Real Estate Test 3, Real Estate Study Questions, Real Estate Test 2, Real Estate Test 1
Elmo bought a property for an agreed price of $450,000. He put down $125,000 and financed the remainder with a 30-year conventional loan with interest fixed at 4.25% and monthly taxes incorporated into the monthly payments at $145 per month. What would Elmo's monthly payment be?
$1,590
Desomond is selling his rental income home to Serphina with closing taking place on March 15. He has paid the $3200 property taxes for the year, and $275 insurance bill for he month as well as water and garbage for the property at $110 per month, plus he has already collected the $1200 monthly rental for March and April. And the parties agreed to split the $400 escrow service fee. How much will Seraphina be credited and how much will she be debited?
$2533.50 for annual taxes $137.50 for one-half month's insurance and another $55 for one half months utilities, and $200 for her half of the escrow fee for a total of $2,926. She will be credited with $1,800 in rent.
Desmond performed a comparative market analysis (CMA) for Seraphina using three homes sold within the previous few weeks all of which were very closely comparable to Seraphina's (the subject property"). comp A is 2750 sq. ft. and sold or $275,000; Comp B is 2550 sq ft and sold for $269,000 sq ft. selling for $287,500. Based on the price sq. ft. of these sales, what is the recommended starting listing price for Seraphins 2800 sq. ft. home? (Choose most appropriate range)
$280,000 -$290,000.
Seraphina is buying a new home for $354,000. She has already put 20% down and owes the balance, plus the $400 escrow fee, five months of the annual $3600 annual property taxes and $900 annual insurance premium, as well as one week of the $280 utility bills for the month. How much does she need to bring to the closing?
$286,100
Desmond's property was assessed at $295,000, appraised at $315,000, listed at $329,000 and sold for $319,000. What is the market price of Desmond's home?
$319,900
Elvira purchased a $325,000 home through FHA. The loan was financed at 96.5% of loan to value (which is the same as the purchase price) with an upfront mortgage insurance premium (UFMIP) of 1.75% of the loan. How much is the UFMIP?
$5,488
A rental complex valued at $873,000 with a capitalization rate of 7% has net operating income of:
$61,110
An origination fee is a fee charged by a lender to process a new loan application, and generally is charged at
0.5% to 16 of the loan amount
Property managers/management companies must keep records how long after the transaction for which the record was made is terminated?
3 years
A license registration holder must repay the real estate recovery trust account the full amount of a payment made on their behalf within how many days after the date the commission provides notice to them?
30 ?
Which of these lists best represents debits generally applied to the seller's closing cost?
?Broker commissions, home repairs agreed in the sales contract, outstanding property taxes or assessments, amounts credited to buyers for repairs agreed to in the sales contract, and the payoffs of any other outstanding mortgages or liens.
Armand is the legal guardian of Seraphina while she is in recovery from major surgery following a brain aneurysm. While in control, Armond sells Seraphina's life estate to Desmond. A month later, Seraphina is fully recovered, livid about the sale, and seeks to cancel the agreement, but Desmond is determined to take it to court. Which of the following BEST describes the outcome of the situation?
?The contract is voidable because the life estate was not subject to a sale by Seraphina, therefore, her guardian lacked the authority to sell in the first place.
Under the recently amended Texas code, a person selling or offering to sell an option or assigning an interest in a contract to purchase real property is engaged in brokerage under which of the following circumstances?
?The do not have the appropriate real estate certification in the area.
Desmond is selling a two-story home that is 30 feet deep with parallel front and back walls of 60 feet. On the ground floor only, there are extensions on both ends forming triangles off the 30' ends with a 15' length at the center. How many feet can Desmond accurately state that this home provides? A) 4,050 B) 3,900 C) 4,500 D) 3,600
A
An action under the Texas Deceptive Trade Practice Act (DTPA) is the most likely to be successful in which of the following cases?
A buyer discovered that the listing agent failed to disclose that a meth lab run by the previous owner left toxic waste in the basement and land beneath the property.
A broker can only pay a commission or a fee to or divide a commission or a fee with which of these parties?
A former license holder from the same firm so long as their license was not revoked.
The Texas information About Brokerage Service (ABS) is best described by which of these options?
A mandatory form that contains a full disclosure of the actual representation agreement and is only intended for use with active clients.
The Texas "Bootstrap" Loan program requires that all Owner Builders provide of the labor necessary to build or rehabilitate their housing by working with a State-certified Nonprofit Owner Builder Housing Provider (NOHP)
A minimum of 65%
A reservation deposit made by a tenant prospective tenant is considered to be which of these?
A non-refundable charge that a tenant pays in order to be placed on a waiting list
When a rezoning effort changes the permitted uses in the zone, but entities still engaged in the formerly approved activities are being allowed to continue, the formerly approved activity is now classified as which of these?
A nonconforming use
"Marketable Title" is BEST described by which of these?
A property title that is considered free from defect and, therefore, the possibility of litigation is eliminated, although there may still be encumbrances on the title but it is one of which the parties are aware, such as a lien or and easement
Which of the following situations is most likely to lead to the use of broker as an intermediary?
A prospective buyer attended an open house for one of Diogenese Realty's listings and requested that the Realty assist them in making an offer on the home
In an open listing, the commission goes to the broker who produces
A ready, willing, and able buyer
A seller's disclosure must, at a minimum, provide:
A warranty against any other claims made on the property. or the seller's disclosure honesty and to the best of seller's knowledge.
A ________________ is collected and condensed history of a property.
Abstract of title
Unless a person holds a license issued under this chapter, the person may not act as or represent that the person is a broker or sales agent, or which of these?
Act as a residential rental locator
The commission may suspend or revoke a license or take other disciplinary authorized action if the license holder while engaged in real estate brokerage.
Acts negligently or incompetently
A party requiring a specific action prior to proceeding with a contract can set that action up in the contract as which of these?
Addenda
The three areas of ownership off rights in real property is best described by which of these lists of property rights?
Air, ground, and underground
Which of the following relationships require a written agreement?
An agreement to represent a seller
Which of these is NOT a duty of the closing officer?
Assembling all of the buyer's loan documentation
In Texas, the home loan borrower holds which of the following? A) Virtual title B) Actual title C) A lien on the property D) Equitable title
B
The Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) is better known as the environmental _ A) safe fund B) superfund C) environmental protection act D) federal fair housing law
B
An escape clause establishes the conditions under which a party or parties can back out of a contract agreement without
Breaching the contract
______________zoning regulations are regulations that restrict the density in a targeted area through a variety of building-specific measures, including such concepts as floor-area-ratios (FAR), setback requirements, and open space requirements.
Bulk
A listing agent's primary duties in the seller's disclosures is which of the following? A) To assist in the completion of the seller's disclosure, ensure that all filled in, and sign off on the disclosure with the seller B) To guide the seller through the disclosure, directing them in which sections to leave blank, and ensure that they reveal no damaging information C) Be certain the seller performs the disclosure, that they do it honestly, and that they know what types of information needs to be disclosed D) To perform the disclosure, make a complete disclosure to the seller of what is being disclosed, and get the seller's sign off on the disclosure
C
Predatory lending is BEST described by which of the following? A) Misleading or fraudulent practices by a real estate employee when referring another real estate employee to a lender B) Redlining and other fraudulent practices by a borrower when soliciting or providing a loan to a consumer C) Unfair, deceptive, or fraudulent practices by a lender when soliciting or providing a loan to a consumer D) Misleading or aggressive practices by a lender when soliciting or providing a loan with offers of rebates and lower interest rates
C
The comprehensive Environmental Response, Compensation, and Liability Act was updated in 1986 by the:
CERLA
The Comprehensive Environmental Response. Compensation, and Liability Act which passed in 1980 is otherwise known as CERCLA or which of the following?
Clean up fund
To be enforceable, a liquidated damages statement in a sales contract must do which of these?
Clearly state the exact nature of damages for which the liquidated damages would be appropriate.
Under TREC regulations, the prohibition of referral fees and rebates without prior approval from the client does NOT apply to which of the following?
Compensation from settlement companies
A _______ is a response to an initial contract offer which revises that offer with terms that are more acceptable to one of the parties involved in negotiating that contract.
Counter offer
An important effect of a counteroffer to remember is that it not only modifies the terms of the previous offer/counteroffer, it also does which of the following? A) Prohibits additional counteroffers B) Automatically kicks in a back-up offer C) Resurrects the previous counteroffer if rejected D) Rejects the previous offer/counteroffer
D
Regulation Z implements which of these critical pieces of federal legislation? A) Real Estate Settlement Procedures Act B) Fair Credit Reporting Act C) Fair Housing Act D) Truth in Lending Act
D
Select the BEST option describing circumstances under which a real estate agent is exempted from certain telephone solicitations? A) The call is generated by an automated system; the transaction will not require a face-to-face meeting to make payment; and the consumer has not previously informed the caller that they don't want to sell B) The call is generated by an automated system; the transaction will not require a face-to-face meeting to complete and make payment; and the consumer has previously informed the caller that they don't want to receive sales calls from the caller C) The call is not generated by an automated system; the transaction will require more than one face-to-face meeting to reach an agreement; and the consumer has not previously informed the caller that they don't want to sell their home D) The call is not generated by an automated system; the transaction will require a face-to-face meeting to complete and make payment; and the consumer has not previously informed the caller that they don't want to receive sales calls from the caller
D
Which of these groups of "ratios" BEST describes those that the FHA is concerned with when determining an individual's eligibility for an FHA-insured loan? A) Loan-to-Debt, Debt-to-Household Expense, and Loan Value to Income B) Loan-to-Value, Debt-to-Expenses, and Household Income to Value C) Loan-to-Debt, Debt-to-Income, and Household Income to Expense D) Loan-to-Value, Debt-to-Income, and Household Expense to Income
D
Which of these sets of criteria BEST represents the basic elements of a sales comparison approach (aka market comparison approach)?
Date of sale, location, physical features, terms and conditions of the sale
The Fair Housing Act is enforced by the Office of Fair Housing and Equal Opportunity, which is part of which of these government agencies?
Department of Housing and Urban Development (HUD)
The Commission will remove a broker's license from inactive status if the broker
Does not act as a sponsoring broker for six months pays the required fee and submits an application..
What two specific legal actions do Texas regulations prohibit real estate licensees, who are not licensed attorneys as well, from performing?
Drafting their own instrument conveying real property ownership and advising on the validity or legal sufficiency of an instrument or the validity of title to real property.
Which of the following is a unilateral contract?
Elvira paid Desmond $1,000 to give her two weeks to decide if she will buy his home at their agreed price.
Seraphina is purchasing Desmond's property on a land sales contract in which she will pay him $1790 per month for 20 years at which point title will be conveyed to her. What types of contract BEST describes their agreement.
Executory and express
Economic obsolescence generally is the result of which of these?
External factors
A real estate license owes ALL parties at least the minimum duties of which of these following sets of choices?
Fair dealing and honestly, loyalty, confidentiality and obedience.
Elmer has a reversionary interest in a property currently occupied by his elder brother Elmo and owned by their aunt, Elvira. Elmo must do or not do as agreed in their ownership interest agreement or the property will go to Elmer. Elmo must likely has which of the following interest in the property?
Fee simple defeasible
Angelina owns numerous properties that she sells, rents, and leases. Which of the following agreements would NOT be required to be in writing under the Statute of Frauds
Has mad an offer to purchase to which Angelina has agreed.
Generally, the most cost-effective maintenance arrangement for larger complexes is which of the following?
Have a regular vendor on call
Another name for a tenancy at sufferance is a(n):
Holdover tenancy
In which of these situations is it most likely that a buyer holds an "equitable title" to the property, but not actual title?
In an owner-financed land sale contract
Groundwater is water that is best described by which of these?
In the land's subsurface, in the soil or in pores and crevices in rock and below the saturation point.
Elvira and Armand had a signed offer and acceptance completed inspections, and secured financing when Elvira discovered that Armand was not the owner as he claimed to be, but was a nephew of the owner by the same name. What is the effect on the contract?
It is void
A contractor just completed a $27,500 remodel of a kitchen and wants to ensure that they get paid, so their best option to ensure payment is which of the following?
Mechanic lien
Which of the following is NOT one of the criteria for determining the "highest and best use" of real property?
Minimally Intrusive
What is required for a broker to "specialize" in a specific type of real estate or real estate transaction in Texas?
No special certification is required, but the broker must be trained and competent in the area in which they hold themselves out to be a "specialist"
Under the Real Estate Settlement Procedures Act (RESPA) referral fees for real estate licensees referring business to settlement/closing services are which of the following?
Prohibited
A party who has paid for the option to purchase a home by a set time and a set price has what further obligation in the contract?
Purchase the property by he agreed time and at the agreed price.
Which of the following is NOT an acceptable advertisement for a rental property under fair housing laws?
Quiet community for single professionals with strong English language skills.
For which of these purposes may a Veterans Administration loan be used?
Refinancing to a lower interest rate
Ameche and Armand had an agreement for Ameche to purchase Armand's home because Armand was being transferred to anther state and Ameche was to get Armand's old job which paid substantially more than Ameche's current position. However, their company canceled the move because of financial difficulties, so both parties circumstances changed. What process can they use to call of their agreement and return to their pre-agreement conditions?
Rescission
Which of these is a legal method for terminating a contract agreement?
Rescission and restitution
The mandatory lead-based paint disclosure applies specifically to which of these?
Residential property built prior to 1978
Which of the following lists represents the duties property performed by an unlicensed assistant?
Scheduling appointments, filing and maintaining records, placing signs and other similar forms of advertising
The mortgage clause that allows a borrower to separate and alienate a portion of a mortgaged property is which of these?
Severance clause
Desmond of Diogenes Realty received a call from Seraphina to get basic information on one of his listings, but no more. She showed up at the agency the next day to meet Desmond and seek his services. Desmond's next move is?
Sign Seraphina to a broker representation agreement
Which of the following statements BEST describes the interaction between state and federal fair housing laws?
State and local jurisdictions may make them more restrictive, but not less so.
A borrower is most likely to encounter "abusive" prepayment penalties in which of these types of loans?
Subprime loans
A real estate licensee using an improperly written or altered contract form could face sanctions from the Commission and which of these other groups
The National Organization of Realtors
A client wants to purchase 160 acres in Township x's SW section. Which of the following descriptions would fit their interest best?
The SW 1/4 of the NE of Section 35
Which combination accurately summarizes the advantages of the back-up addendum for the back-up buyer and the seller?
The buyer steps right in without competition and the seller already has a back-up in place if the first buyers fail through
The single most important item generally needed to obtain a Veterans Administration loan is which of the following?
The certificate of eligibility
Elvira is the legal guardian for Armand, a 17 year-old who inherited a home from his late aunt. The home was valued at $475,000, but Elvira sold it for $495,000 and kept all the proceeds in accounts owned by Armand. The buyer learned of Armand's age and tried to invalidate the sale. What are Armand's options, if any?
The contract is valid as is because it was made by a legal guardian.
A business entity may not act as a broker unless:
The entity's designated broker is a licensed individual broker in active status and on record as in good standing.
Determining if an item is a "fixture" on a property includes consideration of which of these?
The intent of the installer at the time of the property's sale.
Esther is selling her home to Estelle. The home was built in 1976 and has had three owners since. One had HIV, one was murdered in a random killing on the property, and one was a family from the middle east who moved back there without becoming citizens here. Which of these disclosures is required for Esther (or her agent) to provide?
The lead-based paint disclosure because the home was built before 1978.
Desmond of Diogenes Realty has a signed buyer's representation agreement with Seraphina. To which parties described here does he owe disclosure of the fact that he represents Seraphina?
The seller's agent
Which of the following disputes would be under the jurisdiction of the Texas Real Estate Commission?
The seller's agent withholding material information pertaining to the condition of the property known to the agent
In the process of negotiation an employment buyer's representation, or listing agreement, who does the licensee represent until the agreement is signed?
Them self or their brokerage
Which of these options is the BEST option for a solid risk management strategy?
To have established policies that address the liability risks faced by that brokerage
The commission may not adopt a rule restricting advertising or competitive bidding by a person regulated by the commission except for which of the following reasons?
To prohibit a false, misleading, or deceptive practice
Punitive damages are added to some judgments for what purpose?
To punish the offender and to discourage others from offending practice.
Laws and regulations applied under the police powers of a governmental jurisdiction must comply with which of these lists of guidelines?
Uniform in operation nondiscriminatory and cannot be advantageous to any one particular person or group.
What kind of timeline does a "periodic" tenancy generally follow?
Whatever is determined by the parties.
Desmond of Diogenes Realty was a very innovative managing broker, including writing his own advertising, contracts, marketing materials, and listing agreements? In spite of complete success in his endeavors without a single complaint from a client, he receives notice from TREC that his is facing potential disciplinary action. What did he do wrong?
Writing his own contracts is an unauthorized practice of law.
Which of the following is an accurate description of requirements for Texas Residential Leasing specialist (TRLS) and Texas Residential Property Manager (TRPM) certifications?
You do not have to take the TRLS Certification courses before taking TRPM courses, however you must earn the TRLS Certificate before becoming eligible to earn the TRPM Certification.
Which of these lists BEST describes the various forms of "wetlands" found in Texas?
cat tails and standing water tidal, salt marshes along the coast seasonal prairie wetlands in the valleys, mossy ferns in the hills and mountains
The standard steps in risk management are
identity, analyze, plan, track, control, communicate
A person must to the land, the land will not come to them because of the physical characteristic of
immobility
Which of these lists accurately describes the economic characteristics of land?
immobility, indestructibility, nonhomogeneity
A seller is advised to use which of these TREC promulgated forms if the seller is concerned with being at risk of retaining liability on an assumed note?
release of liability addendum
A broker assessing exposure, hazard, peril and loss is most likely addressing issues of
risk management
