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Principals Exam (version 2)

Total questions: 60

Worksheet time: 30mins

Name
Class
Date
1.
An agent works on behalf of
a)
a customer.
b)
a client.
c)
both a customer and a client.
d)
neither a customer not a client.
2.

TRELA

a)

enforces the License Act.

b)

may appoint an administrator for the TREC.

c)

is a primary law that regulates the conduct of the real estate licence holders.

d)

is the law established by the TREC in the rule-making authority.

3.
The Texas Real Estate Commission
a)
does not hold the broker accountable for the actions of sponsored associates.
b)
holds the broker accountable for the professional actions of sponsored associates.
c)
holds buyers or sellers accountable for the acts of their real estate brokers and sales agents.
4.
A person who engages an agent to represent her interests in a transaction is called a client, or
a)
a customer of the agent.
b)
a seller.
c)
a buyer.
d)
the agent's principal.
5.
A listing agent tells a buyer-customer that the seller is under pressure to sell because of a recent contract to purchase another house in Idaho. Such disclosure is
a)
acceptable if it results in a sale.
b)
acceptable if no details of the move to Idaho are disclosed.
c)
unacceptable because of the fiduciary duty owed the owner.
d)
unacceptable because the listing broker is the agent of the buyer.
6.
A material fact is one that
a)
the client considers important.
b)
the customer considers important.
c)
a reasonable person might feel is important.
d)
the listing broker considers important.
7.
Two people own a house, each having an undivided equal interest. Which of the following best describes what they own?
a)
Each own fifty percent of the physical house and the land it rests on.
b)
Each own one hundred percent of the physical house and the land it rests on.
c)
Each owns fifty percent of the estate represented by the real property, but no physical portion of the real property.
d)
Each owns one hundred percent of the estate represented by the real property and fifty percent of the physical house and the land it rests on.
8.
An interest in real estate that includes the right to possess is considered
a)
an estate in land.
b)
a freehold estate.
c)
a fee simple estate.
d)
an encumbrance.
9.
If the duration of an owner's rights in an estate cannot be determined, the owner possesses
a)
an indeterminate legal estate.
b)
a leased fee simple estate.
c)
a freehold estate.
d)
a leasehold estate.
10.
In what kind of estate does ownership revert to the grantor of the estate if usage fails to conform to a stated condition in the grant?
a)
Fee simple absolute.
b)
Life estate with reversion.
c)
Life estate with condition subsequent.
d)
Fee simple defeasible.
11.
Bob grants his sister Mary an estate for as long as she lives, but her heirs cannot inherit the estate. what kind of estate is it.?
a)
An estate pur autre vie.
b)
An estate for years.
c)
An ordinary life estate.
d)
A legal life estate.
12.
Homestead, dower, and curtesy, and elective share are examples of
a)
a conventional life estate.
b)
a legal life estate.
c)
an estate created by an owner's agreement.
d)
a fee simple absolute.
13.
An estate at will
a)
cannot be terminated.
b)
is terminated only if so stated in the lessee's last will and testament.
c)
terminates on the death of the lessor or leassee.
d)
terminates on the date specified in the lease agreement.
14.
Which of the following is true of a tenancy in common?
a)
The co-owners must be married.
b)
The tenants share an indivisible interest.
c)
The tenants must acquire their interests at the same time.
d)
The tenants own equal shares of the estate.
15.
When a tenant in common dies, what happens to the tenant's interest in the estate?
a)
It is divided equally among the surviving tenants in common.
b)
The surviving tenants must buy the interest from the deceased tenant's heirs or sell their interests to the heirs.
c)
It becomes a joint tenancy.
d)
It passes by probate to the deceased tenant's heirs.
16.
Which of the following is true of a joint tenancy?
a)
The tenants can determine the size of the share owned by each tenant.
b)
The size of the tenant's shares is determined by the amount of equality each has invested in the property.
c)
The tenants have an equal and indivisible ownership interest.
d)
There can be no more than two co-owners, and each has a fifty percent interest.
17.
If a joint tenant sells his or her interest to an outside party,
a)
the new owner becomes a joint tenant.
b)
the new owner is a tenant in common.
c)
the joint tenancy terminates and all owners become tenants in common.
d)
the joint tenancy terminates and the owners must create a new joint tenancy to include the new owner.
18.
When real property is held in a land trust, who holds legal title?
a)
The beneficiary
b)
The trustor.
c)
The trustee.
d)
The grantor.
19.
A condominium owner can
a)
sell or mortgage the condominium unit without hindrance from individual owners of neighboring units.
b)
sell the interest in the physical unit seperately from the interest in the common elements.
c)
exclude non-owners from the unit owner's pro rata portion of the common elements.
d)
exclusively posses and use those portions of the common areas structurally or functionally necessary for the operation of the unit.
20.
In a cooperative, real property is owned only by
a)
the individual unit owners.
b)
the individual unit owners and the cooperative association.
c)
the cooperative developer.
d)
the corporate entity of the cooperative association.
21.
In a time-share freehold, owners acquire
a)
undivided interests as tenants in common.
b)
a tenancy from period-to-period for a portion of a year.
c)
a pro rata share of a leased fee.
d)
a tenancy in severalty for a portion of a year.
22.
An encumbrance is most broadly defined as
a)
another's right to use aproperty without the permission of the property owner.
b)
another's right to claim the sale proceedes of a property that has been used as collateral for a loan.
c)
another's interest in a real property that limits the intersets of thehold property owner.
d)
another's right to control how the freehold owner of a real property uses the property.
23.
In what kind of easement is there a dominant tenement and a servient tenement?
a)
An easement in gross.
b)
A commercial easement.
c)
A personal easement.
d)
An easement appurtenant.
24.
If the owner of property A has a court-ordered easement to drive across property B beacuse it is the only way for A to have access to a public road, the easement in a(n)
a)
easement by perscription.
b)
personal easement.
c)
easement by necessity.
d)
easement in gross.
25.
An encroachment is
a)
an easement that has not been recorded on the title of the burdened property.
b)
an unauthorized physical intrusion of one property into another.
c)
a right granted by a property owner of an adjoining property to build a structure that protrudes across the property boundary.
d)
a structure that does not comply with a zoning ordinance.
26.
A court might grant an easement by perscription if
a)
a municipality needs to dig a trench across an owner's property to install a sewer line to a neighboring property, and the owner refuses permission.
b)
a property owner sells the front half of a lot and wants to continue using the driveway to reach the rear of the lot.
c)
an intruder has been using an owner's property for a certain period with the owner's knowledge but without permission.
d)
a property owner wants to prevent the owner of an adjoining property from building a second-story addition that blocks the sunlight to his rose garden.
27.
A lien is a
a)
debt incurred by a property owner.
b)
promissory note granted by a property owner as security for a debt.
c)
creditor's claim against property as a security for a debt of the property owner.
d)
document that creates an easement.
28.
A general lien is a lien
a)
imposed by statutory law.
b)
imposed by court order.
c)
placed against an individual rather than against any particular property.
d)
placed against any and all property owned by an individual.
29.
A real estate tax lien, a federal income tax lien, a judgement lien, and a mortgage lien are recorded against a property. Which lien will be paid first when the property is sold?
a)
Real estate tax lien.
b)
Federal income tax lien.
c)
Judgement lien.
d)
Mortgage lien.
30.
Which of the following tax liens is a junior lien?
a)
Special assessment tax lien.
b)
Inheritance tax lien.
c)
Income tax lien.
d)
Ad valorem tax lien.
31.

According to law, states

a)

may not levy real estate taxes.

b)

may not impose tax liens.

c)

may delegate taxing authority to county

governments.

d)

may prevent federal taxation of real estate within

their respective jurisdictions, if properly legislated.

32.

A special tax district might be created to

a)

construct and manage a park district.

b)

create a two-mile extension of county sewer

facilities.

c)

establish and maintain a public library.

d)

create a fire department.

33.

A homeowner's total tax bill is derived by

a)

dividing the tax requirement by the tax base.

b)

multiplying each district's tax rate times the

assessed value of the property.

c)

multiplying each district's tax rate times the

taxable value of the property.

d)

averaging the tax rate for each tax district, and

multiplying the average tax rate times the

assessed value.

34.
Which of the following would be defined as real estate as opposed to real property?
a)
Wells, driveways, and signs on a parcel of land.
b)
Mobile homes temporarily parked on a parcel of land.
c)
Timber that has been cut and is lying on a parcel of land.
d)
Business equipment an owner or tenant has placed on a parcel of land.
35.
Which of the following best describes the legal concept of personal property?
a)
Any item which is acquired in a fee simple sale transaction.
b)
Any item of property that is not definable as real property.
c)
Any movable property owned by an individual, partnership, or corporation.
d)
Any item that is not a natural item affixed to the earth.
36.
The right to encumber a property means that the owner can
a)
sell the property to an encumbered property.
b)
pledge the property as collateral for debt.
c)
lease the property.
d)
assign the bundle of rights to another.
37.
Riparian rights concern which of the following bodies of water?
a)
Lakes.
b)
Seas and oceans.
c)
Streams and rivers.
d)
Navigable lakes.
38.
Which of the following best describes a "fixture?"
a)
Any item of personal property positioned within the boudaries of a parcel of real estate.
b)
An item of personal property that has been converted to real property.
c)
An item of real property temporarily placed on land for the purpose of conducting a business.
d)
An item of personal property that has been left in one location for a period of six months.
39.

Which of the following is not a required element of a contract.

a)

Mutual Assent

b)

Offer and Acceptance

c)

Consideration

d)

Cash Value Exchange

40.

John and Jenni sign a real estate contract to purchase a historic home. In the body of a contract, a change is handwritten. What law requires the contract to be in writing?

a)

Statute of Frauds

b)

Statute of Limitations

c)

Statute of realtors

d)

Uniform Commercial Code

41.

A broker is hired to procure a customer for a client. In order to earn compensation, the agent must procure a customer who

a)

has seen the property

b)

will show up to closing

c)

is ready to accept the sales price

d)

is ready, willing and able to transact

42.

A property owner agrees to pay a broker a commission, provided the owner receives a minimum amount of proceeds from the sale at closing. This is an example of a(n)

a)

exclusive right to sell agreement

b)

exclusive agency agreement

c)

open listing

d)

net listing

43.

An owner agrees to pay a broker for procuring a tenant unless it is the owner who finds the tenant. This is an example of an

a)

exclusive right to sell agreement

b)

open listing

c)

net listing

d)

exclusive agency agreement

44.

The type of listing that assures a broker of compensation for procuring a customer regardless of the procuring party is a(n)

a)

exclusive right to sell agreement

b)

open listing

c)

net listing

d)

exclusive agency agreement

45.
Special agency occurs when
a)
the principals give an agent a limited authority to act on their behalf.
b)
the principals give an agent authority to act for them in the operation of a business.
c)
a person operates a real estate brokerage business.
d)
a person operates a special real estate brokerage business.
46.
Which statement is TRUE of listing agents?
a)
They must communicate every offer, oral or written, to the owner.
b)
They may refuse to present an offer if it is too low.
c)
They must tell the buyer the seller's lowest acceptable price.
d)
They may tell the buyer the terms f a counteroffer the seller made yesterday.
47.
Sally, as agent for the seller, listed and subsequently sold George's town house. She did not tell George that a major zoning change in progress would allow business use in the area, thus increasing property values. Which statement is TRUE?
a)
Sally was not required to disclose the change because George never asked her.
b)
Sally was not required to disclose the change if George received his full asking price.
c)
Sally was required to disclose the change because it was a material and pertinent fact.
d)
Sally was required to disclose the change because the zoning laws require notice to all interested persons.
48.

A seller told his agent that last year he had received an insurance check for roof damage and spent the money on a trip. The roof was never repaired. What should the agent do?

a)

The agent must disclose the information, as it is a material fact about the property.

b)

The agent must disclose it if asked, but is under no legal obligation to tell the buyer.

c)

The agent must keep the information confidential.

d)

The agent should suggest the sell get the roof checked before selling, but is not required to disclose the information.

49.

Which of these is an agent who is authorized to manage ALL of a principal's affairs within certain specified areas?

a)

special agent

b)

general agent

c)

universal agent

d)

dual agent

50.

The term used for an individual with authority to act on behalf of another is

a)

principal

b)

customer

c)

agent

d)

client

51.

Texas brokers are required by law to maintain a trust account separate from their brokerage's operating accounts. This enables them to fulfill what duty to their clients?

a)

the duty of loyalty

b)

the duty of confidentiality

c)

the duty of accounting

d)

the duty of obedience

52.

When an agent refers to someone as a customer it means:

a)

that person does not have an agency relationship with the license holder

b)

that person is in an agency relationship with the license holder but not the sponsoring broker

c)

that person is in an agency relationship with the license holder

d)

that person is the other agent in the transaction

53.

Which of these duties is the obligation of an agent to carry out the legal and ethical instructions of their client?

a)

estoppel

b)

obedience

c)

loyalty

d)

disclosure

54.

With this type of agency, the principal and agent may never explicitly state the nature or terms of the relationship, but the agent will be held to the duties of an agency relationshiop.

a)

express agency

b)

blatant agency

c)

agency by ratification

d)

implied agency

55.

What is the most desirable cause of an agency termination?

a)

mutual agreement

b)

acts of the parties

c)

expiration of period

d)

performance of fulfillment of purpose

56.

In order to place a listing in an MLS, a broker would need to create what form of agency with their client?

a)

express written agency

b)

either form of express agency

c)

any form of agency other than gratuitous agency

d)

oral written agency

57.

What are the duties that survive termination?

a)

accounting and reasonable care

b)

reasonable care and disclosure

c)

confidentiality and accounting

d)

loyalty and obedience

58.

What law ended racially discriminatory housing practices in the United States?

a)

Fair Housing Act of 1968

b)

End Racist Housing Laws of 1966

c)

Civil Rights Act of 1968

d)

Equal Housing Act of 1966

59.

What is "redlining?"

a)

Drawing a redline on a map and denying financial services to people within that area

b)

Pushing your car to the maximum speed it was designed to handle

c)

Drawing a redline on a map and giving extra financial services to people with that area

d)

A law that allows you to deny your home sale to people of color

60.
A contract is _________ if the court can not uphold it because of some rule of law.
a)
unenforceable
b)
enforceable
c)
voidable
d)
void

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