Texas Real Estate Principles 1 (Allied)

A land survey should always show the:

--all of the choices apply. extent of any mismatch deed record lines occupied lines Hint: A land survey should always show the occupied lines, the deed record lines, and the extent of any mismatch. Significant mismatches suggest potential claims of ownership by senior right or adverse possession or suggest a change in a boundary line by mutual agreement and acquiescence.

What is a fee estate that contains a condition that if violated, could lead to the termination of the estate?

A fee simple subject to condition subsequent

What duty owed to a client requires agents to remit a client's funds into a trust or escrow account according to the terms of an agreement?

Accounting

Which of the following is exempt from TRELA licensing requirements?

An attorney

A person who purposely violates or fails to comply with The Real Estate License Act commits an offense, which is a:

Class A misdemeanor.

__________ refers to the body of law based on custom and judicial precedent rather than on codified statutes.

Common law

Homestead protection lasts __________ until there is solid proof of transfer, abandonment, or death.

indefinitely Hint: Homestead protection lasts indefinitely until there is solid proof of transfer, abandonment, or death. Generally, both spouses must join in any transaction to transfer or encumber a homestead.

TREC regulates all of the following, except:

mobile home dealerships.

Any form of direct communication between a sales agent and a customer is:

personal selling.

Regarding complaints of ethics violations, typical disciplinary actions include:

probation. reprimand. fine. ---all of the choices apply.

The Fair Housing Act protects against discrimination based on all of the following, except:

socioeconomic status.

Texas laws and regulations that address discrimination in housing complement the:

Fair Housing Act.

__________ is a cause that is legally sufficient to result in liability.

Producing cause

What secures the listing broker's commission if the owner personally sells the property to any person whose attention was called to the property during the listing?

Protection Period Clause

The __________ is a statute that is administered and enforced by the Texas Real Estate Commission (TREC), which is a state agency.

Real Estate License Act

The __________ serves to protect the public in real estate transactions involving a real estate license holder.

Real Estate License Act

What is the practice of designating certain neighborhoods as areas where loans will not be made?

Redlining

__________ is issued by the Bureau of Consumer Financial Protection to implement the provisions of the Equal Credit Opportunity Act.

Regulation B

Which rule established the responsibilities of the Education Standards Advisory Committee?

Rule §535.43

What occurs when a licensee is compensated without the full knowledge and consent of the parties in a real estate transaction?

Secret profit

__________ is written law enacted by state (or federal) legislative bodies.

Statutory law

Any person who wants to engage in the real estate business and act as a real estate broker or real estate sales agent within the state of Texas must obtain a license from the:

Texas Real Estate Commission.

What law prohibits discrimination based on race in all property transactions?

The 1866 Civil Rights Act

Regulations regarding Texas real estate agency representation are located in Section 1101 of the Texas Occupations Code known as:

The Real Estate License Act (TRELA).

Why must there be a sufficient legal description when testing the validity of a deed?

To reasonably locate the property during a transfer of title

What types of foreclosure are available under a deed of trust?

Trustee's sale and judicial foreclosure

The __________ is aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs and also requires the lender to state a maximum interest rate in variable rate contracts secured by a borrower's dwelling.

Truth in Lending Act

Usually, members who join a local Association of Realtors automatically become members of the Texas Association of:

both REALTORS® (TAR) and the National Association of REALTORS® (NAR).

An economic system in which most of the economy's resources are privately owned and managed is:

capitalism.

A fee charged by the brokerage that is based on a percentage of the property's sales price is a(n):

commission

The land benefiting from the creation of the easement is the:

dominant tenement.

Active sales agents and brokers may renew their licenses by submitting proof of completing __________ hours of continuing education courses.

18

Of the total amount of members, the Education Standards Advisory Committee has _____ members who are real estate instructors or owners of TREC-approved real estate schools.

4

A mile is equivalent to:

5,280 feet.

Of the total amount of members, the Education Standards Advisory Committee has _____ members with at least 5 years of active participation in practicing real estate

7

There are __________ protected classes under the Fair Housing Act.

7

What is a business organization that enters into a contract with other businesses for a fee in order to operate under the franchisor's name and guidance?

A franchise

In Texas, consumers' rights are protected by the __________ found starting in Section 17.41 of the Business and Commerce Code.

Deceptive Trade Practices and Consumer Protection Act

Which of the following statements is true regarding the Community Reinvestment Act?

Encourages regulated financial institutions to serve their immediate community's needs Requires that lenders lend to low to moderate income families for housing, small business, and farming Requires that lenders meet their local communities' needs first --All of the choices apply

Which of the following is not true with regard to establishing an agency relationship?

Ideally, the agency relationship should be stated in writing. It is standard practice to establish an agency with a listing agreement. It is standard practice to establish an agency with a buyer representation form. --Verbal agreements establishing an agency relationship are illegal

Which of the following is not a type of agent representation?

Intermediary --Arbiter Seller's agent Buyer's agent Hint: Agents must give prospective clients the IABS form to help them identify the types of representation—seller's agent, buyer's agent, intermediary, or no representation. Then consider whether you are acting as a single agent, an intermediary, or as an appointed licensee.

Which of the following is true regarding intermediary brokerage?

Intermediary brokerage provides brokers with a way to represent both parties to a transaction. Intermediary brokerage helps brokers avoid the numerous pitfalls of dual agency. TRELA does not allow a broker to act as a statutory dual agent. --All of the choices apply

Minerals in place are those minerals that have not been removed from the ground. As soon as they are brought to the surface, those minerals become:

It can have corporeal or incorporeal rights --Property can be real It is anything capable of private ownership Property cannot be personal

The Canons of Professional Ethics and Conduct are found in the ______________. Rule §531.19 of the Canons addresses discriminatory practices.

Texas Administrative Code

The __________ enacts statutes affecting the entire state, and city councils pass local laws affecting the residents of the city.

Texas Legislature

The Real Estate License Act (TRELA) is found in the:

Texas Occupations Code.

Which of the following is the client in a single agency relationship with regard to a real estate transaction?

The principal Hint: Every single agency relationship has a principal, an agent, and a third party who are bound together in a legal relationship, with all the duties and rights that go with that connection. In a real estate transaction, the principal is the client (seller, buyer, tenant, or landlord), the agent is the real estate broker, and the third party is the customer.

Which of the following statements is true regarding the real estate cycle?

The real estate cycle undergoes similar phases and turning points as the business cycle. The cyclic nature of the real estate market allows economists to identify the turning points as they occur. --All of the choices apply

What is necessary prior to a broker acting as an intermediary in a real estate transaction?

Written disclosure to all parties

All of the following are true regarding the creation of an intermediary brokerage, except:

--the listing agreement does not address intermediary status. the buyer representation agreement addresses intermediary status. permission for intermediary status is needed from the buyer and seller. a written contract signed by the buyer and seller is mandatory. Hint: When creating an intermediary brokerage, a written contract, signed and agreed to by both the buyer and seller is mandatory. Permission for an intermediary relationship is addressed in the listing agreement and the buyer representation agreement. Each party has the option as to whether or not they want to allow intermediary status.

The person to whom a life estate is conveyed is known as the:

Life Tenant

Specific real estate markets have submarkets. __________ is the process of identifying and analyzing submarkets within these larger markets.

Market segmentation

Which of the following is the oldest method to describe land?

Metes and bounds system

__________ is personal property that can be seen, weighed, measured, felt, or perceived by the senses.

Tangible personal property

Which of the following is not one of the typical appurtenances to real property?

Utility and trade rights

All of the following are true regarding real estate sales associates, except:

a sales associate who has a sales agent license must be sponsored by a broker. --a broker who puts his or her license under a sponsoring broker is known as a sales associate. a person with a broker license may operate independently or put his or her license under a sponsoring broker. they are licensed sales agents sponsored by a broker.

Any form of communication by or on behalf of a license holder designed to attract the public to use real estate brokerage services is a(n):

advertisement

The rights inherent in the vertical place above ground level are:

air rights.

Which of the following is not a duty of TREC?

-- Creates state laws, statutes, and rules Cooperates with other state licensing jurisdictions Sets standards for schools that offer real estate and inspector courses for credit Implements continuing education requirements

Which of the following is a fundamental reason for requiring a land description and survey in a real estate transaction?

--All of the choices apply Relationship of occupied lines to recorded lines Relationship of the property to adjoining properties Existence of the property Hint: There are three fundamental reasons for requiring a land description and survey in a real estate transaction: 1) existence of the property, 2) relationship of the property to adjoining properties, and 3) relationship of occupied lines to recorded lines.

Which of the following statements is true regarding NAR and TAR?

--All of the choices apply. A member of NAR must follow NAR's rules and the Code of Ethics. TAR performs the same function as NAR, but on the state level. A member of NAR is a REALTOR®.

Which of the following is true when writing the legal description in a contract?

--All of the choices apply. To sell real property in Texas, the contract must have a legal description of the property to be conveyed. An inaccuracy in the legal description can create possible financial liability on the part of the owner and broker.

Which of the following is not true regarding a sponsorship agreement?

--Texas law requires a written sponsorship agreement. A real estate broker may enter into a written sponsorship agreement. A broker may retain a licensee as a self-employed independent contractor. To meet IRS requirements, real estate brokers have independent contractor agreements with their sales agents and associate brokers to avoid the taxes associated with an employee

Land surveys are used in the construction process in order to assess:

--all of the choices apply. elevations for flood insurance for home sites. boundaries for properties. topography for engineering designs.

In addition to the legal requirements, to be eligible to get a Texas real estate sales agent or broker license, the person must also:

--all of the choices apply. have integrity be trustworthy. be honest.

The Education Standards Advisory Committee is responsible for reviewing and revising:

--all of the choices apply. instructor certification requirements. course content requirements. curriculum standards.

Texas also licenses:

--all of the choices apply. real estate schools. residential service companies. real estate inspectors.

All of the following are protected classes under the Texas Fair Housing Act, except:

--socioeconomic status. race. disability. color.

Which promulgated form below is used if the seller reserves all or a portion of the Mineral Estate?

Addendum for Reservation of Oil, Gas, and Other Minerals Hint: The Texas Real Estate Commission promulgated the Addendum for Reservation of Oil, Gas, and Other Minerals to be used if the seller reserves all or a portion of the Mineral Estate.

Which pair below represents the types of disclosures required by The Real Estate License Act?

Representation and agency

James, a real estate sales agent, caused panic selling when he told people that the value in their neighborhood was declining because the majority of the homes had recently been purchased by minorities. What James did was illegal and is called:

blockbusting

Persuading an owner to sell housing by saying that people of a particular race are moving into the neighborhood is an example of:

blockbusting.

Intangible personal property includes:

bonds. --all of the choices apply. certificate of deposit. stock.

All of the following are ways to terminate a brokerage agreement, except:

breach of contract. agreement of the parties. --incomplete performance. impossibility of performance.

An analysis of recent sales and listings to help potential sellers determine an appropriate listing price for their property is a(n):

comparative market analysis.

The relationship between demand and supply makes the real estate markets:

cyclical

A legal description should be written in such a way that any person in the future would be able to understand the __________, with reasonable certainty.

description and determine the property location

All of the following are examples of horizontal arrangements between business competitors that conflict with antitrust laws, except:

dividing the market. boycotting. price fixing. --redlining.

Annual crops cultivated by tenant farmers and sharecroppers are:

emblements

Anything that burdens or affects the use or the title of the property is a(n):

encumbrance.

The CRA requires that lenders meet their local communities' needs first by lending to low to moderate income families for:

farming. housing. small business. --all of the choices apply.

A __________ is authorized by a principal to perform all tasks associated with the continued operation of a particular project.

general agent

The water beneath the surface of the land that fills the spaces and cavities between the rocks and soil is:

groundwater

From an ownership perspective, in Texas, groundwater:

is the private property of the owner of the overlying land.

In an effort to distribute its land to small-scale settlers rather than land speculators, the State of Texas encouraged family settlement through:

low land prices. land grants. cheap permitting. --all of the choices apply. Hint: Hoping to distribute its land to small-scale settlers rather than land speculators, the State of Texas encouraged family settlement through land grants and other incentives, including low land prices and cheap permitting. By 1900, Texas had disposed of about 216,000,000 acres of public land, placing it into private ownership.

The most common datum used in the United States is:

mean sea level

Trust funds may not be __________ with funds belonging to the broker.

mixed

When a person or group has exclusive control over a product or service within a given region it is called a(n):

monopoly

Trees, shrubs, and flowers are examples of:

natural attachments. Hint: Natural attachments are growing plants attached by their roots, such as trees, shrubs, and flowers. The two types of natural attachments are fructus naturales and fructus industriales.

All of the following are basic tenancies recognized by law, except:

periodic tenancy. tenancy at sufferance. --life tenancy. tenancy for years. Hint: There are four basic tenancies recognized by the law today—periodic tenancy, tenancy for years, tenancy at sufferance, and a tenancy at will. They differ in how they are initiated, how they are terminated, and in the relationship between the lessor and lessee during the term of each tenancy.

An easement given to an owner of land who adversely and openly crosses another owner's land uninterrupted over a certain amount of time is an easement by:

prescription.

The collaboration of one or more persons setting a fixed price for goods or services to remove the free market's ability to influence prices is known as:

price fixing.

The most common talien is for delinquent:

property taxes.

A(n) __________ is a rule issued by an administrative agency to enforce or amplify a statute.

regulation

All of the following are responsibilities of the Texas Real Estate Commission, except:

setting standards for real estate schools. issuing licenses and certificates of registration. implementing continuing education requirements. --maintaining an extensive database of real property sales.

A typical clause in an independent contractor agreement states that the __________ owns all listing agreements.

sponsoring broker

The absolute right of the property owner to have his or her land supported from beneath its surface is:

subjacent support.

A(n) __________ is any organization that is legally able to levy and collect a tax.

taxing authority

A __________ is a voluntary nonprofit organization of independent and competing business units engaged in the same industry or trade, formed to help solve industry problems, promote progress, and enhance service.

trade association