Commissioners Rules Flashcards
How much time is given to pass the Arizona Real Estate salesperson exam?
300 minutes or 5 hours
How many hours of pre-licensing education do need in Arizona?
96 hours
How old do you have to be in Arizona to obtain a Real Estate License?
18 years old
Biff is hired by a property owner to oversee a residential property complex. Biff will hire employees and oversees maintenance, but has limited authority. Biff is the:
Property Manager
A person who oversees property on behalf of an owner, typically hires & oversees employees, maintenance, & protects the interests of the owner is:
Property Manager
A tenant of a property pursuant to a lease
Lessee
According to Commissioner’s Rules, the Property Manager is hired to what?
Oversee the property, hire employees, oversee maintenance, and protect the property owener’s interests.
When a purchase contract is written, what document is needed to show that the buyer has a loan?
A letter of Approval
A document that is the borrower’s promise to repay a debt:
Promissory Note
If a Broker’s license is revoked before escrow closes, what happens to that broker’s commission?
Broker will receive his commssion
When is a broker’s commission earned?
When a ready, willing, and able buyer is found (contract acceptance)
What law prohibits employers from discriminating against disabled persons based on their disability?
Americans with Disabilities Act (ADA)
A real estate sales person advertises that anyone who buys a home with him will receive a new home appliance up to $500. How is this legal?
as long as full disclosure is made to all interested parties
Is offering a promotion an acceptable business practice?
Yes, so long as full disclosure is made to all parties.
Can an HOA prohibit a ‘FOR SALE’ sign?
No - it is a violation of the First Amendment
Can an HOA impose rules about posting a ‘FOR SALE’ sign?
Yes - so long as they don’t have a rule stating no ‘FOR SALE’ signs.
Can an HOA require a ‘FOR SALE’ sign not be in the front yard?
Yes - an HOA can state where a ‘FOR SALE’ sign can or cannot be placed
A ‘blind’ advertisement is:
Fails to state that the advertiser is a broker or agent and doesn’t include a license number
As a real estate sales person you place an ad for a home on FB. To save space, you don’t include information about being a licensee & you don’t post your license number. You are:
In violation of the Commissioners Rules regarding posting ‘blind ads’
Are ‘blind ads’ permitted in Arizona
No
To avoid posting a ‘blind ad’ what should you include in your ad:
Advertisement by licensed real estate sales person & your license number
Can a group of brokers agree to divide a market area?
No - this is a violation of anti-trust law
Can a group of real estate sales people agree to charge the same rate for real estate services?
No -this is a violation of anti-trust law
What is blockbusting?
The practice of telling home owners that the neighborhood’s demographic makeup is changing to induce panic selling.
Is it legal for a sales person mentions race in a listing appointment?
No - this could be considered an attempt at ‘blockbusting’
A sales person tells a young couple with 2 children that they should consider selling because the neighborhood has more elderly couples moving into it. What illegal practice has the sales person engaged in?
Blockbusting
Who does the Uniform Commercial Code protec?
Creditors
When purchasing a business, the buyer need to be certain a certificate of clearance has been issued by:
State Board of Equalization (SBOE)
What is a certificate of clearance?
An assurance from the State Board of Equalization (SBOE) that any taxes due have been paid
What agency issues a certificate of clearance?
State Board of Equalization (SBOE)
If a tenant pays rent after a lease has expired and the rent check is cashed - is there a contract?
Yes - this is an example of an implied contract. The consideration (rent money) was accepted (the check cashed) which is and implied contract that the tenant can stay until the end of period that was paid.
What is an implied contract?
While the terms may not be written down or even spoken to each other, the parties behave in a way that implies contractual obligation. Most common in real estate would be implied agency. When a potential client asks for advice and the agent starts advising can be seen as implied agency.
Must a contract of sale be notarized?
No
Are pre-printed sales contracts acceptable?
Yes
Is it acceptable to refer to documents of public record to get a property discription?
Yes
When a real estate sales person writes a contract for sale what type of contract is typically used in Arizona?
Pre-printed AAR contract
Who signs the real estate sales contract?
the buyer & the seller
Who are the parties to the sales contract?
the buyer & the seller
Is the real estate sales person a party to the sales contract?
No
If the buyer or seller makes a change to something in a contract, how do they indicate who made the change?
They must initial the chage
If the buyer makes a change to the contract and has initialed the change must the seller also initial the change?
Yes - to indicate their agreement
what are exceptions and reservations?
Restrictions or limitations written into a deed
Restrictions and limitations written into a deed are called:
Exceptions and reservations
Who is the grantor in a transaction?
the current owner of the property
The grantor of a leased property is the:
Landlord
Who is the grantee in a real estate transaction?
the person who receives use of the property
Is a tenant a grantee?
Yes
Is a buyer a grantee?
Yes
Is a seller a grantor?
Yes
Substituting a new obligation for an existing one WITH THE INTENT to cancel the existing one:
Novation
Novation is when
A new contract is used to replace the initial contract
Why are NET LISTINGS typically frowned upon?
They can lead brokers to take advantage of property owners
What is a NET LISTING?
The seller names a minimum price that they want for their property and any amount above that stated price is paid to the broker.
If a seller says, “I want to get $75,000 at closing and anything above that amount is your commission.” What type of listing is this seller requesting?
a net listing
2 ways a broker (or sales person) could take advantage of a seller on a net listing:
- Allowing the seller to accept a relatively low net amount to increase the broker’s (sales person’s) commission
- Encourage the seller to reject offers that may make the seller’s net proceeds but offer the broker (sales person) a very low commission
As a buyer’s agent you know that there is a problem with the property, but you don’t mention it to the buyer. A year later the buyer discovers the problem. Are you liable?
Yes. All known facts must be disclosed.
When a real estate licensee (broker or sales agent) makes an offer on a property what must be disclosed?
that the buyer is a real estate licensee (this is true even if the buyer is a licensee in another state)
what is a subprime loan?
a loan for people with subpar credit; they carry a higher interest rate
A borrower gets a subprime loan. Will the borrower also receive a lower interest rate?
No - subprime loans have higher interest rates
Rate x Loan Balance = ??
Simple Annual interest rate
what is the formula for the simple annual interest rate?
Rate x Loan Balance
Interest = Principal x ? x time
Rate
What is a common interest development
a community with common ownership of something in the community
Common term for common interest development
HOA
When purchasing in an HOA is the buyer entitled receive a homeowner warranty?
No
When purchasing in a common interest development what documents is the buyer entitled to?
CCR’s
HOA bylaws
HOA financial statement
If the broker or sales person misrepresents material facts to a buyer they may face
civil action (lawsuit) criminal action (legal charges) disciplinary action (as directed by the DRE)
what is a material fact?
anything that may affect the value or desirability of the property; anything that may affect a client’s decisions
Is it legal to pay an UNLICENSED assistant a portion of commission?
Yes - they are not licensed sales people and cannot be paid commission
Is it legal to pay a co-operating
Yes - so long as it is disclosed to all parties that there is a co-op fee.
Can a licensee (broker or sales person) pay a portion of their commission to a buyer or seller in the transaction?
Yes this is allowable but must be disclosed to all parties.
Can a referral fee be paid to an unlicensed person?
No
What is an amortized loan?
A loan that is paid in small payments of principal & interest
ARM stands for:
Adjustable Rate Mortgage
What is an ARM loan?
a loan where the interest rate will vary with changes in the market interest rates
When an agent and a principal agree that the agent will represent the principal as a client they have:
express agency - they have agreed verbally or in writing and beyond actions that they have an agency agreement
When an agent and a principal have not ‘officially’ agreed to representation, but their actions imply representation they have:
Implied agency
Agency by estoppel
When an agent performs duties outside of the the normal line of work, but still related to the task, and the principal does not stop them
When the sales person enters & signs a contract with a principal on behalf of the broker, the sales person has created what kind of agency for the broker?
Agency by estoppel
Agency by ratification
when an agreement is formed between the sales person and the principal (client) after a sale is confirmed
If the sales person sells a property to a party without a contract, and the principal agrees to approve the sale what sort of agency is formed?
Agency by ratification
Agency couple with an interest is:
when an agent invests time or money into a project an with the agreement that he/she will also be the representative on the sale of the property
what is exclusive right to sell?
the broker will collect a commission for the sale of the property regardless of who brings the buyer
If a broker and seller enter into an exclusive agency agreement and the seller finds the buyer, is the broker owed a commission?
No - Exclusive Agency is not the same as Exclusive RIGHT
A property owner desires to list his property with multiple agents. This requires what type of listing?
Open listing
who’s rights are protected in a buyer agency agreement?
The buyer’s
which deed is used to release rights to a property in an effort to obtain a clear title?
Quit Claim Deed (quitclaim)
What actually happens on a quit claim deed?
one or more property owners gives up all of their claim rights to a property.
what are encumbrances?
restrictions, easements, or liens on a property that give someone, other than the owner, rights to use the property.
What gives the right of public use on privately owned land?
Eminent domain
When a government agency needs land for private use they access private land by:
Eminent domain
If a homeowner dies with no will and no heirs what is the right of the governement?
Escheat - the government has the right to acquire the property
what is the instrument?
a written document that transfers ownership of something
What is the instrument that transfers ownership of real property?
Deed
What is the instrument that transfers personal property?
Bill of sale
what is the term for pledging something as security for a loan without giving it up?
Hypothecation
what is an easement?
the right to use someone else’s land
When you allow someone to use your property to access his, this is:
an easement
Crops that are considered personal property
Emblements
If a seller has a small acreage with pear trees on it, and wants to sell the property but retain ownership of the pears at harvest, what are the pears?
Emblements
If a seller is selling a home on 2 acres where he is currently growing marijuana, can the seller retain the right to come back and harvest the marijuana?
Yes - it is a crop for profit and therefore personal property (an emblement) so the seller does not have to sell the crop as part of the real property
Emblements are:
Crops that are considered personal property; typically a crop for profit but any crop could be considered personal property
Are rose bushes in the front yard an emblement?
No - they are decorative and would need to be listed as an exclusion in the listing agreement, on the MLS and other marketing, and in the purchase agreement
what type of deed gives the most protection to a buyer (grantee)?
WARRANTY
Freehold estate
the only type of estate without constraints on duration
Who does the appraiser work for?
No one - lender schedules buyer pays appraiser is independent unbiased opinion of value no conflict of interest
what is a subject property
the property being appraised
an appraisal will not help with
Fair market interest
the appraisal is for the buyer’s advantage
False - the appraisal is to estimate a defined value of any real property interest or to conduct an analysis or of real property. Typically the lender orders the appraisal to ensure that they do not over lend on a piece of property.
location of a property can increase its value
yes
location of a property can decrease its value
yes
location of a property can stigmatize its value
yes
heavy traffic or traffic noise will affect the value of a property
yes
does past performance (the amount a property last sold for) affect the value of the property
No
what is an arm’s length transaction?
one where both parties agree, are not forced (under duress), and there are no conflicts of interest
Value in use:
added property value for a specific person or entity using the property for a specific use (highest and best use)
in a common use development there are walkways, driveways, parking spaces, and a park that can be used by anyone living in the development. These are :
Common Areas
who is responsible for the maintenance of common areas in an HOA?
The HOA
What are the differences between a sales person, a broker, and a Realtor?
an agent is a licensee who works under a broker
a broker can work on their own or under another broker
A Realtor is a licensee or broker who is a member of the association of realtors
estate for years
ends on a certain date (vacation rental)
periodic tenancy
reoccurring timeframe (week to week, month to month)
estate at will
can end at any time, typically by notice from either party to the other party
estate at sufferance
the tenant has overstayed and won’t leave (the owner is suffering)
fee simple absolute
total ownership
fee simple defeasible
ownership that is contingent on either something happening first; or ownership that ends when something happens
life estate
property is owned base on someone else’s life
Government Powers
PETE Police Power Eminent Domain Taxation Escheat
Police Power
when the government tells how to use the property
codes
zoning
rent control
how does condemnation occur?
The government decides that private land is needed for public good (use); an the government takes that land from the owner and pays ‘just compensation’ for the land
Ways to own property
Severalty - sole ownership Concurrent - owned with others Joint tenancy Tenancy in common Community property
The instrument that indicates ownership is:
the TITLE
what happened in 1968
Federal fair housing act
