Practice: Chapter 4 • Disclosures

Front 1

Caveat emptor, or “buyer beware,” was the basis on which real estate transactions were conducted until the mid-__

Back 1

1970s

Front 2

full disclosure really is the act of disclosing to a buyer fully and accurately all known material facts relevant to a decision maker in a transaction. A material fact is any fact __to a person making a decision.

Back 2

relevant

Front 3

no fraud is committed if the decision maker has full
and accurate __

Back 3

information

Front 4

Full disclosure satisfies three things: (1) it protects all parties, (2) it establishes
trust and confidence, (3) it satisfies both the licensee’s and the __ duties under the law.

Back 4

principal’s

Front 5

Because reading and understanding are two entirely separate things, it is important that licensees discuss and clarify with a seller or
buyer anything that may not be clearly understood by the parties and then make a note of the discussion in their __ log.

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contemporaneous

Front 6

C.A.R. forms that incorporate disclosures are updated twice a year by the __

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publisher

Front 7

A client is the seller, and the buyer is the prospect or __.

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customer

Front 8

A licensee, working in a fully disclosed dual agency capacity, representing
both parties in a transaction, may not commit an act that
clearly favors one party to the __ of the other party.

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detriment

Front 9

The fiduciary duty of the licensee includes finding or discovery
and full disclosure of visible __.

Back 9

defects

Front 10

Failure to disclose any
known fact that could have a foreseeable effect on the value of the home is legally __.

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actionable

Front 11

Additional disclosure
provided later than, and separate from, the Transfer Disclosure Statement (TDS) has the effect of giving the buyer(s) an additional three-day right to rescind the contract (__days if the disclosure is delivered by mail).

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five

Front 12

Ostensible agency: may arise as a result of the actions of the parties rather than that of any specific __. Avoid this!

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agreement

Front 13

An ostensible agency by estoppel happens when the principal does nothing to __ her agency with the salesman.

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deny

Front 14

There is only one agent in a real estate company, the designated __.

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broker

Front 15

"agency" refers to the real estate broker client relationship
and not to an individual __.

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licensee

Front 16

Dual agency: the licensee “may not, without the express permission of the respective party, disclose to the other
party that the seller will accept a price less than the listing price or that the buyer will pay a price __ that the price offered.” Any discussion of price or terms should be __.

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greater; avoided

Front 17

MLS recognizes 3 agencies: buyer, sell, __. There is no "subagency"".

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both

Front 18

Disclose – Elect – Confirm (DEC) is the three-step process of giving
proper disclosure to a principal in a purchase, sale, or __.

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lease

Front 19

Selling agency disclosure: form AD

Buying agency disclosure: forms AD & __

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DA

Front 20

Elect: once a buyer has been found, they "elect" whether you will be the buying agent, selling, or both. This is done __ the disclosure.

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AFTER

Front 21

Confirm:
Seller only form AC,
Dual agency: either through the RLA Listing Agreement for the seller or through the buyer’s acknowledgment
and signature on the __ form

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DA

Front 22

Agency disclosure should happen “as soon as practicable
prior to presenting the seller with an offer to __.”

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purchase

Front 23

“The selling agent shall provide the disclosure form to the buyer as soon as practicable prior to execution of the buyer’s offer to __.”

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purchase

Front 24

The law requires selling licensees (who represent the buyer) to disclose agency not just to the buyer but to the __.

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seller

Front 25

Natural death on the property need not be disclosed; however, a
murder or suicide should be disclosed for a minimum of __ years from the date of the incident only, but not if he died from AIDS recently.

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three

Front 26

A real estate licensee need not disclose the location of a licensed
care facility that serves __ or fewer people.

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six

Front 27

If the seller has not completed the Transfer Disclosure statement, the buyer must be
notified in writing that she has the right to __ such a statement.

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receive

Front 28

Every time a licensee takes a listing and must complete the Agent’s Inspection __.

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Disclosure

Front 29

the Easton v. __ case is what brought about the Agent Inspection Disclosure.

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Strassburger

Front 30

A check in the “Agent notes no items for disclosure” box is a
blatant indication that said “agent” did not __.

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look

Front 31

Four primary factors may be a signal that further inspection
should be recommended: insect infestation, water damage, material
deterioration, and structural __.

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failure

Front 32

The following transfers are exempt from seller disclosure: trusts, guardianships, conservatorships, court orders. Also, to or from blood relatives, spouses, goverment, foreclosures, or from one co-owner to __.

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another

Front 33

Carpenter ants and subterranean __ cause the overwhelming
majority of damage to real property.

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termites

Front 34

Peeling or flaking paint is a sign of __ damage.

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water

Front 35

Uneven floor can be detected by use of a(n) __.

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marble

Front 36

- Recommend a professional home inspection.
- Have the seller pay for a home protection plan (also called a home warranty plan)
- Get a pest control __

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inspection

Front 37

Disclosure of seller carryback financing (wraparound) on residential property of one to four residential
units on the Seller Financing Addendum and Disclosure
(__) form.

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SFA

Front 38

loans that have or will have a negative amortization must be __.

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disclosed

Front 39

Combined Hazards Book has a complete discussion of __.

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hazards

Front 40

If you choose to provide The
Combined Hazards Book, then you need __ provide more hazard info.

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NOT

Front 41

An earthquake safety disclosure statement must be completed
and signed by every buyer and seller of a __ home.

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California

Front 42

One weird earthquake disclosure question: Is the house outside an Alquist-Priolo Earthquake Fault __?

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Zone

Front 43

Earthquake questions: even if a part of an answer is “No,” the whole answer is “__.”

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No

Front 44

Upon presentation of The Combined Hazards Book to the buyer, the licensee should have the buyer acknowledge
receipt by signing the form at the back of the __

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book

Front 45

Nothing will give the condo buyer a clearer picture of the current financial
and legal condition of the owner’s association like requesting
copies of the last one to two year’s minutes of the association’s
meetings and a statement of any pending or contemplated litigation involving the __.

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HOA

Front 46

In the initial sale of a common interest subdivision, the purchaser
must be given a brochure entitled Common Interest Development
General Information as well as a copy of the Public Report. There are actually two public reports: the preliminary and the __.

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final

Front 47

Any sales must inform buyer of the public availability of Megan's Law sex offenders' __.

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locations

Front 48

Other disclosures: water heater bracing, home energy rating, smoke detectors, and the importance of home __.

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inspection

Front 49

2. Which of the following is not true
regarding agency disclosure?
A. A licensee need not provide the
seller of a rental property with an
agency disclosure.
B. The agency disclosure must be
signed by the buyer at least ten
days prior to close of escrow.
C. Neither a nor b.
D. Both a and b.

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D. Both a and b.

Front 50

6. A special study zone refers to which
of the following?
A. An inner-city redevelopment area.
B. An area of land that is steeply
sloped.
C. An area that is 1/8th of a mile on either side of a known earthquake fault line.
D. Any area of undeveloped land.

Back 50

C. An area that is 1/8th of a mile on either side of a known earthquake fault line.

Front 51

8. Under the Truth-in-Lending Act
(TILA), when a homeowner obtains
a home equity loan on her home,
the rescission period is
A. noon the following business day.
B. within five days after close of the
purchase escrow.
C. there is no right of rescission
period for a refinance.
D. midnight of the third business day following completion of the loan.

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D. midnight of the third business day following completion of the loan.

Front 52

9. A “Watch Out for Lead-Based Paint” notice must be given to the buyer of any one to four residential unit built prior to which one of the following years?
A. 1960
B. 1930
C. 1978
D. None of the above

Back 52

C. 1978

Front 53

The California Real Estate Law
Disclosure Chart was created by __.

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CAR