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Pass California

Practice and Disclosures, 25% of the examination

Material fact

A fact that would affect a reasonable buyer's decision to buy or the price they would pay.

Known material facts affecting the value or desirability of a property must be disclosed to a buyer whether or not that buyer is the agent's client. This is what makes the duty to a non-client third party real. A death on the property is disclosable within three years, though a direct question must always be answered honestly regardless of the window, and the fact that an occupant had or died from AIDS may not be disclosed.

See also

Transfer Disclosure Statement (TDS)The statutory form on which a seller of one to four residential units discloses the property's known condition.Stigmatized propertyProperty affected by an event, such as a death, that has no physical effect on the structure.

See it in a question

One question from Practice and Disclosures, so the term lands in the context the exam uses it in.

Practice and Disclosures ยท 25%Trust Account Management

A salesperson receives a $5,000 good-faith deposit check made payable to the seller. What must happen to it?

Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanour under B&P Code section 123.

Where this is tested

Practice of Real Estate and DisclosuresThe largest area by a wide margin, and the one most study plans leave until last. It is where trust accounts, fair housing, advertising, supervision, DRE discipline and every mandated disclosure live.25%Practise Practice and Disclosures50 questions on this area, every option explained.Practice

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