California Real Estate - State Test Prep

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I wide variety of questions that maybe on the California Real Estate Salesperson Exam.

If property is sold while in probate

Commission is only controlled by law under two situations. One being the Real Property Loan Law and...

Real Property Loan Law

Commission is only controlled by law under two situations. One being If property is sold while in probate and...

agent of the broker

The Broker is the Agent of the seller. The salesperson is the

principle or 3rd party

The Broker is the Agent of the seller. The salesperson is the sub-agent of the

Township

36 individual square miles or 640 acres.

1 square mile =

43560 square feet

43560 square feet =

1 square mile

640 acres =

1 square mile

Which corner does the township numbering system start in

NE , North East

abatement

An action to remove a nuisance

abstract of judgment

A statement from the court of the judgment. When recorded, it becomes a general lien on all of the debtor's property in the county where recorded

abstract of title

A copy of all recorded documents dealing with a property. Attorneys give title opinions based on abstracts.

acceleration upon default

All payments become due upon default of payment. In California, the debtor can cure the default by catching up on payments prior to foreclosure.

accord and satisfaction

An agreement to accept a lesser consideration than bargained for based on disagreement over performance.

accretion

The gradual buildup of land by natural causes ( generally by action of water )

acknowledgment

A statement made before a notary or court officer that the signing of a document was the signer's own free act.

actual notice

notice that has been expressly given and is known to a party

ademption

The revocation of a specific property grant in a will by disposing of said property prior to death.

administrative agency

a government agency that makes rules and regulations to carry out the law.

Administrative Procedure Act

A procedural act that must be complied with prior to revocation, suspension, or denial of a real estate license.

administrator

A person appointed by the court to administer the estate of a deceased person.

ad valorum taxes

Taxes based on value, such as property tax. ( Latin - according to value )

advance costs

Advance payments made to an agent to cover expected cash outlays in carrying out the agency.

advance fee

A fee for rental information accepted in advance, or a promotional fee for a sale listing.

advance fee addendum

An agreement specifying activities for which the agent is to be compensated. It would include provisions for an advance payment of fees.

adverse possession

A method to acquire title. It requires five-year, open, notorious, uninterrupted use under some claim of right, and the payment of taxes.

aesthetic zoning

Zoning for beauty or appearance. Appearance of zone may have a pattern in architecture, colors, and styles.

affirmation

A formal declaration of the truthfulness of a statement, given in lieu of a verification.

affirmative covenant

A covenant under which an owner is required to do something, such as build within a stated period of time.

affirmative easement

Easement that gives the dominant tenement owner the right to use the servient tenement.

after-acquired title

Title or interest acquired by the grantor after property has been conveyed.

agency

Legal relationship under which an agent represents another, or principal, in dealings with third parties.

agency by estoppel

An agency created when a principal's conduct led another to believe in the existence of the agency and thereby to act to his or her detriment.

agency by ratification

An agency created by a principal's approving an unauthorized act of another.

agency coupled with an interest

Agency in which an agent has a financial interest in the subject matter of the agency.

agent

One who represents another in an agency relationship.

Alquist-Priolo Special Studies Zone Act

Provides for project approval in close proximity to earthquake faults, as well as disclosures to buyers.

alteration

A change made to a note or contract by one of the parties without the consent of the other.

amendments to the escrow instructions

Changes in escrow instructions, which require the agreement of both the buyer and seller.

American Land Title Association

ALTA - The association that developed an extended-coverage policy of title insurance for lenders ( same coverage available to buyers )

Americans with Disabilities Act

Prohibits discrimination in a place of public accommodation based on an individual's physical or mental disabilities.

amortized note

A note that will liquidate itself over its term in equal installments

antimerger clause

A clause in a mortgage or trust deed that the senior lienholder will retain lien priority in the event of a merger.

anticipatory breach

Act of a party that can be treated as a breach of contract because it makes performance by that party impossible.

appurtenance

Something that belongs to and goes with a property, such as structure and easement rights

arbitration

Nonjudicial process for resolution of disputes either by agreement or mandated by law.

Article 5

Part of the Business and Professions Code governing transactions in trust deeds and real property sales contracts

Article 7

Part of the Business and Professions Code covering loan costs, commissions, and payment requirements relating to loan brokerage activity.

"as is"

A phrase used in sale contracts by sellers as an attempt to limit liability for the condition of the premises. If known latent defects or condition of a property is known to the seller, seller has the obligation to disclose.

assignment

Transfer of all interest in a contract or lease.

assignment of contract

Transfer of all rights under a contract to a third party. Assignor remains secondarily liability.

assignment of lease

The transfer of all rights under a lease by a lessee to a third party, who becomes a tenant of the lessor. The assignee is primarily liable under the lease, while the assignor has secondary liability

assignment of rent

Owner assigns right to collect rent to another. Usually given to a lienholder when owner is delinquent in rent

assumable loan

A loan that can be taken over by a purchaser. I new purchaser can assume the old note. Such a loan would not have a due on sale clause.

assuming a loan

the buyer's agreeing to be primarily liable on the loan while the seller has secondary liability

attachment

A prejudgment lien that can be obtained to ensure the availability of property for execution after a judgment is obtained.

attorney-in-fact

A person appointed as an agent under a power of attorney

attractive nuisance doctrine

An owner has a duty to reasonably protect children from injury when the premises are likely to attract children.

avulsion

The sudden removal of land by action of water, such as a river changing course.

bait and switch

Practice of advertising where a seller will not sell an item at a price advertised or does not have the item to sell in order to bring in buyers for other items. This conduct is ILLEGAL

balloon payment

A final payment that is more than twice the amount of the lowest payment.

bankruptcy

Federal proceedings to declare a debtor bankrupt. The debtor is relieved of unsecured obligations. If there are secured debts and the security is given up, debtor can be relieved of secured obligations.

beneficiary

Lender (or seller) in a trust deed loan situation

beneficiary statement

Statement by beneficiary as to balance due on loan.

bequest

Personal property transferred by will

bilateral contract - p4p

Promise for a promise.

bilateral contract

A mutual exchange of promises.

blanket encumbrance

A mortgage or trust deed covering more than one property

MLS

Multiple Listing Service

MARIA

Tests for a fixture - Method of attachment, Adaptability for normal use,Relationship of the parties, Intent of the placement of the item, Agreement of parties

Adam E Lee

8 Ways to terminate an easement - Abandonment, Destruction, Adverse Possession, Merger, Express Agreement, Lawsuit, Estoppel, Excessive use

FIRPTA

Foreign Investments in Real Property Tax Act

CoCa CoLa

Elements of a contract - mutual COnsent, CApacity, COnsideration, LAwful purpose ( must be in writing )

RESPA

Real Estate Settlement Procedures Act - requires special information booklet, requires good faith estimate, requires uniform settlement statement

Uniform Settlement Statement

Statement of the actual settlement costs. Provided by US Dept of HUD.

REIT

Real Estate Investment Trust

REET

Real Estate Equity Trust

REEA

Real Estate Educators Association

REMT

Real Estate Mortgage Trust

AMT

Alternative Minimum Tax - requires taxpayers, who make above a certain amount of gross income to, to figure taxes twice.

RPSD

Real Property Securities Dealer

HUD

Department of Housing and Urban Development

NAIFA

National Association of Independent Fee Appraisers

FNMA

Federal National Mortgage Association

GNMA

Government National Mortgage Association

FHLMC

Federal Home Loan Mortgage Corporation

TILA

Truth in Lending Act -

Truth in Lending Act

Implemented by Regulation Z set by the Federal Trade Commission

FTC

Federal Trade Commission

FIRREA

Financial Institute Reform, Recovery, and Enforcement Act of 1989

AIDA

Time tested model used in writing ads - Attention, Interest, Desire, Action

blind ad

An advertisement that fails to reveal that the advertiser is an agent and not a principal

blockbusting

Inducing panic selling based on fear of the entry of persons of another race, color, religion, or ancestry into the area.

breach of contract

failure to comply with a material term or provision of a contract

broker

Licensed real estate agent who can deal directly with principals and employ licensed real estate salepersons

broker's loan statement

A disclosure statement given to borrowers by mortgage loan brokers that provides information on all costs, fees, and loan terms.

Bulk Sales Act

An act that requires recordings and publication of a sale not in the normal course of business.

bulk zoning

Zoning for density with open-space requirements as well as setback, parking, and height restrictions

bundle of rights

All beneficial rights that go with ownership of real property

real property is synonymous with

real estate

budle of rights - 5 things

Right of Possession, Right of enjoyment of the property, Right to control the property's use, Right to exclude others from the property, Right to dispose of the property.

OLDCAR

The Fiduciary Duty owed to a principal (seller) by the Agent (broker) obedience, loyalty, disclosure, confidentiality, accountability, reasonable use of (skill, training, experience, competency)

TTIP

Joint tenants have: unity of time, unity of title, unity of interest, unity of possession

PITI

Items used to qualify a buyer for the proper debt:income ratio. Usually 1/3 of gross income. principle, interest, taxes, insurance

burden of proof

The party required to prove a fact when an issue is in dispute

Farm

a group of people within a geographical area with whom the agent stays in touch monthly, advising each property owner of all real estate activities throughout the year

deposits from clients must be placed in a brokers trust fund

within 3 days from acceptance of the offer (this must happen)

CMA

Competitive Market Analysis

Salesperson can only work for one broker (T/F)

True

FSBO's

For Sale By Owners

staging

offer the seller suggestions on ways to show a home for maximum positive first impression

institutional advertising

attempt to establish a firm's identity to the public

functional obsolescence

loss of value due to adverse factors within a structure that affect the marketability of the property.

examples functional obsolescence

single car garage but market desire is for a double car garage
home has only 1 bathroom but market desires two
floor plan is an older outdated layout

economic obsolescence

any loss of value due to conditions outside of the property itself. aka social obsolescence

social obsolescence

any loss of value due to conditions outside of the property itself. aka economic obsolescence

major repairs in the past 5 years ( house for sale )

must be disclosed to the buyer if

monthly house payment (ratio standard)

Principal + Interest + Monthly taxes and insurance + homeowners assoc. fee = 25% - 30% gross monthly income

Three C's (credit rules of thumb)

Character - how a person has handled past debt obligations
Capacity - how much debt a borrower can comfortably handle
Capital - current available assets of the borrower

liquidated damages

sum of money, agreed to in advance and stated in the contract, that will be paid for not fulfilling a clause or condition in the contract

CE+3

buyer to take possession 3 days after the close of escrow

what trust deeds in California are called

mortgages in California

A valid bill of sale must contain

the seller's signature

A valid deed does not have to contain

an acknowledgment of the grantor's signature

A broker selling a property on which he holds an option should notify the purchaser

that he is acting as an optionor

Tax delinquent real property not redeemed by the owner during the five-year statutory redemption period

is deeded to the county

The maximum commission a broker may charge a seller for the sale of residential income property

negotiable commission for residential

percentage lease

provides for rent as a percentage of the tenants' gross income ( gross sales )

Federal Housing Administration - role

Created in 1934 to provide mortgage insurance on loans made by FHA - approved lenders, part of HUD

Deed of reconveyance

deed from trustee to trustor, at the request of the beneficiary of trust (lender), that returns title to the trustor on payment of indebtedness

chattel mortgage

use of personal property to secure or guarantee a promissory note.

Open end mortgage

Arrangement that allows a mortgagor (borrower) to borrow additional sums in future up to a maximum figure, and is secured by the same asset or property.

grantor - quitclaim

A quitclaim deed conveys only the present right, title and interest of the

fully amortized loan

A loan to be completely repaid, principal and interest, by a series of regular equal installment payments

vendor (term in real estate)

In a legal sales contract, the seller is often referred to as the

Trust Deed

instrument used to secure a loan on personal property is called

Community Property

property owned by husband and wife

sole ownership

person holding title to real property in severalty

Federal Truth-in-Lending Law

finance charge and annual percentage rate - Regulation Z

Appraisals of single-family dwellings

sales prices of comparable properties

void

A contract based on an illegal consideration

3 years - broker documents

Copies of all listings, deposit receipts, canceled checks, and trust records must be retained by a licensed real estate broker

joists

Parallel wooden members used to support floor and ceiling loads are called

a tenancy in common

Joint ownership of real property by two or more persons, each of whom has an undivided interest (not necessarily equal) without right of survivorship

depreciation

loss in value from any cause” is a common definition

Unruh Civil Rights Act - California

All persons within the jurisdiction of this State are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin or disability are entitled to the full
and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever

Fair Employment and Housing Act

law prohibits discrimination in supplying housing accommodations because of race, color, religion, sex, marital status, national origin, ancestry, age, familial status or disability.

Housing Financial Discrimination Act of 1977

Holden Act - prohibits discriminatory loan practices on the part of financial institutions (banks, savings and
loan associations, or other financial institutions, including mortgage loan brokers, mortgage bankers and public agencies which regularly make, arrange, or purchase loans
for the purchase, construction, rehabilitation, improvement, or refinancing of housing

Federal Fair Housing Act, Title VIII of the Civil Rights Act of 1968

all-encompassing set of rules prohibiting discrimination on the part of owners of real property and their agents. This law applies to all sales or rentals of residences through the facilities of real estate licensees and to publication, posting, mailing or advertising in violation of this law.

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