REAL ESTATE EXAM PREP

AgreementItems that are considered fixtures should be clearly dystrophy in the agreement -may include real estate listing contracts and real estate purchase contractsWhen crops are severed, sold, or mortgaged the become property.PersonalAn appurtenance....Runs with the land and is considered real propertyPersonal property is property.Movable PropertyReal property is property.Immovable PropertyChattel Real =Personal PropertyHow is ownership of personal property transferred?Transferred by using Bill of SaleHow can a real estate agent sell a mobile home?They can sell a mobile home if it has been registered with the Department of Housing and Community DevelopmentWho can sell mobile homes that are registered with the CA Department of Housing and Community Development?A person with a Real Estate Broker's LicenseWhat are trade fixtures when a business tenant solidly attaches personal property to a business location, personal or real property?Trade Fixtures = Personal PropertyWhat is an estate?An ownership interest in landWhat are the two types of estates in land?-Freehold Estate -Less-than-Freehold or Leasehold EstateWhat are the two types of estates in fee?-Fee Simple Absolute -Fee Simple Defeasible or QualifiedWhat is the highest form of ownership in California?Freehold EstateWhat rights come into existence with freehold ownership (fee simple)?-Of Indefinite Duration -Estate of Inheritance (can be willed) -Greatest interest a person can own in landOf indefinite durationOwnership interest continues for an indefinite period of time -ownership not a set amount of time; continues indefinitelyEstate of Inheritance (can be willed)Ownership interest can be willed to the owners' heirs and to their heirs, on down through the generations -fee simple estate can be willed to heirs, or to any devisee the freehold owner would like to receive itGreatest Interest a Person Can Own in LandIs no higher form of ownership a person can have in landFee Simple AbsoluteIs the highest form of ownership recognized by law -owner has entire bundle of rights without any restrictionsIf a fee simple absolute owner disposes of a property and places a restriction on the use of the property...Then the new owner has Fee Simple Defeasible or Qualified title to the propertyAt the death of the life tenant, the property will...Revert back to the original property owner if the person is still alive (Estate Reversion), or to a person he or she designates (Estate in Remainder)Life Estate=FreeholdTo devise real property is to...Leave it by willThe DeviseeA person who receives real property by willThe DevisorA person who leaves real property by willLess-than-Freehold EstateAn estate that tenants ownEach person who occupies an individual unit of the property and has possession of that unit owns a..Leasehold EstateLessorOwner of the fee simple (freehold) estate -aka landlordLesseeOwner of the leasehold estateEstate for YearsAn estate that continues for a definite and specified period of time -could be two months, six months, one year, or five yearEstate from Period-to-Period (Periodic Tenancy)An estate from period-to-period continues from one period to another (usually month-to-month) -each month the tenancy ends and is renewed with the coming of the next monthEstate at WillWhen an estate for years expires and the tenant stays on and continues paying rent on a month-to-month basisEstate at Sufferance (Tenancy at Sufferance)When a tenant stays in a property and does NOT continue to pay rent -Landlord suffers when this occursLeaseIs an instrument that transfers possession of real property but NOT title -tenant has possession of the property and the landlord holds the legal title to the propertyA valid lease must contain:LAND 1. Length or duration of the lease 2. Amount of rent 3. Names of the parties 4. Description of the propertySecurity deposits for unfurnished residential units are...Limited to an amount that does not exceed two months rentFor furnished residential units the security deposits cannot....Exceed three months rentLandlords must return security deposits within....21 calendar days of the tenant vacating the propertyCovenant of Quiet EnjoymentDirectly relates to possession of the property -means that the landlord or his agents may not attempt to move a tenant from the premises without following the correct eviction procedures prescribed by lawLessee Signs Rental AgreementIt's not necessary for the lessee (tenant) to sign the rental agreementA lease for agricultural or horticultural purposes cannot have a term exceeding51 yearsA lease for any town or city lot (urban) cannot have a term exceeding...99 yearsWhen a tenant stops paying rent and continues to occupy real property The eviction process must be taken which consists of:1. 3 Day Notice to Pay Rent or Quit delivered to the non-paying tenant 2. Unlawful Detainer Action filed in court (usually small claims court) 3. Writ of Possession issued by the courtPercentage LeaseRent is computed on the gross sales of the businessNet LeaseRequires the tenants in the building to pay their pro-rata share of the property owner's operating expenses. It is the net income to the landlord. Commonly seen in strip-centers and retailGross LeaseCommon with office buildings. Tenant generally pays a set amount per month as rent and the property owner pays all of the property expenses. It is the gross income to the landlordModified Gross LeaseCombines the attributes of a gross lease with those of a net lease. The property owner may pay some of the expenses and the tenant may pay othersGraduated LeaseContains an escalator clause to adjust the rental amount periodically (usually annually) for inflation -CPI goes hand in handSublease vs. AssignmentAssignment of a contract is the transfer of ALL rights and obligations under a contract Sublease transfers PART of the rights and/or obligations under the terms of a contractThe Government Survey Land Description MethodUsed for large parcels of rural acreageWhat are the three principal base and meridian line intersections?-Humboldt -Mt. Diablo -San BernardinoHow much is a township?6 miles square =36 square miles43,560 Sq. Ft =1 acre640 acres =1 square mile1 section =1 mile x 1 mile36 sections =1 township1 township =6 miles X 6 miles or 36 sectionsSubdivision MapIs recorded at the County Recorder's Office and is approved by each city or county where a property is located -Properties are then assed by parcel numberMetesMeasurementsBoundsBoundariesWhat is the most accurate method to describe land?Metes and BoundsEncumbrancesAnything that affects, limits, or burdens title of propertyWhen a property owner does not pay for work that has been completed on a property...The contractor or subcontractor who does not get paid can file a mechanic's lien against the property -Which will either force the property owner to pay the amount owed, sell the property and pay the amount owed, or wait until the property is sold in the future and then pay the amount owed out of escrowA mechanic's lien must be...Recorded to be validLis pendens is aWritten notice of a pending court action -provides notice to the defendant in the pending lawsuit that there is a claim against the parcel of real propertyJudgementWhen the judge makes a ruling regarding who wins the lawsuitWrit of ExecutionCourt order that will move the defendant's frozen assets to the plaintiff to satisfy the judgment -include things of value that can be used to satisfy a judgment (ex. Real estate, bank accounts, etc.)JudgementIs a written summary of the judgment that indicates how much money the losing defendant owes to the person who won the lawsuit, the rate of interest to be paid on the judgement amount, court costs, and any specific orders that the losing defendant must obeyWrit of executionA court order authorizing the sheriff to sell the property to satisfy a judgmentTaxes are...Superior to all liens -they are always superior and will be paid firstSpecial AssessmentA tax levied only against those specific properties that will benefit from the proposed improvementMello-Roos Community Facilities ActAn alternative method of funding for needed community infrastructure, improvements, and services -used to pay for streets, water, sewage and drainage, electricity, infrastructure, schools, parks, and police protection to newly developing areasThe dominant tenement recording a quitclaim deed will...Terminate an easementAppurtenant easement benefits....Adjoining landownersA lessee CAN grantAn easement over leased property, but only for the term of the lease -after the lease expires, the easement is no longer validPrescriptive EasementA way of gaining the right to use another person's property without their permissionOUCHOpen & Notorious Uninterrupted use for 5 years or more Claim of right Hostile to owner's intentEasement in gross isIrrevocableLicense isRevocableCovenants, Conditions, and Restrictions (CC&Rs)can be created by deed, agreement, or recorded declaration of restrictionsBreach of a Covenant (promise)A minor breach and remedied by monetary damagesBreach of ConditionA major breach and remedied by loss of title to the propertyRestrictionIs a private deed restriction -Restricts the use of the propertyInjunctionUsed to enforce private deed restrictionsZoningUsed to implement a county's general plan or master planEncroachmentOccurs when one parcel of real property crosses over onto another parcel of real propertyLeasesAre a non-money encumbrance that limit the use of a property by giving a tenant possession for a short period of timeSetback Requirements RestrictA parcel of land by requiring a building to be built a certain minimum distance from the property linesSubdivision Map ActRelates to anyone who subdivides two or more parcels of real propertyWhat does a subdivision map act require?-Approvals be made to local government officials Planning commission is considered a local government officialThe Subdivided Lands Law (Subdivided Lands Act)Relates to subdividers who are subdividing a parcel of real property into 5 or more parcels -Requires that a copy of a public report on a subdivision must be given to anyone requesting it orally or in writingWhere should a subdivider go the obtain approval to sell parcels of landReal Estate CommissionerWhat does the commissioner issue thus allowing the subdivider to commence selling the parcels covered under the report?A Public ReportSubdivisionOccurs when a subdivider purchases a large parcel of land and divides it into smaller parcelsWhat is considered a subdivision?5 or more parcelsPlanned Unit Development (PUD)Is a subdivision that utilizes separate units (houses, townhouses, or condominiums) along with common areas such as clubhouses and/or swimming pools -Each owner owns the common areas in common with the other ownersCondominiumA form of ownership where the condominium owner owns the airspace of her unit separately and the common areas in common with all the other condominium owners -has fee title to airspaceBrownfieldIs a property that has been affected by environmental contamination (hazardous substance, pollutant, or contaminant)What are the Sovereign Powers of the State?1. Police Power 2. Eminent Domain 3. Taxation 4. EscheatPolice PowerIs the power of the state to enact laws within constitutional limits to promote the order, safety, health, morals, and general welfare of our society Zoning = Police PowerEminent DomainIs the power of the State to take private lands for public benefit -the State must compensate the real property owner(s) for the taking of the propertyTaxationIs the power of the State to tax owners of real estateEscheatIs the power of the State to take real property from deceased persons who do not have a will and do not have heirsZoningA major tool for implementing the local general or master plan -can be initiated by individuals, subdividers, and local authorities -Zones my be single family, multi-family, residential, commercial, and warehouse/industrialResidentialR3 or R-3ManufactureM1VarianceWhen a builder would like to build a building on a property that is not zoned for this specific use, the builder would ask for a variance to build the building on the property anywayNonconforming UseIs a use that is not consistent with the surrounding propertiesGrandfather ClauseHas been in existence for a long period of time and is thus "grandfathered in"An agency is created whenOne person parentheses the principal parentheses gives another person parentheses the agent parentheses the right to act on his behalfAn Agency is terminated at...Close of EscrowAn agency relationship can be created byWritten agreement ratification in ostensible authorityAgency by ratification occurs whenA person acts as the agent for a principal without a written authorization to do so and the principal accepts (ratifies) the agents actionsWhat is the best way to avoid litigation between a principal and a broker?It is to have a written contract or agreementAn agency relationship/fiduciary duty can be terminated byRevocation, agreement, death, destruction of the subject matter, or close of escrowAn agency gives rise to a fiduciary duty ofUtmost care, honest, integrity, and loyalty of the agent to the principalFiduciary obligations includeTruth, confidential Aliti, and competenceA real estate agent generally acts as aFiduciaryFiduciary ObligationThe relationship between principal an agentThe principal is either theBuyer or sellerThe real estate broker is anAgentThe seller is calledThe principalThe real estate broker is calledThe sellers agent or listing agentDual agency occurs whenA broker represents both the buyer and the seller in a real estate transactionThe buyer and seller must consent toDual agencyMaterial factA fact that if the broker knew about it she probably would not purchase a propertyEarnest Money Deposit (EMD)Money provided by the buyer to assure the seller that the buyer is in "earnest" (serious) -Real estate agent is given the authority to accept an earnest money deposit in the listing agreementSecret profitA violation of the real estate law, laws of agency, subject to disciplinary action by the real estate commissioner, and subject to a civil suit by the seller or buyer -Broker cannot receiveWhat is not essential to establish an agency relationshipCompensation -agent who acts without compensation is still held under certain standards of care to his principal -assumes all the liabilities of an agent who is being paid a commission in the transactionThe principal is not liable for the agent'sActions of the agent acts in excess of his authorityAgency disclosure process isDisclosure, election, confirmationIf a listing broker has a seller sign a hold harmless clause...This protects the broker against misinformation by the sellerA real estate appraisal isAn estimate of the value of a parcel of real property -appraiser makes a valuation (appraisal) to determine the worth of a parcel of real property for a specific reason of a definite dateIf a lender requires an appraisal...Then the buyer will pay for the appraisalValueIs the relationship between a thing desired and the potential purchaser -maximum utility of available resources -present worth of future benefits, the ability of one commodity to command another commodity in exchange, & the relationship between the thing desired and the desirous personDUSTDemand Utility Scarcity TransferabilityDemandOccurs when buyers want to purchase properties in a given geographical area -relates to personal income, land available for development, commute time, and moreUtilityIs the ability to use a property for the use desiredScarcityWhen there are few properties available for purchase in a specific geographical areaTransferabilityIs the ability to transfer the property to someone elseIf the property cannot be sold or willed...Then the value of the property will decrease because the existing property owner is stuck with the propertyPEPSIPolitical Economic Physical Social Include them allPEPSI: PoliticalGovernmental powers of zoning, taxes, etc.PEPSI: EconomicJobs and salary constraints, cost of money, etc.PEPSI: PhysicalSize, style, location of property, etc.PEPSI: SocialLifestyle, proximity to shopping, job centers, etcMarket ValueIs the value a buyer (under no duress) places on a parcel of real property -is what the market believe a property is worthMarketability & AcceptabilityTwo primary concerns of an appraiserMarketabilityThe ability to sell or market a parcel of real propertyAcceptabilityA measure of how acceptable the property will be to the general buying publicHighest & Best UseThe use for a parcel of real property that will provide the highest return to an investor or buyerWhen considering the highest and best use for the property in determining value and an appraiser determines that the building on a parcel of real property adds no value to the landThe appraiser would subtract the demolition costs from the value of the propertyWhen homes are similar in size and construction materials...They conform to a well-planned community that will help maintain property valuesContributionWhen a property owner adds a swimming pool to an apartment building, and the pool increases the values of the property more than the cost of the swimming poolRegressionWhen a person over-improves a home in a neighborhood of homes, this loss of value is -home of greater value surrounded by houses of lesser valueAssemblageThe ACT of placing two or more properties under one ownership with the resulting of the parcel being greater than the total purchase price of the parcelsWhen two or more properties are combined to make one property that is more valuable than the sum of the properties separatelyPlottage IncrementPrinciple of AnticipationOccurs when an investor purchases an income property in anticipation of a future income streamWhat is the return percentage on the investor's money?Capitalization RatePrincipal of SubstitutionSubstituting one property for another -would be used by a real estate appraiser for the comparison approach, capitalization approach, and cost approachWhat are the three appraisal approaches?-Comparison/Market Data Approach (Method) -Income/Capitalization Approach (Method) -The Cost Approach (Method)Comparison Approach/Market Data ApproachUses the principal of substitution; most readily adaptable and useable approach -Most often used with single-family homes and unimproved landIncome Approach/Capitalization ApproachUsed to appraise the value of income producing properties by converting an income stream into value -Commonly includes multi-unit residential apartment buildings and leased investmentsCost ApproachLooks at the cost to build a building on a parcel of land and adds it to the land value to determine the overall property value -Good for special purpose and service buildings, new residences, new construction, and older homesThe sales comparison or market data method of appraising properties usesThe principle of substitutionThe sales comparison/market data method is used most often withSingle-family homes and unimproved (vacant) landAn appraiser must makeAdjustments between the subject property and sales comparablesThe market data method is hindered byRapidly changing economic conditionsThe market data method of real property appraisal is used most often to determineOffice building rents and apartment rentsThe income approachUsed to appraise the value of income producing properties -converts an income stream into valueCapitalization RateThe rate of return an investor receives if she pays all cash to purchase an income propertyIncome/Rate/Value FormulaI/R = V I/V =R R x V = IValuePriceRateCapitalization RateIncomeNet (Operating) IncomeCash Flow FormulaIncome - Expenses - Mortgage Interest Payments = Cash FlowCapitalizationA process in which an appraiser converts income into appraised valueCapitalization RateIs the return an investor will receive if he or she pays all cash to purchase an income property -used to determine the value from an income flowThe higher the capitalization rate...The greater the risk inherent in the investmentThe lower the the capitalization rate...The lower the risk inherent in the investmentCapitalization ApproachBased primarily on the appraisal principle of anticipationGross Rent MultiplierThe number of times the gross scheduled income of a residential income property will divide into the price of the property -use GRM used w/ residential properties -only used for small residential income propertiesGross Rent Multiplier (GRM)Sales Price / Gross Rent (Annual or Monthly) = Gross MultiplierLarge multi-unit residential income properties use...An annual gross rent multiplierSmall Residential Income Properties use...A Monthly Gross Rent MultiplierCost ApproachBUILDING (Replacement or Reproduction cost used to value the building) + LAND (Land is valued using the Market Data Approach) - DEPRECIATION = PROPERTY VALUE (using cost approach)Replacement Cost =Same UtilityReproduction Cost =Exact ReplicaWhat three three ways determine the cost of a building?-Quantity Survey -Unit-Cost-in-Place -Square Foot/Cubic Foot MethodQuantity SurveyTakes into account every unit of material that goes into the construction of the property and totals them up to determine the total cost to. Build the property -most accurate method of determining cost to build replacement propertyUnit-Cost-in-PlaceConsiders each component of the structure and totals up each component to re h a cost to build a replacement property -fastest methodSquare Foot/Cubic Foot MethodConsiders cost to build a similar property on a square foot basis for residential and most commercial construction; & cubic foot for warehousesDepreciationThe loss of value from any cause -described through physical deterioration, functional obsolescence, and economic obsolescencePhysical Deteriorationbuilding physically wears out, decays, etcFunctional ObsolescenceIs the loss in value a property receives from factors internal to the property that deal with style -anything within the property lines & causes a loss in value due to outdated style would be considered functional obsolescenceEconomic ObsolescenceA loss in value due to external factors outside the subject property -is the hardest form of depreciation to correctReconciliation-when an appraiser reconciles all the sale comparables within the comparison/market data appraisal approach -when an appraiser reconciles all three appraisal methods to determine a final estimate of valueFee AppraiserAppraiser who is self-employed and appraises properties for the payment of a fee -fee usually paid by the buyer of the propertyFederal FeloniesMisuse of the appraisal report or coercion of the appraiserContemporaryAn architectural style with lots of windows and an open floor planMinimum Size Master Bedroom120 square feet (10' x 12')Minimum Size Regular Bedroom90 square feet (10' x 9')Minimum Dept of a Closet2 feet (6 square feet total)InterestThe cost to rent moneySimple interestInterest used for a loan on one to four unit residential propertiesNominal Interest RateThe actual interest rate named in the promissory note -Does NOT Include the upfront garbage fees lenders usually charge when making aloneEffective interest rateActual rate of interest the borrower pays INCLUDING all the garbage fees lender usually charge when making a loanStraight noteIs a loan in which only interest is paid during the life of the loan and then the entire principal balance is repaid in one lump sum -has no payments of principal during the term of the loan until the last paymentAmortizationThe systematic liquidation of a financial obligation on an installment basis -over a period of time you will eventually pay off the loan and all the interest due over the term of the loan -total monthly payment stays the same over the life of the loanFully-Amortized LoanLoan that is completely repaired by a series of regular equal installment payments of principal and interestPartially Amortized LoanPaid off similar to a fully amortized loan, except that the loan becomes due and payable sometime before the end of the amortized scheduleBalloon Payment (Lump sum payment)Part of a partially amortized loanNegative AmortizedOccurs when the borrower pays such a small payment and it does not cover the principal north part of the interest due to the lenderPrincipal balanceActually increases over the life of a negative amortized loan -used when a real estate market is appreciating and a commercial investor would like to obtain as much cash flow from the property as possibleAdjustable or variable rate loanLoan that adjusts to some predetermined index that changes over the life of the loan -Fixed same rate throughout life of the loanEquity-Down payment made on the property when purchased -amount of cash of buyer has in a property after the loans and lions against the property are paid off -Difference between fair market value of the property and loans (and other liens) against itLeverageDefined is using the maximum amount of borrowed funds to purchase real property -borrower who places a small down payment and finances most of the purchase price of a property is using leverage to purchase a property -Works well when real property prices are increasingLoan-to-Value Ratio (LTV)Defined as the loan amount divided by the price of the the property (or value)ValueSale price or the appraised value. whichever is lowerLow LTV= Large down = Low RiskHigh LTV= Small Down = High RiskImpoundReserves for property taxes and property insurance that lenders usually collect from borrowers who have high loan-to-value loansPITIPrincipal Interest Taxes InsuranceWhen a borrower assumes an existing loan "subject to",The lender does not approve the assumption in the seller continues to remain primarily liable for repayment of the loan for five years after the subject to assumption dateIf a lender does not approve of assumption...The seller stays liableThe pre-payment of a loan isA privilege not a rightPre-payment penalty providesFor a certain sum to be paid by the trust or to the beneficiary if the loan is paid off before it matures -is six months interest if the loan is paid back while the pre-payment penalty remains in effectDiscountingThe note when I wonder sells alone for less than the unpaid balanceDiscount pointsA borrower can pay lender money upfront to reduce the loan interest rateHow much is a discount point?One percent of the loan amountThe borrower will pay the lender the discount points...At the same time of loan origination and receive the lower loan interest ratePromissory noteEvidence of a debt obligation in an unconditional promise to pay the loan security by the trust deed -an IOU or pledge agreementA promissory note is evidence ofThe debt and uses the trust deed to collateralize the loanIs a borrower defaults when making specified loan payments...Than the lender may accelerate the loan balance to become immediately due and payable and proceed with a forclosure actionTrustorBorrower who signs the note indeed of trustTrusteeHolds legal title to the propertyWhen the trust door plays off the loan secured by trust deed...Then the trustee reconverts the legal title back to the trustorTrustee has power of sale and event ofForeclosureBeneficiary StatementA statement sent by the beneficiary to escrow informing the escrow officer of the exact amount that must be paid out of escrow to pay off an existing loanPower of saleThe trust door gives the trustee the power to sell the property if he defaults on the loan paymentsAcceleration ClauseIn the trust deed makes the loan due and payable upon the happening of a certain event -event most commonly associated with an acceleration clause is a loan default by the borrower -allows the lender to declare the unpaid balance of the note due in payable upon defaultWhen the borrower stops making payments on the loan....The acceleration clause takes effect and makes the entire loan amount immediately due in payableAlienation Clause (Due on Sale Clause)Allows the lender to call the entire loan balance due and payable immediately if the owner conveys the propertySubordination clauseFirst trust deed to change positions with a second trust regarding priority of recordingMortgagorBorrower/buyerMortgageeLenderForeclosure of mortgages isUsually accomplish through the courtsA real property sales contract is aPurchase contract and security device between the vendor and Vendee -seller than sells the property to a buyer and the seller extends credit to the buyer using a property sales contractVendorSeller -Holds Legal TitleVendeeBuyer/Borrower -Holds equitable titleHard money Loan-usually secured by real estate and given to a third-party to obtain a cash loan -generally have very high interest rates, many discount points, and low LTV ratios -no restrictions regarding how the loan will be usedPurchase money LoanA loan made to purchase a propertyConventional Loan-loans made by institutional lenders (e.g. commercial banks and savings banks) that do not have government insurance or guarantees -usually comfortable making up to 80% LTV loansGovernment Loan-FHA insured -VA guaranteed -CalVetConstruction Loan-alone used during the construction of a propertyFederal Housing Administration (FHA)Under the department of housing and urban development (HUD) -insurers loans made by approved lenders -charges mutual mortgage insurance to pay for the insurance of high loan to value loans -allows a purchaser to purchase a wonderful four unit residential property that is to be rented out to a tenantVeteran's Administration (VA) loanAre under the department of veterans affairs -guarantees loans made by approved lenders -have the lowest down paymentCalVet loanPurchases the home for the veteran then set up a real property sales contract for repayment of the loan -CalVet is the vendor in the veteran is the Vendee -loans have the lowest closing cost -does not allow a person to purchase a 1 to 4 unit residential property that is to be rented outSecondary Mortgage MarketRepresented by the entities on Wall Street who buy the loans made in the primary mortgage market Entities include: -Fannie Mae (FNMA) -Freddie Mac (FHLMC) -Ginnie Mae (GNMA) Loans are bought and sold in the secondary mortgage marketReal Estate Settlement Procedures Act (RESPA)1. Primary Purpose of RESPA 2. RESPA applies to loans for owner-occupied: single family, fourplex, lot of land upon which mobile home is located 3. RESPA applies to FHA and VA loans, loans through federally insured S&L 4. Violations of RESPA 5. Requires the lender to give the borrowerWillWritten instrument used to dispose of real and personal property after a person's deathSuccessionWhen a person dies without a will but has heirs, the law provides for disposition of the person's property to their heirsAccession-annexation -accretionOccupancy-adverse possession -government patentTransferThrough DeedsHolographic WillWritten, dated, and signed by the decedent in his or her own handwriting and not witnessedWitnessed WillUsually has two witnesses who subscribe their names as witnesses to WillDecendent-is the testator -appoints executor/executrix to carry out wishes of Will Personal Property = LegacyProbateA formal court proceeding to confirm the validity of a will, determine the heirs to the estate, collect the assets of the estate, pay the taxes of the estate, and pay the debts of the estate -occurs when a person dies without a willInterstate Successiondying without a will -law provides for disposition of the person's propertyWhen a person dies without a will and without heirs...His property will escheat to the State of California No will, No heirs = 5 yearsAccessionThe extension of an owner's title to real property through either annexation (man-made) or accretion (natural occurringAccretionOccurs when a riparian owner or littoral owner acquired title to additional land by the gradual build up or accumulation of land deposited on the owners property by the shifting of a river or ocean's actionAvulsionRapid washing away of landAlluviumLoose soil that flows down a river -is the land that accumulates due to the splash-up action of waterAdverse possession occurs whenA person fulfills the following requirements: OUCHT -Open & Notorious -Uninterrupted -Claim of Right -Hostile -TaxesTransfer of Real PropertyAccomplished when the title to real property is conveyed to another personGrantorPerson conveying the real propertyGranteePerson receiving the real propertyWhat are the two types of deeds?Grant Deed and Quitclaim DeedGrant DeedConveys a property and contains certain warrantiesQuitclaim DeedUsed to remove someone from title to a property and has no warranties expressed or impliedValid DeedRequires a grantor, grantee, and property descriptionGrant DeedA written instrument that a property owner uses to convey and transfer title to real propertyWhat are the types of grant deeds?-Trustee's Deed -Sheriff's Deed -Patent DeedQuitclaim DeedDeed where the grantor transfers only his interest in the property -are no warranties or covenants both expressed or implied -warrants nothingQuiet Title ActionA court action designed to quiet the title on a parcel of real property that has a cloud on the titleEminent DomainOne of the sovereign powers of the state -permits the government to take private property for public useIf the government condemns a property due to health and safety reasons...The owners will not be compensatedEminent DomainIs a public right, not a private right -associated with severance damagesInvoluntary ConversionCity or county may take a piece of property for public use through a condemnation actionInverse CondemnationOccurs when an owner sues to recover damages caused by the StateEscrowIs the process where money or other documents are held by a disinterested third party until satisfaction of the terms and conditions of the escrow instructions have been achievedThe escrow officerIs the agent of BOTH the buyer and seller during the escrow periodAfter close of escrowThe escrow officer becomes the agent of the buyer and seller SEPARATELYIf a buyer and seller are in an escrow dispute and both parties demand payment...The escrow agent must receive a court order prior to disbursing fundsEscrow holder cannotRelease documents without the permission or consent of all parties to the escrowDuring close of escrow the seller may have paid for some items...That he would benefit from after the close dateProperty InsuranceUsually paid for the entire year at one time -the seller will not receive these benefits, he may receive a credit in escrowImpoundsWhen a lender collects property taxes and homeowners insurance payments on a monthly basis and pays them for the homeowner -very common proration itemRecurring CostA cost that continues to occurs after close of escrowNon-reoccurring costsCosts that are a one-time charge during escrowCreditMoney coming to the buyer or sellerDebitMoney going away from the buyer or sellerTitle InsuranceAllows a buyer of a parcel of real property to purchase a policy of title insurance that covers the buyer against title-related problems at the time of close of escrow -no title insurance covers everythingChain of TitleIs the recorded history of encumbrances, liens and (especially) ownership interests that affect the subject parcel of real propertyIf there are any breaks in the chain of title...Then the present owners do NOT have valid title to the propertyA preliminary title report ("prelim")An offer from a title insurance company to issue a policy of title insurance -prelim usually completed before a title insurance policy is issued and after escrow is openedCalifornia's Land Title Association (CLTA)Owner's Policy The CLTA Owner's Standard Coverage of Title Insurance covers the owner against: -all recorded items in the chain of title to the property -forgery (someone is NOT who they say they are) -incompetence (declared incompetent by a court of law) -lack of capacity (a minor under the age of 18) -improper delivery of a recorded deedAmerican Land Title Association (ALTA)Extended Coverage Policy of Title Insurance -all CLTA coverage Plus -physical survey -boundary lines -unrecorded encumbrances -encroachmentsCan a title policy cover everything?YESSeveraltyForm of sole ownership (one person)Joint TenancyRequires four unities: time/title/interest/possession -right of survivorship, cannot be willed -requires equal ownership under one title -surviving joint tenant receives title free of unsecured debts of deceasedTenancy in CommonOnly unity is possessionCommunity PropertyVesting type between a married couple -agreement to sell signed by only one spouse is unenforceableSingle person can take how much of sale proceeds of home tax free$250,000Married couple can take how much of sale proceeds from the sale of their home tax free$500,000Mortgage Interest DeductionAllows the homeowner to deduct some of the interest paid on the home loanFederal Income Tax Laws and Social Security TaxesMost real estate agents considered independent contractors -most real estate licensees considered employees of brokerAdjusted Cost BasisUnadjusted Cost Basis + Acquisition/Settlement Costs + Capital Improvements - Adjusted Cost Basis =Adjusted Selling PriceSelling Price - Selling Costs =Capital Gain or Capital LossAdjusted Selling Price - Adjusted Cost Basis =Capital ExpendituresAre added to the cost basis & may be deprecated if income producing propertyResidential properties depreciated on a27.5 year straight line scheduleCommercial properties depreciated on a39 straight line scheduleSale-Leaseback occursWhen an owner of a commercial property sells the property to an investor and leases it back from the same investorWhen an investor sells his income property...He may receive capital gain on the property -must pay a tax on capital gain received, unless he exchanges property for another & follows strict rules set by IRS & courtsTwo types of exchangesStraight Across Exchange Delayed ExchangeStraight Across ExchangeEach investor exchanges (trades) properties directly to eachotherDelayed ExchangeThe investor sells his property and then must reinvest the proceeds into another real estate investment property within a perceived time periodIf a taxpayer buys a property owner by a non-owner (foreigner) and there are capital gains due...The taxpayer buyer is responsible to pay the taxProperty owners in CA payAnnual taxes on all privately help real property in the StateTax rate determined byCounty board of supervisors in annual propertiesHow often are properties assessed for taxes?Once per year"No Darn Fooling Around"N: November 1st ( first installment of property taxes) D: December (delinquent) F: February (second installment) A: April (delinquent)When a property is sold it is reassessed by...The tax assessorWhen a long-term lease is created (& a gift/inheritance)...Both will cause a reassessment of a propertyWhen a person purchases a property that hasn't been sold in many years...The seller my be paying very low property taxesWhen the buyer closes escrow...The escrow officer prorated the taxes on the property based upon the seller's existing tax billAfter close of escrow...The buyer will receive a supplemental assessment from the tax assessor reflecting the new and up-to-date property tax assessmentTaxed Ad ValoremAccording to valueWhen a property is soldIt's value is established for property tax purposesLoan assumptions are...NOT TAXEDCLAMSCompetent Parties/Capacity to Contract Lawful Objective/Legality And in Writing Mutual Consent Sufficient ConsiderationForces Affecting Value-Political: governmental powers of zoning, taxes, etc. -Economic: Jobs & salary constraints, cost of money, etc. -Physical: Size, style, location of property, etc -Society: Lifestyle, proximity to shopping, job centers, etcCC&R's (Covenants, Conditions and Restrictions)-created by deed, agreement, or recorded declaration of restrictionsBreach of a Covenant (Promise)A minor breach and removed by monetary damagesBreach of a ConditionA major breach and remedied by loss of title to the propertyRestrictionA private deed restriction and restricts the use of the propertyInjunctionUsed to enforce private deed restrictionsCivil CourtsUsed for commission disputes or any other monetary dispute -if in probate➡️ turns to courtsReal Estate CommissionerSuspends and revoked real estate licensesDistrict Attorney/Criminal CourtsProsecutes people who act as an agent, but do not have a real estate licenseBusiness and Professions CodeInformation on ethical conduct for a real estate licenseSalesperson Requirements-need 3 courses -don't need experience -minimum age of 18 -conviction of a crime or failure to disclose all criminal history may result in the denial of a licenseBroker Requirements-need 8 courses -minimum age of 18 -need two years full time real estate experience within last five years OR four-year degree in real estate -Conviction of a crime or failure to disclose all criminal history may result in the denial of a licenseHow long is a real estate license valid?Four yearsTo renew a California real estate license the DRE requires how much continuing education?45 hours of continuing educationA license must disclose in writing that...They are licensed when involved in a transaction as a PRINCIPALFraudThe intentional and successful deception or collusion used to deceive another person and that person acts upon it to the loss of property and legal inquiryMisrepresentationOccurs when a principal or agent conceals or falsifies the condition and/or other material fact(s) about a propertyActual FraudAgent purposefully makes an untrue statement that detrimentally affects the principal -intentionalNegligentHonest mistake that caused a client harmNegative FraudIntentional nondisclosure of a material factPuffingExaggeration of the features of a property -is a statement of opinion and usually not considered a statement or representation of factAdvertisingCannot mislead a prospective buyer regarding the condition or other facts about a subject propertyBlind AdDoes not include the name of the agent or broker who has the property listed for sale -are illegal -must have broker name & IF # on adsReferral FeePaid from a broker to another broker for referring a clientFinder's FeePaid from a broker to a non-licensee for introducing the broker to the clientNon-licensee cannotSolicit clients for the broker, can only introduce him to a potential clientLicensee may not receive...Kickbacks, referral fees, finder's fees, or commissions from an escrow company, termite company, title company or lenderBroker in CA can pay a commission to an...Out-of-state brokerLicensee may not receive...Secret profit from sale of one of his listings or other purchase he is involved in as a licensee -person who is NOT a licensee may make as many secret profits as they desireWhat is the primary purpose of the Department of Real Estate's Recovery Fund?It is for members of the general public who hold uncollectible judgements against a licensee to collect limited damages -judgement must be based upon fraud, misrepresentation, deceit, or conversion of trust fundsWhat is the maximum limit per transaction?$50,000What is the maximum limit per licensee?$250,000Where would a broker look to, to secure a commission on the sale of real property?The courtsCommissions are negotiable between the principal & broker and not...Set by lawDisclosure of commission negotiability is...Required by lawTo protect a real estate broker from one of his buyers...Coming in after the expiration of the listing agreement and purchasing the property without paying him a commission, they routinely place broker protection clauses/ safety clauses/ protection period clauses in listing agreementsBroker Protection Clause StatesThat if a buyer, who was shown the property by the broker, purchased the property within 180 days after the expiration of the listing agreement then the broker will be paid a commission on the sale of the propertyBroker only has a right to earn a commission when the property sells during the listing period except...When a broker's protection clause is include in the listing agreementWhen an agent receives multiple offerso. A property...They must present all offers to the seller(s) at the same time hPurpose of a Trust Account-two categories: >earnest money deposits collected in course of sales transactions >property management rents collected from tenants -may only have one trust account -has 3 business days to deposit -aka commingling -must have interest-bearing trust account -non-interested bearing -can have 0 balance -reconcile every 30 days -broker must keep trust checks for min 3 years -must keep account ledgerBroker must retain copies relating to...Real estate transaction for 3 years -Except advertisementsWhen is a written broker-salesperson agreement required?Between all real real estate brokers and salespersons in CAA salesperson is legally...An employee of the broker BUT the salesperson is an independent contractor for tax purposesCommissions are negotiable betweenThe principal and the broker -NOT set by lawDisclosure of commission isRequired by lawAn agency relationship is terminated when...The agent dies -all the broker's listings will automatically terminate with death of the brokerReal Estate CommissionerIs appointed by the Governor of the State of CaliforniaThe Real Estate Commissioner is...Has primary regulatory authority over all real estate subdividers and licensees in the state of CAThe Commissioner issues...A desist and refrain orderHow long does the Real Estate Commissioner have to act on a violation?3 yearsNational Association of Realtors (NAR)A National industry group associated with the California Association of Realtors (CAR) and local associationsLicensee must be a member of ....to call themselves a realtorNARThe district attorney would.....a non-licensee who performs acts the require a real estate licenseProsecuteTransferors are required to...Disclose all material facts that relate to a one-to-four residential property that is being sold in CAReal Estate Transfer Disclosure Statement would be required with aSale transaction involving one-to-four unit dwellingsIf the seller refuses to sign the Transfer Disclosure Statement...The broker should notify the buyer of their rights to get the TDSIf a person lists their home for sale "as is", the seller should visibly inspect the property and is obligated to provide a real property disclosure statementto prospective buyersRegarding the TDS, the broker must visually inspect the property and...Reveal pertinent info/make notes concerning his findings on the formIf someone dies on the property, fact must be disclosed for...3 years -not required to disclose afflicted or dies from AIDSHomeowner's Guide to Earthquake Safety bookletMust be provided to seller to buyer of residential dwellings built prior to 1/1/1960 with one to four living unitsAlquist-Priolo Special Earthquake Studies Zone ActRequires All owners of properties located within 1/4 mileEnvironmental Hazards BookletDiscusses asbestos, formaldehyde, radon, hazardous wastes, household hazardous waste, & leadWhat is radon?A poisonous gas & is measured with a carbon dioxideWhen do you have to check Lead Based Paint Disclosure?-Check if the house was built before 1978 -don't have to check if handicapped elderly expected to live thereMello-Roos Municipal BondA private bond issue that is used by developers to finance sidewalks, schools, and other off-site improvements -generally have a set duration 20-25 years in commonAccording to the Mello-Roos Facilities Bond Act, the ....SELLER must disclose the existence of the Mello-Roos to all prospective purchases (material fact)Structural Pest Control Reports are filed with...The Structural Pest Control Board -on file for 2 yearsUnruh Civil Rights Act (Unruh Act)Prohibited discrimination in business establishments in CACalifornia Fair Housing Act (Rumford Act)Prohibited discrimination in the sale and rent of residential properties in CACalifornia Housing Financial Discrimination Act (Holden Act)Prohibited discrimination in lending in California -prohibits redliningContractAn agreement to do or not to do something -it's legally enforceable agreement between competent parties who have agreed to perform certain acts for consideration or refrain from performing certain actsExpress ContractIs a contract where the parties put their intentions and the terms of the agreement in words (either oral or written)Implied ContractIs a contract where the agreement between the parties is shown by acts or conduct rather than wordsUnenforceable ContractA contract that is valid -for some reason cannot be proved or sued upon -oral = valid but unenforceableBilateral ContractPromise in exchange for a promise -promise of one party is given in exchange for the promise of the other party -usually listing agreementUnilateral ContractA promise in exchange for an act -a promise is given by one party to induce an act by the other partyExecutory ContractA contract that is in the process of being performed and has not yet been completed -pendingExecuted ContractIs a contract that has already been completedValid ContractFour Essential Elements of any valid contract 1. Competent Parties/Capacity to Contract 2. Mutual Consent 3. Lawful Objective 4. Sufficient Consideration (5. In writing) CLAMSCompetent Parties (Capacity to Contract)Parties to a contract must not have been declared incompetent in a court of law -minors may not contract for real property unless married, divorced, in the military, or emancipated by a court of lawMutual ConsentMutuality of agreement -genuine offer and genuine acceptance is used to facilitate a meeting of the mindsLawful ObjectivePurpose of the contract must be of a legal purposeSufficient ConsiderationAnything of value can be used as consideration including services rendered, a promise to perform an act, or an exchange of money.Voidable ContractA contract that appears valid and enforceable but is subject to recession by one of the parties who acted under a disabilityRescindTerminateIf it is before close of escrow...A contract can be rescindedIf it is after close of escrow...Then the party must file a lawsuitVoid ContractHas no legally binding effect -it's unenforceable from the very beginning & is not a contract at allPower of AttorneyCivil CourtsUsed for commission disputes or any other monetary dispute -if in probate➡️ turns to courtsReal Estate CommissionerSuspends and revoked real estate licensesDistrict Attorney/Criminal CourtsProsecutes people who act as an agent, but do not have a real estate licenseBusiness and Professions CodeInformation on ethical conduct for a real estate licenseSalesperson Requirements-need 3 courses -don't need experience -minimum age of 18 -conviction of a crime or failure to disclose all criminal history may result in the denial of a licenseBroker Requirements-need 8 courses -minimum age of 18 -need two years full time real estate experience within last five years OR four-year degree in real estate -Conviction of a crime or failure to disclose all criminal history may result in the denial of a licenseHow long is a real estate license valid?Four yearsTo renew a California real estate license the DRE requires how much continuing education?45 hours of continuing educationA license must disclose in writing that...They are licensed when involved in a transaction as a PRINCIPALFraudThe intentional and successful deception or collusion used to deceive another person and that person acts upon it to the loss of property and legal inquiryMisrepresentationOccurs when a principal or agent conceals or falsifies the condition and/or other material fact(s) about a propertyActual FraudAgent purposefully makes an untrue statement that detrimentally affects the principal -intentionalNegligentHonest mistake that caused a client harmNegative FraudIntentional nondisclosure of a material factPuffingExaggeration of the features of a property -is a statement of opinion and usually not considered a statement or representation of factAdvertisingCannot mislead a prospective buyer regarding the condition or other facts about a subject propertyBlind AdDoes not include the name of the agent or broker who has the property listed for sale -are illegal -must have broker name & IF # on adsReferral FeePaid from a broker to another broker for referring a clientFinder's FeePaid from a broker to a non-licensee for introducing the broker to the clientNon-licensee cannotSolicit clients for the broker, can only introduce him to a potential clientLicensee may not receive...Kickbacks, referral fees, finder's fees, or commissions from an escrow company, termite company, title company or lenderBroker in CA can pay a commission to an...Out-of-state brokerLicensee may not receive...Secret profit from sale of one of his listings or other purchase he is involved in as a licensee -person who is NOT a licensee may make as many secret profits as they desireWhat is the primary purpose of the Department of Real Estate's Recovery Fund?It is for members of the general public who hold uncollectible judgements against a licensee to collect limited damages -judgement must be based upon fraud, misrepresentation, deceit, or conversion of trust fundsWhat is the maximum limit per transaction?$50,000What is the maximum limit per licensee?$250,000Where would a broker look to, to secure a commission on the sale of real property?The courtsCommissions are negotiable between the principal & broker and not...Set by lawDisclosure of commission negotiability is...Required by lawTo protect a real estate broker from one of his buyers...Coming in after the expiration of the listing agreement and purchasing the property without paying him a commission, they routinely place broker protection clauses/ safety clauses/ protection period clauses in listing agreementsBroker Protection Clause StatesThat if a buyer, who was shown the property by the broker, purchased the property within 180 days after the expiration of the listing agreement then the broker will be paid a commission on the sale of the propertyBroker only has a right to earn a commission when the property sells during the listing period except...When a broker's protection clause is include in the listing agreementWhen an agent receives multiple offerso. A property...They must present all offers to the seller(s) at the same time hPurpose of a Trust Account-two categories: >earnest money deposits collected in course of sales transactions >property management rents collected from tenants -may only have one trust account -has 3 business days to deposit -aka commingling -must have interest-bearing trust account -non-interested bearing -can have 0 balance -reconcile every 30 days -broker must keep trust checks for min 3 years -must keep account ledgerBroker must retain copies relating to...Real estate transaction for 3 years -Except advertisementsWhen is a written broker-salesperson agreement required?Between all real real estate brokers and salespersons in CAA salesperson is legally...An employee of the broker BUT the salesperson is an independent contractor for tax purposesCommissions are negotiable betweenThe principal and the broker -NOT set by lawDisclosure of commission isRequired by lawAn agency relationship is terminated when...The agent dies -all the broker's listings will automatically terminate with death of the brokerReal Estate CommissionerIs appointed by the Governor of the State of CaliforniaThe Real Estate Commissioner is...Has primary regulatory authority over all real estate subdividers and licensees in the state of CAThe Commissioner issues...A desist and refrain orderHow long does the Real Estate Commissioner have to act on a violation?3 yearsNational Association of Realtors (NAR)A National industry group associated with the California Association of Realtors (CAR) and local associationsLicensee must be a member of ....to call themselves a realtorNARThe district attorney would.....a non-licensee who performs acts the require a real estate licenseProsecuteTransferors are required to...Disclose all material facts that relate to a one-to-four residential property that is being sold in CAReal Estate Transfer Disclosure Statement would be required with aSale transaction involving one-to-four unit dwellingsIf the seller refuses to sign the Transfer Disclosure Statement...The broker should notify the buyer of their rights to get the TDSIf a person lists their home for sale "as is", the seller should visibly inspect the property and is obligated to provide a real property disclosure statementto prospective buyersRegarding the TDS, the broker must visually inspect the property and...Reveal pertinent info/make notes concerning his findings on the formIf someone dies on the property, fact must be disclosed for...3 years -not required to disclose afflicted or dies from AIDSHomeowner's Guide to Earthquake Safety bookletMust be provided to seller to buyer of residential dwellings built prior to 1/1/1960 with one to four living unitsAlquist-Priolo Special Earthquake Studies Zone ActRequires All owners of properties located within 1/4 mileEnvironmental Hazards BookletDiscusses asbestos, formaldehyde, radon, hazardous wastes, household hazardous waste, & leadWhat is radon?A poisonous gas & is measured with a carbon dioxideWhen do you have to check Lead Based Paint Disclosure?-Check if the house was built before 1978 -don't have to check if handicapped elderly expected to live thereMello-Roos Municipal BondA private bond issue that is used by developers to finance sidewalks, schools, and other off-site improvements -generally have a set duration 20-25 years in commonAccording to the Mello-Roos Facilities Bond Act, the ....SELLER must disclose the existence of the Mello-Roos to all prospective purchases (material fact)Structural Pest Control Reports are filed with...The Structural Pest Control Board -on file for 2 yearsUnruh Civil Rights Act (Unruh Act)Prohibited discrimination in business establishments in CACalifornia Fair Housing Act (Rumford Act)Prohibited discrimination in the sale and rent of residential properties in CACalifornia Housing Financial Discrimination Act (Holden Act)Prohibited discrimination in lending in California -prohibits redliningContractAn agreement to do or not to do something -it's legally enforceable agreement between competent parties who have agreed to perform certain acts for consideration or refrain from performing certain actsExpress ContractIs a contract where the parties put their intentions and the terms of the agreement in words (either oral or written)Implied ContractIs a contract where the agreement between the parties is shown by acts or conduct rather than wordsUnenforceable ContractA contract that is valid -for some reason cannot be proved or sued upon -oral = valid but unenforceableBilateral ContractPromise in exchange for a promise -promise of one party is given in exchange for the promise of the other party -usually listing agreementUnilateral ContractA promise in exchange for an act -a promise is given by one party to induce an act by the other partyExecutory ContractA contract that is in the process of being performed and has not yet been completed -pendingExecuted ContractIs a contract that has already been completedValid ContractFour Essential Elements of any valid contract 1. Competent Parties/Capacity to Contract 2. Mutual Consent 3. Lawful Objective 4. Sufficient Consideration (5. In writing) CLAMSCompetent Parties (Capacity to Contract)Parties to a contract must not have been declared incompetent in a court of law -minors may not contract for real property unless married, divorced, in the military, or emancipated by a court of lawMutual ConsentMutuality of agreement -genuine offer and genuine acceptance is used to facilitate a meeting of the mindsLawful ObjectivePurpose of the contract must be of a legal purposeSufficient ConsiderationAnything of value can be used as consideration including services rendered, a promise to perform an act, or an exchange of money.Voidable ContractA contract that appears valid and enforceable but is subject to recession by one of the parties who acted under a disabilityRescindTerminateIf it is before close of escrow...A contract can be rescindedIf it is after close of escrow...Then the party must file a lawsuitVoid ContractHas no legally binding effect -it's unenforceable from the very beginning & is not a contract at allPower of AttorneyA written instrument giving authority to a person to act on behalf of another personAssignmentIs the transfer of rights, interests or title to property of a person (assignor) to another person (assignee) -personal service contract CANNOT be assignedNotationIs the substitution of a new contract for an old oneStatute of LimitationsThe amount of time a person has to bring action in a court of law -generally 4 years from the close of escrow or when the defect is discovered by the plaintiff in the lawsuitSpecific PerformanceIs a court of action brought to force a party to carry out the terms of a contract -usually force a party to convey real property as stated in a purchase agreement -must be reasonable or sufficient relative to valueLiquidated DamagesThe predetermined amount of damages the parties to a contract agree to pay as the total amount of compensation an injured party will receive if the other party breaches the contractOptionAn agreement to keep an offer to sell or lease real property open for a specified period of time -must be accompanied by consideration -are assignable -is a contract to keep an offer openOpen ListingMultiple brokers work simultaneously to sell the property -commission only paid to the broker who is the procuring cause of the saleExclusive Authorization and Right to Sell ListingSeller pays a commission to the agent -no matter who sells the propertyExclusive Agency ListingSeller pays a commission to the agent no matter who sells the property -except if the seller sells the property him or herselfIn a Net Listing the agent may...Do everything correctly and not receive a commissionOption ListingAgent lists a property for sale and, at the same time, the agent personally has an option to purchase the property for a specified purchase price and length of time to exercise the optionOral ListingAgency relationship created by oral agreement and is effective in establishing the relationship, but not enforceableExclusive AuthorizationTo locate property is a written agreement where the buyer agrees to pay the agent a commission if the agent finds a suitable property for the buyer to purchaseShort LeaseBuyer moving in before close of escrow or seller staying after close of escrow

REAL ESTATE EXAM PREP

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