State and National Review
Which of the following terms is used to describe a situation where a buyer and seller agree to terminate a contract? a. Mutual rescission b. Novation c. Assignment d. Default
a. Mutual rescission
According to TREC, acting as a broker or sales agent without first obtaining a license is a: a. Felony b. Misdemeanor c. Tort d. Misdeed
b. Misdemeanor
Which of the following is the best definition of market value? a. The price a willing seller will sell for. b. Most probable price. c. The price a willing buyer will pay. d. Cost
b. Most probable price.
A property owner has a gas station on his land. The zoning committee changes the zoning to R-1. What must the property owner do? a. Apply for a variance. b. Nothing - his property is automatically considered a non-conforming use. c. Apply for a non-conforming use. d. Nothing - his property is automatically granted a variance.
b. Nothing - his property is automatically considered a non-conforming use.
Which of the following is considered community property? a. Property acquired by husband or wife prior to marriage b. Property acquired by husband and wife after marriage with labor c. Property held as tenancy in common d. Property inherited by husband
b. Property acquired by husband and wife after marriage with labor
A buyer's agent has helped a buyer to find a home. The buyer has expressed concern about the possible presence of radon. What should the buyer's agent do in this case? a. Tell the buyer to mention his concerns to his structural inspector. b. Recommend an inspection for hazardous materials. c. Recommend that the buyer purchase a test kit to determine the possible presence of radon on the property. d. Tell the buyer to question the seller about the possible presence of radon.
b. Recommend an inspection for hazardous materials.
What are the penalties for practicing an act of brokerage without a license? a. Fine of $4000 and/or imprisonment in county jail for up to one year b. Same as "a" plus civil suit for damages c. Fine of $100 - $500 and/or imprisonment in county jail for up to one year d. Same as "c" plus civil suit for damages
b. Same as "a" plus civil suit for damages
What form must the lenders provide to the consumer/borrower and when must it be provided? a. The CD at least one business day before closing b. The CD at least three business days before closing c. The LE at least one business day before closing d. The LE at least three business days before closing
b. The CD at least three business days before closing
The main goal of the ADA is the removal of barriers. All of the following are required under ADA except: a. Wheel chair access b. Automatic doors c. Braille markers on elevator control buttons d. Levered door handles
Automatic doors
What is a point? a. 1 % of a loan amount b. 1% of the price of the property c. 1% of the down payment d. Prepaid interest based on market conditions.
a. 1 % of a loan amount
What is the difference between a general partner and a limited partner? a. A general partner has full liability and a limited partner has limited liability. b. A general partner is only an investor, while a limited partner runs the partnership. c. Although both have full liability, a limited partner has a smaller investment in the partnership. d. Although both have limited liability, the general partner runs the partnership
a. A general partner has full liability and a limited partner has limited liability.
Which of the following conveys title to real property and insures good title? a. A general warranty deed b. A policy of title insurance c. A title commitment d. An attorney's opinion of title
a. A general warranty deed
37. An agent has acted without authority to do so. His principal has found out about the actions and accepted them. What kind of agency does this describe? a. Agency by ratification b. Agency by estoppel c. Ostensible agency d. Agency coupled with an interest
a. Agency by ratification
After several years of selling residential property a license holder wishes to begin working on industrial sales. He should: a. Align himself with a broker or sales license holder who has experience in industrial property in order to learn about and become proficient in industrial sales. b. Advertise his services as an industrial sales expert and learn on the job. c. Contact industrial property owners and try to obtain a listing. d. Take a class in the management of industrial property and then pursue industrial sales.
a. Align himself with a broker or sales license holder who has experience in industrial property in order to learn about and become proficient in industrial sales.
A broker is not required to: a. Be sure to review all contracts prepared by license holders he sponsors b. Be sure his license holders use promulgated forms c. Be sure his license holders obey the laws in advertising d. Be sure his license holders follow all TREC rules and regulations
a. Be sure to review all contracts prepared by license holders he sponsors
A practice of trying to induce homeowners to sell by convincing them that a minority group is moving into the area causing property values to drop is: a. Blockbusting b. Steering c. Channeling d. Coercion
a. Blockbusting
Which of the following properties would be the least desirable neighbor? a. Brownfields. b. Greenfields. c. A landfill. d. A waste disposal treatment facility.
a. Brownfields.
The property management agreement creates what kind of agency? a. General agency b. Special agency c. Limited agency d. Universal agency
a. General agency
A license holder is working as a buyer's agent. Her buyer wants to take his contract to an attorney for advice. The license holder should: a. Give the contract to the buyer to take to his attorney. b. Get approval from her broker before giving the contract to the buyer. c. Select or recommend a particular attorney for her buyer to work with. d. Terminate her relationship with the buyer as he appears to be considering a lawsuit.
a. Give the contract to the buyer to take to his attorney.
Which of the following is false about a property manager? a. He is a universal agent to the owner. b. He should have E&O insurance. c. He should have a management agreement to define his role and responsibilities d. He works to preserve property value while generating income for the owner.
a. He is a universal agent to the owner.
Broker B has signed a Buyer Representation Agreement with his clients. As a buyer's agent he must not disclose: a. His buyer's ability to make a higher offer b. How long the property has been on the market c. The maximum price he feels his buyer's should offer, regardless of list price d. Terms in the offer which are favorable to the seller
a. His buyer's ability to make a higher offer
An appraiser is using the Market Data Approach to determine the value of a residential property. What is FALSE? a. His comparables should not be more than one year old. b. He should have three to five comparables for the property. c. The best comparable will have the least number of adjustments regardless of value. d. The comparables should not be more than six months old
a. His comparables should not be more than one year old.
A property is surveyed to determine a legal description. The surveyor works from a point of beginning, and measures terminal points and angles. What method of land description is he using? a. Metes and bounds b. Lot and block c. Monuments d. Government survey system
a. Metes and bounds
John has a three year lease on office space. In the second year the landlord dies. His heirs inherit the property. They do not want it and they sell it. The new owner wants John to move out. Does John have to leave? a. No, because he has a lease. b. Yes, because death of the landlord terminates a lease. c. Yes, because the sale of the property terminates a lease. d. Only if the landlord begins a forcible entry and detainer procedure.
a. No, because he has a lease.
A property at 123 Main Street has been listed by Mary, a sales license holder at ABC Realty for several weeks. Last week, Mary died. What effect will Mary's death have on the Listing Agreement? a. None b. It is terminated c. It is binding on Mary's heirs d. The seller can claim abandonment and terminate the listing
a. None
Where can you expect to find MIP? a. On an FHA loan b. On a VA loan c. On a low LTV conventional loan d. On a high LTV conventional loan
a. On an FHA loan
Which of the following statements about mold remediation is FALSE? a. Only a licensed remediator can remove mold. b. A homeowner is entitled to a Certificate of Mold Remediation within 10 days of the work being completed. c. An insurance company cannot make an underwriting decision based on previous mold claims if the property owner has a Certificate of Mold Remediation. d. When a property is sold, the seller must provide all Certificates of Mold Remediation he has received in the past five years.
a. Only a licensed remediator can remove mold.
In preparing an appraisal, which of the following would have the least impact on the appraiser's estimate of value? a. Physical deterioration b. Functional obsolescence c. Economic obsolescence d. External obsolescence
a. Physical deterioration
A license holder advertises a listed property as having the most beautiful landscaping in the neighborhood. This is an example of: a. Puffing. b. Deception. c. Misrepresentation of material fact. d. Steering.
a. Puffing.
A buyer's agent is working with a buyer to purchase a property. The buyer is concerned about the location of the fence as it appears to be encroaching. What should the buyer's agent do? a. Recommend a survey. b. Tell the buyer not to worry, as the title company will protect the buyer if there is a problem. c. Help the buyer measure the property to determine if there is a problem. d. Tell the buyer that because the listing does not mention any encroachment, it must be fine
a. Recommend a survey.
One of the property owners in a subdivision is violating the deed restrictions. What can the other property owners do to get him to comply? a. Seek an injunction from the courts b. Sue for damages c. Seek a judgment from the courts d. Ask the courts for an action of forcible entry and detainer
a. Seek an injunction from the courts
Mary and John are married with grown children. Both are intestate. If John dies and Mary immediately becomes the owner of their home, what type of ownership did they have? a. Tenancy by the entirety b. Tenancy in severalty c. Community property d. Tenancy in common
a. Tenancy by the entirety
Under a new construction Home Owner Warranty policy, which of the following would not be covered? a. The air conditioning unit. b. The improper installation of the hot water heater. c. Roof shingles that were not nailed down. d. A faucet that is leaking because the plumber did not use the correct fitting
a. The air conditioning unit.
What is the least important factor for a license holder preparing a CMA? a. The information from expired listings of unsold property in the area. b. The prices of current listings in the neighborhood. c. The date of closed sales used for comparables. d. The curb appeal of the property
a. The information from expired listings of unsold property in the area.
Which of the following differentiates a Broker-Intermediary from a Sales agent-appointee? a. The sales agent can give advice and opinions to one party in the transaction b. The sales agent can give advice and opinions to both parties in the transaction c. The broker can give advice and opinions to one party in the transaction d. The broker can give advice and opinions to both parties in the transaction
a. The sales agent can give advice and opinions to one party in the transaction
A license holder sponsored by a broker must have a written agreement: a. To work as an independent contractor. b. To confirm the sponsorship arrangement. c. For both the sponsorship arrangement and the independent contractor status. d. Only if both parties insist on one.
a. To work as an independent contractor.
A broker has represented a seller in the sale of the seller's property. The property was listed for sale "as is", Caveat Emptor - buyer beware. The seller provided a seller's disclosure stating there were no known problems of any kind with the property. The property was sold to a buyer who agreed to the "as is" provision. After closing the buyer moved in and immediately he discovered many serious problems with the property. He had an inspection done, and the inspector determined that the problems were not "new", but rather most were long standing. The buyer sued the seller and was able to have the sale reversed. Is the broker entitled to keep the commission earned on this sale? a. Yes. b. No, because the buyer is no longer willing therefore the broker is not the procuring cause of sale. c. No, because there was fraud involved in the transaction. d. No because the broker did not require the buyer to have inspections prior to closing
a. Yes.
A couple is moving to a new city and they would like time to learn the city before they purchase a home. What type of lease should their agent recommend? a. An estate for years b. A periodic tenancy c. An estate at will d. A joint tenancy
b. A periodic tenancy
A retired couple is on a fixed income. They own their own home. They are having a hard time making ends meet, yet they do not want to sell their home. What type of loan should they consider? a. A home equity loan. b. A reverse annuity mortgage. c. A participation loan. d. A shared appreciation mortgage.
b. A reverse annuity mortgage.
A one on one relationship between a broker and a client is called: a. Brokerage. b. Agency. c. A listing. d. A partnership.
b. Agency.
A license holder has just taken a class on networking and marketing through social media. She is very excited about the possibilities and has established Facebook, Twitter, LinkedIn and Pinterest accounts. She is also writing a blog. She has decided to market a new listing on these sites. The property has been built to resemble an Antebellum mansion. How can she advertise the property? a. Antebellum mansion. b. Antebellum style mansion. c. Modernized Antebellum mansion. d. Historic Antebellum mansion.
b. Antebellum style mansion.
When must disclosure of representation be made in order to comply with the law? Senate Bill 489 requires disclosure of representation to be made: a. At the first face to face meeting b. At first contact c. At the first substantive dialogue d. On a form approved by a Texas real estate attorney
b. At first contact
John has a loan with equal regular payments of principal and interest. Long before the debt is satisfied, the balance is due in a payment substantially larger than all the others. This is best described as a: a. Term Loan b. Balloon Loan c. Graduated Payment Mortgage d. Bi-weekly Loan
b. Balloon Loan
A listing agent would probably not disclose: a. Death on the property due to a structural defect b. Death on the property due to natural causes c. The possible presence of lead paint d. The presence of endangered species
b. Death on the property due to natural causes
A tenant has vacated a rental property. He stills owes rent. He has left personal property behind. The landlord cannot: a. Sell the property. b. Dispose of the property. c. Pack and store the property. d. Attach the wages of the tenant for the rent owed.
b. Dispose of the property.
A builder is using inferior siding and paint in an effort to construct affordable housing. This would be an example of: a. Physical depreciation b. Functional obsolescence c. Economic obsolescence d. External obsolescence
b. Functional obsolescence
The fact that an individual must go to the land describes which of the physical characteristics of land? a. Non homogeneity b. Immobility c. Indestructibility d. Situs
b. Immobility
Which of the following would cause TREC to refuse to license an applicant? a. Felony conviction. b. Inability to demonstrate honesty, integrity and trustworthiness to TREC. c. Misdemeanor conviction. d. Past revocation of a Real Estate License.
b. Inability to demonstrate honesty, integrity and trustworthiness to TREC.
Which of the following would be considered an operating expense by a property manager preparing an operating budget for the owner? a. Monthly mortgage payments b. Interior painting of apartments c. Depreciation d. Construction of a new wing on the building
b. Interior painting of apartments
Mark had an Open Listing on a seller's property. He had shown the property three times to the same potential buyers. Each time, he notified the sellers of the showing by phone. He heard from the sellers that he should no longer show the property as it was sold. Several weeks later, he learned that it was sold to the buyers he brought to the property. What are Mark's rights with respect to a commission from the sellers? a. Mark is entitled to a full commission as agreed to in the Open Listing. b. Mark is not entitled to any commission as he did not bring the offer to the sellers. c. Mark is not entitled to a commission because he did not give written notice of his showings. d. Mark is only entitled to a partial commission from the sellers as he did not do the paper work for the sale.
b. Mark is not entitled to any commission as he did not bring the offer to the sellers.
What remedy is available in every TREC contract form for Breach of Contract? a. Arbitration. b. Mediation. c. Suit for specific performance, seek such other remedies as may be permitted by law, or both d. Default
b. Mediation.
A property has foundation problems. The seller has painted over them to hide them. He lists his property for sale "as is", and does not disclose the problem. The listing broker views the property but does not detect any defects. A buyer purchases the property and after closing discovers the problems. Which of the following statements is true? a. The seller is not liable because he listed the property for sale "as is". b. The broker will be protected by his E&O insurance because the problem was not able to be detected by visual inspection and the seller misrepresented the property. c. The broker will not be protected by his E&O policy because he should have questioned the seller about all possible problems associated with the property. d. The E&O insurance will protect both the seller and the broker.
b. The broker will be protected by his E&O insurance because the problem was not able to be detected by visual inspection and the seller misrepresented the property.
The local government needs your land to build a new high school. They have the right to take your land for the public good. This is called: a. The right of escheat b. The right of eminent domain c. The right of condemnation d. Police power
b. The right of eminent domain
A buyer has signed an agreement to purchase a property from a seller. He has met all the terms and conditions of the listing. The listing broker has taken the agreement to the seller. The seller has changed his mind about selling and refuses to sign the agreement. What is true? a. The buyer can sue the seller for specific performance. b. The seller does not have to sell, but he owes the listing broker a commission. c. The seller does not have to sell, and does not owe a commission at this time. d. The buyer cannot force the seller to sell, but can sue for damages.
b. The seller does not have to sell, but he owes the listing broker a commission.
A seller's property is listed for $399,900. A buyer makes an offer for $389,000. The seller counter offers for $392,500. The buyers have not responded to the counteroffer. The sellers receive another offer for $395,000. They would like to accept this new offer. What is true? a. They can accept the new offer. b. They can accept the new offer, but only after withdrawing their counteroffer. c. They cannot accept the new offer until the counteroffer expires. d. They can only accept the new offer as a backup offer.
b. They can accept the new offer, but only after withdrawing their counteroffer.
When a license holder has been assessed an administrative penalty by TREC as a result of TREC determining an infraction of its rules, how long does the license holder have to pay that penalty? a. 10 days b. 15 days c. 30 days d. 60 days
c. 30 days
Which of the following contracts would be voidable? a. A contract for cash. b. A verbal lease agreement for seven months c. A contract with a minor. d. A contract to sell illegal drugs.
c. A contract with a minor.
Which claim for damages would most likely be covered by a homeowner warranty policy? a. An undisclosed special assessment. b. A tax proration error on the HUD-1. c. A furnace that breaks down a few weeks after the buyers move in. d. The buyer's discovery that the house is haunted.
c. A furnace that breaks down a few weeks after the buyers move in.
What type of verbal lease agreement would be enforceable? a. An oil and gas lease. b. A graduated lease. c. A lease for one year or less. d. A land lease.
c. A lease for one year or less.
A leased property is not for sale at this time. The tenant has a four year lease on the space. The tenant also has the right to match or better any offer before the property will be sold to anyone else. What agreement between the landlord and tenant gave the tenant that right? a. A lease with an option to buy. b. A lease purchase agreement. c. A lease with a Right of First Refusal. d. A standard commercial property lease.
c. A lease with a Right of First Refusal.
When measuring gross area the appraiser measures the: a. Room sizes b. Interior c. Under roof d. Slab
c. Under roof
A broker has a trust account set up to hold client funds. He has earnest money deposits from several clients in the account at the same time. This is: a. Commingling and illegal. b. Conversion. c. Acceptable as long as he has written records. d. A violation of Federal Banking laws.
c. Acceptable as long as he has written records.
What type of business entity is owned by shareholders, but avoids "double taxation'? a. A corporation. b. An LLC. c. An S Corporation d. A Sole Proprietorship
c. An S Corporation
E signatures or electronic signatures: a. Are not valid. b. Are always valid. c. Are valid for parties that have agreed to their use with the consent of the other parties. d. Are always valid for all parties with or without authorization.
c. Are valid for parties that have agreed to their use with the consent of the other parties.
A chemical manufacturing company purchases a plant. After closing they discover that the previous owners had spilled hazardous materials on the land. According to CERCLA, who is liable for the cost of the cleanup? a. The new owners. b. The previous owners. c. Both the new owners and the previous owners. d. The title insurance company.
c. Both the new owners and the previous owners.
If a license holder, under CE requirements, renews on time without including the required education what will TREC do? a. Consider the license expired. b. Hold the license in inactive status until the education requirements have been met and the $450 of penalties and fees have been paid. c. Consider the license active for an additional 60 days, during which time the license holder must complete the required education and pay the $200 amount for fees and penalties d. Consider the license active for an additional 30 days during which time the license holder must complete the required education and pay the $200 amount for fees and penalties.
c. Consider the license active for an additional 60 days, during which time the license holder must complete the required education and pay the $200 amount for fees and penalties
When a landlord allows the property condition to deteriorate so much that the tenants are forced to leave it is called: a. Waste b. Physical deterioration c. Constructive eviction d. Deferred Maintenance
c. Constructive eviction
Which of the following deaths on a property should never be disclosed? a. Murder b. Suicide c. Death due to HIV/Aids d. Natural causes
c. Death due to HIV/Aids
The Texas Real Estate Commission was created in 1949 primarily to: a. Settle disputes among claimants to commission fees b. Enforce provisions of the Fair Housing Act c. Enforce the TRELA d. Regulate the activities of the local trade association boards
c. Enforce the TRELA
Which of the following statements about flood insurance is FALSE? a. FEMA oversees the National Flood Insurance program in the United States. b. If federally related financing is used to purchase property located in the flood plain, flood insurance will be required. c. Flood insurance is not necessary if a property owner has a comprehensive homeowner's policy. d. Flood maps have been prepared by the Army Corps of Engineers
c. Flood insurance is not necessary if a property owner has a comprehensive homeowner's policy.
Where does the secondary market get its funds? a. From the government. b. From the United States treasury. c. From investors. d. From banks and investment companies.
c. From investors.
The rules and regulations of TREC: a. Must receive approval from the governor b. Must be approved by district court c. Have the full force and effect of law d. Are promulgated by the Consumer Protective Agency
c. Have the full force and effect of law
A property owner receives a notice that his land is in an improvement district. What does this mean? a. Coming improvements will increase his property value at no cost to him. b. He can expect zoning changes on the property in the near future. c. He will receive an additional tax bill. d. He will be asked to donate funds for community improvements on a voluntary basis
c. He will receive an additional tax bill.
A broker owes customers: a. The same level of responsibility that he owes clients b. Honesty, advice and opinions c. Honesty and fairness d. Honesty, fairness and full disclosure of all facts
c. Honesty and fairness
Which of the following is the best example of puffing? a. This is the largest lot in the subdivision. b. The children in this neighborhood attend the best elementary school in the district. c. I think this is the best floor plan available from this builder. d. This home has the lowest taxes of any on this street.
c. I think this is the best floor plan available from this builder.
An appraiser has been hired to value a commercial office building that is fully leased. What approach to appraisal will he use to determine his opinion of value? a. Cost approach b. GRM c. Income approach d. GIM
c. Income approach
The standard contract forms adopted by the TREC a. Must be used by all brokers and attorneys handling real estate transaction b. Are optional but may be requested by either principal in a real estate transaction c. Must be used by real estate license holders in all transactions to which the forms are applicable d. Contain suggested language that a broker or sales agent may wish to include when writing a sales contract
c. Must be used by real estate license holders in all transactions to which the forms are applicable
Mark has an option to purchase Bob's property. The option expires at the end of the month and Mark would like to extend the option. What would he need to do? a. Open title on the property b. Apply for financing c. Pay an additional option fee d. Offer an assignment to the seller
c. Pay an additional option fee
John has leased commercial property and pays rent based on the receipts of his business. This type of rent is referred to as: a. Contract rent b. Economic rent c. Percentage rent d. Gross rent
c. Percentage rent
A landowner wants to sell his property. A title search uncovers a cloud on the title. There is no one available to sign a quit claim deed to clear up the cloud. What can the owner do? a. Advertise ownership in the Public Notice section of the newspaper. b. Record a sworn affidavit stating his ownership is uncontested. c. Pursue an action to quiet title in court. d. File a lis pendens on the property.
c. Pursue an action to quiet title in court.
You have recently purchased property in an area regulated by zoning. It has come to your attention that you have a zoning violation on the property. What should you do? a. Ignore the violation, as it is a pre-existing condition b. Claim non-conforming use to continue the violation c. Request a variance from the zoning board d. File a claim against the title company that issued your title policy
c. Request a variance from the zoning board
Which of the following actions of a broker could jeopardize the independent contractor status of the license holders he sponsors? a. Requiring his license holders to work full time. b. Requiring his license holders to pay their own income taxes. c. Requiring his license holders to work scheduled hours. d. Requiring his license holders to keep their licenses active.
c. Requiring his license holders to work scheduled hours.
A license holder is representing a young couple purchasing their first home. She shows them many properties and finally they find one to buy. They have some concerns about the contract and ask to speak to an attorney. The agent should: a. Prepare the contracts, have the couple sign and then send them to an attorney. b. Send the clients to an attorney of the license holder's choice before they sign. c. Send the clients to an attorney of their choice before they sign. d. Explain that all the contracts are prepared by attorneys and it would be a waste of time and money to visit an attorney
c. Send the clients to an attorney of their choice before they sign.
An investor/developer has borrowed money to build a retail shopping center. His lender has provided a very competitive interest rate, however when the investment property is completed and sold the lender will collect the amount borrowed plus a percent of the developer's profits. What type of loan is this? a. Construction loan. b. Participation loan. c. Shared appreciation loan. d. Straight loan
c. Shared appreciation loan.
A buyer has discovered a defect in title and has suffered a loss due to the defect. The title company has compensated the buyer for the loss. Subsequently, the buyer is awarded a judgment against the seller. The title company is entitled to a portion of the judgment as reimbursement for the claim it paid. This describes: a. Subordination b. Seizen c. Subrogation d. Sufferance
c. Subrogation
What expenses of home ownership can a buyer deduct on his income taxes? a. Principal, interest, taxes and insurance b. Interest, taxes and insurance c. Taxes and depreciation d. Taxes and interest on his mortgage
c. Taxes and depreciation
John and Mary are co-owners of a property. John has a 60% interest in the property and Mary has a 40% interest. What type of freehold estate do they have? a. Joint tenancy b. Estate in severalty c. Tenancy in common d. Life estate
c. Tenancy in common
Which of the following statements about the difference between a license holder who is an employee and a license holder who is an independent contractor would be true? a. The broker is only legally liable for the acts of a license holder who is an employee. b. The broker is only legally liable for the acts of a license holder who is an independent contractor. c. The broker is legally liable for the acts of all license holders, independent contractors and employees alike. d. The broker is not legally liable for the actions of license holders he sponsors.
c. The broker is legally liable for the acts of all license holders, independent contractors and employees alike.
A buyer and seller have signed a contract for the sale of the seller's property. The buyer has received the survey and is unhappy with some of the information. Which of the following actions should he pursue? a. The buyer should file the survey with the local courts and sue the seller for failure to disclose the problems shown in the survey b. The buyer should notify the seller of his decision not to purchase the property c. The buyer has the previously negotiated number of days to notify the seller of his concerns and ask the seller to correct the problems d. The buyer has 7 days from receipt of the survey to terminate the agreement
c. The buyer has the previously negotiated number of days to notify the seller of his concerns and ask the seller to correct the problems
Mary, a single woman, has no children. She owns real property and dies intestate. What happens to her real property? a. The government takes it under the right of escheat. b. The government takes it by condemnation under the right of eminent domain. c. The court will appoint an administrator and it will be distributed to her heirs by the Law of Descent. d. The courts will appoint an executor to distribute her property to her heirs by the Law of Descent.
c. The court will appoint an administrator and it will be distributed to her heirs by the Law of Descent.
Who would use the remedy of Forcible Entry and Detainer? a. The tenant b. The lessee c. The landlord d. The buyer
c. The landlord
A property has lead paint in the interior and on the exterior. Which of the following statements is true? a. The seller must remove the interior paint, but not the exterior paint. b. The seller must remove all lead paint c. The seller has no duty to remediate lead, simply to disclose it. d. The seller does not have to remove the paint, but he must contain it.
c. The seller has no duty to remediate lead, simply to disclose it.
A young couple leases an apartment in an apartment complex for one year. During the year, they become concerned about crime in the area and ask for permission to install an alarm system in the apartment. The landlord grants permission. When the lease is up, what happens to the alarm system? a. The tenants can take it with them as long as they repair any damage it caused. b. The landlord must reimburse the tenants for the system, but the system must remain. c. The system stays as it is now a fixture. d. The tenants can take it with them and do not have to make any repairs.
c. The system stays as it is now a fixture.
For what group of buyers would the ARM be the least desirable? a. Those subject to job transfer. b. First time buyers. c. Those on a fixed income d. Those seeking a low monthly payment
c. Those on a fixed income
Your property borders a non-navigable waterway and you have riparian rights. You have built a 10-foot pier at the water's edge. How do you measure your property? a. To the end of the pier b. To the vegetation line c. To the middle of the waterway d. To the middle of the waterway, or the end of the pier, whichever is greater.
c. To the middle of the waterway
Which of the following is not a duty of an agent? a. Obedience b. Care c. Trust d. Loyalty
c. Trust
A young couple wants to buy a home in a high-risk neighborhood. Their loan has been approved because their credit score is high, but the insurance company has refused to provide coverage to a property in that neighborhood. The insurance company is guilty of: a. usury. b. nothing. c. redlining. d. predatory policies.
c. redlining.
A signed employment agreement is necessary to: a. work in a real estate office b. be considered an agent by the IRS c. sue for a commission d. be an agent under license holder guidelines
c. sue for a commission
How long must a seller or landlord keep a copy of the lead paint disclosure? a. 6 months b. 1 year c. 2 years d. 3 years
d. 3 years
In senior housing communities, at least one person aged 55 and older must be living in what percent of the units? a. 60% b. 70% c. 75% d. 80%
d. 80%
Which of the following is false regarding the Civil Rights Act of 1968: a. The owner-occupant of a three-family house can discriminate in renting a unit in the house. b. Churches can restrict occupancy of church owned rental property to church members. c. Private clubs can prevent non-members from staying in club run properties. d. A FSBO who owns no more than four homes can discriminate when selling a home.
d. A FSBO who owns no more than four homes can discriminate when selling a home.
The best description of a counteroffer is: a. An offer that accepts some of the provisions of a previous offer. b. An offer that rejects some of the provisions of a previous offer. c. An offer that rejects some of the provisions of a previous offer, and accepts some of the provisions of a previous offer. d. A rejection of an offer.
d. A rejection of an offer.
According to Regulation Z, which of the following is not a trigger term? a. Monthly payment amount b. Down payment amount c. Interest rate d. APR
d. APR
Where must a link to the completed IABS form be found in an email? a. Below the signature b. In the footer c. A link is not required d. Above the signature
d. Above the signature
A broker has written permission to represent both the seller and the buyer as a dual agent. Under these circumstances, which of the duties of an agent would be the easiest for him to fulfill? a. Obedience b. Loyalty c. Confidentiality d. Accounting
d. Accounting
All of the following are hazardous substances that a license holder should be aware of except: a. Radon b. Asbestos c. Electromagnetic Fields d. Acrylic paint
d. Acrylic paint
Marketing real property by guaranteeing a profit when it is resold is: a. Good sales technique b. Permitted so long as no deception is intended c. Appropriate only when comparable sales analysis shows the accuracy of such a claim d. Cause for suspension or revocation of licensure
d. Cause for suspension or revocation of licensure
A property owner has installed a chain link fence on his property. He has received an official notice requiring the removal of this type of fence. This fence is most likely a violation of: a. Zoning b. Building codes c. Environmental regulations d. Deed restrictions or deed covenants
d. Deed restrictions or deed covenants
What power does the Commission have when a license holder fails to comply with a subpoena? a. Decline to renew the individual's license b. Freeze the bank account of the license holder c. Order the appropriate county sheriff to place the person in jail d. File suit through the attorney general to enforce the subpoena
d. File suit through the attorney general to enforce the subpoena
When a broker markets his own property he should: a. Use the IABS to disclose his interest b. Use the TREC promulgated form to disclose his interest c. Not mention his interest unless the buyer decides to buy the property d. Inform the buyer that he is a license holder
d. Inform the buyer that he is a license holder
Appraisers are most often asked to determine: a. Insurance value b. Cost c. Price d. Market value
d. Market value
The landlord pays the expenses of the property. The tenant pays rent and utilities. What kind of lease is this? a. Gross lease b. Estate for years c. Periodic tenancy d. Net lease
d. Net lease
Which of the following does NOT pledge property as security for a debt? a. Mortgage b. Deed of trust c. Contract for deed d. Note
d. Note
Which of the following instruments is the promise to repay a debt? a. Mortgage b. Deed c. Deed of Trust d. Note
d. Note
What are an agent's duties to his principal? a. Obedience, loyalty, disclosure, integrity and competency b. Compensation, reimbursement, indemnification, and performance c. Fidelity, integrity and competency d. Reasonable care, obedience, loyalty, disclosure, accounting and confidentiality
d. Reasonable care, obedience, loyalty, disclosure, accounting and confidentiality
A broker using an assumed name, or DBA, must: a. File it at the county courthouse in Austin b. Notify TREC within 30 days after first using the name c. File it in the county courthouse in every county in which he has an office d. Register the name with TREC before using it in any advertisements
d. Register the name with TREC before using it in any advertisements
A license holder in violation has ignored a summons from TREC. What will TREC automatically do? a. Revoke the license. b. Suspend the license c. Fine the license holder $200. d. Set a hearing in Austin
d. Set a hearing in Austin
A license holder is showing her own listing to a buyer customer. While showing the property she notices that there is a serious slope to the porch floor. What should she do? a. She should draw the buyer's attention away from the porch and not mention the problem. b. She should remain silent about it until she has a chance to discuss it with her sellers. c. She should remain silent about it, but recommend that the buyers get an inspection. d. She must point it out to the buyers.
d. She must point it out to the buyers.
A couple is purchasing a home and ask their agent how they should take title so that if one spouse dies, immediately the surviving spouse will be the sole owner of the property. The license holder should: a. Tell them to take title as joint tenants. b. Tell them to take title as tenants by the entirety. c. Tell them to take title as tenants in common and have wills made to clarify their wises. d. Tell them to talk to an attorney, because the license holder is not permitted to give advice on how to take title.
d. Tell them to talk to an attorney, because the license holder is not permitted to give advice on how to take title.
Which of the following is NOT required for a back-up offer to become effective? a. The previous contract must be terminated b. The back-up buyer must pay any earnest money stated in his offer c. The back-up buyer must pay any option fee and name his option period d. The back-up buyer must name his inspector(s)
d. The back-up buyer must name his inspector(s)
What is the advantage to the borrower of a VA loan? a. The loan is guaranteed. b. There is a small funding fee. c. Interest rates on VA loans are always lower than rates on Conventional Loans. d. The guarantee on the VA loan is free.
d. The guarantee on the VA loan is free.
A builder is very successful and active in a new subdivision. Homes in the subdivision are selling well, and the builder is making a good profit on the sales. Two new builders arrive and begin to sell in the same subdivision. All experience a lower level of profit. This demonstrates which principle of appraisal? a. The principle of increasing and decreasing returns b. The principle of regression c. The principle of highest and best use d. The principle of competition
d. The principle of competition
A single property is regulated by building codes, zoning and deed restrictions. The rules are in conflict with one another. Which must the property owner obey? a. Deed restrictions always take precedence over other rules. b. Zoning rules always take precedence over other rules. c. Building codes must be obeyed no matter what other rules exist. d. The property owner must obey whichever rules are the strictest or most limiting.
d. The property owner must obey whichever rules are the strictest or most limiting.
Who is responsible for providing a lead paint disclosure? a. The seller and the buyer. b. The seller and his broker. c. The seller and both brokers d. The seller.
d. The seller.
A buyer and his agent visit a listed property. The buyer loves the property and wants to purchase it. He speaks with the seller, who is at home at the time, and they come to an agreement regarding price and terms. They shake hands on the agreement and the buyer happily leaves the property. His agent should: a. Congratulate him on negotiating the purchase. b. Tell the buyer the verbal agreement is illegal. c. Tell the buyer that he will have to pay the agent's commission since the sales contract is verbal. d. Warn the buyer that the verbal sales contract is unenforceable.
d. Warn the buyer that the verbal sales contract is unenforceable.
