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Principles Of Real Estate I Study Guide Flashcards | StudBud
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Principles Of Real Estate I Study Guide
Principles Of Real Estate I Study Guide
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Study guide for the TREC pre license course Principles of Real Estate I
Flashcards
100 cards
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Practice quiz
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Host live
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Questions
100
Answers
1
Which is generally NOT subject to ad valorem real estate taxes?
City Park Lands
Farms
Banks
Senior Citizens
2
All would affect supply EXCEPT
the labor force
construction costs
government controls
population
3
Which is the same as sole ownership?
Tenancy in common
Ownership in severalty
Joint tenancy
Tenancy at sufferance
4
A homeseller's tax bills are especially useful for real estate agents because
they give both sellers & buyers agents an idea of the direction of value
they give a listing agent a target for setting the home price
they give potential homebuyers a negotiating strategy
they give a listing agent an idea of how much commission the seller can pay
5
The asking price for a property a broker has listed is now too low. Which duty requires them to inform the principal?
Obedience
Accounting
Disclosure
Loyalty
6
What describes the surface, below to the center, above to infinity, natural things permanently attached & legal rights?
Real Estate
Land
Property
Real Property
7
A mortgage lien is what kind of a lien?
General, involuntary
General, voluntary
Specific, voluntary
Specific, involuntary
8
Under the Texas Real Estate License Act, a broker who represents a party in a real estate transaction is
that party's agent
a principal
a buyer's agent
a dual agent
9
Pur autre vie life estates are what kind of life estates?
For the life of the person in possession
Ordinary
For the life of the grantor
For the life of another
10
An agent's responsibility is
only to the principal and customers
to the principal, the customers, and third parties
only to principals and third parties
only to the principal
11
The federal rules concerning lead-based paint require
removal
abatement
testing
disclosure
12
States bordering Texas all permit which kind of legal description that Texas does NOT permit?
Rectangular survey system
Metes and bounds
Texas Department of Interior map
REcorded subdivision
13
The three requirements for a selling broker to be entitled to a sales commission include all of the following EXCEPT
the person advertised the property for sale
the agreement to pay was in writing and signed by the party to be charged
the person held a valid real estate broker's license
advise the buyer in writing they should obtain title insurance/abstrast
14
The profits realized from the sale or exchange of real property are
income tax deductions
equity
investments
capital gains
15
Even if a name and number are on the do-not-call list, the individual may be contacted if
a person has had a business relationship with a competing company
a person has had an affiliated business relationship within 6 months
a person has had a business relationship with the company within 18 months
a person fits a statistical profile of a likelihood of being interested
16
All are categories of the uses of real property EXCEPT
agricultural
residential
developmental
industrial
17
What is a net listing?
One that specifies the amount the seller is to receive from the sale
None of these
One that specifies the total amount of the sale & the commission paid
One that specifies the amount of the commission to be paid to the broker
18
Can a judgment lien be placed on both a real and personal property?
No, only against real property, not possessions
Yes, with exemptions for commercial properties
Yes, against both real and personal property
No, only against personal property
19
When demand decreases, real estate prices
remain stable
increase
decrease
none of these
20
The economic term demand is defined as:
the pent up consumer demand for specific goods in the marketplace
the amount of money people are willing to pay
the amount of goods people are willing and able to buy at a given price
the amount of meoney people are willing to borrow
21
Real estate must be reappraised for tax purposes at LEAST every how many years in Texas?
One
Five
Three
Two
22
A broker who intends to receive a commission from someone other that the broker's client must first obtain consent of
the client
the Real Estate Commission
the local association of REALTORS
all parties to the transaction
23
A federal judgment lien is effective for how many years?
15
12
20
10
24
While it is permissible to sell off pieces of a section, is it permissible to blend pieces of a section together?
Yes, but only if the abutting pieces are at least 1/4 of a section each
Adjoining sections may be combined if the legal description is accurate
No, under Texas law, sections must always maintain their boundary integrity
In urban areas with populations over 1.5 million it is permissible
25
When a complaint against a license holder is received, an investigation is conducted by
the Texas Association of REALTORS
the Texas Bar Association
the Texas attorney general
the Texas Real Estate Commission (TREC)
26
A broker representing a seller would be what kind of agent?
General
Formal
Special
Informal
27
The License Act is administered by
the Texas Bar Association
the Texas Sunset Commission
the Texas Legislature
the Texas Real Estate Commission
28
An agreement in which the buyer and seller have agreed to meet specific obligations is called
a nonvoidable agreement
an anticipatory agreement
an executed agreement
an executory agreement
29
Fixtures are:
real property
chattels
emblements
removable by a tenant before the expiration of the lease
30
To avoid liability, should listing agents simply accept the sellers' word when they provide info about their property?
It is important to have the seller fill out property info & agent not to
Checking details of the listing agreement is a buyer chore
The listing agent must challenge, for the record, every detail provided
It's always best to verify from an independent source what a seller says
31
Which is a physical characteristic of land?
Area preference
Nonhomogeneity
Permanence of Investment
Relative scarcity
32
The method used to describe real estate by distance and direction is:
the recorded subdivision plat method
the rectangular survey method
the metes-and-bounds method
the lot-block-tract method
33
When dwellings are designed specifically for persons with a handicap
landlords may deny handicaped persons to make reasonable accomodations
persons with a drug addiction must be accepted as tenants
the law does not prohibit occupancy exclusively to handicaped tenants
the law prohibits restricting occupancy exclusively to handicaped tenants
34
Fair housing laws allow any aggrieved party to file a discriminatory practices complaint any of the following EXCEPT
in the court of appeals
private litigation
in administrative proceedings
attorney general litigation
35
Which type of homeowners insurance policy provides the MOST extensive covrage?
Alternative policies sold with the approval of the Insurance commissioner
HO-C
HO-B
HO-A
36
In what kind of contract do the parties show their intentions by words (either oral or written words)?
Unilateral
Implied
Express
Bilateral
37
Which prohibits discrimination based on color, race, national origin, religion, gender, familial status?
Civil Rights Act of 1964
Americans with Disabilities Act of 1990
Civil Rights Act of 1866
Fair Housing Act of 1968
38
When a four-acre piece of property is offered at $3 per square foot, what is the asking price?
$624,860
none of these
$436,360
$522,720
39
Which of the following is TRUE of a licensee who commits an act of housing discrimination?
They are subject to potential civil action but not TREC disciplinary action
They are subject to potential civil action, and TREC disciplinary action
None of these
They are not subject to potential civil action or TREC disciplinary action
40
A neighbors child is hurt when a non-maintained swing set breaks in your yard, which kind of insurance will cover this?
Property
Personal property
Liability
Homeowners' warranty
41
Notifications between the parties after the effective date of the contract
must be both of these
may be made orally
must be in writing
are none of these
42
If a partnership, as tenants in common, holding land in the partnership's name sells, how many partners must sign?
One signature by any of the partners
All the partners
Just the senior partner
Just the attorney representing the partnership
43
For an entrepreneur to set up a real estate brokerage as a sole proprietorship, they must first
file an application with TREC so it can determine if more are needed there.
register with the Texas Association of REALTORS
There are no preliminary regulations only after the 10th real estate sale
have a valid broker's license
44
A grant from an owner to a school "on the condition that" the property be used only for educational purposes is
an indeterminable fee estate
a fee simple subject to a condition subsequent
a fee simple subject to a condition precedent
a determinable fee estate
45
Why does TREC approve or promulgate specific forms to be used by licensees?
The vast majority of transactions are similiar & it protects all parties
the federal Consumer Financial Protection Bureau ordered it
So that it can collect a royalty each time a form is used
Lenders require transactions to be recorded via computer
46
Datums and Benchmarks are terms exclusively used to describe
the headwaters of a river
the originating point of an oil or gas pipeline
An elevation point for the purpose of establishing air rights
the originating point of a circle or the originating point of a distance
47
Which term refers to the study and description of a population?
Population review
Demographics
Situs
Nonhomogeneity
48
An encroachment of long standing may result in an easement by
implication
necessity
adverse possession
prescription
49
The reason a real estate license applicant must possess certain stated personal & educational qualifacations/pass a test
is to qualify for the license renewal
is to be able to understand continuing education course material
is to prove adequate knowledge of the business
is to be able to follow cert4ain prescribed standards of business conduct
50
During the time between the signing of a real estate sales contract and the actual passing of the title, the contract is
an implied contract
a voidable contract
an executory contract
an executed contract
51
If Bill & John own adjacent properties, and Bill gives John an easement to cross Bill's land Bill's property is
the dominant tenement
the adjacent tenement
none of these
the servient tenement
52
Which action of a real estate license holder does NOT violate antitrust laws?
Agreeing with another broker to deny access to listings to discount brokers
Arranging with another broker for each office to operate in only one area.
Telling prospects the commissions charged are based on the services offered
Telling prospects the commissions are in line with other brokers
53
Which of the following is TRUE?
TREC may suspend or revoke a licensee who discriminates
TREC may suspend but not revoke a licensee who discriminates
TREC may only place on probabation a licensee who discriminates
TREC may make a licensee pay punitive damages who discriminates
54
Which is a misleading or deceptive practice according to the DTPA?
All of these
Advertsing a property with no intention of selling the property as such
Claiming that repairs have been made when they have not
Claiming that something is new when it is not
55
Must salespersons working for builders or developers have a real estate license?
Paid employees of builders or developers do not need to be licensed
Rules change from county to county so check with the county court
Anyone working for a builder needs a special license that's different
Yes, anyone involved in property sales in Texas must be licensed
56
A purpose of the US & individual state constitutions is to establish citizens rights & delineate goverments authority's
limits
advantages
privileges
rights
57
The term used for the process of developing an opinion of value for a parcel of real estate is
broker's opinion
appraisal
assessment
valuation
58
A homestead may suffer a forced sale for payment of mortgages where the loan proceeds were used to do which?
All of these
Purchase the residence
Improe the residence
Refinance the residence
59
A manufactured home is generally considered
real estate
a fixture
personal property
real property
60
What kind of estate establishes complete ownership and my be inherited, given away, or sold by the owner?
Defeasiblefee estate
Legal life
Conventional life
Fee simple
61
How many acres would be contained in the following parcel of land: N1/2 of SW1/4 of NE1/4 of Section 3?
320
10
20
160
62
A builder does work on a client's lake house & isn't paid, can he file a lien against that property & his home?
No, only against the client's main homestead
Yes, On all of the client's properties
No, the builer may only file a specific lien against the lake house
No, a lake house is considered personal property, not real estate
63
The laws prohibiting monopolies, contracts or conspiracies that unreasonably restrain trade are
tort reform laws
the Texas Deceptive Trade Practices laws
antitrust laws
compensation laws
64
Homes that are constructed with a large factory built wall and roof componets are known as
modular homes
manufactured homes
mobile homes
townhomes
65
When a four acre piece of property is offered at $3 per square foot, what is the asking price?
$522,720
$624,860
None of these
$436,360
66
A homeowner's right to live in a newly purchased house is the right of
control
enjoyment
possession
disposition
67
Rules and regulations adopted by government agencies
are considered a precedent for future rules and regulations
are used to implement and enforce legislative acts
may not preescribel penalties for violatiions
do not have the force and effect of legislative acts
68
Under Texas law, can a property be sold to someone who is NOT a U.S. citizen?
Citizenship is not listed as a required element for a valid contract
No, anyone buying a property in Texas must be able to prove citizenship
Noncitizens may purchase property only if the TDFR approves the sale
Yes, but noncitizens must prove their intent to remain in the United States
69
Under community property laws, property owned before marriage is considered
seperate property
jointly owned
none of these
community property
70
Of the 13 members of the Texas Real Estate Broker Lawyer Committee how many must be appointed by TREC?
8
All
6
10
71
The Texas law allowing a specific time limit during which parties to a contract may bring legal suit is
the statute of frauds
the breach of contract right
the statute of limitations
the discharge of a contract right
72
When subsurface rights are sold seperately from surface rights
the rights typically include minerals such as iron ore, limestone & gravel
the mineral rights owner isn't normally entitled to enter the property
the surface interest is considered dominant over the mineral interest
the mineral interest is considered dominant over the surface interest
73
What is an example of discharge a contract because of impossibility of performance?
When one principal or the other dies before the contract can be signed
When the principals agree to fraudulently move boundries to claim more land
Whe the buyer conceals the fact that he does not have the funds to buy it
When the seller actually does not legally own the proprty being sold
74
Which is considered personal property?
Trade Fixture
Fixture
None of these
Permanently attached bathtub
75
After a property is sold to satisfy a judgment lein, the debor should receive
a writ of execution
a release of judgment
a deficiency judgment
a writ of attachment
76
Which statement BEST describes the relationship of supply and demand in the real estate market?
Supply and price move in opposite directions
When both supply and demand increase, real estate prices rise
When supply goes up, price goes up
Demand and price move in opposite directions
77
A homeowner has a property insurance policy with a coinsurance clause, what's the LEAST percentage of replacement cost?
75
100
80
50
78
In a cooperative, any taxes, maintenance expenses, and mortgage liens are placed against
the building
the individual units
the cooperative
the individual tenants
79
A period of renewed growth after a depression represents which stage of the business cycle?
Depression
Expansion
REcession
Revival
80
Under the federal Fair Housing Act, real estate organizations, (MLS) may NOT do which if someone is in a protected class
All of the above
Refuse membership or put conditions on participation
Discriminate in the listing or sale of commercial properties
As the age of prospective clients
81
Which is co-ownership with right of survivorship?
All of these
Joint Tenancy
Tenancy in common
Community Property
82
The Fair Housing Act provides for certain exemptions, but no exemptions apply when
a single family home rental when it is 1 of only 4 owned by a person
the rental of rooms in an owner occupied 1-4 family dwelling
commercially operated club-owned lodgings rented to its members
a real estate license holder is involved in a transaction
83
What might be the role of a real estate broker if a homeowner seeks to overturn a property appraisal?
A broker may leverage local lenders in keeping taxes low
A broker may offer actual appraisals & sales prices of comparable homes
A broker may testify about the current market conditions
A broker may offer the attorney from the local board of REALTORS assistance
84
Naturally growing plants and trees that do NOT require cultivation are classified as which kind of property?
Fruits of labor
Personal
Real
Fruits of industry
85
Even if the owner sells the property without the help of the broker, the broker gets credit for the sale in
an exclusive right to sell listing
a net listing
an open listing
an exclusive agency listing
86
Is the owner of a sole proprietorship obligaged to file as a business with the secretary of state's office?
No, a sole proprietorship need not file
Yes, a sole prioprietorship must file
Many sole proprietorships go out of business in 1 year so not till year 2
No but a sole proprietorship must file with the Dept. of Business Licensing
87
All are tests for determining a fixture EXCEPT
intention of the parties
adaptation of the item to the real estate
method and permanence of attachment of the item
size of the item
88
The sum to be paid an aggrieved party from the real estate recovery trust account is determined by
the Texas Real Estate Commission
the local association of REALTORS
the Court
the Broker-Lawyer Committee
89
Wich shows only the location and dimensions of a parcel of land?
Improvement survey
Dimension survey
Survey sketch
Loacation survey
90
The relationship between a broker and the broker's sales agent is usually that of
a dual agency relationship
a general agency relationship
a single agency relationship
a special agency relationship
91
The economic characteristic that refers to people's choices and preferences for a given area is
permanence of investment
situs
improvements
relative scarcity
92
For a specified amount of money, an owner agrees to give a prospective buyer the right to buy. This is
an escrow contract
an installment contract
a land contract
an option contract
93
The Texas Real Estate License Act was first passed in
1947
1939
1919
1949
94
All of the following would be considered improvements to land EXCEPT
annual crops
utilities
sewers
roads
95
Loan discount points can be deducted in the year of the purchase if all of the following conditions are met EXCEPT
if the discount points are fees, not interest
if the mortgage is secured by the taxpayer's principal residence
if the points are paid in cash at closing
if they are a charge for the use of the money
96
Must a broker or sales agent have a written listing agreement to sell a property in Texas?
No, many properties that do not involve listing agrements sell each year
Yes, the listing & sales agreement are the only two documents needed
No not necessary unless the license holder wants to assure a commission
Yes, only a written listing agreement can be used to transfer property
97
A limited partnership includes
general partners only
limited partners only
special partners only
both general and limited partners
98
Which of the following is TRUE?
None of the above
Regulations by Gov. agencies are merely advisory & have no effect of law
Regulations by Gov. agencies expand on law & don't have the effect of law
Regulations by Gov. agencies expand on law & have the effect of law
99
An owner of a cooperative unit owns
the cooperative unit & a proportionate share of the undivided common areas
shares of stock in the cooperative
the land under the cooperative unit
a proportionate share of the entire cooperative complex
100
When a government entity transfers ownership of a home is a property disclosure required?
Government entities are not required to provide disclosures
Disclosure is only required if destroyed by fire
Yes, Texas law requires full disclosure
Federal regulation is no disclosre for HUD properties, city owned yes
