Unit 3

The Real Estate Transfer Disclosure Statement (TDS) provides information regarding the

physical condition of the property.

Real estate disclosure laws apply: (a)uniformly to all real estate transactions.Quiz Question(b)primarily for 1-4 residential units.Quiz Question(c)to disclosures to principals only.Quiz Question(d)to buyer disclosure only.

primarily for 1-4 residential units.

The Real Estate Settlement Procedures Act (RESPA) applies to (a)1-4 unit residential property. (b)second mortgages. (c)commercial loans. (d)loans for multi-unit apartment complexes.

(a) 1-4 unit residential property.

A public report is good for five years from the(a)date of issuance.(b)date the first lot is sold.(c)date of approval.(d)date of delivery to the buyer.

(a) date of issuance.

The agent does not disclose a Mello-Roos tax. After close of escrow the buyer may (a)rescind the contract within three days of receipt of the notice. (b)sue the seller for recovery. (c)sue the selling agent for recovery. (d)sue the listing agent for recovery.

(a) rescind the contract within three days of receipt of the notice.

Creative financing and the complaints stemming from these questionable types of financing helped enact existing (a)seller financing disclosure requirements. (b)creative financing protection statutes. (c)purchase money disclosure forms. (d)ARM disclosure requirements.

(a) seller financing disclosure requirements.

A fiduciary relationship applies to a real estate licensee and to: (a)his or her principal. (b)all parties the agent has dealings (c)buyers only. (d)the Department of Real Estate.

(a)his or her principal.

In the course of taking a listing on a single-family dwelling, the owner informs you that his roommate died of AIDS on the property one year ago. Which of the following is correct regarding your disclosure requirements? (a)If an occupant died on the property, it must always be disclosed to prospective buyers. (b)If the occupant's death was a result of AIDS, it does not have to be disclosed. (c)A death on the property is not a material fact in any case and does not need to be disclosed. (d)Unless the death occurred within one month of an offer to purchase, it does not need to be disclosed.

(b) If the occupant's death was a result of AIDS, it does not have to be disclosed.

What is a red flag? (a)A detrimental financing factor that may prevent the buyer from qualifying for a loan. (b)A physical factor about a property that is a potential material fact and that may need further investigation. (c)A defect in the subject property's chain of title that casts doubt on the validity of the seller's ownership. (d)A questionable commission split offer that may result in the selling agent receiving less than the advertised percentage.

(b) A physical factor about a property that is a potential material fact and that may need further investigation.

A selling agent must comply with agency disclosures to the buyer: Quiz Question (a)prior to showing property. (b)before the buyer executes an offer. (c)prior to qualifying the buyer. (d)upon delivery of the seller's acceptance.

(b)before the buyer executes an offer.

Concerning the potential existence of lead-based paint in homes built prior to 1978, (a)the owner can avoid liability by instructing his/her agent to physically remove the lead paint. (b)the owner must deliver to prospective buyers the booklet entitled Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants. (c)the owner should inform the party responsible for the painting that they are required to remove it. (d)the owner may ignore the existence of lead-based paint as long as they did not reside in the home prior to 1978.

(b)the owner must deliver to prospective buyers the booklet entitled Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants.

In an effort to help real estate agents fully disclose environmental hazard issues to prospective buyers, the Department of Real Estate and the Department of Health Services developed the (a)Sick Building Syndrome Pamphlet. (b)Hazardous Substance Release Form. (c)Residential Environmental Hazards Booklet. (d)Water Contamination Disclosure Form.

(c) Residential Environmental Hazards Booklet.

When selling 1-4-unit residential properties built prior to January 1, 1960, the seller must disclose whether the dwelling has (a)flood risk. (b)fire risk. (c)earthquake weaknesses. (d)asbestos.

(c) earthquake weaknesses.

When a developer intends to convert an apartment to a condominium, the developer must notify current tenants of their right to (a)vacate the premises. (b)cancel their lease. (c)purchase their unit. (d)extend their lease.

(c)purchase their unit.

There are statutory rescission rights for a number of transactions. Which of the following provides for rescission rights? (a)A loan for consumer credit that is secured by a borrower's residence. (b)Selling his or her equity interest in a residence in foreclosure. (c)Purchase of a time-share. (d)All of the above.

(d) All of the above.

Which of the following items/facts must be disclosed when seller financing is involved(a)That the loan has or will have negative amortization, or that deferred interest ARMs could have negative amortization.(b)That the note, if not fully amortized, will have to be refinanced at maturity and that this might be difficult or impossible to accomplish in the marketplace.(c)The buyer's creditworthiness (credit report, job verification, etc.).(d)All of the above.

(d) All of the above.

A seller (or seller's agent) must give the buyer a separate Natural Hazard Disclosure Statement if the property lies within which of the following specified areas? (a)A special flood hazard area. (b)A very high fire hazard severity zone. (c)An earthquake fault zone. (d)All of the above.

All of the above.

The Real Estate Transfer Disclosure Statement (TDS) is NOT required when the transfer involves? (a)transfer of a unit in a subdivision when the buyer has been given a public report. (b)a transfer ordered by a probate court in administration of an estate. (c)transfers by foreclosure sale after default. (d)All of the above.

All of the above.

Which of the following statements regarding an agent's duty in a real estate transaction is true? a. An agent has a fiduciary duty to the principal b. an agent must disclose any known detrimental information to a buyer c. any material facts the agent becomes aware of must be disclosed to the principal. D. All of these

D. All of these

Agent's Inspection Disclosure

agent is responsible for conducting an investigation and inspection independent of the seller and for filling out a transfer disclosure statement.

When inspecting for structural failure, agents should look for (a)cracks in structural walls, beams, and columns, and foundations. (b)severe bulging in floors or structural walls. (c)doors that fail to close or that have been trimmed. (d)all of the above.

all of the above.

In the correct order, which of the following lists the chain of events necessary to comply with the agency disclosure law?

disclose, elect, confirm

Real Estate Transfer Disclosure

transfer refers to sale, exchange, real property sales contract (installment land sales contract), option, lease option, and so forth.