Principles of Real Estate 1
A license holder is facing three separate complaints. The license holder must pay $60,000 for the first complaint, $15,000 for the second complaint and $85,000 for the third complaint. What is the maximum amount that the Commission will pay on the license holder's behalf?
$100,000 The maximum amount that can be paid out because of the actions of one license holder will not go above $100,000,
An administrative penalty from TREC cannot exceed $____
$5,000
How long from the TREC filing date does an applicant have to take the state exam?
1 year
Which of the 6 forms are promulgated by TREC? the 6 promulgated contracts are:
1) One to Four Family Residential Contract (Resale) 2) Unimproved Property Contract 3) New Home Contract (Incomplete Construction) 4) New Home Contract (Completed Construction) 5) Farm and Ranch Contract 6) Residential Condominium Contract (Resale)
The essential elements of a valid contract include what 5 things:
1) competent parties 2) lawful objective 3) mutual assent 4) consideration 5) adherence to the statute of frauds
If a licensee's address changes, they must notify TREC of the change within:
10 days
The SE 1/4 of a section would measure how many acres?
160
At what age does a child living with his or her parents no longer qualify for familial status protection under the Fair Housing Act?
18
In what year was the National Association of REALTORS® Code of Ethics first adopted?
1913
Owners of properties built before what year should be concerned about the possibility of lead paint contamination?
1978
How many years are continuing education courses valid for?
2
After receiving a notice of violation, how many days does a license holder have to request a hearing?
20 days
How many tries does an applicant have to pass the state licensing exam?
3
After how many days will the Commission notify an applicant of their moral determination?
30
A broker who wants to change their license status to inactive must notify their sponsored license holders in writing ___ days before they apply to be inactive. They must apply for an inactive license _____ their license expires.
30, before
Township lines intersect with range lines to create townships, which are how many square miles?
36 square miles
How many square feet are there in an acre?
43,560 You can remember this by thinking of four people driving on Interstate 35 at 60 mph.
How many lawyers are on the Broker-Lawyer Committee?
6
The number of forms promulgated by TREC is:
6
How many members of the Broker-Law Committee?
6 brokers, 6 lawyers, and 1 public member.
Township lines run west and east, parallel to the baseline. How many miles apart from each other are they?
6 miles Township lines run west and east, parallel to the baseline
The average number of months it will take to sell a house in a BUYERS market is:
6 months or more
How many acres are there in each square mile (section) in a township?
640 Each square mile contains 640 acres.
How many years are surveys typically good for?
7 years
There are _____ members of the Texas Real Estate Commission. They serve staggered ______ terms. They are appointed by the ______ and must be confirmed by two-thirds of the Texas ______.
9, 6, Governor, Sentate
Difference between and client and a customer?
A CLIENT has an agency relationship with you and your broker. A CUSTOMER does NOT!!
The National Association of REALTORS® Code of Ethics consists of:
A Preamble and 17 Articles
What is TRUE about the MLS services
A REALTOR must belong to at least one board in Texas
What does the term intermediary broker mean?
A broker who negotiates a contract between two parties that are both being represented by that broker
What is a specific lien?
A claim against a particular parcel of real estate
What is an agreement between two or more parties to either do something, or not do something called?
A contract
What is an executory contract?
A contract that has not yet been fully performed.
Who is eligible to request that the Real Estate Commission pay out of the trust account to a defendant who has lost a case?
A defendant's previous employer
Which of the following is an example of encroachment?
A driveway, tree, fence
As defined in the Texas Real Estate License Act, what is a subagent?
A license holder who represents a principal through cooperation with the principal's broker.
Committing a real estate act without a license is what kind of crime?
A misdemeanor
How do you pay a penalty while still ensuring that your payment does not go through until the appeal is over?
A supersedes bond delays
What survey method is used for expressing condominium ownership boundaries?
A vertical land description
Nolo contendere means that a person was accused of something and was a defendant in a trial:
AKA no contest will accept the decision of the court WITHOUT pleading guilty to the charge.
An abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances is called what?
Abstract of title
What is the history of the title to a property called?
Abstract of title
What is the difference between actual and punitive damages?
Actual damages are designed to compensate the claimant; punitive damages are designed to punish the defendant.
What is a main function of the Texas Real Estate Commission?
Adopt and enforce rules for governing real estate practitioners
Which of these is one of the primary functions of the Texas Real Estate Commission?
Adopt and enforce rules for governing real estate practitioners
Under federal Fair Housing law, which of the following acts is illegal?
Advertising property for sale only to childless couples. Advertising property for sale only to married couples is a violation of the Fair Housing Act. Race, color, national origin, gender, familial status, religion, and disability are all protected classes under the Federal Fair Housing Act.
What do you call a person who is representing someone else in a transaction?
Agent
What is the space above a parcel of land called?
Air lot
Subpoena authority exists to:
Allow the commission to bring witnesses to court
In addition to detailing the agreement between the broker and the client, the buyer's representation agreement and the listing agreement create what?
An agency relationship
Under which of the following circumstances could an agent be liable for the actions of the principal or client?
An agents seller client asks him not to disclose a property defect and the agent complies
The Texas homestead protection has limitations on the amount of property that can be homesteaded. Which statement is TRUE about those limitations?
An urban property homestead can be up to 10 acres of contiguous parcels or rural property homestead can be up to 200 acres
What is a protected category according to Texas fair housing laws, but not national ones?
Ancestry
How often will you be formally evaluated in the workplace?
Annually
REALTOR must disclose their lack of experience in a field to a client
Article 11 states that a REALTOR may provide a service they are not specialized in only after fully disclosing their lack of experience, or if the REALTOR obtains assistance from someone competent in the field, in which case, the client must be informed.
What is the major difference between assignment and novation?
Assignment refers to the transfer of parties. Novation refers to the exchange of one contract for another.
With a revokable living trust, when are the beneficiaries able to change the conditions of the trust?
At any time
When should agency relationships be disclosed?
At initial meeting
Which of these people would be exempt from needing a real estate license to perform real estate activities?
Auctioneers, lawyers licensed in Texas, onsite apartment managers, and people selling cemetery lots are all exempt from licensing requirements. Someone selling an apartment for a commission would need a license.
put up in the form of real estate in lieu of cash when a property owner is accused of a crime Enforceable by a court officer or the sheriff if the accused property owner does not appear in court
Bail bond liens
What type of contract is a real estate sales contract?
Bilateral contract Because both parties give consideration and promise to perform actions specified in the contract.
Creates reciprocal obligations. An agreement in which both parties give consideration and promise to perform
Bilateral contracts
In the recorded plat system, parcels are individual lots that combine to make:
Blocks
Broker Bob is the intermediary for Buyer B and Seller C. Buyer B comes to Broker Bob requesting advice on negotiations. Which one of the following actions may Broker Bob perform?
Bob can appoint a sponsored sales agent to the buyer and another to the seller and the license holders can give advice to the parties
Which party must remain neutral during a transaction?
Broker acting as intermediary
All promulgated forms in Texas are created by the ______
Broker-Lawyer Committee
What is the name of the report created from a database the insurance companies use to track insurance claims?
CLUE Report
What is the BEST way to avoid giving misinformation (and consequently, violating the Texas Deceptive Trade Practices-Consumer Protection Act)?
Cite a source whenever you give clients information about a property
For real estate license holders, who is considered "your principal"?
Client
Tenancy in common. Joint tenancy
Co-ownership
Who is responsible for informing employees of their conduct expectations and responsibilities?
Commissioners
The _______ was passed to help eliminate redlining.
Community Reinvestment Act
Property that is bought and held by a married couple in Texas is:
Community property
Unless otherwise specified through an agreement, if one spouse rents out their separate property, the income is considered:
Community property
Ownership by married couples. Each half of a couple owns half of the property
Community property with the right of survivorship
______ notice is when a property's ownership is recorded publicly, so everyone can know the contents of recorded documents. _______ notice is when an individual actually knows of the fact.
Constructive, Actual
What form does the Canons of Professional Ethics and Conduct say must be on display in a readily noticeable location in each of the real estate brokers places of business?
Consumer Protection Notice 1-2
What will a developer need to determine the need for leveling, grading, and engineering problems that may arise?
Contour map
Texas homestead laws protect homeowners from:
Creditors
A person who possesses a broker's license and is responsible for not only their own actions, but the actions of every license holder in their real estate office is called a:
Designated agent
Jamie is an agent representing a seller. She holds an open house to find a buyer for the home. What is she legally required to do?
Disclose that she represents the homeowner
Sally and Fred are two single people buying a home together. The lender is threatening to deny them a loan because he does not like their lifestyle. If the lender does that, it will be a violation of the:
ECOA (Title VII of the Consumer Protection Act). It prohibits lenders from discriminating against credit applicants on the basis of their race, color, religion, national origin, sex, marital status, age, or use of public assistance.
The right of one party to access or use the land of another is a(n):
Easements
Usually created by an agreement between two parties or out of necessity The rights of use by another will convey in the transfer of that deed or title
Easements
a physical intrusion on someone else's property without direct permission an illegal use of another land owner's property
Encroachments
Liens, easements, and encroachments all create:
Encumbrances
A buyer does not pay for a property in full. This is an example of a(n):
Equitable Lien
A buyer is purchasing a property. They signed a contract but the sale has not yet closed. What kind of ownership interest or estate do they have?
Equitable estate
As a license holder, what could help protect you against mistakes you might make in real estate transactions?
Errors and omissions insurance helps protects you against any unintentional mistakes you could make as a license holder so you won't be crying over spilled milk (or in this case, spilled real estate).
Ownership by a corporation. Ownership by a single person
Estate in severalty
Which of the following types of listing agreements provides that the broker will get paid regardless of who buys the listed property?
Exclusive Right to Sell
sellers name who they have in mind to sell the property to, or they just reserve the right to sell it themselves in the addendum. Named listing broker is owed commission only if the property is sold by someone other than the owner
Exclusive agency listings
The broker has the exclusive right to sell the property and the owner has agreed to pay them a commission. Agents are more incentivized to find the highest bid possible for the seller because they are guaranteed a commission.
Exclusive right to sell listings
a contract in which all terms have been fulfilled by all parties
Executed contracts
can be issued by a court to force payment of monies owed from a judgment when a debtor does not pay Gives court officers the right to confiscate and sell the debtor's property to satisfy the debt
Execution Liens
The contract for Mrs. Smith to sell her home has been signed by both her and the buyer, but the sale will not close for another two weeks. This contract is:
Executory
A contract that is not completely executed or performed
Executory Contracts
A person who is employed to rent land by the owner needs a real estate license.
FALSE
Monica owns her house. For the duration of her lifetime, she has the right to her property (unless she sells it) and can will her property title to her children after her death. Monica has a:
Fee simple estate
Where does the money in the recovery fund come from?
Fees paid by license holders when they get their license for the first time
What two elements must be present for a contract to be executory?
For an executory contract to be created, there must be: 1) binding contract on multiple parties and 2) one or more of the parties has yet to perform their contractual duties.
If a lender were to waive their legal right to pursue a debt, they have most likely entered into a __________
Forbearance agreement
What is the part of a contract stating one or more of the contracting parties must refrain from actions that would usually be legal called?
Forbearance agreements. They prohibit actions that would normally be okay to perform.
Life estate Defeasible fee estate
Freehold Estates
If partners share all of the resources and responsibilities for their business, what type of partnership are they in?
General
If no third party is named as remainderman, when a life estate owner dies, the property reverts to the:
Grator
Created through the use of a will when someone dies. Involves a trustor, beneficiary, and trustee
Held in Trust
Homeowners insurance policies are usually paid:
In advance
What are the limitations on the amount of property that can be homesteaded in Texas?
In an urban environment, the maximum amount of land cannot exceed 10 acres. It can be multiple lots but must be contiguous or adjoining. If it is a rural property, the maximum homestead is 200 acres for a family and 100 acres for a single person.
If property is owned by one person or one entity, it is owned:
In severalty
What is one promulgated form that Texas REALTORS has and TREC does not?
Intermediary Relationship Notice form
What does chapter 1102 of the Texas Occupations code govern?
It governs the practice of Texas Real Estate inspectors
When an offer is made, it can be accepted, rejected, retracted prior to acceptance, countered, or allowed to expire. Until one of those things happens, what is the status of the contract?
It remains open.
The four unities apply to co-ownership that is classified as:
Joint tenancy
The three types of co-ownership are community property, tenancy in common, and what?
Joint tenancy
Right of survivorship, even for unmarried co-owners Requires all four unities
Joint tenants
takes effect only after it has been recorded in the county clerk's office When decrees given by courts specify the amount of money owed
Judgement Liens
Which of these contracts would not be subject to the statute of frauds?
Leases of less than one year
Included in a deed to the property. Required for a contract
Legal descriptions
The name service that exposes a property to a larger audience of buyers and also offers advantages to sellers, brokers, and buyers is called the ________
MLS
What is a datum base point established by?
Mean sea level
Uses a point of beginning and markers or landmarks to describe a property. Moves in a clockwise direction, describing land in feet, degrees, minutes, and seconds.
Meets and bounds
Which legal description will likely include the phrase "point of beginning"?
Metes and Bounds
A written legal land description identifying a piece of real estate's exact dimensions and location in reference to a fixed and permanent monument. The description of the property is made up of several points described in relation to each other.
Metes and bounds
What is the most common method used for land description in Texas
Metes and bounds method
When all parties mutually agree to cancel the contract Discharge can be for any reason if all parties agree
Mutual Agreement
What categories of people are barred from serving on the Commission?
Neither trade association employees nor lobbyists can be members of the commission.
It is less of a listing type, and more so a different way of charging a fee. The broker receives the dollar amount above what the owner wants as their commission.
Net listings
Is "123 Buyer Lane, San Antonio, TX 78216" an adequate legal description? Why or why not?
No, a street address is not an adequate legal description
Does the Texas Homestead Act protect a property from federal tax liens?
No, the homestead Act provides no protection from federal tax liens
Does misrepresentation require malicious or deceptive intent?
No, the seller, broker, or agent may be liable for misrepresentation even without malicious or deceptive intent.
A party cannot be compelled to perform an illegal act to meet the terms of the contract. Permissible discharge of a contract to avoid the violation of law
Non-performance due to legal issues
John has an easement appurtenant that allows him to cross Sally's land. Sally is selling her property. When Sally's property sells, John will:
Not have a problem as easements run with the land
What is the term used when one contract is substituted for another?
Novation
Which of the following is NOT true regarding a license holder's obligation to disclose a property defect:
Only if the buyer asks
multiple real estate brokers and the owners themselves have the right to sell the property. May be terminated at any time before performance
Open Listings
Which paragraph of the One to Four Family Residential Contract says that buyers can object to something they find in the survey?
Paragraph 6D gives buyers the option to object to something they see in the survey.
The Texas Real Estate License Act is Chapter 1101 of the
Part of the Texas Occupations Code
When at least one party performs only a portion of the agreed-upon contractual duties. The party injured by the other party's failure to fully perform can seek legal restitution or discharge the contract.
Partial performance
What do Texas homestead rights do?
Protect the home from creditors that do not have specific or tax liens
What should a license holder do when reporting facts in an advertisement?
Quote the source of information
The Civil Rights Act of 1866 prohibits discrimination against individuals on the basis of what?
Race. The Civil Rights Act of 1866 prohibits discrimination against individuals on the basis of race.
Additional tax liability typically happens when selling which of these types of property?
Ranches
Depends on longitude and latitude mapping. Divides land into 36-square mile townships
Rectangular surgery system
In terms of the surface area surveyed, which surveying system is used to describe the most land in the U.S.?
Rectangular survey
Choose the survey method that could result in this legal description: "SW 1/4 of the NE 1/4 of the NW 1/4 of Section 2, Township 8 South, Range 3"
Rectangular survey system
Example: "T1N, R1E" A more refined version of the longitude and latitude system of mapping with a surveyed grid of meridians, baselines, townships, and ranges to describe a piece of land
Rectangular survey system
A father conveys property to his son, but reserves a life estate for himself. During the father's lifetime, what interest does his son have?
Remainder
Outline what someone may not do on their own personal piece of property Usually created by the developer of a subdivision
Restrictions
With a fee simple subject to condition subsequent, if the specific requirement is not met the property will:
Revert back to the original owner
As a broker, when should you inform a buyer, seller, or agent that you are representing a party involved with the property the buyer, seller, or agent is interested in?
Right away
If someone has a river on their property, what type of rights would be associated with it?
Riparian
Who are the parties to the listing agreement?
Seller and broker
What kind of contracts are listing agreements and a buyer's representation agreements?
Service
In order for a real estate contract to be valid, it must be:
Signed by the seller
Who constitutes the Fair Housing Laws, community property Laws and homestead laws?
State Constitutions and US constitutions
You are working with a Black buyer, Tom, and you decide to show him homes in a neighborhood with a high Black population. This illegal act is known as:
Steering
The under-performing party has usually fulfilled enough of the contract's obligations to gain legal enforcement of the contract. When a party performs the majority of the contract's requirements, but not all
Substantial Performance
If a contract has been breached, and the non-breaching party wants to force the breaching party to do what it says in the contract, what can the non-breaching party do?
Sue for specific performance
Promulgated contracts are prepared by:
TREC
______ enforces the Texas Real Estate License Act.
TREC: The Texas Real Estate Commission
What was created first: TRELA or TREC
TRELA first, then TREC
Range lines run parallel to the meridian, running north to south. TRUE or FALSE?
TRUE
MUD districts are unique in that they:
Tax residents for the building of utility infrastructure
Which one of the following actions is most likely to be a violation of the Texas Deceptive Trade Practices-Consumer Protection Act?
Telling a buyer you're not sure if a home has ever flooded when you know for a fact it had
Co-owners don't have the right of survivorship. The default way to take title as an unmarried couple
Tenants in common
Other than their brokerage, which of the following would be another resource for an agent needing a buyer's representation agreement or listing agreement?
Texas REALTORS
Which was the first housing discrimination protection act?
The Civil Rights Act of 1866 was passed by Congress on April 9, 1866. This act protected people from discrimination based on race.
The preamble of the National Association of Realtors' Code of Ethics refers to which rule to use as a guide for making ethical decisions?
The Golden Rule
In a general partnership, all partners are required to take responsibility for:
The actions of all other partners
What happens when the association of a salesperson and a sponsoring broker is terminated?
The broker returns the sales agents license to the commission
What is one practice that has helped lessen the unscrupulous activity prevalent in the early days of real estate?
The buyer getting an abstract and having it examined by an attorney
When should the listing agent give the seller a blank copy of the Seller's Disclosure of Property Condition to fill out?
The day that the sales agent lists the property.
Who would hold the ownership interest of a co-owner who passes away?
The deceased's named descendants
Who designates a broker member of the Commission to serve as a presiding officer?
The governor
A grandfather wants to leave his estate to his grandson, who is only 15. The grandfather sets up a trust to take care of the property until his grandson becomes legal age. In this scenario, what are the grandfather and the grandson?
The grandfather is the truster and the grandson is the beneficiary
A couple renting a home have a leasehold estate, which means they have:
The right of possession
Which of the following is the best description of an open listing?
The seller will pay commission to any broker who is the procuring cause for the sale
Landlords are required to allow tenants to make modifications to their property in order to accommodate their disability. Who's responsible for paying for these modifications?
The tenant
How can a potential student find the pass rates of real estate education providers?
They are posted publicly online by TREC
What is one thing buyers can get to protect themselves against loss if someone attacks their title?
Title insurance
What is the recovery fund used for?
To pay damages to a person from the public who wins a court case against a license holder.
What is the definition of an unconscionable action?
To take advantage of the lack of knowledge, ability, experience, or capacity of a person to a grossly unfair degree."
What is one of the major tenets in the NAR Code of Ethics?
Treat all parties fairly and honestly, not just those you represent
A minor is named the beneficiary of real property upon the passing of the property's owners, but with the stipulation that the property will be held by another party until certain conditions are met (i.e., the minor is no longer a minor). What is the correct term for this legal arrangement?
Trust
Which one of the following is NOT a type of co-ownership?
Trust tenancy
Anne posts "Lost Dog: $50 Reward" flyers on telephone poles all over town in hopes that someone will see Buttons, her very naughty and wayward chihuahua. What kind of contract has Anne created?
Unilateral
A contract in which only one of the contracting parties is bound. Two parties, one promise
Unilateral Contracts
What are the four unities required for joint tenancy?
Unity of interest, time, title, and possession.
What could cause a federal tax lien to be placed on a property?
Unpaid income taxes
An estate at will allows the tenant to occupy the property:
Until either the tenant or the landlord decides tenancy should end
Property taxes are based on what?
Value of the property
The method for expressing condominium ownership boundaries. Most commonly used when air rights and subsurface rights need specific explication.
Vertical land description
What survey method is used to determine elevations for a condo?
Vertical land description
The TCEQ is tasked with regulating which of these things?
Water rights
Doug granted Betsy a life estate for a property he owned and named his son as the remainderman. When will his son become the owner of the property?
When Betsy dies
What is meant by the term "right of survivorship"?
When one co-owner dies, their ownership interest is inherited by the surviving co-owners.
After what point in the negotiation of the contract is it no longer possible for a buyer to rescind the offer?
When the buyer or buyer's agent receives the notice of acceptance
A testamentary trust is created through the use of what?
Will
Seller Andrea hired Agent Samara to sell her home in a net listing. Samara gave Andrea her opinion of the value of the home, and Andrea insisted she wanted to use the net listing structure. Is it permissible for Samara to sell the home as a net listing? Why or why not?
Yes, because Samara gave Andrea her opinion of the value and Andrea insisted on the net listing, it is legal.
Can a license holder renew their expired license if it has been expired for 5 months?
Yes, if the license has been expired more than 90 days but less than 6 months. But they must pay an additional fee equivalent to twice the amount of the renewal fee.
What is a lis pendens?
a notice used to inform the public when a lawsuit is filed that affects a specific piece of real estate
About how long can you have an expired license but still be eligible to reactivate your license without retaking the state exam?
about 2 years
An abstract of title is:
an abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances.
What must a seller in a PID disclose to a potential buyer?
any financial obligations to a PID.
When does the information about intermediary brokerage contained in the IABS need to be given to a consumer?
at the first face-to-face meeting where substantive dialogue about a specific real property occurs
A buyer representation agreement establishes agency between a buyer and a:
broker
What two important classifications were added to the list of protected classes under the 1988 Housing and Community Development Act amendment?
familial status and disability
If a property owner does not pay their income taxes, the IRS may put what on their property?
federal tax lien
What is the name given to the duties owed by agents to their clients?
fiduciary duties.
When a person passes the Texas exam for real estate, they:
have met the competency requirement under the Texas Real Estate License Act.
What is one instance in which the commission allows license holders to use alternatives to the required, or promulgated, forms?
if the alternative form is prepared by the property owner themselves, or if an attorney has prepared the form and a property owner requests that form.
All listing contracts in Texas must include what two pieces of information?
information informing sellers about the special rules concerning anyone who lives on a coast and that all commissions are negotiable.
Jeff died without a will in place, which is known as _________
intestate
An unmarried Texas couple purchased real estate together. How would the deed identify how they hold their interests if they specify they want them passed to the survivor in case of death?
joint tenants with the right of survivorship.
What are important details that could change a customer's decision about a property called?
material facts
Who initiates the foreclosure on an 80-10-10 loan?
mortgage company
An applicant has ____ to pass the state exam after filing their application.
one year
The individual lots that are combined to make a block are called ______. ________ are combined to make a subdivision.
parcels and blocks
If the seller guarantees the named broker receives a commission if the property is sold, regardless of who purchases the property, then they have entered an exclusive __________ listing. If the named listing broker is owed commission only if the property is sold by someone other than the owner, is an exclusive _______ listing.
right to sell, agency
What direction do longitude lines, or meridians, run?
run north to south, perpendicular to the equator
A mortgage is an example of a:
specific, voluntary lien
When a property is talked about in a meeting or via written communication, that is called:
substantive dialogue
Alysha died with a will in place, which is known as________
testate
An agent has obtained a buyer representation agreement with a new client. Who owes the client fiduciary duties?
the broker and all sponsored agents in the brokerage
Which of the following statements accurately describes the basic issues involved in the Jones v. Mayer Co. case?
the refusal to sell a home because of the prospective buyer's race was found to be a violation of the civil rights act of 1866 law
The recorded plat system is made up of what 3 things?
tracts, parcels, and blocks Tracts represent the totality of the property represented on the plat. Tracts are made up blocks and blocks are made up of individual parcels.
When can a salesperson start practicing real estate?
until your physical license has been received at your broker's office.
What is the total amount TREC will pay for a judgment in court for a single transaction?
up to $50,000
On a listing sheet, what would a field stating "BC: 3" mean?
"BC: 3" means the buyer's broker will get a 3% commission once the sale closes.
Single homeowners are exempt from paying taxes on up to $________ of the capital gains from the sale of their home every ____ years
$250,000 / 2 years
What is the definition of misrepresentation?
An unintentional mistake, written or spoken
Also called the recorded plat method An example might be: Lot A, Block 2 of Sunny Brook, Happy County, Michigan
Block and lot
What law (chapter) imposes a code of ethics and standard of conduct on members of the Commission?
Chapter 572
Community property Joint tenancy
Concurrent Estates
If another party has an easement on your property Commonly created by encumbrances
Equitable Estates
The statute of limitations for filing a complaint against a licensee is ____ years.
FOUR years
What is NOT grounds for disciplinary action, including revocation or suspension of a license:
Failing to obey a clients unlawful instruction
What is one way an applicant can satisfy the related post-secondary education required for a broker's license?
Getting a college degree
What is the only scenario in which you do NOT need a real estate license to sell or lease a property?
If you are NOT receiving any commission fro the sale
For a listing agreement to be enforceable in court, it MUST be:
In writing
If property is owned in severalty, it is most likely owned by a(n):
Individual
One person is the owner of a property. Held in severalty
Individual Ownership
Estate for years Periodic estate
Leasehold Estates
Evidence an owner's debt and obligation to pay the debt Use subordination agreements to change the priority
Liens
When a business has general partners that oversee the daily activities of the business and other partners that are only investors and only have liability up to the amount of their investments, what type of partnership do they have?
Limited
Which right is associated with lakefront or oceanfront property?
Littoral
What does the integrity portion of the Canons of Professional Ethics charge license holders with avoiding?
Misrepresentation
specific because they only apply to the property that is secured by the debt and voluntary because owner voluntarily enters into the contract When a person buys a home, the home itself becomes collateral for the loan, so the lender obtains it
Mortgage Liens
What is the name of a district where property owners can make decisions on government projects they will be taxed on?
PID: Public Improvement District
Limited partners' liability is generally limited to the amount of their investments in a business. Creates financial and legal responsibilities for general partners
Partnership
What do you call a listing that does not come up on the MLS?
Pocket listing
TRELA is a law passed by the Texas Legislature to govern:
Texas real estate
If the Code of Ethics and the law conflict, which takes precedence?
The Law
Landlords are required to allow tenants to make modifications to their property in order to accommodate their disability. Who is responsible for paying for these modifications?
The tenant
What is the function of ESAC (Education Standards Advisory committee)?
They review and revise curriculum standards, course content and instructor certification.
How is timeshare ownership different from other kinds of ownership?
Timeshares have multiple owners of a residence. They share ownership, maintenance expenses, and the right of possession for a specific period of time with the other owners.
How often must a real estate license be renewed?
every 2 years
When should agency relationships be disclosed?
first contact
At first contact, the license holder who represents a party in a real estate transaction should disclose that representation to the other party to the transaction and to whom else?
the license holder who represents a party in a real estate transaction
If a homeowner files a homestead exemption for reduced ad valorem taxes, the state of Texas requires the school district to supply an exemption value of $______.
$40,000
How many members does the Education Standards Advisory committee consist of?
12 members, including license holders, education members and a public representative.
Commingling happens when:
A license holder mixes their own money with a client's money.
Agency relationships are generally formed between which two people?
Agent and client
Who requires sponsorship to practice real estate
Any license holder (sales agent, a broker and a broker associate)
The Real Estate License Act authorizes TREc to make sure that real estate sales agnates and brokers abide by:
Both TRELA and TREC rules
What would make the license of a salesperson inactive?
Expiration, Death of a salesperson, termination of the license of the sponsoring broker.
Protected classes in the Fair Housing Act of 1968 include race, color, religion, national origin, sex, disability, and what other category?
Familial Status
_____ agency gives agents more power and holds the principal responsible for actions performed by their agent.
General
What classification of agency does a broker operate under when working for a seller client in an agency relationship?
General agency
Which choice describes rubber hits the road education that meets the education requirements for license renewal?
Graduate, REALTOR Institute
According to the Canons of Professional Ethics and Conduct, the IABS notice can be provided to consumers:
IABS notice can be provided to consumers either in person, by mail, or by email.
What is the role of professional organizations in the real estate industry:
Is to provide education and guidance to improve the practice of their members
A seller is LESS or MORE likely to work with an agent who uses words like "price reduction" rather than "price adjustment
LESS Likely
An agency relationship is a fiduciary relationship. Which of the following are fiduciary duties and obligations are owed to the principal by the agent?
Loyalty, care, and obedience
Why do most brokerages fall within the scope of the ADA, and therefore must be extra careful about accessibility?
Many brokerages fall within the scope of ADA because of their location or because they have 15 or more employees.
Are you required to have a real estate license if you are selling a portion of a joint ownership in a property?
NO-Not required
How long does person who believes that they have been injured by the discriminatory practices of a real estate license holder have to file a complaint with HUD?
One Year
Who is eligible for capital gains tax exemptions?
Only homeowners selling their primary residences are eligible for capital gains tax exemptions.
What is the best definition of blockbusting?
Panic selling or blockbusting is encouraging homeowners to sell before their homes will supposedly lose value because of the entry of a protected class in the area.
The introduction to the National Association of REALTORS® Code of Ethics is called the
Preamble
Which one of the following actions is NOT likely to be a violation of the Texas Deceptive Trade Practices-Consumer Protection Act?
Providing a list of professionals to choose from does not violate the law.
____ agency gives agents the authority to act on behalf of their client for specific actions.
Special
What classification of agency does a broker operate under when working for a seller client in an agency relationship?
Special Agency
What is the difference between the NAR Code of Ethics and the Canons of Professional Ethics and Conduct?
TREC enforces the Canons of Professional Ethics and Conduct. NAR enforces the NAR Code of Ethics.
What is the name of the professional organization that created the Code of Ethics?
The National Association of REALTORS
When an appraisal report is not available, what provides the BEST data for setting a listing price?
The price willing buyers have recently paid for similar properties in the area
What do PUD owners actually own?
Their lot and a share in the common elements
What type of property has multiple owners and is typically located in a recreational environment?
Timeshares
Under the ECOA, it is legal for a lender to ask if a borrower is separated.
True. A lender may ask if a borrower is married, unmarried, or separated under the ECOA.
Ownership of a condo includes the ____ ONLY.
Unit
_____ agency gives agents the power to act on behalf of their principal and make decisions on behalf of the principal.
Universal
When does an inactive license before active?
When the license holder joins a brokerage
Brokerage A charges clients a 6% commission, while Brokerage B charges only 5%. Is this legal? Why or why not?
Yes, brokerages can charge whatever commission they choose. Commissions are negotiable.
Was it wrong for Tom to disclose that the previous occupant died of cancer?
Yes, cancer is considered a natural cause of death that is not directly related to a dangerous defect in the house
To avoid _____________ a license holder should only give factual info from reputable sources, avoid speculation and point potential buyers to the resources that can help with questions that you shouldn't answer
misrepresentation
Ownership of a townhouse includes the:
unit and the land
The Sunset Act, a state law in Texas, requires that all state agencies be reviewed and evaluated with respect to their efficiency and need every how many years?
Every 12 Years
The NAR Code of Ethics is reviewed and updated how often?
Every Year
What designation requires license holders to take three 30 hour courses and is held by more residential sales agents in Texas than any other designation?
Graduate, REALTOR Institute (GRI)
is the following act necessarily WRONG or NOT? The buyer and seller both Pay the commission: Wrong or not?
NOT necessarily wrong
There are _____ members of the Texas Real Estate Commission. They serve staggered six-year terms. They are appointed by the governor and must be confirmed by two-thirds of the Texas Senate.
Nine, six-year
What is one important difference between REALTORS® and other practitioners?
REALTORS® requires a higher standard than the law by the NAR Code of Ethics requires.
TRUE or FALSE: Employees working for a commercial firm do NOT have to have a real estate license if they are selling property by their own firm?
TRUE
What does PITI include?
The acronym PITI stands for principal, interest, taxes, and insurance, the four things that typically make up a mortgage payment.
According to the Texas Real Estate License Act, when must the written statement providing the Information about Brokerage Services be provided?
at the first substantive dialogue
