Mandatory Disclosures

Question 1

Any fact that, if disclosed, could affect the decision of an entity in completing the transaction.

Answer 1

Material facts

Question 2

-Loyalty
-Obedience
-Confidentiality
-Disclosure
-Accounting

Answer 2

Fiduciary Responsibility

Question 3

You must disclose to the buyer any detrimental information you know concerning a property that might affect its value or desirability to the buyer. Your duty of disclosure, however, extend beyond the offer and acceptance of the offer. As an example, if you discover a serious structural problem after acceptance of an offer, you have a duty to inform the buyer, as well as the owner, of the problem.

Answer 3

Duty to Other Party (Nonagency)

Question 4

Step 1: Disclose
Step 2: Elect
Step 3: Confirm
The confirmation of the type agency elected in step 2
must be in writing.

Answer 4

The Disclosure Process (DEC)

Question 5

The agent and the principal(s) must sign the confirmation statement. Usually this confirmation is included as part of the purchase contract (also known as a _______ )

Answer 5

Deposit receipt

Question 6

A red flag is a visual sign or indication of a defect

Question 7

Real estate agents are required only to visually inspect on-to-four residential units. While the law does not require a visual inspection for other than one-to-four-unit residential properties, you still have a duty to disclose know detrimental information to the buyer.

Question 8

An agent need not to disclose a death on a property for any cause. An agent does not have to disclose that a former owner or resident ever had AIDS or died of AIDS. However, if a buyer asks a direct question concerning deaths or a cause of deaths, a false answer would be misrepresentation.

Question 9

A booklet intended to help buyers, sellers, and real estate agents recognize some of the weaknesses in houses that affect earthquake safety. The buyer should sign that they have received the guide.

Answer 9

The Homeowner’s Guide to Earthquake Safety

Question 10

For all houses sold in California, an earthquake safety disclosure statement must be filled out and signed by the buyer and the seller.

Answer 10

Residential Earthquake Hazards Report

Question 11

Sellers or seller’s agents must give buyers a copy of the Commercial Property Owner’s Guide to Earthquake Safety for sales or exchanges of any real property built of precast concreate or reinforced masonry walls with wood frame floors or roofs built before January 1, 1975, unless such property falls within an exemption category.

Answer 11

Commercial Property Earthquake Hazards

Question 12

• Asbestos
• Carbon Monoxide
• Formaldehyde
• Hazardous Waste
• Household Hazardous Wastes
• Lead
• Mold
• Radon

Appendixes.
- A list of federal and state agencies
- A glossary of terms

Answer 12

Environmental Hazardous Booklet

Question 13

For common interest subdivisions, buyers must be provided information about restrictions and the homeowners associations (HOA).

Question 14

Municipal-type bonds issued to fund streets, sewers, and so forth for a new development. The bonds shift the expenses from the developer to each homebuyer, who must pay an assessment to retire the bond. The net effect is higher taxes for the homebuyer.

Answer 14

Mello-Roos Bond Disclosure

Question 15

Full disclosure will

Answer 15

• protect the principals (buyers and sellers)
• establish and build trust and confidence between the licensee and principals, and
• satisfy the law.

Question 16

At times, every agent will be in doubt about exactly what to disclose. The general rule is, “When in doubt on a particular issue, always disclose.”

Question 17

When a principal appoints an agent, the principal assumes _____ ______ for the act of the agent within the scope of the agency.

Answer 17

Vicarious liability

Question 18

Fiduciary duty is one of good faith and trust.

Question 19

Third parties who are not agents of either the buyer or the seller; instead, they assist the buyer and the seller in the transference of real property ownership. They do, however, have a duty to treat all parties fairly and must disclose known defects in a property.

Answer 19

Facilitators/intermediaries and Designated agents

Question 20

The licensee who lists the seller’s home is called the listing agent or seller’s agent.

Question 21

The licensee who brings the buyer into the transaction

Question 22

Listing Agent:
- The listing agent, also know as the seller’s agent, represents the homeowner or property seller.
- Their primary responsibility is to help the seller prepare and market their property for sale. This includes setting the listing price, staging the home, creating marketing materials, and listing the property on multiple listing services (MLS) and other platforms.

Question 23

Selling Agent:
- The selling agent, also known as the buyer’s agent, represents the homebuyer.
- Their main role is to help the buyer find suitable properties that match their criteria, negotiate on their behalf, guide them through the purchase process.

Question 24

RIGHT OF TERMINATION:

The disclosure statement should be delivered as soon as practical and before the execution of the offer to purchase. If the statement is not delivered before the execution, or is later amended, the buyer has the right to cancel the offer within three days after delivery (five days if mailed).

Question 25

A property that may be perceived as undesirable for other than physical or environmental reason.

Answer 25

Stigmatized property

Question 26

For 1-4-unit residential properties built before 1978, purchasers must be given a Protect Your Family from Lead in Your Home booklet. Giving the buyers the California booklet, Environmental Hazards: A guide for Homeowners, Buyers, and Tenants, also satisfies the federal requirement.