Module 1 CE Shop Practice Exam
In real estate, what are emblements?
Cultivated crops
The commission can impose up to a maximum of how much per violation of TRELA?
$5,000
Calculate the equity in a property currently valued at $225,000 if the owner still owes $250,000 on the mortgage loan.
-$25,000
Alana and Michael want to build a 5,000-square-foot ranch home on two acres of land they just bought. Once the house is built, how many acres of land will remain unbuilt?
1.89 acres
What is the continuing education requirement for Texas real estate licensees?
18 course hours for each licensed term
Broker applicants in Texas must have how much experience as an active license holder in the previous five years?
4 years
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
Which of the following provides an example of a universal agent?
A court-appointed guardian
Who is behaving unethically in the following scenarios?
A licensee who doesn't show potential buyers a home because he believes they aren't a cultural fit.
In Texas, it is legal for licensed real estate brokers to rebate commissions to ______.
A party to a transaction
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
Who is entitled to reimbursement from the Real Estate Recovery Trust Account?
Aggrieved persons affected by a license or certificate holder's wrongdoing
Your neighbor bought rights that will prevent you from ever building above two stories. What type of rights are these?
Air
What's the name of the act that requires public accommodation areas to be accessible?
Americans with Disabilities Act
Which of the following could a listing agreement be considered?
An employment contract between a licensee representing the brokerage company and a seller
The term "real estate" refers to which of the following under TRELA's general provisions?
Any interest in real property, including a leasehold, located in or outside of Texas
Where might a legal description be found?
At the county recorder's office or online county offices, or through a title company.
Which one of these situations represents the illegal practice of redlining?
Based on the neighborhood's demographics, Hunter, a mortgage broker, refused to underwrite mortgage applications from applicants who want to buy in specific neighborhoods.
Which act was the first to prohibit any exceptions for discrimination based on race or color?
Civil Rights Act of 1866
You have a listing agreement with Sam. Because of this, what is Sam's relationship to you?
Client
The mixing or combining of escrow funds and non-escrow funds is called ______.
Commingling
______ rights mean real estate acquired by either spouse during the marriage (with a few exceptions) is considered community property.
Community property
Which one of the following says that real estate acquired by either spouse during a marriage (in most cases) is considered community property?
Community property rights
You have a client who travels a lot and wants to feel safe and secure at home. Maintaining a house and yard isn't her idea of fun, and neither is fending off door-to-door solicitors. What type of homeownership would most likely fit her lifestyle?
Condo
Terri just bought her first home! She's so excited to be living the American Dream. She owns her home's interior, including the walls, but not the land on which it sits. What type of home does Terri own?
Condominium
Clarisse, your client, is a traveling salesperson. What type of housing would she likely prefer?
Condominium, for its easy living
A registered land surveyor is preparing a plat map that will show elevations and boundaries for a multi-level condominium complex. What is used as a reference point for measuring elevation?
Datum
What's the point from which elevation is measured?
Datum
Buyers Tony and Sylvia know the postal address of the property they're purchasing but are wondering about the legal description of the property. Where is the most likely place to find the legal description?
Deed
Over which of the following areas do local authorities have no police power?
Deed restrictions
A new business moves into town, significantly increasing the availability of good paying jobs. How is this likely to affect the town's housing market?
Demand will go up, creating a seller's market.
The _______ value affects a property's income tax basis.
Depreciated
Revealing all material facts to the client that are pertinent to the transaction describes which fiduciary duty?
Disclosure
With which type of government power is a property owner compensated when the government imposes an involuntary title conveyance for the public good?
Eminent domain
To reactivate a license in inactive status, a sales agent in Texas must demonstrate completion of continuing education, certify that they have not engaged in activity requiring a license while inactive, pay a fee, and:
Establish a sponsorship relationship with a broker
What type of lien is defined as an involuntary lien placed on all of the property received by a deceased person's heirs?
Estate/inheritance lien
In general, what is the term for a person who's been placed in a position of loyalty and trust?
Fiduciary
John and Susan tell an acquaintance, Carrie, about their "beachfront" condo. They show her pictures of the property, and she decides to buy it, sight unseen. They close on the sale, and Carrie visits her new condo, only to find it's tucked away in a neighborhood several blocks from the beach, and looks nothing like the photos the sellers showed her. What's this an example of?
Fraud
Which of the following statements about escheat in Texas is true?
In Texas, the state has the right to use the power of escheat.
Applying a capitalization rate to the net operating income is one way to determine a property's ______ value.
Investment
Which of the following statements about an easement appurtenant is TRUE?
It's a permanent right that runs with the land.
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
Stan and Emile are arguing over their shared lot line, since Stan thinks that Emile planted a privet hedge on Stan's property. Stan filed a civil legal action against Emile. Which of these would the court use to determine the actual lot line?
Legal descriptions of both properties
An advantage of organizing a business as a limited liability company is its ______.
Limits on the liability of members for company debts or other obligations
The _______ is the price at which an owner has offered to sell the property, and is the amount that's found on the MLS when a property is listed for sale.
List Price
Which type of lien is filed by a supplier of products that were used in construction or improvement of a property?
Materialmen's lien
Datums and benchmarks are used for ______.
Measuring elevations
Oscar bought an older home and hired a contractor to replace the old knob and tube wiring throughout the house. He was invoiced for the work, but 60 days have passed, and Oscar has yet to pay the bill. The electrician filed a lien against Oscar's house. What type of lien is this?
Mechanic's
What are the two primary types of income tax deductions homeowners may take for their primary residence?
Mortgage interest and property taxes
A person in Texas, who is authorized to conduct a real estate transaction under a court order, is:
NOT required to have a real estate license
The seller of residential real property subject to a PID assessment must provide a disclosure about this to prospective buyers before a sales contract is effective. What is this disclosure called?
Notice of Obligations Related to Public Improvement District
What is the length of the statute of limitations to file a fair housing complaint with HUD?
One year
Eileen entered into a contract to buy Peter's home. The contract specified that Peter must leave the refrigerator with the home, and he must replace the roof before closing. During the pre-closing walk-through, Eileen confirmed the house had a nice new roof, but also found that Peter took the refrigerator with him. Eileen decided she didn't want the refrigerator that much anyway so she didn't make a fuss. This is an example of ______ of the contract.
Partial performance
Which type of power gives the government the authority to do what's right for the public good and the owner may or may not be compensated?
Police power
Which of these actions violates the NAR Code of Ethics?
Preparing a written agreement that falsely states a purchase price
Which of the following statements related to the power of taxation is true?
Property tax liens take priority over any and all other liens on the property in most states.
Identify the ways in which the homestead law protects Texas residents.
Protects against foreclosure by general creditors
In the real estate business, whose primary role is it to make improvements to land?
Real estate developer
The Community Reinvestment Act requires lenders to invest in development and ______ efforts that will enable low- and moderate-income individuals and families to afford a home.
Rehabilitation
How can you determine lot size, easements, and encroachments of a property? Select the answer that would provide the most comprehensive search.
Research the deed and title history, check maps at the county recorder's office, and review land surveys.
An apartment building is an example of what kind of property?
Residential
Tina has fee simple ownership of her timeshare unit. Which of these is NOT an example of the type of ownership she may have?
Right-to-use
Kyle owns six acres of land with 400 feet of river frontage. He wants to build a beach along the river bank to make it easier to swim in the river. He can do this because as the owner of river frontage, he has ________ rights.
Riparian
Navigable and non-navigable waterways are a smaller classification within what kind of water rights?
Riparian
Which of the following would be something that could be improved by using funds from a special assessment tax?
Road Repaving
Annette really wants to move to San Francisco, but she's unsure whether she'll be able to afford to live there. Housing is very expensive because there simply is no room to build any new housing units. Which economic characteristic does this reflect?
Scarcity
Churches, schools, and cemeteries are examples of what kind of property?
Special Purpose
Niall is helping his seller client prepare a Bill of Sale. What amount should they write in for the sale price?
The amount that was negotiated with the buyer
Betty hired a contractor to replace her gutters. Within days, the gutters leaked and flooded her basement. She complained to the contractor, who replaced the gutters again. The next time it rained, the gutters leaked and flooded Betty's basement a second time. Frustrated, Betty decided to file a lawsuit against the contractor in an attempt to recover the money she lost. This is an example of ______.
Suing for damages and breach of contract
Which one of the following types of ownership termination allows each tenant to have a specific, divided portion (partition) of the property exclusively?
Termination of co-ownership by partition
What's required before a broker can start using an assumed business name in an advertisement?
The broker must register the name with the Texas Real Estate Commission and provide evidence of legal authority to use the assumed business name in Texas.
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
What's the best definition of land?
The earth's surface, extending downward to the center of the earth and upward to infinity, including permanently attached natural objects
Which statement regarding fee simple defeasible estates is true?
The estate includes the full bundle of legal rights but ownership is based on a condition
Identify which description best fits that of a rural homestead in Texas.
The property is located in the country and is limited to 200 acres for a family.
Identify which description best fits that of an urban homestead in Texas.
The property is located within the limits of a municipality and does not exceed 10 acres in size.
In Texas, the commission is responsible for preparing information outlining its purpose and duties. It must then make this information available to whom?
The public
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 best describes condominium ownership?
The space inside the unit itself belongs to the unit owner, and all owners also share in the ownership of the common elements.
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 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.
How do licensees create implied agency?
Through the parties' actions
Sheila owns a timeshare that gives her ownership of the property for a certain number of weeks per year in perpetuity. What type of timeshare is this?
Timeshare estate
Which of the following best describes the purpose of a buyer agency agreement?
To identify the terms of the buyer agent/buyer agency relationship
A lot measuring 108,900 square feet is for sale. How many acres is this?
Two-and-a-half
Margaret, a consumer in a DTPA lawsuit, was able to prove that the licensee in her suit knowingly failed to disclose information. What type of damages is Margaret entitled to?
Up to three times the original damages
Which of these might bring a charge of illegal steering against a licensee?
When working with single female clients, Cassandra is careful to promote properties in neighborhoods she considers safe.
May listing agreements be terminated without penalty?
Yes, if both the listing broker and the seller's agree in writing
Mavis plans to file a lawsuit under the DTPA. How many days prior to filing the lawsuit is Mavis required to send written notification to the licensee that she is suing him for damages?
at least 60 days
The residents of Blair Avenue are a close-knit bunch. They're all young couples with small children, and they don't want this dynamic to change when two of the couples have to move. Those couples sign an agreement promising not to sell to anyone without kids or to anyone over the age of 50. The contract can't be enforced because it's missing ______.
Legal purpose
After Wynn and Lianne enter into a contract for Lianne to buy Wynn's house, Lianne finds out that there are serious problems with the foundation. Lianne has already signed the contract. Which of the following can she do, if anything?
Lianne can declare the contract void, since a possible misrepresentation of the property invalidated her consent.
Business is booming for Johnstone Realty, a new brokerage firm in town. The other firms in the area are unhappy about the cooperating split Johnstone offers, and they all agree to not show Johnstone's listings to their buyer clients. What is this an example of?
Group boycotting
How is timeshare ownership typically split?
52 weeks
Grace found herself in a breach of contract situation where the other party met some of the terms but not others. Grace thought it would cost a lot of time and money to sue, so she decided to accept the work that had been done and call it good. This is an example of ______.
Accepting partial performance
Which of these landlord policies is discriminatory?
All residents must show a U.S. birth certificate as part of the application process.
What's an antitrust violation's central element?
Conspiracy
Nathan is a sales agent. He convinced one of his clients to purchase in a specific area of town, guaranteeing that it would be the next hot spot in the city and that he was sure to make a profit when his client sold. Six months after closing on the home, his client lost his job and needed to sell. The area had taken a turn, and the client's home was now worth less than what he paid for it. Nathan should have never promised his client a profit. Which of the following is true?
Nathan committed a prohibited action and could have his license suspended or revoked by TREC.
Jasmine is in the market for a new property for her, her partner, and their young child. Tanner is Jasmine's agent and has shown her several properties. Even though several properties meet the criteria his client is seeking, Tanner has intentionally weeded out properties close to the local college campus, because he doesn't think the location would be suitable for a family with young children. What, if anything, has Tanner done wrong?
Tanner has discriminated against Jasmine using familial status as a reason for not showing her properties.
The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) protects consumers against real estate licensees who ______.
Use lies, misrepresentations, fraud, or other deceptive practices or acts to advertise or sell real estate
