Free AZ Real Estate Exam Flashcards

A fixture (e.g., built-in cabinets) is personal property that became real property once attached. A trade fixture is personal property a tenant installs for business use and may remove before the lease ends. Emblements (annual crops) stay personal property to the grower even though they're planted in the ground.

Scarcity, improvements (modification), permanence of investment (fixity), and area preference (situs) — these create economic VALUE. They're distinct from land's 3 physical characteristics (immobility, indestructibility, non-homogeneity), which describe the land itself, not its worth.

Metes-and-bounds describes a parcel using compass directions and distances traced from a point of beginning. The rectangular survey system locates parcels using townships, ranges, and sections measured from principal meridians and base lines.

Public controls come from government power — zoning, eminent domain, police power, taxation, and escheat. Private controls come from property owners — CC&Rs, HOA rules, easements, and licenses — and can be stricter than public zoning as long as they don't violate fair housing law.

Fee simple absolute is the most complete form of ownership — indefinite duration, fully inheritable and transferable. A life estate lasts only for the life of a named person (the life tenant); at that person's death it automatically passes to the remainderman or reverts to the original grantor.

Estate for years (fixed start/end date, no notice needed to terminate), periodic tenancy (auto-renews period to period until notice is given), estate at will (no fixed term, either party ends it with notice), and estate at sufferance (tenant stays after the lease ends without the landlord's consent).

Actual notice is knowledge a person genuinely has (they saw or were told about it). Constructive notice is knowledge the law presumes everyone has once a document is properly recorded in the public record — even someone who never looked it up.

Sales comparison (market data from comparable sales — the default for typical homes), cost approach (land value plus reproduction/replacement cost of improvements, minus depreciation — best for new or unique properties), and income approach (capitalizing net operating income — used for income-producing property).

Market value is the theoretical most-probable price a property would bring under normal, arm's-length conditions. Market price is the actual price a property sold for, which can be higher or lower than market value if the sale involved unusual motivation, financing, or pressure.

A Comparative Market Analysis (CMA) is prepared by a real estate licensee to help set a listing or offer price — it is NOT an appraisal. An appraisal is prepared only by a licensed/certified appraiser and is required for most mortgage lending. A Broker Price Opinion (BPO) is a broker's limited-scope value estimate, often used by lenders on distressed properties, but it also isn't a substitute for an appraisal.

Cap Rate = Net Operating Income ÷ Property Value (rearranged: Value = NOI ÷ Cap Rate). It's the core formula in the income approach — a lower cap rate generally implies a higher value for the same NOI.

Void = never a legal contract at all (e.g., an illegal purpose). Voidable = valid and binding unless/until the disadvantaged party elects to cancel it (e.g., a minor's contract, or one induced by fraud). Unenforceable = the parties intended a valid contract, but a court won't enforce it due to a technical defect (e.g., missing the required writing).

Competent parties, mutual agreement (offer and acceptance), lawful consideration, a legal purpose, and — for real estate — a writing signed by the party to be bound, per the Statute of Frauds.

An executed contract is fully performed by both sides — nothing left to do. An executory contract still has obligations pending; most real estate purchase contracts are executory from acceptance until they're executed at closing.

It requires real estate contracts (and most listing agreements) to be in writing and signed by the party against whom enforcement is sought — an oral agreement to buy, sell, or list real property is generally unenforceable in court.

In single agency, the licensee represents only one party (buyer OR seller) and can fully advocate for that client. In dual agency, the licensee represents both parties in the same deal and must stay neutral. In transaction brokerage, the licensee facilitates the deal without representing — or owing fiduciary duties to — either side.

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care/skill/diligence. These duties are owed to a CLIENT (the party the licensee represents) — a customer (the unrepresented party) is owed only honesty and fair dealing.

Exclusive right-to-sell: the listing broker earns commission no matter who finds the buyer, even the seller. Exclusive agency: the seller can sell it themselves commission-free, but owes commission if any broker finds the buyer. Open listing: the seller can list with multiple brokers and only pays whichever one produces the buyer.

The seller sets a fixed amount they must net, and the broker's compensation is the entire sale-price excess. Arizona's official exam outline flags this as a conflict-of-interest topic: the broker must not exploit superior market-value knowledge or obscure the size of the resulting compensation.

A real estate license does not authorize giving legal, tax, or engineering advice. Licensees must refer clients to an attorney, CPA, or inspector for those questions rather than answering them directly — doing otherwise risks an unauthorized-practice-of-law violation.

A designated/employing broker can be held legally responsible for the licensed acts of the salespersons working under their supervision — this is why brokers are required to review contracts, files, and trust-account activity, not just collect a commission split.

A material fact is something that could reasonably affect a buyer's decision or the property's value (a known leak, a boundary dispute) and generally must be disclosed. An opinion (whether the paint color is attractive, whether the price will rise) is not a fact and isn't subject to the same disclosure duty.

Lead-based paint (federally required disclosure for pre-1978 housing), asbestos, radon, mold, and underground storage tanks. Licensees must disclose KNOWN hazards but are not required to test for them — testing is the buyer's/inspector's job.

The Real Estate Settlement Procedures Act bans kickbacks and unearned referral fees between settlement-service providers (lenders, title companies, agents) and requires borrowers receive a Loan Estimate and Closing Disclosure showing settlement costs before closing.

In a lien-theory state, the borrower holds legal title and the lender merely holds a lien via a mortgage. In a title-theory state, legal title is held by the lender or a trustee (via a deed of trust) until the debt is repaid. Arizona uses the deed-of-trust model, which is why non-judicial trustee's-sale foreclosure is common here.

Lenders must disclose the Annual Percentage Rate (APR) and finance charges so borrowers can compare the true cost of different loans — distinct from RESPA, which governs settlement/closing costs and prohibited referral fees.

43,560 square feet = 1 acre, and 5,280 feet = 1 mile. These aren't given to you during the exam, so any area or distance calculation assumes you already know them.

LTV = Loan Amount ÷ Property Value. A higher LTV means less buyer equity and more lender risk — conventional loans above roughly 80% LTV typically require private mortgage insurance (PMI) to protect the lender.

The Arizona Department of Real Estate (ADRE), operating under Arizona Revised Statutes Title 32, Chapter 20 and the Commissioner's administrative rules. ADRE issues, renews, investigates, and disciplines licenses.

It compensates people who suffer actual, provable financial loss from a licensee's fraud, misrepresentation, or conversion of trust funds. Recovery is capped at $30,000 per transaction, no matter how many people or parcels are involved.

A separate 6-hour course ADRE requires AFTER you pass both salesperson exams but BEFORE your license is activated. It's distinct from — and in addition to — the 90 hours of pre-license education you complete before sitting the exams.

It makes deceptive, false, or unfair practices in a real estate transaction a civil violation consumers can sue over — a separate legal remedy from ADRE license discipline, which only affects the licensee's ability to practice.

It shields a base amount of home equity (currently $400,000, adjusted annually for inflation under A.R.S. §33-1101) from most creditor judgments against the homeowner — relevant when advising a seller who has liens or is in financial distress.

It's an ad for a property or service that doesn't identify the name of the licensee's employing broker/brokerage. ADRE's advertising rules require the broker's name appear in all advertising so the public can identify who is legally responsible for it.

The designated/employing broker — they must review and approve advertising (including social media and online listings) before or as it's published, because ADRE holds the broker accountable for it, not just the individual salesperson.

The employing broker assigns one licensee to represent the buyer and a different licensee from the same firm to represent the seller. Each party gets a fully advocating agent, and the broker — not either salesperson — is the one legally acting as dual agent.

Both the buyer and seller must give prior written informed consent after being told the agent will remain neutral and cannot fully advocate for either side's interests in negotiations.

In writing, before the other party acts on the transaction — this applies any time the licensee (or a close family member) is personally buying or selling the property, not just when representing outside clients.

It must happen at the earliest practical opportunity, and no later than first substantive contact with a buyer or seller — so the party knows who the licensee legally represents before sharing sensitive information like their negotiating position or finances.

New-home sales/development, property management, timeshare, vacant land, and commercial. A general residential licensee is expected to know the baseline rules for each even if they don't specialize in them.

Licensees should advise buyers to independently verify current property tax amounts and check for pending special assessments or improvement-district liens — relying only on the seller's disclosure statement isn't enough.

Appropriable water is surface water, allocated under Arizona's prior-appropriation doctrine through permits from the Arizona Department of Water Resources. Non-appropriable water is groundwater, regulated separately under the 1980 Groundwater Management Act, especially inside Active Management Areas (AMAs).

10 days unless the parties negotiate a different period. During this window the buyer may cancel for any reason (or no reason) and receive their earnest money back.

Under the AAR purchase contract, the buyer must deliver earnest money to the escrow company within one (1) day after contract acceptance (unless the contract states otherwise). A broker who receives the funds must place them in neutral escrow or a trust account immediately/on receipt (A.R.S. 32-2151).

Buyer's Inspection Notice and Seller's Response — the AZ-specific form a buyer uses after the inspection period to request repairs or credits, or to cancel the contract, based on what the inspection found.

A title insurance company — unlike some East Coast states where an attorney runs the closing, Arizona uses the escrow-company closing model for most residential transactions.

No. Proposition 100 (the 2008 'Protect Our Homes Act') amended Arizona's constitution to prohibit any new tax on real property sales/transfers. The only charge at recording is a flat $2 affidavit-of-value fee — not a percentage-based transfer tax like many other states charge.

Property acquired during the marriage is presumed to be owned equally by both spouses. Both spouses generally must sign to convey community real property, even if only one spouse's name is on the title.

It's a document an HOA-governed seller must provide showing the association's fees, rules, financial condition, and any pending special assessments — giving the buyer a clear picture of ongoing HOA obligations before closing.

For a purchase-money loan on 2.5 acres or less with a 1-2 family dwelling, it limits the lender to recovering only the property itself through a non-judicial trustee's-sale foreclosure — the lender generally cannot sue the borrower afterward for the remaining loan balance.