Real Estate Exam Prep 2018 version TEST

Excess money at a foreclosure sale goes to a. the borrower b. the lender c. the courts d. the trustee

a. the borrower

An agent working with immigrant buyer must be careful not to what? a. because the buyer might not speak english well. b. because the agen may not speak the buyers language c. not to steer the buyer to a neighborhood based on language they speak d. because the buyer might want to use contracts in their own language

c. not to steer the buyer to a neighborhood based on language they speak

It has been found that mold can develop due to a. installing gutter on the house b. using blown in insulation c. air tight windows and doors found in newer construction d. using recycled building material

c. air tight windows and doors found in newer construction

A license holder has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statement about media in real estate is NOT true? a. an agent advertising client property on social media needs written permission from client b. an agent advertising on social media must comply with all the same law and rule for print and broadcast advertising c. an agent with permission to advertise a property on social media does not have to worry about protecting confidential information about the client d. the use of social media in real estate advertising is growing

c. an agent with permission to advertise a property on social media does not have to worry about protecting confidential information about the client

Which of the following statement about an easement is true? a. an easement is a benefit to the servant property owner b. an easement is an encroachment c. an easement is a benefit to the dominant property owner d. an easement in gross belongs to or pass it with the land.

c. an easement is a benefit to the dominant property owner

An individual is exempt from real estate licensure in Texas if the individual is doing which of the followings, a. running an apartment locator service for several different complex b. listing real estate for sale, rent, exchange or trade c. being an onsite manager of apartment complex d. procuring prospects for rental of real estate

c. being an onsite manager of apartment complex

Who must be notified to take money out of the trust account in a real estate transaction? a. buyer b. seller c. both buyer and seller d. all parties associated with the transaction

c. both buyer and seller

Which field is most undesirable neighbor? a. landfill b. greenfiedl c. brownfield d. blackfield

c. brownfield

A zoning ordinance would affect what kind of area? a. Buffer zone b. traffic at certain hours of the day c. concentration of housing in a residential area d. style and appearance of construction

c. concentration of housing in a residential area

Which covenant in a deed guarantees that the owners will not suffer or be disturbed by any claims on the property? a. the covenant of seizen b. covenant of against encumbrance c. covenant of quiet enjoyment d. covenant of warranty forever

c. covenant of quiet enjoyment

P, Q and R are joint tenants. P wants to sell the property but Q and R do not. What can P do? a . file and injunction against the other owner b. seek for write of execution c. file a suit for partition d. get a release

c. file a suit for partition

A property manager is hired and signs a management agreement with the owner. A this time the property manager is a. a special agent b. universal agent c. general agent d.limited agent

c. general agent

A father gives his son a life estate on a property. The son leases the property. The tenant dies. What happen to the property. a. it revert to the father b. it goes to the remainderman c. it goes back to the son until he dies. d. it goes to the son`s heir

c. it goes back to the son until he dies.

Your client will be able to qualify for financing for a property they wish to purchase in about six months. after they have had an opportunity to reduce their consumer debt. they have found a property that they would like to purchase now. What type of agreement can they enter into with a seller that will allow them to occupy the property now and purchase it within the six months? a. sale and lease back b. right of first refusal c. lease with option to buy d. graduated lease

c. lease with option to buy

A seller is attending the closing on his property. The title company has discovered an unsatisfied M&M lien on the property. What is most likely for the reason for M&M lien. a. workman on the property left tool behind b. unpaid personal property taxes c. plumbing work that was completed but never paid for d. a judgement

c. plumbing work that was completed but never paid for

A buyer has purchased a property and after closing the seller will continue to occupy the property. This is an example of? a. subletting b. assignment c. sale and leaseback d. ground lease

c. sale and leaseback

What kind loan have most negative impact to seller's credit score a. short sale b. foreclosure c. straight assumption d. assumption subject to

c. straight assumption

Ownership of the common area of condominiums is most likely to be a. joint tenancy b. tenancy entirety c. tenancy in common d. solo ownership

c. tenancy in common

A, B and C are joint tenants. C dies B sells his share to D. What type of ownership do A and D have? a. joint tenant b. tenant by entirety c. tenant in common d. tenant in severalty

c. tenant in common

An underage college student signs a lease then disclose his age to the landlord. What happen to the contract? a. the contract can be voided b. the contract is voided automatically c. the contract is voidable at the minor option

c. the contract is voidable at the minor option

A lead paint disclosure is required for all properties built before what year?

1978

What is maximum amount of time allowed for a victim to file a fair housing complain?j a. 4years b. 3 years c. 24months d. there is no time limit for filing a complaint

2 years (24months)

What are the 4 requirements criteria for real estate to have value?

Demand, Utility, Scarcity, Transferbility

If a person dies without a will who receives their estate? a. spouse and children b. sibling c. escheat to state d. parents

a. spouse and children

A condominium owner policy will most likely cover owner in what kind of case? a. someone drowns in the condominium pool b. there is a fire in the elevator c. a guest slip in the kitchen d. someone get hurts in the hall way

c. a guest slip in the kitchen

What type of mortgage loan would allow the property owner to borrow additional fund at the future date? a. HELOC b. ARM c. EPA d. VA

a. HELOC

What department of the government oversees the FHA insurance program? a. HUD b. CFPB c. EPA d. VA

a. HUD

Under what right can the government change property use from commercial to residential only? a. Police power b. Eminent domain c. Taxation d. Escheat

a. Police power

A property owner has a waterfront lot on a stream. He has the right to use the water from the stream. What is this right called? a. Riparian right b. Littoral c. apprpriative d. approariation

a. Riparian right

What VA should do before foreclosing? a. VA must be notified before the foreclosure b. the lender must have proof that the borrower received the foreclosure notice c. the lender must advertise the foreclosure in local newspaper d. no extra lender requirement for foreclosure of VA loan

a. VA must be notified before the foreclosure

Which of the following is personal property a. a lease b. a fixture c. an easement d. a freehold

a. a lease

Regulation Z applies to what kind of loan? a. all real estate loan b. $26,000 loan c. all luxury car loan d. real estate loan on residential property only

a. all real estate loan

Which of the group hires property manager ? a. an association b. corporation c. FIRREA d. NAR

a. an association

A man leaves his second wife a life estate in their home after which the property goes to his children from his first marriage. What are the children? a. are remainderman b. have fee simple determinable c. have a life estate d. have a dominant interest in the property

a. are remainderman

A broker is running short of fund to meet this months operating expense. He places earnest money deposit in his business account and use it to pay his rent. After his next closing he replaces client deposit in his trust account. What is broker is guilty for? a. conversion b. commingling c. not guilty for any crime d. fraud and embezzlement

a. conversion

An unlicensed assistant is hired to increase an agent's listing inventory. The assistant may a. create marketing flyers and distribute the flyer door to door b. create flyer and show properties to prospective buyers c. host an open house and write contract offer d. make calls soliciting business from expired listing

a. create marketing flyers and distribute the flyer door to door

Which of the following facts about a listed property must be disclosed? a. death due to the structural defects b. death due to the HIV c. suicide on the property d. a sex offender lives next door

a. death due to the structural defects

A licensed broker is advertising that he will perform a free appraisal if you contact him for a listing appointment. He is not in violation of the law. a. if he is a licensed appraiser b. since he is not charging anything for appraisal c. as long as the seller doesent intend to use the appraisal to secure financing d. as long as the property is used for residential purpose only

a. if he is a licensed appraiser

What is another name for contract for deed? a. installment contract b. real estate sales contract c. deed of trust d. non-conforming loan

a. installment contract or land contract

What is requirement of the CFPB? a. lender must provide borrower with LE from at the time of or within three business day of application b. lender must provide borrower with good faith estimate of closing cost c. lender must provide borrower CD form at the time of loan application or within three day of application d. the updated CD must be made available to the borrower at least one business day before closing

a. lender must provide borrower with LE from at the time of or within three business day of application

Accurate record keeping is responsible of all brokers. If a broker computer are stolen what steps could have been taken to protect records? a. offsite or cloud storage b. data encyption c. an alarm system d. an armed security guard

a. offsite or cloud storage

A landlord leased space in his new retail property to an inexperienced business person. Based on location and type of business. The landlord believes it will be a great success. What type of lease can he enter into with the tenant that will allow the landlord to benefit from the tenant success? a. percentage lease b. a net lease c. gross lease d. sale and lease back

a. percentage lease

General liability insurance will a. protect a company's asset if someone is injured on company property b. shield a broker for liability for the action of sales license holder he sponsors c. protect property damage caused by flooding d. replace E&O insurance if a broker is incorporated

a. protect a company's asset if someone is injured on company property

An investor has 15 rent house. He has hired an agent to lease the houses. When 75 year old man apply for the room what can owner do? a. refusing to show the house to anyone over 75 years old b.refusing to show the house to any unmarried pregnant woman c. refusing to show the house to any single parents with childnren d. refusing to show the house to any hispanic couple

a. refusing to show the house to anyone over 75 years old

A license is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the state department of transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of seller's property. What should the agent do? a. tell the seller and help the seller to void the contract with the buyer b. tell the seller and encourage the seller to complete the negotiated sale c. keep the information to himself d. tell the seller and convince the seller to speak with an attorney about voiding the contract

a. tell the seller and help the seller to void the contract with the buyer

A seller comes into the office to sign a contract. The seller is stambling and smells of alcohol. How do you proceed? a. tell the seller to leave and return at another time b. get them to sign the contract c. send them to an attorney d. write an addendum explaining the situation then get them to sign the contract and addendum

a. tell the seller to leave and return at another time

Tenant have signed a 3-year lease on a property. In the second year the owner dies and his heirs and inherit the property. They give the tenants notice to vocate, what happen to tenant? a. tenant can stay until end of the lease b. tenant have to move if the new owner give them 30day notice c. tenant must move immediately d. tenant can stay until new owner has them eviated.

a. tenant can stay until end of the lease

CERCLA is administered by who? a. the EPA b. the CFPB c. HUD d. the superfund

a. the EPA

A buyer's agent has accidentally forwarded confidential information about his buyer's financial background on the listing agent. What is buyer`s agent responsible for? a. the buyer's agent is guilty of negligence and the listing agent must disclose the information to seller b. the buyer agent is guilty of negligence and the listing agent must keep the information confidential c. the buyer agent is not guilty of anything because it was an accident and the listing agent must disclose it to the seller d. the buyer agent is not guilty of anything because it was accident and listing agent must keep information confidential

a. the buyer's agent is guilty of negligence and the listing agent must disclose the information to seller

A property manager notice that the building stucco need repair. He notified the landlord and recommend a contractor. The landlord uses the contractor who does not do a good job. The new stucco leaks and mold grows. The tenant becomes ill from the mold. Who is responsible? a. the landlord b. the property manager c. the contractor d. the tenant

a. the landlord

A condominium complex has liability insurance. This is least likely cover what what kind of case? a. unit owner carpet damage by a broke water pipe b. faulty equipment in the gym result in a injury to a resident c. a car accident in the parking lot hurts a visitor to complex d. a resident has a heart attach in the lobby

a. unit owner carpet damage by a broke water pipe

When does an offer become a contract? a. when it is accepted and acceptance is communicated b. when it is accepted c. when it is closed d. at the closing and funding

a. when it is accepted and acceptance is communicated

If an unlicensed individual provides a referral that end in the closing how can you repay them? a. with $50.00 gift card b. by sending them on a vacation for a weekend c. by paying their rent for a month d. by rebating a part of your commission to them

a. with $50.00 gift card

A listing agent is showing his listing to a buyer customer and notice a problem with the exterior of the property that he missed when he listed the property. What should he do? a.point out to the buyer as it is material fact b. ignore it unless the buyer questions him about it c. ignore it but recommend inspection d. say nothing until he has had a chance to discuss it with his seller client

a.point out to the buyer as it is material fact

Prior to its amendments, the civil right act of 1968 prohibited discrimination based on? a. AIDS b. National origin c. sexual preference d. age

b. National origin

Which of the following is NOT an example of due diligence in a sales contract? a. the seller order the deed to be prepared and agrees to pay for the buyer`s title policy b. a broker complete a CMA for a buyer client prior to the buyer making an offer c. a buyer obtains a survey because he suspects an encroachment d. a buyer has property inspected to be sure all features are functioning properly

b. a broker complete a CMA for a buyer client prior to the buyer making an offer

A developer decides to build a commercial property in the middle of a residential subdivision. What is required? a. approval from surrounding property owner b. a variance c. non conforming use designation d. this would violate deed restriction and can not be done

b. a variance

which of the following statement is true about the duties of an agent according to the common law of agency a. an agent must disclose all fact to client and customer b. an agent must treat both clients and customer with honesty and fairness c. an agent supports and defends the position of all customers d. an agent has a fiduciary duty to clients and customers

b. an agent must treat both clients and customer with honesty and fairness

Your client is an investor who would like to have the right to purchase a commercial tract for $5 million for the next six months. What type of contract should he enter into with the seller? a. an earnest money contract b. an option contract c. bilateral contract d. right of first refusal

b. an option contract

When a broker is acting for more than one party the broker should disclose a. confidential information in writing to the parties b. any known material defects on the property c. the amount of any previous offer d. the financial assets of the buyer

b. any known material defects on the property

What is extremely hazardous and friable? a. lead b. asbesto c. radon d. EMF

b. asbesto

According to the statue of fraud, what have must be in writing? a. a lease for one year or less b. a lease for more than 6months. c. a lease for more than 1year d. all lease must be in writing to comply with the statue of frauds

c. a lease for more than 1year

A license holder while acting as an agent for another should a. expert any ambiguities in the contract documents will be corrected at closing b. be scrupulous and meticulous in performing the agent function c. advise buyer that verbal repair agreements can be documented at closing d. explain that written contract amendment are not as important as the original agreement

b. be scrupulous and meticulous in performing the agent function

Economic life is defined as a. economic obsolescence b. depreciation c. functional obsolescence d. reproduction cost

b. depreciation

What is difference between replacement cost and market value? a. land cost b. depreciation c. functioanl obsolescence d. reproduction cost

b. depreciation

A listing agent went to inspect a seller's property hoping to list it for sale. The seller told the listing agent that his neighbor's satellite dish trespasses on his property. This is example of what? a. annexation b. encroachment c. appurtenance d. license

b. encroachment

A signed sales contracts that has not yet gone to closing is? a. fully executed b. executory c. unilateral d. voidable

b. executory

In rental properties increased demand can be result of a. shortage of renters b. high mortgage interest rate c. low bond interest d. functional obsolecense

b. high mortgage interest rate

A property owner has decided to do some landscaping work on his yard. He has planted a tree surrounded by some flowering shrubs. The tree and shrubs are an example of a. encroachments b. improvements c. surface rights d. emblements.

b. improvements

A sales agent is showing a property. He trips in the house causes major damage to property of the owner. What type of insurance will cover the accident? a. broker e&o insurance b. liability insurance c. title insurance d. FEMA policy

b. liability insurance

If an applicant for a sales license engages in a brokerage transaction, the applicant a. may be paid for the transaction after he gets his license b. may face criminal charges resulting in fine or jail c. is following standard operating procedure d. is ineligible fo a license for 2 years

b. may face criminal charges resulting in fine or jail

Which of the following would NOT be operating expense included in the property managers operating budget? a. property tax b. mortgage payment c. insurance d. reserve for repair

b. mortgage payment

Wetland typically contain what? a. saturated soil b. navigable water c. ground water contamination d. industrial water waste

b. navigable water

The main purpose of Regulation Z is a. equalize credit b. notify borrower of the true cost of credit c. to punish bad mortgage broker d. create zoning rules

b. notify borrower of the true cost of credit

A sales agent just obtained a listing. The seller told the agent that she need to sell the property since they are getting divorce. What must sales person do? a. suggest marketing property below market price b. obtain signature of all owner on listing agreement c. recommend an appraisal to determine best list price d. tell the seller to list the property for sales as is.

b. obtain signature of all owner on listing agreement

Who is not eligible for VA loan that is close to VA applicant? a. disable veteran b. parent and sibling of veteran c. action duty veteran d. retired veteran

b. parent and sibling of veteran

A high rise condominium property is advertised as having the "Most beautiful view of the city" This ad is best described as a. reasonable exaggeration b. puffing c. fact d. mispresentation

b. puffing

After defaulting on a real estate loan, borrower is able to pay off the loan prior to the foreclosure sale. This is called. a. right of first refusal b. right of redemption c. deed in lieu of foreclosure d. an equitable estate

b. right of redemption

An unlicensed assistant get a call from a listing owner with questions about a contract what should the assistant do? a. tell the buyer b. take the information to the listing broker c. refer the owner to TREC d. answer the party's question

b. take the information to the listing broker

In what kind of situation, would the Texas property code excuse the seller from delivery of the seller's disclosure notice regarding the condition of the property a. seller has never lived in the house b. the property is being sold as foreclosure c. the value of the improvement exceed 5% of sales price d. the improvement on the property were constructed prior to 1978

b. the property is being sold as foreclosure

An agent is accused of discrimination. What will HUD do? a. fine agent $50,000 b. try mediation followed by a lawsuit if mediation fails c. revoke the agent license d. send the agent to jail for one year

b. try mediation followed by a lawsuit if mediation fails

When does the buyer under contract for deed get title to the property? a. when the contract are signed and delivered b. when final loan payment is paid c. when buyer take occupancy of the property d. when the seller dies

b. when final loan payment is paid

A seller must keep a copy of the lead paint disclosure he provided to the buyer for how many years? a. 1 year b. 2 years c .3 years d. the seller does not have to keep record for buyer

c .3 years

A buyer is aware that interest rate should go down over the next few months. What type of loan should he get to enable him to buy now and take advantage of declining rate in the future ? a. term loan b. reverse annuity mortgage c. ARM d. balloon loan

c. ARM

What principle of value defines the most important factor for appraisal? a. conformity b. Competition c. Highest and best use d. Substitution

c. Highest and best use

An apartment building owner has renovated and modified several unit to be handicapped accessible. Can he advertise this accommodation? a. No it violate fair housing b. NO it violate ADA c. Yes d. Only if all unit are accessible

c. Yes

The required distance between building and federally protected endangered species wetlands i an example of a. space determined by deed restriction b. condemnation c. a buffer zone d. space determined by zoning

c. a buffer zone

A buyer and seller have negotiated a contract on the seller`s property with a closing set for June 14th time of the essense. On June 12th listing agent calls the buyer 's agent and tell him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what can buyer do to the contract? a. the contract is termnated b. the contract is void c. the contract is voidable by the buyer d. contract is voidable by either party

c. the contract is voidable by the buyer

A couple purchased a condominium. The complex has an exercise room for all residents. The couple does not use the exercise room and does not want to pay the monthly fee for the use of the facility. What can they do to avoid this fee? a. they can deduct the appropriate amount from their monthly condo fee b. They can have an attorney send a letter to the homeowners association stating their intention to not pay the fee and then stop paying the fee c. they must pay the fee as they have a tenancy in common interest in all common area d. they can lease their condo and as landlords they would not have to pay the fee

c. they must pay the fee as they have a tenancy in common interest in all common area

What is the purpose of a property management trust account? a. to hold collected rent b. to hold reserve funds for maintenance and repairs c. to hold tenant security deposit d. to hold funds escrowed for tax and insurance

c. to hold tenant security deposit

A tenant is aware that his lease will expire at the end of the month. He has begun to disassemble his display cabinets and shelves. What tenant can do with these items? a. he can not take them without first obtaining written permission from landlord. b. if the landlord wants them he can pay the tenant and tenant must leave them c.the tenant can take these as they are trade fixtures. d. he must disclose to the landlord that he plans to take them.

c.the tenant can take these as they are trade fixtures.

When did the second amendment of federal housing act go into effect? a. Jan 1 1998 b. Jan 1 1989 c. Mar 12 1988 d. Mar 12 1989

d. Mar 12 1989

What will be covered by RESPA? a. mobile home b. retail shopping center c. apartment complex d. condominium

d. condominium

How is earnest money recorded on the closing disclosure? a. debit to the seller b. debit to the buyer c. credit to the seller d. credit to the buyer

d. credit to the buyer

Which of the following is NOT an example of functional obsolescence? a. an unpopular floor plan b. a property that lacks updating for modern technology c. curb appeal d. deferred maintenance

d. deferred maintenance

What should a buyer do to ensure that he is getting the best title to real property? a. get attorneys opinion of value b. get title insurance c. get a special warranty d. get a general warranty deed

d. get a general warranty deed

What approach would an appraiser most likely use to value a residential rent house in a neighborhood where a majority of the homes are leased? a. market data approach b. GRM c. cost approach d. income approach

d. income approach

When sales agent's sponsorship is terminated by his sponsoring broker the broker must a. release the agent's listing to the new broker b.disclose the termination to the MLS c. notify the commission of all outstanding listing taken by the sales agent d. notify the sales agent of the termination in writing and return the license to TREC immediately

d. notify the sales agent of the termination in writing and return the license to TREC immediately

Which of the following statement about lead is NOT true? a. the lead paint disclosure is required for all properties built before 1978 b. the lead paint disclosure allows an inspection for 10days after date of the contract c. the lead paint disclosure allows a buyer to waive the right to inspection d. property owner must remediate the presence of lead

d. property owner must remediate the presence of lead

A mobility impaired tenant has leased an apartment in a complex with unassigned parking. He has requested an assigned reserved space near to his unit. What does landlord can do? a. the landlord does not have to provide a special space for this teant b. the landlord only has to provide an assigned space if the tenant request it before leasing the apartment c. the landlord must provide an assigned reserved space for the tenant d. the landlord must provide an assigned reserved space for the tenant near to the tenant unit

d. the landlord must provide an assigned reserved space for the tenant near to the tenant unit