Because home builders are not required to provide property disclosures, should buyers also bypass home inspections?

No, new homes can have serious flaws that can be detected in home inspections.

Yes, the buyer can assume the home is built to code and without flaws.

Yes, Texas law specifically denies the right of the buyer to inspect a new home.

Buyers do not need home inspections on new properties because warranties will cover any issues.

Under Texas law, real estate agents are permitted to call individuals on the do-not-call list if they have had a previous business relationship with the person, have received permission to call the person, or

if the call is personally dialed and is not, in itself, an attempt to sell a property over the phone.

if the real estate agent has listed within the past 24 hours a highly suitable property for the individual.

if the individual receiving the call is unaware that other properties in the neighborhood are about to be sold because of undesirable elements about to move into the neighborhood.

Eight years ago the homeowner purchased the property for $500,000. The market in that price range has basically been stagnant since then, and the owner now tells his sales agent (working on a 5.5% commission) he wants to sell the property and at least break even. How much should he list it for?

$527,500, the original cost plus commission

Comfortably above $500,000 to allow for buyer negotiation

$500,000 (commission is a separate transaction that later can be a tax deduction)

$500,000 (commission cannot be counted as part of the transaction)

What is a loan discount point?

A discount point is an up-front amount paid to the lender that has the effect of lowering a monthly payment.

A discount point is a percentage that the listing agent will offer to buyers in cash to encourage them to purchase a specific home.

A discount point is a fee collected by the real estate brokerage on top of the sales commission.

A discount point is an up-front fee collected by the lender to pay the cost of processing a loan.

Items for which the buyer is credited at the time of closing are known as

recoverable non-specific items.

To find the area of a square or rectangle,

multiply [½ (base × height)].

Prorations are various financial responsibilities that need to be dealt with in closing a transaction. Who takes care of the prorations?

Prorations are ongoing property expenses that are divided between the buyer and the seller.

Prorations are expenses divided by the lender and the buyer.

Expenses involving the commission and sale are the responsibility of the real estate agents.

Expenses involving the mortgage are split between the lender and the appraiser.

Which of the following is NOT a characteristic of an appraisal?

An appraisal determines the listing price of a property.

An appraisal cannot be guaranteed or proven.

An appraisal is an opinion of value.

An appraisal can be substantiated and justified.

Which of the following dilemmas fits under the appraisal principle of contribution?

Should an owner install solar cells to reduce his electric bill, even though the payback is 20 years?

Should a property owner with extensive flower beds in the front and back yards install additional beds in the side yards?

Should a property owner not bother with remodeling if he believes the property may soon be razed to make room for an office complex?

Should a property owner fight a proposal to place a sewer treatment plant three blocks away?

If two similar homes are for sale, the lower-priced house will usually be purchased first. This is an example of the principle of

increasing and diminishing returns.

Adding more bathrooms to a three-bedroom house that has only one bathroom may be an example of

incurable functional obsolescence.

incurable physical deterioration.

curable functional obsolescence.

To arrive at a property's value using the cost approach, calculate the value of the land

put to the highest and best use.

The purpose of a CMA is to

act as a general guide to what similar properties are selling for.

set the legal price of the property.

irrelevant because it has been replaced with professional appraisals of value.

give a seller an estimate of how much commission will be paid upon sale.

Are real estate sales agents obligated to list properties at the level desired by the seller?

Yes and no; sellers set the price of their property, but a real estate agent is under no obligation to accept a listing that is priced too high.

No, professional real estate agents have a fiduciary duty to list properties at as low a price as possible, regardless of seller input, in an effort to create a bidding war that might bring the price up.

Yes, under Texas law, the sellers sets the price and the real estate agent must do his best to achieve that price.

Once a real estate agent signs a listing agreement, he is obligated to seek the price the seller wants—even though he understands that the price will likely have to come down.

When an appraiser reconciles the values received from the three approaches of value, which of the following occurs?

The appraiser places more weight on the estimate of value from the sales comparison approach when valuing existing single-family properties.

The appraiser averages the findings from the three approaches to arrive at a final opinion of value for the property.

The appraiser places more weight on the estimate of value from the income approach when appraising new homes.

The appraiser places more weight on the estimate of value from the cost approach when appraising churches, libraries, museums, and schools.

How much experience is required to become a state-licensed real estate appraiser?

2,000 hours of experience spread over 12 months

25 appraisals conducted under the supervision of a certified general appraiser

500 hours of experience, unless the candidate already has a real estate sales license

No experience, only satisfactory passage of the state licensing exam

What is the minimum amount of course work needed to become an appraiser trainee?

79 hours of qualifying education

150 hours of qualifying education, plus 60 hours of verified training under the supervision of a certified general appraiser

None, but must work under the supervision of a certified general appraiser for at least 6 months before beginning formal classroom education

None, but must work under the supervision of a certified general appraiser

What is the basic consumer rationale behind an interest-only loan?

The payment would be modestly lower and the borrower would depend on inflation to improve his equity position.

The payment would cut the loan servicer out of the loop, thereby reducing the payment.

The borrower would be guaranteed to get his down payment back.

The amount of equity would remain the same throughout the loan without risking going down.

Which of the following is a qualifying ratio for a conventional loan?

A variable total-debt ratio based on a borrower's credit score, cash reserves, and residual income

A fixed housing-expense ratio of no more than 31% of gross monthly income

A fixed total-debt ratio of no more than 41% of gross monthly income

A fixed total-debt ratio of no more than 43% of gross monthly income

A low-income Texas resident who is purchasing his first home and needs down payment and closing cost assistance could apply to which program?

The My First Texas Home Program

The Texas Bootstrap Loan Program

The Veterans Housing Assistance Program

Which of the following is NOT a requirement of the My First Texas Home Program?

The applicant must use the loan either for the purchase of a principal residence or a property to be used for rental purposes.

The applicant must have an income of no more than 115% of area median family income or 140% of area median family income in targeted areas.

The applicant must be a first-time homebuyer or a person who has not owned a home in the past three years.

The applicant must be a very-low-income to moderate-income Texas resident.

Which of the following is NOT generally a reason for lenders to sell loans into the secondary market?

To meet minimum loan sales requirements set by the government-sponsored secondary markets

To realize profits upon the sale of the loans

To raise capital to continue making mortgage loans

How many parts are there to a mortgage loan?

Two, the debt itself and the security for the debt

Three, the title, the property insurance, and the buyer agency agreement

Four, the title, the property insurance, the property taxes, and the loan qualification docs

Can a mortgage lien be enforced if only one document—a promissory note or a deed of trust—is signed?

No, both the promissory note and deed of trust must be signed.

No, courts of have ruled that a lien cannot be created unless the lienholder can prove the property owner has actually made payments on the property (in some cases, evidence of payment of property taxes has been accepted).

Yes, Texas courts have ruled that a signed the deed of trust is ample evidence of property ownership.

Yes, Texas courts have ruled that a signed promissory note is a valid indication of a mortgage.

When a property is sold because of foreclosure, all debts are satisfied EXCEPT

all outstanding balances go to zero, except unpaid taxes.

the mortgage is paid, but auctioneers and/or real estate agents may be due commissions.

the lender is paid, but lien holders typically are not.

any attorney fees remain to be resolved outside the sale.

A nonrecourse note and mortgage may prohibit a lender from seeking a deficiency judgment against a borrower. Under what circumstances might a lender agree to a nonrecourse loan?

Equity loans and reverse-annuity mortgages

A borrower with an original credit score above 750

Loans made to military veterans and “first responders” (police, firefighters, etc.)

Legal immigrants under the “special purpose” regulation (scientists, engineers, etc.)

Real Estate Listing Types and Commissions

Authored by Samantha G

English

University

CCSS covered

Used 4+ times

Real Estate Listing Types and Commissions

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MULTIPLE CHOICE QUESTION

1 min • 1 pt

With what kind of listing does the seller employ only one broker?

Open

Net

Single

Exclusive Agency

MULTIPLE CHOICE QUESTION

1 min • 1 pt

In what kind of listing is information shared with other brokers?

Open

Net

Multiple

Closed

MULTIPLE CHOICE QUESTION

1 min • 1 pt

“Only if the listing broker was in any way a procuring cause in the transaction may the listing broker be entitled to a commission” does NOT apply to which listing?

Exclusive right-to-sell listing

Net listing

Open listing

Exclusive agency listing

MULTIPLE CHOICE QUESTION

1 min • 1 pt

Can a real estate licensee with an agency agreement with a buyer collect a commission on a deal with a seller who is unrepresented (for sale by owner)?

Only if the buyer agreement states the buyer will compensate the agent

Yes, if there is an agreement in writing to be compensated by either the buyer or the seller

All of these

Only if the seller agrees to a one-day listing agreement with a compensation clause

MULTIPLE CHOICE QUESTION

1 min • 1 pt

There are an assortment of reasons why sellers might “fire” their listing agent. What are legitimate reasons for listing agents to “fire” their client?

Failure to consistently keep the property clean and “showable”

All of these

Failure to make full disclosures of serious property issues

Repeated rejection of showing opportunities because of inconvenience

The parties to the listing contract are

the seller and the buyer.

the broker and the sales agent.

the seller and the broker.

the seller and the sales agent.

MULTIPLE CHOICE QUESTION

1 min • 1 pt

A seller of unimproved property located in a certificated service area of a utility service provider, must give written notice to a purchaser of which of the following?

That there might be a delay in the utility's ability to provide services

Both of these

That extension of water

That there might be a delay in the utility's ability to provide services

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Real Estate Listing Types and Commissions

With what kind of listing does the seller employ only one broker?

In what kind of listing is information shared with other brokers?

“Only if the listing broker was in any way a procuring cause in the transaction may the listing broker be entitled to a commission” does NOT apply to which listing?

Can a real estate licensee with an agency agreement with a buyer collect a commission on a deal with a seller who is unrepresented (for sale by owner)?

There are an assortment of reasons why sellers might “fire” their listing agent. What are legitimate reasons for listing agents to “fire” their client?

The parties to the listing contract are

A seller of unimproved property located in a certificated service area of a utility service provider, must give written notice to a purchaser of which of the following?

Because home builders are not required to provide property disclosures, should buyers also bypass home inspections?

Under Texas law, real estate agents are permitted to call individuals on the do-not-call list if they have had a previous business relationship with the person, have received permission to call the person, or

An abbreviated formula for finding the commission amount is T × % = Pt. The Pt of this equation stands for which of the following?

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