Texas 30-Hour Principles of Real Estate I

What is the source of law for real estate license laws?

State laws and regulations

Which of the following is a recommended way for listing brokers to use the MLS?

To advertise their listings

Sasha's home has a current fair market value of $193,200. She has a first mortgage of $160,000 and second mortgage of $13,200. What is her current equity?

$20,000 Equity is the fair market value, minus all debts secured against the property.

A broker may not pay a commission or other compensation, directly or indirectly, to someone performing an act for which a license is required, unless that person is what?

A license holder in Texas or a licensed broker in another state A broker can only pay a commission to a licensed real estate professional. This person can be a sales agent or another broker. A broker can also pay another broker located outside of Texas. As a sales agent, you may only receive commission from your sponsoring broker.

What is assessed value?

A percentage of market value; also the amount of property value to which the tax rate is applied

Which of these statements about fair housing for people with disabilities is true?

A person with a disability should not be prevented from making reasonable accommodations and may also request accessibility accommodations. Refusing to allow a person with a disability to make reasonable accommodations is a prohibited act, as is refusing to make reasonable accessibility accommodations.

What is the starting point for any land surveyor who has been asked to perform a survey?

A review of existing historical records

Martha made an offer to buy Drake's home, and he accepted it. Under the terms of the agreement, Martha was supposed to make an earnest money deposit of $10,000, but she only put down $5,000. Drake accepted the lesser deposit, and the sale was ultimately finalized. This is an example of ______.

Accepting partial performance

The property management ______ cements the relationship between the property manager and the owner.

Agreement

Which statement describes a code of ethics?

Guidelines for conduct

What are improvements with regard to property?

Artificial attachments to land that include items such as fencing, buildings, and walkways

What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms?

Assignment Parties to a contract can assign their rights and obligations under the contract to a new party. This technique is most often used by wholesalers, and is generally allowable only if specifically agreed to in the contract.

An unrepresented ______ who's a party to a transaction is known as a principal.

Customer

Which fiduciary duty is missing: loyalty, reasonable skill and care, obedience, confidentiality, accounting, and ______?

Disclosure

The Canons of Professional Ethics and Conduct are divided into five sections: fidelity, integrity, competency, consumer information, and ______.

Discriminatory practices

Your client tells you to do something. It would violate fair housing laws, but it will earn you an amazing commission. What should you do?

Explain that you cannot do it, because it's a fair housing violation, and you could both get into trouble for doing what she's asked.

In the real estate business, whose primary role is to perform a visual inspection of a property's structure, systems, and site conditions?

Home inspector

Francis, an associate broker, promised his brother, Fred, who is unlicensed and not an attorney or trustee, that he would pay him a portion of his commission when he closed on the Maple Street transaction. Under what circumstances would this be legal?

If Fred were a party to the transaction, and this rebate was paid by Francis's broker

Which of the following statements is true about Texas trust accounts?

If they are interest bearing accounts, all interest must be paid to the parties to whom the funds are disbursed.

Which of the following best explains how the statute of frauds protects consumers?

It provides requirements that certain contracts have to meet to be legally enforceable.

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

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

To what type of estate does pur autre vie apply?

Life Estate Pur autre vie means for the life of another. This term comes into play with life estates.

Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time.

Limitations

A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, "You take the north side of town and I'll take the south, so we aren't stepping on each other's toes." You stop their conversation to tell them they're committing an antitrust violation. Which one is it?

Market allocation

Datums and benchmarks are used for ______.

Measuring elevations

Which legal description method uses compass headings and directions?

Metes and bounds

The income tax benefits of owning a primary residence include deductions for property taxes and __________?

Mortgage interest

Anna and Cindy entered a contract to buy Jake's home. However, at the last minute, Cindy had a change of heart and wanted out of the deal. Anna asked another friend, Sally, if she wanted to take Cindy's place as a co-buyer of Jake's home. Everyone agreed to the substitution of Sally for Cindy on the contract. Of what is this an example?

Novation

Under what conditions can a licensee contact sellers who are under an exclusive listing agreement with another agent?

Only to arrange a showing to a buyer

What type of listing agreement provides the sellers with the opportunity to enter into listing contracts with multiple agents and still reserve the right to sell the property themselves, owing no commission?

Open listing

Which of the following actions, when performed by a Texas licensee, violates the Canons of Professional Ethics and Conduct - Integrity?

Preparing a written agreement that falsely states a purchase price Written agreements should accurately state parties to the transaction and details of the transaction, such as purchase price.

Identify the ways in which the homestead law protects Texas residents.

Protects against foreclosure by general creditors The homestead law protects homeowners from forced sale by general creditors, and provides right of occupancy for the surviving spouse, unmarried children and children under 18 years of age. It also requires spouses to sign any documents that convey or encumber the homestead property.

If an applicant for a real estate license in Texas receives a written notice of denial from the Texas Real Estate Commission, the applicant may accept the denial or:

Request a hearing in writing within 30 days of the notice

Which of the following would be something that could be improved by using funds from a special assessment tax?

Road repaving Special assessment taxes are used for improvements that would benefit the community, like road repaving, and not for a particular property owner.

In which form of co-ownership is a person's ownership inheritable?

Tenancy in common With tenancy in common, if one owner dies, that person's ownership is inheritable. It doesn't automatically pass to the other owners as it would with joint tenancy.

______ enforces the Canons of Professional Ethics and Conduct in Texas.

The Texas Real Estate Commission

hich of the following is an advantage of a contract for deed arrangement for the buyer?

The buyer doesn't have to have the money to pay the purchase price all at once.

A family of four, with children ages six and nine, is denied the opportunity to view an available unit in housing intended for older persons. Which of the following statements is true?

The federal Fair Housing Act allows an exemption for communities that are designed and operated for older persons.

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 If the party doesn't have legal capacity and enters into a contract anyway, the contract is voidable by the party lacking legal capacity. So an adult can't hold a minor to a contract; however, the minor can hold the adult to the contract.

In Texas, the commission is responsible for preparing information outlining its purpose and duties. It must then make this information available to whom?

The public Under TRELA, the commission has a responsibility to prepare information outlining its duties and powers for the public interest, and then make this information available to the public.

When state and federal laws differ, as they sometimes do with fair housing and/or human rights, which of these statements is true?

The state law may not remove rights granted to citizens under the federal law.

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.

How do licensees create implied agency?

Through the parties' actions

Which one of the following is a true statement?

Topography determines how the land can be used and where utilities and dwellings can be located.

A lot measuring 108,900 square feet is for sale. How many acres is this?

Two-and-a-half

Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?

Voidable

The ADA was established, among other reasons, to ensure that people with disabilities have access to the same locations as those without disabilities. The ADA creates a set of standards that designers and builders must follow in which circumstance?

When building new or altering older facilities

When does a buyer's market occur?

When supply is high and demand is low

Can an applicant for a real estate license in Texas apply again if their application is denied by the Texas Real Estate Commission?

Yes, the applicant can submit an application two years after the date of the denial

When both supply and demand increase, what does price do?

stays the same