Missed Questions and Answers:

What does an abstract of title document?

A property’s chain of title.

What type of estate is created when property is granted under condition that it reverts if a specific condition is met?

Fee simple determinable.

What is it called when an individual in a life estate neglects the property, diminishing its value?

An act of waste.

What is the purpose of a chain of title?

To establish history of past ownership.

What type of deed conveys real estate to a trustee for the benefit of a beneficiary?

A deed of trust.

What does the covenant of quiet enjoyment promise?

That the grantee won't be disturbed by a title defect passed on by the grantor.

In a deed, what might a subject to clause address?

An easement running across the property.

What type of lease involves payment of insurance and property taxes, but separate payment for some operating expenses?

Modified gross lease.

What happens if the chain of title is broken for 50 years in a state requiring an abstract of title?

The homeowner may have a marketable title.

Who owns the property after Trace passes away if Lucas, Ivan, Chad, and Trace were joint tenants?

Lucas and Tom.

What must occur for the transfer of title in a property sale?

The seller must intend to convey the property.

Which document provides an overview of title history and title insurance coverage?

Preliminary report.

True or False: Testamentary trusts avoid probate.

False; testamentary trusts do not avoid probate.

What are the requirements for deeding property to a 17-year-old?

The parent must sign the deed and have it acknowledged.

What type of lien is a Materialman’s lien?

An involuntary, specific, statutory lien.

What does the Texas Landlord and Tenant Act guide?

Decisions regarding rental properties.

What must Wynona provide her landlord if she wants to terminate her written estate-for-years tenancy?

None; notice is not required upon expiration.

What kind of clause states the grantor’s intention to convey property?

Granting clause.

What document must a Texas tenant receive after moving in regarding key-operated devices?

The landlord must re-key and test all devices within 7 days.

In Texas, what rights do homeowners have regarding property sold at foreclosure?

The right of redemption may have expired.

How many years of real estate experience are required for ESAC membership?

5 years.

How many members serve on the Education Standards Advisory Committee?

12 members.

When must a potential violator submit a written request for a hearing?

No later than the 20th day after receiving the violation notice.

What are the funding sources for the Real Estate Recovery Trust Account?

All real estate license and certificate holders.

When should continuing education for Texas license holders be completed?

Before renewing the two-year licensing period.

What agency enforces Title II under the Americans with Disabilities Act?

HUD.

What is a true statement about civil litigation cases related to fair housing in Texas?

If a TWCCRD conciliation agreement is in place, a private lawsuit must be terminated.

What is required for title insurance claims coverage involving property occupancy?

A public record of tenancy.

Which economic principle states that current property value is affected by expected future benefits?

Principle of anticipation.

What is the formula to calculate value using net operating income?

Value = Net Operating Income / Rate of Capitalization.

What type of loan should a veteran like Commander Halfback consider?

FHA, VA, or conventional loan.

What must be included in the Third Party Financing Addendum related to government-insured loans?

Appraised value or reasonable value of the property.

What happens to excess earnest money upon property closing?

It’s refunded to the buyer.

Which criminal act involves a licensee restricting representation unless a specific closing company is used?

Illegal tie-in arrangement.

What must happen for a dual agency situation to arise from a real estate transaction?

Providing advice to a customer while representing another party.

Robert is the general contractor for a home being constructed in a new development. The foundation has been poured, and he’s working with the homeowners to make some decisions that weren’t identified in the blueprints he’s working from. Which of the following details are guided by local building codes?

 Number and type of electrical breakers

While working with a buyer client, the licensee filled in the blanks on the purchase agreement, drafted an early occupancy addendum, and assured his buyer that she was “fully protected” and would get her earnest money back if the sale didn’t close. He encouraged her to hire an attorney to review the contract and addendum, and then invoiced her for a nominal $15 fee to prepare transaction documents. Which of the following tasks was the licensee legally permitted to do?

 Fill in the contract blanks

When referring to private land use restrictions, fence height, additional structures, and architectural design are generally categorized under ______.

Covenants

Investor Igor made $120,000 last year, but had $25,000 in losses from his rental properties. Can Igor take the full $25,000 deduction on his taxes, assuming he is actively involved in the management and operation of his rental properties?

No. Igor’s $25,000 deduction will be decreased by 50 cents for every dollar he makes over $100,000.

Which of these is an encroachment?

A neighbor installed a sidewalk next to their driveway, six inches outside of their property.

The town planning and zoning board is considering some new zoning regulations to ensure that one of the neighborhoods maintains its designation on the National Register of Historic Places. What type of zoning are they likely to enact?

Aesthetic zoning

Office space in a downtown high rise rents annually at $33.40 per square foot. Max’s tenant client is interested in renting two adjacent suites: one is 7,152 s.f., and the second is 3,560 s.f. What’s the monthly rental rate?

 $29,815.07

If a buyer makes an offer that the seller finds lacking, which of the following actions is the seller most likely to take?

 Respond with a written counter-offer.

Shirley's lender discharged the mortgage lien on Shirley’s property after processing her final payment. Which clause requires the lender to take this action?

Defeasance

When a deed of trust used as the security instrument for a mortgage loan, which of the following is a true statement?

It's generally much easier for a lender to foreclose on a property.

What's another name for an escrow account?

 Trust account

In the appraisal report submitted to Jenkins, the lender, notes that the property is being conveyed with all property rights intact. Which step in the appraisal process does this represent?

State the problem.

In Texas, the Loan Assumption Addendum to the TREC One to Four Family Residential Contract (Resale) allows for a variance of ______ in the amount of the total principal balance at time of closing.

$500

If a buyer will move in before closing or a seller will remain after closing, what form must be prepared in Texas?

  Temporary lease

In Texas, if a real estate licensee is involved in a lease agreement, which of the following documents must the licensee present to the landlord and tenant involved in the transaction?

Information About Brokerage Services

Your seller client, William, had multiple offers to consider. He decided to move forward with Ryan’s offer, and reject the offer from Kevin. What should your client do with the offer from Kevin?

Write "rejected" on Kevin’s offer

Buyer Maria and seller Doug are closing on June 1. Maria’s mortgage loan payment is $927.86, and $871.86 of that amount will go to interest in the first month. Maria will have to pre-pay interest for June using the 360-day proration method. If Doug owns the closing day, what will Maria's prepaid interest cost be at closing?

$842.74

Residents complained that the village-like character of their town is being affected by the condos that are being built on the edge of town. In response, the local government officials rezoned the areas on the edges of town as parklands. What type of zoning is this?

Downzoning

Conveyance of property by escheat is an example of _______ alienation.

 Involuntary

Select the statement that correctly exemplifies the covenant term.

 The covenant of quiet enjoyment promises that the grantee won't be disturbed by a title defect the grantor passes on.

Fred is an agricultural lender who helps the ranchers and farmers in his community by providing credit for purchasing land, making repairs to their buildings, and improving their agricultural property. He’s able to do this in part because of the ______ offered by the USDA Farm Service Agency.

Guaranteed loans

A borrower has a 30-year, $500,000 loan with an interest rate of 6.25%. His monthly principal and interest payment is $3,078.59. What's the total amount of interest he'll pay over the course of the loan?

$608,292.40

Harassment complaints should be ______.

Kept confidential

Don and Becky realized too late that the contract they signed for the sale of their home didn't include any language about a rent-back if the home they're building isn’t ready in time. What can their listing agent do?

Create a contract amendment with the required language.

A buyer is purchasing a home listed at $150,000 using a conventional loan. Does this situation require a licensed or certified appraiser?

No, since the sales price is less than $400,000.

Demographics impact the housing market. Which of the following is a true statement?

An increase in the number of retirees in a given population would negatively impact the demand for large, single-family homes.

Which of the following actions should be taken when using a comparative market analysis to calculate a suggested listing price range?

 Use adjusted prices from comparables and refine a range using active listings, expired listings, and possibly pending listings.

A female tenant is 68 years old and employed full time. She’s of Spanish descent, is raising her 12-year-old grandson, and lives with her partner, who is also female. She requires an accessible apartment because she uses a wheelchair. Under which of the following federally protected classes might Corinne be protected if she faces housing discrimination?

National origin, sex, disability, and familial status

When appraising a property, what type of property would be best suited to the cost approach?

 Historical properties

Which of these is a violation of the Residential Lead-Based Paint Hazard Reduction Act in a transaction involving a property constructed before 1978?

 The seller’s agent fails to provide the pamphlet, “Protect Your Family from Lead in Your Home,” to prospective buyers.

Which one of the following statements is true about land trusts?

Land trusts generally continue for a specified term, such as 10, 20, or 30 years.

A trustee is holding the title to Cassandra’s house until the loan is paid in full. Which type of security instrument was used?

Deed of trust only

One area of town has maximum building height requirements and setbacks for the front, side, and rear yards. These requirements are all indicative of ______.

Bulk zoning

What factors does the underwriter consider in reviewing a mortgage loan application?

Credit, capacity, and collateral

Which of the following scenarios is an example of corrective maintenance that may be overseen by a property manager?

Replacing a section of roof after a leak

Requirements for the disposal and drainage of wastewater and sewage are likely part of the ________ with which the renovators must comply.

Building code

Wendell just listed Barb’s home. Barb told him that there weren’t any easements on the property, and Wendell hasn’t seen a copy of the survey. What is Wendell’s responsibility relative to the disclosure of any easements?

He only needs to disclose easements if they’re known.

Lucas, a landlord, repeatedly refuses to abide by an EPA order that he abate lead-based paint hazards in one of his rental properties. Which of the following penalties are federal authorities permitted to impose?

prison

A seller listed his property with Home Sweet Home Realty and one of its listing agents. About a month later, the listing agent filed for bankruptcy. Which of the following statements about this situation is true?

The agency agreement only terminates if the broker or the principal declares bankruptcy.

To make valid computations of adjustments for the market comparison approach to value, elements of comparison must be applied in a specific order. Which of these elements has the highest priority?

conditions of sale

The Simpsons are buying the Martins' house for $415,000, and closing is set for March 15. The Martins have a loan balance of $230,000 at a rate of 4.7% and have prepaid property taxes ($2,506) and insurance ($1,400), and they also have mortgage interest to consider. Using a 365-day proration method, calculate the prorated amount the Simpsons will owe the Martins at closing. Assume February has 28 days this year. The sellers own the day of closing.

$1,997.62

Calculate daily rates for taxes to be prorated: $2,506 ÷ 365 = $6.87. The Martins pay the first 74 days (January 1 through March 15): 74 x $6.87 = $508.38. $2,506 - $508.38 = $1,997.62 owed by the Simpsons. Homeowner's insurance isn't prorated between the buyer and seller. A homeowner's insurance policy is an agreement between the insurance company and the policyholder, so any refund due to the seller/homeowner will be handled between those two parties.

In instances where the buyer isn’t requesting subdivision information, but the title company is, who pays to obtain the information per the Addendum for Property Subject to Mandatory Membership in a Property Owners Association?

It depends

Mindy and Seth have had to terminate their TREC One to Four Family Residential Contract (Resale). Both parties signed the request to release the earnest money, but only Mindy submitted a written demand for the funds. How many days does Seth have to submit a written objection after receiving notice from the escrow agent of the demand?

15 days

In order to qualify as one of the ______ real estate professional members of the ESAC, you must have been actively engaged in the practice of real estate for five years prior to appointment.

7

Which entity was formed for the purpose of enforcing the Real Estate Dealers Act in Texas?

TREC

According to TREC’s Consumer Protection Notice, how many recovery funds does TREC administer?

2

Which of the following statements about being able to sue for unpaid but owed compensation for real estate services rendered is true?

Only a licensed real estate broker or sales agent may sue to collect commissions.

Can a complaint be filed with the Texas Workforce Commission Civil Rights Division (TWCCRD) against a Texas licensee for an out-of-state transaction?

No. All complaints to the TWCCRD must be for Texas property.

______ enforces the Canons of Professional Ethics and Conduct in Texas.

TREC

Brad, a Texas license holder, is acting on behalf of his brother, Ben, who’s selling his home. Is Brad required to provide a written broker or sales agent disclosure notice to the other party in the transaction that he's acting on his brother's behalf?

No, because the broker or sales agent disclosure is not required when acting on behalf of siblings.