TX 30 Hour Principles of Real Estate I Exam Questions

blockbusting

Any attempt to convince property owners that property values are set to decline or sales will be difficult because of a specific protected group moving into the area

Which of the following is included in HMDA data?

Census tract information

Where can an agent report an antitrust violation?

Citizens Complaint Center of the DOJ's Antitrust Division

Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?

Civil Rights Act of 1866

Which of the following best describes a net listing?

The seller specifies a desired price for the property and agrees to pay the broker any amount received that's more than that price.

Jonas recently sold a house to his friend Josh's parents. Because his friend Josh referred Jonas as the broker for their real estate transaction, Josh wanted to repay the favor by paying Josh a portion of his commission check. Doing so would violate TRELA. What is the maximum administrative penalty Jonas could be fined for this illegal act?

Up to a $5,000 fine

Net listings are...

prohibited in several states, and there's no guarantee of commission

Unilateral Contract

promise in exchange for an act

In what year was the Americans with Disabilities Act made law?

1990

Which of these statements best represents what happens after a federal fair housing complaint is made?

A fair housing specialist will review the complaint.

Which of the following defines the term 'lis pendens'?

A legal notice that a lawsuit is pending that affects the title of a property

Which of the following best describes a contract for a deed?

A legally binding, written contract between a property buyer and the seller that allows the buyer to pay for the property in installments

In which of these situations would a listing be most likely to terminate due to listing agreement expiration?

A market with high inventory and low demand

What is a section?

A one-square-mile square formed in the use of the rectangular government survey system

Josephina is a broker in the same firm as Emilia. Josephina sticks to representing one client, because she knows how hard it is to not favor one party over another in the same transaction. Josephina is acting in which capacity?

A single agent

In calculating estate taxes, lifetime taxable gifts are __________ to net value, and the tax is computed.

Added

Gloria has an option to purchase the cottage she leases from her landlord. She can exercise the option within the next two years. To gain that right, Gloria paid the landlord $5,000. This is called ______.

An option fee

Avery has just completed her licensing exam. She has a gut feeling that she nailed it! When will she know the results of her examination?

As soon as she finishes her exam

Among other things, what should a listing in the MLS always include?

At least one photo

What type of involuntary lien is placed on a person's estate after their death if there are unpaid debts to creditors?

Deceased person's debt lien

Homestead exemptions ______ property taxes for all homeowners by protecting a certain amount of a Texas home's value from tax.

Decrease

Which of the following are deductible expenses for homeowners?

Discount points

A portion of Lance's property can be used by the local utility company to maintain its power lines. What is this an example of?

Easement

Kelo v. City of New London was a court case that focused on the power of ____________.

Eminent domain

Leon and Beth own 1/13 of a timeshare estate. They own weeks 20 and 21, and also weeks 40 and 41. These weeks are inheritable. What type of ownership is this?

Fee simple (Timeshares are fee simple estates)

Fred is buying Gary's property, which is listed with broker Sara. Who are the parties to the listing agreement?

Gary and Sara

Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?

Group boycotting

Rickie is a real estate licensee. She makes regular calls to customers and past clients to market her services. If someone she calls asks to be put on her internal "do not call" list, what is Rickie required to do?

Immediately place the customer's number on her internal do not call list, and avoid making unsolicited calls from that point forward

What's inverse condemnation?

It occurs when government actions deprive a property owner of the value of the property without offering just compensation.

Which of the following is a true statement about the Texas seller's disclosure of property condition law?

It requires sellers of single-family residential properties to disclose material facts to buyers.

Which one of the following statements is true about land trusts?

Land trusts generally continue for a specified term, such as 10, 20, or 30 years.

Which of the following forms is the listing agent responsible for having sellers complete and sign or initial before uploading the property information to the Internet?

MLS Profile Sheet

What type of home is built on a permanent chassis to ensure transportability?

Manufactured home

Which type of antitrust violation occurs when real estate firms agree to divide their market so they don't compete with one another?

Market allocation

Nate represents Elena in the purchase of a house. Katherine represents the seller, Timothy. Which of the following statements accurately reflects the agency duties owed?

Nate owes Timothy the duty of disclosure.

Marlee wants to specialize in the sale, purchase, and lease of easements in Texas. Is she required to get her real estate license?

No, but she will need to get her certificate of registration.

How many members of the ESAC committee are public, non-licensee members

One

A Texas applicant must provide two forms of identification at the testing center. What types of ID are acceptable?

One picture ID and one with your signature

What is the length of the statute of limitations to file a fair housing complaint with HUD?

One year

Which of the following expenses of home ownership may be a tax deduction?

Prepaid interest

TREC does NOT have the right to do which of the following?

Prohibit a license holder from using a contract that has been drafted by the property owner's attorney.

Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?

Rectangular government survey

CAN-SPAM Act of 2003

Regulates the distribution and content of unsolicited commercial e-mail

In a contract, consideration is the giving of ______.

Something of value in exchange for something of value

The ESAC makes recommendations to which agency?

Texas Real Estate Commission

What government agency handles ECOA complaints?

The Consumer Financial Protection Bureau

Which of the following is a possible outcome if a brokerage is found guilty of violating antitrust law?

The brokerage may have to undergo court-ordered supervision for up to 10 years.

Which of the following states that, in certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract?

The parol evidence rule

If a party to a contract lacks legal capacity but enters into a contract anyway, which party may void the contract?

The party lacking legal capacity

Agency may be legally terminated in which of the following ways?

The principal broker becomes incapacitated.

Which of the following conditions would cause a Texas sales agent's license to become immediately inactive?

The sales agent's sponsoring broker has his license revoked

A landlord with a strict "no pets" policy won't rent to a woman who uses a service animal to assist with her epilepsy. Which of the following is a true statement about this situation?

This is discrimination based on disability.

Under the Texas anti-spam law, businesses have ______ days to remove a consumer's email address from their mailing list.

Three

How many forms of ID are required when appearing for your Texas licensing exam?

Two

As a court-appointed guardian, Marion serves as which type of agent?

Universal

The statute of frauds states that if a contract transferring ownership of real property is not in writing it is __________.

Void

discount points

some lenders offer interest rate discounts as incentives

Bilateral Contract

A promise made in exchange for another promise

Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.

Accepting liquidated damages

Although Ophelia hasn't signed a buyer agency agreement with Randall, she continues to ask him to show her homes, and Randall does. What type of agency is this considered?

Agency by ratification

In the rectangular government survey system, what is a base line?

An east-west line used as a reference point

A new business moves into town, significantly increasing the availability of good paying jobs. How is this likely to affect the town's housing market?

Demand will go up, creating a seller's market.

Someone whose license has been expired for between 91 days and six months may renew the license by paying TREC a fee. How much is the renewal fee in these instances?

Double the regular required renewal fee

Which of the following is used to provide documented proof that buildings and improvements are properly raised to minimize flood damage?

Elevation certificate

Which of the following is a leasehold estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other?

Estate at will

What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person's heirs?

Estate/inheritance lien

Niche Marketing

Focusing on a segment of the real estate market with the intention of minimizing and perhaps even eliminating the competition

Texas broker Clark has grown sick of the assumed business name he's been using for the past few years. What, if anything, must Clark do if he's decided to stop using it?

He must notify the commission in writing by the 10th day after the date the broker stops using the assumed business name.

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

Joint tenancy

Which ownership type is defined by four unities: time, title, interest, and possession?

Joint tenancy

Which type of lien is filed by a supplier of products that were used in construction or improvement of a property?

Materialmen's lien

Licensee Cheryl has included a picture of a local church within a posting she just listed on the MLS. She also noted the home's proximity to the church in the description. Is this allowed?

No, because Cheryl is showing preference toward a religious group.

Which agency is charged with enforcing fair housing laws and holding all parties accountable for compliance with these laws and regulations?

Office of Fair Housing and Equal Opportunity

Which of the following is a charge you would pay to your lender to arrange the financing for your home loan?

Origination fee

Ginnie allowed her real estate license to expire in the past six months, because she was uncertain if she wanted to continue working as a real estate professional in Texas. She has recently decided that she does not want to give up on her dream of building a real estate empire. She has come to terms with having to retake the state exam, but is worried about taking the 180-hour pre-licensing course again. Will she be required to retake her pre-licensing courses?

Perhaps. This is only necessary if the required hours have changed.

Hal and Sara own a 212-acre farm. Their property is landlocked, but they have permitted water rights to use the stream located six miles away for irrigation purposes. What kind of water rights do they hold?

Prior appropriation

Homeowner Shaun loves DIY projects and decided to build some bookshelves for his home office. He bolted the shelves to the wall and installed trim around them so they became an integral part of the room. When he sells his home, the bookshelves will be considered ______.

Real property because of the method of annexation

Lewis and Elliot started a real estate investment business together. After much discussion with their attorney, they decided to incorporate, but in such a way that they are treated like a partnership and don't have to pay corporate taxes. What form of business do they have?

Subchapter S corporation

In Texas, which of the following is a true statement about sub/surface rights?

Surface rights and sub-surface rights can be sold separately.

If a Texas licensee is found guilty of a fair housing violation, the _____________could also award monetary damages to the complainant.

TWCCRD

Limited liability companies and limited liability partnerships are favorable forms of business because ______.

They don't require a general partner.

A living trust differs from a testamentary trust in that a living trust is established to convey property as well as to ______.

Transfer ownership before death and avoid probate

Which of the following is an example of price fixing?

Two brokerages determine a standard commission rate.

When does a buyer's market occur?

When supply is high and demand is low

Marissa, a new licensee, has some questions. Which of the following questions can the association of REALTORS® in her state help her answer?

Where can I go to find some marketing data on my area so I can advertise more effectively?

Novation is...

the substitution of one or more of the parties to a contract, creating a new contract.

Assignment of a contract is...

the substitution of one party for another, with the original party still being obligated under the terms of the contract.

Which one of the following statements is true about specializing in a specific type of property transaction?

Both brokers and sales agents may specialize in one or more types of property.

Which of the following statements about independent contractors and taxes is true?

Brokers don't withhold income or Social Security taxes for independent contractors.

Carl is a sales agent who works under the supervision of a broker. Which of the following is true?

Carl can be either an employee or an independent contractor.

Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student's mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?

If the neighbor and the student are content to uphold their agreement, the fact that it's not legally binding doesn't matter.

First Baptist Church in Houston owns two apartments next door to the church, which used to be housing for its ministerial staff. It does not rent to non-Baptists. Is this legal in Texas?

Yes, as long as it does not discriminate based on race, color, or national origin.

Is a license holder required to disclose information surrounding a death at a property if that death were a result of a defect on the property?

Yes. If a death occurred because of a defect on the property, a licensee must disclose this information when listing or selling that property.

Vanessa is a sales agent who must renew her license in two months. Unfortunately, she has put off taking her continued education courses, and now there is no possible way for her to complete the required 18 hours prior to renewal. Does she have any other options?

Yes. Vanessa can defer her continued education requirements, but she must take them and renew her license before the 60th day from the date her license expired.

Anastasia wants to get her real estate license and bring together buyers and sellers. This means she will be involved in which of the following?

Brokerage

Over which of the following areas do local authorities have no police power?

Deed restrictions

In which type of listing agreement does a seller contract with one listing agent but reserve the right to locate the buyer and only pay the listing agent if an agent locates the buyer?

Exclusive agency

the term used to describe a specific, divided portion of the property that's created as part of a co-ownership termination

Partition

In order to qualify as one of the ______ real estate professional members of the ESAC, you must have been actively engaged in the practice of real estate for five years prior to appointment.

Seven

TREC rejected Baylee's sales agent application. She received a written notice about the rejection, but believes it rejected her application unfairly. What recourse does she have, if any?

She can file a notice for a hearing within 30 days.