Texas real estate questions
Payments from the Real Estate Recovery Fund are limited to what aggregate amount for claims arising from a single transaction? $25,000 $50,000 $150,000 $100,000
$50,000
A Texas broker has signed an Exclusive Right to Sell listing agreement with a negotiated commission of 5.5%. He has a buyer-client with a written Buyer Representation Agreement. His buyer-client wants to buy the seller-client's property. What role will this broker play in this transaction? Dual agent Subagent Intermediary Transaction facilitator
Intermediary
Mortgage "discount" points only apply if which of the following conditions are met? The loan does not close and the buyer owes the lender for services rendered. The seller has agreed to pay 1% of the closing costs. The interest rate has been truly reduced for each point charged. The interest rate on the mortgage loan has been lowered by 2% for each point charged.
The interest rate has been truly reduced for each point charged.
When is a seller's disclosure of property condition not required? When selling rental property that has never been owner occupied When the property is in the state of Texas but the seller is not a resident of Texas When selling at foreclosure When a buyer waives his right to a seller's disclosure
When selling at foreclosure
When is it NOT mandatory for the seller to provide a copy of the "Seller's Disclosure of Property Condition" to prospective buyers? When the property is a commercial property When the buyer has occupied the dwelling as a tenant When the seller is offering a home for sale by owner When the home has been vacant for at least a year
When the property is a commercial property
Marissa Pauls, licensed Texas real estate salesperson in Fort Worth, is browsing real estate websites when she views an ad placed by licensed real estate salesperson Brock Jordan that promises bonus cash payments for client referrals. Brock's office is in Dallas, and Marissa has just met a young couple wishing to relocate to Dallas. Under the law, can Marissa receive cash payments for any referrals she makes to Brock? No, payment for business referrals is illegal in the state of Texas. Yes, but she can only receive a payment of up to $50 for a referral. Yes, because it is a business referral between two real estate licensees No, cash payments are illegal; however, she could accept a tangible gift as reward for a referral.
Yes, because it is a business referral between two real estate licensees
An estate that is owned by three siblings with no rights of survivorship is an example of which of the following? tenancy by the entirety joint tenancy fee simple estate tenancy in common
tenancy in common
What is the youngest age at which a Texas citizen can prepare a legally binding will (disregarding exceptional circumstances)? 13 18 16 21
18
What is the criminal penalty for engaging in the real estate brokerage business in Texas without first becoming licensed by TREC? A fine of up to five thousand dollars per day Imprisonment for up to two years A Class A misdemeanor punishable by confinement of up to one year in a county jail and a fine of up to $4,000 Triple damages
A Class A misdemeanor punishable by confinement of up to one year in a county jail and a fine of up to $4,000
In judging whether previous felony or misdemeanor offenses committed by a candidate for licensure would render the candidate incapable of acting on behalf of others with honesty, trustworthiness, and integrity, the commission may take into account all of the following pieces of evidence EXCEPT which one? A comprehensive independent audit of the candidate's financial status to ensure suitability as a fiduciary Evidence of the candidate's rehabilitation and present fitness, including letters of recommendation from law enforcement and corrections personnel The candidate's age at the time the crime was committed The scope and substance of the candidate's criminal offenses
A comprehensive independent audit of the candidate's financial status to ensure suitability as a fiduciary
Standard forms promulgated by the Texas Real Estate Commission exist for all of the following sales EXCEPT which one? A large lot is intended as a future site for a multi-family (5 or more) residence complex. Construction is complete on a new home. The Veterans Administration is asserting entitlement to restoration. Construction is not yet finished on a new home.
A large lot is intended as a future site for a multi-family (5 or more) residence complex.
Which of the following situations is NOT exempt from the Texas Property Code, Section 5.008? An attorney facilitated the transfer of a property between a mother and her son. A lawyer arranged the transfer of a primary residence between divorced spouses. A salesperson, assisted with a foreclosure sale. A real estate broker has successfully negotiated the sale of a previously occupied single-family dwelling.
A real estate broker has successfully negotiated the sale of a previously occupied single-family dwelling.
Which of the following statements is true of a security deposit? Security deposits must be returned to the tenant even in situations where the tenant has failed to pay the last month's rent. A security deposit must be returned to the tenant within 30 days of the end of the lease unless the property has been damaged. A security deposit must accrue interest payable to the tenants during the time which it is held. Security deposits are only applicable to residential units.
A security deposit must be returned to the tenant within 30 days of the end of the lease unless the property has been damaged.
Which of the following people is required to be licensed as a real estate salesperson or broker? A construction company owner A couple purchasing their first home together An individual involved in the running of a real estate brokerage An individual selling her house
An individual involved in the running of a real estate brokerage
Which of the following situations could be considered illegal in Texas and put a licensee's license to practice real estate in jeopardy of suspension or revocation? Anna signs a listing agreement that allows the listing to continue indefinitely. Jerry signs a listing agreement that specifies a commission of 20% on the sale of a property. Lucy signs a listing agreement that fails to include a broker protection clause. Andrew signs a listing agreement that specifies a duration period of three months from date of signing as the valid period of the listing.
Anna signs a listing agreement that allows the listing to continue indefinitely.
With the knowledge and consent of her broker/employer, an unlicensed assistant is showing a property to prospective buyers. What is true about this situation? Both the broker and unlicensed assistant can be fined an administrative penalty of $5,000 per day The broker and unlicensed assistant are both guilty of a third degree felony Only the unlicensed assistant can be fined by the Texas Real Estate Commission for this activity Only the broker can be fined by the Texas Real Estate Commission for this activity
Both the broker and unlicensed assistant can be fined an administrative penalty of $5,000 per day
Rex Kinsella has received two offers on his ranch and acreage. The sprawling Sheffield estate, replete with large Spanish colonial manor house, horse barn, several smaller outbuildings, and several acres of cleared land is a steal at only $216,500. The first offer, from Clara Walters, a young woman who wants to start a horse riding academy, is for $211,900 cash. The competing offer from the Millhouses, a middle-aged couple who need plenty of room for their grandchildrens' visits, offers $215,000 with 10% down and a request that Rex pay 2 points on their mortgage loan. Which offer would be most lucrative for Rex? The Millhouses' offer because it is only $1,500 less than the listing price The two offers are equal in the end. The Millhouses' offer because they are making a down payment Clara Walters' offer because she is paying cash and not asking for Rex to pay any points
Clara Walters' offer because she is paying cash and not asking for Rex to pay any points
Which of the following closing tasks is outside the realm of a salesperson or broker's duties? Disbursing escrow monies to attorneys Conducting the necessary title searches Going over closing procedures with the buyers and/or sellers Arranging a schedule for closing
Conducting the necessary title searches
Which of the following is NOT true of the educational requirements a candidate for licensure must meet? Any course offered by alternative delivery methods such as correspondence or computer delivery, must teach to mastery as prescribed by the commission and follow curriculum development guidelines outlined by the commission. Candidates must complete coursework that includes, at a minimum, courses in promulgated contract forms and law of agency. Course credits awarded by an accredited college or university for life experience or by examination are acceptable in lieu of core real estate courses. Upon completion of the required number of hours of attendance at the prescribed courses, the candidate must pass a final course examination, either written or electronic, before the candidate can be considered to have passed the course.
Course credits awarded by an accredited college or university for life experience or by examination are acceptable in lieu of core real estate courses.
The intent of the Seller's Disclosure Notice is to do which of the following? Provide a limited warranty on the property on behalf of the agent Disclose any latent defects of which the seller is unaware but which might affect the market value of the house Provide a limited warranty on the property on behalf of the seller Disclose the material facts and the physical condition of a property.
Disclose the material facts and the physical condition of a property.
What department of the Federal Government administers the Do Not Call list? CFPB HUD NAR FTC
FTC
From what source may a Texas real estate salesperson legally collect compensation? From the salesperson's sponsoring broker From any licensed real estate broker From a seller whom the salesperson represents From the legal representative of any party to a valid transaction
From the salesperson's sponsoring broker
Harvey Lipman, a masonry subcontractor, is owed $5,000 for work on a custom-built home in Sulphur Springs. How can he give constructive notice when his invoices to the customer continue to go unpaid? He can obtain a mechanic's lien against the property He can file an affidavit against the real estate salesperson He can place a personal ad in the legal notices section of the newspaper He can file a judgment with the district court
He can obtain a mechanic's lien against the property
Without proper authorization, a sales agent may accept a commission directly from: A seller His broker The title company A buyer
His broker
Bob Jones, husband and father of four adult children, from a previous marriage, was the victim of a hit-and-run accident. How will his estate be divided among his wife and four children in the absence of a valid will? His wife inherits his estate in its entirety. His wife inherits half the estate; the remainder of the estate is divided equally among his children. Each of his surviving family members receives one-sixth of his estate. Personal property passes to his wife.
His wife inherits half the estate; the remainder of the estate is divided equally among his children.
Which of the following statements regarding mold and mold remediation is false? A property owner can assess and remediate mold on his own property without a license A certificate of mold remediation must be provided no more than 10 days after the work is complete If mold is visible, it must be remediated All certificates no more than 5 years old must be provided by sellers to buyers
If mold is visible, it must be remediated
Which of the following is NOT true of an easement along the Gulf Intracoastal Waterway? If no clearly marked natural vegetation line exists, there is no easement. The state of Texas retains the right to tear down any structures built seaward of the easement line. Real estate agents should advise buyers that the public has obtained an easement to the public beach areas. It is illegal to interfere with the public easement to the public beach areas.
If no clearly marked natural vegetation line exists, there is no easement.
Ralph and Jane Smith listed their house for sale with Jackson Realty on April 15. The termination date of the listing was specified as September 15, but the Smiths decided in July that they no longer wished to keep their house on the market. Which of the following would be applicable to their situation? The Smith's must appeal to the Texas Real Estate Commission for assistance in terminating the listing agreement prior to the date specified. The Smith's have the opportunity to cancel the listing agreement at any point and will not be subject to any penalties for choosing to terminate the listing early. The Smith's are bound by a contractual listing agreement and do not have the authority to terminate the listing early. In terminating the broker's authority and opportunity to sell the property, the Smith's may be responsible for some expenses in terminating the listing prior to the specified date.
In terminating the broker's authority and opportunity to sell the property, the Smith's may be responsible for some expenses in terminating the listing prior to the specified date.
When a license holder markets his own property, he should: Not mention his interest unless the buyer decides to buy the property Use the TREC promulgated form to disclose his interest in the property Use the IABS to disclose his interest in the property Inform the buyer that he is a license holder, and the owner of the property
Inform the buyer that he is a license holder, and the owner of the property
Which broker has the right to determine the division of commission? Just the selling broker since he is bringing the offer to the seller The division of commission is negotiable between the two brokers Either broker since the division of commission is at the discretion of the broker Just the listing broker since he owns the commission and commission split as negotiated in the listing agreement
Just the listing broker since he owns the commission and commission split as negotiated in the listing agreement
Grant Parks, a general contractor, and his business partner Sam Davis, a licensed broker, decide to buy a rundown apartment building in downtown Houston for which Sam is the listing agent. The property has been on the market for over nine months and has not attracted any offers. Grant and Sam plan to rehab the building and seek a change in zoning to make it more marketable. Can Grant buy the property from the seller without disclosing his partnership with Sam? Yes, in arranging for the sale, Sam is fulfilling his fiduciary obligations to the seller. Yes, Grant can acquire the property without disclosing their plans because he is not a licensed realtor. No, Sam cannot be involved in owning a piece of property for which he was the listing agent within the past eighteen months. No, Grant should inform the seller of his partnership with Sam.
No, Grant should inform the seller of his partnership with Sam.
Broker Joe has a listing contract and a buyer's representation agreement, and so is acting as an intermediary in a transaction. The buyer tells Joe that if he is successful in purchasing the property, he plans to buy all the surrounding property too. What should Joe tell the seller? Nothing, as this is confidential information from the buyer Joe must disclose all facts to the seller, including this information about the buyer Joe should disclose the buyer's intention to the seller, and the seller's response to the buyer, as he is in intermediary status and owes disclosure to both parties Joe should give the seller a broad indication of the buyer's intention, without disclosing specific facts
Nothing, as this is confidential information from the buyer
A seller's disclosure is not required: When the seller lives in another state On the sale of a tenant-occupied property that has been managed by a real estate license holder for years On new construction that has not been occupied When a builder is selling his own residence
On new construction that has not been occupied
Which of the following must be disclosed to a prospective buyer? The dwelling was the site of a suicide. The previous owner was an elderly man who died of a heart attack. The previous owner died of AIDS. One of the previous occupants died from a fall caused by a rotten plank in the basement stairwell.
One of the previous occupants died from a fall caused by a rotten plank in the basement stairwell.
Which of the following types of real estate licensees is required to display their license prominently at their place of business? Only licensees who are residential rental locators are required to display their licenses. Only salespersons are required to display their licenses. Only sponsoring brokers are required to display their licenses. No licensees are required to display their licenses.
Only licensees who are residential rental locators are required to display their licenses.
In what circumstances, if any, can a broker who is serving as an intermediary representing both parties collect compensation from both the buyer and the seller? In most circumstances, except when the buyer and seller are related Only when both buyer and seller have legal representation None; the broker may only collect compensation from one party to a transaction Only when both buyer and seller give informed consent to this arrangement
Only when both buyer and seller give informed consent to this arrangement
When must representation be disclosed and in what form? In writing at first contact Orally or in writing at first contact Using the the Texas Real Estate Commission promulgated IABS at the first face-to-face contact In writing at the first face-to-face contact with a party
Orally or in writing at first contact
When should a salesperson or broker present the "Seller's Disclosure of Property" to a buyer? Prior to, or within an agreed number of days of, preparing a written offer for a buyer. Any time between acceptance of the offer and the closing date. After a satisfactory inspection and appraisal are completed. After the closing date.
Prior to, or within an agreed number of days of, preparing a written offer for a buyer.
Which of the following actions would be mandated by RESPA? Protection of the ownership rights to minerals contained in a particular parcel of land Full disclosure of hidden material/structural defects Provision of a loan estimate Full disclosure of the terms of a loan
Provision of a loan estimate
Which of the following statements is not true? Real Estate Inspectors are licensed by TREC TREC Consumer Information Form 1-2 applies to Real Estate Inspectors Real Estate Inspectors must use promulgated forms for residential inspections Real Estate Inspectors must use promulgated inspection forms for all properties
Real Estate Inspectors must use promulgated inspection forms for all properties
A license holder in violation of the TRELA has received a summons from the Texas Real Estate Commission that a hearing will be held regarding the possible revocation or suspension of his license. The license holder fails to respond to the summons. What will the Texas Real Estate Commission do? Schedule a hearing at the main office or business address of the license holder Schedule a hearing in the county court where the license holder practices real estate Schedule a hearing in the district court serving the license holder Schedule a hearing at the Texas Real Estate Commission office in Austin
Schedule a hearing at the Texas Real Estate Commission office in Austin
An unlicensed assistant can: Show a buyer no more than 3 listings Tele-market for listings Prepare a Comparative market analysis and present it to a client Schedule an appointment by calling a prospect.
Schedule an appointment by calling a prospect.
In the event of a conflict between the statutory duties of Intermediary and the common law duties of a dual agency of a broker, which takes precedence? Whichever the broker entered into first Statutory Intermediary Common Law Dual Agency Whichever the broker and the parties agree to
Statutory Intermediary
A broker acting as an intermediary to the sale of a single-family dwelling, Juan Cho would be acting unlawfully and unethically if he discloses any of the following information except: That the sellers are in dire financial straits, on the verge of bankruptcy, and need to sell immediately even if they have to sell at a loss That the buyers are able and willing to pay $5,000 more than the asking price That both parties have agreed to pay a portion of the broker's compensation That the seller will accept $5,000 less than the asking price
That both parties have agreed to pay a portion of the broker's compensation
Which of the following TREC forms does not include the phrase, "time is of the essence"? The Short Sale Addendum The 1-4 Family Resale Contract The Third Party Financing Addendum The Notice Regarding Coastal Area Property
The Notice Regarding Coastal Area Property
The Texas Real Estate Commission can investigate the actions of a licensee at its' own motion. TREC can also investigate a licensee if: The Texas Real Estate Commission receives any complaint, oral or written about a licensee no longer than four years after the date of a contract or incident The Texas Real Estate Commission receives a written complaint about the actions of a licensee The Texas Real Estate Commission receives a written and signed complaint no longer than four years after the date of a contract or the date of an incident The Texas Real Estate Commission receives a written and signed complaint no longer than two years after the date of a contract or the date of an incident
The Texas Real Estate Commission receives a written and signed complaint no longer than four years after the date of a contract or the date of an incident
What is the difference between a broker in an intermediary position and an appointed associate under intermediary? The appointed associate can give advice and opinions to one party, but the broker can give advice and opinions to both parties There is no difference The appointed associate can give advice and opinions to both parties, but the broker cannot give advice and opinions to either party The appointed associate can give advice and opinions to one party in the transaction, but the broker cannot give advice and opinions to any party
The appointed associate can give advice and opinions to one party in the transaction, but the broker cannot give advice and opinions to any party
What is required in order for a broker to act as an intermediary? The broker must have the written permission of the seller in the listing, but may have a verbal representation agreement with the buyer The broker must use the Texas real estate commission promulgated forms for intermediary status and appointments The broker must have the written permission of the seller and the buyer, including information on how the broker is to be paid The broker must have at least 2 associates to appoint to work with the parties in order to be an intermediary
The broker must have the written permission of the seller and the buyer, including information on how the broker is to be paid
A broker has contacted a seller about listing the seller's property. The listing presentation went well and the seller has agreed to list with the broker. The listing agreement has not been signed but the broker has an appointment with the sellers for this evening to finalize the agreement and for all parties to sign. The broker would like to place his sign on the property today. What is true? The broker can place the sign if he has the seller's spoken permission The broker's sign can be placed in the yard by the seller but not by the broker The broker can place the sign since he has the seller's agreement to list the property The broker must wait for the written permission to place the sign
The broker must wait for the written permission to place the sign
A buyer is unable to obtain credit approval as described in the Third Party Financing Addendum for Credit Approval. If the buyer provides the seller with written notice within the agreed-to number of days, which of the following is not true? The buyer is not entitled to a refund of any option fee he paid The buyer will lose his earnest money The buyer is entitled to a return of his earnest money and there is no remedy for the seller The contract is terminated
The buyer will lose his earnest money
Estimating the value of a house by taking the reproduction or replacement cost of the building, minus depreciation, plus the value of land would be classified as what type of approach to valuation? The cost approach A comparables approach An income approach A market approach
The cost approach
Which of the following is the responsibility of the broker? The listing advertisements of the sales agents he sponsors The continuing education of the license holders he sponsors The timely renewal of licenses by the sales agents he sponsors The financial opportunities and success of the license holders he sponsors
The listing advertisements of the sales agents he sponsors
What is the MOST accurate description of the mission of the Texas Real Estate Commission? The mission of the Texas Real Estate Commission is to ensure that business is conducted properly amongst licensees. The mission of the Texas Real Estate Commission is to assist and protect consumers of real estate services. None of the other options are correct The mission of the Texas Real Estate Commission is maintain property values thereby fostering economic growth in Texas.
The mission of the Texas Real Estate Commission is to assist and protect consumers of real estate services.
Which of the following is true and demonstrates the difference between the role of a Broker-Intermediary and the role of a Sales Agent-Appointee? The sales agent may give advice and opinions to both parties in the transaction The broker may give advice and opinions to one party in the transaction None of the other options are correct The sales agent may give advice and opinions to one party in the transaction
The sales agent may give advice and opinions to one party in the transaction
What is required of a seller's agent who shows a property to a prospective buyer? The seller's salesperson must enter a buyer's representation agreement with the prospective buyer. The seller's salesperson must notify the prospective buyer, either verbally or in writing, of the relationship between the salesperson and the seller and the salesperson's duty to work for the best interests of the seller. The seller's salesperson must advise the buyer to enter a buyer's representation agreement with a qualified licensee. The seller's salesperson must show the property without any commentary on the relationship with the seller.
The seller's salesperson must notify the prospective buyer, either verbally or in writing, of the relationship between the salesperson and the seller and the salesperson's duty to work for the best interests of the seller.
Which of the following statements about the Texas Real Estate Commission is false? Real estate rules and regulations are created by the commission. Prospective real estate licensees must pass an examination given by an independent testing company. A qualified executive director oversees day-to-day operations of the commission. The state association of REALTORS appoints the commission's members.
The state association of REALTORS appoints the commission's members.
Homestead protection serves what purpose? To provide for the payment of all taxes, claims, and liens against the property To remove the threat of disinheritance for spouses and minor children To transfer the deed to a surviving spouse in case of death To protect a homeowner's equity
To protect a homeowner's equity
Brewster Realty has current agency agreements with both the sellers and a buyer. The buyer would like to make an offer on the Sellers' property. Would this be legal? No, such a transaction would put Brewster Realty in the position of becoming a dual agent, and the broker would not be able to fairly and honestly represent the interests of both parties. Yes, but only if the Sellers accept full responsibility for the broker's commission. Yes, as long as the buyer appoints the broker and he/she remains a neutral intermediary in transaction negotiations. Yes, the situation is permissible if Brewster realty discloses the situation to both parties and receives written permission from both the buyer and Sellers.
Yes, the situation is permissible if Brewster realty discloses the situation to both parties and receives written permission from both the buyer and Sellers.
All approved CE classes include: ten hours of legal update eight hours of legal update six hours of legal update eighteen hours of legal update
eight hours of legal update
Requirements for obtaining a broker license in Texas include: four years of experience out of the past five and 3600 points five years of experience and 3600 points four years of experience out of the past five and 900 points five years of experience and 9 qualifying classes
four years of experience out of the past five and 3600 points