The CE Shop Principles of Real Estate 1

Which type of an estate doesn't end automatically when the stated event or condition occurs?

Fee simple subject to a condition subsequent

Broker applicants in Texas must have how much experience as an active license holder in the previous five years?

Four years

Property managers most often serve as which type of agent?

General

Not wanting to delay closing, Alice, the seller's agent, didn't disclose when the seller informed her a week before closing that the water heater needed to be replaced. Which fiduciary duty to the customer is Alice violating?

Honesty and fair dealing

Churches, schools, and cemeteries are examples of what kind of property?

Special purpose

Conversion means to ______.

Take money from an escrow account and use it for someone who is not entitled to it

Which type of valuation is used by government tax assessment offices?

Assessed value

Which type of value is used to calculate property taxes?

Assessed value

Mary agreed to buy her mother's house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can't come up with the agreed-upon funds. What's happening in this scenario?

Assignment

Which of these is usually a brass marker that is used to mark a datum?

Benchmark

Which of the following is the most serious consequence of treating a customer as a client?

Breaching your duty to your actual client

When HUD receives a discrimination complaint from Texas, what step does it take?

Forwards the complaint to the Texas Workforce Commission Civil Rights Division

Peter is a tenant in a single-family home owned by Cheyenne. What type of interest does Cheyenne have in the property?

Freehold

Identify the ways in which the homestead law protects Texas residents.

Protects against foreclosure by general creditors

What pre-licensing education must an applicant for an initial sales agent license in Texas complete?

Six 30-hour courses of qualifying education

Mitch, your seller client, asked you about the tax ramifications of selling his townhome. What's your best response?

"That's not my area of expertise. You should ask your tax advisor."

There are ______ members of the Education Standards Advisory Committee.

12

How is timeshare ownership typically split?

52 weeks

Which of the following provides an example of a universal agent?

A court-appointed guardian

Rhonda is an unrepresented buyer who's purchasing Tony's townhome. Gary represents Tony in the sale of his property. What's Rhonda's relationship to Gary?

A customer

Which of the following is an example of an easement?

A path providing neighborhood access to a pond cuts through part of Hillary's property.

What is assessed value?

A percentage of market value; also the amount of property value to which the tax rate is applied

What's market allocation?

Agreeing with a competing firm on how to split a market

Which of the following statements is true regarding community property rights and property ownership?

Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally.

In Texas, "someone who has agency representation with the real estate sales agent or broker" is the definition of a ________.

Client

The mixing or combining of escrow funds and non-escrow funds is called ______.

Commingling

In several states, married couples usually hold property as ______.

Community property

In a real estate transaction, which of the following is established when the parties enter into an agreement voluntarily with a full understanding of the contract terms?

Consent

If a licensee uses escrow funds belonging to one client to assist another client, that licensee could be found guilty of ______.

Conversion

What's the purpose of PMI?

Covers the gap between the actual loan amount and 80% of the LTV

An unrepresented ______ who's a party to a transaction is known as a principal.

Customer

A real estate licensee is acting as what type of agent when assigned by the broker to represent one party in an in-house transaction?

Designated

Which act created an agency to investigate antitrust practices?

Federal Trade Commission Act

The Crows gave their son, Gibson, the family property, so long as he doesn't join his friend's rock band. If he joins the band, the property goes back to them. What type of estate is this?

Fee simple determinable

What must be submitted with a real estate license application in Texas so a criminal background check can be performed?

Fingerprints

Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?

Immobility

The Equal Credit Opportunity Act specifies that credit applicants must be judged using only what criteria?

Income, net worth, job stability, and credit rating

Identify which of these actions is a prohibited activity for a real estate licensee in Texas.

Increasing the rent and security deposit for a family with seven children

Which of the following statements about a Partnership is true?

It is a business organization owned by two or more partners.

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Joint tenancy

Which of these is the best definition of real estate?

Land, plus all things permanently attached to it naturally or artificially

What type of water rights are granted to landowners whose land borders closed bodies of water, such as lakes or the ocean?

Littoral

Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?

Lot and block

What must a licensee do when preparing a CMA for a consumer?

Make a statement that the opinion isn't an appraisal.

What type of home is built on a permanent chassis to ensure transportability?

Manufactured home

A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract.

Mentally

"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Henry Nelson ..." is an example of what type of legal description?

Metes and bounds

In which of the following situations can the state use its power of escheat?

Nadine died with no heirs and no debt.

Can an unlicensed assistant show properties for sale for a broker in Texas?

No, a license is required for helping find potential buyers of real estate

Which of the following is a legitimate reason to terminate a sales contract?

One or both parties are in default.

On what type of listing (or listings) may a net listing be used in states where they are legal?

Open, exclusive agency, or exclusive right-to-sell listings

In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. Of what is this an example?

Partial performance

A consumer is moving to a new area and uses social media to try to line up a real estate professional to help him find a new home. He asks how much he'll need to pay his licensee. One firm he contacts tells him that all licensees in the area charge at least 2%. What antitrust violation does this imply?

Price fixing

Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first?

Property taxes

Kelvin isn't sure how to read this legal description, but his agent said something about reading it from right to left. Here's the description: "The north half of the northwest quarter of Section 6, Township 8 North, Range 68 west of the 5th principal meridian." What land description method did surveyors use for this piece of property?

Rectangular government survey

Anyone working for a property management company in Texas and who works for more than one owner is _______.

Required to have a minimum of a sales agent license to collect rent and perform other real estate functions

Samantha is a real estate licensee. She's showing her client a property. The client asks about some spots on the ceiling and wonders if they're an indication of a roof leak. What should Samantha do?

Suggest that her client contact a roofing expert to make a determination.

What describes the different symbols that are used in a survey sketch?

Survey legend

Considering TREC's authority under the laws of TRELA, which of the following statements is true?

TREC has the authority to suspend or revoke any license holder's license.

In Texas, whose responsibility is it to supervise associated licensees and review transactional paperwork and advertising?

The Broker's

Sherman is a listing agent. At what point is he no longer obligated to present offers to his seller client?

The sale has closed.

Which of the following is true about air rights?

They allow the owner to use the open space above buildings.

Both the buyer and the seller have to sign the purchase and sale agreement in order to demonstrate that ______.

They understand the terms

Can an applicant for a real estate license in Texas apply again if their application is denied by the Texas Real Estate Commission?

Yes, the applicant can submit an application two years after the date of the denial

What is the length of the statute of limitations to file a fair housing complaint with HUD?

1 year

What age does a person become eligible for real estate licensure in Texas?

18 years

What is the education requirement for first time renewals for sales agents in Texas?

90 hours of sales apprentice education (SAE) and 8 hours of TREC's legal updates

Which of these policies is an example of discrimination based on familial status?

A landlord charges an extra $100 security deposit for each child living in a property.

Doris and Kathleen, who are neighbors, enter into an agreement to not permit their real estate agents to sell their homes to families with children. This agreement lacks ______, so it's void.

A lawful objective

Which of the following constitutes fraud in real estate according to the Fraud in Real Estate and Stock Transactions Statute?

A listing agent purposely fails to mention the structural damage caused by a recent electrical fire in the wall.

The term "real estate" refers to which of the following under TRELA's general provisions?

Any interest in real property, including a leasehold, located in or outside of Texas

What are improvements with regard to property?

Artificial attachments to land that include items such as fencing, buildings, and walkways

The duty of ______ requires a licensee to reveal all material facts that are pertinent to the transaction to both clients and customers.

Disclosure

Which of the following is a leasehold estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?

Estate at will

Cindy, a seller, tells the buyer of her home that the property will soon be part of the public water system. She makes this claim based on erroneous information the city supplied to her. The buyer relies upon this information and moves forward with the purchase of the home. This is an example of ______.

Innocent misrepresentation

In Texas, the Information About Brokerage Services form ______.

Is required by law. Although required by law, the agency disclosure notice is not a contract, and it does not create a brokerage relationship. The licensee must provide a written disclosure at the time of their first substantive communication with a party in a transaction.

Brandon is the listing agent for Jane's property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Brandon do with the offers?

Present both offers to Jane.

Which of these groups of protected classes is included in the NAR Code of Ethics' definition of discriminatory behavior?

Race, color, religion, sex, disability, familial status, national origin, sexual orientation, or gender identity

Jack works for a great company creating online training for individuals who want to obtain their real estate license or need to keep their license current. What is Jack's profession?

Real estate educator

An apartment building is an example of what kind of property?

Residential

Tina has fee simple ownership of her timeshare unit. Which of these is NOT an example of the type of ownership she may have?

Right-to-use

Jasmine is in the market for a new property for her, her partner, and their young child. Tanner is Jasmine's agent and has shown her several properties. Even though several properties meet the criteria his client is seeking, Tanner has intentionally weeded out properties close to the local college campus, because he doesn't think the location would be suitable for a family with young children. What, if anything, has Tanner done wrong?

Tanner has discriminated against Jasmine using familial status as a reason for not showing her properties.

Which of the following is an advantage of a contract for deed arrangement for the buyer?

The buyer doesn't have to have the money to pay the purchase price all at once.

In Texas, the commission is responsible for preparing information outlining its purpose and duties. It must then make this information available to whom?

The public

Who has the ultimate responsibility for the sales agent's actions in Texas?

The sales agent, and the sales agent's broker

Texas broker Karen was preparing to disburse trust funds for a transaction that was underway. Karen may only disburse trust funds _____.

To the party specified in the agreement under which the funds were received.

James purchased five acres of land for $75,000. What was the cost per acre?

$15,000

TREC must notify consumers of their right to file a complaint against a licensed sales agent, broker, or easement or right-of-way agent by which of the following means?

By displaying it in a readily noticeable location in each place of business the brokers maintain

Acme Realty offers discounted services. Berringer Realty and Hawthorne Real Estate Group decide to not show any of Acme's listings and to prohibit showings from Acme buyers to drive Acme out of business. What is this an example of?

Group boycotting

Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?

Group boycotting

Which one of these situations represents the illegal practice of redlining?

Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods based on the neighborhood's demographics.

Francis, an associate broker, promised his brother, Fred, who is unlicensed and not an attorney or trustee, that he would pay him a portion of his commission when he closed on the Maple Street transaction. Under what circumstances would this be legal?

If Fred were a party to the transaction, and this rebate was paid by Francis's broker

Seller Tad has found a buyer, Minnie, for his property. The two of them are about to enter into a contract when Tad receives an email from Minnie. Turns out that Minnie's co-worker used to date Tad and told Minnie he'd cheated on his construction contractor licensing exam. Minnie threatens to spill the beans unless Tad comes down $10,000 on the sales price. Tad reluctantly agrees and they sign the contract. What is true about this situation?

Minnie used duress against Tad, so the contract is invalid.

Following all of the client's lawful instructions describes which fiduciary duty?

Obedience

In the real estate business, whose primary role is it to make improvements to land?

Real estate developer

The Millers moved to a small town and were interested in buying a house. At the first meeting with real estate sales professional Nora, she asked them where they went to church. They replied that they were atheists and didn't attend church. Nora then told them that she didn't know of any listings that met their needs, even though that wasn't true. Nora is discriminating based on _______.

Religion

Sally is a broker in Dallas and has been for 12 years. She enjoys the responsibility, and enjoys the weight of accounting on her shoulders. Luckily, the law protects her from having to know everything. Which of the following is an example of this provision?

Sally cannot be held liable for not asking if a current or previous resident of a home has any related illnesses to HIV or AIDS.

What's required before a broker can start using an assumed business name in an advertisement?

The broker must register the name with the Texas Real Estate Commission and provide evidence of legal authority to use the assumed business name in Texas.

Margaret, a consumer in a DTPA lawsuit, was able to prove that the licensee in her suit knowingly failed to disclose information. What type of damages is Margaret entitled to?

Up to three times the original damages

You've just purchased a rural property, and the attorney at the closing tells you, "You have a dominant estate." What does that mean to you?

You'll be using an easement across your neighbor Jim's property.