Arizona Real Estate Exam 2025–2026 | Complete Study Guide &
Practice Questions
1031 Exchange - A transaction that, under provisions of Section 1031 of the
Internal Revenue Code, allows a taxpayer to sell an investment property and
purchase another investment property in its place without paying capital gains on
the proceeds from the sale.
1099-Misc - CORRECT ANSWER The Internal Revenue Service form that
is used to report various types of miscellaneous income earned other than salary
earned from an employer
Abandonment of a Homestead - CORRECT ANSWER The loss of a
homestead exemption if the owner moves to another state, sells the property,
turns the property into a rental or no longer occupies the home as a primary
residence
Abutting - CORRECT ANSWER Refers to parcels that share a boundary
Acceleration Clause - CORRECT ANSWER A clause in loan documents
that allows the lender to call the note all due and payable if the borrower breaches
the terms
Accretion - CORRECT ANSWER The gradual addition of land by natural
causes, such as shoreline movements
Acre (in square feet) - CORRECT ANSWER 43,560 square feet
Acre Foot - CORRECT ANSWER One foot of water over the entire
surface of an acre; contains 325,851 gallons of water
,Active Management Area (AMA) - CORRECT ANSWER Areas within
Arizona where water management programs, such as restriction governing
groundwater use, are in place; requires demonstration of Assured Water Supply
Actual Eviction - CORRECT ANSWER The physical removal of a tenant
from a leased property with the tenant relieved of any further responsibility to pay
rent
Actual Notice - CORRECT ANSWER Express knowledge of a fact
(compared to Constructive Notice, which is notice given by publication)
Ad Valorem - CORRECT ANSWER A concept for property taxes that
means "according to value"
Adequate Water Supply - CORRECT ANSWER The standard required
from developers OUTSIDE of an Active Management Area (AMA); if adequate
water supply cannot by demonstrated, the developer must disclose this fact in all
advertising and promotional material
Adjustable Rate Mortgage (ARM) - CORRECT ANSWER A mortgage loan
that has an interest rate on the note that periodically adjusts based on an index
that reflects the cost to the lender; also called Variable Rate Mortgage
Adjusted Basis - CORRECT ANSWER The purchase price of a property
(basis) minus accumulative depreciation, plus acquisition costs, plus capital
improvements; also called Adjusted Purchase Price
Adjusted Sales Price - CORRECT ANSWER Sales price minus costs of sale
(commission and closing costs)
Administrator - CORRECT ANSWER Court-appointed personal
representatives of an estate for someone who dies intestate (without a will)
Administrator's Deed - CORRECT ANSWER A document that transfers
title to real estate from an intestate person to his or her heirs
,Adverse Possession - CORRECT ANSWER Acquiring title to land because
of a long-term, open and notorious use of the land. The legal process is called
PRESCRIPTION. The required time period in Arizona is 10 years.
Advisory Board - CORRECT ANSWER A 10-member board appointed by
the Governor that advises and gives recommendations to the Commissioner of the
Arizona Department of Real Estate. Member serve a 6-year term
Affidavit of Affixture - CORRECT ANSWER A document for owners of
mobile homes certifying that the home is immobilized, i.e., anchored to real
property
Affidavit of Disclosure - CORRECT ANSWER A disclosure document that
may be required when selling property that is either in an unincorporated area
(not in a city or town), NOT in a subdivision, or if five or fewer parcels are involved
in the transaction. It provides information about certain aspects of the property
and allows the buyer an opportunity to rescind the contract.
Affidavit of Value - CORRECT ANSWER A sworn statement under oath
that indicates the purchase price paid by the buyer in a trascaction; must be filed
with the deed and signed by both buyer and seller.
Agency - CORRECT ANSWER A relationship of trust between one person
(the principal) and another (the agent) in which the agent has the authority to act
on behalf of the principal. Agency creates a fiduciary duty on the part of the agent
to act in good faith.
Agent - CORRECT ANSWER One who represents a principal; In Arizona,
the designated agent is the agent of the principal. Associated licensees in the
office are considered subagents to the principal. Both the agent and the subagents
are fiduciaries to the principal (client).
Agreement for Sale - CORRECT ANSWER A carryback document
between buyer and seller. The seller does not give a deed to the buyer until paid in
full; therefore the seller retains legal title and the buyer has equitable title. Also
called Land Contract, Contract for Deed or Installment Sale
, Air Lot - CORRECT ANSWER The ownership of the interior of a
condominium; a property that is above the base elevation of the land as in a multi-
level building
Air Rights - CORRECT ANSWER The right to undisturbed use and control
of the airspace over a parcel of land (within reasonable limits for air travel); may be
transferred separately from the land.
Alienation - CORRECT ANSWER The transfer of ownership or an interest
in property from one person to another by any means
Alienation Clause - CORRECT ANSWER A clause used in a mortgage
allowing the lender to demand the full and immediate payment of the mortgage
because the owner transferred ownership of the property. Also called Due on Sale
Clause.
Allodial System - CORRECT ANSWER A concept of land ownership that
allows private individuals to own property
Alluvion - CORRECT ANSWER Solid material deposited along a shore by
accretion
American Land Title Association (ALTA) - CORRECT ANSWER A national
association of title companies, abstractors and attorneys whose members agree to
promote uniformity, quality and professional standards in title insurance policies
Amortization - CORRECT ANSWER Payment of debt in regular, periodic
installments of principal and interest (as opposed to interest-only payments)
Amortization Schedule - CORRECT ANSWER A table or chart that shows
the periodic payments, interest and principal requirements and unpaid load
balance for each period of the life of a loan
Annexation - CORRECT ANSWER Attaching personal property to land so
that the law views it as part of the real property
Practice Questions
1031 Exchange - A transaction that, under provisions of Section 1031 of the
Internal Revenue Code, allows a taxpayer to sell an investment property and
purchase another investment property in its place without paying capital gains on
the proceeds from the sale.
1099-Misc - CORRECT ANSWER The Internal Revenue Service form that
is used to report various types of miscellaneous income earned other than salary
earned from an employer
Abandonment of a Homestead - CORRECT ANSWER The loss of a
homestead exemption if the owner moves to another state, sells the property,
turns the property into a rental or no longer occupies the home as a primary
residence
Abutting - CORRECT ANSWER Refers to parcels that share a boundary
Acceleration Clause - CORRECT ANSWER A clause in loan documents
that allows the lender to call the note all due and payable if the borrower breaches
the terms
Accretion - CORRECT ANSWER The gradual addition of land by natural
causes, such as shoreline movements
Acre (in square feet) - CORRECT ANSWER 43,560 square feet
Acre Foot - CORRECT ANSWER One foot of water over the entire
surface of an acre; contains 325,851 gallons of water
,Active Management Area (AMA) - CORRECT ANSWER Areas within
Arizona where water management programs, such as restriction governing
groundwater use, are in place; requires demonstration of Assured Water Supply
Actual Eviction - CORRECT ANSWER The physical removal of a tenant
from a leased property with the tenant relieved of any further responsibility to pay
rent
Actual Notice - CORRECT ANSWER Express knowledge of a fact
(compared to Constructive Notice, which is notice given by publication)
Ad Valorem - CORRECT ANSWER A concept for property taxes that
means "according to value"
Adequate Water Supply - CORRECT ANSWER The standard required
from developers OUTSIDE of an Active Management Area (AMA); if adequate
water supply cannot by demonstrated, the developer must disclose this fact in all
advertising and promotional material
Adjustable Rate Mortgage (ARM) - CORRECT ANSWER A mortgage loan
that has an interest rate on the note that periodically adjusts based on an index
that reflects the cost to the lender; also called Variable Rate Mortgage
Adjusted Basis - CORRECT ANSWER The purchase price of a property
(basis) minus accumulative depreciation, plus acquisition costs, plus capital
improvements; also called Adjusted Purchase Price
Adjusted Sales Price - CORRECT ANSWER Sales price minus costs of sale
(commission and closing costs)
Administrator - CORRECT ANSWER Court-appointed personal
representatives of an estate for someone who dies intestate (without a will)
Administrator's Deed - CORRECT ANSWER A document that transfers
title to real estate from an intestate person to his or her heirs
,Adverse Possession - CORRECT ANSWER Acquiring title to land because
of a long-term, open and notorious use of the land. The legal process is called
PRESCRIPTION. The required time period in Arizona is 10 years.
Advisory Board - CORRECT ANSWER A 10-member board appointed by
the Governor that advises and gives recommendations to the Commissioner of the
Arizona Department of Real Estate. Member serve a 6-year term
Affidavit of Affixture - CORRECT ANSWER A document for owners of
mobile homes certifying that the home is immobilized, i.e., anchored to real
property
Affidavit of Disclosure - CORRECT ANSWER A disclosure document that
may be required when selling property that is either in an unincorporated area
(not in a city or town), NOT in a subdivision, or if five or fewer parcels are involved
in the transaction. It provides information about certain aspects of the property
and allows the buyer an opportunity to rescind the contract.
Affidavit of Value - CORRECT ANSWER A sworn statement under oath
that indicates the purchase price paid by the buyer in a trascaction; must be filed
with the deed and signed by both buyer and seller.
Agency - CORRECT ANSWER A relationship of trust between one person
(the principal) and another (the agent) in which the agent has the authority to act
on behalf of the principal. Agency creates a fiduciary duty on the part of the agent
to act in good faith.
Agent - CORRECT ANSWER One who represents a principal; In Arizona,
the designated agent is the agent of the principal. Associated licensees in the
office are considered subagents to the principal. Both the agent and the subagents
are fiduciaries to the principal (client).
Agreement for Sale - CORRECT ANSWER A carryback document
between buyer and seller. The seller does not give a deed to the buyer until paid in
full; therefore the seller retains legal title and the buyer has equitable title. Also
called Land Contract, Contract for Deed or Installment Sale
, Air Lot - CORRECT ANSWER The ownership of the interior of a
condominium; a property that is above the base elevation of the land as in a multi-
level building
Air Rights - CORRECT ANSWER The right to undisturbed use and control
of the airspace over a parcel of land (within reasonable limits for air travel); may be
transferred separately from the land.
Alienation - CORRECT ANSWER The transfer of ownership or an interest
in property from one person to another by any means
Alienation Clause - CORRECT ANSWER A clause used in a mortgage
allowing the lender to demand the full and immediate payment of the mortgage
because the owner transferred ownership of the property. Also called Due on Sale
Clause.
Allodial System - CORRECT ANSWER A concept of land ownership that
allows private individuals to own property
Alluvion - CORRECT ANSWER Solid material deposited along a shore by
accretion
American Land Title Association (ALTA) - CORRECT ANSWER A national
association of title companies, abstractors and attorneys whose members agree to
promote uniformity, quality and professional standards in title insurance policies
Amortization - CORRECT ANSWER Payment of debt in regular, periodic
installments of principal and interest (as opposed to interest-only payments)
Amortization Schedule - CORRECT ANSWER A table or chart that shows
the periodic payments, interest and principal requirements and unpaid load
balance for each period of the life of a loan
Annexation - CORRECT ANSWER Attaching personal property to land so
that the law views it as part of the real property
