Principles of Real Estate 1- study guide *Austin Inst.
According to TRELA Subchapter D Sec 1101.153 FEE INCREASE the fees for annual renewal of individual broker license is
$200.00. $50 will go to A&M for research $100 credit of general revenue fund $50 credit of the foundation school
How much should the recovery trust account be at?
1.7 million dollars
What is the TRELA test made of?
110 questions. National portion is 80 questions, 30 Texas questions.
TRELA subchapter H, Sec 1101.358 Salesperson license education and requirements state that educational requirements are:
12 semester hours of postsecondary education 4 hour of core real estate principals, 2 semester hours of agency law, contract law, contract forms and addendums and real estate finance.
The Texas Real Estate Broker-Lawyer Committee consists of:
13 members 6 lawyers 6 brokers 1 public
TRELA subchapter F, section 1101.251 Texas Real Estate Broker Lawyer Committee membership is made of:
14 members appointed as follows 6 members of the state bar (lawyers) (appointed by the president of the state bar 6 brokers, appointed by the TREC 1 member of public appointed by the governor
What is the fee that TREC will pay to grieved consumer per transaction and the CAP per license?
50,000 per transaction (no matter how many claimants) and a CAP of $100,000 until he license or certificate holder has reimbursed the trust account for all amounts paid. sec 1101.610
Subchapter B, sec 1101.051 of TX Real Estate Law defines commission membership. Who is the TREC consist of?
9 members 6 brokers (engaged in business actively for last 5 years as their main job) and 3 public All must be qualified voters Appointments to the commission must be made without regard to race, color, disability, sex, religion, age, or national origin. All appointed by governor
Real Estate Licensing act or 'TRELA' is administered by the TX Real Estate Commission. How many members is the commission made of?
9 members in total. 6 brokers and 3 are members of the public.
Texas Real Estate Agent
A person who is licensed through TREC. Texas Real Estate Commission
The Texas Real Estate Commission consists of _____________. The commission members serve for ________terms. A) 9 members- 6 year B) 6 members- 9 year C) 13 members - 6 year D) 6 members - 13 year
A) 9 members- 6 year - Answer given
TRELA states: An applicant must satisfy the examination requirements not later than one year after the date the licensee application is filed. A) True B) False
A) True - Answer given
Dexter engaged a general contractor to build an addition to his house. The general contractor failed to pay the electrical subcontractor for work that was subcontracted to him. May the subcontractor secure a mechanic's lien on Dexter's house? A) Yes, because the work was done on Dexter's property. B) Yes, because a mechanic's lien is a general lien that attaches to all property of the lienee. C) No, because Dexter did not attach to real property of the general contractor. D) No, because the lien would attach to real property of the general contractor.
A) Yes, because the work was done on Dexter's property. - Answer given
In typical real estate brokerage practice, the amount of earnest money deposit paid by the purchaser is: A) determined by negotiation B) set by state law C) equal to the agent's commission D) the minimum required to make the contract valid
A) determined by negotiation - Answer given
The practice of directing homeseekers to particular neighborhoods based on race, color, religion, sex, or national origin: A) is known as steering B) is prohibited by the Civil Rights Act of 1866 C) constitutes blockbusting D) is called familial status
A) is known as steering - Answer given
The Texas Real Estate Recovery Fund is funded: A) solely by real estate license fees B) by real estate license fees and general revenue funds C) by taxes and real estate license fees D) by real estate application fees and legislative appropriations
A) solely by real estate license fees - Correct answer
When a person assumes, through adverse possession or assignment, the rights of a previous adverse possessor, it is known as: A) tacking on B) prescription C) adversity D) probate
A) tacking on - Answer given
The phrase "time is of the essence" in a sales contract means that: A) the time limits set by the contract must by faithfully observed or the contract is voidable B) the parties are prohibited from giving each other an extension C) the parties are prohibited from giving each other an extension D) the contract is a counter offer
A) the time limits set by the contract must by faithfully observed or the contract is voidable - Answer given
The statute of frauds established the requirement that: A) written deeds be used to show transfers of ownership B) all deeds be recorded in the public records C) a system of public records be established D) anyone claiming ownership of land visibly occupy the land
A) written deeds be used to show transfers of ownership - Answer given
TRELA subchapter 1, sec 1101.405 Reexamination says that an applicant who fails an examination may apply for reexamination by filing a request and paying a fee. How many times can a person re-take the test?
As many times as you would like.
Seller's lead-based paint disclosure notice is required on residential property constructed prior to: A) 1976 B) 1978 C) 1987 D) 1995
B) 1978 - Answer given
Able, Baker, and Charles are going to purchase an investment property as co-owners and will take title as joint tenants. Which of the following statements is incorrect? A) All will acquire their interest at the same moment in time. B) Each will receive a separate deed for his share. C) All will have equal interest in the property. D) All will enjoy equal rights of possession.
B) Each will receive a separate deed for his share. - Answer given
Which one of the following does not need a license? A) a person who offers to lease real estate for compensation B) a person who offers to sell her own property C) a person who offers to exchange real estate for compensation D) an apartment finder for compensation
B) a person who offers to sell her own property - Answer given
An attorney-in-fact derives his powers from: A) the state bar association B) a power of attorney C) judicial appointment D) popular election
B) a power of attorney - Answer given
Which of the following are NOT classified as real property? A) fixtures B) emblements C) shrubs planted in the ground D) air rights
B) emblements - Answer given
A purchaser's right to acquire legal title to real property under the terms of a valid agreement is known as: time is of essence A) naked title B) equitable title C) specific performance D) contract title
B) equitable title - Correct answer
Marketable title to real estate is title which is: A) absolutely free of any possible defect B) free of reasonable doubt as to ownership C) issued by a court after completion of a quiet title action D) free of all liens
B) free of reasonable doubt as to ownership - Answer given
In order to convey title to real property, a deed must be signed by the: A) grantee B) grantor C) agent D) buyer
B) grantor - Answer given
A handwritten will signed by the testator but not witnessed is known as a(n): A) nuncupative will B) holographic will C) oral will D) formal will
B) holographic will - Answer given
A real estate salesperson may elect to remain inactive for: A) two years B) indefinitely C) five years D) ten years
B) indefinitely - Answer given
A licensed real estate agent is offered a listing by an owner who stipulates that she will not sell to any person of a certain national origin. The agent should: A) accept the listing and leave it up to the owner to reject offers from these persons B) refuse the listing C) report the owner to the real estate department D) file a complaint against the owner with HUD
B) refuse the listing - Answer given
The responsibilities of the Texas Real Estate Commission include all the following EXCEPT: A) granting licenses to applicants B) regulating brokerage fees C) protecting the public interest D) regulating the activities of licensees
B) regulating brokerage fees - Answer given
All of the following are true of a quiet title suit EXCEPT that it: A) is a judicial proceeding B) removes all claims to title other than the owner's C) quiets those without a genuine interest in the property D) can be used to clear up a disputed title
B) removes all claims to title other than the owner's - Answer given
When a broker discharges a salesperson, he should: A) give the salesperson his license B) return the license to the Texas Real Estate Commission C) remove the license from the wall and keep it on file until all of the salesperson's deals have been closed out D) instruct the salesperson to return his license to the Real Estate Commission
B) return the license to the Texas Real Estate Commission - Answer given
Area preference in the location of land is described as: A) fixity B) situs C) sunk costs D) surface rights
B) situs - Answer given
Legal action to force the breaching party to carry out the remainder of a contract is called a suit for: A) liquidated damages B) specific performance C) partial performance D) breach of contract
B) specific performance - Correct answer
In Texas, if two or more persons are named as owners and there is no specific indication as to how they are taking title, they are presumed to be: A) joint tenants B) tenants in common C) separate owners D) joint owners
B) tenants in common - Answer given
Management of the limited partnership is performed by: A) the limited partners B) the general partners C) the stockholders D) all partners
B) the general partners - Answer given
The tests of a fixture include the method of annexation to the real estate, adaptation to a particular use of the premises, and A) seizin B) the intention of the parties C) further assurance of the owner D) riparian rights
B) the intention of the parties - Answer given
Lee agreed to purchase real estate from Grant and gave her earnest money deposit at the time the agreement was made. Which of the following constituted the consideration in this contract? A) the earnest money deposit B) the promise for a promise C) earnest money if over $1000 D) contract sales price
B) the promise for a promise - Answer given
Protection against incomplete or defective records of the title to land can best be obtained by securing: A) an abstract of title B) title insurance C) an attorney's opinion D) a title searcher's opinion
B) title insurance - Answer given
The Texas Real Estate Broker-Lawyer Committee consists of: A) no limit B) 12 members C) 13 members D) 9 members
C) 13 members - Answer given
Which of the following statements is NOT true with regard to a real estate investment trust? A) Investors are known as beneficiaries. B) Ownership shares are known as beneficial interests. C) Income is taxed at the level of the trust, rather than as income to the beneficiaries. D) Ownership shares are freely transferable.
C) Income is taxed at the level of the trust, rather than as income to the beneficiaries. - Correct answer
Which of the following would not ordinarily be checked in searching a title to a parcel of land? A) judgment records B) lien records C) chattel mortgage records D) lis pendens index
C) chattel mortgage records - Answer given
The Americans with Disabilities Act deals primarily with: A) single family residences B) multi family residences C) commercial property D) all real estate
C) commercial property - Answer given
A contract that is in the process of being carried out is: A) executed B) executing C) executory D) executrix
C) executory - Correct answer
The day-to-day operation of a corporation is the responsibility of its: A) stockholders B) board of directors C) management D) syndication
C) management - Answer given
Ownership in severalty occurs when: A) two or more persons have identical interests in the same property concurrently B) husband and wife share ownership of the same property C) property is owned by one person D) two or more persons own the same property in any form of title
C) property is owned by one person - Answer given
The shortage of land in a given area where there is great demand for land is: A) fungible B) fixity C) scarcity D) modification
C) scarcity - Answer given
When property is sold by means of an installment contract, the: A) seller delivers deed at closing B) buyer is NOT given the right to occupy the property until the contract terms have been fulfilled C) seller retains title D) time is of essence
C) seller retains title - Answer given
Property owned by a person who dies intestate and without heirs will escheat to the: A) city B) sheriff C) state D) federal government
C) state - Answer given
Typically, physical possession of the property is given to the buyer: A) upon signing of the sale contract B) before close of escrow (settlement) C) the day of close of escrow (settlement) D) 30 days following close of escrow (settlement)
C) the day of close of escrow (settlement) - Answer given
What education is required to obtain for a salesperson license?
Complete education requirement from TRELA. 12 semester hours, or equivalent classroom 180 hours of postsecondary education consisting of 4 hours on principal of real estate, 2 semester hours of agency law, contract forms, and real estate finance. Then take test.
How many square miles are there in a section? A) 640 B) 36 C) 6 D) 1
D) 1 - Correct answer
Discrimination in housing on the basis of race is prohibited by: A) Law k1957g B) Civil Rights Law of 1855 C) an 1815 law D) Civil Rights Act of 1866
D) Civil Rights Act of 1866 - Answer given
Which of the following is not classified as a freehold estate? A) an estate created by statute - Answer given B) a life estate C) a fee simple state D) a leasehold estate
D) a leasehold estate - Correct answer
Once a person is aware of another's rights or interest in property, that person is said to have: A) constructive notice B) legal notice C) inquiry notice D) actual notice
D) actual notice - Answer given
The Texas Real Estate Commission may suspend a license or take other disciplinary action authorized by Chapter 1101 if the license holder, while acting as a broker or salesperson: A) acts negligently or incompetently B) commingles money that belongs to another person with the license holder's money C) solicits, sells or offers for sale real property by means of a lottery D) all of the above
D) all of the above - Answer given
Easements, rights-of-way, and condominium parking stalls are examples of: A) emblements B) trade fixtures C) riparian rights D) appurtenances
D) appurtenances - Answer given
A contract based upon a promise exchanged for a promise is a: A) semilateral contract B) dilateral contract C) binary contract D) bilateral contract
D) bilateral contract - Answer given
Mrs. Baker holds a life estate in the home in which she lives. During her lifetime, she may not: A) convey her interest to any other person, as a sale or gift B) mortgage her interest C) keep rental income D) commit waste on the property
D) commit waste on the property - Answer given
All of the following are prohibited by the Fair Housing Act of 1968, as amended, EXCEPT: A) discrimination in advertising B) denial of availability of housing on the basis of religion C) discrimination in terms or conditions for sale or rent D) discrimination on the basis of age
D) discrimination on the basis of age - Correct answer
Which of the following is NOT a physical characteristic of land? A) immobility B) indestructibility C) nonhomogenity D) fungibility
D) fungibility - Correct answer
Which of the following would be considered to be a fixture because of the manner of its attachment to the property? A) a fireplace grate B) a set of fire tools for a fireplace C) entry area rug D) hot water heater
D) hot water heater - Answer given
A mortgagee's policy of title insurance protects: A) seller B) buyer C) agent D) lender
D) lender - Answer given
Deeds are usually acknowledged to: A) make them valid B) provide constructive notice C) make them enforceable D) make them admissible to the public records
D) make them admissible to the public records - Correct answer
The term "Realtor" applies to any: A) licensed real estate salesperson B) licensed real estate broker C) member of a state real estate commission D) member of the National Association of REALTORS®
D) member of the National Association of REALTORS®
Substitution of a new contract and a new party for a previous one is known as: A) innovation B) assignment C) subrogation D) novation
D) novation - Answer given
An easement acquired by constant use is called easement by: A) subscription B) necessity C) condemnation D) prescription
D) prescription - Answer given
Which of the following is NOT an example of government's exercise of its police powers? A) rent controls B) building codes C) zoning laws D) restrictive covenents
D) restrictive covenents - Correct answer
Types of careers in real estate:
Farm brokerage, finance, real estate instructor, apartment locators, residential, property management, appraisal, inspection, finances, education, full time investigating.
When speaking with a new customer about a potential sale you should provide what document for signature?
Information about brokerage services
Is a full time investor required to have a RE license?
No as long as that person is buying and selling for themselves. If they are helping someone else they have to be licensed.
The owner of a single-family house in which he lives wants to sell. If he does not use discriminatory language in advertising, has not sold any other house within the past two years, and does not employ an agent, may he discriminate on the basis of race in selecting a purchaser?
No, because this would be prohibited by the Civil Rights Act of 1866
Is a real estate instructor required to have a license?
No, the instructor must prove to TREC that they are qualified in the subject that they are teaching.
Does a person who manages, buys, sells, leases, or rents their own property have to be licensed through TREC?
No.
Does an appraiser require a RE license?
No. Appraisers gathers information about property and determines the value of the property.
What is the most popular division of the real estate market?
Residential real estate because there are more transactions in residential in other forms of real estate.
What law governs many of the questions in the TRE licensing exam?
Texas Real Estate Licensing Act, Chapter 1101 Real Estate Brokers and Salespersons
1949 was the year that TREC was created. T of F?
True
Does an inspector have to maintain a RE license?
Yes, inspects property and makes a report of the property condition. Home is inspected during the option period of the contract.
1101.002 defines subagent as
a license holder who represents a principal through cooperation with and the consent of a broker representing the principal
1101.002 defines 'salesperson' as
a person who is associated with a licensed broker for purposes of performing acts mentioned in subdivision 1
1101.002 defines broker as
a person who, in exchange for commission, performs for another person: -sells, exchanges, purchases, or leases real estate.
easement is defined as:
a right to cross, or otherwise use someone else's land for a specific purpose.
TRELA subchapter L sec 1101.558 representation disclosure is a document that is
a written meeting that the agent communicates formally to the prospective client what they represent.
TRELA Subchapter N, Prohibited practices and disciplinary proceedings sec 1101.652 grounds for suspension include
acts negligently or incompletely commingles money that belongs to another person with the license holders own money solicits sells, or offers for sale real property by means of a lottery involved in fraudulent activities (felony)
Sec 1101.003 defines the core real estate courses as
agency of law contract of law principals of real estate property management 3 hours of federal, state, or local laws relating to discrimination and community reinvestment real estate appraisal real estate brokerage real estate finance real estate investment real estate law real estate marketing real estate mathematics
TRELA subchapter D, section 1101.157 Subpoena Authority is created for:
allows TRELA to investigate complaints against a salesperson. Keep files for 4 years, 4 year statue of limitations for TREC.
How many years are appointees terms for TREC for?
appointed by the governor for 6 year terms.
Apartment locators:
are involved in residential real estate and must have a real estate license.
Sec 1101.005 does not apply to (those who don't need REL in TX)
attorney license in this state a public official while engaged in official duties an on site manager of an apartment complex
TRELA subchapter H License Requirements Sec 1101.354 says that in order to be eligible at the time of application you must
be at least 18 years old be a citizen of the US, or lawfully admitted alien be a resident of this state (TX)
There are two types of licenses:
broker's and salesperson's license
According to Sec 1101.055 the terms/vacancy for the commission are:
commission members serve staggered 6 year terms with terms of 3 members expiring Jan 31 of all odd years
TREC Chapter 531, section 531.2 'integrity says that a salesperson has a special obligation to:
exercise integrity in the discharge of the licensee's responsbilities
Chapter 531, Canons of Professional Ethics and Conduct for Real Estate Licensees is part of TREC. Chapter 531 reviews 3 elements:
fidelity, integrity, and competency
Marketable title to real estate is title which is:
free of reasonable doubt as to ownership
TRELA subchapter H, License Requirements Sec 1101.356 Broker License experience and education determine that an applicant must
have had 4 years of active experience as a licensed holder during 60 months preceding the date the application is filed and successfully completed 18 semester core real estate courses and 42 hours of core real estate classes. This doesn't apply if the person is a licensed broker in another state that has similar requirements as TX.
Residential brokerage involves:
helping a person buy or sell a house, condo, or duplex. Agents must be knowledgeable in finance, real estate law, and contracts.
How long may a salesperson elect to remain inactive?
indefinitely
Farm Brokerage:
involves the sale of a home as well as a business including a farm. Ag business experience. Typically in small towns.
TRELA subchapter L sec 1101.557, acting as an agent regulation of certain transactions demonstrates that a broker:
is representing a part in a real estate transaction who lists real estate for sale
Property managers:
manage residential or commercial properties and maybe be required to have a real estate license.
TREC Chapter 531, section 531.3 'competency' states that all real estate agents to be knowledgeable in real estate in regards to:
market conditions, national, state, and local issues. Must exercise judgement and skill in the performance of the work.
How to you apply for a broker's license?
must be licensed in TX for 4 years of the previous last 60 months. Applicant must complete 60 semester hours, or 900 classroom hours or postsecondary education. These hours must include 18 semester hours or 270 real estate courses. 2 semester hours must be in real estate brokerage. Remaining 42 hours can be core RE classes. Must also accumulate at least 3600 points to qualify for broker's license based on experience. Must be during last 5 years.
Substitution of a new contract and a new party for a previous one is known as:
novation
TRELA subchapter M, sec 1101.601 real estate recovery trust account is used to
pay for damages caused by a license holder, a certificate holder, a person who does not have a license, but who is an employee or agent of the licensed holder.
TRELA subchapter L sec 1101.553 display of license states that a residential rental locator shall
prominently display in a place accessible to clients and prospective clients -the locator's license -the statement that the locator is licensed by the commission -and the name, mailing address, and phone number of the commission
A licensed real estate agent is offered a listing by an owner who stipulates that she will not sell to any person of a certain national origin. The agent should:
refuse the listing
When a waterline permanently recedes, exposing dry land, it is known as
reliction
The primary duty of the real estate agent according to TREC 531.1 under 'fidelity'
represent the interests of the agent's client, and the agent's position in the respect should be clear to all parties concerned in a real estate transaction
TRELA subchapter H section 1101.367 Inactive Licenses Salesperson says that when an association of the salesperson with the (inactive) broker terminates the broker shall immediately
return the salesperson license to the commission.
The shortage of land in a given area where there is great demand for land is:
scarcity
Subchapter D Sec 1001.151 General powers and duties of Commission state
that commission shall adopt rules, establish standards, maintain registry of certificate holders, enforce rules and investigate complaints regarding salespersons or brokers
The phrase "time is of the essence" in a sales contract means that:
the time limits set by the contract must by faithfully observed or the contract is voidable
What does the Texas Real Estate-Broker Committee do?
they create, draft, and revise promulgated contracts and forms.
Sec 1101.001 Short Title
this is sited as The Real Estate License Act
Loan officer:
works in finance, with buyers and lenders is a mortgage broker and must have a loan officer's license. Loan officer arranges financing for buyer.
TRELA subchapter E 1101.204: Public Interest Information and Complaint Procedures states that in order to be researched and investigated the complaint must be:
written and signed. The complaint and evidence must be submitted to the commission no more than 4 years after the incident. Complaint cannot be made anonymously.
TRELA subchapter K, Certification Requirements, section 1101.501 certification required states that (right of way agent)
you may not sell, buy, or lease, or transfer an easement or right-of-way for another for compensation unless this person: holds a license issued under this chapter or holds a certificate of registration issued under this subchapter
