American Realty Academy

Adverse Possession

A type of involuntary alienation or giving up of a prop in which an unauthorized person, who does not hold legal title to the prop, can GET legal title and rights A trespasser or squatter can claim Adverse Possession if they can prove they had continuous, hostile, actual, visible, exclusive and full possession of the prop Evidence is given to everyone, including the owner, that someone is using their prop. If owner doesn't forcibly remove them, after a set time, squatters can claim ownership. After a predefined time, squatters can claim FULL legal rights/ownrshp in court.

Trade Fixtures

Another point of discrepancy in contracts. Since it is normally used in the rental, it's assumed to be personal Ex: Shoe racks to display shoes are personal prop of the tenant

In AZ, HOA's can legally foreclose on props for failure to pay...

Assessments (not fines) (They can't legally foreclose on you if you don't pay fines. you just need to pay assessments to avoid foreclosure)

Conversion

Changing one type of prop to another. (Personal prop cannot be included in a RE Xaction; this must be included in a bill of Sale, for an amount over $500. Lenders don't want to finance furniture into a buyer's loan.)

Affixture

Converting personal prop to real prop (Mobile homes are personal property unless they are affixed to the land)

Land

Extends from top of the earth down to the middle of the earth,and back up into the air, sometimes w/ no limit

Homestead Exemptions and Removal

If there is a judgement or lien in excess of $150k, it may be satisfied in the following way: Selling the home, the first $150k is protected. Anything OVER that can be used to satisfy the debt Removal of Homestead Exemptions: 1. A consensual lien placed against the prop overrides the homestead act. (aka a mortg or trust deed would negate the Homestead Act) 2. Abandoning prop for 2 yrs 3. Selling of Xferring prop 4. Owner moving out

Improvements

Improvements that fall in, on or on top of the prop (buildings, rds, walkways, antennas, prkg lots)

Examples of cloud on title or unknown defects on title

Incomplete/missing ownership history, unknown liens or other encumbrances, evidences of fraud or forgery

Lessor

Landlord, giv-or of the lease

Estate por autre vie

Life Estate based upon the life of someone else. (Think: por otra vida) Grantor gives a Life Estate to someone for as long as 3rd person is alive. When that 3rd party dies, prop is reverted to grantor/grantor's heirs or remainderman named in the deed. Ex: Dad conveys Life Estate of laundromat to Tony based upon the life of Tony's rich wife being alive. Upon death of rich wife, prop reverts back to Dad or dad's heirs.

Curtsey

Life Estate the husband has when the wife dies Opposite of dower. If wife dies, husband gets to keep the prop until husband dies himself, even if wife willed the prop to someone else. State will automatically enact Dower and Curstey after a spouse dies. Until the death of the spouse, these legal life Estates are dormant or inchoate. Inchoate=just begun and so not fully formed or developed However, Arizona does NOT have Dower/Curtsey as they have Community Prop Rights

Severance

Opposite of Affixture, converting real prop to personal prop Moving your rosebushes from one house to another when moving

[General] Warranty Deed

Provides buyers most protection Most common type of deed in AZ

Under the rules of adverse possession what must a possessor be able to show?

That he/she was in hostile, visible, notorious and ongoing possession of the property - other words, out in the open.

Derivative Title

Title belonging to either a corporation, individual, or entity that was derived from the gov'ts original title

Color of Title

Title that has the APPEARANCE of good and valid title. In AZ, to claim adverse possession, 3 yrs of continuous use must be held and claimant MUST have paid taxes on the prop w/ record of pmt. If someone does NOT pay taxes, duration of continuous use in AZ is 10 yrs

Indefeasible Fee

Unable to annul, forfeit, or end the estate, especially if the owner is abiding by the laws

Estate in Remainder

Upon death of Life Tenant, prop will revert to 3rd party 3rd party could be an heir or another individual/entity Ex: Dad conveys Life Estate of laundromat to Tony. Upon Tony's death, prop remainderman, Kenny gets prop

Special Purpose Deed

Used to convey special circumstances: Ex's: gift deed, court ordered deed, court appointed deed (aka seized prop).

Patent

Used to transfer land from the govt to an individual for the first time.

Homestead

an owner's primary residence is protected from general creditors. AZ homestead protections = up to $150k in equity Equity exemption is to protect families and their homes during hard times

What is the maximum amount a single member from the general public can recover from The Recovery Fund: a.$25,000 b.$30,000 c.$40,000 d.$90,00

b. $30,000 is the max a single mbr from the general public can recieve from the Rcvry Fund. The Recovery fund will pay a max of $90,000 for every agent over their lifetime.

A bill of sale is usually used to convey personal property over the amount of how much a.$200 b.$350 c.$500 d.$1000

c. $500

How much money should be in the Recovery Fund in the Arizona Department of real estate at the end of the fiscal year: Select one: a.$300,000 b.$500,000 c.$250,000 d.$600,000

d. $600,000. If it falls below $600k by June 30, all agents renewing have to pay add'l monies to the Recovery Fund.

Fee Simple Conditional

inheritance of prop is limited to direct descendants only Aka "Fee Tail" NOT legal in AZ Used to be common to ensure land or prop stayed in the family. The "tail" is attached to body and cannot be separated Ex: whites not allowing blacks to own prop. Or owners not wanting wives of their sons to own their land, so conditional deed "for his sons only"

Fee Simple on Condition Subsequent

"Subject to a prohibited declaration in deed." Grantee is now bound to NOT do something to satisfy the deed Prohibited action/condition is placed in the deed; court action will be req'd to affirm deed restrictions Grantee still missing the control from the bundle of rights Key words: "If" "So long as" (negative statement) Ex: Parents will grant their child to own and use "as long as" the child can hold a job and doesn't drink alcohol. If the child were to drink or get fired, auto reverts to parents. (Think: don't press the red button!)

Habendum Clause

"To have and to hold." States the interest or the amount of the estate being conveyed (if it's less than fee simple). This clause specifies the owners rights and limitations on those rights, and is found in condos, patio homes, timeshares, etc. In a timeshare, this clause states what period of time or interval a user has

Why can't a Life Estate be devised?

Because you don't OWN it. You are missing the DEEP-C, you only have to rights to possess it for the duration of ones life, so if you "devise" it, that would mean you are leaving it in your will, which you don't have the rights to do.

Encumbrance

Burden or impediment on title

This is the weakest of all deeds as it offers the least protections to the buyer: a.Quiet Action Deed b.Special Warranty Deed c.General Warranty Deed d.Bargain and Sale Deed

d.Bargain and Sale Deed Bargain and Sale deed is a deed usually offered to a buyer from a Sheriff at time of mortgage foreclosure or other legal sale

Police Power

(Govt) Gives the state the right to create subdivision law Including Zoning. May require Economic Impact Rpt

Contract Rescission

-One party can back out under certain circumstances -Rescinding allows parties to go back to original starting pt as if they never made a contract -Ex: Before S had chance to review offer, B found another home and decided to rescind offer made to S

Regarding Government Rectangular Survey, how was the curvature of the Earth adjusted for?

-The curvature of the Earth inhibits truly straight lines, so they have gov't checks: areas where certain sections were cut or removed to accommodate the corrections of the curves. Gov't checks: area bound by 2 sides of the guide meridians and correction lines -Spaced 24 miles apart, these sections of land are called FRACTIONAL SECTIONS as they are only 24 miles x 24 miles, NOT the 36mi x 36mi standard. Fractional Sections: section of a township (6x6 = 36 sq mi) where corrections are confined to

Lot, Block and Tract

-Used to describe subdivisions -Assessor's ID #: indexing system for tax purposes -Plat map: specifies the smallest parcel of land that can be subdivided and sold -Tract: large piece of land ID'd in a survey -Lot: Invididual subdivided pieces of land w/in a tract -Blocks: Groups of lots commonly found w/in a subdivision

Capitalization Appch

-converting the income of a prop into an estimation of value -appraisers use this method for commercial bldgs -NOI of the rent collected / capitalization rate Cap Rate: NOI/ Mkt value When cap rate decreases, value of the prop goes up When cap rate increases, value of prop goes down

The appraisal

-is personal prop of whoever paid for it (usually the buyer) -The bank doesn't own the appraisal -Seller doesn't own the appraisal and are NOT entitled to see a copy -Shared only if the prop doesn't meet/exceed value -Sellers can ask B's for a copy but are not entitled to it

Affidavit of Value

-used to determine the tax assessments. -Recorded along w/ the deed in the country records. -Used to track prop values to aid the assessor in taxation -Signed by both buyer and seller to affirm validity

Condemnation is the process....

...Eminent Domain is the act

Records and Retention Rental agreements must be kept for: Financial records must be kept for:

1 year from expiration 3 years from execution date

List the 3 types of land descriptions:

1). Tract - large piece of land identified in a survey 2). Lot - individual subdivided pieces of land within a tract 3). Blocks - groups of lots commonly found within a subdivision

Whenever asked for an Annual Percentage Rate, and there are points involved:

1. Add up all of the points 2. Add that to the original rate 3. Divide that by the loan amount = new rate

Married couple Title options

1. Community Prop 2. Community Prop WROS 3. Tenancy by the Entirety

3 Types of Wills used to Xfer prop

1. Conventional Will 2. Holographic will 3. Nuncupative will Conventional will - signing w/ 2 witnesses. (Codicil-amendment to the will) Holographic will- handwritten signed and dated by its creator. no witness Nuncupative will- oral will

The most common type of deed in Arizona, the General Warranty deed, grants five covenants to the grantee. Name and define two of them...

1. Covenant of seisen - promises the owner has the right to convey, 2. covenant of quiet enjoyment promises that the Grantor will defend the grantee if there are ever any claims.

Agents NOT obligated to disclose:

1. Death (suicide, homicide, natural cause) 2. Haunted 3. Occupied by HIV/AIDS 4. Close to Sex Offender

When financing a purchase, what 2 instruments will AZ purchasers rcv?

1. Deed of Trust 2. Promissory Note (loan amt, rate, term, default triggers) The Note is the legally enforceable doc that shows the promise B made to repay the note. Promissory Note = loan document

Items in an SDR (Subdivision Disclosure Report) aka Commissioner's Rpt aka Public Rpt

1. Documentation to finance the prop 2. Plat map (Sub-d map) 3. Title 4. Certificate of Assured Water Supply if in an AMA 5. Permanent access to lots (roads, ingress, egress) 6. Clear Title 7. Wastewater disposal plan 8. Questionnaire 9. Physical feature of land (topography) 10. Owner condition of title 11. Status of improvements 12. Past law violations of seller etc

Types of Easements

1. Easement by Necessity 2. Easement Appurtenant 3. Easement in Gross 4. Personal Easement in Gross 5. Easement by Prescription 6. Party Wall Easement 7. Conservation Easement 8. View Easement Necessity - in AZ it's illegal to sell a prop that's landlocked, must have a recorded easement for access. Appurtenant - an easement that benefits one piece of land/prop, but detriment to another land/prop. Appurtenant=next to/attached to Prop that benefits = dominant tenement Servient tenement = one who has the detriment In Gross - benefits an individual or legal entity (utility companies, power lines, gas lines, etc). Most props have easements in gross on front or back of their land to allow utility companies rights to add/remove cables, plumbing, lines, etc. Personal Easement in Gross - benefits a person or entity instead of a parcel of land. Ex: homeowner cutting through someone else's yard to get to supermarket quicker, used w/ permission of the owner. Prescription - when someone in AZ uses someone else's land for a determined amt of time (10 yrs in AZ). Must be continuous use, adverse use (w/o owner's persmission/license), visible open and notorious (owner knows about it), tacking on time Party Wall - common items on a divided prop line (fence where both owners share responsibility, driveways, walkways) Conservation - owner promises the state to preserve portion of the land for good of public View - prohibits neighbors from blocking your view or removing anything that's part of the view (trees, landscape)

3 Types of Depreciation

1. Economic (external) 2. Functional (loss of usefulness, not easily changed) 3. Physical (wear & tear, can be corrected)

2 Types of Freehold Estate (Owner interest)

1. Fee Estates 2. Life Estates

5 Types of Fee Estates

1. Fee Simple Absolute 2. Fee Simple Qualified - some limits 3. Fee Simple Determinable 4. Fee Simple on Condition Subsequent 5. Fee Simple Conditional

4 Ways to End a Co-Ownership Interest in Real Prop

1. If Jt Tenants have ROS, any of the 4 units of PITT are broken, then that interest is gone for that owner and remains w/ the others 2. COURT can issue a suit to partition, to either split up prop or sell 3. Foreclosure/bankruptcy 4. Voluntary - all owners agree to end it (sale)

4 Criteria Determining Highest and Best Use of land

1. Legal permissibility 2. Financial feasibility (make profit) 3. Physical possibility (traffic, vis, etc) 4. Maximum productivity (max profit/rtn)

Math Q: When they ask what the actual interest rate is and how much interest per month they'll pay:

1. Loan amt * interest rate to find interest rate for 1st year 2. Add the amt of interest in 1st year + Origination Fee + Discount pt cost together [This is the yearly interest for Yr #1] 3. That's the yearly interest. Divide by 12 for monthly interest 4. Take Yr 1 interest from #Step 2 and divide by loan amt to get Annual percentage rate

3 Legal forms of land description

1. Metes and Bounds 2. Govt Rectangular Survey 3. Lot, Block, and tract

2 Tax Advantages of Seller Financing

1. No capital gains tax when selling the entire prop 2. Instead, S pays ORDINARY tax on monthly rcvd income

2 Types of Title Insurance Policies

1. Owner's title insurance: protects buyer. Seller pays to insure Seller isn't liable for future claims. If new owner incurs damages, the title company will defend the owner. 2. Lender's Title insurance: insures the lender against claims. Buyer pays for it. Common in commercial policies, covers the owner against more defects that may not have been found in prelim title search search reports

What are the two types of land use controls?

1. Police power (Govt) 2. Private Land Use Controls (Not Government)

8 protected classes in ECOA - Equal Credit Opportunity Act

1. Race 2. Color 3. Religion 4. Nat'l Origin 5. Sex 6. Age 7. Marital Status 8. Public Assistance dependence

The 7 protected classes under federal fair housing laws are:

1. Race 2. Color 3. Religion 4. Nat'l Origin 5. Sex 6. Disability 7. Familial Status RCR-NSDF

5 Land Use Controls

1. Residential 2. Commercial 3. Industrial 4. Agricultural 5. Special Purpose

3 Valuation Approaches to an Appraisal

1. Sales approach (aka mkt data appch) 2. Cost Appch 3. Income appch

AZ Succession hierarchy

1. Spouse 2. Children 3. Parents 4. Siblings 5. Nephews/nieces 6. Aunt, uncle, Grandparents 7. State of AZ

4 Items Lenders look at to determine credit

1. URLA (Uniform Residential Loan Application) Fannie Form 1003 2. Credit Score 3. Tri-merged credit report 4. DTI ratio

Items needed in a Deed of Trust

1. legal description of the prop being used as collateral 2. all the parties (trustor, trustee, beneficiary)

Capital gains formula

2 part formula! Essentially, the difference between net profit and adjusted basis Step 1: Cost basis (aka purchase price plus all closing costs) + Capital improvements (only new improvements, not amt spent on normal Mx) - minus adjusted basis (depreciation) Step 2: (sales price - costs to sell) - adjusted basis

Contractual Liens

2 parties have contracted to a lien Ex's: mortgages, deeds of trust Or using eqeuity in home to secure a loan to build a pool

Realtor members must completed ________ hours of ethics training within _____ year cycles

2.5 hours within 4 year cycles

To lower an interest rate by 0.5%, how many discount points would be required?

4 discount points will lower an interest rate how much... Each discount point will lower than rate 1/8th 1 discount pt = .125 2 DPs = .25 3 DPs = .375 4 DPs = .50 8 DPs = 1% Paying 8 DPs will lower the rate 1%

Mortg Foreclosure in AZ redemption period

6 month pd of redemption

Section vs Acre

640 acres vs 43,560 sq ft

Min amt of time to foreclose in AZ

90 days. 90 days minim from the date of default to the actual trustee's sale (auction)

Seller Financing Redemption periods before they forfeit/default

< 20% equity = 30 days 21-30% equity = 60 days 31-50% equity = 120 days 51%+ equity = 270 days Vendor will file a notice w/ the county to serve the Vendee by person or certified mail, delivered at least 20 days prior to actual forfeiture of the property. Publication to general public. If vendee pays up, vendor needs to file a Notice of Reinstatement saying they pd and will not forfeit their equity

What is the difference between a Fee Estate and a Life Estate?

A Fee Estate is property that is owned and is the highest form of ownership. Life Estate is where you can 'use and enjoy' the property as if it was your own, but lasts only for the duration of some one's LIFE.

Consent Order/Consent Agreement

A disciplinary action resulting from negotiation between the Department and the Respondent.

Does AZ have a judicial or non-judicial foreclosure process?

AZ has Non-judicial foreclosure process. Thank AZ = wild wild west, dont do courts and judicial. AZ has Deed of Trust Foreclosure Courts don't get involved between borrower & lender Trustee sale - public auction which is how the lender can foreclose Deed of Trust have 90 day reinstatement pd to pay back, before auction date, but no Redemption period in a deed of trust foreclosure

Community Prop

AZ is a CP state. Treats married couples as equal partners. Share bank accts, real prop, personal prop, etc Anything after marriage = CP One spouse can buy prop during marriage, but it becomes CP automatically Takes 1 spouse to buy, both to sell. both spouses must agree to sell. Sole and Separate prop = owned by 1 spouse Prior to 1995, each spouse could Will the prop to someone else without consent of spouse Encumber- obtain a loan against or hinder the Xferability of title

How can encumbrances be terminated?

Abandonment, Law, Recission by Grantor are examples of how it can be terminated.

Alienation

Act of Xferring real prop from one person to another Compared to "conveyance" which is the LEGAL process of Xferring real prop from 1 owner to another

AMAs

Active Mgmt Areas - 5 regions determined to be highly dependent on groundwater (tucson, pinal county, phx, prescott, santa cruz county). Subj to groundwater Code Developer must supply certificate of assured water - guaranteed for 100 yrs (could be underground water or man-supplied) Overdraft - when more groundwater is being used than being replaced

What is the difference between Constructive Notice and Actual Notice?

Actual Notice is where someone has knowledge of something because they can hold it, see it, feel it. Constructive notice is providing notice to anyone and everyone by usually publishing it in a general circulation paper. Notice to the general public.

Mediation vs Arbitration

All parties agree to a neutral 3rd party to resolve disputes/make resolutions More formal. A small court where all parties plead their side and the outcome must be agreed upon by all parties

ALTA

American Land Title Association - regulates the diff't types of endorsements. there are hundreds of endorsements and are one time charges at closing (reverse mortg endorsement, oil endorsement, enchroachment endorsement, etc)

Discount points vs origination points vs Temporary Buydown points

Prepaid interest that lowers the APR over the life of the loan (getting the interest rate lower). 1 DP costs 1% of the loan, and will decrease the interest rate by 1/8th % Fee borrowers pay to lender for the lender issuing the loan, processing it and underwriting it Paying upfront fees to a lender so the Borrower can receive a reduced interest rate for a set amt of time. (2-1 is a 2 yr reduced payment and rate) Year 1 is reduced by 2%, Year 2 is reduced by 1% Years 3-30 are fixed Can be pd by the buyer or more often by the sellers as an incentive to entice ppl to buy (common w/ developers or builders)

Yield Mx

Prepmt penalty in commercial loans

Sherman Antitrust Act vs Clayton Act

Prevent artificially rising prices (think of cartoon from PF class on gas prices) and prevent monopolies vs Prohibits mergers to create a monopoly

ROI formula

Profit from investment / cost of investment The higher the percentage, the better

Civil Rgts Act of 1866 vs Title 8 of Civil Rgts Act of 1968 vs 1974 vs 1988 Fair Housing Amendments Act

Prohibited discrimination against RACE ONLY Added: Color, Religion, Race, Nat'l Origin Added Sex R -> RRN --> S --> DF

Liens are paid first in time, first in line with two exceptions. What is one of these exceptions?

Property Taxes and Government Liens are always paid before anyone else.

Integration, Equilibrium, and Disintegration (Growth, Stability, Decline, and Renewal)

Property and values have life cycles: new build --> steady --> little improvements --> decline

Escheat

Property reverting back to the state when the individual dies w/o a will or heirs think (they were cheated out of their prop)

AZ Homestead Laws

Protects up to $150k of equity from forced sale due to a judgment. Automatic assumptions in AZ: 1. 18 yrs+ 2. Primary residence (not second home or rental) 3. Must remain a AZ resident (forfeited if moves out of AZ)

Quiet Title

Quiet title: establishes free and clear ownership of the prop, to resolve any defects or clouds found in a property title search. Quiet title clears up outstanding liens due to errors to correct a liens status

Lessee

Receieve-ee of the lease, tenant

Appurtenances

Rights that go along w/ the RE, occurring bc of attachment to the prop becomes PART of the prop. (satellite dishes mounted on to house, solar panels that have to transfer to new owner, window AC units)

In seller financing, who keeps legal title until loan is pd in full? Who gets equitable title?

Seller keeps legal title until loan pd in full Buyer/borrower gets equitable title Easy for seller to repossess/foreclose or take back the home.

Impound Acct

Set up and maintained by the mortg company to collect insurance and tax pmts on behalf of owner

Mechanics Liens

Specific + Involuntary + Equitable In AZ, a GC or subcontractor can place mechanics liens. 20 day notice prior to lien being filed Attached to prop where work was performed. Must be filed within 120 days (20 day notice + 100 days=120 days) Releases must be recorded within 20 days of lien being paid off

Lot Split

Split of 5 or fewer parcels. No public rpt req'd!

How to calculate Acreage in the legal description in: N 1/2, of the NE 1/4, of the SW 1/4 and SE 1/4 of the NW 1/4

Start with top, right to left: 4x4x2 = 32 Then divide 640/32 = 20 acres plus 4x4 = 16 640 acres/16 = 40 acres 20+40=60 acres

Underground rights

Subsurface rights: anything under the ground you own is yours to keep, and is real prop. It's possible to split off one's underground rights to sell or lease it out. If you sell, you no longer retain the rights. if you lease, you keep the rights.

Doctrine of Prior appropriation

Surface water rights are given to those who have historically used the water in a certain area First in time, first in line Surface water rights must be Mx'd every 5 yrs min. If it's not used in 5 yrs, rights revert to the State

If the prop has a domestic well, it should be noted in SPDS. The SPDS will rpt if the well is registered, to whom, and ownership interest typeWhat should I advise my buyer to do:

Tell buyers to verify existence of recording, location, and ownership, all via the ADWR website. Also have the well water tested. There's $30 Well Xfer fee - negotiable

Bargain and Sale Deed

Weakest protection for grantees bc it only warrants that the grantor has the right to convey the prop, and that the prop is free from encumbrances, except those already ID'd in the deed. Most deeds obtained from Sheriff's sale, Tax sales, Foreclosures, will come with Bargain and Sale deeds

Tack On

When a squatter uses someone else's previous adverse possession time to include their time for the adverse possession

Lead Based Paint disclosure due _____ days after contract SPDS - S Prop Disclosure Stmt due ______ days after contract CLUE rpt - covers the last ____ yrs of insurance claims

due 5 days after contract due 3 days after contract 5 years of insurance claims

Intestate

dying without a will. Probate courts appoint a rep to act as the administrator of the estate

Salvage/Residual value

estimated value the asset will have at the of its useful life

Water Quality Improvement Act of 1970 vs Water Pollution Ctrl Act Amendment 1972

expanded fed govt's authority over water resources in the nation Intent was to reduce pollution in waterways, esp where it could endanger humans vs Clean Water Act - gave UPA authority to regulate industrial byproducts dumped into waterways, wetlands, etc

2 Types of Freehold Estates

fee estates and life estates

Fair Housing Logo/slogan must appear ____

in all forms of advertising from an agent (include in biz card)

Plottage (assemblage)

increasing the value of smaller parcels by combining them into 1 larger group (to increase the value, u combine small properties into one)

Net Listing

Bilateral Principal will sell when agent brings a buyer and gets pd Illegal in a lot of states BUT LEGAL IN AZ Seller allows agent to sell the prop for any amount OVER what they are willing to NET. the rest is all commission to agent Rare bc easy to cheat

Exclusive Right to Sell (ER)

Bilateral agreement Most common Agent pd no matter WHO finds buyer

Assessor's Identification Number

indexing system for tax purposes

Block-busting vs Redlining

influencing the decisions of homeowners to buy or sell based on FEAR of an ethnic or social change Refusing to issue insurance policies or make loans on a particular area. Red lines around areas on map knowing they would deny applicants

Elevation Certificate

insurance certificate used to provide elevation info to ensure compliance w/ community floodplain mgmt ordinances to determine the proper insurance premium rate

Govt Check

area bound by the 2 sides of the guide meridians and correction lines. 24 sq miles divided into 16 townships

Open areas

areas outside of AMAs Not as protective, but it's an advisory program for consumers to ensure buyers know of water supply limits

Agent Zed just received a commission in the amount of $12,900 for the sale of his clients land. The settlement statement described the parcel as Township T4S, R1W, section 9, the NW 1/4 of the S 1/2. The settlement statement also stated the commission rate was 5%. What was the sales price per acre? a.$4400 b.$3225 c.I have no idea. d.$1990

b. $3225 There are 80 acres in the property. (2 x 4 equals 8, 640/8 equals 80 acres) The commission earned of $12,900 / .05 equals $258,000 total sales price. If the sales price is $258,000 for the 80 acres, each acre sold for $3225

When you took a listing on a home in Casa Grande, you found out that the solar panels on the roof of your clients home must be transferred to the new owners because they are: a.Leasehold b.Appurtenant c.Fee Simple Absolute d.Freehold

b. Appurtenant Appurtenant means they run with or are attached to the real property which is the house.

When you took a listing on a home in Casa Grande, you found out that the solar panels on the roof of your clients home must be transferred to the new owners because they are: a.Leasehold b.Appurtenant c.Fee Simple Absolute d.Freehold

b. Appurtenant Appurtenant means they run with or are attached to the real property which is the house.

What would happen if someone were found to be operating as a real estate agent in the State of Arizona without being duly licensed? a. Their commission would be confiscated b. Civil penalties could be issued against the offender c. A temporary retro-active license could be granted with the permission of the Commissioner d. Parties could enact a suit for specific performance

b. Civil penalties could be issued against the offender

Husband and wife had a mortgage in Arizona and defaulted after making 112 monthly payments on a 15 year loan. This was their primary home and the money borrowed was used as purchase money. The statutory redemption period is how long for the husband and wife? a.120 days b.180 days c.90 days d.270 days

b.180 days There is a 6 month Redemption period on Mortgages foreclosed in Arizona (Look for the word Mortgage and Arizona, there is not a reinstatement period)

Broker Stan is the Designated Broker for Stealin Stans Realty. He instructs all of his agents to place clients Earnest Monies into the companies' trust fund to be held during the escrow period. Stan also uses that same trust fund to pay the commissions and operating expenses for the brokerage. This is: a.Commingling b.Conversion c.Mixing d.Fraud

b.Conversion This is conversion due to the fact that Stan has spent the money after commingling it into his general account

Key Terms found in Title Policies

Bona Fide Purchaser: rights to retain ownership of prop against someone else's future claims Innocent Purchaser: no reason to suspect any problems w/ prop Subrogation: Title companies clause that gives the title companies the right to take legal action against 3rd parties responsible for their losses for which a claim has been paid. (the title comp can recoup the losses they pd to protect the new buyer)

Package loan

Borrower borrowing for purchase of real and personal prop Ex: buyer buying farm (land) and equipment (personal)

Title Theory States on equitable and legal title

Borrower has equitable title (financial interest in the prop). Borrower has rights to enjoyment, exclusion, possession, ctrl Lender has legal title (disposition). Lender holds some legal rights until mortgagor satisfies terms/obligations. Lender gives full rights (title) to borrower once all pmts made. [[Diff b/w this and lien theory: In lien theory, borrower AT COE holds LEGAL title! allows lender to merely put a cloud on title as first position.]]

Mortgagor vs Mortgagee

Borrower. GivOR of the mortg pmts Lender. ReceivEE of the mortg pmts

Metes & Bounds

Boundaries reference points, distances and angles. -Pt of Beginning: Both the start and end point -METES: distance and direction term -BOUNDS: Boundary description (creek, river, etc) -MONUMENTS: refer to points term (natural pts like trees or markers that are placed in the ground) Think old timer. Go out to that tree and go West until the river.

BPO

Broker Price Opinion: Used when a financial inst chooses to forego the expense and delay of a professional appraisal and it's quicker and not in depth

Designated Broker Duties

Broker must review any and all ctrcts, offers, leases or addendums within 10 days from execution to look for errors or omissions Supervise activities of licensees; hire/fire licensees; sign commission checks; sign on the trust acct or PM trust acct

Broker Advertising

Broker's name must be clear and predominant in ads (no abbreviations) On websites: employing broker must be visible on 1st pg w/o scrolling down "For Sale" Signs on a prop must have owner's permission IN WRITING

Vendee forfeit

Buyer gives up equity due to nonpayment, in seller financing Xaction

The main obligations behind using standardized disclosure forms in the real estate transaction would be: a.Disclosures should protect the interested parties b.Disclosures should protect the public c.Protect the agents d.Protect the sellers

b.Disclosures should protect the public Anytime you see an ANSWER to protect the public, this is usually the ANSWER as is the case here, we want to protect everyone

The IRS has the power to lien both personal and real property. This is what type of encumbrance? a.General, specific, involuntary b.General, Involuntary, Statutory c.Specific but involuntary d.General but involuntary

b.General, Involuntary, Statutory The government has the right which is law or (statutory)... To place liens against all of your property= (general) And you don't want it so it's (involuntary)

Which party in a transaction can claim a loss as a result in a title defect? a.Grantor b.Grantee c.Listing Brokers d.Lessor

b.Grantee

James signed an option to sell a piece of land to Hank. The option was for 18 months and was never recorded. James died 10 months after the option was signed and his heirs decided to sell the land to an investor. What rights does Hank have? a.Hank can sue the investor who purchased the property b.Hank can sue the heirs who sold the property as they represented the estate of James c.Hank can file a judgement lien against the property d.Hank can not do anything since James died

b.Hank can sue the heirs who sold the property as they represented the estate of James

Which of the following reasons could be a reason why a salesperson would not be eligible to become a designated broker in the State of Arizona? a.Does not have a college degree or higher b.He or she is not yet 21 years of age c.Previous ethics complaints d.He or She is Not a Realtor

b.He or she is not yet 21 years of age A salesperson must have at least 3 years experience in order to be eligible to become either an associate broker or designated broker. So if a salesperson obtained their license at 18, add three years to be a minimum of 21 years before being eligible.

When the IRS is owed money and takes it from personal property, this is referred to as a: a.Repossession b.Levy c.Collection d.Impound

b.Levy A levy is when somebody imposes or brings against you a claim for something owed.

Which appraisal is the only method allowed to determine the value in LAND? a.Cost Approach b.Market Data c.Factual Data Approach d.Comparison Value Approach

b.Market Data

During the beginning phases of a new development, the developers research had found the existence of expansive soils. Where must a developer disclose what is now known about the conditions of the soils in this development: a.Not required b.Subdivision Public Report c.Advertising materials d.ADEQ website

b.Subdivision Public Report The public report is the information and disclose packet provided to buyers that describes the property

What are the terms for a contract to be valid?

COLDSIC Competent Parties Offer & Acceptance Legal purpose Description Signed In Writing Consideration (love, trade, $)

Superior Liens

Can be attached to both the prop and the person Judgment liens, Income tax liens, deceased estate lien. All general + involuntary + statutory

3 types of bankruptcy

Chapter 7: shortest time span (months); trustee appt'd to administer; liquidate of all unsecured debts (CC, medical); since it wipes out ALL loans, no more 1st lien or Jr lien Chapter 11: Allows restructuring of debt to pay BACK OVER TIME; common for Biz not individs; no limit on time to repay Chapter 13: Repay debt over 5 years; catch up on mortg, or erase Jr liens from prop; pay back some or all of the debt w/ re-payment plan

2 Other terms for "Subdivision Disclosure Report" (SDR)

Commissioner's Public Report Public Report - comprehensive public report to protect the public

Sales Approach/Market Data Approach for Apparaisal

Compares recently sold props to the subject. Subj vs comps. (The comps are adjusted for value, not the subj) **When Comps is Inferior you Add** (C.I.A) **When Comp is Better you Substract (CBS) ** Substitution = cost of acquiring an equivalent substitute prop that has the same use, design and income Most common method of appraisal for residential props and income producing props This is the only type of appraisal that can be used when appraising land

COLDSIC

Components of a Valid Contract C - Competent parties/Capacity O - Offer & Acceptance L - Legal purpose D - Description (legal description) S - Signed I - In writing C - Consideration

CERCLA

Comprehensive Environmental Response, Compensation, and Liability Act Refers to geographic zones in the US contaminated by hazardous waste, ID'd as cleanup sites by EPA Public health concerns. Responsibility of cleanup falls on owner who created or knew about illegal practices.

CLUE

Comprehensive Loss Underwriting Exchange Home insurance companies contribute claims history info to a database, underwriters use the info in a CLUE report to insurance policies, AZ ctrcts now state that a copy of the CLUE report must be given to buyers Sellers have 5 days after contract to furnish buyer w/ CLUE rpt. Helps buyers understand history of a home before they buy

Deeds

Conveys ownership of real prop. Must be Signed, Sealed, and Delivered Signed only by Grantor. Grantee does not need to sign

Hereditaments

Corporeal (real prop) and Incorporeal (personal prop) Corporeal: REAL prop that is inheritable/handed down -a permanent tangible object that can be seen and handled (attached to the land, bldgs, trees, rivers) Incorporeal: PERSONAL prop that is inheritable/handed down -Intangible objects (rights, patents, royalties, easement, copyrights, intellectual prop)

The 4 C's of lending/credit

Credit Collateral (appraisal) Character (past history) Capacity (financial means to pay all their loans)

Formula for Assessed Value (AV)

Current Market Value x Assessed Ratio MV x AR

Full Cash Value equation (what county thinks ur prop is worth) Assessed Value equation (specific to AZ - reduces the effect of inflation on prop taxes)

Current Mkt Value x Assessed Ratio Mkt Value x Assessed Ratio

Which is a subagent: a.The attorney who also holds a real estate license and is representing their own client in a transaction b.The attorney who hires a property manager to manage the clients property c.The attorney representing a trust d.The attorney representing a seller who is out of state

b.The attorney who hires a property manager to manage the clients property The property manager would work for the attorney, who in turn works for the client, so this is subagency

A seller must disclose all known defects, but the buyer must do what? a.Sign a receipt of the sellers disclosure reports b.Their own due diligence and inspections c.Nothing as it is up to the seller to disclose d.Provide evidences of their findings to the escrow company

b.Their own due diligence and inspections Buyers must do their own diligence and inspections during their inspection periods

A broker verbally agreed to list a neighbor's house for sale and put the house in the local MLS and promised to get the agreements to the sellers soon. What is the status of this listing? a.Enforceable b.Void c.Rescinded d.Valid

b.Void The listing is Void as there were no signatures attesting to the parties intentions

Under the Arizona Landlord Tenant Act who is responsible for making repairs? a.The Landlord b.Whoever is on the lease that was agreed to by both parties c.The Tenant d.The Property Manager or Property Management Company

b.Whoever is on the lease that was agreed to by both parties

During a sale of a farm in Kansas, the owners of the farm included in the sale the tractor and the plow. These items would be considered: Select one: a. Transferable b. Real Property c. Chattle d. Intangible Property

c. Chattle

All of the following are required to have a real estate license in Arizona except: a. Timeshare sales b. Out of state agents who do only 1 transaction in Arizona per year c. Property manager who manages only 1 property for someone else d. Real estate auctioneer

c. Property manager who manages only 1 property for someone else

Which of the following would be an example of Personal Property: a.courtyard water fountain b.A Satellite Dish mounted on the roof c.Rolling Garage shelves d.Landscape lighting

c. Rolling Garage shelves. They are the only things not affixed to the house

Property Taxes are what type of lien? a.Voluntary b.General c.Specific d.Both A and B

c. Specific Property taxes are specific to the property and are involuntary

A seller would want to be able to prove that they have Marketable Title in order to show what? a.The ability for the general public to view recorded liens on the property b.The ability to transfer their real property to the escrow company c.The ability of the escrow company to provide a title insurance policy d.The ability of the sellers or agent to market the property to others

c. The ability of the escrow company to provide a title insurance policy Title insurance is the best protections for a buyer so that is proof or protection that the title is good.

Which of the following would not be considered part of the land? a.Cotton b.Gold c.Title d.Minerals

c. Title. Title is used to convey ones ownership in land, it's not PART of the land.

What is the purpose of an Impound Account? a.Seller deposits keys for escrow to hold onto until transfer of ownership b.Hold commissions on behalf of agents c.To collect upfront money used to pay buyers taxes and insurance d.To Hold the buyers Earnest Money

c. To collect upfront money used to pay buyers taxes and insurance During escrow, the lender would ask for prepaid money to be collected from the borrower for future taxes and insurance, which is held in this impound account for future use by the lender. Earnest money goes into Escrow. Buyer's taxes and insurance = go into Impound Acct

In a state where Trust Deeds are used, who has the right to sell the property in case of foreclosure action taken? a.Original Lender b.Grantor c.Trustee d.Beneficiary

c. Trustee (lender) The trustee was given the rights to sell in the form of legal title by the borrower or trustor

A married couple bought their family home outside of Flagstaff in 1989 for $330,000 and then when they decided to sell, the house was in rough shape since no maintenance had been done on it. The best offer that they received was $225,000 in 2018. They closed on the sale and paid out a total of $15,000 in seller fees. What is their combined tax liability? a.Tax loss of $90,000 b.Tax loss of $105,000 c.Zero d.Not enough information to determine the ANSWER

c. Zero There wouldn't be a tax loss on a personal residence

Which type of person would most likely receive a cease and desist notice from the commissioner of the Department of real estate in Arizona: a. the designated broker b. a licensed agent employed by the Dozen a broker c. an unlicensed property manager on behalf of multiple properties d. any member of the General Public who is selling their own home

c. an unlicensed property manager on behalf of multiple properties

An HOA can foreclose for failure to pay dues or assessments but the minimum owed must be at least how much? a.$900 b.$280 c.$1200 d.$500

c.$1200 HOA's can foreclose on homeowners If the Ho is owed $1200 or more and back assessments, not penalties and fines but only assessments owed

Who has the capacity to act while the Designated Broker is gone for a period of more than 24 hours but less than 30 days: a.Licensed Broker from out of State b.A State Appointed Designated Broker c.Associate Broker d.All of the Above

c.Associate Broker

Different lenders may require different Title Policy Endorsements. In addition, sometimes builders or even communities may want or need a title endorsement. Which of the following would best describe what endorsements would commonly do? a.Ensure the seller will pay for any damages caused by fraud b.Provide an endorsement of the properties condition c.Be tailored to fit the specific needs of the seller or lender d.Designed to protect the lender in case of fraudulent sale

c.Be tailored to fit the specific needs of the seller or lender Endorsements are add-ons or subtractions to a title insurance policy to protect against predetermined defects.

The Smart Family moved into a rental house on March 5th after signing a lease for 1 year. On July 13th, the landlord was served with a notice of foreclosure. In Arizona, when is the last day that the landlord must notify the Smart Family? a.July 31 b.June 1 c.July 18 d.July 16

c.July 18 The owner must notify the tenants within five days of the foreclosure notice

The biggest reason why banks don't typically lend money on Co-Ops is due to the fact that: a. The sellers don't have any input as to how the board is run b.Owners don't have any form of ownership in the corporation c.Owners have a proprietary leasehold interest in the building d.The prices are not determined by fair market

c.Owners have a proprietary leasehold interest in the building

A lumber yard didn't get paid from the framing contractor who was hired by the General Contractor. They have how long to file a lien on the property where the material was used? a.90 days after the invoice was first sent b.90 days from the date the work started c.They can't file a lien as a supplier of materials used on a job d.90 days from when the material was dropped on the site

c.They can't file a lien as a supplier of materials used on a job A supplier to a subcontractor Will not have any legal rights to file a lien

A buyer at an auction of a foreclosed property in Arizona would obtain what type of deed if the beneficiary was the lender? a.Auction and Sale Deed b.Beneficiary Deed c.Trustees Deed d.Deed in Lieu

c.Trustees Deed

An Easement is what type of encumbrance? a.Beneficial to all b.Involuntary c.Voluntary or Involuntary d.Voluntary

c.Voluntary or Involuntary

Brownfields

contaminated industrial or commercial sites that may require environmental cleanup before they can be redeveloped or expanded

Which ones of the following examples would not be eligible for a designated brokers license? a. A sales person who has been working in Arizona Real estate for 4 out of the past 5 years b. A 21 year old who has had their license but does NOT have a college degree c. A law professor who has been working for a land broker since 2015 as their licensed sales agent d. An out of state licensee who had a brokers license last in 2017

d. An out of state licensee who had a brokers license last in 2017 A person must be 21 or older, have at least 3 years experience as an agent, pass Brokers education courses, take the brokers mgmt courses, pass the Brokers State exam, new fingerprints and disclosures. Residency does not matter - an out of state applicant can in fact apply if they meet the same criteria.

Which of the following could not be depreciated: a.Commercial properties b.Rental properties c.Investment REIT owned Properties d.Land

d. Land Land will ALWAYS have inherent value, therefore cannot depreciate it

When the sheriff acts as the grantor, which financing instrument was used? a.Deed of Trust b.Land Contract c.Promissory Note d.Mortgage

d. Mortgage A sheriff will be the grantor of a deed when the JUDGE declares the property foreclosed due to non payment to the mortgagee, so this is a Mortgage. (Judicial foreclosures are always used with Mortgages) Think: sheriff = more roudy ppl - Northeast - mortgage Sheriff workign with judges. Judges needed in NE states - mortgages

A seller of a property has a collection of garden potted plants in their courtyard and they are all very heavy cast concrete pots. In addition, they are all on a drip system and timers for the sprinklers. What will convey in the sale? a.Only the Plants can convey b.The pots and the plants would convey c.Neither the pots or plants would convey d.This must be decided and agreed upon by both parties

d. This must be decided and agreed upon by both parties

A land owner who uses his land to graze cattle allows other cattle rancher to use his land also. One day, the neighboring rancher proposes that he be able to use the land exclusively for the next 3 years, and is willing to pay the land owner for these rights. The owner of the land want's to discuss it with his business partners. What might the neighbor offer as an enticement to the owner and his partners? a.A legally recorded easement b.A notarized letter or intent c.A formal offer to purchase d.A monetary deposit

d.A monetary deposit The neighbor is the GIV-OR of the option, and in that case, he would offer some form of consideration to the OPTION-EE to reserve his options and prevent anyone else from taking this from him.

A title policy underwriter discovers a defect in the chain of title and they can't seem to find where a previous owner ever signed the deed to the current owner. This defect would cause what potential action? a.A title policy could be issued but would have a defect note b.The new buyers of the property would need to clear the defect c.A cloud was found and can be easily cleared by the title company d.A title policy most likely won't be issued

d.A title policy most likely won't be issued

By recording the deed, owners are giving what: a.Factual Notice b.Actual Notice c.Restrictive Notice d.Constructive Notice

d.Constructive Notice

In the State of Arizona, who can determine the mental capacity of a grantor when it comes time to transfer, sell or deed real property? a.Special Counsel b.Grantor Attorney c.Heirs to the Grantor d.Courts

d.Courts Only the courts can determine a personal mental state or lack thereof in the State of Arizona

A fee simple absolute estate is an estate where it is almost impossible as long as the owner abides by all legal rights to be forfeited or given up. This is because of: a.Action Estate b.Determinable Estate c.Defeasible fee estate d.Indefeasible fee state

d.Indefeasible fee state

HOA's may not be able to enforce the illegal paint color change on a property that was sold 2 years ago due to what? a.Statute of Limitations b.Fault c.Languish d.Latches

d.Latches Latches is the term used to describe the failure to assert one's rights and timely fashion. Latches = failure to assert your rights in the right amt of time.

The owner of a duplex lives in one unit and rents the other unit to a tenant. The tenant who always paid late overstayed the expiration of the lease and refuses to leave. A week later, he pays the owner rent which is then cashed. This is a: a.Special Eviction Exception b.Estate at Sufferance c.Estate for Expired Duration d.Periodic Estate

d.Periodic Estate A periodic a state was created when the landlord accepted the money which was good for a period of one month . This state will continue on a month to month basis unless one of the either tenant or landlord provides notice to the other of the termination of the lease.

A change in zoning directly across the street would be a potential : a.Zoning Encumbrance b.Monetary Encumbrance c.Non-Monetary Encumbrance d.Potential Encumbrance

d.Potential Encumbrance The change in zoning across the street might affect the sales price or the sale ability

The city and state have been provided the power to encumber your property by taxing the owner of each parcel of land. Even the smallest parcel of land is taxed. What type of encumbrance is this? a.Specific, Voluntary and Statutory b.General, Involuntary and Statutory c.Specific and Voluntary d.Specific and Involuntary

d.Specific and Involuntary Property tax liens are specific to an individual property and they are involuntary because the owner does not ask for them specific=one prop, not all ur props

The newly licensed agent from Sunshine Realty has a client who wants to make an offer to purchase a property after a week of showings. Agent Sally would most likely use forms from what source: a.The National Association of Realtors b.State Licensing authority c.Her Broker d.States Real Estate Association

d.States Real Estate Association These forms would usually be provided by the state's Association of Realtors. In Arizona, this is the Arizona Association of Realtors®

Governments can levy liens against a deceased person's estate. These are: a.Recorded at time of death b.Voluntary c.Creditor Liens d.Statutory

d.Statutory

Which of the following is not a material fact relating to the sale of a commercial lot listed for sale with your brokerage: a.The soil condition report b.The proximity to a superfund site c.The ownership is in the name of an LLC d.The potential zoning change request

d.The potential zoning change request A potential zoning change request has not happened yet, and may not, so this is not a fact but a hypothetical

Of the following parties listed below, which one does not receive monthly payments? a.Beneficiary b.Mortgagee c.Vendor d.Trustee

d.Trustee The trustee holds legal title, or the right to dispose/sell in case of default. They aren't receiving the monthly payments directly. Even tho trustee = lender. the beneficiary is the one who receives the pmts since the lender acts as both trustee and beneficiary

5 legal rights that make up the bundle.

DEEP-C: D - Disposition (owner can dispose of it) E - Enjoyment E - Exclusion (right to exclude others from using the land) P - Possession (w/ legal title) C - Control (under legal circumstances)

4 Components of Land Value

DUST D-emand U-tility (highest & best use) S-carcity T-ransferability

What is the difference between A Deed and Title?

Deed is the paper proof of ownership, like a receipt, while Title is a concept of who owns the property

LTV

Describes size of loan compared to value Lenders use LTV to determine how risky a loan is. Can be used to approve loan and MI Loan amt/ prop value = LTV Ex: $144k / $180k = 80% LTV

Subdivided Land

Divided into 6 or more parcels at less than 36 acres/each parcel Public report req'd! Commissioner responsible for the land

Unsubdivided Land

Divided into 6 or more parcels with each parcel between 36-159 acres/each parcel No public report req'd. (Think Wild wild west, lot of terrain)

Disclaimer Deed

Document signed by one spouse prior to the other spouse acquiring property in order to prevent it from becoming community property.

Where does earnest money, DP $, and other advanced money like lot reservations, go when selling subdivided land?

Earnest money, DPs, and other advanced money are paid directly to Seller and NOT put in neutral escrow acct. Holds are maxed at $5k RE Agents MUST ensure Buyer gets copy of SDR because if they don't, agents can lose their license.

Easement is a type of

Encumbrance. A right to use someone else's prop (like cross over it for egress, landlocked prop)

ADRE

Established by the Legislature to provide the Real Estate Commissioner with such recommendations as it deems necessary and beneficial to the best interests of the public

Freehold estate

Estate which is "free from hold" of any entity. Owners of real prop have freehold interest in an estate which signifies that the bundle of rights belong to them. (Freehold interest is far more powerful than Leasehold interest that renters get) Freehold estate = owners Leasehold estate = renters

Exclusive Listing

Even though listing is signed, it's exclusive only if the listing is NOT put into the MLS. Once on the MLS, it's not exclusive Doesn't offer a buyer's agent commission - it's up to the listing agent alone to find the buyer and get the commission Compensation to buyer's agent: IF another broker brings a buyer, it's up to the agents to agree before the offer is submitted to a commission

Excess Money Bid

Excess funds belong to the foreclosed borrower

AZ homeowners have mortgages. T or F

False. AZ = deed of trust state. no mortg

Fee Simple Qualified

Fee Estate (inheritable estate) with some limitations. The limitations placed upon the estate are created at the time of granting Action or inaction, something happening or not happening can cause it to annul (be voided) Limitations or conditions SHOULD be in writing Defeasible: can be terminated if certain criteria are met Annul: to declare invalid/void

Promissory Note vs Mortgage/Deed of Trust

IOU (Doc says they promise to repay) Doc pledging/hypothecating prop as collateral/security for the loan

Absence of Designated Broker

If DB is unable to act within 24 hrs, DB may designate a licensee under the DB or another DB to act on broker's behalf. Must be in writing and may not exceed 30 days. That salesperson or other DB can do ANY of the DB duties (oversee contracts, sign checks, etc), EXCEPT for hire&fire A Salesperson may act as a branch mgr or limited broker Temporary broker: when DB dies or is incapacitated, not need to be licensed in AZ, period fo 90 days, can be extended up to 15 months. wraps up all biz the broker had at the time

When are prop taxes due? And other AZ state dax months

If you owe more than $100 in prop taxes, you can pay in 2 installments: first pmt: due Oct 1 2nd pmt: due Mar 1 in arrears - - - - - - - - - - - - - - Oct - due Nov - delinquent March - due May - delinquent Sept - delinquency notices sent Feb - tax lien sold at auction ONMMSF - Oh no, more money send funds!

Rescission timeframes

Improved land = no rescission Unimproved land: If B inspected it= 7 calendar days If B did not inspect= 6 months

Deed of Reconvyance

In Deed of Trust states where buyer has paid in full and repaid the deed. (Same as Satisfaction of Mortgage for mortgage states)

What is the difference between an Implied Contract and an Express Contract?

In an Implied Contract, both parties assume a contract based upon their ACTIONS while, Express Contract is an exchange of promises either ORALLY OR IN WRITING implied = actions express = oral/in writing

Clouds on title are resolved by...

Initiating a quit claim deed, or, Commencement of action to quiet title Quiet title: establishes free and clear ownership of the prop, to resolve any defects or clouds found in a property title search. Quiet title clears up outstanding liens due to errors to correct a liens status

P.I.T.T.

Joint Tenancy (2+ ppl holding title) Possession - all owners hold the entire prop (undivided ownership), cannot divide prop Interest - all owners have equal % ownership Title - only 1 deed that has all membr names (rights of survivorship) Time - cannot add more mbrs later One owner can still sell their interest in the prop to someone on the outside, but that new owner will not have PITT. Instead, they will be a Tenant in Common with the others, not Joint Tenancy LLCs or entities cannot take title as Joint Tenants (WROS). Corporations can't die, only people do so only ppl can get WROS

Timelines of how long brokers have to keep the following: 1. Hiring, severing, renewing licensees 2. Closed files 3. Rejects contracts that didn't close Where must they be maintained?

Keep for 5 years Keep for 5 years Keep for 1 year At the employing broker office in AZ or off-site storage location if broker provides written notification of the address to the Dept; or electroincally if provide written notification to the Dept

Other terms for "seller financing"

Land Contract Contract for Deed Agreement for Sale

Anti Deficiency Laws

Lender cannot take further axn against a debtor if foreclosure did not cover the entire balance of the loan that the lender was owed. Lender is SOL if the prop at foreclosure didn't raise enough money to cover all of lender's $ into it. don't go after the borrower.

Lender's credit bid Deficient Bid Subordination Non-disturbance

Lender gets a credit for the amount the borrower owed after putting it up for bids. When foreclosing lender submits a written bid less than the amt owed. Foreclosing lender may elect to sue the homeowner for the amt of the deficiency Lenders want to be in 1st place lien but if a lender agreed to "subordinate" their position, it would mean taking a subordinate loan to a new lender Ensures a tenant will not be evicted if the landlord goes bankrupt

Cancellation of Debt

Lender is req'd to rpt the amt of Cx'd debt to borrower AND the IRS on 1099-C Used to forgive debt $600 or greater, which can result in taxable "income" to the borrower

Which states use Deeds of Trust

Lien Theory states. (AZ! No mortg!) Borrower has legal title (the deed) [and can sell the prop] Lender (TRUSTEE) has a recorded Lien against prop Lender holds equitable title

Statutory Liens

Lien placed bc of an act of law. Aka involuntary liens. (Taxes, special assessments)

Liens vs Encumbrances

Lien: monetary or financial claim placed against real prop. Ex: HELOC Encumbrance: much broader than liens. Any sort of claim against real prop, could be monetary or non-monetary. Ex: Recorded easement, license granted to someone else to use the prop, deed restriction that runs w/ the land All liens are encumbrances. But not all encumbrances are liens.

Estate in Reversion

Life estate that ends upon death of the Life Tenant and reverts back to the grantor/grantor's heirs Ex: Dad conveys life estate of laundromat to Tony Martinato. When Tony dies, prop reverts to Dad or mom/me/kat.

Dower

Life estate the wife has when her husband dies. Designed to protect the wife specifically in a marriage to keep the home of her husband even if she did not own it, she is allowed to stay until her death. *Even if the husband devised the prop to someone else!*

Equitable Liens

Lis Pendens (written notice that a lawsuit has been filed) Notice is usually filled in the county land records office Alerts potential buyer that the title is in jeopardy

Sheriff's Deed

Little protection to the buyer, Used to convey ownership as an act of law Granted by courts in a judicial foreclosure (rare in AZ)

Subject To

Loan stays in seller's name Buyer gets deed and ctrls prop Buyer makes mortg pmts, but Seller still repsonsible for loan

When is a public report not req'd?

Lot splits (5 or fewer parcels). But that's not a way to game the system by splitting fewer than 5 multiple times as opposed to one split into 6 or more (at <36 acres each)

Plat Map

Lot, Block, Tract Lot - Individual subdivided pieces of land w/in a tract Block - Groups of lots, commonly found w/in a subdivision Tract - Large piece of land ID'd in a survey

Disputes about what is real prop (and therefore conveying) can use the MARIA test:

MARIA Test: M - Method of Attachment (how is it attached? plugged in? or nailed down?) A - Adaptability (was this item made specific for the home?) R - Relationship (who installed them: tenant vs owner? Will it be taken when lease is over?) I - Intent (was it intended to be part of the property, or was it intended to be temporary?) A - Agreement (Was there a specific agreement in the lease/sale?) *Declare these on all disclosures to avoid surprises*

Flood Ctrl Act 1969 vs Nat'l Flood Insurance Act of 1968

Made it mandatory to disclose to buyer before paperwork signed, in writing vs FEMA (Fed Emergncy Mgmt Admin) directed flood insurance

Community Property WROS

Married couples only after 1995 Allows married couples tax benefits and avoids probate PITT Deceased spouse's interest auto goes to other spouse CPWROS is assume dmethod for married couples in AZ 1 spouse can buy prop and keep separate after marriage, but must have disclaimer or quit claim deed signed by other spouse.

Asbestos

Microscopic fibers that were once used in construction materials like insulation, flooring, roofing. Cause cancer and fibromyalgia Asbestos ban in 1989 - asbestos no longer manufactured in bldg materials, however asbestos-based materials are still in use "popcorn" CIGs Professional remediation

A property owner fails to pay their real estate property taxes and a statutory lien is place on the property. What type of encumbrance is this?

Monetary, judicial, involuntary lien

Income Ratio Debt Ratio

Monthly housing expenses/ monthly gross income All housing expense + all other monthly expenses / monthly gross income The lower the better, the more you can borrow

Special Warranty Deed

Most commonly used by LLCs, corporations, trusts, builders, bc it limits responsibility of claims to only the period in which the LLC, etc owned the prop Same rights as the General warranty, but only responsible for when the grantor owned that prop

Is a lease usually recorded? Why or why not?

No, Most common residential leases are not recorded as the estate "reverts" back to owner. Commercial, Retail, Mineral, Gas, Oil and even some residential leases for longer periods of time are usually recorded to give the public notice.

Are E&O insurance policies mandatory in AZ?

No, but recommended.

Would leased solar panels on a home be considered a part of the property?

No. LEASED solar panels mean they do not belong to owner, belong to the company. Rights revert back to the original owner

Type 1 vs Type 2 Grandfathered Water Rgts

Non-irrigation Grandfathered water rights: -Used for commercial use but NOT farming -Irrigation rgts NOT Xferable, stays w/ the land owner -Converting TO this rgt is Irrevocable Non-Irrigation Grandfathered Water rights: -Commercial use including farming but NOT crop-related (cattle) -Xferable w/in the AMA it first began in -Water rgts considered personal prop and have Mkt Value -Can Keep the prop but can lease/sell the water rgts out to someone else

How many littoral rights are there in AZ

None! No lakes in AZ!

Notice of Reinstatement vs Completion of Forfeiture

Notice that vendee has pd up vs Vendee didn't pay up and now vendor foreclosed and took prop back (in seller financing)

Assignment vs Novation

On the hook still vs off the hook after parties swap places

Tenancy by the Entirety

Option #3 for Married couple title NOT legal in AZ! bc we have CPWROS Treats both spouses as a single person, not as equal partners Cannot be ended unless both parties agree

Liens ranked in which order

Order of recorded. First in time, first in line. Except for mechanic's liens and materialman's liens Taxes and Special Assessments ALWAYS TAKE PRIORITY. Whatever is left after these liens will go to the other liens, if any.

AZ Registrar of Contractors (ROC): Ctrs performing work over ________ must be licensed Under AZ statues, a ____-year warranty is imposed on completed work. ROC will override builder's offered 1-yr warranty

Over $1,000 must be licensed 2 year warranty imposed on completed work.

4 Govt Powers in R/E (PETE)

P-olice power E-minent domain T-axation E-scheat

Bulk Land

Parcels of land that are 160 acres or larger

Common Laws

Part of English law that is derived from custom and judicial precedent rather than statutes. "What's commonly done."

Trigger terms in which lender must disclose true APR (Regulation Z)

Payment terms interest rates term, length, amt of pmts down pmt

Leasehold estate. Personal or real prop?

Personal prop

Chattel

Personal property. 2 forms: tangible and intangible Tangible - TV, stereo, car, cash Intangible - intellectual property, trademarks, rights to someone elses' water/oil

Physical Characteristics of Land Value vs Economic Characteristics

Physical Characteristics of Land Value- Indestructible, Immobile, Non-homogeneous (not alike) Economic Characteristics of Land Value- Situs (location), Scarcity, Permanency of Investment (Good investment) and Improvements (Adding Value).

Insurable Value

less than the property's appraised or mkt value b/c it excludes the value of the land Market/appraised value - value of land =

Correction Lines vs Guide Meridians

occur every 24 miles N-S vs occur every 24 miles E-W

Referral fees are always paid off what amount

on the gross commission.

Deed in Lieu

owner of the home has option to man up and "give up" rights and possession to the bank in lieu of foreclosure prevent foreclsure and are less impactful on credit

Accord & Satisfaction

parties' agreement to change the obligation required by their original contract and the performance of the new obligation, or walk away from whatever agreement they decided on (Owner cancelling contract w/ construction to remodel if that bldg will condemn it soon; construction cancelling roof remodel if owners can't pull the permit)

Hypothecation

pledging of property as security without surrendering possession

Blue Sky Law Puffing Misrepresentation Fraud

protect public from unscrupulous (not honest) land sellers Exaggerating the prop's qualities unintentional false statement Intentional False statements

All parties signing a contract acting fairly w. the INTENT TO COMPLETE the contract is:

reasonable standard

Effluent

reclaimed (treated) waste water. Water that can be used for agriculture, golf courses, etc

Appurtenant water rights

rights may be lost if abandoned or not using for 5 years in a row Valid for 40 yrs

Perfected water rights

rights to use the water.

Fractional sections

section of a township where corrections are confined to -start counting on the N and W side of the township

Distraint

seizing a tenant's property until full payment has been made. Not legal in AZ! you can't change the locks on a non-paying renter. have to give them 5 days notice and then evict.

Full Service

start to finish: post up to post down, contract to close

Tax Sale Redemption Pd

starts 3 years after the sale, not when taxes were originally due After 3 years, if prop owner didnt pay back in full, investor can go to court to exchange the certificate of purchase for a treasurer's Deed Treasurers deed: investor now takes ownership of the real prop, any and all liens are wiped out, investor owns that prop free and clear

Trusts, Corporations or Entities

the 4th co-ownership way to take title. Entities can hold either in Severalty, or TIC Never WROS, because that includes dying. Corps can't die.

Boot

the amt of $ taxed at the time of exchange that the investor took from the sale

Appraiser licensed by ____ Under what Jurisdiction 3 Levels of Appraisers in AZ

the state Board of Appraisers falls under jurisidiction of State Dept of Financial Inst. in State of AZ (AZDFI) Trainee Appraiser - 3 yrs Licensed Residential: 2k hrs in no fewer than 12 months Certified Residential: 2,500 hrs in no fewer than 24 months Certified General: 3k hrs in no fewer than 30 months

Appropriate water rights

to give away water rgts

Govt Rectangular Survey Ranges, Townships, Range lines and Tier lines Township vs section vs acre

uniform squares (grids)=townships -Uses 2 sets of lines -Principal Meridians: Longitude (N-S) -Baseline: Latitude (E-W) -AZ uses Gila and Salt River baseline and Meridian -point of intersection -Range lines (N-S) and Township Lines (E-W) are 6 mi apart -Ranges (N-S) - 6 mi strips (for Ranges) -Tiers (E-W) 6 mi. strips (for Townships) -Township Square - point where each 6 mi wide range and tier instersect Township: 6x6 sections (36 sq mi) Section: 640 acres Acre: 43,560 sq mi

Within how many days of COE should the seller, at their own expense, have the septic system pumped and inspected, with a report drafted to send to buyer?

within 20 days of COE

An Escrow Agent notices a discrepancy in the documents provided from the seller. Who must the escrow agent receive clarification from?

all parties

4 Types of Leasehold Estates

(All Leasehold estates revolve around time) 1. Estate for Years - lease has a fixed term (even if length of lease is long, it still has an expiration, will not auto-renew, neither death nor sale will terminate the lease) 2. Periodic Estate - Yr to Yr or month to month basis. (continuous basis, renews automatically at the end of each yr or month, notice must be given to end the lease, neither death nor sale will terminate the lease) 3. Estate at Sufferance - Leaseowner is holdover after expiration of lease (Against the owners' wishes, the lease ended but tenant still there. If lease ends, but tenant overstays and pays rent and owner accepts it* then it turns into a periodic estate. For owner to evict, need to stop collecting rent) 4. Estate at Will - tenant allowed to stay indefinitely (either party can give notice to terminate; bc it's from the will of the owner, if the owner dies, the tenant must leave; if tenant dies, terminates the leasehold estate; if prop sold, agreement ends, new owner= new will)

INA - Irrigation non-expansion Area

Area having INsufficient groundwater for safe irrigation New land irrigated w/in 5 yrs of the INA having been designated is prohibited 3 in AZ

Fee Simple Determinable

As long as something is done (or not done) in the deed. "So long as" "During" "While" are key words Subject to a positive action that must occur in order to continue Grantor won't have full control of the bundle of rights If these limitations/conditions ARE met, prop would revert back to grantor Reverter clause - automatically Xfers full ownership back to grantor Ex: wealthy patron of the arts wills a prop to a museum "so long as" the museum continues to display art for free to the public. If the museum starts charging, it reverts automatically to the grantor/heirs of the grantor.

2 Types of Crops

Fructus Naturales: the plants that produce the harvested crop (Ex: Corn stalk) Fructus Industriales: the actual fruit that came from the plant (Ex: the actual corn cobs) Emblements: items that came from the crop and are now personal prop. (The crops that were planted in the ground to produce shit=real prop. But what is produced like cotton, fruits, veggies, etc = personal prop)

Alternative to Cap Rate

GRM - Gross rent multiplier -how long to investor is repaid/ how many months until original investment is recouped GRM = Mkt value/annual gross income Mkt value = GRM x annual income

Trustee's Deed

Given to the party who is the successful bidder at foreclosure auctions in states that use Trust Deeds and not mortgages

AZ Constitution - Article XXVI (26)

Gives real estate licensees the power to draft or write contracts related to the sale of real estate in AZ.

Compensatory Damages vs Liquidated Damages

Giving hurt party the amount necessary to replace what was lost When damages were paid that were agreed upon in the original contract

Reliction Accretion Alluvion Avulsion Erosion

Gradual recession of water which uncovers land Increase in land by sediment in the water (new land becomes prop of land owner) Actual particles (sand, mud, etc) that create the new shoreline Loss of land due to erosion Fluid or wind wearing away the earth (grand canyon was due to erosion)

Master Deed

Grants ownership of the common areas (golf courses, lakes, bike paths, parks, jogging trails, etc) to homeowners via the HOA using CCRs.

Life Estates

Grants possession and limited ownership to someone for the duration of the recipients life or the life of another person Main difference b/w fee estate and a life estate: Fee estate has no time limit. Life estate has a time limit. (during the life) Bc life estate is based on duration of a life, it's not possible to devise (aka will or Xfer real prop upon ones death)

Conventional Life Estates

Grants use and ownership of real prop based upon someone's life. Could be the duration of the recipients life or life of another person. Holder of a life estate is a "life tenant" Life Tenants hold rights of disposition, enjoyment, exclusion, possession. But NOT control. Life Tenant can sell or rent, but buyer or tenant must know that their interest is limited to the duration of the life estate. (If I was a life tenant to my dad's laundromat, I could sell it to Josue, but josue's interest would only be as long as I am alive.) *Nearly impossible to obtain any type of financing for life estates* Life tenant must keep up prop, cannot diminish the prop value. Waste: lowering the value of prop by neglect Main diff bw Fee Estate and Life Estate: Fee estate = has no time limit Life estate = has time limit Conventional Life Estates are NOT inheritable as it's based upon the life of someone

Fee Estate aka Inheritable Estates

Highest and most desirable form of ownership. Owners of Fee Estates can give away, donate, will, or sell their estate. Very few limitations

Encumbrance

Hindrance that could lessen the value of the prop. Hindrance is an interest in prop held by someone other than the legal owner Could be non-monetary encumbrance: (claims, easements, govt pwers) Could be monetary encumbrance: Mortg, tax lien, IRS lien, judgements In no case can encumbrances be used to prevent Xfer of title. Encumbrances are more-so hassles, making it harder or less desirable of a prop

Estate

The degree, quantity, nature, and extent of interest a person has in real property/land.

When would an interpleader be used?

The escrow agents act as intermediaries and will determine who is owed the earnest money based upon facts in case of breach. Interpleader= neutral 3d party who listens to each side of the story.

Timeshare (interval) ownership vs Vacation Ownership

Timeshare (interval) ownership: owner has DEED, title, right to occupy for an agreed time (usually same week every yr) Vacation Ownership: LICENSE to use, while the owner/developer retains the deed and full ownership of the units Timeshare = DEED Vacation ownership= LICENSE.

Regarding timeshares, what's the difference between Vacation Ownership and Timeshare Ownership?

Timeshare ownership = has a DEED Vacation ownership = license to use for a defined time, like a lease.

Title Company vs Escrow Company

Title Company: provides title searches on props; ensure title is legit and can issue title insurance policy. Don't need to be bonded bc they don't work with money - do not handle $ in Xaction Escrow Company: intermediary b/w all parties; close; responsible for all funds and recordings. Many escrow companies are owned by title companies. In states back East, escrow agents are attorneys. Both are regulated by the AZ Dept of Financial Inst

Demise Devise

To convey a leasehold estate to leave in a will

DTI Ratio

Total recurring monthly debt / gross monthly income (%) Ex: 4 Props + Amex loan + Car loan = $5,600 Divided by Gross Monthly Income Income: $8k + 1300+ 1300+ 1495+ 1600 = $13,695 = 5600/13,695 = 41%

3 Parties involved in a deed of trust

TrustOR: borrower. the Borrower gives bare legal title to the trustee. Trustor has equitable title (right to use and possess) TrustEE: neutral 3rd party. Rcvs or holds the legal title. Beneficiary: entity that benefits from payments (banks, lenders)

Trustor / Trustee in Deed of Trust states

Trustor: borrower Trustee: lender Borrower (trustor) is giving trust to trustee (lender) to place voluntary lien on prop

Partition Action

Under joint tenants, it means courts getting involved to dispose of prop if the co-owners cannot come to an agreement on selling

USPAP

Uniform Standards of Professional Appraisal Practice -quality ctrl in appraisals -nearly every state has its own licensing authority

Open Listing

Unilateral listing agent who finds the buyer gets pd Seller must perform the contract by paying the agent who found the buyer Seller can hire multiple agents to solicit offers from buyers, but only the agent who finds the buyer to close will get pd If the seller finds a buyer, seller does not need to pay agent

Exclusive Agency (EA)

Unilateral or Bilateral Agent pd UNLESS Seller finds their own buyer Brokers don't use these as they may not get pd Agent will get pd even if another agent finds the buyer bc it was listed in MLS

3 Types of Agents

Universal -acts for Principal in all matters -must have Power of Attorney signed by P (agent becomes attorney in fact) General agent: -Acts for Principal in pre-determined actions -takes care of P's individual biz interests, not all of them -ex:a PM for a prop owner Special/Specific Agent: -in charge of only ONE action for P -one specific action, like selling a home -real estate agents

Acceleration Clause

Upon defaulting on a mortg, the lender can call the whole loan payable upon default and thus accererating the forced sale.

Math Q: they give you LTV % but you have to find out the purchase price Ex: 90% LTV on a loan of $129,306 How much was the purchase price?

Use the T Loan amt / LTV % 129,306 / .9 = 143,673

Cost Approach in Appraisals

Used when hard to find comps How much to rebuild/replace after subtracting depreciation Calculate the cost of creating a new bldg in today's $$ Cost of construction - depreciation + land = mkt value Reproduction cost: cost of exact reproduction (typically higher cost) Replacement costs: rebuilding using current materials (like, or as is) Sq Ft method: to find cost, used in custom or unique props Quantitative method: Materials + Labor (used in insurance estimating) Unit in Place Method: estimating cost of all prop components (foundation, roof, walls, etc) used in warehouses and large commercial

WQARF -

Water Quality Assurance Revolving Fund Site AZ sites where grdwater and/or soil contamination is present, qualifies for funds from WQARF can find these in public databases

Expressed Agreement Agency

We know we work together (verbal or in writing)

Release or Partial Release loan term

When financing multiple props under a Blanket loan, if you pay off 1 of them in full, the lender will "release" that prop from being encumbered

Accession

When landlord acquires tenants prop due to tenant leaving it behind after the lease. (Tenant moving and leaving all washing machines. owner then owns them)

Transfer of ownership from Seller to Buyer takes place when?

When the deed passes from S to B (not when the prop is recorded as most ppl think) Only the grantor signs the deed, the grantee (buyer) does not need to sign. Once the Seller signs the deed, death of either the seller or buyer will still not stop the escrow. The prop will still transfer if either buyer/seller die.

When would an owner voluntarily agree to have a lien placed on their property?

When the owner needs a mortgage, deed of trust or wants to allow someone voluntarily to lien the property usually to borrow against.

Devise

Will or Xfer real prop upon one's death

With a lot split, is a (SDR) required?

With lot splits (5 or fewer parcels), NO SDRs are req'd.

Abstract of title

Written history of title

Statute Laws

Written laws adopted by a legislative body.

A seller has 5 days to submit SPDS (Seller's Property Disclosure Statement) to a buyer after offer acceptance. In this instance, they took 12 days to do so. Is their contract still valid?

Yes, contract still valid. The buyer is assumed to accept the property in it's condition if they did not raise any objections during their inspection period. They have lost their rights to change their offer due to the time restraints agreed upon in the offer and acceptance.

An example of a non-monetary encumbrance: a. Court issued claim b. Mortgage c. Judgement d. IRS Lien

a. Court issued claim

Fruit that is stored in boxes and is then placed on a truck bound for the grocery store would be considered what: a.Emblements b.Harvested Crops c.Fructus Industriales d.Fructus Naturales

a. Emblements Emblements are the crops that came from the earth but have since then picked an are now Personal property

A purpose built greenhouse on the property was expressed in the listing agreement as not to convey. This is: a.Severance b.Special Circumstances c.Collateral Property d.Reversion

a. Severance

Your seller informs you during the listing process that their property is serviced by a conventional septic system. What is now required with regards to this listing; a.All of these b.The seller must provide inspection reports to Arizona Department Environmental Quality c.The sellers must have the septic system inspected prior to close of escrow d.The sellers to provide evidence of the septics location

a. all of these The seller must do all of these in order to satisfy the Arizona Department of Environmental Quality addendum on properties serviced by a septic system

Licensed agents failing to identify as a party in the sale in an advertisement is: a.A Blind Ad b.A Felony c.Legal d.False advertising

a.A Blind Ad

By dividing a plot of land into 5 parcels of land where each parcel is between 2-3 acres each, the seller would have to furnish a (an): a.Affidavit of Disclosure b.Affidavit of Value c.Public Right of Way d.Public Report Disclosure

a.Affidavit of Disclosure This is an example of a lot split of a maximum of 5 times, so the seller would have to funish the affidavit of disclosure

Which form clearly states that the agent is working for the BUYER in the transaction? a.Agency disclosure b.Listing agreement c.SPDS d.Purchase agreement

a.Agency disclosure Agency election and representation is used, unless there is a BUYERS BROKER agreement

By recording the deed, owners are giving what: a.Constructive Notice b.Factual Notice c.Actual Notice d.Restrictive Notice

a.Constructive Notice

What type of estate was given to Pat and Kat by their parents who are the legal owners and allows Pat and Kat to remain there as long as they abide by the limitations set by the parents: a.Fee Simple Determinable b.Fee Simple Qualified c.Fee simple d.Fee simple conditional

a.Fee Simple Determinable Fee simple determine estates are used commonly with a condition such as so long as.

What duty is not owed to a customer? a.Fiduciary b.Care c.Disclosure d.Honesty

a.Fiduciary Agents are only a fiduciary to their clients, not the customers

Several unrelated business associates want to acquire a commercial building and lease out the property to a new tech start up company that is looking for space in the area. These business partners agree that by forming a LLC together they could use that LLC to buy and take title to the building. Which method of holding title would this LLC be forced to take? a.Severalty b.Tenants in Common c.Joint Tenants w/ Rights of Survivorship d.Community Property w/ Rights of Survivorship

a.Severalty LLC's, governments and singles will own property in Severalty

During a closing, which party would pay for the escrow fees due to the statutes? a.There are no statutes that state who would pay for escrow b.The agreed upon party identified in the contract c.Buyer would pay for the close of escrow d.Both parties would split it according to the statutes

a.There are no statutes that state who would pay for escrow There are no statutes that state who is responsible for paying escrow since everything is negotiable

Which of the following would be a possible reason as to why it is hard to finance a co-op property? a.There is not a deed but an owners lease which makes it difficult to finance b.Co-Op's are rare which make them difficult to finance c.Co-Op's are owned in severalty making it difficult to finance d.The co-op is managed by a board who has control which make them hard to lease

a.There is not a deed but an owners lease which makes it difficult to finance Co-Op units don't have a deed, but a proprietary lease, and lenders typically need a deed to lend in case of failure to repay, they can foreclose and take the deed.

Which of the following would most likely not be considered a cloud in a property's title? a.Title transfer from an LLC to an individual b.IRS Liens c.A recorded personal easement in gross d.Missing ownership history

a.Title transfer from an LLC to an individual

Which of the following most accurately describes the Title in real estate: a.What rights one has with the property b.A document used to show liens on a property c.The direct proof of ownership d.Evidence that the seller has the capacity to negotiate the sale

a.What rights one has with the property Title is used to show what rights or interests one has in property, while the deed is the paper that shows proof of ownership.

Abatement

additional testing by environmental engineers to determine extent of pollution on property

Statutory Year

aka Bankers Year. 360 days in a year. Each month=30 days.