General: Property, Title, Value
22%of exam
property characteristicslegal descriptionsland controlsownership estatestitle recordingvaluation principlesappraisal approachesCMA and BPO
General: Contracts, Agency, Practice
19%of exam
contract elementscontract performancesales contractsagency creationlicensee obligationsbrokerage agreementsfair housingrisk management
General: Disclosures, Finance, Math
16%of exam
property disclosuresenvironmental hazardsfinancing conceptsloan programsfederal regulationssettlementmath calculationsprorations
State: Regulation, Protection, Advertising
11%of exam
regulatory frameworkrecovery fundlicensing requirementsconsumer fraudstatute of fraudsArizona fair housinghomestead lawsadvertising
State: Agency, Duties, Care
17%of exam
Arizona agencyfiduciary dutiesdisclosure obligationsconflicts of interestprofessional competencyproperty typesreasonable skillenvironmental regulation
State: Contracts, Services, Title
15%of exam
Arizona contractsescrowtitle insurancelendingownershipliensdeedsforeclosure
Quick Facts
- Format
- Two separately scored exams
- General items
- 80 scored; 5 pretest
- General time
- 150 minutes
- State items
- 60 scored; 5 pretest
- State time
- 90 minutes
- Passing score
- 75% on each exam
- Combined total
- 140 scored; 150 total
- Weight basis
- Combined 140 scored items
- Testing vendor
- Pearson VUE
- Combo fee
- $75 back-to-back
- Prelicense course
- 90 hours; valid ten years
- Application clock
- Within one year after passing
Government Powers: PETE
Public powers spell PETE
Police powerEminent domainTaxationEscheat
Real vs Personal Property
Real property
- Land plus permanent attachments
- Usually conveys by deed
Personal property
- Movable items
- Usually conveys by bill
Attachment and intent guide classification
General Exam Blueprint
- Property characteristics and use
- 11 scored items13.75%
- Ownership and title
- 9 scored items11.25%
- Value and appraisal
- 11 scored items13.75%
- Contracts and agency
- 16 scored items20%
- Real estate practice
- 10 scored items12.5%
- Disclosures and environment
- 9 scored items11.25%
- Financing and settlement
- 7 scored items8.75%
- Math calculations
- 7 scored items8.75%
Fixture Test: MARIA
MARIA decides fixture status
MethodAdaptationRelationshipIntentionAgreement
Actual vs Constructive Notice
Actual notice
- Direct knowledge
- Observed or communicated
Constructive notice
- Legally presumed knowledge
- Often created by recording
Recording usually creates constructive notice
Property, Estates, and Title
- Fixture
- Attached item becomes realty
- Trade fixture
- Tenant business item stays personalty
- Emblements
- Annual crops remain personalty
- Fee simple
- Broadest inheritable estate
- Life estate
- Ends with measuring life
- Tenancy in common
- No survivorship required
- Joint tenancy
- Includes survivorship right
- Community property
- Most marital acquisitions
- Valid deed
- Grantor, grantee, words, description, execution, delivery
- Recording
- Creates constructive notice
- Actual notice
- Directly known information
- Title insurance
- Covers qualifying prior title defects
Value Elements: DUST
Value needs DUST
DemandUtilityScarcityTransferability
Market Value vs Price
Market value
- Opinion
- Assumes defined market conditions
Market price
- Fact
- Actual negotiated amount
Value is opinion; price is fact
Controls and Encumbrances
- Police power
- Regulates property use
- Eminent domain
- Takes property with compensation
- Taxation
- Funds public services
- Escheat
- Transfers ownerless estate
- Zoning
- Public land-use control
- CC&Rs
- Private recorded restrictions
- Easement
- Nonpossessory use right
- License
- Revocable personal permission
- Encroachment
- Unauthorized physical intrusion
- Lien
- Monetary property claim
- Mechanic's lien
- Secures unpaid improvement work
- Public report
- Required development disclosure
Valuation and Appraisal
- Market value
- Opinion under market conditions
- Market price
- Actual transaction amount
- Substitution
- Comparable alternatives cap value
- Contribution
- Improvement value may differ cost
- Anticipation
- Future benefits drive value
- Highest and best use
- Legal, possible, feasible, productive
- Sales comparison
- Adjust comparable sales
- Cost approach
- Land plus improvements minus depreciation
- Income approach
- Capitalizes property income
- Physical deterioration
- Wear and deferred maintenance
- Functional obsolescence
- Design reduces utility
- Economic obsolescence
- Outside forces reduce value
- CMA or BPO
- Broker pricing analysis
General vs State Exam
General
- 80 scored; five pretest
- 150 minutes
- Eight content categories
State
- 60 scored; five pretest
- 90 minutes
- Eleven content categories
Track each exam independently
Contract Classification Flow
- Question asks formation→Check five valid elements
- Writing issue appears→Apply Statute of Frauds
- New terms replace offer→Treat as counteroffer
- Party may rescind→Test voidable status
- No legal effect ever→Classify void
- Court remedy is barred→Classify unenforceable
- All duties completed→Classify executed
- Performance remains→Classify executory
Contracts and Enforceability
- Voluntary
- No duress or coercion
- Agreement
- Offer meets acceptance
- Competent parties
- Parties have legal capacity
- Consideration
- Bargained legal value
- Lawful purpose
- Objective is legally permitted
- Statute of Frauds
- Writing signed by charged party
- Executed
- All promises performed
- Executory
- Performance remains due
- Void
- Never legally enforceable
- Voidable
- Valid until rescinded
- Unenforceable
- Valid but court remedy barred
- Counteroffer
- Rejects and replaces original
- Option
- Keeps offer open for consideration
Void vs Voidable
Void
- No legal effect
- Cannot become enforceable
Voidable
- Valid unless rescinded
- Protected party chooses
Ask whether rescission is possible
Mortgage vs Deed of Trust
Mortgage
- Mortgagor and mortgagee
- Two-party security instrument
Deed of trust
- Trustor, trustee, beneficiary
- Three-party security instrument
Count parties before naming instrument
Math Formula Selection
- Area asks acres→Divide feet by 43,560
- Area asks square feet→Multiply acres by 43,560
- LTV requested→Loan divided by value
- Cap rate requested→NOI divided by value
- Value from income→NOI divided by cap rate
- Commission requested→Price times rate
- Proration requested→Read stated day basis
- Seller net requested→Price minus seller costs
Financing and Settlement
- Promissory note
- Evidence of borrower debt
- Mortgage
- Two-party security instrument
- Deed of trust
- Three-party security instrument
- Trustor
- Borrower
- Trustee
- Neutral title holder
- Beneficiary
- Lender
- FHA
- Insures qualifying loans
- VA
- Guarantees qualifying loans
- USDA
- Supports eligible rural loans
- Conventional
- No government insurance
- PMI
- Protects lender against default
- RESPA
- Settlement disclosures; kickback limits
- TILA / Regulation Z
- Consumer credit cost disclosure
- ECOA
- Bars credit discrimination
- TRID
- Loan Estimate; Closing Disclosure
- Settlement
- Transfer funds and documents
Disclosure, Housing, Environment
- Material fact
- Could affect party decision
- Buyer ability
- Disclose known performance concerns
- As-is
- Never erases known-fact duties
- Federal classes I
- Race, color, religion, national origin
- Federal classes II
- Sex, familial status, disability
- Steering
- Channels protected buyers
- Blockbusting
- Induces sales through protected-class fear
- Redlining
- Denies services by location
- Reasonable accommodation
- Changes rules or services
- Reasonable modification
- Changes physical premises
- Lead-based paint
- Pre-1978 federal disclosure
- CERCLA
- Hazardous cleanup liability
- Phase I assessment
- Records and site review
- Phase II assessment
- Sampling tests suspected contamination
- Local ordinances
- May add protected classes
Math Formula Grid
- One acre
- 43,560 square feet
- One mile
- 5,280 feet
- Commission
- Price × commission rate
- LTV
- Loan ÷ property value
- NOI
- Income − operating expenses
- Cap rate
- NOI ÷ property value
- Income value
- NOI ÷ cap rate
- GRM
- Price ÷ gross rent
- Equity
- Value − total debt
- Simple interest
- Principal × rate × time
- Seller net
- Price − seller costs
- Proration basis
- Use stated days and owner
Arizona State Exam Blueprint
- Regulatory framework
- 5 scored items8.33%
- Consumer protection laws
- 5 scored items8.33%
- Advertising
- 5 scored items8.33%
- Arizona agency
- 6 scored items10%
- Licensee duties and obligations
- 6 scored items10%
- Licensee competencies and duties
- 6 scored items10%
- Reasonable skill and care
- 6 scored items10%
- Contracts
- 8 scored items13.33%
- Critical business services
- 5 scored items8.33%
- Ownership and encumbrances
- 5 scored items8.33%
- Foreclosure processes
- 3 scored items5%
Arizona Licensing and Regulation
- ADRE
- Arizona real estate regulator
- A.R.S.
- Statutes: Title 32 Chapter 20
- A.A.C.
- Rules: Title 4 Chapter 28
- Article 26
- Draft instruments within represented transactions
- Minimum age
- 18 at license application
- Prelicense course
- 90 hours; valid ten years
- Contract writing
- Six hours; valid two years
- Exam validity
- Apply within one year
- Employing broker
- Only one employing broker
- Compensation
- Flows through employing broker
- Fingerprinting
- DPS clearance card required
Fiduciary Duties: OLDCAR
Old Loyal Dogs Chase All Rabbits
ObedienceLoyaltyDisclosureConfidentialityAccountingReasonable care
Client vs Customer
Client
- Agency relationship exists
- Receives fiduciary duties
Customer
- No agency relationship
- Receives fair dealing
Representation creates fiduciary duties
Relationship and Disclosure Flow
- Party signs representation→Treat as client(Apply fiduciary duties)
- Party lacks representation→Treat as customer(Deal fairly)
- Same brokerage represents both→Get prior written consent(Limited representation)
- Fact affects consideration→Disclose promptly(All parties may need notice)
- Knowledge exceeds competence→Disclose limitation(Use qualified expert)
- Client gives unlawful direction→Refuse instruction(Obedience covers lawful acts)
- Personal interest appears→Disclose conflict(Before party becomes bound)
- Agency ends→Maintain confidentiality(Other duties may cease)
Agency and Licensee Duties
- Client
- Receives fiduciary duties
- Customer
- Receives fair dealing
- Obedience
- Follow lawful client instructions
- Loyalty
- Put client interests first
- Disclosure
- Share known material information
- Confidentiality
- Continues after agency termination
- Accounting
- Track money, timelines, risks
- Reasonable care
- Meet professional competency standards
- Express agency
- Agreement creates representation
- Implied agency
- Conduct creates representation
- Limited representation
- Requires prior written consent
- Compensation source
- Does not determine representation
Arizona Transaction Disclosures
- Seller disclosure
- Known property conditions
- Pool barrier notice
- Deliver required safety disclosure
- Soil remediation
- Provide required notice
- HOA or condominium
- Deliver statutory information
- Affidavit of disclosure
- Applies to qualifying land
- Military airport
- Use mapped-area notice
- Public airport
- Use mapped-area notice
- Subdivision
- Public report may apply
- Licensee interest
- Disclose before party becomes bound
- Outside expertise
- Disclose limits; obtain assistance
- Offer delivery
- Submit promptly unless instructed otherwise
Arizona Closing and Distress
- Escrow
- Neutral conditional stakeholder
- Title search
- Finds recorded ownership issues
- Owner policy
- Protects buyer's title interest
- Lender policy
- Protects lender's title interest
- Closing costs
- Allocate by contract and law
- Trustee sale
- Nonjudicial deed-trust foreclosure
- Judicial foreclosure
- Court-supervised lien enforcement
- Anti-deficiency
- Protection needs statutory criteria
- Short sale
- Lender accepts below payoff
- Deed in lieu
- Borrower voluntarily conveys title
- Water rights
- Verify source, right, transferability
- HOA restrictions
- Inspect governing documents
Common Traps
Two Exams, Not Portions
Pass each exam separately ≠ Pretest items look scored
Blueprint Denominators
General counts use eighty ≠ State counts use sixty
Agency Is Not Compensation
Payment source does not create agency ≠ Representation creates fiduciary duties
As-Is Still Discloses
Known material facts still matter ≠ Inspection rights depend on contract
Forms Are Not Legal Advice
Draft only in represented transactions ≠ Refer legal questions outward
Proration Assumptions
Use stated day-count basis ≠ Assign closing day as stated
Arizona Agency Vocabulary
Study limited representation ≠ Require prior written consent
Last Minute
- 1.Memorize 80/60 scored split
- 2.Budget 150/90 minutes
- 3.Target 75% each exam
- 4.Answer every pretest item
- 5.Memorize acre and mile constants
- 6.Drill sixteen-item General contracts
- 7.Drill eight-item State contracts
- 8.Review agency disclosure duties
- 9.Separate client from customer
- 10.Check deed parties and notices
- 11.Rehearse NOI, cap, LTV formulas
- 12.Verify Pearson booking details
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