TX 30 Hour Principles of Real Estate I

The four tests of a fixture include the method of annexation, the intention in placing the item on land, and which two other methods?

Adaptability of the item to the land's use and agreement of the parties

Which of the following is a true statement about deducting interest on mortgages taken out in tax years between 2018 and 2025?

Interest on the first $750,000 of mortgage debt is deductible for married couples filing jointly or $375,000 for married couples filing separately.

Mac isn't licensed, but he's helping his sister, Katie, find a new house. Which of the following activities can Mac legally do?

Search real estate sites and resources for Katie to find available homes in the area

Ted's seller client is adamant that she'll be uprooting and taking most of the fruit trees in the backyard when she sells her home. Ted makes a note to himself that he'll need to include the ______ of the trees in the comments for his listing.

Severance

Sofia is thinking of becoming a real estate professional. Which of the following is a true statement?

She will be directly affected by the work of the ESAC through course curriculum, content, and licensing requirements

How is equity calculated?

Subtract loan balance from home value

In a buyer's market, what causes prices to go down?

Supply exceeds demand

What signifies that a survey is certified and represents a guarantee of accuracy?

Surveyor's stamp

Home ownership has many benefits. These include ______________.

Tax deductions

Which type of government power uses the legal power of a lien?

Taxation

What are the four types of government power?

Taxation, eminent domain, escheat, and police power

A buyer of five acres in rural Texas, which includes the subsurface rights, should be concerned about what in relation to mineral rights?

That oil and gas activities on adjacent properties may impact their enjoyment of the property

The ESAC is making a recommendation that will improve real estate education in Texas. Which entity is responsible for reviewing and implementing its recommendation?

The Texas Real Estate Commission

The Recovery Trust Account exists for the benefit of whom?

The account is established for the benefit of the public.

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.

Which law source provides a way to implement and enforce laws, establishes illegal practices, and penalties for violations?

Administrative law and ordinances

What type of individual's property is affected by a general lien?

All real property and personal property

Which of the following statements related to condominiums and surveys is true?

All states require that land used for condominiums be surveyed by a registered land surveyor and that a plat map be prepared to show the elevations of the floor and ceiling boundaries, as well as the vertical boundaries of each unit.

What is a syndicate?

An organization with many investors who jointly participate in a real estate investment

James is a licensed real estate sales agent in Texas. According to the general provisions of TRELA, when is he allowed to receive compensation for performing real estate activities?

Because he has his license and is sponsored by a broker, he will receive compensation once the broker has been compensated for the transaction.

All trusts have three parties: the trustor, the trustee, and the ______.

Beneficiary

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.

Texas sales agent Carl just received his license. Which of the following is a true statement?

Carl must complete a total of 98 hours in SAE and legal update courses by the end of his initial two-year licensing period.

Which of the following is an example of special purpose real estate?

Church

In real estate, what are emblements?

Cultivated crops

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

Your marketing messages need to go where they'll make a difference, and that's primarily your sphere of influence and your ______.

Farm Area

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

A general homeowners insurance policy does not cover______________________.

Flood Damage

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 of the following is true about homeowners insurance?

Homeowners policies generally cover structure, belongings, and liability.

After location, which is commonly the second biggest factor in a buyer's selection of a home?

Housing type

Your client, Jackson, has been renting and wants to purchase in the next year. What is something he should do early on to prepare?

Improve his credit score

How does a sole proprietorship own property?

In severalty

What's inverse condemnation?

It occurs when government actions deprive a property owner of the value of the property without offering just compensation.

Unlicensed consumers may only perform real estate activities in certain situations. In which of these scenarios would the consumer need a real estate license in Texas?

Jessie is searching for a new home for a friend moving into town. Jessie will be compensated 2% of the sale price for her time and effort.

The term "right of survivorship" is closely linked with _____________________.

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. What will the court use to determine the actual lot line?

Legal descriptions of both properties

Which of the following is deductible on an income tax return?

Loan origination fee

What type of home is built on a permanent chassis to ensure transportability?

Manufactured home

For what are datums and benchmarks used?

Measuring elevations

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

Can a license holder be held liable if they are unaware that a party to a real estate transaction is concealing information pertaining to that same real estate transaction?

No, the license holder was not aware of the dishonesty and is not liable.

What type of policy is an HO-A amended policy?

Non-standardized

Which type of property is exempt from the Fair Housing Act?

Owner-occupied with no more than four units

In what way is a townhome similar to a single-family detached home?

Ownership includes both the structure and the land.

When strong winds and tidal action from storms change the vegetation line, what can happen?

Private property can become subject to the public beach easement

Identify the ways in which the homestead law protects Texas residents.

Protects against foreclosure by general creditors

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.

Navigable and non-navigable waterways are a smaller classification within what kind of water rights?

Riparian

Examples of real property include which of the following?

Shelves attached to the wall with brackets

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

Texas Real Estate License Act

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

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

The cost of a parcel of land is 50 cents per square foot. Candace wants to purchase one acre. How much will this cost?

$21,780

If you have an 800-square-foot rectangular building and it sells for $75,000, that equates to ______ per square foot.

$93.75

What does it mean to be a buyer's agent?

A buyer's agent represents the buyer of a home per a written agreement.

Which of these scenarios is legal

A homeowner makes a room available for rent in her residence, but only interviews female applicants.

Which of the following are possible effects of an inaccurate survey?

A wrong legal description which results in unintentional encroachment, title, and legal issues

Marilyn owns a beautiful cottage on the beach in Texas. The general public has the right to use which portion of the beach in front of her house?

Wet beach

How is priority determined in cases where more than one judgment lien is filed against a property?

Whoever filed their claim first receives priority.

Jim lives in Texas. If he dies with no will in place, and no creditors or heirs can be found, all of his personal and real property will revert to _________.

The state of Texas

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

What's the purpose of licensing laws?

To protect the public by requiring certain education, training, and standards of licensees

What type of involuntary lien is placed on a person's estate after their death if there are unpaid debts to creditors?

Deceased person's debt lien

Under a sole proprietorship form of business, ______.

The owner assumes personal liability for all debts

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

How should you respond if your buyer says the following? "We're looking for a three-bedroom, two-bathroom home. We have young children, so we want to make sure we're in a good neighborhood—somewhere safe, where we'll find a lot of good families and neighbor kids that we'd want our children to play with."

"If you provide me with specific neighborhood names, I can certainly look for homes in those areas. You can learn about the different neighborhoods in the area at neighborhoodscout.com."

Rhonda and Oliver bought an old schoolhouse with the hope of transforming it into a residence. They owned the property as joint tenants. After Oliver died, how did Rhonda own the building?

In severalty

IRA funds distributed under the first-time homebuyer program require that borrowers use them within ___________ to acquire, build or improve a residence, and for closing costs.

120 days

Joy has just turned 18, and can't wait to get her Texas real estate sales agent license. How many hours of education does Joy need to complete before she's able to sit for the exam?

180

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 these statements best represents what happens after a federal fair housing complaint is made?

A fair housing specialist will review the complaint.

Which of these may have been used as a point of beginning in the metes and bounds system?

A fence post, iron stake, pine tree

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.

Which of the following is true regarding home ownership?

Besides the mortgage payment, utilities, maintenance, and other expenses apply.

Which of the following statements is true regarding community property rights and property ownership?

Both partners may own other properties purchased before the marriage separately (in severalty), but any properties purchased during their marriage are owned equally.

Indicate which of the following statements is true regarding legal life estates.

Created by operation of law

In a seller's market, what causes prices to go up?

Demand exceeds supply

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.

Which of the following is an advantage of living in a PUD or MUD?

Easy access to amenities

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 MorphoTrust USA™. She'll need her TREC ID number from her eligibility letter.

What's the best definition of personal property?

Everything that's not real property

What is the importance of a legal description appearing in real estate documents?

It precisely locates the land, improvements, encroachments, and easements that impact a property

What's NOT true of an easement appurtenant?

It's an encumbrance on the dominant property.

Valerie is a licensed real estate sales agent with four years of experience; Albie is a parts salesperson in Oklahoma, and Jake is a real estate instructor at a real estate school accredited by TREC. Who is qualified to serve on the committee?

Jake

Contrary to federal fair housing laws, the state where Katrina lives includes age as a protected class. Which of these statements about this conflict is true?

Katrina must follow the more restrictive of federal or state law.

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

What type of water rights are granted to landowners whose land borders closed bodies of water, such as lakes or the ocean?

Littoral

In general, which factor has the greatest impact on a buyer's decision to purchase a home?

Location

Homeowners policies cover five basic areas: structure, belongings, liability, medical payments, and _________.

Loss of use

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

Adam lives in an apartment above his friend's café. Adam lives in a ________.

Mixed-use development

Which area of real estate law covers what's required of a licensee when performing real estate activities within the state, including license law, continuing education requirements, supervisory requirements, and prohibited conduct?

Real estate license law

Homeowner Shaun loves DIY projects and decided to build some bookshelves for his home office. He bolted the shelves to the wall and installed trim around them so they became an integral part of the room. When he sells his home, the bookshelves will be considered ______.

Real property because of the method of annexation

An unlicensed person who practices real estate in Texas is guilty of committing a Class A misdemeanor with a fine of up to $4,000 and faces a TREC administrative penalty of up to $5,000 per violation. The violator is also liable to the state for a civil penalty of a maximum of more than ______ times more than the amount of compensation received from that unlicensed activity.

Three

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?

What's the difference between reversionary interest and remainder interest in a property?

With reversionary interest, the property reverts to the owner after the death of the life tenant. With remainder interest, the title to the property goes to a named third party following the death of the life tenant.

Vanessa is a sales agent who must renew her license in two months. Unfortunately, she has put off taking her continued education courses, and now there is no possible way for her to complete the required 18 hours prior to renewal. Does she have any other options?

Yes. Vanessa can defer her continued education requirements, but she must take them and renew her license before the 60th day from the date her license expired.