Arizona Real Estate Salesperson Exam — All Questions

Which of the following is a physical characteristic of land rather than an economic characteristic?

• a.Scarcity
• b.Immobility✓
• c.Situs (area preference)
• d.Permanence of investment

Immobility is a physical characteristic: land cannot be moved from one location to another. Scarcity, situs, and permanence of investment are economic characteristics that affect value and demand rather than the physical nature of the land itself.

A tenant installs custom shelving bolted to the wall to display merchandise in a leased retail space. At lease end, this item is most likely classified as a:

• a.Fixture that must remain with the real property
• b.Emblement belonging to the landlord
• c.Trade fixture the tenant may remove✓
• d.Appurtenance that transfers with title

Items a commercial tenant attaches to conduct business are trade fixtures and remain the tenant's personal property, removable before the lease ends (tenant must repair damage). An ordinary fixture becomes part of the real estate, but the business-use exception controls here. Emblements refer to annual crops, not shelving.

Which deed offers the grantee the greatest protection by warranting title against defects arising at any time, even before the grantor owned the property?

• a.General warranty deed✓
• b.Special warranty deed
• c.Quitclaim deed
• d.Bargain and sale deed

A general warranty deed contains full covenants and warrants against all title defects, including those predating the grantor's ownership. A special warranty deed only covers defects arising during the grantor's ownership, and a quitclaim deed conveys whatever interest the grantor has with no warranties at all.

Arizona is a community property state. When a married couple acquires real property during the marriage without specifying otherwise, the property is generally presumed to be:

• a.Separate property of the spouse who earned the funds
• b.A tenancy in common with unequal shares
• c.A joint tenancy with automatic survivorship
• d.Community property owned equally by both spouses✓

In Arizona, property acquired by either spouse during marriage is presumed community property, owned equally by both regardless of who earned the money. Separate property is generally that owned before marriage or received by gift or inheritance. Survivorship is not automatic unless the couple takes title as community property with right of survivorship.

An appraiser valuing a single-family residence in an established neighborhood would rely primarily on which approach to value?

• a.Cost approach
• b.Sales comparison approach✓
• c.Income capitalization approach
• d.Gross rent multiplier approach

The sales comparison approach, which analyzes recent sales of similar nearby homes, is the most reliable and heavily weighted method for owner-occupied residential property. The cost approach is best for new or special-purpose buildings, and the income approach applies to investment or rental property rather than a typical single-family home.

An outdated floor plan and a functionally obsolete single bathroom in a four-bedroom home are examples of:

• a.Economic (external) obsolescence
• b.Physical deterioration
• c.Functional obsolescence✓
• d.Curable physical depreciation only

Functional obsolescence is a loss in value caused by outdated or poorly designed features within the property itself, such as a bad floor plan or too few bathrooms. Physical deterioration is wear and tear, while external/economic obsolescence stems from negative influences outside the property, like a nearby nuisance.

Which listing agreement entitles the broker to a commission no matter who sells the property during the listing period, including the owner selling it themselves?

• a.Exclusive right-to-sell listing✓
• b.Exclusive agency listing
• c.Open listing
• d.Net listing

Under an exclusive right-to-sell listing, the listing broker earns the commission if the property sells during the term regardless of who procures the buyer, including the owner. In an exclusive agency listing the owner may sell without owing a commission, and an open listing lets multiple brokers compete with no commission owed if the owner sells.

A buyer's agent learns the buyer client will pay well above list price if necessary. Under agency duties, the agent must:

• a.Disclose the buyer's top price to the listing agent to speed the sale
• b.Share the information only if the seller directly asks
• c.Reveal it to any other agent to promote cooperation
• d.Keep the buyer's price limit confidential✓

The fiduciary duty of confidentiality requires the buyer's agent to protect information that could weaken the client's negotiating position, such as the maximum price the buyer will pay. Disclosing it to the listing agent or seller would breach loyalty and confidentiality and harm the principal.

A purchase contract signed by a minor is generally best described as:

• a.Void from the outset
• b.Voidable at the option of the minor✓
• c.Fully enforceable against both parties
• d.Illegal and therefore unenforceable by anyone

A contract with a minor is voidable, meaning the minor may choose to disaffirm it while the competent adult party remains bound. It is not automatically void, and it is not illegal; the law simply gives the minor the power to cancel to protect against lack of capacity.

Under the federal Fair Housing Act, which of the following is a protected class?

• a.Occupation
• b.Marital status
• c.Familial status✓
• d.Source of income

The federal Fair Housing Act protects race, color, religion, national origin, sex, disability, and familial status (households with children under 18). Occupation, marital status, and source of income are not federally protected classes, though some state or local laws add protections beyond the federal minimum.

A licensee steers minority buyers only toward certain neighborhoods and away from others. This illegal practice is called:

• a.Steering✓
• b.Blockbusting
• c.Redlining
• d.Panic selling

Steering is directing prospective buyers toward or away from areas based on a protected characteristic, limiting their housing choices in violation of fair housing law. Blockbusting is inducing owners to sell by exploiting fears of changing demographics, and redlining is denying loans or services based on the location's makeup.

The federal lead-based paint disclosure rule (Title X) requires disclosure for residential properties built:

• a.In any year regardless of age
• b.Before 1978✓
• c.Before 1950
• d.After 1978 only

Federal law requires lead-based paint disclosure and the EPA pamphlet for target housing built before 1978, the year residential lead-based paint was banned. Buyers must also receive a 10-day opportunity to test. Homes built in 1978 or later are generally exempt from this specific requirement.

In Arizona, the seller of a resale home typically communicates known material property conditions to the buyer using the:

• a.Public Report issued by ADRE
• b.Affidavit of Disclosure only
• c.Lead-based paint addendum only
• d.Seller Property Disclosure Statement (SPDS)✓

Arizona sellers customarily use the SPDS to disclose known material facts about the property's condition to buyers. The ADRE Public Report applies to subdivided land sales, and the Affidavit of Disclosure is used for certain unincorporated rural parcels of five acres or fewer, not standard resale disclosures.

In a deed of trust, the party who holds legal title in trust and can conduct a trustee's sale upon default is the:

• a.Trustor (borrower)
• b.Beneficiary (lender)
• c.Trustee✓
• d.Mortgagee

In a deed of trust, the trustee holds title in trust and, upon the borrower's default, may conduct a nonjudicial trustee's sale as directed by the beneficiary. The trustor is the borrower who conveys title, and the beneficiary is the lender secured by the deed of trust. Deeds of trust with trustee's sale are standard in Arizona.

A home sells for $420,000. The total commission is 6%, split equally between the listing and selling brokerages. How much does the listing brokerage receive?

• a.$12,600✓
• b.$25,200
• c.$6,300
• d.$18,900

Total commission is $420,000 x 0.06 = $25,200. Splitting equally, each brokerage receives $25,200 / 2 = $12,600. The $25,200 figure is the full commission before the split, so it is not the listing brokerage's share alone.

An investor buys a property producing $36,000 in annual net operating income and wants a 9% capitalization rate. What value supports that return?

• a.$324,000
• b.$400,000✓
• c.$450,000
• d.$40,000

Value equals net operating income divided by the cap rate: $36,000 / 0.09 = $400,000. Multiplying instead of dividing ($36,000 x 9 = $324,000) is a common error, and $324,000 would imply a much higher cap rate than 9% for this income.

In Arizona, before a licensee begins representing a party in a transaction, the licensee must provide the consumer with the:

• a.Public Report
• b.Affidavit of Disclosure
• c.HUD-1 settlement statement
• d.Real Estate Agency Disclosure and Election form✓

Arizona requires licensees to give consumers a written agency disclosure explaining representation options so the consumer can make an informed election about who represents them. The Public Report concerns subdivided land, the Affidavit of Disclosure covers certain rural parcels, and settlement statements are provided at closing, not at the start of representation.

An Arizona broker represents both the buyer and the seller in the same transaction. This limited dual representation is permitted only when the broker:

• a.Obtains the informed written consent of both parties✓
• b.Notifies only the seller since the seller pays the commission
• c.Keeps the arrangement confidential from both parties
• d.Represents the buyer's interests above the seller's

Arizona allows limited dual (or designated) representation only with the informed written consent of both the buyer and the seller. A dual agent must remain neutral and cannot advocate for one party over the other or hide the conflict, since both principals are owed honesty and fair dealing.

Under Arizona law, a salesperson who negotiates a listing or sale must ensure that any commission earned is:

• a.Paid directly to the salesperson by the buyer
• b.Split with the client at closing
• c.Paid only through the salesperson's employing broker✓
• d.Deposited into the salesperson's personal account

Arizona law requires that a salesperson be compensated only through their employing (designated) broker, never directly from a buyer, seller, or another brokerage. This keeps the broker responsible for supervising the licensee and accounting for funds. A salesperson accepting a commission directly would violate license law.

In Arizona, how long must a broker generally retain transaction records and documents related to a real estate deal?

• a.One year
• b.Five years✓
• c.Ninety days
• d.Ten years

Arizona brokers are required to keep transaction files and related records for five years from the date of the transaction or termination, so the ADRE can inspect them during audits or investigations. Shorter periods such as 90 days or one year would not satisfy this recordkeeping duty.

An Arizona salesperson receives an earnest money check from a buyer. The salesperson must:

• a.Deposit it into a personal checking account for safekeeping
• b.Hold it until after closing to avoid bank fees
• c.Cash it and give the seller the funds directly
• d.Promptly deliver it to the employing broker for handling per the contract✓

A salesperson must promptly turn earnest money over to the employing broker, who deposits it into the broker's trust (escrow) account or handles it as the contract directs. Commingling client funds with personal accounts is a serious violation, and the salesperson may not personally decide to cash or hold the funds.

Which entity licenses and regulates real estate salespersons and brokers in Arizona?

• a.The Arizona Department of Real Estate (ADRE)✓
• b.The National Association of REALTORS
• c.The Arizona Association of REALTORS
• d.The Federal Housing Administration

The Arizona Department of Real Estate (ADRE), led by the Commissioner of Real Estate, administers license law under Title 32 and enforces the Commissioner's Rules. The National and Arizona Associations of REALTORS are private trade organizations, and the FHA is a federal agency involved in mortgage insurance, not state licensing.

Before a developer may sell or lease lots in a subdivision to the public in Arizona, the developer must obtain and provide buyers with a:

• a.Affidavit of Disclosure
• b.Public Report from the ADRE✓
• c.Seller Property Disclosure Statement
• d.Certificate of Occupancy

Arizona requires developers of subdivided (and certain unsubdivided) land to obtain a Public Report from the ADRE and give it to prospective buyers before a sale, disclosing material facts about the parcels. The SPDS is for resale homes and the Affidavit of Disclosure applies to certain rural parcels, not new subdivision sales.

Under Arizona advertising rules, when a salesperson advertises a listed property, the advertisement must include the:

• a.Salesperson's home address
• b.Seller's full name
• c.Employing broker's name✓
• d.Property's original purchase price

Arizona advertising rules require that real estate advertising identify the employing broker by the name under which the broker is licensed, because the broker is responsible for all advertising by licensees. A salesperson cannot advertise as if acting independently, and the seller's name or original price is not required.