Questions and Answers
What is a property defect that would likely affect the price a buyer would be willing to pay?
a material fact
The broker analyzes the suitability of an income property by preparing an ____________ and reviewing it with the buyer.
Annual Property Operating Data Sheet (APOD)
What type of duty do a seller's broker and their agents owe solely to the seller?
fiduciary agency duty
What statutory form must a seller of a one-to-four unit residential property complete and deliver to a prospective buyer?
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Radon gas concentrations in enclosed spaces are an example of what?
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Environmental hazards not itemized in the Transfer Disclosure Statement (TDS) include whether the property is located in a special flood hazard area.
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Natural hazards such as __________ come with the location of a parcel of real estate.
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What form did the California legislature create to streamline natural hazard disclosures?
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The Natural Hazard Disclosure Statement (NHD) discloses environmental hazards and physical deficiencies in the soil or property improvements.
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The Natural Hazard Disclosure Statement (NHD) requires the seller's agent to disclose if they know the property is located in a fault zone.
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Study Notes
Property Defects and Material Facts
- A property defect that significantly influences a buyer's offer price is termed a material fact.
Income Property Analysis
- Brokers evaluate the viability of income properties using an Annual Property Operating Data Sheet (APOD) and discuss it with prospective buyers.
Agency Duties
- Seller’s brokers and their agents have a fiduciary agency duty to actively promote the property exclusively for the seller's benefit.
Disclosure Requirements
- For residential properties with one to four units, sellers must provide a Transfer Disclosure Statement (TDS) to potential buyers.
Environmental Hazards
- Radon gas in poorly ventilated areas, particularly in buildings sitting on uranium-rich rock, is classified as an environmental hazard.
Special Flood Hazard Areas
- The TDS does not specifically inform buyers about whether the property is situated in a designated special flood hazard zone.
Natural Hazards
- Natural hazards, such as very high fire hazard severity zones, are inherent to the property's location rather than constructed features.
Natural Hazard Disclosure
- To streamline information regarding natural hazards, California introduced the Natural Hazard Disclosure Statement (NHD) for sellers to provide to potential buyers.
Limitations of the NHD
- The NHD does not reveal environmental hazards or physical deficiencies associated with the soil or any improvements on the property.
Fault Zone Disclosure
- The NHD obligates the seller's agent to inform buyers if they are aware the property lies within a fault zone.
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Description
Test your knowledge on key concepts from Chapters 13 to 17 of Real Estate Principles. This quiz covers important terms, definitions, and analytical tools used in the real estate industry. Challenge yourself with flashcards designed to reinforce your understanding of property defects and income property evaluation.
