TX Real Estate State & National

Which of the following statements about the Sunset Act is TRUE?

The Sunset Act requires the reviews of all state agencies

Chapter 1102 of the ______ governs the practice of Texas Real Estate Inspectors

Texas Occupations Code

The role of professional organizations in the real estate industry is to regulate the industry and ensure compliance with all state and federal laws

False

Which of the following is TRUE about MLS services?

a RELATOR must belong to at least one board in Texas

Which choice describes “rubber hits the road” education that meets the education requirements for license renewal?

Graduate, REALTOR institute

What is the only scenario in which you do NOT need a real estate license to sell or lease a property?

If you are not receiving any commission from the scale

Employees working for a commercial firm do not have to have a real estate license if they are selling property owned by their firm

True

The following circumstance would make the license of a salesperson inactive EXCEPT:

Having a recovery fund payment made as a result of an improper transaction

The bundle of right associated with property ownership include quiet enjoyment, possession, disposition, and: 

Exclusion

Ricky bought a ceiling fan. When he brought it home, it was personal property. Then, he permanately installed it into his ceiling. Now, it has become real property. What is this process called?

Affixing

What do owners in co-op buildings actually own?

Shares of stock in the co-op corporation

What type of property has multiple owners and is typically located in a recreational environment?

Timeshares

Who is eligible for capital gains tax exemptions?

Homeowners selling their primary residences

A homeowner sells her primary residential home and realizes a gain (profit) of $185,000 from the sale. How much tax will this homeowner pay in the capital gains?

None. She is exempt from capital gains up to $250,000 every two years

If a homeowner files a homestead exemption for reduced ad valorem taxes, the state of Texas requires the school district to supply an exemption value of: 

$100,000

What is the name of the report created from a database the insurance companies use to track insurance

CLUE Report

Agency relationships are generally formed between which two people?

Agent and client

An agent has obtained a buyer representation agreement with a new client. Who owes the fiduciary duties?

The broker and all sponsored agents in the brokerage 

If a salesperson has no interest in opening their own brokerage, why might they still want to get a brokers license?

For marketing purposes

As defined in the Texas Real Estate License Act, what is a subagent?

A license holder who represents a principal through cooperation with the principal’s broker

What is the name of a district where property owners can make decisions on government projects they will be taxed on?

Public Improvement Distribution (PID)

What must a seller in a PID disclose to a potential buyer?

Any financial obligations they’ll have to the PID

What do you call a listing that does not come up on the MLS?

Pocket listing

Seller Andrea hired Agent Samara to sell her home in a. net listing. Samara gave Andrea her opinion of the value of the home, and Andrea insisted she wanted to use the net listing structure. Is it permissible for Samara to sell the home as a net listing? Why or why not?

Yes, because Samara gave Andrea her opinion of the value and Andrea insisted on the net listing, it is legal

A buyer representation agreement establishes agency between a buyer and a:

Broker

What is a protected category according to Texas fair housing laws, but not national ones?

Ancestry

Which of the following statements accurately describes the basic issues involved in the Jones v. Mayer Co. case?

A real estate company refused to sell a home because of the prospective buyer’s race and was found guilty of violating the Civil Rights Act of 1866

Sally and Fred are two single people buying a home together. The lender is threatening to deny them a loan because he does not like their lifestyle. If the lender does that, it will be a violation of the:

ECOA

Why do most brokerages fall within the scope of the ADA, and therefore must be extra careful about accessibility?

Because of their location or because they have 15 or more employees

What is one important difference between REALTORS and other practitioners?

REALTORS are held to a higher standard than the law by the NAR Code of Ethics

What year was the National Association of REALTORS Code of Ethics first adopted?

1913

What is the difference between the NAR Code of Ethics and the Canons of Professional Ethics and Conduct?

The NAR Code of Ethics is enforced by NAR; the Canons of Professional Ethics and Conduct are enforced by TREC

What form does the Canons of Professional Ethics and conduct say must be on display in a readily noticeable location in each of the real estate brokers places of business?

Consumer Protection Notice 1-2

Which of the following people would need a real estate license?

A person selling their neighbor’s home for a fee

What categories of people are barred from serving on the commission?

Trade association employees and lobbyists are barred from membership

Who designates a broker member of the Commission to serve as a presiding officer?

The governor

What law (chapter) imposes a Code of Ethics and standard of conduct on members of the commission?

Chapter 572

Who is responsible for informing employees of their conduct expectations and responsibilities?

Commissioners

Promulgated contracts are created by:

The TREC Broker-lawyer Committee

What is one instance in which the commission allows license holders to use alternative to the required, or promulgated, forms?

If the alternative form is prepared by the property owner themselves

All listing contracts in Texas must include what two pieces of information?

The special rules concerning anyone who lives on a coast that all commissions are negotiable

Subpoena authority exists to:

Allow the commission to bring witnesses to court

How does the Real Estate License Act require brokers to provide consumers with information for the purpose of firing complaints?

The broker must display Consumer Protection Notice TREC No. CN 1-2 in each place of business

The statute of limitations for filing a complaint against a licensee is ____ years

Four

How many lawyers are on the Broker-lawyer Committee?

Six

What is one promulgated form that Texas REALTORS has and TREC does not?

The Intermediary Relationship Notice form

If a licensee’s address changes, they must notify TREC of the change within ____ days

10

After how many days will the commission notify an applicant of their moral determination?

30

Who pays for mortgage title insurance?

The buyer

When a property is talked about in a meeting or via written communication, that is called:

Substantive dialogue

Who is eligible to request that the Real Estate commission pay out of the trust account to a defendant who has lost a case?

A defendant’s previous employer

…Agent Sam owes Agent Layla a referral fee. How must he get it to her?

Send it to Layla’s sponsoring broker

An administrative penalty from TREC cannot exceed

$5000

After receiving a notice of violation, how many days does a license holder have to request a hearing?

20 days

How do you pay a penalty while still ensuring that your payment does not go through until the appeal is over?

Give a supersedes bond

Township lines run west and east, parallel to the baseline. How many miles apart from each other are they?

6 miles

How many years are surveys typically good for?

Seven

Which paragraph of the one to Four Family Residential Contract says that buyers can object to something they find in the survey?

Paragraph 6D

What is the part of a contract stating one or more of the contracting parties must refrain from actions that would usually be legal called?

Forbearance agreement

Select the transaction below where the license holder is required to use a TREC-promulgated form. The agent is:

Representing the seller of an agricultural property

In order for a real estate contract to be valid, it must be:

Signed by the seller

What is the major difference between assignment and novation?

Assignment is the transfer of parties in a contract. Novation is the exchange of one contract for another

What is one practice that has helped lessen the unscrupulous activity prevalent is the early days or real estate?

The buyer getting an abstract and having it examined by an attorney

An estate at will allows the tenant to occupy the property:

Until either the tenant or the landlord decides tenancy should end

If a property owner does not pay their income taxes, the IRS may put what on their property?

Federal tax lien

A buyer does not pay for a property in full. This is an example of a(n):

Equitable lien

A mortgage is an example of a: 

Specific, voluntary lien

Who initiates the foreclosure on an 80-10-10 loan?

The mortgage company

The TCEQ is tasked with regulating which of these things?

Water rights

Does the Texas Homestead Act protect a property from federal tax liens?

No, the Homestead Act provides no protection from federal tax liens

What are the limitations on the amount of property that can be homesteaded in Texas?

An urban property can be up to 10 acres of contiguous parcels, and rural property can be up to 200 acres for a family

In a typical tenancy in common, who would hold the ownership interest of a co-owner who passes away?

The deceased’s named decendants

An unmarried Texas couple purchased real estate tougher. How would the deed identify how they hold their interests if they specify they want them passed to the survivor in case of death?

Joint tenancy with rights of survivorship

What are the four unities required for joint tenancy?

Unit of interest, time, title, and possession

The four unities apply to co-ownership that is classified as:

Joint tenancy

Bill is married to his second wife, Susan. Bill has a daughter from his first marriage. If Bill dies without a will (intestate), how will their community property be divided?

Susan keeps her half and the daughter gets the other half

A minor is named the beneficiary of real property upon the passing of the property’s owners, but with the stipulation that the property will be held by another party until certain conditions are met (i.e., the minor is no longer a minor). What is the correct term for this legal arrangement?

Trust

The borrower pays the lender interest in exchange for the:

Principal

With an amortizing loan, mortgage payments are:

Made over time, consist of equal installments, and go towards both principal and interest

To solve for the total, which formula should you use?

Total = part/percentage

If a buyer makes a 15% down payment and obtains a $200,000 mortgage, what is the sales price of the property? Hint: The mortgage is 85% of the sales price. The raining 15% is being paid in cash 

$235,294 (rounded)

A property is sold for $300,000. The buyer has paid $15,000 as earnest money and is obtaining and 80% loan. Based on the information provided, how much additional cash will the buyer have to bring to the closing day?

$45,000

A listing broker made 3% commission on a $475,000 sale, how much did the listing broker make in commission?

$14,250

Agent Tommy sold the home for $250,000. We’re told that the commission rate is 6%. To arrive at the commission expressed in dollars, we simply multiply $250,000 by 6% (0.06) to get $15,000.

$15,000

brokerage receives: $7,500

Third party receives half: $3,750

What term is used to describe the total money gained?

Total revenue

Amy took out a non-amortized loan of $350,000 with an interest rate 3.5%, what is her annual interest payment?

$12,250

If Greta has annual interest total of $24,000, how much is her monthly interest payment?

$2,000

In an amortized loan, the monthly interest payment is always based on:

The remaining principal

Over the course of an amortized loan’s life, the borrower’s payments will increasingly be allocated towards interest payments

False

Which of these explains why the amount of money that goes towards interest decreases after each payment?

Because the interest payments are always based on the current principal balance

Barry took out a $400,000 30-year mortgage. After 30 years, Barry paid a total of $730,000 to the lender. How much did Barry pay in interest over the life of the loan?

$330,000

If a loan principal is $150,000, how much would 2 discount points cost?

$3,000

If a loan principal is $300,000, how much would 1 point cost?

$3,000

What are ad valorem taxes based on?

The value of the property

Find the tax owed on a four-story mansion with an assessed value of $5,859,000. The tax rate for the mansion’s municipality is $5.34 per $100

$312,870.60

An HOA has an annual, prepaid fee of $1,080. A new buyer closes on a home in the neighborhood with exactly 3 months left in the year. How much will the buyers pro rated fee cost?

$270

Ben wants to carpet his bedroom. He measures it as 270 sq ft. When he gets to the carpet store, he finds that they sell carpet by the square yard. How many square yards is Ben’s room?

30 sq yds

A home measures 80 ft. by 40 ft. The garage is 15 ft by 15ft. What is the total livable area of the home?

$2,975

A room is 20 ft. long by 15 ft. wide and 10 ft. high. What is the volume of this room?

3,000 cubic ft.

Your buddy Dave asks you to meet him for lunch at a restaurant 2 miles away. How many feet is that?

10,560 ft