California Real Estate Exam 2025 Flashcards

California Real Estate Exam 2025 Flashcards Universal AgentAuthorized to act on behalf of another in all matters.Real Estate Transfer Disclosure Statement (TDS) To inform buyers about the condition of the property.Purpose of a trust accountTo hold client funds separate from broker's personal/business funds.SteeringDirecting clients to or away from neighborhoods based on race or ethnicity.Broker's Responsibility for AgentsThey must reasonably supervise the activities of their salespersons.Americans with Disabilities Act (ADA)A federal law requiring accessibility for disabled persons.dual agency legality in CaliforniaYes, if both parties give informed written consent.termination of an agency relationshipDeath, expiration, mutual agreement, completion, or revocation.Purpose of the Department of Real Estate (DRE) To regulate and license real estate professionals in California.Trust Account log requirementsDate, amount, payee, purpose of payment, and running balance.Designated AgentA specific agent assigned to a client in a firm with dual agency.Estoppel CertificateA document used to confirm facts and prevent someone from asserting contrary claims later.Trust account records retention periodMinimum of 3 years.Procuring CauseThe agent who caused the sale to happen and is entitled to commission.FinderA person who introduces parties but does not negotiate or discuss terms.Easton vs Strassburger caseIt established the duty to inspect and disclose material defects.General AgentAuthorized to handle all of the principal's affairs in one area.Maximum amount a broker may keep in a trust account for business purposes $200.listing agent vs selling agentListing agent represents the seller; selling agent brings the buyer.duty of loyalty in real estateTo put the client's interests above all others, including the agent's.Power of AttorneyA legal document authorizing someone to act on another's behalf.Conversion in Real EstateUnauthorized use of client funds.RedliningThe illegal practice of denying loans based on the racial makeup of a neighborhood.

subagentAn agent working under another agent with the principal's permission.six fiduciary duties owed by an agentObedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable Care (OLD CAR).agency by necessityWhen urgent action is needed to protect the principal's interests.Trust account titlingIn the name of the broker, as trustee, with 'Trust Account' included.purpose of an open listingAllows multiple brokers; only the one who brings a buyer gets paid.Federally protected classes under the Fair Housing ActRace, color, religion, sex, national origin, familial status, and disability.fictitious business nameA name used in business that is not the actual name of the individual or entity.Trust account reconciliation frequencyMonthly.Commission SplitAn agreement to share commission between agents or brokerages.constructive fraudDeception without intent to defraud, often due to negligence or carelessness.express vs implied agencyExpress agency is stated in words; implied agency is created by actions.Agency disclosure timingAs soon as practical before entering into a listing or sales agreement.Material factA fact that could influence a buyer's or seller's decision.agency disclosure timingAs soon as practicable before entering into a listing or purchase agreement.Megan's LawA law requiring disclosure of registered sex offenders.Panic sellingAnother name for blockbusting.ratify an agency relationshipTo approve and accept an agent's actions after they occur.Latent DefectA hidden defect not discoverable by ordinary inspection.Examples of natural hazard zonesEarthquake fault zones, flood zones, high fire severity zones.Safety PeriodA period after expiration of a listing when broker may still earn commission.PuffingExaggerated or subjective statements that are not legally binding misrepresentations.Limit per transaction for the Consumer Recovery Account$50,000.Finders License RequirementNo, if they do not discuss terms or details.negligent misrepresentationFailing to use reasonable care in verifying information.Civil Penalty for Practicing Without a License Up to $20,000 and possibly criminal charges.statute of limitations for filing a complaint with the DREThree years from the date of the incident.DRE's actions on complaintsThey investigate and, if necessary, take disciplinary action.Employee vs Independent ContractorEmployee follows company policies; contractor works independently but must meet certain IRS tests.

actual fraudIntentional deception for unlawful gain.Life EstateOwnership limited to the duration of someone's life.Who may file a complaint with the DREAnyone.fraud in real estateIntentional misrepresentation of a material fact.Arm's Length TransactionA deal made by unrelated parties each acting in their own self-interest.Safety ClauseAllows a broker to collect commission after listing expires if they found the buyer.Commingling in real estateMixing client funds with broker's personal or business funds.exclusive right-to-sell agreementThe broker earns commission no matter who sells the property.Agency Disclosure LawTo inform all parties of who represents whom in a real estate transaction.register a fictitious business name with the DRE File with the county and submit paperwork to the DRE.Listing AgreementA contract between a property owner and a broker to sell property.Fee Simple AbsoluteThe highest form of property ownership, lasting indefinitely with maximum rights.Advertising laws enforcement in CA real estate The California Department of Real Estate (DRE).Holden ActCalifornia law prohibiting discriminatory lending practices.agency coupled with an interestAn agency where the agent has a financial interest in the property.Written Agency Disclosures ImportanceThey clarify relationships and reduce legal risks.actual noticeDirect knowledge of a fact or information.Transfer Disclosure Statement (TDS)A mandatory form disclosing the condition of a property, required in most residential sales.Caveat Emptor"Let the buyer beware" - buyer assumes risk in a transaction.Unruh Civil Rights ActProhibits discrimination in business establishments, including housing.constructive noticeNotice given by recording documents in public records.Prohibited advertisingMisleading or deceptive advertising.ostensible agencyCreated when the principal's actions lead others to believe there is an agency.Cooperating BrokerA broker who works with another broker to sell a property.Special AgentAuthorized to perform a single act or transaction.Attorney-in-FactSomeone authorized to act for another through a power of attorney.disclosing death on propertyOnly deaths within the past 3 years must be disclosed.principal vs clientA principal is the person represented; a client is typically used synonymously in real estate.Unlicensed Assistant Open HouseNo, not unless they are licensed.Investigators of fair housing violations in CA The DRE and Department of Fair Employment and Housing.

Penalties for violating fair housing laws Civil penalties, potential loss of license, and damages.blind adAn ad that doesn't identify the licensee as a real estate agent.BlockbustingEncouraging owners to sell their homes because minorities are moving into the area.fiduciary dutyA legal duty to act in the best interests of another party.Purpose of the Natural Hazard Disclosure Statement

(NHDS)

To disclose known natural hazards like flood zones, fire severity areas, and seismic zones.Difference between mobilehome and manufactured homeA manufactured home is built after June 15, 1976, and meets HUD standards; a mobilehome is built before that date.dual agencyWhen a broker represents both buyer and seller in a transaction.net listingThe seller sets a minimum price, and the broker keeps any excess.DRE's authority over licenseesThey can suspend, revoke, or deny real estate licenses.Fair Employment and Housing Act (FEHA)A California law prohibiting housing discrimination.Maximum fine for violating trust account regulationsUp to $10,000 per violation.exclusive agency agreementOnly one broker is authorized to act, but the seller may sell without paying commission.California Consumer Recovery AccountA fund that reimburses victims of fraud by licensed real estate agents.Aggregate limit per licensee for the Consumer Recovery Account

$250,000.

broker document retentionThree years.IndemnificationCompensation for harm or loss.agent's role in disclosing property defects To visually inspect and disclose all known or observable defects.Broker CommissionWhen they bring a ready, willing, and able buyer to a willing seller.Disclosure requirements in real estate advertisementsThe licensee's status as a licensed real estate agent.