Car form rpa ca revised 11 14

Real Estate Open Book Exam

California Real Estate Practice

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California Real Estate Practice

Third Edition

Robert L. Herd Bruce A. Southstone

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California Real Estate Practice, 3rd Edition

Robert L. Herd and Bruce A. Southstone

Executive Editor: Sara Glassmeyer

Project Manager: Arlin Kauffman, LEAP Publishing Services

Print and Digital Project Manager: Abby Franklin

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Cover Image: © Shutterstock / Mark Krapels

© 2015, 2011 OnCourse Learning

ALL RIGHTS RESERVED. No part of this work covered by the copyright herein may be reproduced, transmitted, stored, or used in any form or by any means graphic, electronic, or mechanical, including but not limited to photocopying, recording, scanning, digitizing, taping, web distribution, information networks, or information storage and retrieval systems, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the publisher.

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Library of Congress Control Number: 2015940019 ISBN-13: 978-1-62980-016-5 ISBN-10: 1-62980-016-3

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Printed in the United States of America 1 2 3 4 5 6 7 18 17 16 15 14

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v

Illustrations xxi Preface xxv Acknowledgments xxix About the Authors xxxi

1 Starting Your Real Estate Career 2 2 Choosing the Right Broker 30 3 Ethics, Fair Housing, and RESPA 54 4 Disclosures 94 5 Lead Generation or Prospecting for Clients and Customers 152 6 Working with Buyers 176 7 Real Estate Financing 196 8 Writing and Presenting Effective Purchase Contracts 242 9 Preparing for the Listing Appointment 302 10 The Listing Presentation 312 11 Servicing the Listing 358 12 Escrow and Title Insurance 390 13 The Life of an Escrow 436 14 Real Estate Taxation 458 15 Advertising and Marketing 498 16 Alternate Real Estate Careers 518

Appendix A: Quiz Answers 560 Appendix B: Licensed Assistant Pre-employment

Application 564

Glossary 569 Index 607

BRiEf ConTEnTs

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Illustrations xxi Preface xxv Acknowledgments xxix About the Authors xxxi

1 Starting Your Real Estate Career 2 1.1 History 3 1.2 Facts and Myths 7 1.3 Attitude is Everything 10 1.4 Goals 12 1.5 Plans 16 1.6 Real Estate Business Plan 19 1.7 On Becoming a Real Estate Professional 23

Learn Office Policies and Procedures 23 Become Computer Literate 23 Tax Knowledge 23 Equipment Needed 24 About You 26

Summary 26 Important Phrases and Terms 28 Class Discussion Topics 28 Chapter 1 Quiz 28

2 Choosing the Right Broker 30 2.1 The Broker is the Agent 31 2.2 Selecting the Right Broker 34 2.3 Broker/Salesperson Relationships 38 2.4 Continued Education and Advanced

Training 44

ConTEnTs

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Survival Training 48 2.5 Professional Designations 50 Summary 51 Important Phrases and Terms 51 Class Discussion Topics 52 Chapter 2 Quiz 52

3 Ethics, Fair Housing, and RESPA 54 3.1 What Are Ethics? 55 3.2 REALTOR® Code of Ethics—and—The Realtist® 56

National Association of REALTORS® Code of Ethics 56 Realtists® 56

3.3 Fair Housing and Antidiscrimination 56 Federal Laws That Affect Real Estate 65 Thirteenth Amendment 66 Civil Rights Act of 1866 66 Fourteenth Amendment 66 Civil Rights Act of 1870 67 Executive Order 11063 67 Civil Rights Act of 1964 67 Civil Rights Act of 1968 68 Jones v. Mayer 70 1988 Fair Housing Amendments Act 70 Americans with Disabilities Act 71 California Fair Housing Laws 73 Unruh Act 73 Rumford Fair Housing Act 73

3.4 The California Business and Professions Code 74 Section 125.6: Disciplinary Provisions for Discriminatory Acts 74 Section 10177(I): Further Grounds for Disciplinary Action 74 The Holden Act (Housing Financial Discrimination Act of 1977) 75

3.5 Commissioner’s Rules and Regulations 75 Section 2780: Discriminatory Conduct 75 Section 2781: Panic Selling 76 Section 2725f: Duty to Supervise 76

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3.6 Sexual Harassment in the Workplace 77 3.7 Real Estate Settlement Procedures Act

(RESPA) 78 RESPA Prohibitions 78 Exceptions to RESPA’s Prohibitions 79 Examples of Permissible Activities and Payments 80 Examples of Prohibited Activities and Payments 81

3.8 Case Studies of Ethics, Fair Housing, and RESPA 82 Case Study 1 82 Analysis 1 83 Case Study 2 83 Analysis 2 83 Case Study 3 84 Analysis 3 84 Case Study 4 84 Analysis 4 85 Case Study 5 85 Analysis 5 85 Case Study 6 86 Analysis 6 86 Case Study 7 86 Analysis 7 87 Case Study 8 87 Analysis 8 87 Case Study 9 87 Analysis 9 88 Case Study 10 88 Analysis 10 88

Summary 88 Important Phrases and Terms 89 Class Discussion Topics 90 Chapter 3 Quiz 91

4 Disclosures 94 4.1 Understanding Mandated Disclosures 95 4.2 Obligations of a Fiduciary 97 4.3 Agency Disclosure—Process and Timing 100

The Disclosure Process 104

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4.4 Death or AIDS Disclosure 109 Stigmatized Property 110 Licensed Care Facilities 110

4.5 Real Estate Transfer Disclosure Statement (TDS) 110

4.6 Agent’s Inspection Disclosure—How and Why? 111 Insect Infestation 120 Water Damage 120 Material Deterioration 121 Structural Failure 122

4.7 Seller Financing Disclosure 124 Addendum to the RPA-CA Seller Financing Addendum and Disclosure (SFA Revised 11/13) 127

4.8 Environmental Hazards Disclosure 133 Hazardous Substances Released 134 Lead-Based Paint 135 Mold 135 Radon 135 Military Ordnance Location 135

4.9 Natural Hazards Disclosure 136 Earthquake Safety 136 Special Study Zone 140

4.10 Common Interest Subdivisions 143 4.11 Preliminary and Final Public Reports

(Subdivisions) 143 4.12 Right of Rescission 143

Other Required Disclosures 144 4.13 California Association of REALTORS®

Disclosure Chart 145 Summary 147 Important Phrases and Terms 148 Class Discussion Topics 148 Chapter 4 Quiz 149

5 Lead Generation or Prospecting for Clients and Customers 152 5.1 Lead Generation or Prospecting 153

Attitude is Everything 154

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5.2 Do Your Research First 155 5.3 Formulating a Business Plan 156 5.4 The “Do-Not-Call” List 158 5.5 For Sale by Owners 159 5.6 Expired Listings 161 5.7 Your Sphere of Influence 162 5.8 Geographical Farm 163 5.9 Open House 165

Internet Site 167 Absentee Owners 168

5.10 Building Your Database 170 Summary 171 Important Phrases and Terms 172 Class Discussion Topics 172 Chapter 5 Quiz 173

6 Working with Buyers 176 6.1 Sources of Buyers 177 6.2 The First Appointment 180 6.3 Pre-Approved for Financing 183 6.4 Agency Disclosure 185 6.5 Buyer Representation Agreement 186 6.6 Tips on Showing Property 187 6.7 Buying Signals 190 Summary 192 Important Phrases and Terms 192 Class Discussion Topics 192 Chapter 6 Quiz 193

7 Real Estate Financing 196 7.1 An Appraisal or an Estimate

of Value? 197 7.2 Financing Sources 197 7.3 Primary and Secondary Financing 197

Fannie Mae 198 Ginnie Mae 199 Freddie Mac 199 Federal Agricultural Mortgage Corporation 199

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7.4 Conforming Versus Nonconforming Loans 200 7.5 Types of Lenders 200

Institutional Lenders 200 Noninstitutional Lenders 202 Real Estate Brokers 204

7.6 Types of Loans 205 Conventional Loan 206 Government Participation Loans 207 Other Types of Mortgages and Trust Deeds 210

7.7 Getting the Buyers Pre-Approved (The Financing Process) 222 Qualifying the Borrower 223 Qualifying the Property 234 Computerized Loan Origination 235

7.8 Real Estate Financing Regulations 236 Fair Credit Reporting Act 236 Mortgage Loan Originator (MLO) 236 Truth-in-Lending Act (TILA) 237 Real Estate Settlement Procedures Act 237 Affiliated Business Arrangement 237

Summary 238 Important Phrases and Terms 239 Class Discussion Topics 240 Chapter 7 Quiz 240

8 Writing and Presenting Effective Purchase Contracts 242 8.1 Selling or Counseling 243 8.2 The Counseling Process 245 8.3 Understanding the Residential Purchase

Agreement and Joint Escrow Instructions (RPA-CA) 250 Content of the Form 261 Short Sale 290

8.4 Preparing to Present the Offer to Purchase 290 8.5 Negotiating the Offer with the Sellers 291 8.6 Selling Your Own Listing 292 8.7 Handling Single and Multiple Counteroffers 293 8.8 Buyer’s Estimated Closing Costs 296

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8.9 Setting up the Escrow Timeline 296 Summary 297 Important Phrases and Terms 298 Class Discussion Topics 298 Chapter 8 Quiz 300

9 Preparing for the Listing Appointment 302 9.1 Research Thoroughly First 303 9.2 Comparative Market Analysis 304 9.3 The Listing Presentation Manual 306 9.4 Estimated Seller’s Proceeds Form 308 Summary 309 Important Phrases and Terms 309 Class Discussion Topics 309 Chapter 9 Quiz 310

10 The Listing Presentation 312 10.1 The Listing Agreement 313

Definition 313 Elements 314

10.2 Types of Listing Agreements 314 Residential Listing Agreement (Exclusive Authorization and Right to Sell Listing) (C.A.R. Form RLA, Revised 11/13) 315 Exclusive Agency Listing (Residential Listing Agreement–Agency, C.A.R. Form RLAA) 316 Open Listing (C.A.R. Form RLAN) 316 Exclusive Authorization to Acquire Real Property (Buyer Representation Listings) 317 Option Listing 319 Net Listing 324 Alternative Fee Listing (Limited Agency Broker) 324 MLS Access-Only Listing 324

10.3 The Exclusive Authorization and Right to Sell Listing Form 325 Signatures 341

10.4 Presenting the Comparative Market Analysis and Your Marketing Plan 344 Comparative Market Analysis 346

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10.5 Estimated Seller’s Proceeds 349 10.6 Common Seller Objections and

How to Handle Them 349 Summary 353 Important Phrases and Terms 354 Class Discussion Topics 354 Chapter 10 Quiz 355

11 Servicing the Listing 358 11.1 Your Marketing Plan 359

Next Meeting 359 “For Sale” Sign 362 Rider Strips 362 Talking Signs 363 Keysafe Lockbox Installation 363 Information Boxes 363 Property Brochures 364 Multiple Listing Service 364 The Internet 365 Virtual Tours 367 Advertising 367 Open House 368 Office Tour 368 Multiple Listing Service Tour 369 Just Listed Postcard 369 Your E-mail Database 370 Social Networking 370

11.2 Good Communication 370 Weekly Activity Report 371 Broker Letter 371 Showings 372 Explain Your Advertising Policy 372 Prepare the Owners for an Offer 373 Pricing Strategy 373 Market Conditions 374

11.3 Modifying or Extending the Listing Contract 375 11.4 Presenting Offers to Your Sellers 377

Presenting Your Buyer’s Offer 378

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Presenting Offers from Cooperating Brokers 379 Presenting Multiple Offers 380

11.5 Handling Single or Multiple Counteroffers 381

11.6 Cancellation of Contract 384 Summary 386 Important Phrases and Terms 386 Class Discussion Topics 386 Chapter 11 Quiz 387

12 Escrow and Title Insurance 390 12.1 Escrow 391

Escrow Requirements 392 Escrow Responsibility 392 Broker Responsibility 393 Parties to an Escrow 393 Escrow Licensure Requirements 395 Laws Governing Escrow 396 Advantages of an Escrow 397 Escrow Procedures 398 Opening the Escrow 399 Escrow Instructions 399 Closing the Escrow 401 Common Escrow Documents 403 Deed of Trust and Assignment of Rents 403 Confidential Statement of Information 406 Common Escrow Transaction Terms 406

12.2 Title Insurance 418 CLTA Policy 419 ALTA Policy 428 Preliminary Title Report 429 Special Policies 430 Rebates 430

Summary 431 Important Phrases and Terms 432 Class Discussion Topics 432 Chapter 12 Quiz 433

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13 The Life of an Escrow 436 13.1 Open Escrow 437 13.2 Order Inspections 440

Home Inspector 440 Pest Inspector 440 Licensed Roofer 441 Mandated Disclosures 442

13.3 Financing 445 13.4 Review Reports 446 13.5 Negotiate Repairs 449 13.6 Property Insurance 450 13.7 The Final Walk-Through Inspection 451 13.8 The Closing 452 Summary 453 Important Phrases and Terms 454 Class Discussion Topics 454 Chapter 13 Quiz 455

14 Real Estate Taxation 458 14.1 Real Property Taxes 459

The Tax Bill 459 Supplemental Tax Bill 461 Special Assessments 461 Proposition 13 462 Proposition 58 463 Proposition 60 463 Proposition 90 465 Change-in-Ownership Statement 465 Exemptions 465 Homeowner’s Exemption 465 Veteran’s Exemption 466 Senior Citizen Property Tax Postponement Act 466

14.2 Income Taxes 467 Capital Gain Tax 467 Primary Personal Residence 468 Secondary Residence 468 Land 468 Universal Exclusion for Gain on Sale of Principal Residence 469

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Deductible Versus Nondeductible Home Buying Expenses 469 Building a Home 470 Buying an Existing Home 470 Inheriting a Home 470 Business and Investment Property 470 Depreciation 471 Property Basis 471 Original Basis 472 Operating Expenses 472 Depreciable Basis 472 Computing Capital Gain 474 Depreciation Calculation 474 Tax-Deferred Exchanges 474 The Entity Rule 477 The Investment Property Rule 478 Like-Kind Rule 478 The No-Choice Rule 479 The No-Loss Rule 479 The Delayed Exchange 479 Exchange Analysis 480 Installment Sales 480 Sale-Leaseback 481

14.3 Tax Shelter 481 Home Interest 482 Acquisition Indebtedness 482 Equity Indebtedness 483 Points 484 Determining Gain 484 Types of Gain 484 Home Improvements 485 Relief for “Forced” Sales 486 Other Tax Shelter Issues 487

14.4 Foreign Investment in Real Property Tax Act (FIRPTA) 487 Federal Withholding 488 California Withholding 492

Summary 493

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Important Phrases and Terms 495 Class Discussion Topics 495 Chapter 14 Quiz 496

15 Advertising and Marketing 498 15.1 Advertising and Marketing 499

Advertising 499 15.2 A Budget for Your Business Plan 508 15.3 The Advantages of Niche Marketing 509 15.4 Compliance with CalBRE, State, and

Federal Statutes 510 California Business and Professions Code (B&PC) Section 10139 “Penalties for Unlicensed Person” 510

Summary 514 Important Phrases and Terms 515 Class Discussion Topics 515 Chapter 15 Quiz 516

16 Alternate Real Estate Careers 518 16.1 Commercial Real Estate Brokerage 519

Education and Specialization 520 16.2 Property Management and Leasing 522

State-Defined Responsibilities 523 Specific Duties 524 Establishing Rent Schedules 524 Accounting Records 529 Trust Account Ledger 529 Leasing 529 Types of Leases 530 Residential Leasing 533 Tenant’s Responsibilities 546 Landlord’s Responsibilities 546 Assignment versus Sublease 547 Termination of a Lease 547 Evictions and Unlawful Detainer Action 548 REO and Foreclosed Homes 548 Retaliatory Eviction 549

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16.3 Licensed Real Estate Assistant 549 The Value of a Licensee’s Time 549 The Right Time to Hire an Assistant 550 The Art of Transitioning 550 Hiring/Interviewing 551 Training 552 How to Work Effectively with a Licensee 552 The Four Deadly Sins 553 It’s a Family Affair 554

Summary 554 Important Phrases and Terms 556 Class Discussion Topics 557 Chapter 16 Quiz 557

Appendix A: Quiz Answers 560 Appendix B: Licensed Assistant Pre-employment

Application 564

Glossary 569 Index 607

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Figure 2.1 Brokerage Comparison Chart 37 Figure 2.2 Independent Contractor Agreement 39 Figure 2.3 Employee or Independent

Contractor Checklist for IRS Guidelines 45 Figure 3.1 2015 NAR Code of Ethics 57 Figure 3.2 Equal Housing Opportunity Poster 72 Figure 3.3 Reasonable Modifications to Public

Facilities or Services 73 Figure 4.1 Possible Representation of More Than One

Buyer or Seller—Disclosure and Consent (PRBS) 99

Figure 4.2 Disclosure Regarding Real Estate Agency Relationship (AD Revised 11/12) 105

Figure 4.3 Real Estate Transfer Disclosure Statement (TDS Revised 4/14) 112

Figure 4.4 Seller Financing Addendum and Disclosure 128 Figure 4.5 Residential Earthquake Hazards Report 137 Figure 4.6 Residential Earthquake Hazards

Report Receipt 139 Figure 4.7 Natural Hazards Disclosure Statement 141 Figure 4.8 HUD Notice to Purchasers; For Your

Protection: Get a Home Inspection (HID) 146 Figure 5.1 Sample Weekly Prospecting Plan 158 Figure 5.2 Sample Absentee Owner Letter 169 Figure 6.1 Sample Client Information Sheet 182 Figure 6.2 Qualifying Process 183 Figure 6.3 Rules of Professional Conduct 190 Figure 7.1 Government Home Loan Program 207 Figure 7.2 ARM Checklist 220

illusTRaTions

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Figure 7.3 Uniform Residential Loan Application 224 Figure 8.1 California Residential Purchase

Agreement (RPA-CA) 251 Figure 8.2 Seller Counter Offer 11/14 294 Figure 10.1 Broker Compensation under

Three Types of Listing Agreements 315 Figure 10.2 Buyer Representation Agreement-

Exclusive (C.A.R. Form BRE Rev. 4/13) 320 Figure 10.3 Residential Listing Agreement

(Exclusive Authorization and Right to Sell) C.A.R. Form RLA Rev. 11/13 326

Figure 10.4 Seller’s Advisory (C.A.R. Form SA Rev. 11/13) 342 Figure 10.5 Estimated Seller Proceeds

(C.A.R. Form ESP Rev. 4/06) 350 Figure 11.1 Marketing Plan 360 Figure 11.2 Dividing an MLS Listing Commission 366 Figure 11.3 Modification of Terms Authorization

and Right to Sell 4/13 (Form MT) 376 Figure 11.4 Seller Counter Offer (C.A.R. Form SCO,

and Seller Multiple Counter Offer, SMCO 382 Figure 11.5 Cancellation of Contract

(C.A.R. Form CC 11/14) 385 Figure 12.1 Escrow Responsibilities 392 Figure 12.2 Legal Requirements for Escrow Officers 396 Figure 12.3 The Life of an Escrow 398 Figure 12.4 Grant Deed 404 Figure 12.5 Quitclaim Deed 405 Figure 12.6 Deed of Trust and Assignment of Rents 407 Figure 12.7 Assignment of Deed of Trust 411 Figure 12.8 Buyer’s and Seller’s Closing Costs 413 Figure 12.9 Escrow Closing Statement 417 Figure 12.10 Sample California Land Title

Association Policy 420 Figure 14.1 Real Property Taxation Calendar 460 Figure 14.2 Use of an Intermediary in a

Tax-Deferred Exchange 476 Figure 14.3 Buyer’s Affidavit 489

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Figure 14.4 Seller’s Affidavit of Nonforeign Status 490 Figure 16.1 Property Management Agreement 525 Figure 16.2 Residential Lease Agreement

(C.A.R. Form Revised 12/13) 534 Figure 16.3 Move In/Move Out Inspection

(C.A.R. Form MIMO, Revised 11/07) 541

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a nEW BEGinninG The housing market has undergone volatile changes in recent years, the impacts of which are demanding better performance from those in the field. Although the real estate market has always seen and will always experience fluctuations, the combined fallout in the finance, banking, and construction industries did not help an already fragile situation. We open with this statement because that is where we are— at a new beginning.

Real estate has been and continues to be one of the most exciting and rewarding career paths we know. The opportunity to work with others in brokering the foundation of their dreams has pushed us to want to better ourselves so that we can better serve the consumers who rely on us.

MEasuRaBlE ouTCoMEs The real estate market can be tough—and rewarding. With this third edition, we hope to provide new and updated information to aid instruc- tors in their goal of better preparing students to meet the challenges of an ever-changing real estate market. This challenge is and continues to be one of constant vigilance in the area of professional education so as to maximize the ability of every licensee to meet the changing needs for consumer protection the public has a right to expect.

While it is true that student learning objectives require basic think- ing skills, “student learning outcomes” require a higher order of think- ing, analysis, synthesis, and/or evaluation. The authors sincerely hope that this third edition becomes an instructional tool further facilitating the teaching and learning experience on both sides of the lectern.

CalBRE liCEnsE REQuiREMEnTs The state of California and its Bureau of Real Estate require appli- cants for the salesperson license to show, among other requirements (see BPC §10153), an understanding of California real estate as

PREfaCE

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xxvi Preface

evidenced by successful completion of three college-level courses of study in Real Estate Principles, Real Estate Practice, plus one course from a list of approved courses. This text may be used for a college-level course of study to meet the required Real Estate Practice requirement. Also, to qualify to sit for the California broker license examination, one must successfully complete eight required college-level courses, including a course in California Real Estate Practice. This text and the associated college-level course also meet that requirement.

THE THiRD EDiTion Since publication of California Real Estate Practice, 1st Edition, real estate as practiced in California has continued to change and evolve as it has since its earliest beginnings. This third edition underwent significant revision to cover current principles, practices, and technol- ogy. California real estate is a work in progress; therefore, constant adjustment in both detail and practice is necessary to maintain a level of knowledge and professional competence sufficient to meet the high standards of consumer protection demanded by professional stand- ards, the state of California, and the California Bureau of Real Estate (CalBRE).

We have made a concerted effort to minimize the confusing use of the word “agent.” Generally speaking, an agent is one who is authorized to represent another (called the principal) in dealings with a third party. However, California real estate law has limited those who, for compensation, may legally act as agents in real estate and related transactions to those holding a valid California real estate bro- ker license. Hence, there can be only one person in each firm who qualifies as a “real estate agent” and who can legally represent the public for compensation; that person would be the employing broker at each firm.

All other “licensees,” whether broker associate or salesperson, working under an independent contractor agreement with a princi- ple broker, and being therefore an agent of that broker, will be referred to in this text as a either licensee, listing licensee, selling licensee, sales- person, or seller’s or buyer’s representative, not as “agent” as that position is already held by the employing broker who is the only one that by law can be paid directly for her services. We will use the term agent when specifically referring to a firm’s employing real estate bro- ker or professional representatives in other fields such as loan agent or insurance agent. Our intent here is to avoid any confusion that may be caused by misuse of terminology.

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xxviiPreface

In deference to the fact that a majority of licensees nationally are women and to avoid the repetitious use of gender-specific pronouns, we use the feminine where a gender-specific pronoun is required. It should be understood that we are referring to both genders.

nEW To THE THiRD EDiTion Global changes to the third edition are extensive and include additions of and updates to California real estate law, references to California Civil Code (CCC), Business and Professions Code (B&PC), Regula- tions of the Real Estate Commissioner, revised title of the Department of Real Estate to the California Bureau of Real Estate (CalBRE), and an update of all forms where necessary throughout.

Other significant changes by chapter include the following:

• Chapter 1: Re-titled subsections and edit text, revised chapter quiz.

• Chapter 2: Updated forms, terms, and definitions, revised legal forms and chapter quiz.

• Chapter 3: Newly updated NAR 2015 Code of Ethics, moved and expanded various B&PC definitions 2780, 2781, revised case studies, Section 3.6 modified, revised chapter quiz.

• Chapter 4: Detailed and expanded descriptions, newly revised forms, revised chapter quiz.

• Chapter 5: Minor changes plus revised chapter quiz. • Chapter 6: Major revision and clarifications, new forms, and

revised chapter quiz. • Chapter 7: Formerly Chapter 11, new forms, revised government-

agency descriptions and definitions. • Chapter 8: Formerly Chapter 7, new forms and listing agree-

ment with revised annotations, revised chapter quiz. • Chapter 9: Formerly Chapter 8, minor changes and revised chap-

ter quiz. • Chapter 10: Formerly Chapter 9, newly revised forms, revised

annotations and chapter quiz. • Chapter 11: Formerly Chapter 10, revised forms and chapter quiz. • Chapter 12: Newly revised forms and chapter quiz. • Chapter 13: Newly revised forms and chapter quiz. • Chapter 14: Revised definitions and formulas and chapter quiz. • Chapter 15: Minor changes and revised chapter quiz. • Chapter 16: New and updated forms and revised chapter quiz.

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insTRuCTional suPPoRT Instructors who adopt this book receive access to an online Instruc- tor’s Manual written by the authors. Each chapter is supported with chapter rationale, overall focus of classroom discussions, lecture out- line, classroom discussion topics, and supplemental learning activities or quizzes. In addition, there are a 50-question Mid-Term Exam and a 100-question Final Exam.

Classroom PowerPoint® presentation slides also support each chap- ter outlining learning objectives, emphasizing key concepts, and high- lighting real-world applications to help further engage learners and generate classroom discussion.

These instructional support materials are available online only to adopters from the text companion site: www.oncoursepublishing.com.

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When I was asked to write a second edition of this textbook, I asked myself, “What can I do to make it clearly the very best textbook out there? What can I do to make it a valuable cutting-edge resource?” The answer came in the form of Bruce Southstone, a practicing Cali- fornia broker, director of the California Association of REALTORS®, and community college real estate instructor. Bruce and I have nearly seventy years of real estate experience between us, and our collabora- tion gives the reader many useful suggestions about how to handle the everyday issues faced by a licensee.