1-6
A first-time homebuyer may make a penalty-free withdrawal from an IRA of up to A) $25,000. B) $30,000. C) $10,000. D) $15,000.
$10,000.
Which family is NOT protected under the familial status provisions of the Fair Housing Act? A) A 23-year-old single father who has custody of a 3-year-old son and wants to rent a home B) A 55-year-old father, 40-year-old mother, and 17-year-old son who want to purchase a home in an age-restricted adults-only community C) All of these are protected classes D) An 18-year-old pregnant female who wants to rent an apartment
A 55-year-old father, 40-year-old mother, and 17-year-old son who want to purchase a home in an age-restricted adults-only community
Under the discriminatory practices canon of the Canons of Professional Ethics and Conduct, which practice is permitted? A) A license holder may inquire about the marital status of a current property owner. B) A license holder may disclose that a current property owner has or may have AIDS. C) A license holder may inquire about or respond to inquiries about the race, color, religion, sex, national origin, ancestry, familial status, or handicap of a current property owner. D) A license holder may inquire about or respond to inquiries about the race, color, religion, sex, national origin, ancestry, familial status, or handicap of a previous property owner.
A license holder may inquire about the marital status of a current property owner.
Which one of these adds objective value to a property? A) A new roof B) Proximity to a good elementary school C) Proximity to a major airport D) A south-facing front door
A new roof
A developer wishes to build a commercial building in the space over the railroad tracks. To do this, the developer must purchase which right from the owner? A) Enjoyment B) Exclusion C) Air D) Subsurface
Air
Which criteria may an insurance company use when evaluating and issuing a homeowners policy? A) An insurance company can refuse to sell a policy or cancel or refuse to renew a policy solely on the basis of credit. B) An insurance company can refuse to insure a home in poor condition. C) An insurance company cannot charge more for a policy if claims have been filed in the past. D) An insurance company can deny coverage solely because of a home's age or value
An insurance company can refuse to insure a home in poor condition.
If there are only two remaining spec homes in a development of 100 completed and sold units, the prices of those remaining homes can be expected to rise. What economic principle is that? A) Dead cat bounce B) Buy low and sell high C) As supply falls, demand increases D) Market equilibrium
As supply falls, demand increases
Why is "area preference" considered the single-most important economic characteristic of land? A) Because "area preference" is gauged by scarcity of available property, such as when a new highrise condo is nearly sold out and a new buyer must act quickly B) Area preference is not considered an important element because it is typically based on non-fact-based emotion. C) Because "area preference" is always based on already completed improvements to a property D) Because "area preference" expresses an individual's desire to own a property that meets what often is an abstract need, such as a home on a golf course or a highrise condo with specific view
Because "area preference" expresses an individual's desire to own a property that meets what often is an abstract need, such as a home on a golf course or a highrise condo with specific view
Which term refers to working with the parties in negotiating the sale, rental, or purchase of real estate? A) Appraisal B) Consulting C) Brokerage D) Development
Brokerage
Which statement about professional ethics is NOT accurate? A) Members of the National Association of REALTORS® must follow the NAR Code of Ethics. B) Complying with the law ensures that a real estate agent performs ethically. C) Ethics defines a code of conduct for relations among professionals in the real estate industry. D) Ethics refers to moral principles that establish standards for integrity and competence in dealing with consumers.
Complying with the law ensures that a real estate agent performs ethically.
In real estate markets, which may change quickly? A) Supply B) Prices C) Demand D) All of these
Demand
Which is the right to use the property in any legal manner? A) Control B) Exclusion C) Enjoyment D) Possession
Enjoyment
Which is designed to make credit available to every financially qualified applicant? A) Community Reinvestment Act (CRA) B) Equal Credit Opportunity Act (ECOA) C) Americans with Disabilities Act (ADA) D) Home Mortgage Disclosure Act (HMDA)
Equal Credit Opportunity Act (ECOA)
As the owner reduces the debt on a property, which of the following increases? A) Forfeiture B) Value C) Price D) Equity
Equity
A vacant building that had previously been used as a restaurant is being leased by a person who is opening a coffee shop. Which statement BEST describes the trade fixtures installed by the owner of the coffee shop? A) Even though attached to the real estate, trade fixtures generally belong to the tenant. B) Trade fixtures cannot be attached to the walls or floors of a building that is leased. C) Trade fixtures may be removed up to 30 days after lease expiration. D) If attached to the real estate, trade fixtures belong to the owner of the real estate.
Even though attached to the real estate, trade fixtures generally belong to the tenant.
A seller has accepted an offer from a ready, willing, and able buyer, and the real estate agent is anticipating the closing of the transaction and receiving a commission. However, if the transaction does not close, the broker still would receive a commission under which circumstances? A) Failure of the broker to get the listing agreement signed by the seller(s) B) Failure of the broker to give the required title notice C) Failure of the owner's spouse to sign the deed D) Failure of the broker to state an amount or percentage rate of commission in a listing agreement
Failure of the owner's spouse to sign the deed
Which aspect of the Canons of Professional Ethics and Conduct requires a real estate agent to represent the interests of the client? A) Integrity B) Fidelity C) Knowledge D) Competency
Fidelity
Which condition is NOT a factor to be considered in deciding whether a manufactured home is real property? A) The county's chief tax appraiser has been notified that a statement of ownership and location has been filed with the county clerk. B) It has been permanently attached to a foundation for at least five years. C) It is placed on land that is titled in the name of the owner of a manufactured home. D) A copy of the statement of ownership has been filed with the county clerk.
It has been permanently attached to a foundation for at least five years.
If the court learns that a wall-to-wall carpet is tacked to the floor of a property, the court will consider which tests of a fixture in determining whether the carpet is a fixture? A) Adaptation of the item B) Agreement of the parties C) Intention of the parties D) Method of attachment
Method of attachment
What is the classification of a legal, single condominium unit that is being sold along with a retail unit on the ground floor below it? A) Commercial B) Special purpose C) Mixed use D) Residential
Mixed use
Which type of home is composed of prefabricated components that arrive on site in units preassembled at the factory and then lifted into place with a crane? A) Modular homes B) Town houses C) Planned unit developments (PUDs) D) Manufactured homes
Modular homes
The initials NAR stand for A) National Association of REALTORS®. B) National American Real Estate Owners. C) Nonaligned Realtor PAC. D) National Rifle Association.
National Association of REALTORS®.
If a listing agent, with fiduciary duty owed to the seller, is specifically asked by a buyer what the seller's lowest acceptable price is, is the listing obligated to respond? A) Yes, it is good business for all concerned, including the seller, that a reasonable price be paid for property. B) Yes, and if the listing agent is uncertain what the lowest price is, the Canon of Ethics obligates him to find out. C) Yes, under the "integrity" section of the Canons of Ethics, sales agents are obligated to be fair and honest with all parties. D) No, "integrity" means the listing agent will uphold his pledge of confidentiality with the seller.
No, "integrity" means the listing agent will uphold his pledge of confidentiality with the seller.
If the largest brokerage in a community decides to offer different competitors varying levels of commission splits or fees, is that considered boycotting or price-fixing? A) Yes, brokers are encouraged to work together to control fees so that consumers will have a general idea of what real estate services cost in their community. B) Yes, the broker could be guilty of price-fixing but not boycotting. C) No, brokers are entitled and encouraged to make business decisions regarding how they will compensate various competitors. D) Yes, the broker could be found guilty of boycotting but not price-fixing.
No, brokers are entitled and encouraged to make business decisions regarding how they will compensate various competitors.
If an independent contractor announces her "farm" will henceforth be the country club crowd, can the sponsoring broker redirect her if someone else in the office already is working the country club scene? A) No, the broker may discuss the difficulties of breaking into the other agent's farm but could not otherwise order the agent to work elsewhere. B) Yes, the sponsoring broker would be obligated to redirect the intruding sales agent. C) No, the sponsoring broker should step in and divide which days the two independent contractors can work the country club set. D) The sponsoring broker would access which independent contractor is most likely be successful, and award the farm to that agent.
No, the broker may discuss the difficulties of breaking into the other agent's farm but could not otherwise order the agent to work elsewhere.
If a homeseller specifically instructs the listing agent to only show the property to a specific class of people—for instance, white buyers—is the listing agent obligated to follow that instruction? A) Yes, if the client makes a specific instruction, the listing agent is required to comply. B) Yes, the listing agent should comply, and explain to any nonwhite buyers that they are not allowed to view the property. C) No, the instruction is unlawful and the sales agent cannot comply. D) Yes, if it appears the seller will cancel the listing agreement if minorities are shown the home, the sales agent should comply with the request.
No, the instruction is unlawful and the sales agent cannot comply.
Upon receiving a real estate license in Texas, which organization(s) are license holders required to join? A) The National Association of Home Builders and National Association of Real Estate Appraisers B) The Texas Association of REALTORS® C) The National Association of REALTORS® and Texas Land Title Association D) None of these
None of these
How much can real estate professionals do to ease the anxiety of potential buyers who are fearful that someone with AIDS either occupied or died in a listing? A) The buyer agent may ask surrounding neighbors about the home's occupants. B) The buyer agent may ask the listing agent to find out if anyone in the house had AIDS. C) Nothing. D) The buyer agent may ask the seller of the property.
Nothing
In reference to real estate, which phrase means that investments are long term? A) Scarcity B) Permanence of investment C) Nonhomogeneity D) Area preference
Permanence of investment
Cultivated annual crops are classified as which kind of property? A) Personal B) Fixtures C) Homogenous D) Real
Personal
Which one of these can be seen as harming the subjective value of a property? A) Broken windows B) Leaking roof C) Cracked foundation D) Proximity to a major highway
Proximity to a major highway
A deed is issued to transfer title to which kind of property? A) Real B) Trade fixture C) Personal D) Fixture
Real
In a deed, which indicates subsurface interests being retained by the seller? A) Qualification B) Reservation C) Exception D) Hold back
Reservation
The DTPA does NOT apply to transactions that exceed $100,000 where there is a written contract and the consumer is represented by legal counsel, EXCEPT for which type of property? A) Residential B) Commercial C) Industrial D) Agricultural
Residential
Under what real estate classification must a broker list a property if that property—once a very large single-family home—has since been carved into three condominium units and one rental apartment? A) Special purpose B) Mixed use C) Commercial D) Residential
Residential
What is the classification of a farmhouse for sale that has been legally separated from its auxiliary buildings and surrounding acreage? A) Mixed use B) Agricultural C) Residential D) Commercial
Residential
Federal flood insurance policies are available on which types of properties? A) Residential, commercial, industrial, and agricultural B) Residential, commercial, and agricultural only C) Residential and agricultural only D) Residential only
Residential, commercial, industrial, and agricultural
If a new airport is built near an existing residential community, what rights do the homeowners have? A) Payment of monthly fee for moving through their airspace B) No rights because airports are considered commercial developments C) Discounted tickets on carriers leaving the airport D) Right to require the airport operator to soundproof their homes and possibly even buy their homes
Right to require the airport operator to soundproof their homes and possibly even buy their homes
What is a common tool used to determine whether a landlord is violating provisions of the Fair Housing Act? A) Putting undercover officers in parking lots to count the number of minorities coming and going from buildings B) Conduct random census counts of buildings C) Unannounced audits of landlord books D) Sending paired testers to apartments to attempt to rent apartments
Sending paired testers to apartments to attempt to rent apartments
When a large quantity of wood milled in the United States is exported to a foreign country, leaving a shortage for domestic construction projects, which would be negatively affected? A) Supply of housing B) Demand for housing C) Neither supply nor demand D) None of these.
Supply of housing
Under what classification of legal rights is underground water? A) There are no underground "water rights" because water cannot be fixed in place. B) Subsurface rights, because it is below ground. C) Surface rights because Texas law places it under surface rights. D) Owners cannot control subsurface water if that water emerges aboveground on another owner's property.
Surface rights because Texas law places it under surface rights.
In addition to principal and interest, which additional expenses must be included when using the housing-expense ratio? A) Payments on loans for window treatments, furniture, or other home furnishings B) Taxes and insurance for a month C) Taxes and insurance for a year D) Payments on credit card debt
Taxes and insurance for a month
Which remedy is NOT available to the Texas Real Estate Commission (TREC) upon finding that a Texas license holder has violated the Canons of Professional Ethics and Conduct? A) The Commission may reprimand a real estate license holder. B) The Commission may recommend that a real estate license holder serve up to three years in jail. C) The Commission may suspend or revoke a real estate license. D) The Commission may place on probation a person whose real estate license has been suspended.
The Commission may recommend that a real estate license holder serve up to three years in jail.
A buyer maintains a seller inappropriately removed a driveway basketball pole and hoop that had been cemented into the ground. Who is likely to prevail? A) The seller, because the hoop is personal property. B) The seller, because the hoop could be removed without causing permanent damage to the property. C) The buyer, because the pole had been permanently placed on the property. D) The seller, because the hoop is not a customized feature and can be easily replaced.
The buyer, because the pole had been permanently placed on the property.
Regulations passed by governmental agencies have which of the following characteristics? A) Are merely suggestions B) Override statutes C) No effect D) The effect of law
The effect of law
If a large factory that employs a large number of local residents closes, what will the impact on housing likely be?decrease A) The price of housing would tend to be depressed. B) The price of housing would tend to go up. C) There would be no impact on housing. D) The availability of housing would tend to go down.
The price of housing would tend to be depressed.
Why must brokerages display information about the Texas real estate recovery trust account? A) The real estate recovery trust account is one of the ways Texas protects consumers in the event of misdeeds by license holders. B) Information must be displayed so that consumers understand that their sales agents will still be paid if the consumer backs out of the deal. C) The recovery trust account silences consumer fears that a brokerage will go out of business if it is flooded, catches fire, or is destroyed by a tornado. D) The recovery trust account is available to consumers who suffer damage from floods, tornadoes, or fire.
The real estate recovery trust account is one of the ways Texas protects consumers in the event of misdeeds by license holders.
What is the effect on housing when a city is named the site of a major event—such as a political convention or sporting events—that will employ a large number of local people? A) Home prices will tend decrease because locals will leave until the event is over. B) Home prices will tend to rise with influx of people. C) Home demand will go up as a result of a community being able to showcase itself. D) There will be little to no impact.
There will be little to no impact.
he 14th Amendment, providing civil rights protections, is an example of which of the seven sources of law? A) U.S. Constitution B) Texas Constitution C) Laws passed by Congress D) Laws passed by the Texas Legislature
U.S. Constitution
Because licensed associates (sales agents) are agents of the broker, they should have which with the broker? A) Verbal agreement B) Property management agreement C) Written agreement D) Listing agreement
Written agreement
Are all forms of media - including the internet - obligated to follow fair housing advertising law? A) Yes, any media that carries real estate advertising is subject to the requirements of fair housing law. B) Magazines and newspapers must follow federal guidelines, but radio, television, the internet and other electronic media are free from government interference. C) No, magazines are considered exempt unless they are published daily, but the internet is not exempt because it must follow the same rules as newspapers. D) No, the internet is protected under the Reno vs. ACLU decision that allows free speech on the internet.
Yes, any media that carries real estate advertising is subject to the requirements of fair housing law.
Would placing a for-rent advertisement that states "kids OK" represent a violation of the Fair Housing Act? A) No, but landlords could still bar families with children in the juvenile detention system B) No because children are now protected under the Act C) Yes, because it could be viewed as expressing a preference for families over seniors and single individuals D) No, as long as the "kids" were under 18 and under the supervision of an adult
Yes, because it could be viewed as expressing a preference for families over seniors and single individuals
In an educational setting where competitors are in the same class, is it permissible to discuss how brokers may derive commission levels? A) Yes, but only if all the broker owners in the class were from different parts of the state. B) Yes, but only if all broker owners in the class were from the same organization, such as a single franchise. C) No, such discussion would be consider price-fixing. D) Yes, brokers may learn "the business of brokerage."
Yes, brokers may learn "the business of brokerage."
Is there a scenario in which a new buyer could buy only surface rights to a property? A) Yes, if the subsurface and air rights already have been resolved. B) No, at the very least the buyer must purchase the surface and air rights. C) No, if subsurface and air rights already have been sold, a new buyer cannot purchase surface rights. D) No, a buyer new to a property always receives surface, subsurface and air rights, which can then be resold.
Yes, if the subsurface and air rights already have been resolved.
If an undocumented worker asks to be shown a property in a specific neighborhood, would it be discriminatory to refuse? A) No, undocumented workers may be trying to establish a foothold in a neighborhood so they can bring in other undocumented workers. B) No, noncitizens cannot purchase property in the United States. C) No, undocumented workers may be in the country illegally, making them criminals. D) Yes, it is illegal to discriminate against noncitizens.
Yes, it is illegal to discriminate against noncitizens.
Does the Fair Housing Act allow a childless, but pregnant, woman to claim protection under the familial status section of law? A) Yes, pregnant women are protected under the familial status provisions of the law. B) No, if she is single and pregnant, she could be denied an apartment under the apartment manager's morals clause. C) No, but depending or her race or religion, she might qualify for fair housing protection. D) No, if she is denied a rental unit, it would have to be under gender discrimination.
Yes, pregnant women are protected under the familial status provisions of the law.
Is the sponsoring broker liable for the unauthorized misdeeds of a licensed employee? A) No, the sponsoring broker may not be liable for the actions of employees. B) No, the sponsoring broker is not responsible for the actions of employees, even if the supervisor was aware of the misdeed at the time it occurred. C) No, in most cases employees are responsible for their own malfeasance. D) Yes, the chain of liability goes all the way up from the employee to the broker, to the owner of the company.
Yes, the chain of liability goes all the way up from the employee to the broker, to the owner of the company.
Is a real estate licensee required to go beyond the services stated in the listing agreement? A) No, the listing agreement is a comprehensive document that informs the seller what services the listing agent will provide. B) Yes, the real estate license holder is also subject to provide services required by law C) No, the listing agreement sets the services of the license holder—but additional services may be added for an additional fee. D) No, the listing agreement is a negotiated contract between the seller and the license holder and fully and entirely explains the obligations of both.
Yes, the real estate license holder is also subject to provide services required by law
An agent's legal requirement to act in the client's best interest and with the utmost good faith is called A) a trustor-trustee relationship. B) a fiduciary relationship. C) a special agency relationship. D) a subagency relationship
a fiduciary relationship.
A REALTOR® is BEST described as an individual who is A) any real estate broker or sales agent who assists buyers, sellers, landlords, or tenants in any real estate transaction. B) a member of the National Association of Real Estate Brokers who specializes in residential properties. C) a specially licensed real estate professional who acts as a point of contact between two or more people in negotiating the sale, purchase, or rental of property. D) a member of the National Association of REALTORS®.
a member of the National Association of REALTORS®.
License holder compliance with the TREC's Canons of Professional Ethics and Conduct is A) less arduous than the Code of Ethics of the National Association of REALTORS®. B) a regulation of the state and licensees can be held liable for violations. C) not enforceable because it has not actually been legislated into law. D) strictly a professional-to-professional document that consumers need not be aware of.
a regulation of the state and licensees can be held liable for violations.
Broker Y is cooperating with a listing broker by showing that broker's listing to a prospective purchaser/customer. She is, therefore, working as A) an intermediary broker. B) a seller's agent. C) a buyer's agent. D) a subagent.
a subagent.
The canon of fidelity requires that a real estate broker or sales agent, while acting as an agent for another, A) be informed of market conditions affecting the real estate business. B) be faithful and observant to trust placed in the agent and be scrupulous and meticulous in performing the agent's function. C) employ prudence and caution to avoid misrepresentation by either commission or omission. D) pledge to continuing education in the intricacies involved in marketing real estate.
be faithful and observant to trust placed in the agent and be scrupulous and meticulous in performing the agent's function.
When supply increases, real estate prices usually A) remain stable. B) decrease. C) increase. D) average out
decrease
The bundle of rights refers to an owner's right to A) enjoy the property by establishing a brothel. B) possess the property as a meth lab. C) dispose of the property by giving it to a family member. D) control the property through its use as a drop-house for illegal drugs.
dispose of the property by giving it to a family member.
MOST Texas homeowners insurance policies exclude losses caused by A) hurricane. B) explosion. C) earthquake. D) vandalism and malicious mischief.
earthquake
A factor affecting supply of real estate is A) demographics. B) population. C) government financial policies. D) employment.
government financial policies.
A potential purchaser learns that a new expressway overpass is to be constructed within two blocks of one of the houses she is considering. If this fact causes her to reduce the amount she offers for the property, that decision would likely be based on the economic characteristic of A) relative scarcity. B) area preference. C) improvements. D) permanence of investment.
improvements.
Real estate license holders who are not members of the National Association of REALTORS® may call themselves A) Seller Representative Specialists. B) Certified Residential Specialists. C) REALTORS®. D) license holders or agents.
license holders or agents.
If the number of skilled workers to frame houses in a particular city has declined in the last few months, that factor would A) not affect supply or demand. B) more likely affect the supply of housing. C) more likely affect the demand for housing. D) none of these.
more likely affect the supply of housing.
A developer who seeks to build apartments on the site of a former school must first receive the approval of A) no one, because permission is not needed if the developer has title to the property. B) local government, typically including zoning and planning boards. C) the U.S. Department of Education. D) the Texas Real Estate Commission.
no one, because permission is not needed if the developer has title to the property.
HUD has determined that phrases such as "desirable neighborhood," "master bedroom," and "rare find" are A) objectionable because terms like "rare find" suggest an exclusivity that precludes people from other countries. B) not acceptable terms because "rare" connotes "exclusive," "master" connotes the era of slavery, and "desirable" suggests that other neighborhoods are undesirable. C) all objectionable as racist. D) perfectly acceptable words to use in advertising.
perfectly acceptable words to use in advertising.
The federal Fair Housing Act of 1968 A) prohibits discrimination in residential housing based on race, color, national origin, and religion. B) prohibits racial discrimination in any real estate transaction. C) applies solely to the prohibition of discrimination in housing that receives federal funding. D) prohibits discrimination in residential housing based on marital status, age, and dependence on public assistance
prohibits discrimination in residential housing based on race, color, national origin, and religion.
New construction in a community typically means A) land values are about to go down. B) property values will move depending on the type and purpose of construction. C) there will be no impact on property values. D) land values are about to go up.
property values will move depending on the type and purpose of construction.
One of the primary goals of the National Flood Insurance Program (NFIP) is to A) reduce flood damage through a community's adopting and enforcing floodplain management regulations. B) reimburse communities for flood losses on state and federal government buildings. C) reduce flood damage through a federal government project to build dams and levees. D) reimburse property owners for flood losses in all flood-prone communities.
reduce flood damage through a community's adopting and enforcing floodplain management regulations.
Wetlands issues often are resolved by the Texas Commission on Environmental Quality, which enforces A) regulation of state and federal agencies. B) city ordinances. C) county law. D) constitutional law.
regulation of state and federal agencies.
Individuals who do not want to pay for the upkeep of the exterior of their home, nor pay property taxes, should consider A) buying a town house. B) renting an apartment. C) buying a condominium. D) buying a detached, single-family home.
renting an apartment.
A tree is cut down for lumber so that the real property (tree) is now personal property (lumber). The process is called A) severance. B) fixation. C) harvest. D) attachment.
severance.
Government-owned building complexes that are sold to school districts for educational purposes should be classified as A) mixed use. B) commercial. C) special purpose. D) industrial.
special purpose.
Income tax deductions on loan interest on first and second homes are A) none of these B) available only to military veterans. C) not subject to limitations. D) subject to limitations.
subject to limitations.
Nonhomogeneity and heterogeneity are A) opposite terms. B) none of these. C) different terms. D) synonymous terms.
synonymous terms.
A broker who acts as a subagent represents A) the seller. B) no one. C) the listing agent D) the buyer.
the seller.