Real Estate Study #6

Having _______ on file allows lenders to confiscate personal property pledged as collateral in the event of a borrower default.

A UCC security agreement and financing statement

Which of these choices is NOT part of the operation plan that CAGRD has to submit every 10 years?

A detailed report on how groundwater is used inside INAs (CAGRD is responsible for groundwater recharging, but it doesn't report on how that water is used in INAs)

An escrow officer is an example of which type of agent?

A limited agent

Which of the following options describes a subordination agreement?

An agreement between two lien holders to modify the order of lien priority

A borrower whose home is in foreclosure in Arizona under a deed of trust has the right to reinstate the loan. What other party is allowed to do this?

Any creditor holding a junior lien on the property

On what type of listing (or listings) may a net listing be used in states where they are legal?

Open, exclusive agency, or exclusive right-to-sell listings

If a landlord wants to notify a tenant that the leasehold interest in the property is subordinate to a mortgage, what clause would be included in the lease?

Subordination clause

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

Substantive policy statements

Billy purchased a vacant commercial lot for $10,000 last year. Assuming a depreciation rate of 2.6%, what is Billy's property now worth?

Subtract the 2.6% depreciation rate from 100% to get 97.4%, or 0.974 in decimal form. Then multiply the original value by 0.974: $10,000 × 0.974 = $9,740.

When looking at a rectangular government survey system map, where would Section 36 be located?

The southeastern-most section of the township

How are accrued real estate taxes that have been assessed but not yet due handled in a real estate transaction?

The tax bill will be prorated to the day of closing.

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.

Which of the following is the sunshine law based on?

The Freedom of Information Act

Why do brokerage firms purchase general liability insurance as a risk management method?

To transfer risk

You have a client who is worried about the water bill in the house she's about to buy. "I just heard that they charge a lot for water in this neighborhood," she tells you. What should you say?

"A lot of people in Arizona keep their water bills low by xeriscaping. That might help!"

Buyers of timeshares in Arizona may cancel their purchases within how many days of signing the contract?

10 days

Josh and Taylor are excited to move into their new home outside Tucson in the massive Cactus Junction subdivision. With more than 300 home sites, a town center with shops and restaurants, plenty of parks, and gated access, they are confident they have made a sound investment. How long does the subdivision's HOA have to notify the couple of its rules, bylaws, and other pertinent community information?

10 days from the notification of pending sale

Per FIRPTA, trusts with foreign beneficiaries must withhold what percentage from the sale of U.S. properties?

35% (Foreign individuals must withhold 15% of the sales proceeds.)

What kind of real estate advertisement in Arizona features only a phone number or address as identifying information?

Blind ad

After switching careers, Alice just graduated from culinary school and is looking to purchase a house. Until she gets her feet wet with her new job, she knows the cost of living with her mortgage is going to be tight. Which mortgage might help her manage her expenses each month?

Budget

Craig's loan is secured by a mortgage. Who holds legal title when this security instrument is used?

Craig

When you, as an Arizona licensee, cooperate with other brokers in a transaction, what is it called?

Co-brokerage

To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which one of these elements listed has the highest priority?

Conditions of sale

Insurance monthly premiums are taken from which account?

Escrow

Property taxes generate approximately ______ of local government revenue.

One third

Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?

Department of Housing and Urban Development

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.

Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?

Easement by prescription

Easement by prescription

Easements by prescription are created through continuous, exclusive, and long-term use of another's property without actual permission.

What type of contract do you have once the seller has accepted the buyer's offer in writing and the buyer has been notified of the acceptance?

Enforceable

Which of the following is an example of conversion?

Herve withdrew funds from the trust account to pay the brokerage's rent.

Arizona statutes prohibit the lender from pursuing a deficiency judgment for what two reasons.

If the property is 2.5 acres or less and a single one- or two-family dwelling.

Capitalization is the process of converting ______ to value.

Income

Under which type of ownership arrangement can buyers purchase condominiums?

In severalty, in joint tenancy, in tenants in common, or tenants by the entirety

Arizona's solar energy exemption protects consumer's rights to ______.

Install/use solar energy devices

Which type of legal description do courts prefer?

Lot and block

The market value of your client's property is $280,000. Taxes in the area are assessed at 60% of market value. Your client's semi-annual tax bill was $1,461. What's the tax rate per 100?

Multiply market value ($280,000) by assessed percentage (60% or .6) to get an assessed value of $168,000. The semi-annual bill was $1,461, so annual taxes are $2,922. Divide annual taxes by assessed value: $2,922 ÷ $168,000 = .0174. Multiply this by 100 to get $1.74.

You represent a buyer who can employ other real estate professionals to help in their home search. The buyer is not obligated to compensate you, and the agreement can be revoked at any time by either party. What type of buyer agency relationship do you have?

Non-exclusive, not-for-compensation

Nonny is purchasing a rental property where the tenants pay month-to-month rent. Which of the following is the most likely way for the rent to be prorated?

Nonny will receive prorated rents beginning the day of closing.

In what type of life estate does property ownership return to the original owner when the life estate holder dies?

Ordinary with reversion

Which of the following entities may NOT be licensed as an employing broker?

Professional limited liability company

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

Which clause in the deed of trust is the equivalent of the defeasance clause in the mortgage?

Reconveyance

Your seller client Miranda thinks the kitchen in her loft in downtown Phoenix needs a little work before she lists it, and she knows she can do the work herself. What can you do to help her navigate the handyman exemption?

Research the cost of the repairs she wants to make to ensure they are less than $1,000 and don't require a permit or involve gas or electrical connections.

In the case of a ______, the lease terms, including the rent, may not be changed during that time.

Tenancy for a specific term

Which type of pest may make mud tubes—tunnels that run along the walls—or shed tiny wings?

Termites

Which of the following is NOT a requirement for a property sold under a judicial foreclosure in order for the borrower to be protected under Arizona anti-deficiency statutes?

The borrower used the property for a personal residence.

Henrietta is 17 years old. She wants to sell the property given to her by her grandmother. Which covenant provided by the general warranty deed may prevent her from doing so?

The covenant of the right to convey (The covenant of the right to convey requires that the grantor have legal capacity to convey, and Henrietta is a minor.)

In property ownership, what is an undivided interest?

The right of each co-owner to use the entire property

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

Tim's property will be sold at auction in a foreclosure action.

What. is coversion?

When licensees/escrow holders use money that they received on behalf of the principals for a reason other the intended use, it's known as conversion, and it is illegal.

In Arizona, when must an owner of unsubdivided land provide copies of advertising and marketing materials to the commission?

Within 21 days of usage

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.