Final Flashcards
What’s the purpose of an attornment clause in a lease?
It notifies tenants that their lease is still in effect if the building ownership changes.
Under which of the following clauses are the costs of building maintenance over a specified level are passed on to the tenant?
expense stop clause
What consequences might a licensee face from the Department of Real Estate for violating a property management rule?
Their license may be revoked.
When prorating annual HOA fees of $1,500 using the statutory calendar, what’s the daily rate, rounded to the nearest cent?
125 dollars
What entity administers the regulations that govern the conduct of real estate licensees?
Department of Real Estate
The Arizona Department of Real Estate administers the state’s real estate law, including the regulations from the Arizona Administrative Code.
Jameson has just passed his licensing exam, despite the fact that several key pieces of information he learned from his online training were incorrect. “I wonder what rules are used to register these institutions,” he says. What can Jameson do to find out?
He should contact the Arizona Department of Real Estate.
The WQARF uses notices, plans, and an advisory board for each cleanup site to encourage
Community involvement in cleanups
Which of the following statements about Colorado River water is true?
The federal government regulates the distribution of this water.
What is the name of the federal law that sets forth guidelines regarding telephone solicitation?
Telephone Consumer Protection Act of 2003
While at the local hardware store, you run into one of your clients. She is picking out windows to have installed in the home after closing. What is the best advice you can give her?
You tell her that she’ll need a building permit and a licensed contractor to do the work.
why does she need this? look further into it.
Arizona licensed salesperson Andrea has an active license, but in order to perform real estate activities to earn compensation, she’ll also need
To be employed by an employing broker
In the rectangular survey system, what is a base line?
An east-west line used as a reference point
Where can a party that’s reviewing a title commitment find exceptions that aren’t covered by the title insurance policy?
Schedule B-2
Study the whole section about this
Carla Ricardo has been offered her dream job in another state. She asks her current landlord to let her out of her lease early. The landlord agrees to do so, with no strings attached. Carla and her landlord have decided to terminate the contract through
Mutual agreement
In terms of function and purpose, which of the following is most similar to Fannie Mae?
Freddie Mac
review the loans and how they function section.
Through the divorce process, Gail was granted ownership of the couple’s vacation timeshare. Gail is ready to sell the timeshare but discovers that her ex-husband Daniel’s name is still on the deed, creating a cloud on the title. What should Gail do?
Ask Daniel to sign a quitclaim deed to release his ownership share.
What does quitclaim do in this scenario?
look further into it
How many hours of continuing education are active Arizona salespeople required to take?
24 hours
Which of these items wouldn’t be prorated?
A down payment
Select the choice that best translates this clause into plain English. “Upon payment of all sums secured by this Mortgage, Mortgagee shall discharge this Mortgage without cost to Mortgagor. Mortgagor shall pay all costs of recordation, if any.”
When the borrower has fully paid off the loan, the lender will record that the note is satisfied.
What’s depreciation?
A decrease in property value
Under which of the following circumstances would the client and agent most likely mutually agree to terminate a listing?
The agent and client don’t agree on the best way to price, maintain, and market the property.
Buyer Susie’s a little nervous about the $20,000 earnest money check she just deposited with the title company. When should she expect to see this money applied toward her purchase of the property?
When conditions are met at closing
Study the closing process as well please
A property is 50 square yards. How many square feet is this?
450 square feet
One square yard is equal to nine square feet. Fifty square yards is equal to 450 square feet.
what is a single agency?
When a licensee/brokerage firm acts in a fiduciary capacity for either the buyer/tenant or the seller/landlord in a real estate transaction, but not for both
Manuel is selling his home to Selena. He has an existing loan that he’ll continue to make payments on, and he’s extending credit to Selena for the balance of the purchase price. She will make monthly payments to him. What type of financing are the parties using in this transaction?
Wrap-around loan
Study more on the different loans.
Ken, Barbie, and Skipper owned a property as a joint tenancy. When Skipper moved out of state, she sold her interest to Midge. Two years later, Ken died. How is the interest in the property divided?
Barbie owns two-thirds, and Midge owns one-third.
Study about Tenancy
what is a good risk management strategy to maintaining documentation?
Maintain good records as proof of conversations, document delivery, and other related events.
What are the five basic test that courts use to determine whether an item is a fixture or personal property?
What type of investment strategy is most similar to a 1031 tax-deferred exchange?
Rolling over funds from one IRA into another
Arizona licensees are required to abide by ______ laws.
Both Federal and state
Licensees are expected to act within both federal and local laws, including areas like environmental disclosures, federal fair housing requirements, truth in advertising laws, and all the laws laid out in the Arizona Revised Statutes.
After a life estate holder dies and ownership rights have either reverted to the original owner or have been transferred to a remainderman, with what type of estate is the property held?
Fee simple
Broker Joseph tells his client that a property is zoned as residential even though he knows it’s zoned as commercial. This violation is an example of ___
Making a substantial and willful misrepresentation
Ruby’s single-family home in an urban neighborhood was auctioned off at a trustee’s sale. There was also a junior lien on the property for a home equity loan. Will Arizona’s anti-deficiency statutes protect Ruby?
Yes, the statutes protect Ruby because her property meets the requirements for a protected residential property.
Arizona resident Harry receives a notification from his landlord that advises him the late fee for paying rent will increase from $30 to $50 in two months. Is it legal for Harry’s landlord to make this rule change?
Yes, because it does not fundamentally change the lease and gives more than 30 days’ notice.
When you, as an Arizona licensee, cooperate with other brokers in a transaction, what is it called?
Co-brokerage
in what way can office exclusives slow down the sale of the property?
Reduced market exposure
Monica’s business is booming. She’s representing an owner who’s selling a $500,000 home on one side of town, and a buyer who’s purchasing a $300,000 property on the other side of town. As it happens, the seller and buyer both know each other from church and have been talking to others about Monica’s talents, which has brought in several new leads for her to pursue. What type of agency relationship does Monica have with the seller and buyer?
She is each party’s single agent.
Investor Charlie wants to rehab the home he just bought. Under what condition can he NOT use the handyman exemption to do the work?
If he plans to sell or rent the home within one year
Study when a handyman can and can’t be hired.
What information does Schedule B-1 of an ALTA title commitment provide?
Requirements that must be met before a title policy will be issued
With which of the following problems can ADWR help?
Willies wants to know if he has the right to irrigate a piece of land that’s been in his family for generations. It’s in an INA.
What type of measurement is used to describe the size of a two-dimensional shape?
Area
How are mechanic’s liens enforced?
The courts settle liens by priority
The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have?
Executed
Which of the following strategies would help to make a “Choose Your Neighbor” marketing letter non-discriminatory in its effect?
Listing the property on the MLS
Look further into this.
Which term describes a contract that will stand up in court?
Enforceable
Bethany has agreed to purchase Derrick’s property using a land contract. Who holds legal title to the property during the term of the loan?
Derrick
What deed warranty guarantees that the seller is the actual owner of the property being conveyed?
Covenant of seisin
Why are life insurance companies less concerned with liquidity than long term security of an investment?
They prefer financing larger projects, which inherently have more long-term security.
What’s true of chlorofluorocarbons (CFCs)?
They are nontoxic.
Stu is buying Freddie’s property. What must occur for the transfer of title to take place?
Freddie must intend to convey the property to Stu.
If Arizona licensee Leslie engages in mortgage brokerage as well as real estate activities in the same transaction, she must
Disclose to her client that she’ll be receiving compensation for both services.
What is non-contingent?
Which legal description method is regulated by the U.S. Department of the Interior’s Bureau of Land Management?
Rectangular government survey
Velma accepted Rigli’s offer on her acreage. The offer’s contingent on Rigli’s sale of his current home. She accepted the offer on the condition that she can continue to actively market her property. What’s likely to happen if Velma gets a non-contingent offer on her property?
She’ll give Rigli a set amount of time to remove the contingency (usually 24 hours).
In a planned community, the nonprofit corporation or unincorporated association of owners to which members pay fees is called the
Association
A property owner who wishes to convey property to a new owner will generally use a
Deed
Which of the following is true of an express contract?
It’s stated specifically
An express contract is one that’s stated in specific terms. It may be oral or written.
Marion gave her granddaughter Sheila the deed to a brand new home, on the condition that Sheila complete her PhD in astronautics. When Sheila dropped out of school and got a job as a greeter at a big box store instead, Marion ______ to regain ownership of the property.
Had to take legal action
Harini had a lease with an option to buy on her condo since she wasn’t financially stable enough to purchase the condo when she first signed the lease. Two years later Harini was in great financial shape, but she found out that the owner legally sold the condo to another buyer. Harini has to move out next month. What must have happened?
The option expired.
When a judgment has been awarded to a consumer against a licensee for damages related to a licensee’s actions and the licensee cannot pay those damages, who would file a claim for payment from the Arizona real estate recovery fund?
The wronged consumer
What standards do appraisers follow?
Uniform Standards of Professional Appraisal Practice
Volatile organic compounds can make indoor air quality toxic. Where are VOCs likely to be found?
Air fresheners
Which of the following is NOT something that the commissioner does to educate licensees and the public about relevant real estate topics?
Pocket any profit made from selling educational materials.
How should you respond if your buyer says the following? “We’re looking for a three-bedroom, two-bathroom home. We have young children, so we want to make sure we’re in a good neighborhood—somewhere safe, where we’ll find a lot of good families and neighbor kids that we’d want our children to play with.”
“If you provide me with specific neighborhood names, I can certainly look for homes in those areas. You can learn about the different neighborhoods in the area at neighborhoodscout.com.”
If there’s no state or local building code to cover a specific situation, what code must the builder abide by?
The federal building code
Which entity creates regulations governing real estate activities in Arizona?
Arizona Department of Real Estate
Bailey just graduated from college with a degree in construction management, and he wants to apply for a contractor’s license. Where should he submit his application?
Arizona Registrar of Contractors.
Those who wish to apply for a contractor’s license should submit their application to the Arizona Registrar of Contractors.
Property management firms must keep all clients’ financial records for at least _____ year(s) from the date each document was executed.
Three
Christina purchased a house from Thomas. When did she officially gain ownership of the property?
With the transfer of deed from the seller to the buyer
Marjory is an Arizona salesperson representing a seller on behalf of her employing broker, Leonard. Kenneth is a salesperson representing a buyer on behalf of his employing broker, Jason. Marjory’s listing agreement provides for compensation to the buyer’s agent in the transaction. From whom will Kenneth receive his compensation?
Jason
An unenforceable contract is one that
Won’t stand up in court
Which section of a commitment identifies exceptions to title insurance coverage?
Schedule B-2
What is the 95% rule as it relates to tax-deferred exchanges?
The total value of the property (or properties) being exchanged is at least 95% of the value of the property being sold.
The National Association of REALTORS® Board of Directors enacted MLS Statement 8.0. What’s its more common name?
Clear Cooperation Policy.
Recently, the National Association of REALTORS® Board of Directors passed MLS Statement 8.0, more commonly known as the Clear Cooperation policy.
Which of the following circumstances would qualify someone other than the licensee representing the transaction principal to handle negotiations for a real estate transaction?
The property has been listed by the property owner.
What entity administers the National Flood Insurance Program?
FEMA
Your buyer is worried that after she closes on her property, she’ll find out someone else has a claim to its ownership. What can reassure her?
Title Insurance
Homeowner Lynn is underwater on her home loan and is having difficulty making her monthly payments. Which of these options would allow Lynn to avoid foreclosure, even though she’ll lose her property and will need lender approval?
Deed in lieu of foreclosure or short sale
Keira’s father leaves her some property in a tiny town. When she goes to see it a year or so later, she’s surprised to see that a family lives in one of the property’s outbuildings. All of the neighbors know that this family had been there for the past two years. This is an example of
Open and notorious possession
Investing in capital improvements to a property is one way to stall
Obsolescence
Over how many years is a commercial property depreciated?
39 years
Marvin is facing penalties from the Arizona Registrar of Contractors for contracting without a license outside of the handyman exemption. In addition to facing six months in the county jail, what is the maximum fine he faces for his first offense?
2,500 plus an 83% surcharge
For a first offense, a person who is found to be contracting with a license outside of the handyman exemption faces a penalty of $1,000, plus an 83% surcharge. The maximum penalty is a fine of $2,500 plus an 83% surcharge and six months in jail.
Which of the following is a true statement about the MLS and sellers?
It’s rare for sellers to decline advertising their property on the MLS
In every listing agreement, sellers state whether they give permission for their property to be listed on an MLS. It’s rare that sellers decline this opportunity, since the MLS is the most powerful tool that real estate professionals have at their disposal.
What is a principal meridian?
imaginary line running north and south and intersecting a base line at a definite point,
Administrative agencies like the Arizona Department of Real Estate create regulations that supplement laws. What are these regulations called in Arizona?
Arizona Revised Code
In marketing her new listing, Alice asks the photographer to “touch-up” the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
This is deceptive advertising for which both Alice and her broker may be disciplined.
The mortgage industry is made up of the primary and secondary markets. What’s the role of the primary mortgage market?
To originate and fund mortgage loans to consumers
Ginnie’s Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What’s the best way to terminate the agreement?
Ginnie and Becca can mutually agree to terminate the agreement.
Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn’t perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?
Strict liability
Study the liablities there is four different ones
Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?
Promissory note
Which entity regulates contractor Wayne from Millwork Options?
Arizona Regulator of Contractors
Which of the following entities oversees the Arizona Department of Real Estate?
The Real Estate Commissioner
What is general warranty deed?
A general warranty deed is a deed used to legally transfer real property from one person to another. This type of deed offers the most protection for the buyer.
Study the general warranty deed further
Kevin and Regina sold their property to Vickey using a general warranty deed. Which one of these statements is true?
Vickey is the grantee.
Shelly found a malnourished dog in a rental unit that was abandoned by her tenant. She decided to take the dog to a veterinarian and board it until it recovered. Since she took this action, what else must Shelly do?
Keep record of the name and location where the dog is boarded.
Review the question
What is PUD?
is a community of single-family homes, and sometimes condos or townhomes, where every homeowner belongs to a homeowners association (HOA).
Which of the following is an advantage of living in a PUD?
Easy access to amenities
Learn more about PUDS
When a consumer suffers damages resulting from the real estate-related activities of an Arizona licensee, the consumer has ______ year(s) from the time of the incident to file legal proceedings against the licensee.
5 years
Ricky Nubbins is three months behind in his rent and has received several reminders from the landlord that the rent is past due. As a result, the landlord has begun working through proper channels to legally end Ricky’s lease before the contract end date. The landlord is terminating his lease through ___
Eviction
According to the FTC privacy rule, a landlord or property manager would have to obtain a tenant’s written consent before sharing the tenant’s personal information with which of the following?
An unaffiliated third party
The Institute of Real Estate Management, an affiliate of the National Association of REALTORS®, offers a specific certification program. What designation would you earn upon completing this program?
Certified Property Manager
What information does the Loan Estimate provide to buyers under required disclosures law?
Loan Payment schedule
There is more info on this please study it
An advantage of organizing a business as a limited liability company is its
Limits on the liability of members for company debts or other obligations
An advantage of an LLC is the limits on members’ liability for company debts or other obligations.
What is prorated?
To divide or distribute a sum of money proportionately.
Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager’s office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on
Color
What is Arizona’s anti-deficiency statutes ?
in foreclosure, when property is soled for less then it’s worth. Anti-deficiency prevents the lender to sue the borrow for the deference still owed.
What is ADWR?
What is land contract?
Name the deed warranties?
What is clear cooperation policy?
What’s the intended use of the Uniform Residential Appraisal Report?
To evaluate the subject property for a mortgage finance transaction
As stated on page four of the URAR, the intended use of this appraisal report is for the lender/client to evaluate the subject of the appraisal for a mortgage finance transaction.
All contractors who want to reserve their right to file liens in Arizona have to file a
Preliminary 20-day notice
All contractors and suppliers have to provide a preliminary 20-day notice before they file a lien. They submit these within 20 days of first providing labor or materials.
The Residential Lead-Based Paint Hazard Reduction Act requires sellers, landlords, and their agents to ______ any known lead hazards in the home.
Disclose
Property ownership gives the title holder a bundle of rights. What’s significant about the concept of a bundle of rights?
It describes the ability to separate one right from the others while leaving the rest of the bundle intact.
The agreements that allow out-of-state licensees to receive commissions from Arizona licensees are established between which two parties?
The out-of-state licensee and an Arizona licensed broker
Prior to signing the closing documents, what should the parties have already done?
Assured themselves that the conditions and contingencies of the purchase agreement have been met.
Study the closing process and what takes place prior to it.
Arizona designated broker Rhonda decides to keep all of her transactional records in electronic format. Which of the following is true about Rhonda’s new practice?
She must be able to produce the records within 24 hours.
Janson Industries worked with architects and engineers to draw up plans for a planned community that will include residential, shopping, dining, and entertainment uses within the community itself. As a property that falls under mixed-use zoning, what does the company have to provide to the planning commission?
Plat map
What is an active management area in Arizona?
An area where groundwater is carefully managed
Whose role is it to develop the comprehensive master plan?
Planning board members
Who establishes real estate commission rates?
The licensee or brokerage and the client
Camille has a listing for a townhome, and appoints Ivy as her sub-agent. Ivy brings a buyer customer to the transaction, and the buyer purchases Camille’s listing. What’s true about the agency relationships in this situation?
Ivy is Camille’s sub-agent and owes loyalty to the seller.
It’s been more than two weeks since Mickey removed a former tenant’s belongings from an abandoned dwelling unit. Mickey decided to list some of the abandoned furniture on a local ad board and donate the rest to a local charity. What must Mickey do with any proceeds he receives from the sale of the furniture?
Apply them toward outstanding rent.
What can he do with the money that is left over?
What’s the relationship between the Loan Estimate and the Closing Disclosure?
Lenders issue the Loan Estimate within three days of receiving an application, and Closing Disclosure figures should be similar to the Loan Estimate.
Lenders first issue the Loan Estimate; borrowers can compare the Closing Disclosure, issued before closing, to the estimate’s figures.
looker further into this.
Of the institutions listed, which of these is viewed only as a secondary mortgage market player?
Fannie Mae
look further into this.
A group of 26 different families have shared ownership of a vacation condominium. Each family spends two weeks annually at the condominium. Legally, the condominium is considered a
Timeshare property
Assuming that the seller pays for the date of closing, if closing is July 7, how many days will the seller be responsible for paying using a statutory year?
187 days
Look into this as well there is two different ways to use the system
After a trustee’s sale, the title is conveyed
By the trustee by recording a trustee’s deed with the county
The trustee records the trustee’s deed with the county.
When is cooperating with your customer’s agent not a good idea?
Cooperation isn’t in the best interest of your client.
In the case of a ______, the lease terms, including the rent, may not be changed during that time.
Tenancy for a specific term
Lisa is holding an open house for her client, Tim. Several couples stop by. Aarthi and Ram don’t interact with Lisa at all. Gina and Reggie talk with Lisa about the property; they’re not working with another licensee. Marcus and Marvin stop by and talk with Lisa about the property; they’re already working with another licensee. Which parties are considered consumers at this point?
Aarthi and Ram
**Tim is Lisa’s client; Gina and Reggie and Marcus and Marvin both talk with Lisa about the property, so they could be considered customers. Aarthi and Ram made no contact with Lisa, so are most likely to be termed consumers at this point.
**
When specializing in distressed properties, it’s a good strategy to __
Identify potential properties quickly so the competition pool is small
Why do brokerage firms purchase general liability insurance as a risk management method?
To transfer risk
A real estate firm purchases insurance in order to transfer the risk of financial loss to the insurance carrier.
Where can a party reviewing a title commitment find requirements that must be met before a title insurance policy will be issued?
Schedule B-1
When you’re involved in a transaction as a licensee, who are the third parties?
Anyone involved in the transaction who isn’t your client
James is a trustee for an estate that’s being sold. What are the license requirements for James under Arizona statute?
There is no requirement to have any type of real estate license.
Construction loans are a type of ______ financing.
Interim
What makes distressed properties a valuable niche for investors?
The discounted price
Why might a property owner ask you to prepare a report showing the trend in rental delinquency rates?
To assess the adequacy of tenant income screening processes
Which of these is an example of legal single license dual agency?
You represent both the buyer and seller in a single transaction with appropriate consent from both.
Legal single license dual agency is a situation where a single licensee represents both the buyer and seller in a given transaction with informed consent in place, the broker’s permission, and the state’s blessing.
Administrative agencies like the Arizona Department of Real Estate create regulations that supplement laws. What are these regulations called in Arizona?
Arizona Administrative Code
The rules in the state of Arizona are called the Arizona Administrative Code.
In marketing her new listing, Alice asks the photographer to “touch-up” the photos of the house so that the old roof and siding look as though they are new. Which statement about this is true?
This is deceptive advertising for which both Alice and her broker may be disciplined.
The mortgage industry is made up of the primary and secondary markets. What’s the role of the primary mortgage market?
To originate and fund mortgage loans to consumers
look further into primary and secondary
Ginnie’s Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What’s the best way to terminate the agreement?
Ginnie and Becca can mutually agree to terminate the agreement.
Latrell purchased an old warehouse with the intent to create shared studio space for artists. However, he didn’t perform due diligence before the purchase, and it turns out that there are hazardous materials that need to be cleaned up first. Latrell took the prior owners to court, and the court ruled that Latrell is responsible for the costs of cleanup. What kind of liability is this?
Strict liability
Look at different liabilities
Which of the following is a promise from the borrower to repay a certain sum of money to another party (the lender or holder of the note) under specified terms?
Promissory note
Which entity regulates contractor Wayne from Millwork Options?
Arizona Registrar of Contractors
The Arizona Registrar of Contractors licenses and regulates contractors.
Which of the following entities oversees the Arizona Department of Real Estate?
The Real Estate Commissioner
Kevin and Regina sold their property to Vickey using a general warranty deed. Which one of these statements is true?
Vickey is the grantee.
What is general warranty deed?
Reuben purchased a property from a seller who gave him a general warranty deed. What’s true of Reuben’s deed to this property?
The deed provides the greatest protection available from a grantor to a grantee.
Which of the following describes a right-of-way easement?
Land that a railroad company runs its track through
Right-of-way easements allow pass-through and can be as short as a driveway or as long as a railroad track.
Shelly found a malnourished dog in a rental unit that was abandoned by her tenant. She decided to take the dog to a veterinarian and board it until it recovered. Since she took this action, what else must Shelly do?
Keep record of the name and location where the dog is boarded.
Which of the following is an advantage of living in a PUD?
Easy access to amenities
What is a PUD?
When a consumer suffers damages resulting from the real estate-related activities of an Arizona licensee, the consumer has ______ year(s) from the time of the incident to file legal proceedings against the licensee.
FIVE
Arizona’s solar energy exemption protects consumer’s rights to
Install/use solar energy devices
Ricky Nubbins is three months behind in his rent and has received several reminders from the landlord that the rent is past due. As a result, the landlord has begun working through proper channels to legally end Ricky’s lease before the contract end date. The landlord is terminating his lease through _
Eviction
According to the FTC privacy rule, a landlord or property manager would have to obtain a tenant’s written consent before sharing the tenant’s personal information with which of the following?
An unaffiliated third party
The Institute of Real Estate Management, an affiliate of the National Association of REALTORS®, offers a specific certification program. What designation would you earn upon completing this program?
Certified Property Manager
What is Title commitment
A title commitment is document by which a title insurer discloses to all parties connected with a particular real estate transaction all the liens, defects, and burdens and obligations that affect the subject property. It lists all requirements that must be met before a title company can insure a title as “marketable” or a loan as having a certain priority.
Land
The earth’s surface extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
Real estate:
Land, plus all things permanently attached to it naturally or artificially
Real property
Real estate, plus the interests, benefits, and rights included with real estate ownership
Improvements
any positive permanent change to land that augments the property’s value. ex sidewalk, fence.
Fixtures
anything permanently attached to the land or to permanent structures on the land) are part of real property, and are included with a sale of real property unless the parties negotiate differently.
What are the bundle of rights
Is ownership right that includes
the right of possession
the right of control
the right of exclusion
the right of enjoyment
the right of disposition (right to convey or sell the property)
The owner is the one who has the authority to separate each of these rights from the land by selling the right to another person.
What is appurtenance
is when something becomes a permanent addition to the property,
Profit
In this usage, profit is a legal term that means the right to take products out of the soil.
License
A license is permission to do something on another’s land without actually possessing any interest or ownership in the land; it’s a temporary privilege that is neither assignable or inheritable. License may be revoked by the owner at any time unless a termination date has been specified by contractual agreement.
Personal property is also know as
chattel
Five test to determine whether something is a fixture (in which case it’s classified as real property).
MARIA
Method of annexation (how the item is attached to the land
Adaptability of item (determine whether removing the item will change how the land is used
Relationship of the parties
Intention in item placement
Agreement of parties
What is a trade fixture
is a piece of equipment or other item that is on or attached to the real estate which is used in a trade or business
What are Emblements?
re growing crops, such as corn, vegetables, grain, etc., which are produced annually. These are usually not considered fixtures, but are the personal property of the person who planted them
What are manufactured Homes?
A manufactured home is a home that’s constructed with a permanent chassis and wheels because it’s made to be transported.
According to ARS 42-15203, what can a person who owns both the manufactured home and the land on which the manufactured home is located file?
Affidavit of Affixture with the Recorder of the county in which the real property is located.
What is affidavit of Affixture?
is a document that is used to change the status of a manufactured home from personal property to real property. If the manufactured home for which an Affidavit of Affixture has been filed is removed or sold separately from that parcel of land, then the manufactured home must be re-titled as a motor vehicle.
What is Estate in Land?
is the amount, type, and extent of an owner’s interest in real property.
What is freehold estate
you have exclusive rights to the property for an undefined length of time
What is fee simple estate
a landowner’s complete and total ownership of a piece of land and all properties on it
What is fee simple absolute estate
the owner retains both title and possession to the land regardless of any future events or circumstances. is form of ownership. Provides the highest possible interest in property.
Grants the owner all legal rights with no limitations other than public or private restrictions (e.g., zoning laws).
What is fee simple defeasible estate
he property holder owns the property with all legal rights, but subject to a condition.
If the condition is breached, the property may go back to the original owner.
What is fee simple determinable estate
is an estate granted using a phrase such as, “so long as,” “while,” or “during” a stated condition if broken the original owner is reverter and possesses the property back
fee simple subject to a condition subsequent
an estate given on the condition that the owner does or doesn’t take a specific action, using phrases such as, “on condition that” or “provided that.”
What is life estate
is also a freehold estate, which comes with the whole bundle of rights, but ownership is limited to someone’s lifetime (either the title holder or another person specified by the person granting the life estate). There’s no specified termination date, because a person’s lifetime is undefined. Upon the death of the person specified (the life tenant), the estate reverts immediately to another owner (the remainderman).
created by a deed that gives the land to the person “for life” and identifies what should happen to it after that person dies.
What is conventional life estate
is created by the property owner, who grants the property for the duration of an individual’s lifetime
What is reversion
means the property reverts to the original owner (the one who granted the life estate) when the life estate ends. An example of ordinary life estate with reversion: Jean granted a life estate to Phillipe. When Phillipe died, the property reverted to Jean, who owns it as a fee simple estate.
What is remainder
means the original owner named another individual as the remainderman who will receive the property when the life estate ends. An example of ordinary life estate with remainder: Jean granted a life estate to Phillipe and named Raoul as remainderman. When Phillipe died, the property was transferred to Raoul as a fee simple estate.
What is Pur autre vie with reversion or remainder:
means “for another’s life.
lasts for the lifetime of someone other than the life tenant who was named when the life estate was established.
what is homestead
a dwelling in which a person resides.
What is Dower
gives the widow life estate rights upon the death of her husband
what is curtesy
gives the widower life estate rights upon the death of his wife.
What is leasehold estate (also known as a non-freehold estate
is a possessory interest (or leased interest) in property that has a specified end date; it lasts for a definite length of time.
estate for years
is a form of a lease. it simply means a definite duration with a specific start and stop date that can be for any length of time, even days or weeks.
That terminates automatically
if the owner or tenant dies, the lease isn’t automatically terminated.
tenant signs a lease to live on the property for a specified period of nine months
what is estate at will aka tenancy at will
It’s a lease hold. oral agreement or a written agreement with no specific ending date. Either party may terminate it at will, and it’s not inheritable. At the death of either party to the lease, the leasehold automatically terminates.
what is holdover tenant
tenant continues to occupy property after lawful authority has expired.
What is periodic estate
is a form of a lease. automatically renews itself for a given period (e.g., six months or any other negotiated length of time) in successive tenancy unless one party terminates. This may also be referred to as an inheritable leasehold estate.
What is Joint Tenancy?
Creates an equal, undivided interest between the co-owners. It can only be created if these conditions called the four unities are present.
Joint tenants may each sell their ownership interest without the other tenants permission; however, the buyer of that share doesn’t become a joint tenant, because the new buyer didn’t receive title at the same time as the other tenants, breaking the four unities.
new owner is tenant in common
remaining tenants continue as joint tenants with the right of survivorship shared between them.
it doesn’t include the right of inheritance
What are the four unities in Joint Tenancy
Possession
Interest (ownership is divided equally among the owners)
Time (Ownership interest is acquired at the same moment. New owners cannot be added at a later time unless a new joint tenancy is created.
Title Each of the joint tenants acquires title to the property from the same source (i.e. a deed)
What is survivorship?
If two parties jointly own a property that has a right of survivorship, when one of them dies, their share property goes directly to the other owner.
What is deficiency?
If a property sells at a foreclosure sale for less than what’s owed on the loan, the balance remaining on the loan, along with any other fees owed to the lender.
How is deficiency determined?
by using the greater of the property’s fair market value or the foreclosure sale price and subtracting this from the amount owed to the lender.
When does Anti-Deficiency apply in AZ?
AZ doesn’t allow deficiency judgments for most residential property after a trustee’s sale or sheriff’s sale
Specifically, the law doesn’t allow deficiency judgment for property that’s smaller than 2. 5 acres and has a one- or two-family dwelling on it.
What does Office Exclusives refers to?
Listing agreements in which the seller has instructed that the listing firm may only be marketed within the brokers firm and not be entered into the MLS and cannot be marketed publicly.
What is Land Contract (aka contract for deed, installment contract or land sales contract)?
Buyers pain money to seller on monthly bases instead of getting a mortgage from bank.
Title remains with the seller
Buyer has equitable title
Once buyer finishes the payments, he receives the title.
What is a Deed?
the actual legal document that would transfer the ownership (title) of a property from one person to another
What is Deed in lieu of foreclosure or short sale?
The bank agrees to accept the deed to the property in lieu of a foreclosure sale
What is grantee?
the buyer, recipient, new owner, or lien holder
What is Grantor?
is a person that transfers ownership rights of a property to another person.
What are prorations used for?
To divvy up expenses on the property at closing.
Some items are paid by the seller and some by the buyer.
What is Appraisal?
a process through which a real estate appraiser determines the fair market value of a home
There is no price range for appraisal it has to be a definitive number.
Why does real estate industry use appraisal?
to ensure that a property’s value supports its given loan amount.
What is automated valuation model (AVM)
software-based tool that’s used in residential and commercial real estate to determine property value.
What is comparative market analysis (CMA)
Estimates a home’s price based on recently sold, similar properties in the immediate area.
Salesperson or broker creates the reports to help sellers set listing prices for their homes and help buyers make competitive offers.
What is Broker’s price opinion (BPO)
Is the estimated value of a property as determined by a real estate broke or licensee
Prepared for lenders or for relocation companies
charge must be paid of 50-200 to the licensed broker.
Who can preform appraisals?
Licensed appraiser
they use sales comparison approach and cost approach
Appraisals are detailed and can cost hundreds of dollars
prepared for lenders, buyers, sellers and sometimes courts
What is Market Value
This is the price that the property would be expected to sell for after suitable exposure to the market
What is Mortgage Value
The mortgage value is the value of the property set by means of an appraisal carried out by an accredited company
The mortgage value will determine how much the Bank will lend for the transaction.
What is investment value?
This type of value helps a buyer determine if the rate of return on a property will be as expected.
What is Going-Concern Value
This is the value of the property when it’s functioning as a business and is expected to continue doing so into the future.
what is salvage value
This value is considered when a structure that’s at the end of its useful life may be demolished, but some value can be realized if the improvements are sold.
What is Insured value
This is the amount it would cost to replace or rebuild a house that’s damaged or destroyed
What is liquidation value
This is the value of a property when it is not given sufficient time to sell on the open market. Typically, liquidation value is lower than market value. If a property is subject to foreclosure or a rapid sale, liquidation value comes into play. This method of sale can affect the value of other homes in the neighborhood.
In use Value
This determines the value of a property to the person using it, rather than to a typical buyer. For example, a family estate with generations of history is likely of more value to those living there than it would be to a new buyer.
What is assessed value?
This is the amount the local taxing authority thinks a property is worth.
What are the four factors that influence value?
DUST:
Demand how popular or desirable a property is.
Utility the property’s function
Scarcity relates to market supply
Transferability: The ease with which another person can purchase the property
What are the principles of value?
Anticipation future benefits it is expected (anticipated) to provide :
Change: RE values are subject to constantly changing conditions
Competition: Supply and Demand
Conformity Value is created and maintained when the characteristics of a property conform to its neighborhood.
Ex. , energy-efficient, seven-bedroom home built in the middle of a neighborhood of older three-bedroom homes is valued differently
Contribution: How a change in a property impact s the value as a whole.
Highest and best use: This describes a property’s most profitable use that is both legal (in other words, conforms to zoning) and economically feasible.
Plottage This term describes the joining or assemblage of two neighboring land parcels; increases the property value.
Rgression ower-quality property that’s located adjacent to a higher-quality property can diminish the value of the higher-quality property.
Progression Progression is the bump in value that a lower-value property gets by being near a higher-value property.
Substitution A property’s value is determined by what it would cost to purchase a similar substitute property
What are the four real estate cycles?
Growth: The neighborhood is under development and property values will steadily increase.
Equilibrium: This stage is also known as “stability.” It’s characterized by steady property values.
Decline the neighborhood declines in desirability and value. Homes are more likely to be rented rather than owner-occupied, and the overall level of property maintenance is lower.
Revitalization This stage is also known as “rehabilitation” or “renewal.” The neighborhood gains a renewed appeal (can occur for many reasons, such as access to jobs or amenities) and affordable prices allow people to purchase and renovate the homes.
What is directional growth
Property located with an up and coming neighborhood may be valued higher than a similar home in neighborhood that seems to be in decline
This is the general trend toward which a neighborhood appears to be headed.
What land characteristics that can impact property value
Orientation: The “siting” of a house—how it’s oriented to the sun—can have both benefits and drawbacks, depending on the climate and time of year.
Excess Land When a property has excess land (land beyond the subject property site), an appraiser must describe it in the appraisal but may not assess its value. Excess land doesn’t significantly affect a property’s value, but it provides potential for the land to be subdivided and sold.
Percolation This describes how well water drains through the soil.
Compaction : Compacted soil affects soil quality and inhibits plant growth. It also impedes proper drainage, which can damage foundations and cause basement flooding.
What is Sales Comparison Approach
This approach to determining value bases the subject property’s value on the value of similar properties on the market.
