California Real Estate Salesperson License Exam

California became a state: - ANSWER-1850 Bundle of Rights - ANSWER-The right to: Own property Possess property Use property Enjoy property Encumber property or borrow against Dispose property Exclude those who do not share ownership Real Property Consists of: - ANSWER-1. Land 2. That which is affixed to the land 3. That which is appurtenant or incidental to the land 4. That which is immovable by law Under ground water - ANSWER-The landowner has neither ownership of specific underground water nor absolute ownership of waters running across or bordering property, such as a lake or a stream. Owner access guided by "reasonable use." Riparian Rights - ANSWER-Owners of land that borders on a river or another owing water course enjoy certain benefits regarding use of the water--"reasonable use." Each owner has a right to an amount of water in proportion to the amount of land owned that borders the water course and in light of the needs of all interested parties Right of Appropriation - ANSWER-Right given to the state to give permission to a nonriparian owner to take water from a river or lake Affixed to the Land - ANSWER-1. Things permanently resting on the land, such as buildings. 2. Things permanently attached to a building, such as fixtures. 3. Things attached to the land by roots, such as trees and shrubs. Appurtenant to the Land - ANSWER-1. Easements 2. Stock in a mutual water company. A mutual water company is a nonpro t organization that is created to provide water to property owners within a specific district. Usually, each share is considered to be appurtenant to a specific piece of real property and cannot be sold separately. In other words, the stock is considered real property and transfers with the property Immovable by Law - ANSWER-Native American artifacts may be prohibited from disturbing them. When the law declares that an item of personal property is required to stay with the land, that item then becomes real property Chattels - ANSWER-Personal property Fixtures - ANSWER-Items that were originally personal property but are now attached to the land in such a manner as to be considered part of the land itself, thus becoming real property Tests of a Fixture - ANSWER-1. Method by which the property is incorporated into or attached to the land and its consequent degree of permanence 2. Adaptability: is the item in ques- tion customized, or can it easily be used in some other building? 3. Relationship: between the person who adds the article and the party with whom he or she may be transacting business. Courts favor: tenant > landlord/ buyer > seller/ borrower < lender 4. Intention: is indicated by action or agreement of the parties, whether it be expressed or merely implied. If intention can be proved, the courts consider this the most important test 5. Agreements: between the parties regarding the item in question Trade Fixtures - ANSWER-Articles of personal property that a business tenant has attached to real property because of their need to be used in a trade or business Ostensible agent - ANSWER-Apparent authority Fiduciary relationship - ANSWER-loyalty, obedience, and confidentiality, and it obligates the agent to act in the principal's best interest Dual agency - ANSWER-Broker represents both seller and buyer Disclosure form - ANSWER-Describes the agency status. Must be done before the seller signs the listing contract and before the buyer signs the purchase contract The disclosure and confirmation process - ANSWER-Disclosure, election, and confirmation Estopple - ANSWER-Individual mislead, but criteria of agency is met Agencies are created how: - ANSWER-1. Agreement, ratification, estoppel Fiduciary relationship - ANSWER-loyalty, obedience, and confidentiality Agency disclosure form - ANSWER-Explains the real estate agency status Disclosure step: disclosure - ANSWER-Agent discloses or presents the choice of being the agent for only the seller, or only the buyer, or for both. Disclosure step: Elect - ANSWER-The seller and/or buyer elect the type of representation: single or dual Disclosure step: Confirmation - ANSWER-The agent, seller, and buyer confirm the agency relationship and sign the required form False Promise: - ANSWER-A false statement about what the promiser is going to do in the future. Prove: 1. Promise was impossible 2. Promiser know it. Misrepresentation - ANSWER-A false statement of fact Conversion - ANSWER-Misappropriating and using client's money Definite termination date - ANSWER-If a termination date cannot be determined by listing contract, then agent is in violation of law If a broker receives a deposit from a prospective buyer who does not instruct the deposit to be held uncashed, the broker must: - ANSWER-Within three business days agent must either: 1. Give deposit to the principal (seller) 2. Put deposition in escrow 3. Put deposit in trust fund account As Is - ANSWER-The buyer must be first fully informed as to the condition of the property, including any known defects Caveat emptor - ANSWER-"let the buyer beware" no longer a defense if seller withholds material fact Unilateral termination - ANSWER-Canceling party may be liable for damages Transfer Disclosure Statement (TDS) - ANSWER-Details material facts about property If TDS is given after the purchase contract is signed the buyer has how many days to cancel sale: - ANSWER-3 (5 if mailed) Sellers that are not required to complete a TDS can be divided into two categories: - ANSWER-Lenders selling foreclosures and court-supervised sales. Natural Hazard Disclosure (NHD) Statement - ANSWER-discloses possible natural hazards Agent Visual Inspection Disclosure form (AVID). - ANSWER-a three-page form for agents to disclose their inspection findings. Voidable under the following circumstances - ANSWER-duress (force), menace (threat of force), undue in uence (pushed by a person with excess power), or fraud (misrepresentation) Elements of enforceable real estate contract - ANSWER-(1) parties capable of contracting; (2) mutual consent; (3) lawful object; (4) a suf cient consideration; and (5) according to the statute of frauds, it must be in writing. Parol evidence rule - ANSWER-Oral evidence may not be used to modify a written contract that appears to be complete Remedies in the case of a breach of contract: - ANSWER-(1) liquidate damages, (2) sue for speci c performance, or (3) sue for damages Statute of limitations to bring action for removal of encroachments - ANSWER-3 years Statute of limitations to bring action on a written contract - ANSWER-4 years Statute of limitations to bring action for recovery of title to property - ANSWER-5 years Statute of limitations after filing a mechanic's lien, the mechanic must bring a court foreclosure to enforce the lien - ANSWER-90 days Doctrine of Laches - ANSWER-If an unreasonable delay in bringing an action results in an unfair situation for a defendant, the extent of the lawsuit might be limited Basic provisions should be part of a real estate contract: - ANSWER-1. The date of the agreement 2. The names and addresses of the parties to the contract 3. A description of the property 4. The consideration 5. Reference to the creation of new mortgages or deeds of trust, if any, and the terms thereof; also, the terms and conditions of exist- ing mortgages, if any 6. Any other provisions that may be required or requested by either of the parties 7. The date and place for closing the contract Open listing - ANSWER-Given simultaneously to more than one agent. Only one commission is payable, and it is paid to the agent who first procures an offer acceptable to the seller Exclusive agency listing - ANSWER-One broker is named in the contract. The named broker may cooperate with other brokers and agree to share his or her commission with them if they bring in a buyer Exclusive authorization and right-to-sell listing - ANSWER-The broker is entitled to a commission no matter who sells the property, including the owner, during a specic time period Net Listing - ANSWER-The seller stipulates a set sum of money that the seller wants regardless of the final sale price of the property MLS - ANSWER-Multiple Listing Service The California Association of REALTORS Residential Purchase Agreement (RPA-CA) - ANSWER-A contract between the buyer and seller that outlines the terms for the purchase of real property RPA-CA - ANSWER-An offer to the seller from the buyer Paragraph 1 of RPA-CA - ANSWER-The buyer identifies herself, the property, the purchase price, and the escrow period Paragraph 2 of RPA-CA - ANSWER-Agency relationships are con rmed between the buyer and seller Paragraph 3 of RPA-CA - ANSWER-Financing terms are stated, including whether the buyer will take the earnest money deposit to escrow or has given the deposit to the selling agent Paragraph 4 of RPA-CA - ANSWER-Allows the buyer to make the offer contingent on the sale of his or her property Paragraph 7 of RPA-CA - ANSWER-Buyers asks seller to pay for inspection reports and/or to obtain proof the property is in a certain condition. The party responsible to the cost will also be stated. This is true for the expenses of escrow and title insurance as well. The seller has how many days after acceptance to disclose material facts? - ANSWER-7 days The buyer has how many days after acceptance to investigate material facts? - ANSWER-17 days Angles - ANSWER-north-south line Defections - ANSWER-east-west line The U.S. government section and township method - ANSWER-to describe agricultural or rural land Range lines - ANSWER-Run parallel to the principal meridians at six-mile intervals Township lines (tier lines) - ANSWER-Run parallel to the principle base lines at six-mile intervals One mile square - ANSWER-640 acres Township contains - ANSWER-36 squares/sections Section of a township contains - ANSWER-1 square mile/ 640 acres A quarter of a section - ANSWER-160 acres A quarter of a 1⁄4 section - ANSWER-40 acres A quarter of a 1⁄4 of a 1⁄4 section - ANSWER-10 acres One mile contains - ANSWER-5,280 feet One acre contains - ANSWER-43,560 square feet One square acre - ANSWER-208.71 feet Five legal ways of acquiring property - ANSWER-succession, accession, occupancy, and transfer A holographic will - ANSWER-Document written, dated, and signed in its entirety in the handwriting of the maker Statutory will - ANSWER-Preprinted form--two witnesses Nuncupative will - ANSWER-verbal will (usually ignored by the probate courts) Devise - ANSWER-A gift of real property by will Devisee - ANSWER-Person receiving real property by will Testator - ANSWER-Person who makes a will Executor - ANSWER-Person named in the will by the maker to handle the estate of the deceased Administrator - ANSWER-Person appointed by the court to handle the estate when no will is left Bequest, legacy - ANSWER-A gift of personal property by will Legatee - ANSWER-Person receiving personal property by will Codicil - ANSWER-A change in a will Intestate - ANSWER-A situation in which a person dies without leaving a will Testate - ANSWER-A situation in which a person dies leaving a will Probate bids - ANSWER-1st bid: 90% of property value 2nd bid: increase of (5% of (1st bid - 10K),) + $1K When a person dies intestate: - ANSWER-All community property goes to spouse Separate property goes 1/2 to spouse and 1/2 to parents if no children. If 2 + children. Spouse gets 1/3rd. Accession - ANSWER-You may acquire title to property that is added to your existing real estate Accretion - ANSWER-The gradual accumulation of soil on property bordering a stream, a river, or an ocean shoreline. The soil is called alluvion or alluvion deposits. Reliction - ANSWER-When the waterway, sea, or river recedes permanently below the usual water line. When this takes place, the owner of the property that borders on the waterway, sea, or river may acquire title to the newly exposed land. Avulsion - ANSWER-When a river or stream, during a storm or earthquake, carries away a part of the bank and bears it to the opposite bank or to another part of the same bank. The owner of the part carried away may reclaim it within one year after the avulsion. However, the owner must reclaim the title by applying some act of ownership, such as cultivation of the soil, within one year; if not, the land belongs to the owner of the property to which the land is now attached Adverse possession - ANSWER-The process by which title to another's property is acquired without compensation (5 conditions) Partition action - ANSWER-A court action wherein the co-owners of property may sue other co-owners for severance of their respective interests. If the property cannot be physically divided, the court can order a sale and divide the proceeds among the former owners. Escheat - ANSWER-legal process whereby ownership of property reverts to the state due to lack of heirs or want of legal ownership