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