Tx Real Estate Principles 1
Which of the following broker comments to a buyer would not violate an agency relationship?
"I will submit your offer at the terms you requested as soon as possible."
The Education Standards Advisory Committee has _____ members appointed by the Commission.
12
Active sales agents and brokers may renew their licenses by submitting proof of completing __________ hours of continuing education courses.
18
Examinations for licensees were instituted in:
1955
The Education Standards Advisory Committee is a relatively new committee and was created in:
2012
Of the total amount of members, the Education Standards Advisory Committee has _____ members who are real estate instructors or owners of TREC-approved real estate schools.
4
Of the total amount of members, the Education Standards Advisory Committee has _____ members with at least 5 years of active participation in practicing real estate.
7
There are __________ protected classes under the Fair Housing Act.
7
Which of the following is true regarding the renewal of a sales agent license?
A course may not be repeated for credit during the same license period.
What is a business organization that enters into a contract with other businesses for a fee in order to operate under the franchisor's name and guidance?
A franchise
Which of the following statements is true regarding NAR and TAR?
A member of NAR is a REALTOR®. TAR performs the same function as NAR, but on the state level. A member of NAR must follow NAR's rules and the Code of Ethics.
What is a cooperative listing service conducted by a group of brokers, usually members of a real estate association?
A multiple listing service
Which of the following actions would constitute an unauthorized practice of law?
A real estate licensee creating his or her own forms
Which of the following is true regarding the employee federal income testing purposes for real estate sales agents or broker-sales agents?
A real estate sales agent or broker-sales agent is not considered an employee for federal income testing purposes. The IRS does not consider real estate licensees independent contractors. Real estate licensees have been classified by the IRS as statutory nonemployees.
What is a voluntary nonprofit organization of independent and competing business units engaged in the same industry or trade?
A trade organization
What duty owed to a client requires agents to remit a client's funds into a trust or escrow account according to the terms of an agreement?
Accounting
Which of the following is not true regarding the law of agency?
Agency agreements involving real property should be oral rather than in writing.
Which of the following is exempt from TRELA licensing requirements?
An attorney
Which of the following is not a type of agent representation?
Arbiter
Which of the following is true regarding federal "do-not-call" rules?
Calls must be made between 8:00 AM and 9:00 PM.
How should a sales agent align him or herself with regard to a brokerage firm?
Choosing a firm that adheres to ethical conduct
A person who purposely violates or fails to comply with The Real Estate License Act commits an offense, which is a:
Class A misdemeanor.
TRELA does which of the following?
Combats dishonesty among real estate brokers and their sales agents Stops fraudulent activities among real estate brokers and their sales agents Requires real estate brokers and their sales agents to have licenses
__________ refers to the body of law based on custom and judicial precedent rather than on codified statutes.
Common law
Which of the following is not one of the five main steps for obtaining an active Texas real estate sales agent license?
Completing a physical and mental health check
__________ refers to discretion in holding privileged information.
Confidentiality
Which of the following is not a duty of TREC?
Creates state laws, statutes, and rules
In Texas, consumers' rights are protected by the __________ found starting in Section 17.41 of the Business and Commerce Code.
Deceptive Trade Practices and Consumer Protection Act
__________ is a set of principles or values by which an individual guides his or her own behavior and judges that of others.
Ethics
Which of the following statements is not true regarding ethics?
Ethics and law are one in the same
The __________ protects consumer identity and credit information and is designed to promote the accuracy, fairness, and privacy of the information collected and maintained by credit reporting agencies.
Fair Credit Reporting Act
Texas laws and regulations that address discrimination in housing complement the:
Fair Housing Act.
What do fair housing laws require real estate offices to display?
Fair Housing posters
The purpose of the __________ is to maintain and promote economic competition in trade and commerce occurring wholly or partly within the State of Texas and to provide the benefits of that competition to consumers in the state.
Free Enterprise and Antitrust Act
The basis of the NAR Code of Ethics is the:
Golden Rule.
The __________ deals with high-rate, high-fee home loans that are refinance or home equity installment loans and law addresses certain deceptive and unfair practices in home equity lending.
Home Ownership and Equity Protection Act of 1994 (HOEPA)
What term refers to protection against damage, loss, or injury, or to make compensation for damage, loss, or injury?
Indemnification
Which of the following is true regarding intermediary brokerage?
Intermediary brokerage provides brokers with a way to represent both parties to a transaction. Intermediary brokerage helps brokers avoid the numerous pitfalls of dual agency. TRELA does not allow a broker to act as a statutory dual agent.
__________ is the number of jobs added or deleted if the growth is negative, to the number of jobs in an area.
Job growth
__________ refers to the duty to put your client's best interests first.
Loyalty
Specific real estate markets have submarkets. __________ is the process of identifying and analyzing submarkets within these larger markets.
Market segmentation
Adopted in 1913, the __________ provided a model for many of the original state licensing laws.
National Association of REALTORS'® Code of Ethics
__________ is a cause that is legally sufficient to result in liability.
Producing cause
What secures the listing broker's commission if the owner personally sells the property to any person whose attention was called to the property during the listing?
Protection Period Clause
In 1939, the state of Texas passed the __________, which provided the first credible real estate brokerage law in Texas.
Real Estate Dealer's License Act
The __________ is a statute that is administered and enforced by the Texas Real Estate Commission (TREC), which is a state agency.
Real Estate License Act
The __________ serves to protect the public in real estate transactions involving a real estate license holder
Real Estate License Act
What is the practice of designating certain neighborhoods as areas where loans will not be made?
Redlining
Which of the following is not one of the federal and state regulations that protect consumers from unfair business practices?
Regulation B
__________ is issued by the Bureau of Consumer Financial Protection to implement the provisions of the Equal Credit Opportunity Act.
Regulation B
The purpose of __________ is to promote the informed use of consumer credit by requiring disclosures about its terms and cost.
Regulation Z
Which pair below represents the types of disclosures required by The Real Estate License Act?
Representation and agency
Which of the following statements is true regarding the Community Reinvestment Act?
Requires that lenders lend to low to moderate income families for housing, small business, and farming Requires that lenders meet their local communities' needs first Encourages regulated financial institutions to serve their immediate community's needs
Which rule established the responsibilities of the Education Standards Advisory Committee?
Rule §535.43
What occurs when a licensee is compensated without the full knowledge and consent of the parties in a real estate transaction?
Secret profit
What are changes in business and economic activity that occur within the year?
Short-term fluctuations
Which of the following topics is not tested on the national portion of the real estate examination?
Statistical probabilities
__________ is the law governing Texas real estate license holders and is enforced by __________.
TRELA; TREC
The Canons of Professional Ethics and Conduct are found in the ______________. Rule §531.19 of the Canons addresses discriminatory practices.
Texas Administrative Code
The __________ is the supreme law of Texas and establishes the fundamental legal rights of its citizens.
Texas Constitution
The __________ enacts statutes affecting the entire state, and city councils pass local laws affecting the residents of the city.
Texas Legislature
The Real Estate License Act (TRELA) is found in the:
Texas Occupations Code.
The __________ enforces the provisions of TRELA and determines administrative policy.
Texas Real Estate Commission
Any person who wants to engage in the real estate business and act as a real estate broker or real estate sales agent within the state of Texas must obtain a license from the:
Texas Real Estate Commission.
Texas real estate license holders are regulated by:
Texas Real Estate Commission.
The __________ has the authority to investigate purported violations of the Texas Fair Housing Act.
Texas Workforce Commission Civil Rights Division
Which of the following is not true regarding a sponsorship agreement?
Texas law requires a written sponsorship agreement.
What law prohibits discrimination based on race in all property transactions?
The 1866 Civil Rights Act
The Fair Housing Act prevents lenders from imposing different loan terms for all of the following, except:
The Fair Housing Act prevents lenders from imposing different loan terms for all of the following, except:
What law provides funding to public and private entities that formulate or carry out programs to prevent or eliminate discriminatory housing practices?
The Fair Initiatives Program
License holders are required to follow the provisions of __________ in all transactions and to deal with the public in a competent and honest manner.
The Real Estate License Act
Regulations regarding Texas real estate agency representation are located in Section 1101 of the Texas Occupations Code known as:
The Real Estate License Act (TRELA)
Which of the following is the basic federal antitrust statute?
The Sherman Antitrust Act of 1890
What happens if an employing broker's license is suspended or revoked?
The employed sales agent must transfer his or her license to another broker
Which statement is incorrect regarding a person who has an Inactive Sales agent License?
The person has a sponsoring broker.
"Do-not-call" restrictions do not apply if:
The person is already a member, you have written permission to call the person. You have a personal relationship with the person.
Which of the following is the client in a single agency relationship with regard to a real estate transaction?
The principal
Which of the following statements is true regarding the real estate cycle?
The real estate cycle undergoes similar phases as the business cycle. The real estate cycle undergoes similar turning points as the business cycle. The cyclic nature of the real estate market allows economists to identify the turning points as they occur
23 of 24Which of the following statements is true regarding the real estate cycle?
The real estate cycle undergoes similar phases as the business cycle. The real estate cycle undergoes similar turning points as the business cycle. The cyclic nature of the real estate market allows economists to identify the turning points as they occur.
The __________ is aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs and also requires the lender to state a maximum interest rate in variable rate contracts secured by a borrower's dwelling.
Truth in Lending Act
__________ is defined as taking advantage of the lack of knowledge, ability, experience, or capacity of the consumer to a grossly unfair degree.
Unconscionable action
Which of the following often constitutes a red flag in real estate advertising?
Use of certain terminology
Which of the following is not true with regard to establishing an agency relationship?
Verbal agreements establishing an agency relationship are illegal.
When is the equal housing opportunity logotype in real estate advertising too small?
When the size of the logotype is so small that the facial features (ethnicities) of the people are not clearly distinguishable
What is necessary prior to a broker acting as an intermediary in a real estate transaction?
Written disclosure to all parties
All of the following are true regarding real estate sales associates, except:
a broker who puts his or her license under a sponsoring broker is known as a sales associate.
All of the following are necessary requirements to be eligible for a real estate license in Texas, except being:
a college graduate.
When establishing an agency with a written contract, an agent should always make sure the client receives:
a copy of all signed documents.
All of the following are true regarding TAR's citation policy, except it:
accepts any and all complaints against a licensee.
Any form of communication by or on behalf of a license holder designed to attract the public to use real estate brokerage services is a(n):
advertisement.
The Civil Rights Act of 1968 disallows discrimination based on all of the following, except:
age.
Common law agency gets its authority from the:
all of the choices apply.
To be eligible to get a Texas real estate sales agent or broker license, a person must:
be at least 18 years old. be a citizen of the United States or a lawfully admitted alien. meet any applicable residency requirement.
In addition to the legal requirements, to be eligible to get a Texas real estate sales agent or broker license, the person must also:
be honest. be trustworthy. have integrity
James, a real estate sales agent, caused panic selling when he told people that the value in their neighborhood was declining because the majority of the homes had recently been purchased by minorities. What James did was illegal and is called:
blockbusting.
Persuading an owner to sell housing by saying that people of a particular race are moving into the neighborhood is an example of:
blockbusting.
Usually, members who join a local Association of Realtors automatically become members of the Texas Association of:
both REALTORS® (TAR) and the National Association of REALTORS® (NAR).
The two main types of real estate licenses are the:
broker's license and sales agent's license.
A broker hired by the buyer to represent his or her interests in locating a certain kind of real property is a(n):
buyer's agent.
An economic system in which most of the economy's resources are privately owned and managed is:
capitalism.
Real estate agents who do not comply with the duties and obligations required by law may be subject to:
civil action and penalties. criminal action and penalties. action and penalties
Every state passes statutes to __________ common law principles.
codify clarify change
A fee charged by the brokerage that is based on a percentage of the property's sales price is a(n):
commission.
An analysis of recent sales and listings to help potential sellers determine an appropriate listing price for their property is a(n):
comparative market analysis.
The failure to disclose a material fact, if intended to induce or allow a false belief is:
concealment.
The Education Standards Advisory Committee is responsible for reviewing and revising:
curriculum standards. course content requirements. instructor certification requirements.
The relationship between demand and supply makes the real estate markets:
cyclical.
The ability to earn repeat business is directly related to an individual's:
ethical business practices.
A set of principles an individual uses to guide his or her own behavior and others is:
ethics.
Protection under the Americans with Disabilities Act (ADA) includes all of the following handicaps, except:
financial dependence.
All of the following are prohibited by real estate regulations that uphold federal and state fair housing laws, except:
flipping.
All of the following can cause TREC to revoke or suspend a real estate license, except:
following fair housing laws.
A __________ is authorized by a principal to perform all tasks associated with the continued operation of a particular project.
general agent
By observing the code of ethics, members of local, state, and national trade associations promote __________ and harmony and further the interests of the real estate industry as well as the public.
goodwill
Section 1101.652, Item 32 states that a licensee who commits a discriminatory act can:
have his or her license suspended or revoked.
A sales agent can only accept a commission for completing a real estate transaction from:
his or her sponsoring broker.
A mistake that does not question the honesty, competence, or diligence of a person and does not constitute a breach of duty is called a(n):
honest mistake.
The CRA requires that lenders meet their local communities' needs first by lending to low to moderate income families for:
housing. small business. farming.
All of the following are ways to terminate a brokerage agreement, except:
incomplete performance.
An individual who chooses the method to use in completing contracted work is a(n):
independent contractor.
Employment of prudence and caution to avoid misrepresentation relate to a licensee's special obligation to exercise:
integrity.
TREC may suspend or revoke a license if the license holder:
is convicted of a felony in which fraud is an essential element.
The law that affects the licensing and conduct of real estate brokers and their sales associates sometimes is called the : ?
license law.
The parties in an intermediary relationship are subject to:
limited representation.
A contract between the property owner and the brokerage to place properties for sale with the brokerage is a:
listing agreement.
An employment contract between an owner of real property and broker for the sale of real estate is a(n):
listing agreement.
All of the following are responsibilities of the Texas Real Estate Commission, except:
maintaining an extensive database of real property sales.
Exceptions to the professional service exemption include:
making an express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion. failing to disclose material information. following an unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion.
An individual practicing real estate without a license is committing a:
misdemeanor.
Trust funds may not be __________ with funds belonging to the broker.
mixed
TREC regulates all of the following, except:
mobile home dealerships.
When a person or group has exclusive control over a product or service within a given region it is called a(n):
monopoly.
An instructor who wishes to teach TREC legal courses must first:
obtain certification through training sessions.
A person who obtains judgment for actual damages due to misconduct by a real estate licensee can:
obtain funds from the Recovery Account if the licensee cannot pay.
A victim of discrimination under the Texas Fair Housing Act has __________ to file a complaint.
one year
Good sources for connecting with prospects include:
open houses. for-sale-by-owners. introductory calls.
A __________ is a form of business in which two or more persons join their money and skills in conducting the business.
partnership
Typically, a new licensee's first expense will be to:
pay for his or her license.
Any form of direct communication between a sales agent and a customer is:
personal selling.
The forms used in real estate transactions must have been:
prepared by the property owner. prepared by an attorney. promulgated by the Texas Real Estate Commission.
The collaboration of one or more persons setting a fixed price for goods or services to remove the free market's ability to influence prices is known as:
price fixing.
After having someone sign a document pertinent to a real estate transaction, the licensee should:
provide the signer with a copy.
Texas also licenses:
real estate inspectors. residential service companies. real estate schools.
The Real Estate License Act must be viewed separately from what is known as:
real property law. law of agency. contract law.
All of the following are examples of horizontal arrangements between business competitors that conflict with antitrust laws, except:
redlining.
Prior to the CRA, lenders tended to avoid lending in high-risk communities and neighborhoods in a practice known as:
redlining.
A(n) __________ is a rule issued by an administrative agency to enforce or amplify a statute.
regulation
When a sales agent leaves the employ of a particular broker, any listings he or she has will:
remain with that broker.
Regarding complaints of ethics violations, typical disciplinary actions include:
reprimand. fine. probation.
Companies that offer a "home warranty" also known as a __________ must be licensed by TREC
residential service contract
The Fair Housing Law states that it is unlawful to publish ads that sell real estate that discriminate against any of the following, except:
senior citizen housing.
If real estate sales advertising uses human models, the media must not include models that:
show exclusiveness to a specific group.
It is a good idea for a new licensee to have at least __________ of living expenses set aside.
six months
Real estate advertising must contain the equal housing opportunity logotype, which should be all of the following, except:
small so it does not distract the advertising message.
All of the following are protected classes under the Texas Fair Housing Act, except:
socioeconomic status.
The Fair Housing Act protects against discrimination based on all of the following, except:
socioeconomic status.
A(n) __________ is a law passed by a legislature.
statute
A meeting that involves a substantive discussion regarding a real estate transaction is an example of:
substantive dialogue
All of the following are true regarding the creation of an intermediary brokerage, except:
the listing agreement does not address intermediary status.
All license holders' advertisements must include:
the name of the license holder or team
A __________ is a voluntary nonprofit organization of independent and competing business units engaged in the same industry or trade, formed to help solve industry problems, promote progress, and enhance service.
trade association
A sales agent should align with a brokerage firm that adheres to both legal and ethical business practices. It is important to follow all the correct procedures for:
transaction paperwork. advertising. trust funds.
Under Section 1101.652(b), a real estate licensee can cause his or her license to be suspended or revoked for paying any portion of a commission or a fee to a(n):
unlicensed associate.
The purpose of a real estate association is to:
upgrade the reputation and dignity of the real estate business.
An intermediary relationship requires:
written consent from both parties