Final Real Estate Exam Study Set

Maximum referral fee for unlicensed persons

$50 gift card

What is a counteroffer?

A rejection of an offer and a presentation of new terms and/or conditions. It is not valid until both parties have signed it.

Who is responsible for filling effective date?

Broker

What is recession?

Cancellation of contract

Fannie, Freddie, Ginnie, Farmer What they do Government sponsored, government owned

Fannie (FNMA) - gov sponsored mortgage company - purchases from commercial or big banks - not insured by gov Freddie - gov sponsored mortgage company - purchases from smaller banks and lenders - not insured by gov Ginnie - gov sponsored mortgage company - extenion of HUD - FHA, VA, and USDA loans (GOV INSURED LOANS) Farmer - private, stockholder owned

Subordination Vs Subrogation

Subrogation - right to pursue someone else's claim Subordination - Subordination is the process of ranking home loans (mortgage, HELOC or home equity loan) by order of importance, lien position

TREC and TRELA

TREC enforces provisions of TRELA TRELA: passed by legislation to protect the public against unscrupulous brokers and salesmen

Disclosure required as agent (1) When acquiring property

immediate family (which includes siblings), members of your firm, or any entities in which you have any ownership interest more than 10%

Essential elements contract

- Consideration - Legal capacity - offer and acceptance - mutual agreement

Real Estate Settlement Procedures Act (RESPA)

- help consumers become better shoppers for settlement services (lender, inspector, attorney, tile, ect.) - eliminates kickbacks/referral fees

How much E&O insurance is required, when a designated broker has less than 10% interest in the LLC?

1 million

Texas Deceptive Trade Practices Consumer Protection Act (DTPA) 1. Allows recovery up to X times damage 2. does not apply to commercial properties > ___k 3. Has __ years to file complaint

1. 3 times 2. 500k 3. 2 years

Types of freehold estates

1. Fee simple absolute - complete and top ownership, not free from encumbrances 2. Fee simple defeasible - subject to a condition 3. Life estate - during their life

Rank all the types of deeds best to worst

1. General warranty deed - most protection 2. Special/Limited warranty deed - only protection during ownership 3. Bargain and sale deed - guarantees title but no guarantees of claims, usually foreclosure, tax sale, deceased persons estate 4. Quit claim deed - dont guarantee ANYTHING

Homestead exemption 1. Protects forced sale from creditors except ____ 2. if foreclosed for unpaid property taxes, owner has __ years to redeem property, or __ years for HOA 3. Max size urban/rural

1. mortgage, tax, mechanic/material men, and HOA 2. 2 years and 6 months 3. 10 acres, 200 acres

After how many days does the loan estimate expire

10

It's possible for the adjustment period on an adjustable rate mortgage (ARM) to have ranges, such as three or ______ years apart.

10

Fair Housing

1968 Prevents discrimination based on race, religion, national origin, sex, familial status

According to the TREC contract form, when must the title company deliver the title commitment to the buyer?

20 days from the receipt of the contract.

DTI ratios for conventional loans

28% (housing) and 36% (total debt)

Broker has how long to deposit money into trust account? Broker must keep record of this for __ years?

2nd business day after execution of the contract 4 years

Your lender is required by federal law to give you the standardized Closing Disclosure at least __ prior to closing.

3

DTI ratios for FHA loans

31% (housing) and 43% (total debt)

Individual has __ years from effective date of contract to file complaint to TREC

4, must be written and signed

Maximum fine for engaging in real estate without license and jail time?

4,000 and jail up to 1 year

Maximum payout TREC recovery trust fund

50,000

Your lender is required by federal law to give you the standardized Closing Disclosure at least

580-669

TREC is comprised of term length

6 gov appointed brokers and 3 general public 6 years

Homeowners over the age of ______ are eligible for the HECM program.

62

1 square mile = XXX acres Each township = XX SECTIONS

640 36

Maximum days seller or buyer lease back Seller's Temporary Lease Addendum TREC 15-3 and Buyer's Temporary Lease Addendum TREC 16-3

90 days

The duty of ______ that a licensee owes the client remains after the brokerage relationship terminates.

Accounting and confidentiality

Difference between: Addendum for Property Located Seaward of the Gulf Intracoastal Waterway Tidal Wave and Other Coastal Hazards Addendum

Addendum for Property Located Seaward of the Gulf Intracoastal Waterway - notifies buyers of the risks of purchasing coastal property

When is a contract valid after both parties sign?

After the offeror is notified of the acceptance

Types of less than freehold estates

Agreement with person and not the real estate 1. An estate for years/tenancy for years - fixed period of time, no notice is needed 2. Periodic lease - month to month, week to week, year to year, proper notice must be given 3. At sufferance - squatters 4. At will - end at any time by either party

Names for seller financing

Contract for deed land contract purchase-money mortgage

Debit vs credit

Debit - owed Credit - received

Truth in Lending Act (TILA) regulation Z

Discloses APR -the right of rescission allows a borrower to cancel a home equity loan, line of credit, or refinance with a new lender, other than with the current mortgagee, within three days of closing.

How many people in broker-lawyer committee/what do they do?

Draft and revise all contracts, DO NOT promulgate forms, TREC does that 6 members from commission, 6 members by state bar of texas, and 1 public member 6 year terms

Discrimination is prohibited in lending practices under which of these acts?

Equal credit opportunity act (ECOA)

Do inspectors have to use promulgated forms?

Just for residential inspections

Metes and bounds

Logical point of beginning, measuring distances and directions using landmarks

Mediation vs arbitration

Mediation helps guide parties vs arbitration tells parties what to do

Piggyback loans

Piggyback loans, also known as 80/10/10 loansSimply defined, a piggyback loan is the term used by mortgage lenders when a borrower takes out a first and second mortgage at the same time, often to avoid paying PMI, higher interest rates or avoid taking out a jumbo loan. The first mortgage will typically cover 80% of the purchase price as a traditional 30-year fixed rate mortgage without the usual private mortgage insurance. The second mortgage, the piggyback, will cover 10% of the home price, usually as a home equity line of credit (HELOC). The remaining 10% of the home price is a cash down payment by the borrower.

Types of easements

Right to use another persons property Easement in gross - not using to get to another property Easement by necessity - need to cross someones land Easement by prescription - happened long enough over time, result law suit, time varies by state Easement by abandonment

Types of agents

Special - typical buyer and seller General - perform acts associated with ongoing business aka PROPERTY MANAGER, ends when contract ends Universal - super hero agents and act on behalf of principal, power of attorney

Who handles fair housing complaints?

Texas workforce commission civil right division

Unilateral vs bilateral

Uni - one Bi - both

How long does a broker have to deposit earnest money in an escrow account?

Until the close of business of the second business day after the offer was acceptance was communicated

Alienation clause acceleration clause

also known as a due-on-sale clause, is a real estate agreement that requires a borrower to pay the remainder of their mortgage loan off immediately during the sale or transfer of a property title and before a new buyer can take ownership. due immediately

Avulsion vs accretion

avulsion - takes land away, pulling back of shoreline accretion - adds to land, growth or enlargement

Writ of execution

court order to sell something

Seller's Disclosure of Property Condition How many days to terminate after receiving disclosure

must be given to a buyer before he signs an offer to make that offer binding on the buyer- if the buyer does not have the disclosure before signing, he has 7 days to terminate his offer, after receiving the disclosure -disclosure required in most states, but not all (required in Texas)

Real Estate Recovery Fund

persons can receive up to 3 times the amount of money 400k 50k

Statue of Frauds

requires that all contracts that relate to the transfer of any interest in real estate must be in writing to be enforceable

Intestate Succession

the laws that govern how property passes when a person dies without a will or with a will that makes only a partial distribution of his/her property -courts will appoint an administrator to settle the estate -property will be distributed according to the Laws of Descent and Distribution -heirs will have Title by Descent

MUST use a TREC promulgated form unless

unless another contract form has been prepared and is REQUIRED by the owner of the property