Principles of Real Estate 1- Texas: The CE Shop

Evan bought into a housing cooperative that's focused on cultural exchange. Each month, the co-op residents have dinner meetings and share food and information about the culture of their respective regions. When Evan made his purchase, he received a proprietary lease for his unit. What else did he receive?

Shares in the cooperative corporation

Which of the following is the definition of a client in Texas?

Someone who has agency representation with the real estate sales agent or broker.

What kind of tax could be levied on property owners for a public project that benefited the property owners only in that district?

Special assessment tax

When both supply and demand increase, what tends to happen to prices?

Stay the same

Absent a legal description, what are other ways to identify a property?

Street addresses and tax map personal identification numbers

Samantha is a real estate licensee. She's showing her client a property. The client asks about some spots on the ceiling and wonders if they're an indication of a roof leak. What should Samantha do?

Suggest that her client contact a roofing expert to make a determination.

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.

What age does a person become eligible for real estate licensure in Texas?

18 years

How large is a section used in the rectangular government survey system?

640 acres

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

Lance purchased a home, but he won't own any real estate—just shares in a corporation. This is because his new home is ______.

A cooperative

Which of the following is an example of an easement?

A path providing neighborhood access to a pond cuts through part of Hillary's property.

What's a datum?

A point, surface, or line used as a reference for measuring elevations

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

In what way is a townhome similar to a condominium?

They both typically have HOA dues.

Kellan and Stacy are in the midst of a property dispute. Each party has a legal description and survey that show conflicting boundaries between their properties. What may be the best way to resolve this dispute?

They must take the dispute to court.

Which of the following is true about net listings?

They often involve a conflict of interest.

A group of 26 different families have shared ownership of a vacation condominium. Each family spends two weeks annually at the condominium. Legally, the condominium is considered a _______.

Timeshare property

Which of the following best describes the purpose of a buyer agency agreement?

To identify the terms of the buyer agent/buyer agency relationship

Which one of the following terms refers to the dimensions, physical features, and contours of the land?

Topography

Charlene shares one wall with her neighbors to the side, but her home has three levels and she has no upstairs or downstairs neighbors nor a neighbor on the other side. What type of dwelling does Charlene own?

Townhome

Which of the following is an example of price fixing?

Two brokerages determine a standard commission rate.

In contract law, undue influence differs from duress in that duress includes ______.

Use or threat of force

What type of laws are enacted by government agencies at the city, state, federal, or county levels such as the Federal Housing Administration, state real estate commissions, and local planning boards, to provide a way to implement and enforce laws?

Administrative laws and ordinances

Who is entitled to reimbursement from the Real Estate Recovery Trust Account?

Aggrieved persons affected by a license or certificate holder's wrongdoing

What's market allocation?

Agreeing with a competing firm on how to split a market

Which statement most accurately describes a licensee's responsibility related to written offers on their listing, according to the NAR Code of Ethics and Standards of Practice?

All formal written offers received by the licensee must be presented to the owner until closing or execution of a lease, unless the client waives this obligation in writing.

To what properties does the Texas seller's disclosure of property condition law apply?

All single-family residential properties

Ricky is working for Matt, a buyer client, who is interested in a property at which the listing agent offers compensation to cooperating agents. The listing agent has offered Ricky or any cooperating agent additional compensation if the transaction closes within 40 days. Is this ethical?

Yes, but only if all of the involved parties have full knowledge and provide consent.

Can sales agents defer their continuing education (CE) requirements if they don't complete their continuing education prior to renewal?

Yes, sales agents may defer completion of CE for 60 days.

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.

What's the name of the act that requires public accommodation areas to be accessible?

Americans with Disabilities Act

What is a special flood hazard area?

An area where flood insurance is mandatory

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

Why would a buyer want to know if any easements or encroachments exist on a property?

Both easements and encroachments affect the property's lot size, enjoyment, and use, which can affect a property's value.

TREC must notify consumers of their right to file a complaint against a licensed sales agent, broker, or easement or right-of-way agent by which of the following means?

By displaying it in a readily noticeable location in each place of business the brokers maintain

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

Mr. Gray owns property in the city. He passed away, leaving no will, no heirs, and no creditors. The state can acquire the property through which process?

Escheat

Why do ethics matter in real estate?

Ethics uphold the profession.

What must be submitted with a real estate license application in Texas so a criminal background check can be performed?

Fingerprints

Property managers most often serve as which type of agents?

General

What must a newly licensed sales agent do to change their license to an active status?

Get sponsored by an active Texas licensed broker

Unhappy with some of the fees a local mortgage company charges her clients, Renee decides to not do business with that company and convinces buyer agents showing her listings to not do business with this company, either. What is this an example of?

Group boycotting

Jim is a listing agent. What offers must he present to his client, and when?

He must present all offers as soon as is practical.

Which physical characteristic of land addresses the concept that while improvements may deteriorate over time, the land itself cannot be destroyed?

Indestructibility

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

As demand decreases, what happens to the price?

It decreases.

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 is true?

James could be sanctioned by both the TWCCRD and the Real Estate Commission.

Five competing licensees in the same area agreed to cooperate in setting a standard commission rate for the area. This makes them guilty of a per se antitrust violation. What is a per se antitrust violation?

One in which no intent needs to be proven to establish a violation has occurred

Which of the following is a legitimate reason to terminate a sales contract?

One or both parties are in default.

Which of the following best describes condominium ownership?

Ownership of air space between a unit's boundaries and shared ownership in common areas

Ken, Dale, and James are brothers who own more than 100 acres as tenants in common. The relationship between Ken and James disintegrated, and so James initiated a lawsuit. The end result is that the court gave each brother a designated set of acres to own. What was granted by the court?

Partition

What might the government do if property owners fail to pay taxes on their property?

Place a lien on the property.

Sue Ellen has a contract to buy Roger's house, which she has always admired, when Roger decides he's ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario?

Preformance

Which of these actions violates the NAR Code of Ethics?

Preparing a written agreement that falsely states a purchase price

What, besides mortgage interest, can homeowners deduct from their income taxes for owning property?

Property taxes

Jack works for a great company creating online training for individuals who want to obtain their real estate license or need to keep their license current. What is Jack's profession?

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

Sally is a broker in Dallas and has been for 12 years. She enjoys the responsibility, and enjoys the weight of accounting on her shoulders. Luckily, the law protects her from having to know everything. Which of the following is an example of this provision?

Sally cannot be held liable for not asking if a current or previous resident of a home has any related illnesses to HIV or AIDS.

Which of the following phrases doesn't potentially discriminate against any protected class?

"Easy access to local shops"

A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400' deep. What was the price per front foot of the property?

$1,335.67

Your client Frank is interested in selling a 54,450-square-foot lot. A comparable property in the vicinity sold for $3,500 per acre. What would be reasonable list price for Frank's property?

$4,375

If not satisfied with a real estate license applicant's honesty, trustworthiness, or integrity, what may the Texas Real Estate Commission do?

Deny a license to the applicant

Jan is a real estate licensee selling a vacation home for which she is part owner. What must she do?

Disclose the interest in writing to all parties to the transaction

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.

Revealing all material facts to the client that are pertinent to the transaction describes which fiduciary duty?

Disclosure

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

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.

A couple of licensees you know from different firms are tired of competing with one another for the same listings. You overhear them saying, "You take the north side of town and I'll take the south, so we aren't stepping on each other's toes." You stop their conversation to tell them they're committing an antitrust violation. Which one is it?

Market allocation

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

Eric is a new licensee who wants to specialize in manufacturing and large office buildings. He is probably interested in which type of specialization?

Mixed use

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

The income tax benefits of owning a primary residence include deductions for property taxes and __________?

Mortgage interest

Can an unlicensed assistant show properties for sale for a broker in Texas?

No, a license is required for helping find potential buyers of real estate

Can an unlicensed individual search for a new home for a friend if they accept compensation for their effort?

No, because a real estate license is required in this situation.

Which of the following elements is always required for a real estate contract to be valid?

Consideration

Mark is the listing agent for a home owned by the Browns. At the open house, a colleague, Brandon, indicates that he has a buyer for the Browns' home. Mark has had numerous interactions with Brandon on other listings, and found that they don't get along. He really doesn't want to work with him on this deal. In order to behave ethically, what can Mark do?

Cooperate with Brandon because it's in the best interest of his clients.

Which option best defines a statutory lien?

Created by law and gives right of possession

In real estate, what are emblements?

Cultivated crops

You're holding an open house for Brenda. Walt and Mary walk in and ask you for a flyer that gives details about the property. At this point, what's your relationship with Walt and Mary?

Customers

What's the point from which elevation is measured?

Datum

When measuring elevations, what is used instead of a point of beginning?

Datum

Rickie is a real estate licensee. She makes regular calls to customers and past clients to market her services. If someone she calls asks to be put on her internal "do not call" list, what is Rickie required to do?

Immediately place the customer's number on her internal do not call list, and avoid making unsolicited calls from that point forward

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

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 how an agency relationship is created and explains the duties of an agent to the principal?

Law of agency

Ryanne is a tenant in a single-family home owned by Dominick. What type of interest does Ryanne have in the property?

Leasehold

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

Unlawful possession after the expiration of a lease is called ______.

Tenancy at sufferance

Which of the following trusts is created according to the terms of the will of a deceased person?

Testamentary

The ESAC makes recommendations for improvements to real estate education to the ______, which is tasked with implementing the new standards.

Texas Real Estate Commission

TREC is charged with passing rules to enforce, interpret, and explain the provisions of which of the following?

Texas Real Estate License Act

What act was introduced to combat discriminatory lending practices against individuals and businesses in low- and moderate-income neighborhoods?

The Community Reinvestment Act

Real estate licensees in Texas need to pay attention to updates from what agency, which is responsible for enforcing Texas Fair Housing Law?

The Texas Workforce Commission Civil Rights Division

In Texas, whose responsibility is it to supervise associated licensees and review transactional paperwork and advertising?

The broker's

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.

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.

What happens when a municipality completes an "in rem" foreclosure?

The municipality obtains title to the property.

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

The person has a real estate license.