Texas Real Estate Exam Study Guide

What is the youngest age at which a Texas citizen can prepare a legally binding will (disregarding exceptional circumstances)? A. 13 B. 18 C. 21 D. 16

B.18 18 is youngest age at which a legal will can be prepared (married minors and minors in the armed forces can be exceptions to this rule).

Standard forms promulgated by the Texas Real Estate Commission exist for all of the following sales EXCEPT which one? A. A large lot is intended as a future site for a multi-family (5 or more) residence complex. B. Construction is not yet finished on a new home. C. Construction is complete on a new home. D. The Veterans Administration is asserting entitlement to restoration.

A. A large lot is intended as a future site for a multi-family (5 or more) residence complex. Chapter 537 of the Texas Administrative Code presents the variety of standard contract forms promulgated by TREC. Standard Contract Form TREC No. 12-3 is promulgated for use as an addendum to be attached to promulgated forms of contracts where there is a Veterans Administration release of liability or restoration entitlement. Standard Contract Form TREC No. 23-15 is promulgated for use in the sale of a new home where construction is incomplete. Standard Contract Form TREC No. 24-15 is promulgated for use in the sale of a new home where construction is completed. Although Standard Contract Form TREC No. 9-13 is promulgated for use in the sale of unimproved property where intended use is for one to four family residences, no form has been developed yet for the sale of unimproved property where intended use is for a multi-family (5 or more) residence.

Recent changes to the law require the Texas Real Estate Commission to provide an online system for license applications and renewals. Which of the following is NOT required for an electronically submitted license application? A. A state-authorized photo for purposes of definitive identification B. A fee for evaluation of educational records C. A complete application form, filled out on the web site D. A signature submitted to the commission before the license can be issued

A. A state-authorized photo for purposes of definitive identification Candidates submitting licensure applications via the web site must supply all the required information for the online version of the application form as well as pay the required fee (per instructions given on the web site) for an evaluation of the candidate's educational record. Also, before a license certificate can be issued, the candidate must supply the commission with their signature to authenticate their application. A photo is not required.

Bill Thierauf is a licensee in Mesquite. Although he is an outgoing and engaging man known for setting clients at ease and smoothing ruffled feathers, he makes constant substantive errors in anything involving mathematical calculations. After a client won a $15,000 award from the recovery fund due to Bill's incompetence, Bill is facing certain discipline. Which of the following options would NOT be available to the commission in pursuing disciplinary action? A. Limit the scope of Bill's practice to the marketing and showing of properties , ensuring that he doesn't have the opportunity to make any more costly mathematical errors B. Charge Bill with a class A misdemeanor for negligence C. Require Bill to report regularly to the commission during a period of probation D. Revoke Bill's license until he has remitted the full cost of the $15,000 award paid out of the trust account, plus interest at a legal rate

A. Charge Bill with a class A misdemeanor for negligence The authority of the Commission does not extend into criminal law. When dealing with a licensee who has violated the Act, though, the commission has a number of options. It can revoke a license until the holder has remitted the entire amount of damages paid from the trust account, plus interest at the legal rate. The commission can also impose probation and limit the scope of a licensee's practice to an area of competence ; require a licensee to report to the commission regularly regarding the area of probation; or continue to require the licensee to complete continuing education in the area of deficiency until achieving a level of competence satisfactory to the commission.

From what source may a Texas real estate sales agent legally collect compensation? A. From the sales agent's sponsoring broker B. From a seller whom the sales agent represents C. From the legal representative of any party to a valid transaction D. From any licensed real estate broker

A. From the sales agent's sponsoring broker Only the sales agent's sponsoring broker may legally disburse compensation

A broker has a listed property. The owner mentions that a neighbor is interested in selling. The broker meets with the neighbor and secures a second listing. Both listings sell and the broker earns a commission on each. The broker would like to thank the owner of the first listed property for this referral. How can the broker thank the seller? A. He can give the seller a gift of up to $50.00 in value, not cash B. He can give the seller a gift of up to $100.00 in value, not cash C. He can pay the seller whatever commission amount he agreed to pay for the referral D. He can give the seller a gift of $50.00cash

A. He can give the seller a gift of up to $50.00 in value, not cash You may give an unlicensed person a non-cash gift worth $50 or less in exchange for a referral and not violate The Real Estate License Act (TRELA) or Texas Real Estate Commission rules. According to TRELA, if a referral is made with the expectation of receiving valuable consideration, the person making the referral must be licensed under the act. Under Section 535.20 of TREC rules, gifts of merchandise having a value of $50 or less do not count as valuable consideration. A bank gift card that can be converted to cash or credit or any amount of cash or credit toward rent owed is not allowed to be used as gifts to an unlicensed person in exchange for a referral, according to TREC.

Bob Jones, husband and father of four adult children, from a previous marriage, was the victim of a hit-and-run accident. How will his estate be divided among his wife and four children in the absence of a valid will? A. His wife inherits half the estate; the remainder of the estate is divided equally among his children. B. His wife inherits his estate in its entirety. C. Personal property passes to his wife. D. Each of his surviving family members receives one-sixth of his estate.

A. His wife inherits half the estate; the remainder of the estate is divided equally among his children. In the event that Bob does not have a valid will, half his estate passes to his wife and the other half is divided equally among his four children from his previous marriage. If the four children were from his present marriage his wife would inherit his entire estate.

What, if any, is the restriction on protected acres of rural homestead per family in the state of Texas? A. Limited to 200 acres B. There is no restriction in the state of Texas C. Limited to 100 acres D. Limited to 50 acres

A. Limited to 200 acres In Texas, a family is limited to owning a maximum of 200 protected acres.

The Mackys purchased their two-story brick home twenty years ago and have ten years left on their mortgage which has an interest rate of thirteen percent. This is their primary residence and they would like to pay it off now. Will they be subject to a prepayment penalty? A. No, because the interest rate is greater than twelve percent. B. It depends on the lender; Texas statue does not take a stance on prepayment penalties. C. Yes, but no more than five percent of the current balance of the loan may be levied as a prepayment penalty. D. Yes, the lender is entitled to levy a prepayment penalty equal to a full year of interest on the current balance of the loan.

A. No, because the interest rate is greater than twelve percent. When the interest rate on a loan for a homestead property is greater than twelve percent, a prepayment penalty may not be levied. For loans with a lesser interest rate, it is up to the lender whether or not a prepayment penalty will be charged.

Kelly, A seller, is queried as to whether any known plumbing defects exist in her home. She replies that no, to the best of her knowledge, there are no plumbing defects. Unbeknownst to her, the pipes are corroded and due for replacement. Is she in violation of her disclosure responsibilities? A. No, since she is unaware of the plumbing issue, she is not liable for failure to disclose material defects. B. Yes, unless she was specifically qualified to answer the question or had qualified advice, she was in violation of her responsibility to disclose material defects. C. No, because she is not required to answer this question; any material defects will be discovered during the inspection. D. Yes, because it is her responsibility to make sure the property is free of material defects or to report them.

A. No, since she is unaware of the plumbing issue, she is not liable for failure to disclose material defects. Since Kelly answered to the best of her knowledge, she was not in violation of her responsibility to disclose any known material facts.

Which of the following licensees is subject to the provisions of the Texas Real Estate License Act? A. One whose job entails recruiting qualified renters and buyers for real estate B. Someone conducting official duties C. A "for sale by owner" listing An on-site apartment manager

A. One whose job entails recruiting qualified renters and buyers for real estate You must have a real estate license to solicit business.

Which of the following types of real estate licensees is required to display their license prominently at their place of business? A. Only licensees who are residential rental locators are required to display their licenses B.No licensees are required to display their licenses C. Only sales agents are required to display their licenses D. Only sponsoring brokers are required to display their licenses

A. Only licensees who are residential rental locators are required to display their licenses Per a change to the law, effective 01/04/2004, the statutory provision requiring a broker to display broker's and sales agent's licenses at the broker's place of business has been repealed. However, residential rental locators are still required to display a license at their place of business.

In which of the following situations can a licensee legally and ethically accept a net listing? A. Only when the principal understands current market values and requires a net listing B. Anytime the seller agrees, as long as Craig earns no more than ten percent of the sale proceeds C. Whenever the sale price exceeds the owner's asking price by at least twenty-five percent D. Only when he is representing both parties of a transaction

A. Only when the principal understands current market values and requires a net listing Net listings are discouraged because they enable the agent to place personal interests above the principal's interests. Net listings should only be executed when the principal is familiar with market values and requires a net listing. Certainly, the licensee should work diligently to obtain the best price possible for the principal, and although commissions are always fully negotiable, a maximum should be set for the amount to be earned on a net listing.

A broker acting as an intermediary to the sale of a single-family dwelling, Juan Cho would be acting unlawfully and unethically if he discloses any of the following information except: A. That both parties have agreed to pay a portion of the broker's compensation B. That the sellers are in dire financial straits, on the verge of bankruptcy, and need to sell immediately even if they have to sell at a loss C. That the buyers are able and willing to pay $5,000 more than the asking price D. That the seller will accept $5,000 less than the asking price

A. That both parties have agreed to pay a portion of the broker's compensation In serving as an intermediary between parties, a broker must represent both parties honestly. In acting as intermediary, the broker may not, without the express consent of the affected party, disclose confidential information (unless mandated by court order to do so) about either party or disclose that either the buyer is willing to pay more or the seller is willing to accept less.

Whose duty is it to prepare promissory notes for a closing statement? a. The attorney representing the lender b. The attorney for the settlement c. The real estate sales agent or broker representing the seller d. The attorney representing the buyer

A. The attorney representing the lender A promissory note is a promise to pay. It is a signed, written r:;ontract between a borrower and a lender that provides evidence of the borrower's indebtedness to the lender. It is the lender's responsibility to prepare any promissory notes.

Which of the following is the responsibility of the broker? A. The listing advertisements of the sales agents he sponsors B. The financial opportunities and success of the license holders he sponsors C. The continuing education of the license holders he sponsors D. The timely renewal of licenses by the sales agents he sponsors

A. The listing advertisements of the sales agents he sponsors The broker is responsible for keeping agents legal by properly advertising the name of their broker in all advertisements. Independent contractors are responsible for their own education, financial opportunities and renewing their license.

The Texas Real Estate Commission retains which of the following powers? A. The power to probate, suspend, or revoke a license or reprimand or place on probation a licensee for a violation of the Act or a rule of the commission B. The power to mediate disputes between or among licensees concerning entitlement to sales commissions C. The power to conduct licensure examinations for candidates seeking a sales agent or broker's license D. The power to recommend individual licensees to the public

A. The power to probate, suspend, or revoke a license or reprimand or place on probation a licensee tor a violation of the Act or a rule of the commission The Commission is imbued with the power, only as specifically authorized according to Texas Occupations Code, Chapter 1101, (the Act), §1101.151(b)(3), to conduct hearings and render final decisions in contested cases, including ordering the issuance of a probationary license; suspending or revoking a license; and censuring or placing a licensee on probation for a violation of the Act or a rule of the commission. The Commission does not have the power to mediate disputes regarding sales commissions or to recommend individual licensees to the public. Although the Commission oversees development of licensure examinations, the actual examinations are conducted by an independent testing firm with which the Commission contracts.

A broker can communicate to clients the availability of a trust to pay damages to aggrieved persons in which of the following ways? A. Through writing via a receipt for professional services, a sign posted in the licensee's place of business, or on a brochure distributed by the licensee B. In writing when a client makes a formal grievance complaint to the broker C. By directing them to the web site of the Texas Real Estate Commission D. By informing them verbally at first substantive contact

A. Through writing via a receipt for professional services, a sign posted in the licensee's place of business, or on a brochure distributed by the licensee A broker has the responsibility to let clients know that a trust account exists to pay damages to aggrieved persons. Simply directing clients to the TREC website or sharing the information after a complaint has been made is not sufficient notification. Per Section 1101.615 of the Texas Occupations Act, this information can be communicated through: a written contract for the license or certificate holder's services; on a brochure that the license or certificate holder distributes; on a prominent sign prominently in the broker's place of business; on a bill or receipt for professional services; or in a prominent display on the Internet website of a person regulated under this chapter. The notice must include the commission's name, mailing address, and telephone number as well as any other required information.

What is the purpose of Regulation Z? A. To provide full disclosure of loan terms B. To establish the right of the borrower to redeem property during foreclosure proceedings. C. To curtail the practice of redlining D. To ensure that a real estate agent provides care, accounting, confidentiality, and disclosure to their client.

A. To provide full disclosure of loan terms Regulation Z refers to the truth in lending law which requires lenders to provide full disclosure of the terms of the loan, including interest rates expressed as an annual percentage rate (APR). Although a borrower is entitled to redeem property during foreclosure proceedings (equitable redemption) and an agent certainly does owe care, accounting, confidentiality, and disclosure to the client, neither of these are pertinent to Regulation Z. Redlining, the practice of refusing or limiting mortgage Joans in a particular neighborhood based on ethnic considerations, is illegal but does not fall under the auspices of Regulation Z.

When a license holder markets his own property, he should: A. inform the buyer that he is a license holder and the owner of the property. B. use the IABS to disclose his interest in the property. C. use the TREC promulgated form to disclose his interest in the property. D. not mention his interest unless the buyer decides to buy the property.

A. inform the buyer that he is a license holder and the owner of the property. Per TRELA you must always disclose self, spouse, parent or child is involved in a real estate transaction. The /ABS discloses agency, not personal interest. There is no TREC promulgated form solely intended for this disclosure although paragraph 4 of the TREC contracts are now used for this. Not mentioning your personal interest in a transaction is illegal.

Canyon Properties in Killeen, Texas owns a two-family dwelling that generates a 12.5% return on its value, or an annual return of $17,000. What would the value of this property be in terms of an income approach to value? A. $17,000 B. $136,000 C. $76,500 D. $215,500

B. $136,000 An income approach estimates the value of a property based on its monetary returns (or the returns it could be expected to generate). In this case. the calculation is completed by multiplying the amount of investment returns ($17,000) by the multiplier 8 (because 100% is divisible by 12.5% exactly 8 times). The product, and estimated value of the property, is $136,000.

Payments from the Real Estate Recovery Fund are limited to what aggregate amount for claims arising from a single transaction? A. $25,000 B. $50,000 C. $150,000 D. $100,000

B. $50 ,000 As stipulated by Section B (n) (2) of TRELA, Recovery Fund disbursements are limited to a maximum aggregate payment of $50,000 for all claims arising out of a single transaction.

The term "holographic" refers to which of the following types of wills? A. A executed will B. A handwritten will C. A invalid will D. A valid will

B. A handwritten will A holographic will is a do-it-yourself handwritten will. To be valid this will must be totally in your own handwriting, signed and dated. About 20 states allow holographic wills, but it is best to have a more formal will.

Which of the following people would not be in jeopardy of losing their Texas real estate sales agent's license? A. A sales agent who implies in an advertisement that they are the responsible party for a property B. A sales agent who is authorized by their broker to accept an excessive commission from a seller C. A licensee who was recently convicted of a felony D. A licensee depositing his/her client's escrow money into his personal bank account because it was more convenient for both parties involved

B. A sales agent who is authorized by their broker to accept an excessive commission from a seller While felony conviction, false advertising, and commingling funds are grounds for license revocation, commissions are always negotiable and an excessive commission is permissible. As always, however, the seller would pay the broker, who would then pay the sales agent from the firm's business account.

Which of the following statements is true of a security deposit? A. A security deposit must accrue interest payable to the tenants during the time which it is held. B. A security deposit must be returned to the tenant within 30 days of the end of the lease unless the property has been damaged. C. Security deposits are only applicable to residential units. D. Security deposits must be returned to the tenant even in situations where the tenant has failed to pay the last month's rent.

B. A security deposit must be returned to the tenant within 30 days of the end of the lease unless the property has been damaged. In the case of damage to property or failure to fulfill the terms of the lease, a security deposit may be held; otherwise, as long as the tenant has left a forwarding address, the deposit must be returned to the tenant within 30 days of the end of the lease.

Which of the following is true of income earned through properties separately owned by a married couple in Texas? A. Half of the income is presumed to be community property, while the other half of the income is considered separate property B. All earnings from community property and separate property are presumed to be community property C. The income is also considered separate property D. The income is not subject to taxes

B. All earnings from community property and separate property are presumed to be community property In Texas, couples can legally partition property and arrange for certain income to be separate, but given that Texas is a community property state, income from community property and separate property is generally (in the absence of legal action) presumed by Texas law to be community property.

Which of the following situations could be considered illegal in Texas and put a licensee's license to practice real estate in jeopardy of suspension or revocation? A. Andrew signs a listing agreement that specifies a duration period of three months from date of signing as the valid period of the listing. B. Anna signs a listing agreement that allows the listing to continue indefinitely C. Jerry signs a listing agreement that specifies a commission of 20% on the sale of a property. D. Lucy signs a listing agreement that fails to include a broker protection clause.

B. Anna signs a listing agreement that allows the listing to continue indefinitely Since a listing must contain a definite termination date not subject to prior notice, Anna's indefinite listing period puts her in jeopardy of having her real estate license suspended or revoked.

Which of the following tasks is outside the realm of a sales agent or broker's duties? A. Arranging a schedule for closing B. Conducting the necessary title searches C. Going over closing procedures with the buyers and/or sellers D. Disbursing escrow monies to attorneys

B. Conducting the necessary title searches Conducting a title search is relegated to the legal domain- a real estate sales agent or broker who conducts a title search may be vulnerable to a charge of practicing law without a license.

Which of the following is a qualification for obtaining a prescriptive easement in Texas? A. Continuous, open, and notorious use of land for a variable period of 5-30 years B. Continuous, open, and notorious use of land for a minimum period of 10 years C. Continuous, open, and notorious use of land for a minimum of 15 years D. Continuous , open, and notorious use of land for a minimum period of 5 years

B. Continuous, open, and notorious use of land for a minimum period of 10 years. To establish an easement by prescription in Texas, an individual must prove continuous, open, and notorious use of land for a period of 10 years.

Which of the following is NOT true of the educational requirements a candidate for licensure must meet? A. Candidates must complete coursework that includes, at a minimum, courses in promulgated contract forms and law of agency. B. Course credits awarded by an accredited college or university for life experience or by examination are acceptable in lieu of core real estate courses. C. Any course offered by alternative delivery methods such as correspondence or computer delivery, must teach to mastery as prescribed by the commission and follow curriculum development guidelines outlined by the commission. D. Upon completion of the required number of hours of attendance at the prescribed courses, the candidate must pass a final course examination, either written or electronic, before the candidate can be considered to have passed the course.

B. Course credits awarded by an accredited college or university for life experience or by examination are acceptable in lieu of core real estate courses. Course credits awarded by an accredited college or university for life experience or by examination are acceptable only for real estate related courses. The commission periodically publishes a list of acceptable real estate related courses on TREC's website.

A license holder in violation of the TRELA has received a summons from the Texas Real Estate Commission that a hearing will be held regarding the possible revocation or suspension of his license. The license holder fails to respond to the summons. What will the Texas Real Estate Commission do? A. Schedule a hearing in the county court where the license holder practices real estate B. Enter a default order against the licensee. C. Schedule a hearing in the district court serving the license holder D. Schedule a hearing at the main office or business address of the license holder

B. Enter a default order against the licensee. If a licensee doesn't respond to TREC within 30 days of a reported violation, a default order will be entered against them, including the information in the Notice of Alleged Violation (§533.4 Failure to Answer, Failure to Attend Hearing and Default).

Which of the following must a real estate broker disclose to prospective owners? A. History of occupancy of a dwelling B. Existence of a leak in the roof C. Knowledge of a suicide D. Awareness of a criminal indictment against the owner for murder

B. Existence of a leak in the roof Any known material facts must be disclosed to prospective buyers.

Without proper authorization, a sales agent may accept a commission directly from: A. The title company B. His broker C. A seller D. A buyer

B. His broker Your sponsoring broker is the only one that can pay you a commission. All payments tor services rendered in real estate should go to your sponsoring broker first.

Which of the following is NOT true of an easement along the Gulf Intracoastal Waterway? A. The state of Texas retains the right to tear down any structures built seaward of the easement line. B. If no clearly marked natural vegetation line exists, there is no easement. C. Real estate agents should advise buyers that the public has obtained an easement to the public beach areas. D. It is illegal to interfere with the public easement to the public beach areas.

B. If no clearly marked natural vegetation line exists, there is no easement. The public has acquired a right of use or easement to or over the area of any public beach; the easement is generally marked by a boundary of natural vegetation. When no clearly marked natural vegetation line is visible, the landward boundary of the easement is as provided by Sections 61.016 and 61.017 of the Natural Resources Code (nearest clearly marked line, line of constant elevation, or line of average elevation on each side of unmarked area -- no further inland than 200 feet from seaward line of mean low tide). Structures built seaward of the vegetation line or that become seaward through the natural processes of shoreline erosion may be subject to a lawsuit by the State of Texas to remove the structures.

A sponsoring broker, has made the decision to terminate his sponsorship of Ralph Cho. What step must he take? A. Provide Ralph with an official letter of resignation of sponsorship, clearly stating the reasons for the decision, that he may submit to the Texas Real Estate Commission for her files B. Immediately notify in writing both Ralph and the commission C. Notify Ralph in writing that he wishes to terminate his sponsorship and give 30 days to appeal his decision, in writing; if he fails to appeal, or if his appeal does not change his decision, he may then terminate his sponsorship immediately D. Notify Ralph immediately and return his license to him so he can find a new sponsoring broker

B. Immediately notify in writing both Ralph and the commission When the broker decides to terminate his sponsorship of Ralph, it is incumbent upon him under Section 13 of the License Act to notify both Ralph and the commission immediately, in writing. When the commission receives the notice they'll place Ralph on inactive status (sec. 1101.367)

Which of the following must be disclosed to a prospective buyer? A. The previous owner was an elderly man who died of a heart attack B. One of the previous occupants died from a fall caused by a rotten plank in the basement stairwell C. The previous owner died of AIDS D. The dwelling was the site of a suicide

B. One of the previous occupants died from a fall caused by a rotten plank in the basement stairwell Although violent deaths should be disclosed with the express permission of the owner, the only requirement is for a broker or sales agent to disclose deaths related to the condition of the property. Disclosure of an AIDS-related death is against fair housing laws.

In what circumstances, if any, can a broker who is serving as an intermediary representing both parties collect compensation from both the buyer and the seller? A. In most circumstances, except when the buyer and seller are related B. Only when both buyer and seller give informed consent to this arrangement C. Only when both buyer and seller have legal representation D. None; the broker may only collect compensation from one party to a transaction

B. Only when both buyer and seller give informed consent to this arrangement In order for a broker to receive commissions from both buyer and seller, both parties must give their informed consent to the dual compensation.

Tammy Doherty, a licensee found to be in violation of the Act, has been ordered to pay an administrative penalty of $1,000. Tammy has 30 days to: A. Appear before the Commission to plead her case B. Pay the penalty, stay the penalty, or contest the decision C. Deliver her license certificate to the Commission office D. Engage legal counsel to file a writ with the Commission contesting the violation, the penalty, or both

B. Pay the penalty, stay the penalty, or contest the decision Not later than the 30th day after the date the commission's order becomes final, Tammy has to either pay the administrative penalty in full or stay the penalty by paying the amount to the administrator to be placed in escrow or by paying the amount in supersedeas bonds approved by the administrator. ff Tammy is financially unable to pay the penalty, she can file an affidavit stating that she is financially unable to either pay the penalty or to pay the

James, a tenant, moved out of his apartment without paying the last month's rent on a one-year lease. What action may the landlord take? A. Confiscate any belongings the tenant has left behind B. Take James to court to collect the rent owed. C. None; the lease is terminated. D. Automatically extend the lease for six months because no notice was given, and hold James accountable for the extra rent.

B. Take James to court to collect the rent owed. The landlord may either sue James for back rent or charge the money owed against the security deposit.

At what point should prospective buyers/tenants receive the "Information about brokerage services" brochure? A. The brochure is recommended, but not required. B. The brochure should be given to prospective buyers/tenants at the first in-person meeting with the sales agent/broker. C. The brochure is required to be included in the paperwork at closing. D. The brochure should be handed out to all visitors at an open house.

B. The brochure should be given to prospective buyers/tenants at the first in-person meeting with the sales agent/broker. At the first face-to-face meeting, the sales agent/broker must present the brochure to prospective buyers/tenants.

Estimating the value of a house by taking the reproduction or replacement cost of the building, minus depreciation, plus the value of land would be classified as what type of approach to valuation? A. An income approach B. The cost approach C. A market approach D. A comparables approach

B. The cost approach A cost approach to estimating value takes into account the current construction costs for reproduction or replacement, less depreciation, plus land value. Reproduction is defined as creating a replica whereas replacement is defined as producing improvements of equal utility. The cost approach is the only approach that can be applied to all types of construction, and it can be highly useful in markets with a dearth of comparables. To establish an easement by prescription in Texas, an individual must prove continuous, open, and notorious use of the land for a period of 10 years.

A listing agent must disclose which of the following facts to a prospective buyer? A. The values and features of comparables in the area B. The existence of any covenants, conditions, and restrictions C. The lock-in rate D. The existence of an open listing

B. The existence of any covenants, conditions, and restrictions Before the close of a sale, a real estate agent must inform the prospective buyer of any covenants, conditions and restrictions (CC&Rs) on use of property that bind everyone who owns land in the development. Generally, such restrictions take the form of limitations on the size or color of a house, specification of standardized neighborhood features, or guidelines on pets. CC&Rs are usually enforced by a Homeowners Association and will be passed on to the new owners during the sale of a property. Although agents often provide comparables for purposes of estimating market value, this is not a required disclosure, nor is the existence of an open listing which gives the seller the right to list the property with more than one sales agent. Lock in of rates refers to the interest rate on a mortgage and is handled through the lender, not through the real estate sales agent.

What is the MOST accurate description of the mission of the Texas Real Estate Commission? A. None of the other options are correct B. The mission of the Texas Real Estate Commission is to maintain property values thereby fostering economic growth in Texas. C. The mission of the Texas Real Estate Commission is to ensure that business is conducted properly amongst licensees. D. The mission of the Texas Real Estate Commission is to assist and protect consumers of real estate services.

B. The mission of the Texas Real Estate Commission is to assist and protect consumers of real estate services. The primary goal of the TREC is to protect the consumer.

Which of the following situations is not a valid reason for foreclosure on a property? A. A bank has a lien against the property for home improvements. B. The owner has a large amount of unsecured credit card debt. C. The homeowner's association has a lien against the property D. The IRS has put a tax lien on the owner's assets.

B. The owner has a large amount of unsecured credit card debt. Ordinary creditors' claims -- including those of credit card companies -- are not sufficient reason for foreclosure on a property.

When is it NOT mandatory for the seller to provide a copy of the "Seller's Disclosure of Property Condition" to prospective buyers? A. When the buyer has occupied the dwelling as a tenant B. When the property is a commercial property C. When the home has been vacant for at least a year D. When the seller is offering a home for sale by owner

B. When the property is a commercial property The "Seller's Disclosure of Property Condition" is required for all single-family dwelling units which have been previously occupied (regardless of when or in what capacity), but this code does not apply to commercial properties.

Deeds of conveyance should be recorded within what period of time after closing? A. Within 1 week B. Within a reasonable time C. Within 3 days D. Within 48 hours

B. Within a reasonable time Deeds of conveyance must be recorded within a reasonable period of time after the closing.

A Texas licensee has defaulted on his Texas State Student loans. As a result of this Texas Real Estate Commission will: A. revoke the license of the license holder immediately. B. do nothing. C. refuse to renew the license of this individual unless and until the loan payments are brought up to date. D. require the license holder to move his license to inactive status.

B. do nothing. In Texas (and many other states), there used to be laws which could result in a real estate licensee losing their license if they defaulted on their student loan debt. In 2019, SB 37 banned Texas agencies from denying, suspending, or revoking a borrower's occupational license for defaulting on their student loans.

Prior to issuance of an inspector's license, a newly approved inspector must remit what amount to the Real Estate Inspection Recovery Fund? A. $300 B. $10 C. $75 D. $50

B.$10 According to TAC Rule §535.210, a fee of $10 is collected by the commission prior to issuing an inspector's license.

How much notice must a landlord give a delinquent tenant, in writing, before filing an action to evict? A. 30 days B. None of the other options are correct C. 3 days D. 7 days

C. 3 days A landlord is required to provide 3 days' written notice to a delinquent tenant that an action to evict will be filed if rental payments are not brought up to date.

Julio Ko rents his above-garage studio apartment to a college student on a month-to-month basis. When Julio decides to terminate the rental agreement and convert the apartment into a private studio for his artwork, how much notice is he required to give his tenant? A. 10 days B. 15 days C. 30 days D. 1 week

C. 30 days A landlord who wishes to terminate a month-to-month rental period is required to give one rental period's notice (30 days).

Which of the following actions is NOT a violation of the Texas Real Estate License Act? A. A broker guarantees a buyer that, based on past performance , an investment property will appreciate over the next two years. B. Placing a sign to sell or lease real property with only the verbal consent of the owner. C. A broker offers a guaranteed buy back of a property for a set price, if the purchaser is not happy with the investment after a two-year period of ownership. D. Selling real estate by lottery.

C. A broker offers a guaranteed buy back of a property for a set price, if the purchaser is not happy with the investment after a two-year period of ownership. · Putting your money where your mouth is and signing a contract to purchase with a two-year close date to buy it back yourself is legal. You can't guarantee a future profit verbally as this is illegal. Selling real estate by lottery and putting a sign in the yard on verbal consent is also illegal.

Which of the following situations is NOT exempt from the Texas Property Code, Section 5.008? A. A sales agent who assisted with a foreclosure sale B. An attorney that facilitated the transfer of a life estate between a mother and her son C. A real estate broker that has successfully negotiated the sale of a previously occupied single-family dwelling D. A lawyer who arranged the transfer of a primary residence from a divorcing wife to her soon-to-be ex-husband

C. A real estate broker that has successfully negotiated the sale of a previously occupied single-family dwelling All previously occupied single-family dwellings are subject to Section 5.008, the "Seller's Disclosure of Property Condition," EXCEPT in the case of foreclosure, transfer of primary residence per divorce settlement, or transfer between family members. NOTE - This question asks "Which of the following situations is NOT exempt" which means it's looking for a false answer, and it's false that a real estate broker successfully negotiating the sale of a previously occupied single-family dwelling is exempt (or "an exception'') from Texas Property Code, Section 5.008.

Which of the following people is required to be licensed as a real estate salesperson or broker? A. A construction company owner B. An individual selling her house C. An individual involved in the running of a real estate brokerage D. A couple purchasing their first home together

C. An individual involved in the running of a real estate brokerage Any individual operating a real estate brokerage must hold a real estate license.

Arthur was a Texas licensed Real Estate Sales agent for a long time. He then chose to become inactive and Texas Real Estate Commission has been holding his license in inactive status. He now wants to activate the license. What does he need to do? A. Apply through a broker, pay $200 and take a 30-hour continuing education course B. Apply through a broker, pay $50 and take a 30-hour continuing education course C. Apply through a broker, pay $200 and take an 18-hour continuing education course D. Apply through a broker, pay $200 and take a 15-hour continuing education course

C. Apply through a broker, pay $200 and take an 18-hour continuing education course Licensees past their 2 yr SAE period (experienced) must be sponsored by a broker, pay their $200 CE deferral fee and take 18hrs (10 CE, 8 Legal) to re-activate an inactive license. There is no time limit for experienced agents to be inactive nor education required while inactive as long as you pay your renewal fee eve,y two years.

With the knowledge and consent of her broker/employer, an unlicensed assistant is showing a property to prospective buyers. What is true about this situation? A. Only the broker can be fined by the Texas Real Estate Commission for this activity B. The broker and unlicensed assistant are both guilty of a third degree felony C. Both the broker and unlicensed assistant can be fined an administrative penalty of $5,000 per day D. Only the unlicensed assistant can be fined by the Texas Real Estate Commission for this activity

C. Both the broker and unlicensed assistant can be fined an administrative penalty of $5,000 per day Any violation of TRELA can result in an administrative penalty of up to $5000/day per violation imposed by the Texas Real Estate Commission. It is not a felony only a misdemeanor. Both broker and assistant may be fined not just one or the other.

Rex Kinsella has received two offers on his ranch and acreage. The sprawling Sheffield estate, replete with a large Spanish colonial manor house, horse barn, several smaller outbuildings, and several acres of cleared land is a steal at only $216,500. The first offer, from Clara Walters, a young woman who wants to start a horse riding academy, is for $211,900 cash. The competing offer from the Millhouses, a middle-aged couple who need plenty of room for their grandchildren's' visits, offers $215,000 with 10% down and a request that Rex pays 2 points on their mortgage loan. Which offer would be most lucrative for Rex? A. The two offers are equal in the end. B. The Millhouses' offer because it is only $1,500 less than the listing price C. Clara Walters' offer because she is paying cash and not asking for Rex to pay any points D. The Millhouses' offer because they are making a down payment

C. Clara Walters' offer because she is paying cash and not asking for Rex to pay any points Clara Walters' offer is, ultimately, more lucrative than the Mil/houses' offer because Clara is paying cash. With a 10% down payment, the Mil/houses would be financing $193,500 of the $215,000 purchase price. 2 points on $193,500 is equal to $3,870. Since Rex is requested to pay the $3,870 to the Mil/houses' lender as part of the closing, that will lower his proceeds from the purchase price of $215,000 to an actual profit of $211, 130. The end result is that Rex would make $770 less from the Mil/houses' offer than from Clara Walters' offer.

Adverse possession of land is possible in which of the following circumstances? A. Larry has granted permission to some neighborhood teens to hunt in the woods located on his property until they graduate in 4 years time B. Sarah has ridden her horse across her neighbor's field for the past year C. Eric has been farming 5 acres of Stuart's land for 7 years based on a faulty survey D. The Gessup family has been secretly swimming in the lake on their neighbor's property for a full summer

C. Eric has been farming 5 acres of Stuart's land for 7 years based on a faulty survey To acquire land by adverse possession, an individual must use the land without the owner's permission for a period of three to twenty-five years. Eric has been farming this land for more than 5 years and, because of the faulty survey, has also been paying taxes on the land and claims it under his deed. Per Sec.A16.025 of the Texas Civil Practice and Remedies Code, Eric can claim adverse possession of these 5 acres. This may seem like a wide range of timelines, but it's because Texas has several statutes of limitations regarding adverse possession- 3 years, 5 years, 10 years, 15 years and 25 years, depending on the circumstances.

Harvey Lipman, a masonry subcontractor, is owed $5,000 for work on a custom-built home in Sulphur Springs. How can he give constructive notice when his invoices to the customer continue to go unpaid? A. He can file a judgment with the district court B. He can file an affidavit against the real estate sales agent C. He can obtain a mechanic's lien against the property D. He can place a personal ad in the legal notices section of the newspaper

C. He can obtain a mechanic's lien against the property The mason,y subco_ntractor can place a legal claim called a mechanic's lien on the property. Such liens are generally placed by general contractors, subcontractors and suppliers of building materials who are owed money for labor, services, or supplies used in property improvements. A mechanics' lien claimant can sue to have the real estate sold at auction and recover the debt from the proceeds. Because property with a lien on it cannot be easily sold until the lien is satisfied (paid off), owners have a great incentive to pay their bills.

Which of the following is required of an applicant for real estate licensure in Texas? A. He/she must have an associate's degree B. He/she must be a resident of the state of Texas for at least a year prior to the date of application. C. He/she must sit for and pass a required examination D. He/she must be at least 21 years old.

C. He/she must sit for and pass a required examination In addition to passing an examination, an applicant for licensure must be a resident of the state of Texas and have attained at least 18 years of age.

When a sponsoring broker is unaware that a sales agent is violating the Texas real estate code through activities such as blockbusting, discrimination, and commingling funds, which of the following is true of the sponsoring broker's responsibility? A. The Texas Real Estate Commission will have the sole authority to determine the course of action to take against the sponsoring broker, and may choose to impose a fine and/or suspend or revoke the broker's license B. The sponsoring broker's responsibility will be limited to paying the fine levied against the sales agent. C. If the sponsoring broker is deemed to be completely unaware of the sales agent's illegal activities, the broker will be absolved of responsibility. D. The sponsoring broker is responsible for all actions of the licensees working under him or her and will be held accountable in the same manner as the licensee who has violated the code.

C. If the sponsoring broker is deemed to be completely unaware of the sales agent's illegal activities, the broker will be absolved of responsibility. If the investigation proves that the sponsoring broker was unaware of the illegal activities of the sales agent, the broker will be absolved of responsibility since the sales agent acted independently.

Which of the following actions is mandated by RESPA? A. Full disclosure of hidden material/structural defects B. Protection of mineral ownership rights contained in a particular parcel of land C. Loan estimate D. Full disclosure of the terms of a loan

C. Loan estimate Real Estate Settlement Procedures Act (RESPA) is a federal law which deals with the procedures to be followed in a real estate closing. It is intended to make borrowers more knowledgeable about possible costs and charges associated with closing a home loan. RESPA, in accordance with TRIO (TILAIRESPA Integrated Disclosures), requires agents to provide prospective buyers with a loan estimate of closing costs, as accurate as possible, within three days of the submission of an application, and all revisions must be provided at least 7 days before closing. Separate laws govern the protection of mineral rights and the disclosure of latent defects and loan terms.

Lucy Smith signed a contract in the state of Texas six months before her eighteenth birthday. Which of the following statements is true? A. Since she signed the contract within six months of reaching the age of legal majority, she is bound by the contract. B.Since she was under 18, the legal age of majority, the contract is null and void. C. Since she was under 18, the age of majority, she has until "reasonable time" after her 18th birthday to void the contract, if she chooses. D. Since she was under 18, the legal age of majority, she has until she reaches 18 to void the contract

C. Since she was under 18, the age of majority, she has until "reasonable time" after her 18th birthday to void the contract, if she chooses. A minor who signs a contract in the state of Texas has until "reasonable time" after reaching the age of majority to disaffirm the conveyance. The question of "reasonable time" is one of fact, not of law. There is no certain period for the minor to disaffirm,, but what is a "reasonable time" is determined by all facts and circumstances.

In the event of a conflict between the statutory duties of Intermediary and the common law duties of a dual agency of a broker, which takes precedence? A. Common Law Dual Agency B. Whichever the broker and the parties agree to C. Statutory Intermediary D. Whichever the broker entered into first

C. Statutory Intermediary Statutory Intermediary takes precedence over Common Law Dual Agency in Texas.

What does TREC stand for? A. Texas Real Estate Council B. None of the other options are correct C. Texas Real Estate Commission D. Texas Real Estate Code

C. Texas Real Estate Commission (Texas Real Estate Commission) The mission of the Texas Real Estate Commission is to assist and protect consumers of real estate services, thereby fostering economic growth in Texas.

The Texas Real Estate Commission has received an application for a Texas Real Estate Sales License from Mary. Mary has completed all her educational requirements and passed the state exam. At this point, the Texas Real Estate Commission will begin the background check. Which of the following statements is not true? A. Mary can appeal a denial of her application within 30 days. B. The Texas Real Estate Commission will notify Mary if her application for license is denied. C. The Texas Real Estate Commission has 30 days to complete the background check. D. The Texas Real Estate Commission has no time limit for determining the "integrity" of an applicant like Mary.

C. The Texas Real Estate Commission has 30 days to complete the background check. The Texas Real Estate Commission has no limit on days to review your application or complete your background check. TREC will notify an applicant if the application for license is denied. An applicant has 30 days from the date their application was denied to request a hearing. NOTE - This question asks "which of the following... is NOT true?" which means it's looking for a false answer, and it's false that TREC has 30 days to complete the background check.

What is the responsibility of an agent or broker, if any, to a seller previously listed with their firm but currently listed with a different brokerage? A. The broker has no residual responsibility to the seller since the agency has been terminated B. The broker can show the property to a buyer but may not disclose any knowledge of the property, including physical condition C. The broker can show the seller's property to current clients but cannot share any inside information on offers received for the property when it was previously listed with the broker D. The broker must not show the seller's property to any clients because of potential conflict of interest

C. The broker can show the seller's property to current clients but cannot share any inside information on offers received for the property when it was previously listed with the broker In the case where a broker is showing a previous listing to a current client, the broker must not disclose any knowledge of offers received while the broker held the listing because of confidentiality requirements; however, any material facts about the property must be disclosed.

What is the legal view of dower and curtesy in Texas? A. They are recognized but not enforced B. They are recognized on a case-by-case basis C. They are not recognized D. They are voluntarily recognized

C. They are not recognized Since Texas is a community property state, dower and curtesy are not recognized.

Homestead protection serves what purpose? A. To remove the threat of disinheritance for spouses and minor children B. To transfer the deed to a surviving spouse in case of death C. To protect a homeowner's equity D. To provide for the payment of all taxes, claims, and liens against the property

C. To protect a homeowner's equity Homestead protection preserves a homeowners equity.

To which agency may a person bring a complaint of illegal discrimination? A. To the Texas Real Estate Commission B. To the Texas Attorney General C. To the Department of Housing and Urban Development or the Texas Commission on Human Rights D. To the Texas Secretary of State

C. To the Department of Housing and Urban Development or the Texas Commission on Human Rights A person with a claim of illegal discrimination may take their case to HUD or the Texas Commission on Human Rights or may choose to file suit in federal court.

At what point should the landlord apprise the tenants of the rules and regulations of the lease? A. At any time during the lease period B. Upon request C. Upon entering the leasing agreement -- or when the rules are adopted (if the lease has already begun) D. Upon violation of the rules

C. Upon entering the leasing agreement -- or when the rules are adopted (if the lease has already begun) The landlord should present the rules and regulations of the lease either at the time the tenants enter into the lease agreement or as soon as the rules are adopted.

95. A sales agent wished to transfer to a new broker. When may he engage in the business? A. When the Texas Real Estate Commission receives his request for transfer B. When the new broker receives a license for him from the Texas Real Estate Commission C. When his fees and sponsorship forms have been mailed to Texas Real Estate Commission D. After a waiting period of 48 hours

C. When his fees and sponsorship forms have been mailed to Texas Real Estate Commission The moment your forms have been mailed (or e-mailed) to the Texas Real Estate Commission and your license fee has been mailed (or i.e. pay pal) you work for the next broker. Your first broker must have your license the first time only, not for subsequent brokers. There is no waiting period.

Two brothers, Mike and Austin Dunn, want to buy a townhouse together in Texarkana. Both men are recent college grads with professional-level jobs. Their lender has suggested a mortgage that offers lower monthly payments in the beginning that gradually increase at predetermined times over the life of the loan. Given that they expect their incomes to increase annually, they feel this type of loan might be a good choice because they'll be able to afford a larger townhouse. What type of loan does this describe? A. an 80-10-10 mortgage B. a balloon mortgage C. a graduated-payment mortgage D. an adjustable-rate mortgage

C. a graduated payment mortgage The Dunns are contemplating a graduated payment mortgage. Since their initial payments are lower, their qualifying ratios are lower and they can afford more property. The monthly payments will gradually increase, as will their earning capacity. This type of loan is an example of negative amortization. A balloon mortgage differs in that it has fixed payments for a short-term period and then requires a lump sum payment of the balance (or refinancing the remainder of the loan). An 80-10-1O Joan (combination or piggyback loan) is a type of conventional loan that entails a first mortgage of 80%, a down payment of 10%, and a second mortgage of 10%. The advantage to an 80-10-10 is that it allows a smaller down payment without requiring mortage premium insurance and also gives the option of paying off the second trust more quickly (resulting in smaller monthly payments). An adjustable rate mortgage adjusts according to a selected index on a periodic basis, thereby causing the monthly payments to fluctuate over the life of the loan.

Brownsville boasts a paved 2 mile hiking and bicycle trail that is popular with fitness enthusiasts all year long. Recently, the state legislature voted to approve a 3 mile extension to the trail. The path of extension will run through the east side of Windemoor subdivision, the only private property affected by the development plans. Most of the property owners have already sold land to the city to support the project, but one homeowner is holding out, grousing that losing the small strip of land on the east side of his property will make his landscaping look lopsided and decrease the overall desirability of his property. What can the city do if the disgruntled owner absolutely refuses to sell? A. nothing B. acquire an easement C. expropriate it D. attach it

C. expropriate it The Fifth Amendment allows the government to take private property for a public use that is sanctioned by a federal or state legislative body as long as the owner is 'Justly compensated" -- usually referring to fair market value. This is sometimes called expropriation. Attachment refers to a debtor's property held in custody. An easement might apply to hikers/bikers wanting to use the trail but would not allow the land to become part of the paved project.

Which of the following actions is a broker or licensed sales agent required to perform after signing a listing agreement? A. Communicate and cooperate with other brokers wishing to participate in the marketing of the listing. B. Maintain a listing file with a number given to the case in accordance with the specifications of the Texas Real Estate Commission C. Advertise the listing as soon as possible in local places D. Provide the seller a legible, signed, true, and correct copy of the listing

D. Provide the seller a legible, signed, true, and correct copy of the listing Upon obtaining a listing, the broker or licensee must provide the seller signing the listing with a legible, signed, true, and correct copy of the agreement.

In judging whether previous felony or misdemeanor offenses committed by a candidate for licensure would render the candidate incapable of acting on behalf of others with honesty, trustworthiness, and integrity, the commission may take into account all of the following pieces of evidence EXCEPT which one? · A. The candidate's age at the time the crime was committed B. The scope and substance of the candidate's criminal offenses C. Evidence of the candidate's rehabilitation and present fitness, including letters of recommendation from law enforcement and corrections personnel D. A comprehensive independent audit of the candidate's financial status to ensure suitability as a fiduciary

D. A comprehensive independent audit of the candidate's financial status to ensure suitability as a fiduciary Although the commission is not authorized to demand a comprehensive audit of the candidate's financial status, the commission may consider the following factors: the extent and nature of the person's past criminal activity; the age of the person at the time of the commission of the crime; the amount of time that has elapsed since the person's last criminal activity; the conduct and employment history of the person prior to and following the criminal activity; (5) evidence of the person's rehabilitation; and other evidence of the person's present fitness, including letters of recommendation from: prosecution, law enforcement, and correctional officers who prosecuted, arrested, or had custodial responsibility for the person; the sheriff and chief of police in the community where the person resides; and any other persons in contact with the convicted person.

A Texas broker may pay a commission to: A. Any unlicensed person for a referral B. An in-house employee of a principal C. A licensed attorney in Texas D. A foreign broker who doesn't negotiate in Texas

D. A foreign broker who doesn't negotiate in Texas Any licensed broker outside of Texas is considered a foreign broker and may be paid a referral tee out of your commission. Attorneys must also have a real estate license. In-house employees must have a license. Only licensed brokers in Texas can receive a real estate commission in Texas.

How soon following the closing of a transaction may a broker receive a commission check? a. 2 business days after the closing b. After the buyer makes the first mortgage payment c. As soon as the deed of trust is recorded d. After the transaction is completed and funded

D. After the transaction is completed and funded As soon as the transaction is closed and funded, the broker may receive a commission check.

Susan has listed the property at 123 Main St. The sellers have told her that the property has 2,000 sq. ft. Susan has verified the square footage and entered this information correctly into the MLS. Arthur, a license holder from another firm, shows the property to some buyer customers. He tells them that the property has 2,500 sq·. tt. Who is liable for this misrepresentation? A. Susan and her broker B. The seller, the listing broker and the selling broker C. The seller, listing broker and Susan, selling broker and Arthur D. Arthur and his broker

D. Arthur and his broker The parties responsible for the incorrect information would be liable. The listing agent/broker did nothing wrong in this instance.

By what date must the current year's real estate taxes be paid in order to avoid a penalty and interest on the taxes? A. By December 31 of the current year B. By September 15 of the current year C. By June 1 of the next year D. By January 31 of the next year

D. By January 31 of the next year To avoid having to pay a penalty and interest on taxes, property owners must remit the current year's real estate taxes in full by January 31 of the next year.

The intent of the Seller's Disclosure Notice is to do which of the following? A. Provide a limited warranty on the property on behalf of the agent B. Provide a limited warranty on the property on behalf of the seller C. Disclose any latent defects of which the seller is unaware but which might affect the market value of the house D. Disclose the material facts and the physical condition of a property.

D. Disclose the material facts and the physical condition of a property. The Seller's Disclosure Notice is a form completed by the seller, to the best of the seller's knowledge, indicating all known material facts, adverse conditions, defects, and needed repairs of a property. The notice does not constitute any type of warranty on behalf of the seller or agent. The seller should deliver the notice to the buyer by the date the purchase contract is executed or within an agreed upon time after. If the contract is executed before the seller provides the notice, then the buyer has seven days to terminate the contract, for any reason , after receiving the notice.

A licensed real estate sales agent is working at a small brokerage in San Antonio. Which of the following functions can she NOT perform without an agency agreement? A. Helping prospective buyers find the right ranch house in San Antonio B. Assisting prospective buyers in obtaining a loan for their desired house C. Preparing a contract for a transaction D. Holding monies for disbursement in escrow until closing

D. Holding monies for disbursement in escrow until closing To safeguard the client's interests, a broker must have a signed agency agreement stipulating the manner of disbursement of funds before they can accept escrow monies. However, licensees can assist clients in locating a property, preparing a contract or lease, or obtaining financing without executing a representation agreement.

A broker has recently listed a small, commercial building with strong rental income, and one of his sales agents, Ron, is interested in purchasing the property as an investment. Which of the following steps must Ron take? A. Appeal to the Texas Real Estate Commission for special permission to make an offer on the listing B. Ron is not eligible to make an offer; a sales agent cannot make an offer on a property listed by a current or recent sponsoring broker because of ethical concerns C. Find a new sponsoring broker in order to be eligible to make an offer D. Provide written notice to the owner, before signing a contract, that he is a licensed real estate sales agent

D. Provide written notice to the owner, before signing a contract, that he is a licensed real estate sales agent Before making an offer, Ron must let the owner know, in writing, that he is a licensed real estate sales agent. No change of employment or appeal to TREC is necessary, nor is it illegal for a sales agent to make an offer on a broker's listing.

Ralph and Jane Smith listed their house for sale with Jackson Realty on April 15. The termination date of the listing was specified as September 15, but the Smiths decided in July that they no longer wished to keep their house on the market. Which of the following would be applicable to their situation? A. The Smith's must appeal to the Texas Real Estate Commission for assistance in terminating the listing agreement prior to the date specified. B. The Smith's have the opportunity to cancel the listing agreement at any point and will not be subject to any penalties for choosing to terminate the listing early. C. The Smith's are bound by a contractual listing agreement and do not have the authority to terminate the listing early. D. In terminating the broker's authority and opportunity to sell the property, the Smith's may be responsible for some expenses in terminating the listing prior to the specified date.

D. In terminating the broker's authority and opportunity to sell the property, the Smith's may be responsible for some expenses in terminating the listing prior to the specified date. Since the broker or sales agent will have incurred expenses in an attempt to sell the Smith's property, the Smiths may be responsible for some expenses when they choose to terminate the agreement early and withdraw the broker's opportunity to sell the property.

A landlord of residential property must provide all of the following EXCEPT: A. Ensuring that the smoke detectors are functional when the unit is rented B. Providing keyless deadbolt locks for each unit C. Rekeying a unit with seven days of a new tenant occupying the unit D. Installing a burglar alarm system or other protective apparatus in a unit in a documented high-crime area when the occupant requests the protection.

D. Installing a burglar alarm system or other protective apparatus in a unit in a documented high-crime area when the occupant requests the protection. Landlords must rekey units within seven days of a new tenant taking occupancy, ensure that smoke detectors are functioning when the unit is rented, and providing keyless deadbolts, but an alarm system is not required.

Which of the following statements is true of an exclusive-right-to-sell listing agreement? A. The owner must commit to purchasing title insurance coverage B. Without the sales agent's and sponsoring broker's full names and license numbers, the agreement will be invalid and unenforceable C. Any such agreement must include a form for seller's property disclosure D. It must specify a definite termination date not subject to prior notice

D. It must specify a definite termination date not subject to prior notice The only requirement of an exclusive-right-to-sell listing agreement is that it must specify a definite termination date not subject to prior notice by either party.

A real estate sales agent has a policy of not charging a fee to prospective renters because she receives a commission from local landlords for each qualified rental. A renter engages the sales agent to help him find a suitable apartment. He is a successful banker who can afford a monthly rent of at least $1,500, but he is interested in viewing a unit for which the usual rent is only $900. May the sales agent inform the landlord that renter can afford a higher rent? A. Yes, but only if the sales agent does not suggest a specific minimum amount that the renter can afford B.Yes, because the sales agent loyalty is to the landlord who pays her commission C.No, because it is unlawful for the sales agent to become involved in rental price negotiations D. No, although the landlord pays the sales agent a fee, her loyalty is to the renter since he engaged her services

D. No, although the landlord pays the sales agent a fee, her loyalty is to the renter since he engaged her services The sales agent owes her loyalty, per statue, to the person who engages her services, not to the person who pays the fee.

Grant Parks, a general contractor, and his business partner Sam Davis, a licensed broker, decide to buy a rundown apartment building in downtown Houston for which Sam is the listing agent. The property has been on the market for over nine months and has not attracted any offers. Grant and Sam plan to rehab the building and seek a change in zoning to make it more marketable. Can Grant buy the property from the seller without his partnership with Sam being disclosed? A. No, Sam cannot be involved in owning a piece of property for which he was the listing agent within the past eighteen months B. Yes, in arranging for the sale, Sam is fulfilling his fiduciary obligations to the seller C. Yes, Grant can acquire the property without disclosing their plans because he is not a licensed realtor D. No, the seller should be informed of Grant's partnership with Sam

D. No, the seller should be informed of Grant's partnership with Sam Sam owes fiduciary duties such as loyalty, confidentiality, full disclosure, and reasonable care to the seller and he is obligated to disclose his relationship with the buyer to avoid any conflict of interests. A conflict of interest could be presumed if Sam, as the buyer's partner, is placing his own interests above the needs and interests of the seller is trying to negotiate a fair contract. An informed seller could make the choice to retain Sam as the listing agent or to employ a new agent. Without full disclosure, though, the seller may be unaware that his interests are not being fully represented. NOTE - Sam is a business partner of Grant's, so he has an interest in the business purchasing the property that must be disclosed to the seller.

When should a sales agent or broker present the "Seller's Disclosure of Property" to a buyer? A. Any time between acceptance of the offer and the closing date B. After a satisfactory inspection and appraisal are completed C. After the closing date D. Prior to, or within an agreed number of days of, preparing a written offer for a buyer

D. Prior to, or within an agreed number of days of, preparing a written offer for a buyer The buyer needs this information in order to make an informed offer, so the sales agent must share the "Seller's Disclosure of Property Condition" prior to preparing a written offer on a property or within an agreed number of days after the contract is signed (TREC NO. 20-14). If delivered after the contract is signed, a buyer can terminate the contract within 7 days or prior to closing, whichever happens first.

A license holder in violation of the TRELA has received a summons from the Texas Real Estate Commission that a hearing will be held regarding the possible revocation or suspension of his license. The license holder fails to respond to the summons. What will the Texas Real Estate Commission do? A. Schedule a hearing in the county court where the license holder practices real estate B. Schedule a hearing in the district court serving the license holder C. Schedule a hearing at the main office or business address of the license holder D. Schedule a hearing at the State Office of Administrative Hearings in Austin

D. Schedule a hearing at the State Office of Administrative Hearings in Austin The Texas Real Estate Commission will schedule a hearing at the State Office of Administrative Hearings in Austin.

A homeowner has just received a promotion that requires her to relocate to Little Rock, Arkansas within two months. She would like to have the proceeds from the sale of her house to finance her move. At the suggestion of her real estate sales agent, the house is listed as having an "assumable mortgage." What does this mean? A. The homeowner will sign a quit claim deed to the property, and the buyers will make monthly mortgage payments to them B. The homeowner will continue to make the mortgage payments and the buyer(s) will pay half of the total value of the property at closing and the other half of the total value through monthly mortgage payments to them C. That the buyers will assume liability for making monthly mortgage payments in their name D. That the buyers can assume the mortgage on its current terms, as long as the lender approves

D. That the buyers can assume the mortgage on its current terms, as long as the lender approves An assumable mortgage is an existing mortgage that can be taken over by the buyer on the same terms given to the original borrower. The property title is transferred to the buyer, who assumes liability for payment of an existing note secured by a mortgage against the property. Should the mortgage be foreclosed and the property sold for a lesser amount than that due, the buyer who has assumed and agreed to pay the debt secured by the mortgage is personally liable for the deficiency and the original borrower is exempt from liability. The lender must accept the transfer of liability for payment of the note in order for the original borrower to be released from liability. Also known as simple assumption.

Mortgage "discount" points only apply if which of the following conditions are met? A. The loan does not close and the buyer owes the lender for services rendered. B. The seller has agreed to pay 1% of the closing costs. C. The interest rate on the mortgage loan has been lowered by 2% for each point charged. D. The interest rate has been truly reduced for each point charged.

D. The interest rate has been truly reduced for each point charged. Mortgage "discount" points are paid at the closing either to maintain or lower the interest rate charged on the loan. Each point costs one percent (1%) of the loan amount (i.e., two points on a $250,000 mortgage would equal $5,000). The amount if interest reduced per point can va,y by lender.

What is required of a seller's agent who shows a property to a prospective buyer? A. The seller's sales agent must show the property without any commentary on the relationship with the seller. B. The seller's sales agent must enter a buyer's representation agreement with the prospective buyer. C. The seller's sales agent must advise the buyer to enter a buyer's representation agreement with a qualified licensee. D. The seller's sales agent must notify the prospective buyer, either verbally or in writing, of the relationship between the salesperson and the seller and the salesperson's duty to work for the best interests of the seller.

D. The seller's sales agent must notify the prospective buyer, either verbally or in writing, of the relationship between the salesperson and the seller and the salesperson's duty to work for the best interests of the seller. When a sales agent who is working for a seller agrees to show a property to a prospective buyer, the sales agent must inform the buyer that the buyer's interests will not be represented.

Which of the following statements about the Texas Real Estate Commission is false? A. Prospective real estate licensees must pass an examination given by an independent testing company. B. A qualified executive director oversees day-to-day operations of the commission. C.Real estate rules and regulations are created by the commission. D. The state association of REALTORS appoints the commission's members.

D. The state association of REALTORS appoints the commission's members. The governor, not the state association of REALTORS, is responsible for appointing members of the commission.

Marissa Pauls, licensed Texas real estate sales agent in Fort Worth, is browsing real estate websites when she views an ad placed by licensed sales agent Brock Jordan that promises bonus cash payments for client referrals. Brock's office is in Dallas, and Marissa has just met a young couple wishing to relocate to Dallas. Under the law, can Marissa receive cash payments for any referrals she makes to Brock? A. Yes, but she can only receive a payment of up to $50 for a referral B. No, cash payments are illegal; however, she could accept a tangible gift as reward for a referral C. No, payment for business referrals is illegal in the state of Texas D. Yes, because it is a business referral between two real estate licensees

D. Yes, because it is a business referral between two real estate licensees According to Texas laws, since Marissa is a licensee, she can accept a commission from Brock for any referrals; the amount of the commission is determined by Brock, and Marissa's sponsoring broker must consent to the commission. However, if an unlicensed individual receives a cash payment or a tangible gift valued at more than $50 as compensation for referring clients to an internet agent, both the individual and the agent providing compensation are in violation of the Texas Real Estate License Act. Additionally, because engaging in unlicensed real estate activity is considered a Class A misdemeanor, the unlicensed individual would be in violation of the Texas criminal law for making business referrals to the internet agent. when the broker decides to terminate his sponsorship of Ralph, it is incumbent upon him under Section 13 of the License Act to notify both Ralph and the commission immediately, in writing. When the commission receives the notice they'll place Ralph on inactive status (Sec. 1101.367}.

Brewster Realty has current agency agreements with the sellers of a property and Ms. Jones. Ms. Jones would like to make an offer on the property. Would this be legal? A. Yes, but only if the Sellers accept full responsibility for the broker's commission B. Yes, as long as the buyer appoints the broker and he/she remains a neutral intermediary in transaction negotiations C. No, such a transaction would put Brewster Realty in the position of becoming a dual agent, and the broker would not be able to fairly and honestly represent the interests of both parties D. Yes, the situation is permissible if Brewster Realty discloses the situation to both parties and receives written consent from both parties

D. Yes, the situation is permissible if Brewster Realty discloses the situation to both parties and receives written consent from both parties A brokerage can represent both the seller and the buyer in a transaction by appointing "intermediaries." An intermediary is an agent who negotiates the transaction between a buyer and a seller without full agency representation of either side.

Patty rents a storefront in downtown Arlington for her day spa, Boundless Beauty. She pays $1,500 a month in rent, plus a portion of the landlord's taxes, maintenance, and insurance (which fluctuate). What type of lease does Patty have? A. a sandwich lease B. a gross lease with stops C. a gross lease D. a net lease

D. a net lease Patty has a triple net lease because she pays a portion of all three of the landlord's usual operating costs (taxes, maintenance, and insurance) on a regular basis -- in addition to her monthly rent. A net lease is one that requires a tenant to contribute to some of the landlord's operating costs. Both types of leases are favorable for the landlord because they allow rising costs to be passed along to tenants. Net /eases can include caps on costs. A gross lease, in contrast, is most similar to the typical residential lease that stipulates a fixed monthly rent regardless of the landlord's fluctuating operating costs. A gross lease with stops is a lease that allows a landlord to pass along some operating costs when they reach a certain level.

Ash Mason owns a home with an expansive lawn in the Dallas suburbs and has decided to install _an in ground pool for recreational and health purposes. She has chosen non-slip pavers for the perimeter of the pool (to reduce risk of falls and, thereby, her liability as property owner) and plans to add a deck at one end of the pool for lounging. Which of the following factors should she consider most carefully in deciding whether or not to erect a fence around part or all of her backyard? A. her privacy B. potential that neighbors might seek an easement to use the pool C. aesthetics and how the fence might make the lawn look smaller D. possibility that the pool might be an attractive nuisance

D. possibility that the pool might be an attractive nuisance An unfenced swimming pool may be considered an attractive nuisance because it appeals to children but presents safety risks. Neighbors who deem the pool an attractive nuisance could bring a lawsuit to abate or remove the nuisance. Although fencing the yard might make it seem to appear smaller, the hazards of leaving it unfenced probably outweigh the benefits of having an unfenced landscape. While a neighbor might obtain an easement to cross Ash's property for a specific purpose, effectively preventing the erection of a fence in that area, the easement wouldn't apply to the use of the private pool.

An estate that is owned by three siblings with no rights of survivorship is an example of which of the fo llowing? A. joint tenancy B. tenancy by the entirety C. fee simple estate D. tenancy in common

D. tenancy in common Tenancy in common is ownership by two or more people with an undivided interest and no right of survivorship; in the case of one owner's death, his or her share in the ownership passes to heirs. In contrast, joint tenancy occurs when two or more people share the ownership of a property with right of survivorship passing to the remaining joint tenant(s) on the death of one or more owners. Tenancy by the entirety is a special case, available in only certain states, that applies to married couples and provides for right of survivorship. Fee simple estate is the simplest form of ownership and indicates absolute ownership, usually in regards to a property for which the owner holds an undivided title to the land on which the property is located.

What happens if I renew timely and request active status but do not complete my MCE? A. you will be required to pay an additional $20 deferral fee and complete the MCE within 60 days of the renewed license. B. you will be required to pay an additional $200 deferral fee and complete the MCE within 30 days of the renewed license. C. you will be required to pay an additional $250 deferral fee and complete the MCE within 30 days of the renewed license. D. you will be required to pay an additional $200 deferral fee and complete the MCE within 60 days of the renewed license.

D. you will be required to pay an additional $200 deferral fee and complete the MCE within 60 days of the renewed license. If you renew your license on an ACTIVE status without first completing MCE, you will be required to pay an additional $200 deferral fee and complete the MCE within 60 days of the renewed license. Your license will remain active during this time.

What is the minimum required number of witnesses who must sign in the presence of the person writing a will? A. 3 B. 4 C. 1 D. 2

D.2 Two witnesses are required to sign in the presence of the person writing the will.