TX License Test

The presence of mold

Marilyn is reviewing the inspection report with her buyer clients. Which of the following issues in the report should Marilyn flag as most significant?

27.5 years

Over how many years is a residential income-producing property depreciated?

Punitive Damages

Courts rarely award what kind of damages in a real estate contract dispute?

Investment Value

an tell a consumer about the expected rate of return for a property

Aesthetic Zoning

applied when a community wants all of the structures in a given area to have a similar visual look

assessed value

determined as a percentage of market value. It's used to calculate taxes and is just one factor in determining an offer price

3

According to the Addendum for Property Subject to Mandatory Membership in a Property Owners Association, within how many days of receiving subdivision information does the buyer have to terminate the contract?

Recording provides constructive notice that he owns the property

Conrad just closed on the house he's buying to fix up. Why should he follow up to be sure the deed has been recorded?

To the All American Escrow Company

Texas residents Carole and Frank Bellacera are purchasing a two-story house with five bedrooms for $350,000. To whom should they write out their earnest money check of $10,000?

Equitable title

the right to obtain full ownership of a property when a certain condition has been met

Novation

the substitution of one party for another, with the full and complete release of the original party from any obligations under the terms of the contract

Effective Gross Income

the sum of all sources of income minus vacancies and credit loss

Surface waters

The Clean Water Act regulates pollutants in U.S. waters and establishes quality standards for

Periodic estate

An example of this type of leasehold estate is a month-to-month lease.

If the subject property has a valuable feature lacking in the comparable property, she adds this value to the comparable property's sales price

Carol is performing a comparative market analysis (CMA), and is working with three comparable properties. How does she account for differences between the subject property and comparables?

Short Sale Addendum

Archie is behind in his mortgage payments. He wants to sell his house and get out from under the loan. You agree to help Archie list his property. Which TREC addendum will you and Archie need to complete and attach to the sales contract?

cultivated crops

What are emblements in real estate?

$5,000

The commission can impose up to a maximum of how much per violation of TRELA?

$320,000

A buyer is purchasing a property for $400,000. His loan-to-value ratio is 80%. How much is the buyer financing?

$896.88

A buyer with a 15-year, $250,000 loan at a 5.5% interest rate has a monthly mortgage payment of $2,042.71. Assuming he pays taxes and insurance separately, if $1,145.83 of his payment is interest, how much is applied to the loan's principal?

Refuse to rent to a female tenant.

A homeowner has converted two rooms in his home to a rental unit. What does the "Mrs. Murphy" exemption permit him to do?

Credited $1,207

A real estate transaction has a closing date of May 20. The seller, who's responsible for closing costs up to but not including the day of closing, has already paid annual property taxes of $1,949. How will the closing statement reflect the proration for the seller? Use a calendar year proration, and round to the nearest dollar.

$9,005.85

Alistair bought a townhouse for $285,900. He got a 90% loan and the lender charged him three-and-a-half discount points. How much did Alistair pay in discount points?

area preference

Allen and Lewis are friends who each recently purchased real estate. Allen purchased a patio home in a small town an hour from the city, while Lewis purchased a condo in a really hot area near the city center. Although they paid similar amounts for their properties, Lewis' condo is worth much more two years later. Which economic characteristic does this demonstrate?

In the Promissory Note paragraph

Allison is helping her buyer complete a Seller Financing Addendum to a Texas sales contract. Where should she put that the buyer needs a $40,000 loan at a 6% fixed rate from the seller to be paid back in 120 monthly payments?

Reconciliation or correlation

Ashton, an appraiser, is estimating value using the sales comparison approach. He applies more weight to two comparables over several others he used. What process is he utilizing?

rebate

Barbara, a Texas sponsoring broker for Longhorn Realty, paid Gwendolyn, a buyer, a portion of the commission Longhorn received from the sales transaction. This is known as ______.

Kathy Simone and John Simone, a married couple

Because Texas is a community property state, marital status should be included when naming the parties. What is the correct way to name these parties on the contract?

commitment

Before the title company will issue an insurance policy to a Texas buyer, which of the following must the seller furnish to the buyer?

$4,700

Dale and Barbara, your buyer clients, aren't thrilled about the current interest rates on home loans. They opt to pay two discount points to their lender to bring down their monthly payment. They're financing $235,000 on their new $400,000 home, so how much can they expect to pay for points at closing?

Bilateral

Desmond has a signed listing agreement with his clients, the Harpers. In exchange for helping the Harpers list, market, and sell their home, the Harpers have agreed to pay Desmond a commission. What type of agreement do Desmond and the Harpers have?

Four years

For how many years following an incident does TREC allow a person to file a complaint against a license holder?

Time is of the essence

Garrett wanted to move his real estate closing to a date after his wedding. His broker and attorney encouraged him not to do it because of which contract clause?

Gina and the seller can negotiate installation of a mitigation system

Gina is buying a home. Her home inspector performed a radon test and discovered a radon level of six picocuries. Which of these statements is true?

Zoning Board of Appeals

If individuals want to use their property in a way that's not permitted by a zoning ordinance, they must submit a request for a variance to which one of the following groups?

$295.20

If the daily rate is $1.23 and closing is August 31, what will the seller owe at closing? Assume a statutory year and that the seller hasn't made any payments. Round to the nearest cent.

Nadine died with no heirs and no debt.

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

permanence

Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?

Open Listing

James, a seller, signed a listing agreement that allows him to contract with multiple agents but only pay a commission to the agent who locates a buyer. This type of listing agreement is called

Group Boycotting

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

Yes, these are clues that the property may have been used as a waste disposal site

Jared wants to purchase property. One of the properties his agent shows him was formerly zoned for commercial use. It has a steep drop off at the back of the property, as well as some soft spots and mounds. Should Jared's agent recommend that he have a home inspector investigate it?

Get a low 4.925% APR

Jerome is developing an ad for three properties he has listed in an upscale community. He wants to keep it short and simple. Which of these would NOT trigger full disclosure under TILA?

Gather and analyze data

Kenneth, an appraiser, is driving around the area where the subject property is located. Which step in the appraisal process does this represent?

bearing

Looking at a survey drawing, you see this measurement at the corner of a property boundary: S 42° 05' 16" W, which means 42 degrees, five minutes, 16 seconds from the south to the west. What is this measurement called?

The course is built on a capped landfill

Marcus and Lucinda decided to play a round of golf on a beautiful new course in their neighborhood. As they're making the rounds, they notice vent pipes extending from the ground in various places. What might this signify?

Cynthia deposited her client's earnest money check into the firm's operating account

One of the following licensee's actions would constitute commingling. Which is it?

document the date prior to closing by which all inspection issues must be fixed

One thing that the inspection contingency must do

Annual cash flow ÷ initial cash investment

Rate of Return

24%

Shelly, an investor, is thinking about buying a $500,000 house to use as rental property. She has $100,000 saved up for a down payment and will mortgage the remaining $400,000. The annual cash flow is projected to be $24,000. What's the potential rate of return?

A right of way provides a pass-through, but not a right to use the property

Sondrine's beach cottage has a right of way that allows nearby residents to get to the beach. What is the primary difference between a right of way and an easement?

Federal

The Clean Water Act and the Clean Air Act are both what type of regulations?

6.29%

The Gatlins' lender tells them they can afford a monthly payment of $1,830 on their new home loan. What interest rate are the Gatlins getting if this is an interest-only loan with a principal balance of $349,000?

sex

The Housing and Community Development Act of 1974 added which protected class to federal fair housing law?

$46,750

The Walton family got a great deal on their new home. They bought it for $101,295, and it appraised at $187,000. Using an assessment ratio of 25%, what is the assessed value of their new home?

$120,000

The gross income multiplier for an area is 12X. If the estimated annual rent is $10,000, what's the property's estimated value?

Physical Depreciation

The loss in value caused by deterioration in physical condition is called

A public record of tenancy

Title insurance covers claims by individuals who live or lived on the property in question, as long as what's in place?

A young couple with only a few thousand dollars saved for a down payment and relatively low credit scores

To which of the following borrowers might a lender be most likely to recommend an FHA loan?

Obedience and reasonable skill and care

Tristan refuses to let Marla list his property on the MLS, even though Marla told him that more exposure to the property will generate more potential buyers. Which two fiduciary duties are at odds in this situation?

Federal Communications Commission

What entity enforces the Telephone Consumer Protection Act?

Credit, Capacity, Collateral

What factors does the underwriter consider in reviewing a mortgage loan application?

It's no longer in play

What happens to an initial offer from the buyer after a seller counters?

An area where flood insurance is mandatory

What is a special flood hazard area?

The buyer's earnest money

What is put at risk if a buyer misses a contingency deadline?

The licensee must disclose the existence of an environmental hazard in the area

What is required of a licensee who is working with a property located near a Superfund site?

A document to transfer ownership/interest in real estate

What is the best description of a deed?

When asbestos fibers decay or are disturbed, the friable particles can be inhaled

What is the most common way that asbestos enters the body?

Telephone Consumer Protection Act

What is the name of the federal law that sets forth guidelines regarding telephone solicitation?

To release homeowners from the responsibility of cleaning up hazardous substances if the homeowner didn't know they existed

What is the primary purpose of the Superfund Amendments and Reauthorization Act (SARA)?

Underground Storage Tanks

What property feature could lead to soil contamination?

It provides funds to help assess and clean

What role does the Brownfields Law play in the assessment and cleanup of unused commercial/industrial sites that may contain hazardous waste?

There could be hidden title issues.

What special concern do foreclosed properties often present?

$110,000

What's the estimated value by cost approach for a property if the site value is $25,000, the cost of improvements is $100,000, and the total depreciation estimate is $15,000?

Legal Description

Which of the following elements does the Statute of Frauds require as part of a valid real estate contract in Texas?

counter offer

Which of the following would a seller use to reject some terms of an offer and ask for different terms?

The seller's agent fails to provide the pamphlet, "Protect Your Family From Lead in Your Home" to prospective buyers

Which of these actions is a violation of the Residential Lead-Based Paint Hazard Reduction Act when a property constructed before 1978 is being marketed by a licensee?

contribution

Which of these principles of value is related to how a change to a portion of a property impacts the value as a whole?

Landowners who perform due diligence when purchasing a property, including a Phase I site assessment, may be immune from liability if the property is found to be contaminated

Which of these statements about the Superfund Amendments and Reauthorization Act (SARA) is true?

How much the property is worth to its owner as it's currently used

Which of these statements best describes value in use?

Testamentary trusts do not avoid probate

Which one of the following statements about testamentary trusts is true?

The property's legal ownership can be challenged

Which option is true if a deed is not recorded after closing?

Recording the deed provides constructive notice of the property sale

Which statement most accurately describes the type of notice provided by recording a change of ownership document?

Environmental Impact Statement

Which written statement will be used to consider ways to minimize a project's negative impact on the environment?

Borrowers with homes in a floodplain must purchase flood insurance

Why is it important for buyers to know if a property is in a special flood hazard area (SFHA)?

18 months

You're a broker in Houston. Although your former client, Meghan, is on the Texas Do Not Call list, it's okay for you to call her to solicit business if you have an established business relationship with that person, and were involved in a business transaction with that consumer within ____

Yes, and since the purchase is being financed with a VA-guaranteed loan, the appraiser must be VA certified

Your client is purchasing a single-family home using a VA-guaranteed loan. The sales price is $150,000. Is a certified appraiser required to perform an appraisal?

Yes, it's required

Your client is purchasing a single-family home with a conventional loan. The listing price is $410,000. Does this situation require a licensed or certified appraiser?

Title Insurance

Your client, Ray, is worried about title issues that may arise after closing. Remind Ray of his secret protection:

Write "rejected" on Kevin's offer

Your seller client, William, had multiple offers to consider. He decided to move forward with Ryan's offer, and reject the offer from Kevin. What should your client do with the offer from Kevin?

Incentive Zoning

a way to grant an exception to a developer for something in return that will benefit the community

Lot and Block Survey

always uses one of two things as a beginning reference: a rectangular government survey or a metes and bounds description

reproduction cost approach

determines the cost to build an exact replica of the property with the same materials and deficiencies

1. financing terms and cash equivalency 2. conditions of sale 3. market conditions at the time of contract and closing 4. location 5. physical characteristics

elements considered in the sales comparison approach are applied in a specific order

Spot Survey

includes the location, size, and shape of any improvements on a property

condition

is a contingency placed on property ownership

External Depreciation

loss in value caused by an undesirable or hazardous influence offsite

Market Value

price at which a willing buyer and a willing seller would strike a deal, given normal market conditions

Correlation

process where the most weight may be given to one or two comparables, or equal weight may be given to all

Civil Rights Act of 1866

provided every U.S. citizen with the right to buy, sell, convey, inherit, and possess property.

National Environmental Policy Act (NEPA)

requires that new federal government construction projects be evaluated for their potential environmental impact