TX Principles of Real Estate I Exam
Carmen is a new licensee who wants to drum up some business. There are a lot of high-end homes in her area, and she would love to sell one of them. She sees a few for sale signs and thinks perhaps she could convince the sellers to drop their current agent and allow her to represent them. Which of the following is true?
Carmen may not try to persuade sellers to break the contract they have with another licensee.
If a licensee uses escrow funds belonging to one client to assist another client, that licensee could be found guilty of ______.
Conversion: means to take money from an escrow account and using it for the benefit of someone who is not entitled to it
What is a primary focus of the statute of frauds as it relates to real estate transactions?
Real estate purchase and sale contracts must be in writing to be enforceable.
What's the best definition of real property?
Real estate, plus all of the interests, benefits, and rights included in ownership
The duty of ______ requires licensees to provide both clients and customers with quality, knowledgeable, and prudent service, and live up to the trust placed in them.
Reasonable skill and care
Committee tasked with implementing new standards
TREC: Texas real estate commission
A complaint has been filed through the TWCCRD for a fair housing violation. What agencies can impose sanctions on James
TWCCRD and the real estate commission
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 parcel of land measures one half mile by 3,000 feet. If price per acre is $4,200, what's the list price for this parcel? Round to 10ths of an acre for your calculation.
$752,066 Area = length × width. One mile = 5,280 feet. The area of this parcel is 7,920,000 s.f. ([5,280 ÷ 2] × 3,000). One acre = 43,560 s.f. The parcel is 181.8 acres (7,920,000 ÷ 43,560). So, the list price is $763,560 ($4,200 × 181.8).
Education standards advisory has how many members
12
Broker applicants in Texas must have how much experience as an active licensee in the previous 5 years?
4 years (must be 48 of the 60 preceding months)
Acre to SQFT
43,560 sqft
Timeshare is typically split in:
52 weeks
Filing a lawsuit under DTPA requires how many days prior to filing a lawsuit for sending written notification to the licensee that they're being sued for damages?
60
1 sq mile to acres
640 acres
What is the education requirement for first time renewals for sales agents in Texas
90 hours of sales apprentice education (SAE) and 8 hours of TREC's legal updates
Which of the following is the best definition of a broker in Texas?
A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person
A sponsoring broker paid a buyer a portion of the commission that the broker received from a sales transaction. This is called:
A rebate
Type of buyer is most likely to be involved in an assignment of contract
A wholesaler
The "MAIA" acronym helps to identify the four tests of a fixture. In "MAIA," the two "A"s stand for ______.
Adaptability of the item to the land's use and agreement of the parties
Which statement most accurately describes a licensee's responsibility related to written offers on a 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.
Easement by necessity
An easement (usually involving an access road) that allows the owner to avoid being landlocked
Ken signed a contract to purchase Debra's condo. Ken signed the contract two weeks prior to turning 18, which is the age of majority in his state. Debra found out about his age prior to the closing but honored the contract, and they closed on the condo a month after Ken's birthday. What was the status of the contract when Ken and Debra entered into it?
Because Ken was a minor when he entered into the contract, he had the option to cancel it (making it a voidable contract). However, the parties to a voidable contract may choose to execute it, which is what happened here.
The process in which the government actually takes someone's property through the power of eminent domain is called ______.
Condemnation
What's the purpose of PMI?
Covers the gap between the actual loan amount and 80% of the LTV
Basic property rights include the rights of possession, control, exclusion, enjoyment, and ______.
Disposition
Duress v Undue influence
Duress: Use of physical threat Undue influence: manipulation without physical threat
A portion of Lance's property can be used by the local utility company to maintain its power lines. What is this an example of?
Easement
Why do ethics matter in real estate?
Ethics uphold the profession.
Your client tells you to do something that would violate fair housing laws so you will earn an amazing commission. What do you do?
Explain you can't do it because its a fair housing violation and you both could get in trouble
Bills passed by Congress and signed into law by the President, which regulate mortgage lending and fair housing, are examples of what type of laws that real estate professionals must follow?
Federal laws
A seller received $800,000 for a 5.5 acre rectangular parcel alongside a road frontage. The property is 400 feet deep. What was the price per front foot of the property?
First, find the square footage (5.5 × 43,560 = 239,580). You're given one dimension of the rectangle, so find the other: 239,580 ÷ 400 = 598.95 front feet. To find the price per front foot, $800,000 ÷ 598.95 = $1,335.67 per front foot.
When HUD receives a discrimination complaint from Texas, what step does it take?
Forwards the complaint to the Texas Workforce Commission Civil Rights Division
Peter is a tenant in a single-family home owned by Cheyenne. What type of interest does Cheyenne have in the property?
Freehold
Phil is a property manager, which means he serves as a _______ agent to his landlord/client.
General (property managers are general)
What's inverse condemnation?
It occurs when government actions deprive a property owner of the value of the property without offering just compensation.
In order to be considered REALTORS®, what must licensees do?
Join the National Association of REALTORS®.
What does the concept "first in time" refer to when discussing lien priority?
Liens are paid based on date of filing.
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
type of lien is filed by a supplier of products that were used in construction or improvement of a property
Materialmans lien
Regular mortgage financing is available for this type of housing
Modular home
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
Which of the following is the defining characteristic of a per se antitrust violation?
No intent needs to be proven
Does an on-site manager of an apartment complex in Texas need a real estate license?
No, a real estate license is not required.
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.
does an executor of an estate need a real estate license to sell property according to the terms of a will?
No, because an executor is allowed to sell real estate under the authority of the will.
Jacob is a developer who purchased 78 acres and had it subdivided into half-acre lots. He decided to install sewer and underground electric for the entire subdivision, because he thinks that he will easily recoup his initial infrastructure investment. This is an example of which economic characteristic of real property?
Permanence of investment
What might the government do if property owners fail to pay taxes on their property?
Place a lien on the property.
Party to a transaction and the person for whom the agent acts?
Principal
In the real estate business, whose primary role is it to provide clients with the information they need to make informed decisions about their own specific real estate interests?
Real estate counselor
In the real estate business, whose primary role is it to make improvements to land?
Real estate developer
Which of the following legal descriptions is not used in Texas
Rectangular government survey
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
Navigable and non-navigable waterways are a smaller classification within what kind of water rights?
Riparian (applies to land acquired before 1895)
In a contract, consideration is the giving of ______.
Something of value in exchange for something of value
Texas resident Sonny, who doesn't have a real estate license, helps his brother's neighbor, Nicole, sell her house. He charges her a commission of $3,000, which she happily pays. Which of the following is true in this situation?
Sonny may have to pay administrative and civil penalties. This is a misdemeanor punishable by admin penalty for up to $5k per violation, plus a civil penalty up to a maximum of more than three times the commission earned
When working with a client on a real estate sale, a real estate licensee usually acts as which type of agent?
Special
ESAC makes recommendations to which agency
TREC
Which entity is responsible for reviewing and implementing recommendation?
TREC
Considering TREC's authority under the laws of TRELA, which of the following statements is true?
TREC has the authority to suspend or revoke any license holder's license.
In Texas, the Texas Real Estate Commission (TREC) is charged with passing rules to enforce, interpret, and explain the provisions of which of the following?
The Real Estate License Act
Licensees in Texas need to pay attention to updates from what agency?
The Texas Workforce Commission Civil Rights Division
Which of the following is an advantage of a contract for deed arrangement for the buyer?
The buyer doesn't have to have the money to pay the purchase price all at once.
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.
In what way is a townhome similar to a condominium?
They both owe 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.
Timeshares CAN be sold or passed down to heirs
True
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
The ADA was established, among other reasons, to ensure that people with disabilities have access to the same locations as those without disabilities. The ADA creates a set of standards that designers and builders must follow in which circumstance?
When building new or altering older facilities
Senior living can reject occupancy to young children under what circumstance
all residents are 62+
formula to calculate property taxes
assessed value x tax rate
Belinda is asked to draft an addendum using complicated terms that she doesn't fully understand. She should:
avoid unauthorized practice of law
Which is NOT unwanted intrusion according to the Telephone Consumer Protection Act: 8:30 am call 9:30pm call anonymous calls calls to cell phones
call at 8:30am
The Sherman Antitrust Act of 1890 expressly prohibits
collusive acts that result in an unreasonable restraint of trade or reduced competition.
Parties enter into an agreement voluntarily with full understanding of contract terms
consent
a real estate pro decides not to do business with a company and spreads word to other buyer brokers not to do business with them either
group boycotting
This is true about texas trust accounts:
if they are interest bearing accounts, all interest must be paid to the parties to whom the funds are disbursed
best definition of real estate
land + all things permanently attached to it naturally or artificially
How do you determine the cost of purchasing land
multiply the land area by cost per unit
redlining
name of a discriminatory lending practice whereby lenders limits exclude neighborhoods with certain ethnic or economic characteristics
How large is a section used in the rectangular survey system
one sq mile (640 acres
In which type of listing agreement will a seller contract with multiple agents and only pay commission to the agent who locates a buyer?
open listing
Monument
permanent land marker sometimes used in legal descriptions
Novation
process of substituting one party on an existing contract with a new one
Income tax benefits of owning a primary residence include deductions from
property tax and mortgage interest
Fee Simple Absolute
provides complete ownership without limitations or conditions
The description of "The north half of the northwest quarter of Section 6, Township 8 North, Range 68 west of the 5th principal meridian." What land description method did surveyors use for this piece of property?
rectangular government survey
Community reinvestment act requires lenders to invest in development and _________ efforts that will enable low and moderate income individuals / families to afford a home
rehabilitation
Two people became joint tenants in purchasing a property. One died so how did the other own the building?
severalty
Spot survey
sketch that shows location, size and shape of improvements on surveyed property
Best describes real property tax lien:
specific and involuntary
legal description of a property is most likely to be found in:
the Deed
Which of these is usually a brass marker that is used to mark a datum?
Benchmark
Which act was the first to prohibit any exceptions for discrimination based on race or color?
Civil Rights Act of 1866
Layla, a licensee, has had a few casual meetings with a potential client, Marcus. Marcus has told Layla the type of home and locations he's interested in. Layla has mentioned a few homes that she thinks Marcus might be interested in. Although Layla hasn't said that she will continue to look for homes for Marcus, Marcus believes she'll do just that. Which of these statements about this situation is correct?
Implied agency
Juan has decided to invest his small inheritance in real estate. He is drawn to the fact that he can add a building where there wasn't one previously and immediately increase the value of his investment. Which economic characteristic of real property is this?
Improvements
A buyer client 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 in 40 day. is this ethical?
Yes, but only if all of the involved parties have full knowledge and provide consent
The act that protects Texas consumers against real estate licensees who use false, misleading, or deceptive actions or practices in the advertising, offering for sale, selling, or leasing of personal property or real property:
Deceptive Trade Practices Act (DTPA)
As a real estate licensee in Texas, if you advertise, otherwise market, or deal with a consumer using lies, misrepresentations, fraud, or other deceptive practices or acts, which act are you violating?
Deceptive Trade Practices-Consumer Protection Act
