Unit 3
The Principal
The buyer or seller that you represent in the real estate transaction
Compliance with environmental hazards disclosure requires:
The buyer sign that they have received a booklet titled Environmental Hazards: A Guide for Homeowners, Buyers, Landlords, and Tenants
The Third Party
The customer (buyer or seller) that is represented by another agent
Agency Disclosure
The disclosure of the relationship in which one party (agent) acts for or represents another (principal) under the authority of the latter
Associate Licensee
A licensed real estate salesperson who is employed by or associated with the broker to perform brokerage activities on behalf of or for the broker
Transfer Disclosure Statement (TDS)
A mandatory disclosure prepared by a seller and given to prospective buyers setting forth any property defects known or suspected to exist by the seller, generically called a condition of property disclosure.
Stigmatized Property
A property that has acquired an undesirable reputation due to an event that occurred on or near it, such as violent crime, gang-related activity, illness or personal tragedy. Some states restrict the disclosure of information about stigmatized properties.
Natural Hazard Disclosure (NHD)
A report provided by a third party disclosure company and is required when there is a potential threat of natural disasters near the property (i.e. Earthquake safety, Flood hazards, Fire hazards)
Common Interest Subdivision
A subdivision in which the owners own or lease a separate lot or unit together with an undivided interest in the common areas of the project; usually governed by a HOA
Under Easton, an agent's duty of inspection and disclosure covers:
A visual inspection and known or should have known defects
Real Estate Broker
Acts as an agent for the principal, who wishes to sell, buy, or exchange real property or a business opportunity with a third party
Single Agency
Agency relationship in which the agent represents only one party to a transaction.
Buyer's Agent
Agent who represents the buyer
Residential Earthquake Hazards Report
All houses sold in CA have to have an earthquake safety disclosure statement that is filled out and signed by the buyer and seller
The proper order of the steps taken in agency disclosure is:
Disclose, Elect, Confirm
Full Disclosure
Disclosing any fact that could reasonably affect the decisions of the buyer or seller in a transaction
The buyers sign that they have received a booklet relating to:
Environmental hazards
Mello-Roos Disclosure
Failure to disclose the fact that a property is in a Mello-Roos district would allow the transferee a three- to five-day right of rescission
California land projects
Have a 14-day right of rescission
A fiduciary relationship applies to a real estate licensee and to:
His or her principal
Dual Agency
Representing both parties to a transaction. This is unethical unless both parties agree to it, and it is illegal in many states
Brownfields
A term used to describe contaminated soil
A Transfer Disclosure Statement must be provided to the buyer when the sale involves:
A 3-unit residential building
An agent's inspection under Easton v. Strassburger (as codified by state statutes) applies to: -Visual inspections -Accessible areas only -1 to 4 residential units -All of these
All of these
The Seller Financing Disclosure Statement provided to both buyer and seller provides: -Credit terms -A warning as to balloon payments -Disclosure of deferred interest -All of these
All of these
Which of the following statements regarding agency disclosure is TRUE? -The confirmation of agency must be in writing -The three steps of the disclosure process are disclose, elect, confirm -The selling agent must confirm the agency before the buyer makes an offer -All of these are true
All of these are true
Which of the following statements regarding an agent's duty in a real estate transaction is TRUE? -An agent has a fiduciary duty to the principal -An agent must disclose any known detrimental information to. a buyer, even when the agent represents the seller -Any material facts the agent becomes aware of must be disclosed to the principal -All of these are true
All of these are true
Truth in Lending Act
An act which requires lenders to inform borrowers of all direct, indirect and true costs of credit; a rescission right exists until midnight of the third business day following the completion of the loan
Material Fact
Any fact that, if disclosed, could affect the decision of an entity (person or persons) in completing (to buy, to sell, etc) a transaction
A selling agent must comply with agency disclosures to the buyer:
Before the buyer executes an offer
A right of rescission is provided by law for purchase agreements involving all EXCEPT: a. 1-4 unit residential properties b. Time-shares c. Undivided interest subdivisions d. Both B and C
Both B and C
The earthquake safety disclosure statement: a. Is voluntary b. Applies to 1 to 4 residential units c. Must be signed by buyer and seller d. Both B and C
Both B and C
An agent need not disclose to a buyer: -That a former owner had AIDS -That there was a death by murder or suicide on the property more than 3 years ago -That there was a death on the property within the last 3 years -Both that a former owner had AIDS and that there was a death by murder or suicide on the property more than 3 years ago
Both that a former owner had AIDS and that there was a death by murder or suicide on the property more than 3 years ago
Mello-Roos Bonds
Buyers make special monthly assessments or taxes to help fund community parks, police buildings, streets, and community improvements typically for new neighborhoods; Mello-Roos Bonds are transferred from the developer of the property to the buyer; typically for 30 years and transferred to the new owner
Megan's Law
Informs the buyer about the public availability of the registered sex offenders database
Which statement regarding earthquake safety disclosure is TRUE? -It applies to 1-4 unit residential properties -It applies only to homes built before 1930 -The buyer can waive her right to a hazards report -Delivery of a copy of The Homeowner's Guide to Earthquake Safety is evidenced by an affidavit from the agent
It applies to 1-4 unit residential properties
Agent's Visual Inspection Disclosure (AVID)
It is the agent's responsibility to conduct a visual inspection of the property and disclose all material facts about the property after careful visual inspection (ex: carpet appears worn, cracks above door, stain on the ceiling)
Caveat emptor
Latin for "Let the buyer beware"
Seller's Agent
Licensee who brings the buyer into the transaction; typically the buyer's agent but CAN be a listing agent
Listing Agent
Lists the seller's home, represents the seller
Which of the following statements regarding agency disclosure is TRUE? -An agent need not provide a seller of a commercial building with an agency disclosure -The listing agency cannot elect to be only a buyer's agent -Both of these are true -Neither of these is true
Neither of these is true
Real estate disclosure laws apply: -Primarily for 1 to 4 residential units -To buyer disclosure only -Uniformly to all real estate transactions -To disclosures to principals only
Primarily for 1 to 4 residential units
The purpose of the Subdivided Lands Law is to:
Protect purchasers from fraud
Seller's Property Questionnaire
Provides information on the following: -Location of the property: is it an industrial or commercial zone, is it near airports or a military site -Death occurred within the last 3 years -Any illegal controlled substances released -Repairs/alterations to the property -Water related or mold issues -Easements, enroachments, boundary disputes
The Agent
The real estate broker representing a principal
Which seller(s) must provide a Real Estate Transfer Disclosure Statement? -The seller of a lot -The seller of a 4-unit apartment building -The seller of a 16-unit apartment building -All of these
The seller of a 4-unit apartment building
Fiduciary Relationship
Trust and confidence between parties; Loyalty Obedience Confidentiality Disclosure Accounting