The CE Shop Principles of Real Estate I Exam Review
Which of these policies is an example of discrimination based on familial status?
A landlord charges an extra $100 security deposit for each child living in a property.
Which of the following best describes what a listing agreement is?
A legally binding, written contract between a property seller and a listing broker
Which type of survey system is also known as the Public Land Survey System (PLSS)?
Rectangular government survey
What's the term for a lender refusing to lend in a specific area, often based on the area's minority make-up?
Redlining
In Texas, a real estate licensee doesn't have to have any additional licenses to sell manufactured homes as long as _________________.
The licensee negotiates for the consumer while acting as the consumer's broker or sales agent
At least 60 days prior to filing a lawsuit under DTPA, what is the consumer required to do?
Provide a written notice to the person against whom the suit is to be filed
What describes the different symbols that are used in a survey sketch?
Survey legend
What signifies that a survey is certified and represents a guarantee of accuracy?
Surveyor's stamp
Contracts may use the terminology ______ after the assignor's name to make it clear that the contract is assignable.
"And/or assigns"
Office space in a downtown high rise rents annually at $33.40 per square foot. Max's tenant client is interested in renting two adjacent suites: one is 7,152 s.f., and the second is 3,560 s.f. What's the monthly rental rate?
$29,815.07
A 4-bedroom, 4-bath 4,875 square feet house was listed at $445,000. Andreas, the seller, accepted an offer that was 95% of the listing price. What price per square foot did he get for the house?
$86.72
How long is a license valid in the state of Texas?
24 months
In certain cases, antitrust violators may be subject to court-ordered supervision. How long can this supervision last?
10 years
The Education Standards Advisory Committee is comprised of ______ members.
12
What is the continuing education requirement for Texas real estate licensees?
18 course hours for each licensed term
In what year was the Americans with Disabilities Act made law?
1990
TREC will issue a notice of violation to anyone it feels has violated the law by performing a prohibited activity. If an accused violator completely disagrees with TREC, that person has the right to request a hearing within how many days?
20 days
A lot measuring three-fourths of an acre is for sale. How many square feet is this?
32,670 (An acre is 43,560 square feet.)
A property is 330 feet long by 100 feet wide. How many square feet is the property?
33,000
How many square feet are in an acre?
43,560 square feet
Melanie is a licensed real estate professional who recently completed the required course hours for obtaining her broker's license. Now she just needs to pass the state exam. What is the passing grade for a real estate professional taking the broker exam?
75%
The total educational requirement that Kyle must meet in order to receive his broker's license is ______.
900 classroom hours
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
A central element of an antitrust violation is ______.
A contract
What is a plat map?
A detailed map of a subdivision that includes boundaries, measurements, and distances between points
Which of these may have been used as a point of beginning in the metes and bounds system?
A fence post An iron stake A pine tree (All of these)
Pamela inherited a piece of property that has been in her family for generations. She wants to find the property's exact boundaries. What should contain this information?
A legal description of the property
Which of the following defines the term 'lis pendens'?
A legal notice that a lawsuit is pending that affects the title of a property
When accepting compensation, which of the following statements is most accurate, according to the NAR Code of Ethics?
A licensee shall not accept compensation from more than one party to a transaction without the consent of all parties.
What is a principal meridian?
A north-south line used as a reference point in the rectangular government survey system
Which of these is something that is NOT requested in the initial fair housing complaint form?
A notarized copy of the complaint description
What is a section?
A one-square-mile square formed in the use of the rectangular government survey system
What is assessed value?
A percentage of market value; also the amount of property value to which the tax rate is applied
According to the terms defined in Subchapter A of TRELA and known as the general provisions, what is the definition of a broker?
A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person
What is a bound?
A physical feature that defines the boundaries of the land
"A party to a transaction and the person for whom the agent acts" is the definition of ________.
A principal
Who can request a CLUE report?
A property owner
Which of these is an example of blockbusting?
A real estate agent approaches a homeowner as soon as a demographic shift starts to occur in her neighborhood and convinces her that she needs to sell now, or she'll never be able to sell.
Barbara, a Texas sponsoring broker for Longhorn Realty, paid Gwendolyn, a buyer, a portion of the commission Longhorn received from the sales transaction. This is known as ______.
A rebate
What does a land surveyor produce?
A survey that includes a legal description and a survey sketch
A fair housing specialist is reviewing fair housing complaints. Which of these contains an action that is prohibited?
A transgender woman is evicted from a rental property because she makes the neighbors uncomfortable.
What type of buyer is most likely to be involved in an assignment of contract?
A wholesaler
Henry died, and his property wasn't held in a trust. Thus, his estate will go through probate to ensure his property is distributed to his beneficiaries in accordance with his will. The probate process often takes _______ before the property is distributed.
A year or more
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 Adams family is financing their loan through Acme Bank and their agent negotiated a great sales price on their new home. Smith Title Company processed the loan documents. The Adamses must purchase mortgage insurance. Who does the insurance protect?
Acme Bank
The "MAIA" acronym helps to identify the four tests of a fixture. In "MAIA," the two As stand for __________________________.
Adaptability of the item to the land's use and agreement of the parties
A home inspector provides a report on a property's structure, systems, and site conditions. To whom is the report provided?
Buyer
Although Ophelia hasn't signed a buyer agency agreement with Randall, she continues to ask him to show her homes, and Randall does. What type of agency is this considered?
Agency by ratification
Marcy is found guilty of price fixing. This means she must have ______.
Agreed with a competitor to charge a specific amount
Which of the following is a true statement about single-family detached homes vs. condos?
All else being equal, single-family homes typically cost more than condominiums.
To what properties does the Texas seller's disclosure of property condition law apply?
All single-family residential properties
What makes an income tax lien different from a property tax lien?
An income tax lien is a general lien and a property tax lien is a specific lien.
Gloria has an option to purchase the cottage she leases from Jacob and Lori. She can exercise the option within the next two years. To gain that right, Gloria paid Jacob and Lori $5,000. This is called ________.
An option fee
Which of the following statements correctly identifies what the seller must include in the disclosure notice per Texas law?
Any actual knowledge of latent defects
In Texas, when is a licensee required to provide an agency disclosure?
At the time that the licensee is having the first substantive dialogue about a specific property with the party whom they are not representing in the transaction
You're a sales agent in Texas, and you just received your part of the commission on a recent sales transaction. With whom can you legally share your commission?
Attorneys who are TREC-licensed real estate professionals
The client owes the agent the primary duties of compensation, information, indemnification, and ______.
Availability
Which of the following statements about real estate licenses is true?
Before you can legally perform any of the same activities that licensed real estate professionals perform, you must have your real estate license.
What's the permanent marker used primarily for marking datums when measuring elevation?
Benchmark
Which of these is usually a brass marker that is used to mark a datum?
Benchmark
You represent a buyer in a transaction that includes a 2% cooperating agent commission that will be paid by the seller. Who's your client?
Buyer
How is ad valorem property tax calculated?
By multiplying the property's assessed value by the tax rate
Janice conducts brokerage activities and can receive compensation directly from buyers or sellers. She must be a ______.
Broker
Anastasia wants to get her real estate license and bring together buyers and sellers. This means she will be involved in which of the following?
Brokerage
In case history regarding fair housing, which case involved an ordinance that prohibited blacks from living on a block where the majority of the residents were white?
Buchanan vs. Warley
Which of the following describes a modular home?
Built using precise pieces and very energy efficient
Carl is a sales agent who works under the supervision of a broker. Which of the following is true?
Carl can be either an employee or an independent contractor.
Renae moved to the U.S. from Nigeria and became a citizen. Which act specifically provides Renae with the right to buy, sell, convey, inherit, and possess property?
Civil Rights Act of 1866
In Texas, "someone who has agency representation with the real estate sales agent or broker" is the definition of a ________.
Client
In several states, married couples usually hold property as ______.
Community property
Which of the following documents is the listing agent responsible for preparing and delivering to the seller?
Comparative Market Analysis
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
Bill and Mindy, who are neighbors, get into a disagreement about late-night noise. The two come to an agreement: Bill promises to stop having loud parties and Mindy promises to keep her dogs inside after 10 p.m. Their promises represent the ______ in their agreement.
Consideration
Which of the following elements is always required for a real estate contract to be valid?
Consideration
Javier represents Marcus, who's selling his rental property to Ben. Ben is represented by another real estate licensee, Francis. What is Ben's relationship to Javier?
Customer
The Office of Fair Housing and Equal Opportunity is a part of which federal department?
HUD
Which of the following acts protects Texas consumers against real estate licensees who use false, misleading, or deceptive actions or practices in the advertising, offering for sale, selling, or leasing of personal property or real property?
DTPA
Darren wants to set up a land trust so that his children can benefit from his real estate investments after he dies. He asked his financial advisor Tom to manage the trust, and Tom agreed. How is the trust created?
Darren conveys the real estate to Tom.
A ______ is a point, surface, or line used as a reference for measuring elevation.
Datum
Homestead exemptions ______ property taxes for all homeowners by protecting a certain amount of a Texas home's value from tax.
Decrease
Over which of the following areas do local authorities have no police power?
Deed restrictions
When there are more buyers in area than there are homes available to purchase, it means what?
Demand exceeds supply
The _________________ affects a property's income tax basis.
Depreciated value
Which of the following are deductible expenses for homeowners?
Discount points
The Canons of Professional Ethics and Conduct are divided into five sections: fidelity, integrity, competency, consumer information, and ______.
Discriminatory practices
When a policy negatively impacts a protected class more than it negatively impacts others, this is called what?
Disparate impact
Which of these is harder to identify: disparate impact or disparate treatment?
Disparate impact
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
Samantha helped her neighbor sell his home by assisting with negotiations. She received no compensation for her assistance, however. Based on this one transaction, Samantha ________.
Doesn't need a real estate license
Gene and Alex bought a property that backed up to a neighborhood park. The previous owner mentioned that ever since the park was built eight years ago, the next door neighbor who works at the park has cut through the yard to get to the park rather than going around via the streets, which saves about half a mile. What kind of easement is this?
Easement by prescription
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
Erica is preparing to take her licensing exam, so she's following the process outlined in the candidate bulletin. Which of these actions should Erica take to follow the process correctly?
Erica must make a reservation at least 24 hours in advance to have her fingerprints taken by MorphoTest. She'll need her TREC ID number from her eligibility letter.
_____ is an estate for an unknown period of time in which either party may terminate the lease by giving notice to the other.
Estate at will
What is a tax on your right to transfer property at your death called?
Estate tax
Which of the following is true regarding express agreements?
Express agreements may be written or verbal.
Which agency enforces fair housing law?
FHEO
Jessica filed for her real estate application on February 20. It is now June, and Jessica is realizing that the months have flown by since her decision to pursue her real estate license. She must register for and take her licensing exam before ______.
February 20 of next year
Brenda represents Tina in a real estate transaction. She therefore owes Tina ______ duties, such as confidentiality, obedience, and reasonable skill and care.
Fiduciary
Clint is interested in making an offer on a house with hardwood floors that will need to be replaced. The hallway is 18' x 6'. The kitchen is 20' x 30'. The living room is 25' x 45'. Two bedrooms are 12' x 16', and the master bedroom is 14' x 20'. If the cost of the flooring is $5.48 per square foot, and the cost of installation is $1.49 per square foot, how much can Clint plan to spend to replace the floors?
First, find the area of each room and add them together to get the total square footage. 108 + 600 + 1125 + 192 + 192 + 280 = 2,497 square feet. The total cost of the flooring per sq. ft. is $5.48 + $1.49 = $6.97. 2,497 x $6.97 = $17, 404.09.
Jameson is interested in becoming a member of the ESAC. How many years of real estate experience must he have in order to qualify as one of the seven real estate professional members?
Five
In Texas, a party to a contract has ______ from a contract breach to sue the other party.
Four years
Which of the following states that the person who committed the fraud, as well as anyone who knew about the fraud, failed to disclose it, and benefited from it, can be held liable for actual damages?
Fraud in Real Estate and Stock Transactions
Fred is buying Gary's property, which is listed with broker Sara. Who are the parties to the listing agreement?
Gary and Sara
Phil is a property manager, which means he serves as a ______ agent to his landlord/client.
General
Property managers most often serve as which type of agents?
General
Mike and his buddy Daryl own a business together. They are jointly and separately liable for any debts the business may incur. What type of partnership do Mike and Daryl have?
General partnership
Which area of real estate law covers the government's rights and authority under eminent domain?
General property law
Which of these is an example of good consideration?
Gifting a house to a family member
When a land trust expires, the trustee must either extend the trust term or sell the real estate and ______.
Give the proceeds to the beneficiary
Texas broker Clark has grown sick of the assumed business name he's been using for the past few years. What, if anything, must Clark do if he's decided to stop using it?
He must notify the Commission in writing not later than the 10th day after the date the broker stops using the assumed business name.
Select the statement about homeowners insurance policies that is true.
Homeowners policies are comprised of several types of insurance.
Which of these situations represents the illegal practice of redlining?
Hunter, a mortgage broker, refuses to underwrite mortgage applications from applicants who are buying in specific neighborhoods.
Which of the following is a true statement about civil litigation in Texas fair housing complaint cases?
If a TWCCRD conciliation agreement is entered into or a hearing commences before an administrative law judge, the private lawsuit must be terminated.
Which of the following statements about the contract for deed default process in Texas is true?
If the buyer is in default, the seller must provide the buyer with a notice before taking further action.
Which of the following would be a description used for real property?
In-ground
The Johnsons have owned a small restaurant for more than 20 years. It's open for lunch and dinner six days a week, and 80% of its weekday revenue comes from the happy hour drink and appetizer specials. The town in which their restaurant is located recently constructed a new middle school and stripped the liquor license from the Johnsons' restaurant, because it no longer complies with the ordinance to be 500 feet from a school property. The Johnsons have accused the town of _____.
Inverse condemnation
Which of the following statements about a partnership is true?
It is a business organization owned by two or more partners.
What type of rights to the property does a seller have during the contract for deed process?
Legal title rights
Which of the following is a true statement about the Texas seller's disclosure of property condition law?
It requires sellers of single-family residential properties to disclose material facts to buyers.
Which of these statements is NOT true about a specific lien?
It's always involuntary.
What's NOT true of an easement appurtenant?
It's an encumbrance on the dominant property.
Widget Corporation just bought land on which it plans to build a new manufacturing facility. How is the land owned?
It's owned as an estate in severalty.
Texas resident Jasmine's sales agent application has been denied. For which of the following reasons might her application have been denied?
Jasmine didn't submit the application fee within 20 days of TREC requesting payment.
What amount of liability does a Texas licensee who acted in cooperation with another person(s) to commit a third-degree felony have?
Joint and separate responsibility for all damages
Siblings Julia and Gene are co-owners of a small retail building in which a tanning salon is currently operating. Gene really wants to leave his ownership interest to his son when he dies, but the way in which they own the property doesn't allow him to do so. What type of ownership do they have?
Joint tenancy
Jolene signs a contract to buy Harvey's home. Before closing, it's discovered that Jolene is only 16 years old. Because she's a minor, she's not considered legally competent to enter into a contract. Which of the parties can void the contract?
Jolene
Carlton listed his property with an agreement end date of August 31. The property went under contract on May 12 and closed on July 2. When did Carlton's listing agreement officially terminate?
July 2
Which of these is the best definition of real estate?
Land, plus all things permanently attached to it naturally or artificially
Which area of real estate law covers lease agreements?
Landlord/tenant
What would likely have the most negative impact on your credit score?
Late payments
A licensee who's been threatened with violence after refusing to violate fair housing law should report the threat to _______.
Law enforcement officials
Which type of value is found on the MLS?
List price
The right to access ponds, lakes, and other stationary bodies of water is ______.
Littoral
Harmony is looking at the legal description on her purchase contract. It mentions that the plat of her property is recorded in Map Book 12, page 14, at the county courthouse. What type of legal description is this?
Lot and block
Which type of legal description do courts prefer?
Lot and block
Lucas, Ivan, Chad, and Trace own a property as joint tenants. After a few years, Ivan sells his interest to Tom. Chad dies intestate but is survived by a wife, Amy. Trace also then passes away but wills his property to Monique. Who owns the property after Trace's death?
Lucas and Tom
What must a licensee do when preparing a CMA (or opinion of price) for a consumer?
Make a statement that the opinion isn't an appraisal.
The ESAC does which of the following?
Makes recommendations for improvements to real estate education
Datums and benchmarks are used for ______.
Measuring elevations
"Beginning at a stake and stones about 30 feet from the center of the brook that runs across the road Southwesterly from the dwelling house of the late Jebediah Smith ..." is an example of what type of legal description?
Metes and bounds
Morty, a land surveyor, was called out to survey a property. After doing some research, he located the legal description for the property in question. Now, if he could just find the point of beginning located at the iron pin on the southerly line of state route 117, 30 feet east of the oak tree next to Bear Creek. What type of legal description is Morty working with?
Metes and bounds
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
Which one of the following statements about community property rights is true?
Nine states have community property rights.
Which of the following is an advantage of condominium ownership?
No yard work
Anna and Cindy, two friends, enter a contract to buy Jake's home. However, at the last minute, Cindy has a change of heart and wants out of the deal. Anna asks another friend, Sally, if she wants to take Cindy's place as co-buyer of Jake's home. Everyone agrees to the substitution of Sally for Cindy on the contract. This is an example of ______.
Novation
How many members of the general public must be on the ESAC committee?
One
When can specific performance be enforced under a sales contract?
One party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract.
If a farm that's for sale measures one and three-quarter square miles, how many acres is it?
One square mile is 640 acres. Three-quarter square mile is 480 acres (640 x .75 = 480). So, 640 + 480 = 1,120 acres.
You represent April, the seller, who is your Uncle Clyde's girlfriend. You receive an offer from Barry on behalf of a prospective buyer. Whose interests do you represent, and in what order?
Only April's
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
In an addendum to the purchase and sale contract, the seller agrees to paint the house before conveying the house to the buyer. The weather changes, and the seller is unable to finish painting the house before closing. This is an example of _______.
Partial performance
Brandon has a right-to-use timeshare. What can he NOT do with this type of timeshare?
Pass the timeshare on to an heir.
Ginnie allowed her real estate license to expire in the past six months, because she was uncertain if she wanted to continue as a real estate professional in Texas. She has recently decided that she does not want to give up on her dream of building a real estate empire. She has come to terms with having to retake the state exam, but is worried about taking the 180-hour pre-licensing course again. Will she be required to retake her pre-licensing courses?
Perhaps. This is only necessary if the required hours have changed.
Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?
Permanence
A subdivision that consists of common property and improvements that are owned and maintained by an owners association is called what?
Planned unit development
What does the lot and block system use to develop a property's legal description?
Plat references
Brandon is the listing agent for Jane's property. After a couple of weeks on the market, two formal written offers come through. One is for well below the listing price, and another is a bit closer, but still under the list price. What should Brandon do with the offers?
Present both offers to Jane
The ________ market is comprised of major lenders which then sell the loans to other lenders that actually service and retain the loan.
Primary
Texas sales agent applicant Drew has already taken 30 hours each of Principles of Real Estate I and II, Law of Contracts, and Law of Agency. Which two additional 30-hour courses must he take to complete his prelicense education requirements?
Promulgated Contract Forms and Real Estate Finance
Deirdre lost her job, and the bank foreclosed on her condo. Which of the following of her outstanding debts will the bank pay first?
Property taxes
Which is not one of the lender requirements under the Community Reinvestment Act?
Providing school loans in low-income areas
In the real estate business, which professional's primary role is to estimate property value based on established valuation guidelines?
Real estate appraiser
In the real estate business, which professional's primary role is to provide training to individuals who want to obtain their real estate license or who need to keep their license current?
Real estate educator
Richard is interested in purchasing some rural land and included outbuildings. When reviewing the legal description, he sees the name of a principal meridian. What type of legal description is this?
Rectangular government survey
Which of the following legal descriptions is not used in Texas?
Rectangular government survey
Any agreement between competing firms that restricts trade, discourages competition, or ______ is a violation of antitrust law.
Restricts choices for consumers
In addition to its power to impose stiff administrative penalties, TREC also has the authority to ______.
Revoke or suspend an agent's or broker's license
An agent who buys, sells, leases, or transfers easements is also known as what kind of agent?
Right-of-way agent
This written notice must be provided by the seller of a single-family residence to the buyer, and must disclose material facts that are not reasonably discoverable about the property.
Seller's Disclosure Notice
Sima purchased a cooperative. When the sale goes through, what will she own?
Shares in a corporation
Which of these situations represents a unilateral contract?
Sherry promises to give Brent a ride home from work, and then doesn't show up.
The Texas Workforce Commission consists of three members who serve ______-year terms.
Six
How long is a member of TREC's term?
Six years
Texas resident, Sonny, who doesn't have a real estate license, helps his brother's neighbor, Nicole, sell her house. He charges her a commission of $3,000, which she happily pays. Which of the following is true in this situation?
Sonny may have to pay administrative and civil penalties.
If a property being sold is located within a municipal utility district (MUD), the seller must provide this statutory disclosure to the buyer before the sales contract is executed.
Statutory Tax District Notice
TREC has established that two continuing education courses must be taken, and then 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?
TREC Legal Updates I and II
Allentown sits on the river, and its many bridges need repair. Which police power is Allentown likely to use in order to fund improvements to its bridges?
Taxation
Which type of government power uses the legal power of a lien?
Taxation
Which of these tasks is a licensee required to perform based on her fiduciary duties?
Tell parties to the transaction that she's a licensee when she's buying a property for herself.
Once Greg and Caitlin were married, they decided to purchase a home together. Since it was a shotgun wedding after a weekend in Vegas, they made sure that their ownership included the right of survivorship as well as protection from the other spouse attempting to sell the house from under them. The most likely form of co-ownership under which they would make this purchase is ________.
Tenancy by the entirety
Eva, Stella, and Lynn own a vacation home two blocks from the beach. Sadly, Stella passed away this winter, and so when summer arrives Eva and Lynn will be sharing the home with Stella's nephew Drew, to whom Stella willed her share of the property. What type of ownership is this?
Tenancy in common
In which form of co-ownership is a person's ownership inheritable?
Tenancy in common
What was the name of the first law regulating real estate brokerage in Texas, which was originally passed in 1939?
Texas Real Estate Dealers Act
What does the registration of an assumed business name with the Secretary of State or county clerk's office in Texas show?
That the broker has the legal authority to use that name
Which of these statements most accurately represents existing federal antitrust legislation?
The Clayton Act supports the Sherman Antitrust Act's purpose of prohibiting monopolies by prohibiting mergers or acquisitions that would create a monopoly.
The Equal Credit Opportunity Act is regulated by ______.
The Consumer Financial Protection Bureau
Which of these statements accurately describes finance- and housing-related legislation?
The Fair Housing Act of 1968 prohibited discrimination in the sale, rental, and financing of housing based on race, color, religion, or national origin.
James is a real estate licensee in Texas. A complaint has been filed through the TWCCRD against James for a fair housing violation. Which of the following agencies could impose sanctions on James?
The TWCCRD and the Real Estate Commission
The ESAC makes recommendations to which agency?
The Texas Real Estate Commission
Vanessa has had her Texas real estate broker's license for 12 years. What law stipulates the requirements Vanessa must follow to keep her license?
The Texas Real Estate License Act
You are the Texas agent for the buyers, the Jansens. The Yothers are the sellers, and their mortgage holder is Richard Steele. To which of these parties must you disclose your agency status?
The Yothers only
Candace and Phil Tolson listed their home for sale with Trent Richards, the broker for Richards Homes. Sadly, Trent became incapacitated due to a car accident. What's the status of the listing agreement?
The agreement terminates by operation of law.
In Texas, whose responsibility is it to supervise associated licensees and review transactional paperwork and advertising?
The broker's
Who is required to sign and date the TAR Seller's Disclosure Notice?
The buyer and seller only
Which 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.
Bart just toured his fourth patio home of the day. To help him remember what he saw in each one, he's making notes about décor, updates, and inclusions that will stay with the property. Which of the following items is NOT considered personal property and would therefore stay with a home?
The chandelier in the foyer
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
Which of the following statements is true regarding a partially performed sales contract that otherwise contains all of the essential elements?
The contract is voidable
For tax years 2018 to 2025, a borrower can write off the interest on a home equity loan only if _______.
The funds are used to buy, build, or improve the home that secures the loan
Who is responsible for appointing the members of the commission?
The governor of Texas
Trina's property is listed with Avalon Homes. The market is a little slow, and Trina's listing is a high-end home, where sales are even slower. She's had several showings, but no offers. The term of the listing agreement is nearly over. What happens when the termination date is reached?
The listing expires and is automatically terminated.
Which of these situations would be exempt from most provisions of the federal Fair Housing Act?
The local Elks club owns a property that's rented only to Elks club members.
Which of the following is a true statement about federal antitrust penalties?
The maximum fine may be increased to twice the gain or loss involved.
What does the parol evidence rule say about contracts?
The terms agreed to in a written contract are the only terms relating to that contract.
To be considered real property in Texas, a manufactured home must be permanently attached to a foundation and ______.
The owner must file a certified copy of the home's Statement of Ownership and Location (SOL) in the real property records of the county where the home is located
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
Under TRELA, a broker is prohibited from paying someone a commission unless what is true?
The person is a license holder.
Ad valorem taxes are based on what?
The property's assessed value
Exercise of police power must be in whose best interest?
The public
Who determines if a property will be marketed using the MLS?
The seller
Dorcas and Ralph were married for 15 years. Ralph, an accountant, always took care of the bills and other financial matters for the couple. Then Dorcas discovered that Ralph had failed to pay the property tax on their property for the last three years. Which of these is likely to happen?
The state will place a tax lien on their property so it can't be transferred without satisfying the debt.
Tom and Jim are neighbors. Jim wants to buy Tom's rental property. In the contract they sign, Jim is identified only as "the neighbor." Which statute or contract element does this violate?
The statute of frauds
The purpose of Texas anti-trust laws is to prevent ______.
The substantial decrease of competition in any line of trade or commerce
In what way is a townhome similar to a condominium?
They both typically have HOA dues.
Which of the following actions can licensees take related to signs?
They can place signs on an owner's property with the owner's written consent.
Which of the following is true about net listings?
They often involve a conflict of interest.
Two intoxicated co-workers sign a contract in which they agree to marry each other if they're both still single when they reach age 40. Which of the following is true about this contract?
This is a voidable contract because the parties were intoxicated at the time they signed it.
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.
Under the Texas anti-spam law, businesses have ______ days to remove a consumer's email address from their mailing list.
Three
Sheila owns a timeshare that gives her ownership in the property for a certain number of weeks per year in perpetuity. What type of timeshare is this?
Timeshare estate
Ellen and Isaac have a timeshare near the Grand Canyon. They'll be able to use it for two weeks every September for the next eight years. What type of timeshare is this?
Timeshare use
Which of the following best describes the purpose of a buyer agency agreement?
To identify the terms of the buyer agent/buyer agency relationship
What term refers to the dimensions, physical features, and contours of the land?
Topography
Travis is a new real estate licensee and is writing up his first offer to purchase for his buyer clients. Which of these statements is true?
Travis should include the legal description in the offer, because it provides a complete description of the property.
Clay is interested in purchasing a condo about a mile from the city center. He went to the city records office to review everything that was filed by the condo developer. In the condominium declaration, he sees how ownership of the common areas is shared among the ________.
Unit owners
As a court-appointed guardian, Marion serves as which type of agent?
Universal
Which of the following types of consideration can be an exchange of money for a promise, an exchange of an item of value for money, or an agreement between the parties to do or not do something?
Valuable
A contract for an illegal purpose is ______.
Void
Which of these scenarios describes a voluntary specific lien?
When Rob and Sue bought their house using a mortgage, the lender put a lien on the property.
Marissa, a new licensee, has some questions. Which of these questions can the Association of REALTORS® in her state help her answer?
Where can I go to find some marketing data on my area so I can advertise more effectively?
Within a tax sale, which of the following can occur?
Whoever purchases the lien at the sale must pay at least the delinquent tax and penalty owed.
Julian and Clara want to leave their real estate holdings to their children. If at all possible, they'd like those holdings to avoid the probate process after they're deceased. Their attorney recommends a land trust. Is there a type of trust they could establish that would avoid probate?
Yes, a living trust would avoid probate.
May listing agreements be terminated without penalty?
Yes, if both the listing broker and the seller's agree in writing
Which of the following is true about property taxes?
You may have a property tax lien on your property right now.
Of the following Texas licensees, which are allowed to work independently without being sponsored?
brokers
How many members does TREC appoint to the Broker-Lawyer Committee?
Six
Whose interests are protected by homeowners insurance?
The buyer and lender
Who has the ultimate responsibility for the sales agent's actions in Texas?
The sales agent, and the sales agent's broker
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.
The Recovery Trust Account should maintain a balance of at least what amount?
$1.7 Million
IRA funds distributed under the first-time home buyer program require that borrowers use them within ___________ to acquire, build or improve a residence, and for closing costs.
120 days
In which of these situations would a listing be most likely to terminate due to listing agreement expiration?
A market with high inventory and low demand
In Texas, it is legal for licensed real estate brokers to rebate commissions to ______.
A party to a transaction
What's a datum?
A point, surface, or line used as a reference for measuring elevations
Josephina is a broker in the same firm as Emilia. Josephina sticks to representing one client, because she knows how hard it is to not favor one party over another in the same transaction. Josephina is acting in which capacity?
A single agent
Which of the following is NOT a characteristic of a corporation?
Corporations are tangible and nontaxable
Kenneth entered into a contract to sell his home to Valerie, who put down a $5,000 earnest money deposit. At the last minute, Valerie backed out of the deal and Kenneth kept the earnest deposit. This is an example of ______.
Accepting liquidated damages
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.
Which of these property owners are exempt from discrimination requirements?
An owner-occupant of a single-family principal residence
According to the Uniform Electronic Transactions Act and the Uniform Real Property Electronic Recording Act of 2005, when are electronic transactions legally enforceable?
Both parties agree to conduct the transaction electronically
Select the statement that best describes how brokers handle income and Social Security taxes for independent contractors.
Brokers don't withhold income or Social Security taxes for independent contractors.
Which federal act protects consumers from unwanted email solicitations?
CAN-SPAM Act of 2003
Clint was looking for alternatives to the traditional vacation condo rental for his family. He purchased the right to use a given set of facilities at any point throughout the year. What did Clint purchase?
Campground membership
Christine listed her house with you. Tailleur represents the buyer, Rebecca, and the seller's mother, Freida, is paying your commission. Which of these factors determines how legal agency is determined in this situation?
Christine listed the property with you.
Which agency enforces Title II under the Americans with Disabilities Act of 1990, when it relates to state and local public housing, housing assistance, and housing referrals?
Department of Housing and Urban Development
Which stage of the real estate cycle is considered the bottom?
Depression
What must a licensee do regarding property the licensee holds directly or indirectly if it becomes the subject of a real estate transaction?
Disclose the interest to all parties to the transaction.
Kelo v. City of New London was a court case that focused on the power of ____________.
Eminent Domain
Which ownership type is defined by four unities: time, title, interest, and possession?
Joint Tenancy
Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah was unable to pay, so the court placed a ______ on her home.
Judgment lien
Ryanne is a tenant in a single-family home owned by Dominick. What type of interest does Ryanne have in the property?
Leasehold
According to the canon of competency in Texas, what responsibility do licensees have related to material facts?
Make a reasonable effort to ascertain all material facts concerning each property for which an agency is accepted.
Which of the following is the duty of the State Office of Administrative Hearings at a hearing of an alleged violator?
Making findings of fact and conclusions of law
A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract.
Mentally
Who owns the dry sandy part of the beach that extends from the "wet beach" to the line of vegetation on the shore?
Property owners
In the real estate business, which professional's primary role is to make improvements to land?
Real estate developer
When working with a client on a real estate sale, a real estate licensee is usually acting as which type of agent?
Special
What is the purpose of licensing?
To protect the public by requiring certain education, training, and standards of licensees
What is the purpose of a listing agreement?
To spell out the agreement between the listing broker and the seller
What is a township?
A 36-square-mile square formed in the use of the rectangular government survey system
Before being issued a real estate license in Texas, the candidate must submit which of the following to TREC?
A legible set of candidates fingerprints
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
You have a listing agreement with Sam, which makes him your ______.
Client
Rhonda and Jade both consider themselves African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on ______.
Color
Office buildings, shopping centers, and hotels are examples of ____________ properties.
Commercial
Many of an agent's fiduciary duties to the client end upon termination of an agency agreement. Which fiduciary duty never ends?
Confidentiality
In a real estate transaction, which of the following is established when parties enter into an agreement voluntarily with full understanding of the contract terms?
Consent
Under a land trust, the owner directs a ______ to hold title to the real estate.
Corporate fiduciary
A portion of Lance's property can be used by the local utility company to maintain its power lines. What is this an example of?
Easement
Your client submits an application to rent a condo unit. He has excellent credit and been in the same job for a long time. He uses a cane to help him with mobility. When his application is rejected, he feels it's due to his disability. He is protected under ______.
Fair Housing Amendments Act of 1988
Ginnie's Aunt Becca listed the old family mansion with Ginnie. Ginnie put it on the market for Becca, but then she and her cousins talked with Becca and decided they wanted to keep the property in the family. What's the best way to terminate the agreement?
Ginnie and Becca must mutually agree to terminate the agreement
Several brokerages in a certain area agree to stop running advertisements in a local publication. What type of antitrust violation is this?
Group boycotting
Your neighbor hires a middle school student to mow his lawn every two weeks. He draws up a written contract in which he clearly outlines the student's mowing responsibilities and the payment the student will receive in return. Which of the following is true in this situation?
If the neighbor and the student are content to uphold their agreement, the fact that it's not legally binding doesn't matter.
Which of the following is true regarding estate tax?
If your estate is worth less than $4 million, the estate tax will not apply
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
What does the parol evidence rule state?
In certain cases, oral evidence can be used to support or complete an otherwise incomplete or ambiguous contract.
The seller of property that may be subject to a private transfer fee must provide the prospective buyer with this written notice.
Private transfer fee obligation
Which of the following forms is required by law, and is the listing agent's responsibility to have the seller complete and sign (for property that was built prior to 1978)?
Lead-Based Paint Addendum
A valid contract must include which of the following elements?
Legally competent parties
Property owners who live on or next to water have certain rights. An example of one of these rights includes ______.
Littoral
Which term would you most likely see associated with a lake?
Littoral
Sunshine Surveyors Inc. created a lot and block survey for a new residential development, Happy Acres. The first thing the surveyor did when he surveyed the new neighborhood was to reference what type of description?
Metes and bounds description
Seller Tad has found a buyer, Minnie, for his property. The two of them are about to enter into a contract when Tad receives an email from Minnie. Turns out that Minnie's co-worker used to date Tad and told Minnie he'd cheated on his construction contractor licensing exam. Minnie threatens to spill the beans unless Tad comes down $10,000 on the sales price. Tad reluctantly agrees and they sign the contract. What is true about this situation?
Minnie used duress against Tad, so the contract is invalid.
Which of the following would be a violation of the Texas Deceptive Trade Practices—Consumer Protection Act (DTPA)?
Misrepresenting the facts about the reasons for a price decrease
In order for a lease for real estate to be enforceable, it must be in writing and signed by the person to be charged with the promise/agreement, or by someone who is legally authorized to sign for that person. This requirement applies to a lease with a term of ______.
More than one year
Shannon and Rene are sisters who enter into a contract to buy an income property. The sisters get into a dispute, and Shannon wants out of the deal. However, their uncle Jerry wants to replace Shannon on the contract. Shannon agrees to the substitution so they go ahead and do it. This is an example of ________.
Novation
What is the key difference between assignment and novation of a contract?
Novation releases the original party from all obligations, while assignment does not.
In most markets, in which month would a real estate downcycle typically start?
November
A Texas applicant must provide two forms of identification at the testing center. What types of ID are acceptable?
One picture ID and one with your signature
An area of 640 acres is equal to ______.
One square mile
Zack enters into a contract to buy Olivia's home. Per the terms of the contract, Zack must put down a $10,000 earnest money deposit and have the property inspected within five days. In reality, he puts down a $12,000 deposit and has the property inspected within two days. This is an example of ______.
Performance of the contract
Licensee Dionne pointed out to her buyer client the items in the house she was showing that would be considered real property. One of the key determinants, she explained, was whether the item were _______.
Permanently affixed to the property
What's the best definition of real property?
Real estate, plus all of the interests, benefits, and rights included in ownership
Jackson is a broker who specializes in high-rise apartment buildings in metro areas. What types of properties are these?
Residential
Churches, schools, and cemeteries are examples of what kind of property?
Special purpose
Fair housing complaints submitted to the Texas Workforce Commission Civil Rights Division must ______.
Specify the protected class that was discriminated against
Absent a legal description, what are other ways to identify a property?
Street addresses and tax map personal identification numbers
The Recovery Trust Account exists for the benefit of whom?
The account is established for the benefit of the public.
Dana is a licensed broker in Texas. She has one primary location from which she conducts most of her business. However, she does have two additional branch locations. What must be included on all branch license certificates?
The address at which the broker's office is located
Which of the following is a possible outcome if a brokerage is found guilty of violating antitrust law?
The brokerage may have to undergo court-ordered supervision for up to 10 years.
Which of the following is a legitimate reason to terminate a buyer agency agreement?
The term of the agreement has expired.
Elizabeth's property is encumbered by an easement in gross with which of these entities?
The utility company that needs to access the power line that crosses a corner of Elizabeth's land
In the real estate market, when supply exceeds demand, it means what?
There are more homes than buyers and prices will be lower.
How many forms of ID are required when appearing for your Texas licensing exam?
Two
Physical characteristics of land include its immobility, indestructibility, and ______.
Uniqueness (nonhomogeneity)
In which of the following situations is it okay for a Texas broker acting as an intermediary to disclose any confidential information about a party to the transaction?
When it is required by law or court order
Robert and Sarah enter into a contract for Sarah to purchase Robert's home. Robert decides he doesn't want to sell, and is elated when he finds out that Sarah's only 17 years old. Can Sarah force Robert to sell?
Yes, Sarah can require that Robert fulfill the contract terms.
You've just purchased a rural property, and the attorney at the closing tells you, "You have a dominant estate." What does that mean to you?
You'll be using an easement across your neighbor Jim's property.
Once your license has been expired for six months—or even longer—you're no longer eligible to renew your license. What is required in these instances?
You'll have to go through the complete pre-licensing process again, including taking the state exam.
