Principles of Real Estate I The CE Shop

A person performing real estate activities under the judgment or order of a court, such as a trustee in a bankruptcy, is _______.

An exception to the real estate licensing requirement

The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?

$21,780

A parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what's the list price for this parcel? Round to 10ths of an acre for your calculation.

$763,560 Area = length × width. One mile = 5,280 feet. The area of this parcel is 7,920,000 s.f. ([5,280 ÷ 2] × 3,000). One acre = 43,560 s.f. The parcel is 181.8 acres (7,920,000 ÷ 43,560). So, the list price is $763,560 ($4,200 × 181.8).

Which of the following is a true statement about the MLS and sellers?

* It's rare for sellers to decline advertising their property on the MLS. For most sellers, listing on the MLS is not cost effective. It's rare for sellers to decline advertising their property on the MLS. Most sellers dislike advertising their property on an MLS. Sellers are required to list their properties on the MLS if they're working with a real estate licensee.

There are ______ members of the Education Standards Advisory Committee.

12

Which of the following provides an example of a universal agent?

A court-appointed guardian

In Texas, it is legal for licensed real estate brokers to rebate commissions to ______.

A party to a transaction

Who is responsible for funding the Real Estate Recovery Trust Account?

All real estate license and certificate holders

Which of the following is an example of illegal market allocation?

Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half. Acme Realty and Hawthorne Realty Group agree to divide the city in half, each working its own half. Acme Realty and Hawthorne Realty Group each discuss with their licensees where the most lucrative deals can be found. Acme Realty and Hawthorne Realty Group each try to win the million-dollar listings. Acme Realty maps out a plan to dominate the eastern part of the city.

What type of laws are enacted by government agencies at the city, state, federal, or county levels such as the Federal Housing Administration, state real estate commissions, and local planning boards, to provide a way to implement and enforce laws?

Administrative laws and ordinances

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

Agreement

Which of the following statements related to condominiums and surveys is true?

All states require that land used for condominiums be surveyed by a registered land surveyor and that a plat map be prepared to show the elevations of the floor and ceiling boundaries, as well as the vertical boundaries of each unit.

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

Which one of these situations represents the illegal practice of redlining?

Based on the neighborhood's demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods.

Which of the following statements is true regarding community property rights and property ownership?

Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally.

Which of the following is the most serious consequence of treating a customer as a client?

Breaching your duty to your actual client

Which of the following describes a modular home?

Built using precise pieces and very energy efficient

Which of the following is NOT a good method for real estate companies to avoid penalties for making accidental calls to numbers on the DNC list?

Calling consumers on the DNC list for four weeks after they are added to the registry

Carmen is a new licensee who wants to drum up some business. There are a lot of high-end homes in her area, and she would love to sell one of them. She sees a few for sale signs and thinks perhaps she could convince the sellers to drop their current agent and allow her to represent them. Which of the following is true?

Carmen may not try to persuade sellers to break the contract they have with another licensee.

The process in which the government actually takes someone's property through the power of eminent domain is called __________.

Condemnation

You're holding an open house for Brenda. Walt and Mary walk in and ask you for a flyer that gives details about the property. At this point, what's your relationship with Walt and Mary?

Customers

A ______ is a point, surface, or line used as a reference for measuring elevation.

Datum

Which of the following may an owner place on the land when it's sold to limit the use of the property?

Deed restriction

Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.

Disposition

Evan has his home and cell number on the Do Not Call Registry. He received an unwanted solicitation call from a new real estate licensee in the city. He told the licensee his number is on the Do Not Call Registry and that he does not wish to do business with the licensee. A few days later, he got another unwanted call from the licensee. What federal act is the licensee possibly violating?

Do Not Call Implementation Act of 2003

Justin decided to build a privacy fence around his yard. He thought the fence was along the property line, but it turns out he built it one foot inside his neighbor's property. What will an inspector document as existing on the neighboring property?

Encroachment

To reactivate a license in inactive status, a sales agent in Texas must demonstrate completion of continuing education, certify that they have not engaged in activity requiring a license while inactive, pay a fee, and:

Establish a sponsorship relationship with a broker

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

Which act attempted to eliminate discrimination caused by blockbusting, steering, and redlining?

Fair Housing Act of 1968

Pur autre vie means:

For the life of another. This term comes into play with freehold estates of inheritance.

To what type of estate does pur autre vie apply?

Freehold estate

Which of these situations represents an illegal tie-in arrangement?

Grayson tells his seller client, Geneva, that he'll reduce the listing commission if Geneva uses MBS Title Services to close her transaction.

Brandon is interested in purchasing a piece of property, but before doing so, he'd like to verify the accuracy of the legal description. Which of these options will accomplish this?

Having a survey conducted

Not wanting to delay closing, Alice, the seller's agent, didn't disclose when the seller informed her a week before closing that the water heater needed to be replaced. Which fiduciary duty to the customer is Alice violating?

Honesty and fair dealing

Our Sanctuary is a senior living community. It can reject occupancy by families with young children under which of the following circumstances?

If all residents are required to be age 62 or above

Which physical characteristic of land addresses the concept that the geographic location of a piece of land is fixed and can never be changed?

Immobility

Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn't one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?

Improvements

Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?

In severalty

Which of the following is NOT recommended during a downcycle?

Increase your advertising.

Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?

Indestructibility

Cindy, a seller, tells the buyer of her home that the property will soon be part of the public water system. She makes this claim based on erroneous information the city supplied to her. The buyer relies upon this information and moves forward with the purchase of the home. This is an example of ______.

Innocent misrepresentation

Which of the following defines an income tax lien?

Involuntary lien placed against a property owner's property for due and unpaid taxes

Sam and Bridget are cousins who jointly own property. They are both named on the deed, they received title at the same time, they have the right of survivorship, and they each have equal interest and undivided rights of possession. What type of ownership do they have?

Joint tenancy

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 of the following best indicates that Harold is Kelsey's seller client?

Kelsey and Harold have a signed agency agreement.

To whom/which entity should a licensee who's been threatened with violence after refusing to violate fair housing law report the threat?

Law enforcement officials

A valid contract must include which of the following elements?

Legally competent parties

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

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

Which of the following is a specific lien filed by a supplier of products for the construction or improvement of a building?

Materialmen's

Five competing brokerage firms in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?

No intent needs to be proven

Which legal description method is regulated by the U.S. Department of the Interior's Bureau of Land Management?

Rectangular government survey

Real estate licensees are seldom guilty of blatant discrimination, but unintentional discrimination does exist. What's one example of unintentional discrimination?

Not showing homes in neighborhoods where the client may become a victim of racial bias

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

Eileen entered into a contract to buy Peter's home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the pre-closing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn't want the refrigerator that much anyway so she didn't make a fuss. This is an example of ______ of the contract.

Partial performance

Like other agreements, the property management agreement details the terms of "employment" between the ______ and the ______.

Property manager; owner

In the real estate business, whose primary role is to estimate property value based on established valuation guidelines?

Real estate appraiser

Which area of real estate law covers what's required of a licensee when performing real estate activities within the state, including license law, continuing education requirements, supervisory requirements, and prohibited conduct?

Real estate license law

The duty of ______ requires licensees to provide both clients and customers with quality, knowledgeable, and prudent service, and live up to the trust placed in them.

Reasonable skill and care

Anyone working for a property management company in Texas and who works for more than one owner is _______.

Required to have a minimum of a sales agent license to collect rent and perform other real estate functions

Apartment buildings are an example of what type of property?

Residential

Your clients, the Flanders, have two small children and are faced with a choice of two fairly comparable properties: a single-family, and a condo. What type of housing will they likely prefer, and why?

Single-family, for its flexibility

DeeAnna thought she purchased an investment property, but the seller refused to deliver the title to her. DeeAnna met all of her obligations per the written contract she and the seller signed. She decided to take the seller to court in an effort to force him to hand over the title. This is an example of ______.

Suing for specific performance

When there are more homes for sale in an area than there are buyers, it means what?

Supply exceeds demand.

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

Tenancy in common

How does the Office of Fair Housing and Equal Opportunity support real estate consumers?

The FHEO provides support for protected classes through the fair housing complaint process.

Niall is helping his seller client prepare a Bill of Sale. What amount should they write in for the sale price?

The amount that was negotiated with the buyer

All real estate licensees in Texas must abide by the Canons of Professional Ethics and Conduct enforced by ______.

The Texas Real Estate Commission

In Texas, whose responsibility is it to supervise associated licensees and review transactional paperwork and advertising?

The broker's

Although she was not part of writing up the sales contract between the seller and the buyer, Trisha believes she should be compensated for finding the buyer and shepherding the transaction to its conclusion. Her reason for making this assertion is likely based on ______.

The concept of procuring cause

Who has full ownership rights to a property, a party with a legal interest or an equitable interest in the property?

The party with a legal interest

Sally and Jake are ready to give up apartment living and buy a home. Which of the following is a true statement about their situation?

The price of homes in their area will depend on the market.

As a listing agent, when are you no longer obligated to present offers to your client?

The sale has closed.

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.

Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?

They must take the dispute to court.

A ______ is a piece of real estate owned by multiple unrelated individuals who, in addition to their ownership rights, each hold the right to occupy the dwelling unit based on the specific terms of a timeshare agreement, usually in one- to two-week intervals during the year.

Timeshare estate

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

What type of timeshare involves a buyer agreeing to pay a one-time purchase price and an annual maintenance fee, and in return selecting an accommodation time and having the right to use the unit for a specified number of years?

Vacation

When does a seller's market occur?

When supply is low and demand is high

Can a sales agent use an assumed business name in an advertisement?

Yes, the sales agent can use the assumed business name of their broker in an ad.

Jenner purchased his first home, to which he'll have access forever, as far as he knows. Jenner owns ______.

A freehold estate

Which of these landlord policies is discriminatory?

All residents must show a U.S. birth certificate as part of the application process.

If mold is found on a property and then professionally remediated, the licensed contractor who did the work will issue a certificate. If the property is sold, the buyer must be provided with copies of each such certificate issued for the property within the past five years. What is this certificate called?

Certificate of Mold Remediation

Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own?

Condominium

Clarisse, your client, is a traveling salesperson. What type of housing would she likely prefer?

Condominium, for its easy living

Which area of real estate law governs the use of contracts, explains the elements required to make a contract valid, and describes what happens if a breach of contract should occur?

Contract law

Sally and Jake haven't found any homes they can afford in their desired neighborhood. In fact, there are hardly any available at all. Those that go on the market usually end up in bidding wars, and sell for about twice the price of similar homes in neighborhoods 15 minutes away. What is the state of the market in Sally and Jake's desired neighborhood?

Demand exceeds supply.

Revealing all material facts to the client that are pertinent to the transaction describes which fiduciary duty?

Disclosure

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

Disclosure

Which of the following describes community property rights?

In some states, it's a form of property ownership for married couples with equal ownership and possession of any property acquired during the marriage.

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

Materialmen's lien

Datums and benchmarks are used for ______.

Measuring elevations

Eric is a new licensee who wants to specialize in manufacturing and large office buildings. He is probably interested in which type of specialization?

Mixed use

Which does the following describe? "A legally binding document that creates a lien or security interest on a property and gives the lender the right to foreclose in the event of buyer default."

Mortgage

What are the two primary types of income tax deductions homeowners may take for their primary residence?

Mortgage interest and property taxes

Jared, a seller, has found his own buyer and wants to terminate his exclusive right-to-sell listing agreement with Sue, his listing broker. Can he do so without penalty?

No, because the listing agreement is contractually binding.

When can specific performance be enforced under a sales contract?

One party didn't meet the terms of the contract in the specified timeframe, and is now being required to do exactly what was agreed to in the contract.

How long after the date of filing a license application does an applicant have to pass the real estate licensing examination in Texas?

One year

Which of the following best describes condominium ownership?

The space inside the unit itself belongs to the unit owner, and all owners also share in the ownership of the common elements.

Which of these might bring a charge of illegal steering against a licensee?

When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.