Principles 1 Aceable Practice Tests

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All of the following are examples of legal descriptions of property EXCEPT: A) 8647 Notting Hill Drive, Berkshire, Colorado 52467 B) SW 1/4 of NW 1/4 of NE 1/2 of T3N R4E of Meridian 16 C) Lot A, Block 2 of Shady Tree Subdivision, Madison County, Wisconsin D) Lot E, Block 14 of West Lake Village, Orange County, Texas

A) 8647 Notting Hill Drive, Berkshire, Colorado 52467

Which one of these situations would title insurance protect against? A) After purchasing a home and living in it, Terrence is contacted by the heir of a deceased former owner who claims the home is actually hers. B) Theresa moves into a new home. Within a few months, the roof has developed a major leak, despite getting an all clear during the inspection. C) Unbeknownst to him, Tomas's new home had faulty wiring. The resulting fire did thousands of dollars of damage to the structure. D) A 500-year storm causes Trudy's house to flood, despite not appearing on any FEMA floodmaps for her area.

A) After purchasing a home and living in it, Terrence is contacted by the heir of a deceased former owner who claims the home is actually hers.

If a tenant were to buy and install new cabinets for their kitchen, they would: A) Belong to the landlord upon expiration of the lease B) Be purchased by the landlord upon the expiration of the lease C) Be removed from the property at the expense of the tenant D) Go with tenant upon the expiration of the lease

A) Belong to the landlord upon expiration of the lease

What type of contract is a real estate sales contract? A) Bilateral contract B) Unilateral contract C) Novation contract D) Implied contract

A) Bilateral contract

Which one of these is NOT one of the three basic forms of ownership? A) Community ownership B) Co-ownership C) Ownership held in trust D) Individual ownership

A) Community ownership

What is the term for a rejection of an offer to buy or sell made with the simultaneous substitution of a new offer? A) Counteroffer B) Responsive offer C) Terminated offer D) Alternate offer

A) Counteroffer

According to the Canons of Professional Ethics, what must every broker do with Consumer Protection Notice TREC No. CN 1-2? A) Display it in a readily noticeable location B) File it with TREC every year C) Include it in a buyer's closing document package D) Have each of their salespeople sign a copy of it

A) Display it in a readily noticeable location

Which of the professional canons states that the primary duty of the real estate agent is to represent the interests of the agent's client? A) Fidelity B) Competency C) Discriminatory practices D) Integrity

A) Fidelity

Homestead rights offer protection from: A) General creditors B) Tax liens C) Unpaid taxes D) All creditors

A) General creditors

How do insurance companies find past claims filed by people or on property to determine their insurability? A) Get a CLUE report B) Do a title search C) Research deed history D) Look at a survey

A) Get a CLUE report

Texas offers several exemptions for reduction of property taxes including the: A) Homestead tax exemption B) Urban exemption C) Under 65 exemption D) Homeowners insurance exemption

A) Homestead tax exemption

A detailed description that uniquely identifies the property in such a way that a surveyor would be able to locate it is called a(n): A) Legal description B) Street address C) Taxable property D) Property ID

A) Legal description

Under the ECOA, it is illegal for lenders to discriminate on the basis of: A) Marital status B) Credit score C) Debt D) Employment

A) Marital status

Which of these should always be disclosed? A) Material defects B) HIV status of homeowner C) Unknown defects D) That a homeowner belongs to a protected class

A) Material defects

"Beginning at the intersection of Main Street, and Oakgrove Lane, proceed due north 300 feet to the creek; then due east 500 feet, more or less, to the U.S.G.S. benchmark; then proceed due south 300 feet to the maple tree, then proceed west about 500 feet, returning to the point of beginning." is an example of a legal description using which type of survey method? A) Metes and bounds B) Rectangular survey C) Lot and block D) Recorded plat

A) Metes and bound

What is the difference between personal property and real property? A) Personal property is an unattached, moveable asset not considered real estate. Real property is land, improvements, and its corresponding rights. B) Personal property can be turned into real property, but real property can't be turned into personal property. C) Personal property includes all real property. D) Real property always goes with the seller. Personal property always goes with the buyer.

A) Personal property is an unattached, moveable asset not considered real estate. Real property is land, improvements, and its corresponding rights.

The Fair Housing Act includes the protected classes of: A) Race, color, religion, national origin, sex, disability, family status B) Race, color, religion, national origin, sex, disability, education C) Race, color, sex, disability, family status, education, national origin D) Race, color, religion, national origin, sex, genealogy, career

A) Race, color, religion, national origin, sex, disability, family status

Conga installed her family's candelabras on the wall in her dining room when she first moved in. Ten years later, when she gets ready to move, she removes the candelabras from the walls so she can take them with her. What process did Conga go through when she removed the candelabras? A) Severance B) Affixation C) Adaptation D) Annexation

A) Severance

What are ownership rights to all that is found beneath the surface of the tract of land owned, extending downward to the center of the earth? A) Subsurface rights B) Riparian rights C) Real estate rights D) Remainder rights

A) Subsurface rights

What are the possible consequences if a licensee attempts to lure away the already represented client of another broker in Texas? A) Suspension and/or revocation of their license B) Five months jail time and no more than a $10,000 fine C) Revocation of their license without opportunity for reapplication D) No less than a $10,000 fine

A) Suspension and/or revocation of their license

Which of the following describes how special agency works in a typical real estate broker-client relationship? A) The authority given by the client is narrowly defined towards a single goal — the sale or purchase of property. B) The authority given by the client is broad and the client will be held liable for the broker's actions. C) The broker is given the general power of attorney. D) The authority given by the client is broad as long as it serves the client.

A) The authority given by the client is narrowly defined towards a single goal — the sale or purchase of property.

What is required of lease contracts with a lease period of one year or more that is not required for leases of less than a year? A) They must be in writing B) An attorney must be present at signing C) They must be oral D) They must be unilateral

A) They must be in writing

What is the money in the Recovery Trust Account used for? A) To pay an aggrieved party who has won a judgment against a licensee for damages from a real estate transaction B) To pay commission that agents were wrongfully deprived of C) For taxes for the state of Texas D) For TREC to recover the funds to keep their computer systems up to date

A) To pay an aggrieved party who has won a judgment against a licensee for damages from a real estate transaction

Which term refers to the fact that no two tracts of land are the same? A) Uniqueness B) Fixity C) Durability D) Situs

A) Uniqueness

Which of the following best describes when a broker might act as an intermediary in Texas? A) When both the seller and the buyer are clients of the same broker B) When the broker is mediating a transaction between clients of two different brokerages C) When there is only one party to the transaction D) When the broker is operating as a dual agent

A) When both the seller and the buyer are clients of the same broker

What is the citizenship requirement for being granted a Texas real estate license? A) You must be a U.S. citizen or "lawfully admitted alien" B) Only U.S. citizens are eligible C) People of any immigration status are eligible D) Only permanent residents are eligible

A) You must be a U.S. citizen or "lawfully admitted alien"

If pursuing action through HUD, a fair housing complaint must be filed within how long of the alleged violation? A) 90 days B) 1 year C) 180 days D) 2 years

B) 1 year

Molly is part of a limited partnership. She does not handle the day-to-day business of the partnership, and she is liable only for the money she has invested in the partnership. Based on this description, what kind of partner is Molly most likely to be? A) An investment partner B) A limited partner C) A controlling partner D) A general parter

B) A limited partner

Which of the following would NOT be considered real property (and would therefore be considered personal property)? A) An industrial warehouse B) A motorcycle C) A home D) A 10-acre soybean field

B) A motorcycle

Under federal fair housing law, it is illegal to: A) Create a homeownership awareness program for low-income earners B) Advertise property for sale only to couples without children C) Advertise a community that only allows residents over the age of 55 D) Refuse to represent a client who has expressed racist beliefs

B) Advertise property for sale only to couples without children

Which of these is an example of an agent committing fraud? A) A seller does not tell an agent about some of the defects in the home B) An agent knew about foundation problems but did not disclose them when the buyer asked about the foundation C) A listing agent tells a potential buyer that there are current offers on the house D) A buyer's agent recommends that a buyer doesn't put an offer down because he suspects the house has termites

B) An agent knew about foundation problems but did not disclose them when the buyer asked about the foundation

Which of these people would be described as a cooperating broker? A) Barry posted a listing to the MLS on behalf of a seller. B) Ann brought a buyer to another broker's listing. C) Caroline is helping a landlord find a tenant for her building. D) David is supervising an agent who is working with a seller.

B) Ann brought a buyer to another broker's listing.

What is the name given to the recipient of advantage or gain from an act or instrument such as a trust, will, or insurance policy? A) Trustee B) Beneficiary C) Trustor D) Mortgagee

B) Beneficiary

A cooperating broker is a broker who: A) Earns a commission B) Brings a buyer to another broker with a listing C) Also serves as a closing agent D) Works with a client

B) Brings a buyer to another broker with a listing

In which type of residential property does a resident hold no actual ownership in the property, but instead holds a proprietary lease as a stockholder? A) PUD B) Co-op C) Condo D) Single-family home

B) Co-op

Which of these is the best summary of the NAR Code of Ethics Article 16: Respect Existing Agreements? A) Contracts must be used for all agency relationships. B) Don't attempt to steal away someone else's clients. C) An agent cannot use a contract to gain a new client. D) A broker has a limited amount of agency agreements they can be party to.

B) Don't attempt to steal away someone else's clients.

Net listings and open listings are the same thing. A) True B) False

B) False

What type of estate causes the title to automatically revert to the original owner if the deed requirements regarding property use are violated? A) Fee simple condition subsequent B) Fee simple determinable C) Dower/curtesy D) Legal life estate

B) Fee simple determinable

In a breach of contract scenario, which of these four options would allow the wronged party (the seller) to keep the earnest money that had been put up by the buyer? A) Rescission B) Forfeit C) Suit for specific performance D) Suit for compensatory damages

B) Forfeit

Andrew is renting his property to a tenant for a period of two years. For this lease to be valid, what must Andrew do? A) Notarize the lease B) Get it in writing C) Get a security deposit D) Give the tenant a copy of the HOA bylaws

B) Get it in writing

What is the difference between a home inspector and an appraiser? A) Home inspectors have less responsibility than appraisers. B) Home inspectors report on condition. Appraisers report on value. C) There is no difference. D) Home inspectors report on value. Appraisers report on condition.

B) Home inspectors report on condition. Appraisers report on value.

Buyer Nancy has asked her agent, Brad, which of the homeowner's insurance policies she has examined are best for her. Brad's best course of action would be to: A) Help Nancy select the best policy for her needs B) Inform Nancy that this advice should come from an insurance professional C) Encourage Nancy to contact an attorney D) Give Nancy the best information he can based on his professional experience

B) Inform Nancy that this advice should come from an insurance professional

Which is NOT one of the canons of professional ethics? A) Integrity B) Justice C) Fidelity D) Competency

B) Justice

Which of the following is NOT a duty an agent owes a customer or third party? A) Disclosure B) Loyalty C) Honesty and fair dealing D) Reasonable care and skill

B) Loyalty

An agent knows that a previous owner of a property passed away in his sleep in one of the bedrooms. Is the agent required to disclose this to the buyer? Why or why not? A) No, because deaths are never required to be disclosed, regardless of the cause. B) No, because the death was due to natural causes, and not due to a defect on the property. C) Yes, because all deaths must be disclosed, regardless of the cause. D) Yes, because the death happened in the home, not outside.

B) No, because the death was due to natural causes, and not due to a defect on the property.

A corporation has what type of ownership? A) Joint tenancy B) Ownership in severalty C) Community property D) Tenancy by the entirety

B) Ownership in severalty

When a person owns a tract of earth, improvements, and the full bundle of rights associated with their property, they can be said to own: A) Land B) Real property C) Personal property D) Mineral rights

B) Real property

Which of these owners or groups of owners are MOST likely to take title as tenants in common with no rights of survivorship? A) David and Julie, a married couple B) Sarah and Sally, an unmarried couple C) Jim, an unmarried single guy D) Tomato Real Estate Holdings, a corporation

B) Sarah and Sally, an unmarried couple

The act of converting real property into personal property is called: A) Affixation B) Severance C) Annexation D) Close association

B) Severance

According to what legal concept do contracts involving the sale or transfer of real estate need to be in writing? A) Parol evidence rule B) Statute of frauds C) Statute of limitations D) Power of attorney

B) Statute of frauds

Which of these should an agent disclose when they're first meeting with a third party? A) Their client's budget B) The agent's agency relationships C) How many offers are currently submitted D) The agent's past clients

B) The agent's agency relationships

Before a new license holder can engage in the practice of real estate, who must receive a copy of that sales agent's license? A) Any broker involved in a transaction with that sales agent B) The broker that is sponsoring the sales agent C) Texas REALTORS® D) The National Association of REALTORS®

B) The broker that is sponsoring the sales agent

An agent owes the duty of obedience to which of the following people? A) The customer B) The client C) Subagents D) No one

B) The client

Real property refers to: A) Just the land and improvements on it B) The land and improvements on it plus the set of rights associated with real estate ownership. C) The land and everything below it D) Just the set of rights associated with real estate ownership.

B) The land and improvements on it plus the set of rights associated with real estate ownership.

What are the primary duties of the Broker-Lawyer Committee? A) To ensure the legality of TREC discipline procedures B) To draft and revise contract forms for the approval and adoption by TREC C) To encourage licensed brokers to pursue law degrees and other forms of higher education D) To educate license holders against the unauthorized practice of law

B) To draft and revise contract forms for the approval and adoption by TREC

Fructus naturales are: A) The same as emblements B) Trees, persistent decorative plantings (such as perennial landscape plants), and uncultivated plants C) Annually-cultivated crops D) The same as improvements

B) Trees, persistent decorative plantings (such as perennial landscape plants), and uncultivated plants

Of the following, who may legally be denied the opportunity to rent an apartment? A) A pregnant woman living on her own, unmarried B) A couple caring for two young boys as foster parents C) A single father with poor credit who belongs to a minority group D) A grandmother who is the guardian for her ten-year-old grandson

C) A single father with poor credit who belongs to a minority group

What is an exclusive right to sell listing agreement? A) An exclusive agreement in which the listing broker receives a commission if the property is sold unless the seller brings the buyer B) An agreement that exclusively names the listing broker but pays commission to anyone who brings the buyer C) An exclusive agreement in which the listing broker receives a commission if the property is sold even if the seller brings the buyer D) An agreement that allows the listing broker exclusively to determine who purchases the property

C) An exclusive agreement in which the listing broker receives a commission if the property is sold even if the seller brings the buyer

Ashley and Leslie have entered into a contract agreement where they both have promises to fulfill. Based on this information, you can infer that they have entered into what kind of contract? A) Unilateral B) Express C) Bilateral D) Implied

C) Bilateral

When a party makes changes to an offer and then presents a new offer, it is called a(n): A) Breach of contract B) Forbearance C) Counteroffer D) Addendum

C) Counteroffer

Which of the TREC canons prevents license holders from making disclosures about race, color, religion, sex, national origin, ancestry, familial status, or disability? A) Fair housing B) Integrity C) Discriminatory practices D) Fidelity

C) Discriminatory practices

The first 9 articles of the NAR Code of Ethics are known as the: A) Duty of Confidentiality B) Duties to the Commission C) Duties to Clients and Customers D) Duties to the Association

C) Duties to Clients and Customers

Attachments can be natural or manmade. Those that are manmade are commonly known as: A) Situs B) Encumbrances C) Fixtures D) Severance

C) Fixtures

To legally act as an intermediary in the state of Texas, a broker must do what? A) Include the promulgated Intermediary Attachment to the contract B) Get the okay of their lawyer C) Get written consent from both parties D) Temporarily reassign one agent to another supervising broker

C) Get written consent from both parties

Why can't brokers draft their own contracts for transfers of real property? A) That is an example of commingling B) It could potentially violate housing discrimination law C) It's considered an unauthorized practice of law D) It's considered a form of misrepresentation

C) It's considered an unauthorized practice of law

A buyer is looking for a property where they have access to some common elements that they don't have to maintain, but will also own their own private yard and building. Which of these common interest ownership properties BEST fits their needs? A) Condo B) Co-op C) PUD D) Timeshare

C) PUD

A ceiling fan, still in its original packaging and NOT attached to the ceiling, is an example of: A) Real property B) An emblement C) Personal property D) An improvement

C) Personal property

Which one of these actions would be illegal under Texas's Open Beach Law? A) Rudy sunbathed on the beach in front of someone else's beach house. B) Sarah bought beachfront property, and built a house several hundred feet back from the top of the dunes and vegetation. C) Quincy built a private cabana on the beach in front of his beach house. D) Thalia put up a temporary sun shelter at the high tide line, then took it home with her at the end of the day.

C) Quincy built a private cabana on the beach in front of his beach house.

The act of severance is the most common way to convert: A) Industrial property into commercial property B) Residential property into commercial property C) Real property into personal property D) Personal property into real property

C) Real property into personal property

Wesley just bought a house with a creek that flows along the south boundary. He wants to use the water to irrigate his garden. Through which set of rights is he entitled to use this water? A) Water Rights B) Littoral Rights C) Riparian Rights D) Agricultural Use Rights

C) Riparian Rights

Which of these attributes is NOT a protected class under the Texas Real Estate License Act? A) Familial Status B) Religion C) Sexual Orientation D) Disability

C) Sexual Orientation

How long are the terms of the Texas Real Estate Commission members? A) Nine years B) Two years C) Six years D) Four years

C) Six years

According to the canons of professional ethics, what two things MUST be linked to a brokerage's website? A) A sample contract and TREC Notice of Representation No. 24 B) The Canons of Professional Ethics and the listing agreement C) The IABS Notice and the Consumer Protection Notice TREC No. CN 1-2 D) The Consumer Protection Notice and the NAR Code of Ethics

C) The IABS Notice and the Consumer Protection Notice TREC No. CN 1-2

What is unique about an exclusive right-to-sell listing agreement? A) The broker acts as a general agent for the client in all business dealings. B) There are multiple brokers working to sell the same property. C) The broker gets compensation regardless of who sells the property. D) The broker represents both the seller and the buyer.

C) The broker gets compensation regardless of who sells the property.

Who must be confirmed by two-thirds of the Texas Senate? A) The leadership of Texas REALTORS® B) ARELLO C) The governor's appointed TREC commissioners D) The Broker-Lawyer Committee

C) The governor's appointed TREC commissioners

Who can a salesperson accept payment from? A) A client with whom they have a written agency agreement B) The principal in any deal where the salesperson was the procuring cause C) Their sponsoring broker only D) a licensed escrow officer or title professional

C) Their sponsoring broker only

Who manages and holds the legal title to a property on behalf of the beneficiary in a trust? A) Lessee B) Tenant C) Trustee D) Trustor

C) Trustee

In what kind of contract is only one of the parties obligated to perform? A) Bilateral B) Multilateral C) Unilateral D) Implied

C) Unilateral

The Golden Rule says to treat others like: A) TREC requires you to B) They are cooperating brokers C) You would want to be treated D) They are made of gold

C) You would want to be treated

For a married couple that has lived in their home for the past three years, how much of a capital gains tax exemption are they eligible for? A) $250,000 B) $0 C) $375,000 D) $500,000

D) $500,000

A couple owns property as community property. If one spouse dies testate (that is, with a will) and had children outside of this marriage, how will the community property be distributed? A) It all goes to the surviving spouse B) The deceased spouse's 1/2 share will go to his or her children C) The deceased spouse's 1/2 share will be split between the surviving spouse and the children of the deceased spouse D) According to the will

D) According to the will

What civil rights law prohibits discrimination based on disability, and creates consistent and enforceable standards regarding discrimination based on disability? A) RESPA B) Steering Act C) Fair Housing Act of 1962 D) Americans with Disabilities Act

D) Americans with Disabilities Act

Which of the following is an example of a statutory lien? A) An equitable lien B) A mortgage C) A vendor's lien D) An IRS tax lien

D) An IRS tax lien

A condensed history of title to a tract of land that summarizes the transfers of ownership and encumbrances is known as: A) A title ownership history B) A title history C) A title definition D) An abstract of title

D) An abstract of title

Which of these is an example of an agent committing fraud? A) A buyer's agent recommends that a buyer doesn't put an offer down because he suspects the house has termites B) A listing agent tells a potential buyer that there are current offers on the house C) A seller does not tell an agent about some of the defects in the home D) An agent knew about foundation problems but did not disclose them when the buyer asked about the foundation

D) An agent knew about foundation problems but did not disclose them when the buyer asked about the foundation

Which of these is an individual with whom a license holder has no agency relationship nor fiduciary duties but to whom fairness and honesty are still required? A) Client B) Principal C) Agent D) Customer

D) Customer

The goal of the Community Reinvestment Act is to: A) Encourage investment in specific communities B) Provide tax breaks to lower income communities C) Provide affordable housing to lower income communities D) Ensure credit availability in all communities

D) Ensure credit availability in all communities

The Department of Housing and Urban Development, commonly referred to as HUD, enforces the: A) Texas Real Estate Licensing Act B) Occupational Code C) Real Estate Procedures Policy D) Fair Housing Act

D) Fair Housing Act

Which of these owners are most likely to own property as tenants in common? A) 99 Real Estate Corp, a corporation B) Raymond and Kevin, a married couple C) Gina, a single woman D) Jake and Amy, unmarried business partners

D) Jake and Amy, unmarried business partners

Broker Bob is the intermediary for Buyer B and Seller C. Broker Bob appoints Mary to assist the buyer and John to assist the seller. Who can give advice and opinions to the seller? A) Broker Bob B) Mary C) No one can give advice or opinions in an intermediary transaction D) John

D) John

Which of the following scenarios describes a fee simple determinable estate? A) Karl willed his home to his nephew on the condition that his replica Trevi fountain be properly maintained. When Karl's daughter noticed the fountain had been torn down in favor of a hot tub, she sued and gained possession of the home. B) Kaspar signed a lease with his landlord that allows him full use of the landlord's property as long as Kaspar pays him monthly rent. C) Kylie owns a lakefront property. For the duration of her lifetime, she has the right to use, occupy, and/or dispose of the property as she sees fit. She can also will her property title to her children after her death D) Kandace donated a property to the local dog rescue with the condition that is would ONLY be used for dogs. When they started taking in cats, ownership automatically reverted to Kandace.

D) Kandace donated a property to the local dog rescue with the condition that is would ONLY be used for dogs. When they started taking in cats, ownership automatically reverted to Kandace.

Fixity refers to the fact that: A) All land is not worth same amount B) Land is scarce C) Land is desirable D) Land is cannot be moved

D) Land is cannot be moved

Which of these is an agent's fiduciary duty to put the client's interests first, including over those of the agent? A) Special agent B) Self-dealing C) Estoppel D) Loyalty

D) Loyalty

The Fair Housing Act does not cover: A) Residences outside of city limits B) Apartment units C) Transactions made with license holders D) Non-dwelling buildings

D) Non-dwelling buildings

Which of the following is a downside to living in a co-op? A) Residents do not own shares B) They include residential units alongside nonresidential units C) There are never common areas D) One resident's actions can harm the entire cooperative

D) One resident's actions can harm the entire cooperative

Jasmine lives in a single-family home and shares amenities like a pool, golf course, and park with her neighbors. An HOA owns and maintains these amenities, and Jasmine pays a monthly fee to the HOA. She most likely lives in a: A) Timeshare B) Co-Op C) Multi-Family Home D) PUD

D) PUD

What is the main difference between how real and personal property are conveyed? A) Real property can be conveyed by oral contract. Personal property requires a written contract. B) Real property is conveyed by lawyers. Personal property can be conveyed by a broker or salesperson. C) Real property is conveyed by a fee simple estate. Personal property is conveyed by a determinable estate. D) Real property is conveyed by deed. Personal property is conveyed by a bill of sale.

D) Real property is conveyed by deed. Personal property is conveyed by a bill of sale.

Which of these people is eligible to apply for a Texas real estate license? A) Ulrich is 17, a Texas resident, and a U.S. citizen. B) Victor is 30 and visiting Texas on a tourist visa from his home country of Canada. C) Wendy is 85, lives in Texas, and is an undocumented immigrant. D) Tanya is 22, a Texas resident, and non-citizen who can legally work in the U.S.

D) Tanya is 22, a Texas resident, and non-citizen who can legally work in the U.S.

Which of the following can be used to determine air rights, as well as condominium ownership boundaries? A) Metes and bounds B) Recorded plat C) Rectangular survey D) Vertical land description

D) Vertical land description

What is a leasehold estate? A) When a property owner has rights to only the parts of the property above the surface of the land B) When ownership is dependent on certain conditions being fulfilled C) When a property owner possesses the full bundle of rights to a piece of land D) When a property occupant has possession for a specified period of time with no ownership rights

D) When a property occupant has possession for a specified period of time with no ownership rights


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