Ch 3
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) is correct. A public report is good for five years from the date of issuance.
The Real Estate Transfer Disclosure Statement (TDS) provides information regarding the (A)physical condition of the property. (B)properties chain of title. (C)agency relationships between the parties to the transaction. (D)commission split between real estate agents.
(A) is correct. As required by California Civil Code, a transferee (buyer) of residential real property is entitled to a statement from the transferor (seller) which provides information regarding the physical condition of the property.
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) is correct. Failure to give notice of a Mello-Roos tax before signing of the sales contract permits the buyer or tenant a three-day right of rescission after receipt of the notice.
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) is correct. RESPA applies to federally related first mortgages for the purchase of 1-4 residential units.
The proper order of the steps taken in agency disclosure is: Quiz Question(A) elect, confirm, disclose. Quiz Question(B) confirm, elect, disclose. Quiz Question(C) disclose, elect, confirm. Quiz Question(D) elect, disclose, confirm.
disclose, elect, confirm.
The earthquake safety disclosure statement: Quiz Question(A) both applies to 1-4 residential units and must be signed by buyer and seller. Quiz Question(B) applies to 1-4 residential units. Quiz Question(C) must be signed by buyer and seller. Quiz Question(D) is voluntary.
A) both applies to 1-4 residential units and must be signed by buyer and seller.
A dual agency is legal if (A)all parties are told before close of escrow. (B)the buyer and seller consent to it. (C)the broker and escrow company agree to it. (D)all parties are told after they sign the contract.
(B)the buyer and seller consent to it.
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) is correct. Unethical kinds of seller financing and the complaints stemming from the victims helped enact the current statutes requiring seller financing addendum and disclosure.
The Seller Financing Disclosure Statement provided to both buyer and seller provides: Quiz Question(A) a warning as to balloon payments. Quiz Question(B) all of these. Quiz Question(C) credit terms. Quiz Question(D) disclosure of deferred interest.
(B) all of these.
A fact about a property is considered a "material fact" if (A)the seller elects to disclose the fact prior to consummation of the transaction. (B)prior knowledge of the fact would have prevented the other party from entering into the contract. (C)all parties to the transaction agree in advance that the fact is important. (D)the seller's agent determines that the fact warrants disclosure.
(B) is correct. A material fact is any fact that, if disclosed, could affect the decision of a person or entity in completing the transaction.
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) is correct. A red flag is anything that indicates that there may be a problem, in other words, any visual sign or indication of a defect.
Compliance with environmental hazards disclosure requires: Quiz Question(A) chemical tests of the soil for all dangerous contaminants. Quiz Question(B) the buyer sign that they have received a booklet entitled Environmental Hazards: A Guide for Homeowners and Buyers. Quiz Question(C) that the seller post a bond to cover damages by hazards discovered at a later date. Quiz Question(D) that the Alquist-Priolo Act be complied with.
(B) the buyer sign that they have received a booklet entitled Environmental Hazards: A Guide for Homeowners and Buyers.
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.
n 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. Civil Code Section 1710.2 states that no cause of action arises against an owner of real property or his or her agent, or any agent of a transferee of real property, for the failure to disclose that an occupant of that property was afflicted with or died from AIDS. However, if a buyer asks a direct question concerning deaths, the statute does not protect an agent from misrepresentation.
In addition to disclosing known material facts concerning the property, the listing agent also has a duty to disclose defects that can be discovered by (A)canvassing the neighborhood and interviewing neighbors. (B)conducting a reasonably diligent visual inspection. (C)ordering a detailed inspection of historical records and police reports. (D)All of the above.
(B)conducting a reasonably diligent visual inspection.
The licensee who brings the buyer into the transaction is called the (A)listing agent. (B)selling agent. (C)associate licensee. (D)subagent.
(B)selling agent.
A Transfer Disclosure Statement must be provided to the buyer when the sale involves: Quiz Question(A) all of these. Quiz Question(B) a vacant lot. Quiz Question(C) a 3-unit residential building. Quiz Question(D) a commercial building.
(C) a 3-unit residential building.
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) is correct. As of January 1, 1993, the state law requires that when selling 1-4-unit residential properties built prior to January 1, 1960, you must disclose whether the dwelling has earthquake weaknesses.
In the correct order, which of the following lists the chain of events necessary to comply with the agency disclosure law? (A)confirm, disclose, elect (B)investigate, disclose, confirm (C)disclose, elect, confirm (D)disclose, confirm, reconfirm
(C) is correct. According to the agency disclosure law, the correct order is Disclose, Elect, Confirm (Memory Aid: DEC).
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) is correct. Each tenant of a proposed conversion has an exclusive right to contract for and purchase the unit he/she lives in. The tenant must be offered the same or better terms and conditions that such unit would be initially offered to the general public.
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) is correct. The Department of Real Estate and the Department of Health Services have prepared a booklet for homeowners and buyers. This booklet is distributed by the California Association of REALTORS® for use by real estate agents to fully disclose environmental hazard issues to prospective buyers.
Real estate disclosure laws apply: Quiz Question(A) to disclosures to principals only. Quiz Question(B) uniformly to all real estate transactions. Quiz Question(C) primarily for 1-4 residential units. Quiz Question(D) to buyer disclosure only.
(C) primarily for 1-4 residential units.
An agent need not disclose to a buyer that: Quiz Question(A) None of these. Quiz Question(B) a former owner had AIDS. Quiz Question(C) there was a death by murder or suicide on the property more than 3 years ago. Quiz Question(D) Both a former owner had AIDS AND there was a death by murder or suicide on the property more than 3 years ago.
(D) Both a former owner had AIDS AND there was a death by murder or suicide on the property more than 3 years ago.
An agent's inspection under Easton vs. Strassburger (as codified by state statutes) applies to: Quiz Question(A) visual inspections and known or should-have-known defects. Quiz Question(B) accessible areas only. Quiz Question(C) 1-4 residential units. Quiz Question(D) all of these.
(D) all of these.
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.
(D) is correct. In addition to the usual Transfer Disclosure Statement required by Civil Code Section 1102.6, a seller (or the seller's agent) must give the prospective buyer a separate Natural Hazard Disclosure Statement if the residential property lies within one or more of six statutorily specified areas:A special flood hazard area designated by the Federal Emergency Management Agency.An area of potential flooding in the event of a dam failure, designated by the state Office of Emergency Services.A very high fire hazard severity zone designated by the California Department of Forestry and Fire Protection.A wildland fire area that may contain substantial forest fire risks and hazards, designated by the State Board of Forestry.An earthquake fault zone designated by the State Geologist.A seismic hazard zone designated by the State Geologist.
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) is correct. Many items and facts must be disclosed, including all of the choices in this question.
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.
(D) is correct. Certain types of transfers are specifically exempted in Civil Code Section 1102.1. It should be noted, however, that a real estate licensee still has a duty to conduct a reasonably competent and diligent visual inspection of accessible areas in almost all situations. In other words, although the seller is exempted from having to provide a disclosure statement in certain situations, a licensee must conduct this inspection, and disclose the results of the inspection, in almost all residential transactions involving 1-4 units.
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) is correct. In an effort make sure the buyer (or borrower) is informed of his or her rights, several types of transactions are afforded statutory rescission rights.
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.
(D) is correct. Structural failure can be caused by environmental extremes, poor design, material deterioration, water, or insects.
A selling agent must comply with agency disclosures to the buyer: Quiz Question(A) upon delivery of the seller's acceptance. Quiz Question(B) prior to showing property. Quiz Question(C) before the buyer executes an offer. Quiz Question(D) prior to qualifying the buyer.
C) before the buyer executes an offer.
A fiduciary relationship applies to a real estate licensee and to: Quiz Question(A) buyers only. Quiz Question(B) his or her principal. Quiz Question(C) the Department of Real Estate. Quiz Question(D) all parties the agent has dealings with.
Quiz Question(B) his or her principal.
