AZ Prep Exam MOST TESTED QUESTIONS AND CORRECT
DETAILED ANSWERS WITH RATIONALE
. Which of the following does not apply to the use of a well in Arizona under the Groundwater
Act of 1980?
A. An exempt well is one that has a maximum pumping capacity of 35 gallons per minute.
B. A grandfathered irrigation well must be registered and is limited to the acre feet of water
used during the period of 1975-1980.
C. Type 2 non-irrigation well rights may be sold separately from the land.
D. A new subdivision to be built in an AMA (active management area) can obtain a public report
without a certificate of assured water supply from the Arizona Department of Water Resources.
- answers-D
(The exception is a new subdivision to be built in an AMA {active management area}, as the real
estate commissioner cannot issue a public report without a certificate of assured water supply.
Regarding the other answer choices, no permit is required for an exempt well that has a
maximum pumping capacity of 35 gallons per minute; a grandfathered irrigation well must be
registered; and type 2 non-irrigation well rights may be sold separately from the land.)
. Arizona does not follow the riparian doctrine of an owner's beneficial right to use water on or
under their land. What is the Arizona doctrine regarding water rights?
A. Allodial
B. First in time is first in right
C. Reasonable use
,D. Accretion - answers-B
(The Arizona doctrine regarding water rights is "first in time is first in right," also known as the
doctrine of prior appropriations. Regarding the other answer choices, accretion is the buildup of
land by deposit of alluvium, and benefits adjacent landowners where the deposit occurs.
Allodial is a system of ownership opposite to feudal; and reasonable use is restricted to
domestic purposes in case of a draught.)
1. A licensed broker procures a ready, willing, and able buyer for his seller-principal. The seller
accepts the buyer's offer in writing, but then experiences a change of heart and withdraws the
acceptance. In this situation, the broker
A. is entitled to collect a commission.
B. is without recourse since the transaction was never completed.
C. may sue the buyer.
D. may retain the deposit as commission. - answers-A
(Because the seller accepted the offer, the broker earned the commission. In regard to the other
answer choices, the broker may not sue the buyer since they did not establish an agency
relationship. The deposit must be retained in trust until a release is signed by all parties.)
2. A real estate company has entered into agency agreements with both a seller and buyer. The
buyer is interested in making an offer on the seller's property. Can this occur?
A. No, the real estate company would then be a dual agent.
B. Yes, as long as written agency agreements have been entered into with both parties
C. Yes, if the seller has agreed to pay the commission
D. Yes, if the seller and buyer both give their informed mutual consent to dual agency - answers-
D
(The real estate company can represent both the seller and buyer as long as both parties give
their informed mutual consent.)
,3. A seller's listing agreement has expired, and subsequently the seller decides to list with a
different brokerage firm. The original listing agent now has a buyer interested in the seller's
property. The original listing agent
A. is a dual agent.
B. cannot disclose offers received on the seller's property while it was listed with him to the
buyer.
C. cannot disclose information about the physical condition of the property to the buyer.
D. cannot represent the buyer. - answers-B
(While the listing agent must disclose information he possesses about the physical condition of
the property, he must keep confidential information-such as the amounts of previous
offers-confidential.)
4. A real estate salesperson has been working with buyers. After helping them negotiate for
their dream home, the buyers ask the salesperson if she can help them secure a mortgage. The
salesperson knows a lender that pays a fee for referring purchasers to
him. Should the salesperson refer the buyers
to this lender?
A. Yes, if the salesperson does not request or receive a referral fee
B. Yes, if the salesperson and the buyers have previously entered into a written buyer agency
agreement
C. Yes, if the salesperson discloses the referral fee to the sellers
D. Yes, if the lender offers the market's best interest rates and terms - answers-A
(Arizona real estate license laws prohibit a licensee from requesting and/or receiving such a
referral fee unless the licensee is employed by the lender on an hourly or salary basis. Lenders
are regulated by the Arizona Department of Banks but they are not prohibited from paying such
fees.)
, 5. In Arizona, what is the legal relationship of licensees to their employing broker?
A. Independent contractors
B. Agents of the principal
C. Employees of the principal
D. Employees of the broker - answers-D
(Arizona statutes specifically state all real estate licensees are employees of their employing
broker.)
6. In order for a listing salesperson to receive a commission for a property sold during the term
of a listing, he or she must meet all the following requirements EXCEPT be
A. licensed when the listing was signed.
B. employed by a licensed broker when the listing was signed
C. employed by the listing broker when the contract of sale was signed by the buyers and
sellers.
D. employed by the buyer's broker when the contract is signed. - answers-D
(The listing salesperson does not have to be employed by the buyer's broker at the time the
contract was signed. The salesperson must, however, be licensed and employed by the listing
broker at the time both the listing and purchase agreement were signed, and the buyer was
notified of the acceptance of his offer as written.)
7. In Arizona, an exclusive-right-to-buy agreement
A. is illegal.
B. is equivalent to a listing agreement.
C. must be mutually agreed upon.
DETAILED ANSWERS WITH RATIONALE
. Which of the following does not apply to the use of a well in Arizona under the Groundwater
Act of 1980?
A. An exempt well is one that has a maximum pumping capacity of 35 gallons per minute.
B. A grandfathered irrigation well must be registered and is limited to the acre feet of water
used during the period of 1975-1980.
C. Type 2 non-irrigation well rights may be sold separately from the land.
D. A new subdivision to be built in an AMA (active management area) can obtain a public report
without a certificate of assured water supply from the Arizona Department of Water Resources.
- answers-D
(The exception is a new subdivision to be built in an AMA {active management area}, as the real
estate commissioner cannot issue a public report without a certificate of assured water supply.
Regarding the other answer choices, no permit is required for an exempt well that has a
maximum pumping capacity of 35 gallons per minute; a grandfathered irrigation well must be
registered; and type 2 non-irrigation well rights may be sold separately from the land.)
. Arizona does not follow the riparian doctrine of an owner's beneficial right to use water on or
under their land. What is the Arizona doctrine regarding water rights?
A. Allodial
B. First in time is first in right
C. Reasonable use
,D. Accretion - answers-B
(The Arizona doctrine regarding water rights is "first in time is first in right," also known as the
doctrine of prior appropriations. Regarding the other answer choices, accretion is the buildup of
land by deposit of alluvium, and benefits adjacent landowners where the deposit occurs.
Allodial is a system of ownership opposite to feudal; and reasonable use is restricted to
domestic purposes in case of a draught.)
1. A licensed broker procures a ready, willing, and able buyer for his seller-principal. The seller
accepts the buyer's offer in writing, but then experiences a change of heart and withdraws the
acceptance. In this situation, the broker
A. is entitled to collect a commission.
B. is without recourse since the transaction was never completed.
C. may sue the buyer.
D. may retain the deposit as commission. - answers-A
(Because the seller accepted the offer, the broker earned the commission. In regard to the other
answer choices, the broker may not sue the buyer since they did not establish an agency
relationship. The deposit must be retained in trust until a release is signed by all parties.)
2. A real estate company has entered into agency agreements with both a seller and buyer. The
buyer is interested in making an offer on the seller's property. Can this occur?
A. No, the real estate company would then be a dual agent.
B. Yes, as long as written agency agreements have been entered into with both parties
C. Yes, if the seller has agreed to pay the commission
D. Yes, if the seller and buyer both give their informed mutual consent to dual agency - answers-
D
(The real estate company can represent both the seller and buyer as long as both parties give
their informed mutual consent.)
,3. A seller's listing agreement has expired, and subsequently the seller decides to list with a
different brokerage firm. The original listing agent now has a buyer interested in the seller's
property. The original listing agent
A. is a dual agent.
B. cannot disclose offers received on the seller's property while it was listed with him to the
buyer.
C. cannot disclose information about the physical condition of the property to the buyer.
D. cannot represent the buyer. - answers-B
(While the listing agent must disclose information he possesses about the physical condition of
the property, he must keep confidential information-such as the amounts of previous
offers-confidential.)
4. A real estate salesperson has been working with buyers. After helping them negotiate for
their dream home, the buyers ask the salesperson if she can help them secure a mortgage. The
salesperson knows a lender that pays a fee for referring purchasers to
him. Should the salesperson refer the buyers
to this lender?
A. Yes, if the salesperson does not request or receive a referral fee
B. Yes, if the salesperson and the buyers have previously entered into a written buyer agency
agreement
C. Yes, if the salesperson discloses the referral fee to the sellers
D. Yes, if the lender offers the market's best interest rates and terms - answers-A
(Arizona real estate license laws prohibit a licensee from requesting and/or receiving such a
referral fee unless the licensee is employed by the lender on an hourly or salary basis. Lenders
are regulated by the Arizona Department of Banks but they are not prohibited from paying such
fees.)
, 5. In Arizona, what is the legal relationship of licensees to their employing broker?
A. Independent contractors
B. Agents of the principal
C. Employees of the principal
D. Employees of the broker - answers-D
(Arizona statutes specifically state all real estate licensees are employees of their employing
broker.)
6. In order for a listing salesperson to receive a commission for a property sold during the term
of a listing, he or she must meet all the following requirements EXCEPT be
A. licensed when the listing was signed.
B. employed by a licensed broker when the listing was signed
C. employed by the listing broker when the contract of sale was signed by the buyers and
sellers.
D. employed by the buyer's broker when the contract is signed. - answers-D
(The listing salesperson does not have to be employed by the buyer's broker at the time the
contract was signed. The salesperson must, however, be licensed and employed by the listing
broker at the time both the listing and purchase agreement were signed, and the buyer was
notified of the acceptance of his offer as written.)
7. In Arizona, an exclusive-right-to-buy agreement
A. is illegal.
B. is equivalent to a listing agreement.
C. must be mutually agreed upon.
