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168 terms

California Real Estate - State Test Prep

I wide variety of questions that maybe on the California Real Estate Salesperson Exam.
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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.
The Recovery Account
fund of last resort for a member of the public who has obtained a final civil judgment or criminal restitution order against a real estate licensee based on fraud or certain other grounds and who has been unable to satisfy the judgment
through the normal post-judgment proceedings.
- DRE has 15 days to notify
- DRE has 90 days within which to pay, compromise, or deny the claim
three most common methods of describing property
by recorded map; by U. S. Government section and township; and by metes and bounds
base lines
horizontal in the township and section system
meridians
vertical in the township and section system
ranges
grid of vertical lines (US Government and township)
township
grid horizontal lines (US Government and township)
California has three sets of base lines and meridians
the Humboldt Base Line and Meridian in the northwestern part of the State; the Mt. Diablo Base Line and Meridian in the central part of the State; and the San Bernardino Base Line and Meridian in the southern part of the State.
Recording Act of California
after being acknowledged, any instrument or judgment affecting the title to or possession of real property may be recorded
instrument
some paper signed and delivered by one person to another, transferring the title to, or giving a lien on, property or giving a right to a debt or duty
OWNERSHIP OF REAL PROPERTY
Separate ownership
--- and ---
Concurrent ownership;
a. Tenancy in common;
b. Joint tenancy; and
c. Community property.
Separate ownership
ownership by one person
Concurrent ownership or co-ownership
simultaneous ownership of a given piece of property by two or more persons - Tenancy in common; Joint tenancy; and Community property.
Tenancy in common
when two or more persons are owners of undivided interests in the title to real property. It is created if an instrument conveying an interest in real property to two or more persons does not specify that the interest is acquired by them in joint tenancy or in partnership or as community property
Joint tenancy - TTIP
two or more persons are joint and equal owners of the same
undivided interest in real property. We regard this as a fourfold unity: interest, title, time, and possession. Joint tenants have one and the same interest, acquired by the same
conveyance, commencing at the same time, and held by the same possession. TTIP right of survivorship - If one joint tenant dies, the surviving joint tenant (or tenants)
immediately becomes the sole owner
Community property
consists of all property acquired by a husband and wife, or
either, during a valid marriage, other than separate property
Separate property of a married person includes
-All property owned before marriage
-All property acquired during marriage by gift or inheritance
-All rents, issues and profits of separate property, as well as other property acquired with the proceeds from sale of separate property (separate property is not commingled with the community property)
-Earnings and accumulations of a spouse while living separate and apart from the other spouse
-Earnings and accumulations of each party after a court decree of separate maintenance
-Property conveyed by either spouse to the other with the intent of making it the grantee's separate property
Tenancy in partnership
two or more persons, as partners, own property for partnership purposes
encumbrance
very generally as any right or interest in land, possessed
by a stranger to the title, which affects the value of the owner's estate but does not prevent the owner from enjoying and transferring the fee
cloud on the title
any outstanding claim or encumbrance which would, if valid, affect or impair the owner's title to a particular estate. While the cloud remains, the owner is prevented from conveying marketable title