’s materials and designs vs. new replica

159
Q

When a property is in need of repair due to neglect it is…

A

Deferred Maintenance

160
Q

A successful new home builder would

be subject to conformity or…

A

Competition

161
Q

A 100-year old building with modern fixtures

is an example of…

A

Replacement** not reproduction**

162
Q

If a 100-acre subdivision is broken into five-acre lots,

the property owners would have an easement…

A

appurtenant

163
Q

Square footage of residential property is based on…

A

exterior measurements

164
Q

The benefits of one property when compared

to another is called…

A

Substitution

165
Q

When a lessee pays upfront deposits and
then cancels the lease, the landlord can keep the…

A

Security Deposit

166
Q

Security deposits may not exceed…

A

One and one-half month’s rent

167
Q

If a tenant fails to pay rent, the first step the
landlord takes is to give the tenant a…

A

5-Day Notice

168
Q

A notice of eviction must be given to a tenant
prior to the eviction process. How many days
is the notice of eviction?

A

5-Day Notice

169
Q

The landlord has to return any security
deposit due the tenant within how many days?

A

14 Days

170
Q

Who may sign checks written on a property
management trust account?

A

The Broker, licensee, or an employee of the company.

171
Q

Can a property owner be a signor on a
property management trust account?

A

NO. A property owner MAY NOT be a signor
on a property management trust account.

172
Q

Can tenants’ security deposits be placed
in interest bearing accounts?

A

Yes. Tenant security deposits MAY BE
deposited in interest bearing accounts.

173
Q

How much notice must a landlord give a
tenant before entering a dwelling?

A

48 hours

174
Q

A broker must keep a copy of all rental
contracts for no less than?

A

One Year

175
Q

When a tenant moves out of a property because
it is no longer livable, this is called?

A

Constructive Eviction

176
Q

How many days written notice must a tenant give
a landlord to repair any defects before the tenant
can repair such items?

A

10 days written notice

177
Q

What is the self-help for minor defects amount?

A

One-half the month’s rent or $300, whichever is greater.

178
Q

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?

A

Twice the amount wrongfully held.

179
Q

Though illegal in many instances, this clause gives a
landlord the right to seize a tenant’s belongings for
rents in arrears.

A

Distraint Clause

180
Q

When subdividing lots the legal description used is?

A

Lot & Block

181
Q

What items are permanent and
attached to real property?

A

Fixtures

182
Q

If a salesperson is not an employee of a broker for tax
purposes but works for the broker, the salesperson is an?

A

Independent Contractor
(If answer not available, use Subagent)

183
Q

A public report will be denied on a subdivision if…

A

The developer can’t show ownership
or title to the property.

184
Q

When a person acts with intent to harm
someone and suffer a loss, this is called?

A

Fraud

185
Q

Before a public report is issued,
a developer may…

A

Take lot reservations.

186
Q

A licensee has a right to prepare all
real estate documents according to?

A

Arizona Constitution, Article XXVI

187
Q

If a subdivision is sold with no
ingress or egress, the sale would be?

A

Voidable by the Buyer.

188
Q

A public report is required when
you sell more than how many lots?

A

Five lots

189
Q

What is the primary purpose of a public report?

A

Inform and protect the Buyer.

190
Q

How many years must a broker
keep a copy of the public report?

A

5 Years

191
Q

If a public report is required but the buyer was not issued
one; how long does the buyer have to rescind the contract?

A

Within 3 years without cause.

192
Q

When a person buys a timeshare,
how long do they have to rescind the contract?

A

7 days to rescind without cause.

193
Q

An improved lot is defined as?

A

One that has a struture or a contract is written
for a structure to be built within two years.

194
Q

When is a public report to be presented to the Buyer?

A

Before signing the contract!

195
Q

A public report is not…

A

An endorsement by the Department of Real Estate.

196
Q

When advertising a subdivision, what claim is
the developer prohibited from saying?

A

The Property has no risk.

197
Q
A
198
Q

If a buyer buys unimproved subdivided property
sight unseen, how long do they have to rescind the sale?

A

6 months to rescind the sale

199
Q

How long does a licensee have to notify the
real estate department of a conviction of a felony
or misdemeanor?

A

Within 10 days!

200
Q

The designated broker or delegated associate broker
must initial all contracts within how many days?

A

Within 10 days

201
Q

Arizona environmental policies are controlled by?

A

Arizona Department of Environmental Quality (ADEQ)

202
Q

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.

A

Civil or Criminal Action

203
Q

The seller is responsible to give to the buyer all
documents regarding the homeowner’s association
if there are less than ____ units?

A

Less than
50
units

204
Q

The homeowner’s association is responsible to give the
buyer all documents regarding the association if there
are ____ units or more.

A

50
units or more

205
Q

A temporary broker’s license will not be issued for an
extended leave of absence, but wil be issued for
_______, _______ or ______.

A

Death, insanity, or Disability

206
Q

Community Property with Right of Survivorship can only
be held by?

A

Husband & Wife

207
Q

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?

A

Step up in basis.

208
Q

(T/F)

All disclosures of material facts must be in writing
according to the rules.

A

TRUE

209
Q

Arizona “Superfund” Sites are called _____ _____
_____ _____ _____ areas?

A

Water Quality Assurance Revolving Fund (WQARF)

210
Q

A variance in zoning would be an…

A

exception of the zoning law.

211
Q

Revocable permission to use the property for
weekends only for summer camp would be a?

A

License

212
Q

When does the seller receive the buyer’s
earnest money?

A

At Close of Escrow (COE)

213
Q

What does the salesperson do with the
earnest money check?

A

Turn it over to the Broker.

214
Q

What is similar to medical malpractice insurance?

A

Errors and Omissions Insurance

215
Q

Fair dealing is the same as?

A

Honesty

216
Q

How long is a broker required to keep rejected offers?

A

1 year

217
Q

A timeshare presentation may not last
more than?

A

120 minutes
(2 hours)

218
Q

When borrowed money is used to buy
real estate, this is called?

A

Leverage

219
Q

A limited partnership is closest in
similarities to a?

A

Syndicate

220
Q

Homeowners’ association fees are paid by?

A

All owners of property in the association.

221
Q

A master planned community is defined as?

A

Two or more platted subdivisions with CC&R’s.

222
Q

When a Lender charges a fee for paying off a loan
before its time, the fee is called a?

A

Pre-Payment Penalty

223
Q

Regulation Z shows all costs of
borrowing money except for?

A

Document Preparation Fees

224
Q

What are the particulars of an
Adjustable Rate Mortgage (ARM)?

A

Rates and Terms can change
with market conditions.

225
Q

An interest only payment loan
is called a?

A

Term Loan

226
Q

What type of lien is a mortgage?

A

Voluntary Lien

227
Q

What is the name of the legislation
which outlawed price fixing?

A

Sherman Anti-Trust Act

228
Q

An agreement between real estate companies not to
do business in each others areas, would be in
direct violation of what federal act?

A

Sherman Anti-Trust Act

229
Q

If a residential property was built before 1978, the
buyer or tenant is to receive what specific information?

A

Lead Based Paint Disclosure & Booklet

230
Q

Secondary Market is the same as?

A

Re-sale Mortgage Market

231
Q

When a buyer obtains a loan, the lender charges a fee
to cover their overhead, what is this fee called?

A

Origination Fee

232
Q

Note: Deed of Trust

Who are the parties involved in a
Deed of Trust transaction?

A

Trustor = Borrower

Beneficiary = Lender

Trustee = Holds Legal Title “Bare & Naked”

233
Q

Note: Mortgage

Who are the parties involved in a
Mortgage transaction?

A

Mortgagor = Borrower

Mortgagee = Lender

234
Q

Note: Agreement for Sale

Who are the parties involved in an
Agreement for Sale transaction?

A

Seller = Vendor

Buyer = Vendee

235
Q

Arizona water law is based on the concept of?

A

Prior Appropriation

236
Q

What are the two water classifications in Arizona?

A

Ground & Surface

237
Q

Arizona water usage is regulated by?

A

The Department of Water Resources

238
Q

This law was the first to prohibit any
type of discrimination by race.

A

Civil Rights Act of 1866

239
Q

Which agency is the administrator for
the Fair Housing Law?

A

Department of Housing & Urban Development
(HUD)

240
Q

This landmark Supreme Court decision
abolished “separate but equal”.

A

Brown v Board of Education

241
Q

What law addresses the rights of individuals with
disabilities in employment and public accommodations?

A

Americans with Disabilities Act
(ADA)

242
Q

This section of the ADA requires employers to make
reasonable accommodations that enable an individual
with a disability to perform a job.

A

ADA Title I

243
Q

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?

A

Blockbusting

244
Q

Deciding for a protected class where they should
live instead of showing all properties available is
known as?

A

Steering

245
Q

Limiting loans or insurance to a geographical
area is know as?

A

Redlining

246
Q

A principal who is HIV positive is
protected under which law?

A

Fair Housing Act of 1988

AZ Real Estate Exam (4 decks)

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