prepedge

Which of these is excluded on a title insurance policy on Martha's property because of the schedule of exceptions?

The title policy doesn't exclude property taxes (assuming they're properly recorded), though the taxes must be paid before the policy is issued. The verbal lease agreement is excluded since it's not shown in public records.-A verbal lease agreement Martha has with her neighbor who leases Martha's garage

Which phase of the investment cycle includes deductions for mortgage interest and property taxes?

This is the ownership phase.

The GRM for Sunny Hills is 147. If a three-bedroom, one-bath house in Sunny Hills rents for $820 monthly and sold for $125,000, what is the suggested value of a house that leases for $1,000 monthly based on the GRM?

This question asks you to find the value of a house based on the GRM of 147. The value of the home that rents for $820 monthly isn't relevant to your calculation, which is 147 x $1,000 = $147,000. Remember that GRM is just an estimate of value.

A client of yours is selling a piece of property with a well attached. He's not allowed to use the well for irrigation, but he uses it to water his livestock. He can sell the water right separately from his property. What is true about this well?

This well has a Type 2 right.

Once buyers submit their loan application, they must be given their Loan Estimate. At the very least, they must receive the Loan Estimate within ______.

Three business days after submitting the loan application Buyers must be given the Loan Estimate either upon submitting a loan application, or within three business days after submitting a loan application.

Which of these actions would NOT help a real estate licensee who wants to specialize in sales of distressed properties?

Working with distressed properties doesn't mean selling them at auction. Understanding foreclosure laws, being familiar with the local market, and advising clients about appropriate offers are good ways to specialize successfully.

Your clients received a check for $395,000 when they sold their property, which they owned free and clear. Their closing expenses were $4,575, and they paid 5% in brokerage fees. What was the sales price of their property? Round to nearest whole dollar.

100% - 5% = 95% (.95), and $395,000 + $4,575 (before commission) = $399,575. $399,575 ÷ .95 = $420,605 (rounded).

Which of these is NOT a likely reason for a short sale?

A homeowner who has decided to move to a new location won't need to make a short sale, since this only occurs when the homeowner's financial situation can no longer meet the requirements for a monthly payment.

Which of the following situations is an example of a non-agency relationship?

A non-agent, also referred to as a transaction broker, may assist a customer with ministerial tasks.-Dutton was previously a licensee. He's selling his home, and he wants Wanda, who's currently licensed, to assist him with the paperwork.

ABC Bank in Arizona financed Betty's purchase of a three-bedroom home a few years ago. She kept up with the payments on the loan until a few months ago but is now in default. How will ABC Bank most likely go about initiating the foreclosure process?

A non-judicial foreclosure is initiated when the trustee records a Notice of Trustee's Sale in the county where the property is located.-Ask the trustee on the deed of trust to record a Notice of Trustee's Sale with the county.

Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place?

A public record of tenancy Claims against a title by people who reside (or resided) on the property are typically only covered by title insurance if there's a public record of tenancy, such as a lease.

Which of the following is a potential ramification to the seller if a short sale is completed?

A short sale can negatively impact the seller's credit, and the lender may seek a deficiency judgment for the amount not repaid. Short sales can negatively impact the seller's credit. It's an alternative to foreclosure, but the borrower may still be liable for the amount not paid if the lender seeks a deficiency judgment.

Which of the following best describes a tenant's right to quiet enjoyment?

A tenant has the right to enjoy lawful use of the property without being dispossessed or trespassed upon, even by the landlord. The right of quiet enjoyment gives the tenant the right to enjoy lawful use of the property without being dispossessed or trespassed upon, even by the landlord.

Gretchen receives a call from a prospective employer wanting information on one of her tenants. In accordance with the FTC privacy rule, Gretchen can do which of the following?

A tenant's information can be shared without the tenant's written consent with the tenant's prospective employer, a police officer, another rental housing owner or manager, or a consumer reporting agency.-Share information about her tenant with the prospective employer without her tenant's written consent.

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?

At the end of a life estate, the reversionary owner or remainderman hold a- fee simple estate.

An Arizona city or town may prohibit or regulate vacation and short-term rentals for which the following reasons?

Based on the rental being used to operate a sober living house-An Arizona city or town may regulate vacation and short-term rentals to limit or prohibit using the rental for the certain purposes, including operating a sober living home.

Sam has a mortgage payment that includes his property taxes and property insurance. What type of mortgage does Sam have?

Budget Sam has a budget mortgage, so named because it helps borrowers budget their monthly expenses by combining them into one payment.

When Fannie Mae purchases a loan, they pay the loan originator a(n) ______ fee.

Collection-Fannie Mae pays a collection fee, which can be a significant source of income for loan originators.

Your buyer clients Silas and Joan just put a contract on a fix-and-flip property. What should you recommend they request from the sellers?

Copies of receipts from licensed contractors When working with buyers who are purchasing a fix-and-flip property, always recommend that they obtain copies of receipts from licensed contractors.

Anita's property appraised at $370,000. It is assessed at 40% of appraised value, and the tax rate is 80 mills. What are Anita's semi-annual property taxes?

Divide mills by 1,000 (80 ÷ 1,000 = .08). Assessed value is 40% of appraised value, so multiply .4 by $370,000 = $148,000. Multiply this by the mill rate (.08) to get annual taxes of $11,840. Divide this by two to get semi-annual property taxes of $5,920.

How many days after termination of the property management agreement does the property management firm have to provide the owner with a list of all tenant security obligations?

Five A list of all tenant security obligations must be provided to the owner within five days of the property management agreement being terminated. Other financial records and responsibilities are due at either 35 days or 75 days following termination, depending upon the type of record.

Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 and 2025?

For tax years 2018 to 2025, interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly.-Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separately.

Which of these statements best describes the concept of procuring cause?

If you're the procuring cause, you're the licensee who brought a ready, willing, and able buyer to a transaction that closed.-Procuring cause means the licensee's actions produced a ready, willing, and able buyer.

In which of these situations would the property most likely be conveyed with a trustee's deed?

In states that use a deed of trust as security for a mortgage, the trustee conveys foreclosed property with a trustee's deed.-Tim's property will be sold at auction in a foreclosure action.

Which agency administers the Interstate Land Sales Full Disclosure Act?

It may help to remember that the Interstate Land Sales Full Disclosure Act is designed to protect consumers from the fraudulent sale of property sight unseen through the regulation of land sales across state lines.-Consumer Financial Protection Bureau

You're a buyer's agent, meeting with the buyer and the buyer's lender, Chuck, who is a ______ the transaction.

Lenders, appraisers, and other service providers are third parties.

Marcus listed his property with Home Sweet Home Realty and one of its listing agents, Ron Savage. About a month later, Ron filed for bankruptcy. Which of the following statements about this situation is true?

Marcus can choose whether or not to continue the listing agreement with Ron. Bankruptcy of the broker (not the agent) or the principal terminates an agency agreement by force of law.

Which of these is NOT a benefit that the CAP project brought to Arizona?

New, larger dam projects across the state CAP required construction of tunnels, pipelines, pumping plants, and aqueducts, but no dams.

Five competing licensees in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?

One in which no intent needs to be proven to establish a violation has occurred

Which of the following, when done for others and for compensation, may be done by someone who doesn't hold an Arizona real estate license?

Performing official real estate duties as an Arizona government employee Licensure is nearly always required when performing real estate activities for others for compensation, but exceptions are made for government employees.

Which of the following belongs in a property management plan?

Property condition Property condition belongs in the property management plan as part of the property analysis.

Property managers most often serve as which type of agents?

Property managers often serve as general agents because they are given the authority to act on the property owner's behalf, and are responsible for handling all details regarding the owner's property.

Kali signed a lease in which an appraisal is performed every three years, and the rent is then adjusted according to percentage of the prior rent. What type of lease is this?

Reappraisal lease In the case of a reappraisal lease, appraisals take place at pre-determined intervals—typically every three to five years—and the rent is adjusted according to an agreed-upon percentage of the prior rent.

Which legal description method is regulated by the U.S. Department of the Interior's Bureau of Land Management?

Rectangular government survey The U.S. Department of the Interior's Bureau of Land Management regulates the rectangular survey system.

When engaged in an Arizona real estate transaction, which of the following is something licensees are required to do for their customers?

Report information that their client may not be able to perform in the transaction. -Disclosing any information that either the buyer or seller is, or may be, unable to perform is a requirement of Arizona licensees, even if you are reporting your own client's inability to perform to a customer.

Tina has fee simple ownership of her timeshare unit. Which of these is NOT an example of the type of ownership she may have?

Right-to-use Fee simple ownership of a timeshare (aka timeshare estate) unit means that the owner may share tenancy in common with other timeshare owners or may have an interval ownership. A right-to-use timeshare is a lease agreement, not an ownership interest.

Your seller client wants to hire an unlicensed handyman to do some work around her house before she sells it. What advice would you give her?

Select a worker who's bonded and insured. You should advise clients to make sure they select a worker who's bonded and insured for home renovations.

Kayla purchased a home in January, fixed it up, and then sold the property in May of the same year for a gain of $45,000. What type of capital gain is this?

Short-term capital gains apply to properties owned for one year or less.

Seller Walt has an agreement for sale with buyer Jessie, who's agreed to buy Walt's property just outside Prescott. Two years later, Jessie defaults on the loan. He's paid Walt $75,000 of the $100,000 purchase price and still owes 25%. Walt is allowed to start forfeiture proceedings ______ after Jessie's first missed payment.

Since Jessie has paid more than 50% of the original purchase price, Arizona law doesn't allow Walt to start the forfeiture process until Jessie's been in default for nine months.

Cheyenne needs a licensed contractor to install drywall in her home. What type of contractor does she need?

Specialty commercial contractors -deal with areas of construction work that require special skill sets, such as acoustical systems, elevators, drywall, electrical, plumbing, and carpentry.

Mohave County is listing for sale property on Havasu Island. Under Arizona's Article X, which of these statements about the sale is true?

State and school lands in Arizona can only be sold or leased to the highest and best bidder at a public auction, which must be held and advertised in accordance with specific rules.-the land can only be sold or leased to the highest and best bidder at a public auction.

the Arizona Department of Real Estate will occasionally produce ______ offering advisement on some regulations.

Substantive policy statements The ADRE produces substantive policy statements to clarify its current approach to a specific rule or regulation.

For Arizona residents to take advantage of the homestead exemption, what must they do?

The Arizona homestead exemption is automatic- and doesn't require homeowners to register their residence. It allows them to exempt up to $150,000 of the value of their primary residence from seizure for payment of certain types of debts.

New water claims can't be made on Colorado River water because ___

The Colorado River's water is so important that it's federally regulated and isn't managed according to prior appropriation.

Which act created an agency to investigate antitrust practices?

The Federal Trade Commission Act -created the FTC. This agency investigates practices and will stop companies and individuals from committing antitrust violations.

How many members sit on the Arizona Real Estate Advisory Board?

The advisory board consists of 10 governor-appointed members who serve six-year terms.

Who or what entity has legal title to a financed property in a lien theory state?

The borrower is the legal owner and has the right to possess and control the property. The lender has the right (after a loan default) to take possession of the property through foreclosure.-The borrower

Which one of the following actions is a licensee required to take to fulfill a fiduciary duty?

The fiduciary duty of disclosure requires that licensees disclose any conflict of interest.-Disclose personal interest and licensed status when buying property for personal use.

When a mortgage is used as a security instrument, who holds the mortgage and the promissory note?

The lender holds the mortgage and the note. The note and mortgage are the lender's leverage to foreclose in the event of default.

What information must subdividers provide the Arizona Department of Real Estate before accepting reservation deposits for a subdivision?

The name and location of the development must be provided, along with other information.

Which of the following is not required to appear on a broker's property management trust account deposit slip?

The name of the brokerage firm Deposit slips must include the date of the transaction, the amount of the deposit, and the names of the parties who were involved in the transaction.

What is NOT a benefit of using the property management agreement?

The parties to a property management agreement are the property owner and the property manager.-It creates an agreement between a property owner and a tenant.

Which of the following would be considered a seller debit in the closing statement?

The seller's debits include expenses, the seller's share of prorated items, and the payoff of the seller's current mortgage loan or other lien.-The seller's current mortgage payoff