Texas State Practice Exam

Under TRELA, a broker is prohibited from paying someone a commission unless what is true?

A broker is prohibited from paying someone a commission unless the person has a real estate license.

Who does the DTPA define as a consumer for the purposes of filing a lawsuit?

A business consumer that has assets of $25 million or less

Before a manufactured home may be considered real property in Texas, it must meet several conditions. One such condition is that the home must ______.

Be Permanently attached to a foundation

You're assisting a Texas buyer who needs to move in 15 days before closing. If the seller agrees, what form must both parties sign?

Buyer's Temporary Residential Lease is used if buyer moves in earlier than closing date.

During the earnest money demand process, how many days after receiving a request to send a release of earnest money notice to the escrow agent do the parties to the transaction have to respond?

Seven (7) Days

If a property being sold is located within a municipal utility district (MUD), which statutory disclosure must the seller provide to the buyer before the sales contract is executed?

Statutory Tax District Notice

Rollback taxes are assessed whenever an agricultural property's _______ changes.

Use. The party responsible for the change in use is also responsible for the rollback taxes, which can be quite substantial.

Mechanics Lien is

specific, involuntary. A specific lien is against a single property. An involuntary lien occurs when a creditor places a claim on real or personal property through legal means without the owner's consent in order to collect a debt.

Which of the following statements is true about constructive eviction in Texas?

Constructive eviction is an unlawful way to try to get a tenant to vacate. The court may award damages to the tenants and order the landlord to make repairs.

The ranch that Adam and Maria are interested in buying has a cotton crop already planted on it. Which of the following is a true statement?

The seller has the right to harvest the crops up until the closing, unless otherwise specified in writing. The seller may also reserve the right to harvest after closing, provided the buyers agree to this in writing.

Rusty is getting a conventional loan from his bank to finance the purchase of his house. When he completes the TREC sales contract, which addendum will he use to describe his financing?

Third Party Financing Addendum

If a Texas buyer wants to enter into an option contract with the seller, how many days from the effective date of the sales contract does the buyer have to pay the seller the option fee?

Three (3) Days, by 5:00 PM

Is there a designated area for the broker information in the TREC One to Four Family Residential Contract (Resale)?

Yes on page 9

What are voluntary use forms in Texas?

TREC doesn't require licensees to use voluntary forms, but they are available if you want to use them.

What are the documents that the title company provides to the buyer along with a title commitment?

Evidence of exceptions in the title commitment

Peter is selling his ranch and has decided to exclude his cotton crop from the sale. Which of the following is true?

Peter must REMOVE the crops before closing.

It's time to renew the real estate license for Austin Assets, a business entity in Texas. The designated broker, Jack, owns eight percent of Austin Assets. Which of the following must be provided to TREC?

Proof that the entity maintains errors and omissions insurance with a minimal annual limit of $1 million for each occurrence

Which of these IS NOT one of the seven exemptions to the Fair Housing Act in regard to property transactions and the Act's requirement of nondiscriminatory treatment?

Racial Homogeneity

Sylvia is in the process of buying a home in Texas, and her offer is contingent on obtaining financing. Her lender is requiring that certain repairs be made to the home before it will approve the loan. Neither Sylvia nor the seller is willing to pay for the repairs, although the repairs are less than 5% of the sales price. Which of the following statements regarding termination of this contract is true?

The sales contract will be terminated, and Sylvia's earnest money will be refunded.

Any parties who prevail in a legal proceeding regarding the TREC One To Four Family Residential Contract (Resale) are entitled to recover their ______ as well as the costs of the legal proceeding.

Attorney's Fees

Duke Cartwright wants to sell his property. Mavis, his wife, has a small ownership interest in the property. The Cartwrights are entering into a listing agreement with Samuel Feines, a broker. Whose names must appear as parties to the listing agreement?

Duke, Mavis, and Samuel

In the TREC One To Four Family Residential Contract (Resale), paragraph G, titled ______, alerts buyers that wetlands, toxic substances, or the presence of a threatened or endangered species may affect the buyer's intended use of the property.

Environmental Matters

The three Canons of Professional Ethics and Conduct are

Fidelity, Integrity, Competency

Jan is selling her home, but she wants to keep the new refrigerator and the above ground pool. In order to do this, where should they be listed on the One to Four Family Residential Contract (Resale)?

Items the seller wants to retain or the buyer wants to have removed are listed as exclusions in the Property section of the contract.

Unlicensed consumers may only perform real estate activities in certain situations. In which of these scenarios would the consumer need a real estate license in Texas?

Jessie is searching for a new home for a friend moving into town. Jessie will be compensated 2% of the sale price for her time and effort.

TREC has established that two continuing education courses must be taken, and the remaining hours needed can be made up of electives. Eight of the mandatory 18 CE hours must be devoted to which two courses of study?

Legal updates I and II (TREC Requires two legal CE courses.

Your seller client, Tammy's, late husband, George, died on the front lawn of their two-story home after falling off the roof while drunkenly attempting to imitate a stunt he'd seen on YouTube. Is she required to disclose this to potential buyers, now that she's selling her house?

No it was not caused by property condition

A Texas resident who's performing real estate activities under the judgment or order of a court, such as a trustee in a bankruptcy, is _______.

Not required to have a real estate license

What is one major difference between condominiums and townhomes?

One primary difference is the form of ownership. Townhome owners have fee simple title to the land beneath their units, while condo owners do not.

In property management, when looking into the criminal history of a prospective tenant, it is a best practice to

Only consider convictions, NOT arrests.

Where would Texas licensees find the requirements for completion of promulgated forms?

The Texas Property Code

Allison is helping her buyer complete a Seller Financing Addendum to a sales contract. Where should she put that the buyer needs a $40,000 loan at a 6% fixed rate from the seller to be paid back in 120 monthly payments?

The Promissory Note paragraph requires the terms for repayment of the loan from the seller in the Seller Financing Addendum.

How many days does the Texas seller have to deliver a "commitment for title insurance" to the buyer under the terms of the TREC One To Four Family Residential Contract (Resale)?

The Seller Has 20 Days

Which addendum requires that the seller of a property within a propane gas system service area provide written notice to the prospective buyer on or before the sales contract's execution (or the closing on the property)? Addendum for Property in a Propane Gas System Service Area

This Addendum (Addendum for Property in a Propane Gas System Service Area) is used when the property may be located in a propane gas system service area.

Toby is a seller who is willing to allow the buyer to assume his mortgage. In addition, to the Loan Assumption Addendum, what other addendum might Toby consider using if he'd like to limit his responsibility if the buyer defaults on the loan?

Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement is used in conjunction with the Loan Assumption Addendum if the Seller wants to be released from future liability of the loan.

An easement by __________________ occurs when there is a subdivision of a property and one of the smaller sections requires an easement.

Implication

Which required clause in a Texas deed contains the phrase "to have and to hold" and defines or limits the ownership of interest of the grantee?

Habendum Clause: defines or limits the ownership interest of the grantee.

Marshall is a buyer who made an offer on a home prior to receiving a copy of the Seller's Disclosure Notice. If the seller, who is not exempt from the disclosure requirement, doesn't provide this notice before closing, what may Marshall do?

If the seller fails to provide the required seller's disclosure notice, the buyer may terminate the contract and have the earnest money refunded.

After proper notice, Texas landlord Liam changed his tenant's locks in attempt to collect rent. What type of breach of lease remedy is Liam using?

Lockout

What happens if a buyer wants to terminate the contract, but fails to deliver the Notice of Buyer's Termination Contract to the seller prior to the expiration of the option period?

The buyer is obligated to complete the transaction if the buyer fails to deliver the Notice of Buyer's Termination Contract to the seller prior to option period's expiration date.

You're a broker in Houston. Although your former client, Meghan, is on the Texas Do Not Call list, it's okay for you to call her to solicit business if you have an established business relationship with that person, and were involved in a business transaction with that consumer within ______.

The past 18 Months

Sylvester is a first-time home buyer who needs to take out a conventional loan to help finance his purchase. What type of financing addendum will Sylvester need to check in the Sales Price section of the TREC residential One to Four Family (resale) contract?

Third Party Financing Addendum

Housing for older persons is exempt from the prohibition against familial status discrimination if:

it houses at least one person who is 55 or older in at least 80 percent of the occupied units, and adheres to a policy that demonstrates an intent to house persons who are 55 or older.