Real estate state prep

Rachel just sold her home and paid $18,427 in closing costs. Her brokerage fee, which is included in that figure, was 6%. She netted $230,063. What were her non-brokerage fee-related closing costs? Round to the nearest dollar.

$230,063 + $18,427 = $248,490, her sales price. Multiply her brokerage fee by her sales price: $248,490 × .06 = $14,909; $18,427 - $14,909 = $3,518.

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

$5,000

In Texas, the Loan Assumption Addendum to the TREC One to Four Family Residential Contract (Resale) allows for a variance of ______ in the amount of the total principal balance at time of closing.

$500

What's the maximum size for a rural homestead family in Texas?

200 acres

Accidental misrepresentation is exempt from liability according to

2011 amendment to the DTPA?

Of the nine total members of TREC, how many members are licensed brokers?

3

To effect a transfer of title by deed in Texas, what must occur?

The grantor must deliver the deed to the grantee and the grantee must accept it; DELIVERY and ACCEPTANCE are the actions that are required to effect a transfer of title by deed. However, acceptance is usually implied.

effect a transfer of title by deed in Texas, what must occur?

The grantor must deliver the deed to the grantee and the grantee must accept it; DELIVERY and ACCEPTANCE are the actions that are required to effect a transfer of title by deed. However, acceptance is usually implied.

Under Texas law, which of the following occurs if a tenant dies during the term of lease?

The lease does not terminate and becomes the responsibility of the tenant's heirs.

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

commitment

trigger" terms are included, such as

down payment, payment amount, number of payments, or interest rate (other than APR), this would require full disclosure.

Joint tenancy

equal ownership shares with undivided possession rights and requires four ownership unities: time, title, interest, and possession. Joint tenancy includes the right of survivorship.

The earnest money check must be written to the

escrow agent or title company and held by the buyers' broker until the contract is finalized.

Someone performing real estate activities under a court order or judgment is

exempt from licensing requirements, so no real estate license is required,

Fidelity

faithfulness; loyalty

Canons of Professional Ethics and Conduct are divided into five sections: ________,

fidelity, integrity, competency, consumer information, and discriminatory practices.

Which law protects the Texas property owner from loss of a family home due to claims by general creditors?

homestead law

protect against general creditors

homestead laws

The Recovery Trust Account should maintain a balance of at least what amount?

$1.7 million

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.

$1207

There are ______ members of the Education Standards Advisory Committee.

12, 7 active licensees, 4 education members, 1 public member

The Education Standards Advisory Committee is comprised of ______ members.

12, 7 active members, 4 education members, 1 public member

when a contract terminates, if the parties can't come to terms about who should receive the earnest money and one party requests that the earnest money be given to them, the escrow agent must inform the other party that the request has been made. The other party then has - days to formally object to the request in writing.

15

FHA housing ratio, total debt obligation

31, 40

Acre

43,560 square feet

1 mile

5280 ft

How long is a member of TREC's term?

6 years

One square mile

640 acres

the sellers don't reserve all of their interest in the mineral estate, the sellers have ______ days after the effective date of the contract to provide the buyer with the contact information of any existing mineral lessee known to the seller.

7

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

A power of sale clause

A clause that allows the trustee to sell trust deed property, without court supervision, when terms of the trust deed are not kept.

Captain Kirk is a veteran who sells his home to Leonard. Leonard is also a veteran, and they agree to let Leonard assume Captain Kirk's VA loan for the property. They agree to a novation, which is ______.

A new contract with the lender using a substitution of entitlement

broker isn't required to maintain a place of business in Texas.

A non-resident licensed

Texas homeowner James is required to present any prospective buyers with a notice as to the legal and economic risks of purchasing coastal property. Which TREC addendum is James required to include?

Addendum for Property Located Seaward of the Gulf Intracoastal Waterway

current copy of the subdivision's restrictions, bylaws, the homeowner association rules, and a resale certificate

Addendum for property's subject to homeowner associations

enacted in 1946 in response to the creation of several new federal agencies. It established a process for how the agencies could propose and establish regulations.

Administrative procedures act

Which of the following statements about the TAR Residential Lease agreement's automatic renewal policy is true?

After the lease term has expired, the lease will be automatically renewed on a month-to-month basis.

Fannie Mae's multi-state note includes a due-on-sale clause, also known as a(n) ______ clause.

Alienation clause

Which groups are required to prominently display TREC's Consumer Protection Notice in their offices?

All real estate brokers and inspectors

To become a broker in Texas, an applicant must complete the 270 classroom hours of qualifying real estate courses required of sales agents by their first time renewal, and how many additional classroom hours?

An additional 630 classroom hours

What is the first thing that the earnest money is applied to at closing?

Any cash down payment

Why is it important to identify the marital status of the parties in a sales contract in Texas?

Because Texas is a community property state

When should the continuing education requirement be completed in Texas?

Before renewal of the two-year licensing period for license holders

Bethany has several clients who've used Jerrica, a local mortgage broker, for their mortgage loans. Jerrica recently referred a buyer client to Bethany. Through her broker, Bethany sent Jerrica a $200 gift card as a referral fee. Which one of the following statements best represents this transaction?

Bethany and her broker violated federal (and perhaps state) laws prohibiting referral fees to certain third-party vendors.

A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person

Broker

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

Brokers

According to the Property Condition paragraph of the TREC One To Four Family Residential Contract (Resale), at whose expense are any property inspections conducted in Texas?

Buyer

Chrissy lives in Lake Ridge Estates, a neighborhood in which vinyl siding may not be used on homes. This HOA regulation is what kind of private land control?

CC&R

Texas sales agent Carl just received his license. Which of the following is a true statement?

Carl must complete a total of 98 hours in SAE and legal update courses by the end of his initial two-year licensing period.

Texas provides special protections for certain tenants, ensuring that landlords can't evict a tenant based on which of the following?

Circumstances surrounding a domestic violence-related protective order, including things like police calls or noise disturbances.

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

Credit, capacity, and collateral

To reactivate a license in inactive status, a sales agent in Texas must demonstrate completion of continuing education, certify that they have not engaged in activity requiring a license wh

Establish a sponsorship relationship with a broker

In Texas, contracts for deed, lease-purchase agreements, and lease-option agreements are referred to as ______ contracts.

Executory

Which of these HUD programs is primarily responsible for providing mortgage insurance on home loans?

FHA

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

FHA Loan

Farm and Country Bank provides credit to the farmers, ranchers, and other rural residents of its community. What government program helps the bank maintain enough capital to fund those loans?

Farmer Mac

What entity enforces the Telephone Consumer Protection Act?

Federal Communications Commission

The Canons of Professional Ethics and Conduct are divided into five sections: ______.

Fidelity, Integrity, Competency, Consumer Information, Discriminatory Practices

If the property is owned free and clear, the home equity loan is a - mortgage.

First

Chandra is a Texas seller who is considering financing a loan for a buyer. According to the TREC-promulgated Seller Financing Addendum, the buyer agreed to deliver credit documentation within five days of the effective date of the contract. That time has passed, and Chandra has not received the credit documentation, so she decides to terminate the contract. What must Chandra do next?

Give notice to the buyer that the contract is terminated within seven days of the expiration of the delivery date.

TREC denies a license, it must immediately provide written notice of the denial to the applicant, explaining that ______.

Hearing

With this common loan type, the home is used as collateral and the loan creates a second mortgage if the first mortgage hasn't been paid off.

Home equity loan

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

What happens to a sales agent's license if their sponsoring broker dies?

Immediately

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?

In the Promissory Note paragraph

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

It's no longer in play.

Which form of real property ownership (for owners other than married couples) means there's equal ownership shares with undivided possession rights?

Joint tenancy

He received his license as a sales agent three years ago today. As he celebrates his third anniversary, he is looking forward to meeting the experience requirement so that he can pursue his broker's license someday. How much longer must Jonathan wait to apply for his broker's license?

Jonathan must wait another full year before he can apply, because the requirement is to be an active agent for 48 of the previous 60 months.

A title insurance company buys you dinner to thank you for referring a client.

Kickback

What other Texas addendum is required if the Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement is used with the TREC One to Four Family Residential Contract (Resale)?

Loan assumption addendum

Which of the following is the duty of the State Office of Administrative Hearings at a hearing of an alleged violator?

Making findings of fact and conclusions of law

What does a CMA determine?

Market price range

Which of the following is an example of an involuntary, specific, statutory lien in Texas?

Materialman's/mechanicman's lien

Lyle, an investor, secures an owner-occupied loan at a much lower rate than the general public is allowed, yet never plans to live in the property. What crime is Lyle committing?

Mortgage fraud

Simone is a trustee for her children's trust fund. Simone is also a broker. When she buys or sells investment property on behalf of that trust, which of the following is required by Texas law?

Must disclose in wrong that she is a licensed

Seller property disclosures are not required for -

New construction, foreclosure

Does an executor of an estate need a real estate license to sell property according to the terms of a will?

No, because an executor is allowed to sell real estate under the authority of the will.

Wynona is a Texas tenant with a written estate-for-years tenancy. How much notice must she give her landlord if she wants to terminate her lease upon expiration of the lease term?

None

process that substitutes one person for another on a contract.

Novation

Delilah is selling her Dallas home. She has received three offers on the home, but has allowed one of the potential buyers the exclusive right to decide to purchase the property because they offered her $5,000 as a fee for this exclusive option. Delilah and this potential buyer have entered into a (an) ______.

Option contract

there a designated area for the broker information in the TREC One to Four Family Residential Contract (Resale)?

Page 10

Which of the following types of tenancy comes with an automatic renewal clause?

Periodic estate, tenancy at will

Kylie has a tenancy-at-will lease agreement with her landlord. How much notice must she give her landlord when she's ready to terminate the lease?

Proper advance notice

Which of the following must be included in a seller's disclosure of a home built in 1983?

Recent permitted remodel

Chapter 27 of the Texas Property Code requires that buyers follow certain procedures in order to ______.

Recover damages for construction defects

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

Refuse to rent to a female tenant.

Violet purchased a house from Nick, and assumed the existing loan. Nick wants to make sure he isn't liable if Violet ever defaults. What can he do to remove his name from the loan agreement?

Request a Novation

When the parties couldn't mutually decide how to disperse the earnest money after a contract terminated, buyer Kevin sent the escrow agent a written request to return the earnest money to him. What should the escrow agent do next?

Send a copy of Kevin's request to the seller

Koby is a Texas seller who has a recent property survey that he would like to provide to the buyer's lender and title company. Koby swears and notarizes a statement about any changes to the property since the existing survey. What document does Koby use to provide his statement?

T-47 Residential Real Property Affidavit

- offers its members access to standardized lease forms, as well as networking opportunities and a variety of educational offerings.

TAA

Which of the following parties has the authority to file a complaint or conduct an investigation into a complaint about a real estate licensee in Texas?

TREC

enforces the Canons of Professional Ethics and Conduct in Texas.

TREC

After a complaint is filed, and an investigation of a possible violation and related facts is conducted, if the Standards and Enforcement Division of TREC determines that a violation has occurred, it may issue a notice of violation to the alleged violator. Which of the following must be included in this notice?

TREC's recommendation regarding imposition of an administrative penalty or another disciplinary sanction

What is the purpose of TREC's Consumer Protection Notice?

Tells consumers how to submit a complaint against a license holder

Real estate licensees in Texas need to pay attention to updates from what agency, which is responsible for enforcing Texas Fair Housing Law?

Texas Workforce Commission Civil Rights Division

TWCCRD

Texas Workforce Commission Civil Rights Division

Which of the following parties has the authority to file a complaint or conduct an investigation into a complaint about a real estate licensee in Texas?

Texas real estate commission

Which of these financial tasks should be planned on a quarterly basis?

The Disburse funds from the income tax savings account

Elisha is a property manager at Oakwood Luxury Apartments in San Antonio. A family of seven recently inquired about renting a three-bedroom unit. What law can guide Elisha in her decision?

The Texas Landlord and Tenant Act

nonresident license applicant who resides in a municipality in which the boundary is contiguous with the boundary of a Texas municipality may be licensed under Texas law in the same manner as a Texas resident, provided that ______.

The nonresident has been a resident of that municipality for at least the 60 days immediately preceding the date the application is filed.

Which of the following is a true statement about when a promissory note is sold?

The promissory note is endorsed to the new owner of the loan.

Joaquin, a broker in Houston, needs to act as an intermediary in one of his transactions. He has received written consent from the parties of the transaction. Now he just needs to fulfill the other requirement, which is providing ______.

The source of the broker's expected compensation

The house payment Tim and Vickie are considering would give them a housing ratio of 34% and a total debt obligation of 40%. Their credit score is 640. What do they need to change to meet the underwriting requirements for an FHA loan?

They should look for a home in a lower price range.

Which of the following is an example of price fixing?

Two brokerages determine a standard commission rate.

What type of loan can be obtained with no down payment?

VA

Rich wants to add a room to his house, so he takes out a home equity loan. This creates a(n) ______ lien.

Voluntary specofoc

In Texas, when is a licensee required to provide an agency disclosure to the party they are not representing in a transaction?

When engaging in substantive dialogue about a specific property

Applicants must register and take the Texas real estate licensing exam when?

Within one year from the date their application was filed

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?

Write rejected on offer

CC&R

covenants, conditions, and restrictions

Non-judicial foreclosure is only available for

deeds of trust with power-of-sale clauses.

mechanic's lien is

involuntary, specific

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

legal description

The Texas Loan Assumption Addendum requires some information about the seller's mortgage, including the______.

name of the lender, interest rate, and any loan assumption fee, monthly payment, and Unpaid loan balance,

situations where a leased property is sold, and the tenants have been notified of the transfer of their security deposits, who is responsible for refunding the security deposits when the tenants' leases are up?

new owner

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 ______.

rebate

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?

reconciliation

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

sex

How many members does TREC appoint to the Broker-Lawyer Committee?

six

How many members does TREC appoint to the Broker-Lawyer Committee?

six members, all of whom are licensed brokers in Texas.

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?

three

"exclusive right to sell" means

Bernie gets paid no matter who finds the buyer.

Which required clause in a Texas deed describes the type of warranty being made by the grantor?

warranty

Jill has acquired an option to purchase real property, and now she's decided to sell that option. Is she allowed to do this in Texas without having a real estate license?

. Yes, but only if she doesn't use the option to engage in real estate brokerage activities and if she discloses the nature of their equitable interest to any potential buyer.

How many days does a broker have to notify TREC if their business address has changed?

10 days

Texas, real estate licensure applicants can be rejected for several reasons, including failure to satisfy a current education, experience, or exam requirement within what time period from the application filing date?

12 months

When his contract to buy a hip downtown penthouse condo fell through, buyer Kevin submitted a request to the escrow agent to release the earnest money to him. If seller Anita doesn't feel Kevin's request is warranted, she has ______ days to formally object.

15

What is the continuing education requirement for Texas real estate licensees?

18 course hours for each licensed term

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

18 months

Who is responsible for funding the Real Estate Recovery Trust Account?

All real estate license and certificate holders

Can sales agents defer their continuing education (CE) requirements if they don't complete their continuing education prior to renewal?

Yes, sales agents may defer completion of CE for 60 days.

Can a sales agent use an assumed business name in an advertisement?

Yes, the sales agent can use the assumed business name of their broker in an ad.