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WorksheetsReal Estate Listing Types and Commissions
Total questions: 160
Worksheet time: 3hrs 44mins
With what kind of listing does the seller employ only one broker?
Open
Net
Single
Exclusive Agency
In what kind of listing is information shared with other brokers?
Open
Net
Multiple
Closed
“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
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
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.
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
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 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.
if the call is personally dialed and is not, in itself, an attempt to sell a property over the phone.
have a Robocall license.
An abbreviated formula for finding the commission amount is T × % = Pt. The Pt of this equation stands for which of the following?
Total
Rate
Part
Percentage
A house sells for $180,000 and the broker is to receive a 5% commission. The broker's commission is
$3,000.00
$8,000.00
$6,000.00
$9,000.00
How much interest will the seller owe the buyer for a closing date of August 10 if the outstanding loan balance is $43,580? The interest rate on this assumable loan is 10.5% , and the last payment was paid on August 1. Prorations are to be done through the day of closing, using a statutory year.
$254.22
$127.11
$508.43
$381.33
The sale of Mrs. Gates's home is to close on September 28. Included in the sale is a garage apartment that is rented for $350 per month. The September rent has been paid. What is the rent proration, using actual days and prorating through the day of closing?
$325.67
$23.33
$350.00
$175.00
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?
Comfortably above $500,000 to allow for buyer negotiation
$527,500, the original cost plus commission
$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 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 amount paid to the lender that has the effect of lowering a monthly payment.
A discount point is an up-front fee collected by the lender to pay the cost of processing a loan.
If a lender agrees to an $80,000 loan at 9% for 15 years with 2 loan discount points, what amount will be charged at closing for the points?
$7,200
$1,600
$3,168
$800
With an outstanding loan balance of $12,000 at an interest rate of 9% and a monthly payment of $100, the amount of the first payment that goes toward interest is
$90.00
$91.00
$10.00
$89.93
Items for which the buyer is credited at the time of closing are known as
accrued items.
prepaid items.
postcredited items.
recoverable non-specific items.
To find the area of a square or rectangle,
multiply (length × width).
divide [½ (base × height)].
multiply [½ (base × height)].
divide (length ÷ width).
A fence is being built to enclose a lot 125 feet by 350 feet. How many running feet of fence will it take to enclose the lot?
600
475
825
950
What is the area of a triangle that is 24 feet by 36 feet?
432 square feet
756 square feet
1,512 square feet
864 square feet
Prorations are various financial responsibilities that need to be dealt with in closing a transaction. Who takes care of the prorations?
Prorations are expenses divided by the lender and the buyer.
Prorations are ongoing property expenses that are divided between the buyer and the seller.
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 cannot be guaranteed or proven.
An appraisal determines the listing price of a property.
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.
substitution.
anticipation
competition.
In the sales comparison approach, the sales price for each of the comparable properties is changed by the net adjustments calculated in the analysis, resulting in what sales price range for the comparable properties?
Highest
Average
Adjusted
Lowest
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 economic obsolescence.
curable functional obsolescence.
To arrive at a property's value using the cost approach, calculate the value of the land
with existing structures.
put to average use.
as it is currently being used.
put to the highest and best use.
The purpose of a CMA is to
set the legal price of the property.
irrelevant because it has been replaced with professional appraisals of value.
act as a general guide to what similar properties are selling for.
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?
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.
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.
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 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.
The appraiser places more weight on the estimate of value from the sales comparison approach when valuing existing single-family properties.
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 cut the loan servicer out of the loop, thereby reducing the payment.
The borrower would be guaranteed to get his down payment back.
The payment would be modestly lower and the borrower would depend on inflation to improve his equity position.
The amount of equity would remain the same throughout the loan without risking going down.
There are two qualifying criteria set by the VA for loans: debt-to-income ratio and
net income.
adjusted income.
total income.
residual income.
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 Texas Bootstrap Loan Program
The My First Texas Home Program
The Veterans Housing Assistance Program
The Veterans Land 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.
Under which financing technique would no payment be due until the property is sold, the borrowers move from the home for longer than 12 months, all borrowers have died, or the borrower defaults?
Reverse mortgages
Shared-appreciation mortgages
Equity loans
Purchase money mortgages
Which of the following is NOT generally a reason for lenders to sell loans into the secondary market?
To avoid interest-rate risks
To realize profits upon the sale of the loans
To meet minimum loan sales requirements set by the government-sponsored secondary markets
To raise capital to continue making mortgage loans
What government-sponsored enterprise (GSE) is available to help creditworthy farmers and ranchers maintain their businesses?
Farmer Mac
Ginnie Mae
Freddie Mac
Fannie Mae
The Truth in Lending Act, Regulation Z, always applies to all credit transactions secured by
an automobile.
a business.
a residence.
a boat.
If state law says that a mortgage conveys ownership to the mortgagee and the mortgagee may take possession of and rents from the property upon default by the mortgagor, this state follows the
mortgage theory.
lien theory.
title theory.
possessory theory.
Under which theory of mortgage law does Texas operate?
Foreclosure theory
Lien theory
Non-credit theory
Interest payment theory
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
One, the title
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.
If a borrower obtains a home loan, the interest-rate ceiling for that loan may NOT exceed what percentage per year?
28
16
20
18
The maximum rate of interest charged for business, commercial, investment, or similar-purpose loans may be raised via the floating index to what percentage per year?
18
22
28
24
Written notice of a proposed foreclosure sale must be given at LEAST how many days before the date of the sale?
21
15
30
25
When a property is sold because of foreclosure, all debts are satisfied EXCEPT
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.
all outstanding balances go to zero, except unpaid taxes.
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.)
What is a typical amount a borrower may pay under a mortgage modification?
28% of gross monthly income
31% of gross monthly income
None of these
45% of net monthly income
What is a deed in lieu of foreclosure?
A situation in which a lender becomes insolvent and must surrender property deeds to borrowers, commonly a final step before a lender liquidates its holdings
A situation in which the borrower has no option but to send the keys to the home back to the lender and abandon the property
A situation by which the federal government (via Fannie Mae or Freddie Mac) loses faith in a frequently delinquent borrower and seizes the property
A situation in which an investor will swoop in on properties in default and buy the mortgages cheap from the lender, thus becoming the new holder of the notes
What is the purpose of a tax incremental district (TIF)?
To attract new businesses to an area
To promote aesthetic value of a building
To prevent incompatible land uses
To separate residential from nonresidential areas.
What local government option is available to communities experiencing a deterioration of their center cities?
HUD housing grants
U.S. Department of Interior grants
Historic Land Trust protections
Tax increment reinvestment zones
Which of the following is an example of a variance?
A zoning map amendment that allows a convenience store in the middle of a residential area.
A homeowner needs to get a permit to build a home that encroaches on a side-yard setback.
A person wants to build a bed and breakfast in an area zoned residential.
The owner of a small restaurant is able to keep the restaurant open until it is sold after a city has rezoned an area from commercial to residential.
A landowner wants to build a bed and breakfast in a neighborhood zoned single-family residential. Because a bed and breakfast is marginally acceptable under the local zoning ordinance, the landowner may
apply to the planning and zoning commission for a conditional-use permit.
apply to the zoning board of adjustment for a spot zoning permit.
apply to the zoning board of adjustment for a variance.
apply to the planning and zoning commission for a nonconforming-use permit.
Amendments to the official zoning map can be requested by
the planning and zoning commission.
only property developers.
property developers or city planning staff.
only city planning staff.
An existing building in a location that has newly been rezoned for different purposes (meaning it is now nonconforming) may be grandfathered to continue its historic use until what happens?
The building is sold.
All of these occur.
The building is torn down.
The building is no longer used for its current purpose.
Which of the following is an example of bulk zoning?
To require that a new building dedicate the street floors to retail establishments
To require that a new building look like other buildings in the area
To require that a new building in an area not be taller than 10 stories
To encourage use of land for its highest and best use
Underground storage tanks are dangerous for which of the following reasons?
The possibility of exposure to urea formaldehyde
The possibility of exposure to leaking gasoline
The possibility of exposure to radon gas
The possibility of exposure to polychlorinated biphenyl
Which of the following is suspected of causing serious health issues, although to date there is no proof?
Electromagnetic fields
Urea Formaldehyde Foam
Polychlorinated biphenyl
Asbestos
The duty to know the environmental disclosures that must be given in each transaction before the execution of a contact is
the real estate agent's.
the purchaser's.
the seller's.
the mortgager's.
Francisco is a real estate sales agent. He shows a pre–World War II house on city water and sewer to Teresa, a prospective buyer. Teresa has two toddlers and is worried about potential health hazards. Which of the following is TRUE?
There is very little risk of mold on the premises.
Because the house was built before 1978, there is a good likelihood of the presence of lead-based paint.
Because the house is approximately 60 years old, Teresa should have the water tested for polychlorinated biphenyl.
There is probably no asbestos insulation in the home.
Which of the following is the BEST example of a green building program?
Using green grass, such as St. Augustine, for landscaping
Using a ducted whole-house vacuum cleaner in a residential property.
Using native plants in landscaping that don’t need extra watering for landscaping
Building a greenhouse in the backyard of a residential property to grow vegetables
What is an EEM used for?
To finance the purchase of a new energy-efficient home
To measure the difference in utility bills before and after installation of energy improvements
To pay for an energy audit of an existing home
To finance ENERGY STAR improvements in a home
From a real estate agent’s perspective, why is a green home better than a standard home?
It takes half as long to sell, but pays off almost twice the cost of the improvements.
It sells quicker and for more money.
It sells for more money, although it often takes more time.
There are fewer adverse disclosures to make.
Beyond the benefits derived from living or working in an environmentally sensitive building, does the government provide additional benefits?
Yes, the EPA’s ENERGYSTAR RebateFinder program will occasionally offer tax credits or exemptions on energy savings products or home improvements.
Yes, the State of Texas offers an ad valorem tax exemption on the portion of assessed value of a home derived from installation of solar or wind energy generators.
All of these apply.
Yes, the federal government offers residential energy-efficiency tax credits to homeowners who make efforts to make their homes more energy efficient.
A real estate agent who wants to assist families in the purchase and sale of real estate might work in which specialization within the real estate industry?
Commercial
Agricultural
Residential
Industrial
If a church building is being sold, which real estate specialist would likely be involved in its listing and sale?
Special purpose
Agricultural
Commercial
Industrial
Which of the following real estate specializations matches landlords and tenants?
Home builder
Property developer
Rental locator
Property management
Joan Jettson is a residential rental locator in Houston. Joan works for several apartment complexes in the downtown area. Does Joan need a real estate license?
No, because she is paid a set fee for her services not a commission
Yes, because she negotiates leases for the complexes she does business with
Yes, because she works as an independent contractor for the complexes
No, because she works as an independent contractor for the complexes
Which of the following is a TRUE statement?
A real estate license is required to develop a time-share plan in Texas.
A real estate license is always required to work in the resort industry in Texas.
A real estate license is required to work in the landman industry in Texas.
A real estate license is not generally required to work in the resort industry in Texas.
What are some basic areas of knowledge that sales agents should have in order to be involved in the farm and ranch land real estate specialty?
Basic understanding of agricultural production and farm markets
Golf course and other recreational alternative land interests
Weather forecasting for counseling farm owners on crop yields
Zoning that would restrict farm stands to specific roadways or urban “farmers markets”
A sales agent wishes to practice in commercial sales. Which of the following matters should the agent have knowledge of in order to be competent in commercial sales?
Foreclosure laws
Property management laws
Real estate investment principles
Negotiating with lenders
Gloria has a sales agent license. She wants to get a certification to do apartment management. What type of designation indicates competency in apartment management?
ABR
CPS
AMS
CAM
Jennifer Jones is a new sales agent sponsored by Capital City Realty, a licensed brokerage firm in Austin. Jenna Lewis is the designated broker for Capital City. Which of the following should Lewis advise Jones about when she starts working for Capital City?
The hours Jones must devote each week to work as a sales agent
The social media Jones can and cannot use to market properties
The scope of Jones’s authorized activities
The areas of Austin in which Jones can practice as an agent
Brian Belson is a licensed sales agent sponsored by Gulf Realty, a licensed brokerage firm in Galveston. Brian has been licensed for six years. He has handled all kinds of real estate transactions, but for the last 3 years has only done residential sales. Jenna Lewis is the designated broker for Gulf. Jenna has informed Brian that he can only do residential sales. Brian has decided to advertise on his website that he is available to do property management for vacation rentals, as well as residential sales and leasing. Is Gulf responsible for Brian’s actions if one of his property management clients files a complaint against him with TREC?
No, Jenna has limited Brian’s authorized activities to residential sales.
Yes, because Brian has been licensed for more than five years, Capital City is responsible for all his activity.
No, because Brian does not have a property management license.
Yes, because a broker is strictly liable for all of its sponsored agents’ activities, authorized and unauthorized.
Richard Reagan is a new licensee with no experience. Richard is sponsored by Janet Jones, a licensed real estate broker. Janet has authorized Richard to engage in all areas of real estate, including property management. Janet’s firm manages several residential properties owned by investors. Richard mishandles a security deposit in a residential leasing transaction. Janet is concerned about the security deposit matter and thereafter requires Richard to take a property management class before he does any property management for the firm. Can Janet do this?
Yes, but Janet must notify TREC so that it can keep track of Richard’s additional education requirements.
Yes, Janet can require Richard to get more education.
No, if no consumer was harmed by his action, Janet cannot limit Richard after she has authorized him in all areas.
No, Richard must be permitted to gain more experience under Janet’s close supervision.
A professional estimate of a property's market value or opinion of value, based on established methods and using trained, professional judgment, is performed by
a home inspector.
a real estate appraiser.
a real estate counselor.
a mortgage lender.
A specialist in negotiating purchase or lease contracts with land or mineral interest owners is
a real estate counselor.
an urban planner.
a title/escrow officer.
a petroleum landman.
Does a landman need to have a real estate license?
No, a landman does not need to have a real estate license.
No, if the landman works for an oil and gas company
No, if the landman works for a governmental entity
Yes, if the landman works on an independent contract basis
Do real estate educators need to have a broker-level real estate license to teach in Texas?
No, a real estate license is not required to be a real estate educator.
No, but they are required to have licenses from the Texas Department of Education.
Yes, all real estate educators are required to have broker-level real estate licenses.
No, but educators are required to have at least a sales license and seven years of experience.
n real estate transactions prorations are common. Describe what prorations are, what parties are responsible for paying them and when they are due. Please provide at least 2 examples of items that are typically prorated in real estate transactions.
For this example real estate transaction, please calculate the amount due by each party using the calendar year method. Property owners have paid $4,400 in property taxes on a property they are now selling. The transaction will closed on June 15.
If a property is worth $320,000 and has loans of $10,000 against it, the owner's equity is
$10,000.00
$320,000.00
$310,000.00
$330,000.00
The increase of money in circulation coupled with a rise in prices, resulting in a decline in the value of money, is called
appreciation.
inflation.
deflation.
recapture.
Clara owns Ginnie Mae certificates as part of her real estate investments. What type of investments are the certificates considered?
Real-property securities
Real-property assets
First-lien mortgage notes
REITS
Sara is a real estate investor; she owns several homes in Galveston that she rents out on both short- and long-term leases. She has mortgages on the homes that she pays monthly. What is the portion of her mortgages that is applied to the principal for each loan considered?
Liquid assets
Equity buildup
Interest income
Liquidable security
Which of the following is a means of diversification into a real estate security while continuing to hold a real estate investment?
Rather than selling a house when he moves out, the homeowner decides to rent it out.
A seller sells a fractional ownership in a house to a family member.
A seller takes back a mortgage on a house he sells to a buyer.
A buyer gets a wrap mortgage.
Joan has two rental properties that are exactly the same size. One is a new duplex near downtown Austin, and the other is a duplex built in 1971 in Manor. What happens to the duplex in Manor if she can’t rent it out?
If rent cannot cover expenses, there will be a negative cash flow.
If expenses exceed rent, the duplex will depreciate.
If rent cannot cover expenses, there will be a positive cash flow.
If expenses are greater than rent, the duplex will diversify.
Why is it risky for an investor to purchase raw land with the expectation that there will be growth in the area in the future?
Its potential appreciation is difficult to determine.
Its intrinsic value is difficult to determine.
Neither of these are reasons.
Both of these are reasons.
Arnold has watched television commercials promoting the use of pyramiding as a real estate investment technique. If Arnold wants to try this approach, which action would he take?
Simply use borrowed money to finance the bulk of his investments
Contact his bank to arrange a refinance of one of his investment properties, thereby obtaining cash to buy another rental house
Arrange for an installment sale of one of his investment properties
Relinquish one of his current investment properties and replace it with a new property
A parcel of property that increases in value because of its location in the center of an affluent and rapidly growing neighborhood is an example of
depreciation.
capital gain.
appreciation through intrinsic value.
positive cash flow.
Income from interest, stock dividends, and royalties is
passive income.
active income.
capital gains income.
portfolio income.
An investor may defer federal income taxes on a portion of the gain on the sale of a property, provided all sales proceeds are not received during the year of the sale. This describes
an installment sale.
a 1031 exchange.
an adjusted basis.
pyramiding.
Syndications often come under securities registration laws administered by the federal
Securities and Exchange Commission (SEC).
Securities and Trust Commission (STC).
Securities and Stock Commission (SSC).
Securities and Syndication Commission (SSC).
State laws passed requiring registration of securities to protect the public from investing schemes are commonly called
black-sky laws.
blue-sky laws.
white-sky laws.
gray-sky laws.
Jacob has invested in a real estate investment syndicate that purchased a shopping center. Which does NOT describe the advantages of his participating in the syndicate?
Jacob will be able to sell his interest in the syndicate upon the approval of the syndicate's management.
Jacob enjoys the same federal income tax advantages as a sole-owner real estate investor.
Jacob owns a certain percentage of a particular parcel of real estate.
Jacob was able to invest only a modest amount of money but owns part of a large-scale, high- profit, high-risk shopping center.
What is the difference between an equity REIT and a real estate syndicate?
Equity REITs pool investors’ funds to purchase one property, while real estate syndicates pool properties and sell shares to investors.
Equity REITs pool mortgages and sell shares to investors, while real estate syndicates pool several investors’ funds to purchase one property.
Equity REITs pool properties and sell shares to investors, while real estate syndicates pool several investors’ funds to purchase one property.
Equity REITs pool mortgages and sell shares to investors, while real estate syndicates pool properties and sell shares to investors.
An Information About Brokerage Services form must be given to prospective tenants at the first substantive dialogue on a residential lease for
more than one year.
six months or more.
three years or more.
any length of time.
Which of the following is TRUE?
A multidwelling rental housing owner must disclose to all rental applicants of an apartment community that a convicted sex offender is living in the apartment community.
The owner of a single-family rental unit has a duty to disclose to rental applicants any information about high-risk sex offenders living near the rental unit.
A multidwelling rental housing owner need not disclose to rental applicants of an apartment community that a convicted sex offender is living in the apartment community.
The owners of single-family rental houses have a duty to disclose to rental applicants any information about high-risk sex offenders living near the rental dwelling that they know about.
What type of multifamily units are subject to the Americans with Disabilities Act?
Multifamily properties of four or more ground-floor units
None of these
Multifamily properties of four or more units with elevators
Both of these
Tina is in a wheelchair and looking for an apartment unit to rent. She wants to see an upstairs unit in a small apartment complex because the view is much better on the second floor. Unfortunately, there is no elevator and the property is not required to have one. What should the landlord do in this situation?
Show Tina only a downstairs apartment.
Convince Tina to take a downstairs apartment because the landlord is not required to have an elevator.
Show Tina an upstairs apartment.
Install a ramp or elevator once Tina pays the security deposit on an upstairs unit.
An “estate for years” must run a minimum of how many years?
15 years
99 years
50 years
No minimum
Which of the following is NOT a type of lease?
Gross lease
Net lease
Percentage lease
Profit/loss lease
A variable lease may be an index lease or
a ground lease.
a fixed lease.
a percentage lease.
a graduated lease.
In a leasehold estate, the landlord is called
the lessee.
the lessor.
the trustee.
the trustor.
Landlord Leslie and tenants Toni and Terri enter into a lease wherein Toni and Terri will rent Leslie’s house for an indefinite period. Toni and Terri are married, and Toni is 16 years old. Is the contract valid?
No, because the lease has no termination date.
No, because Toni is too young.
Yes, because Toni and Terri are married.
Yes because Toni is 16.
Tenant Tobias decides to rent a house from landlord Larry for two years. They do not sign a lease and only rely on a “handshake.” Tobias finds a much nicer home for a lot less money and decides to go with the nicer home. Can Larry sue Tobias for breach of contract?
No, because the lease was to be for two years.
Yes, because the lease was to be for two years.
No, because there was no consideration.
Yes, because an oral lease is legal.
Tenant Tomas and landlord Landis enter into a contract for Tomas to rent Landis’s home for two years. Halfway through the lease, Tomas decides to install smart lights and a security system that requires intensive modifications to the wiring and electrical system. May Tomas make such improvements?
Yes, because Landis can only benefit from the improvements to the property
No, because Tomas intends to do it himself.
No, because the terms were not in the original lease
Yes, with Landis’s permission
A right of first refusal allows a tenant to
remain in a space without being forced to renegotiate the contract.
prevent a landlord from opening negotiations with another potential tenant until negotiations with the existing tenant have been exhausted.
be the first to consider and possibly renegotiate a renewal with a landlord.
is not allowed under Texas law.
A right of first refusal allows a tenant to
be the first to consider and possibly renegotiate a renewal with a landlord.
remain in a space without being forced to renegotiate the contract.
prevent a landlord from opening negotiations with another potential tenant until negotiations with the existing tenant have been exhausted.
is not allowed under Texas law.
Jasmine owns a home that she has rented to Sue. Sue stopped making her rent payments, necessitating Jasmine's evicting her. Which is NOT a part of the process she is expected to follow to regain possession of the property?
Jasmine must give a 24-hour address or phone number to Sue so Sue can get a key to get into the property.
Jasmine will post an eviction notice on Sue's front door, stating the deadlines for payment of rent and that legal assistance is available.
The forcible detainer suit will be heard in court not less than 20 and not more than 21 days after Jasmine's filing the eviction documents.
If the court issues a judgment of possession in favor of Jasmine, Sue will have five days to file an appeal.
What happens to a tenant application deposit if the application is accepted?
It is given to the entity that conducts the background check.
It is provided to the entity that does the credit check.
It is credited to the security deposit or other fee due when the lease is signed.
It is retained by the landlord.
Texas law suggests that occupancy standards for apartments be set at no more than three people per bedroom. Which of the following best describes how occupancy matters should be addressed?
The law is very specific and landlords are permitted to turn away families that exceed that standard.
Landlords cannot limit the number of people in an apartment unless there has been an event at the apartment that required police action—in which case “extra” residents may be removed (evicted).
Tenants and landlords should work together, along with municipalities, concerning occupancy rates.
The law is rarely enforced because the Landlord and Tenant Act restricts a landlord’s access to rental dwellings to see how many people are living there.
A property manager for warehouses is considered
an industrial property manager.
a commercial property manager.
a residential property manager.
a retail property manager.
When Jeffrey, a property manager, and Pete, a property owner, negotiated a property management agreement, which provision of the agreement might have been based on a percentage of gross or net income, a commission on new rentals, a fixed fee, or a combination of methods?
Owner's agreement fee
Operating expenses
Rental rate
Management fee
A property manager is typically considered what type of agent?
Special
General
Real estate
Constructive
Do apartment managers need real estate licenses?
Property owners and their onsite employees do not require licenses to lease units.
Under Texas law, anyone involved in the rental of property must have a license.
Only homeowners renting one or two rooms in their homes are exempt from the licensing requirement.
Whether on site or off site, no license is needed to lease property in Texas.
An estimate of income and expenses and a consideration of the owner's long-range plans for the property are contained in
the lease.
the budget.
the inspection.
the survey.
Maintenance, rehabilitation, insuring the property, and addressing environmental requirements are
a property manager's administration activities.
a property manager's physical management activities.
none of these.
a property manager's marketing activities.
In setting an operating budget, which of the following is not a fixed expense?
Real estate taxes
Employee salaries
Property taxes
Repairs
How is commercial space rental typically stated?
On a monthly rate per square-foot basis
On a monthly rate per unit basis
On a yearly rate per capita basis.
On a yearly rate per unit basis
What is a property manager required to do if the manager rejects an applicant on the basis of a credit report?
Provide a copy of the credit report to the applicant
Give the name of the credit-reporting agency to the applicant
Refund the application fee
Give the tenant three days to clean up the credit report
The occupancy rate for the Mountain View Apartments has reached 98%. From the point of view of the property manager, what might this indicate?
Rents should be raised.
Rents should be lowered.
The building may need repairs.
The building is poorly managed.
Phillip is moving out of town to take a new job and has advertised his home for lease. As a landlord, which of the following is NOT a part of the required tenant-approval process?
Phillip must provide an applicant with a list of the grounds for which he may deny the application.
Phillip must provide an applicant with a printed or online notice of his tenant selection criteria at or before he gives the applicant an application form.
Phillip must provide a copy of an applicant's credit report to any applicant rejected based on a credit report.
Phillip may not reject an applicant based on a criminal screening if all applicants are not being screened.
A property manager's minimizing or eliminating the potentially enormous losses that can result from fire, water, accidents, or other causes is
risk management.
cost management.
physical management.
administrative management.
What are property owners or managers required to do if asbestos is present in a building?
While not always required to abate the asbestos, they must develop procedures for working in areas that contain asbestos.
They must always abate the asbestos.
They must not rent out any space that has more than 50% asbestos contamination.
They must either abate or develop procedures for working in areas that contain asbestos.
Clarissa manages an apartment complex. She requires tenants to carry renters insurance. This is an example of what type of risk management?
Controlling the risk
Avoiding the risk
Transferring the risk
Retaining the risk
What is an example of the types of damages covered by extended coverage insurance?
Medical bills paid for a broken leg in an accident by an employee on the job
Medical bills paid for a slip and fall accident by a customer at a shopping mall
Claims paid for building damages after a tornado hits an office building.
Claims paid for loss of revenue income after a tornado hits a grocery store
Must an organization be legally organized under Texas law in order for it to accept property that has been willed to it?
Clubs that are recognized by a superior organizations, (i.e., the Pine Grove Swim Club that is recognized by the Pine Grove Homeowners Association), are allowed to accept property.
No, such things as informal “hunting clubs” and the like routinely receive acreage to make available to members.
No, under the right of free of religion, congregations that form themselves into churches may accept property without being formally recognized by the state.
Yes, the grantee must be legally formed to accept title to real estate.
What assurances are offered through a covenant against encumbrances?
The seller is assured any unknown liens on the property will not block the sale.
The buyer is assured the property is free of liens except for those specifically written into the deed.
The buyer is assured that a process by a judgment may be obtained if encumbrances are discovered post-purchase.
The buyer is assured there are no encumbrances against the property.
A grantor who wishes to limit liability for encumbrances against the property to those that occurred after the grantor acquired the property would execute a
special warranty deed.
general warranty deed.
deed without warranty.
quitclaim deed.
Foreclosure because of delinquent real estate taxes is an example of title transfer by
adverse possession.
voluntary bequest.
voluntary alienation.
involuntary alienation.
A property owner discovers that someone has moved into old caretakers quarters on his land. If the property owner does not file an adverse possession suit or otherwise remove the trespasser within a prescribed period, the adverse possessor may receive
a fee simple estate.
a leasehold estate.
a defeasible fee estate.
a determinable fee estate.
A devise is the disposition under a will of
real property.
jewelry.
furniture.
personal property.
Title to real estate can be transferred at death by which of the following documents?
Warranty deed
Trustee's deed
Will
Special warranty deed
Under the TREC promulgated residential contract, the seller has how many days from the date the title company receives the contract to deliver a "commitment for title insurance" to the buyer?
30
20
15
14
Ultimately, who is responsible for maintaining complete records of land ownership and transfers?
The Texas Association of REALTORS®
The Texas Land Office
The Texas Real Estate Commission
The county clerk where the property is located
Can anyone go either to the courthouse or online and search property records for the names of the current owners of a property?
Yes, records are public and searchable by anyone.
Individuals must filled out a Freedom of Information Act (FOIA) form that asks why they need to know the property owner’s identification, then the county clerk decides whether to give access.
No, the names of owners of private residential property is considered confidential.
Only the names of corporations that own commercial or industrial properties is considered public information.
The buyer's attorney examines the abstract and writes a report called an attorney's
insurance of title.
opinion of title.
guarantee of title.
abstract of title.
While under Mexican rule, what was a key differentiator in deciding how much land settlers would receive?
Whether you were married or single
How many oxen you owned
Whether you intended to raise cattle, sheep, or horses
Whether you self-identified as Mexican or English
How does an individual know what records were searched in the effort to establish the condition of the title?
The Texas Real Estate Commission keeps an electronic list of all land title searches.
The listing real estate agent lists which records were searched and signs an affidavit of clear title.
The abstracter lists which records were searched and which were not.
The General Land Office is a one-stop source for all Texas land records.
Once an attorney’s opinion of title is provided, is the need for title insurance eliminated?
Yes, because the abstracter is liable for any errors in the report, title insurance is redundant.
Yes, under Texas law the abstracter’s report and attorney opinion is sufficient to determine the condition of the title.
Yes, as a practical matter, by signing off on the abstracter’s report, the attorney makes himself the insurer of the title.
No, most lenders understand that despite the due diligence of the abstracter, mistakes do happen, so title insurance will be insisted upon.
A real estate sales contract has been negotiated between the Smiths and the Rays. The transaction is ready to close. Who is considered a disinterested (neutral) third party who can coordinate the closing activities without the parties' being present?
Buyer's lender
Buyer's real estate broker
Attorney for the seller
Escrow agent
The doctrine of relation back is MOST closely associated with
escrow
subrogation.
prorations.
title evidence.
Agent Allen wants to ensure that the sale of seller Louise’s house to buyer Bennie will close without a problem. Which of the following is NOT an issue for Louise?
That Bennie will lease the property at closing to tenants
That all the repairs to the property required in the contract are completed
That Bennie has enough money to complete the sale
That Bennie has been approved for financing
What are the two events that typically take place at a closing?
Buyers given list of occupancy deficiencies and zoning authorities provide list of proposed changes
The buyer’s agent gives gift to the new buyer and the listing agent gives percentage of the commission to the seller
The closing of the sale and the consummation of the buyer’s loan
Transfer of the homeowners association covenants and disclosures of nonrequired information (body found in house, previous owner had AIDS, race or religion of neighbors).
The Real Estate Settlement Procedures Act was first enacted as
federal law.
Republic of Texas law.
Texas law.
Republic of Mexico law.
When must the Closing Disclosure be provided to the borrower-buyer?
Three days after the application is submitted
Five days before consummation of the loan
Seven days after the application is submitted
Three days before consummation of the loan
The Closing Disclosure must be used to illustrate all settlement charges for
residential transactions financed by federally related mortgage loans.
all transactions in which mortgage financing is involved.
all transactions involving commercial property.
transactions financed by Department of Veterans Affairs (VA) and Federal Housing Administration (FHA) loans only.
After a sales contract has been signed by all parties, TREC rules require the broker to have the earnest money deposited by the end of
the first calendar day.
the second calendar day.
the first business day.
the second business day.
At closing, the payoff on an existing mortgage is
a debit to the buyer
a credit to the buyer
a credit to the seller
a debit to the seller
Who is responsible for payment of attorney’s fees for preparation of the deed?
Both the buyer and the seller
The seller
The title company
The buyer
The sales price of the property is which of the following?
A credit to the buyer only
A debit to the seller only
A credit to the buyer and a debit to the seller
A debit to the buyer and a credit to the seller
Who pays the appraisal fee on the property?
Appraisers are paid by the lender.
The seller pays the fee because he has a primary interest in the valuation.
Usually the buyer pays for the appraisal, but that payment can be the subject of negotiation between the buyer and the seller.
The buyer pays the fee because he is receiving the property.
Rita and Samuel are closing on their new home. They received the Closing Disclosure three days before closing. The principal amount of their new mortgage loan would be shown as which of the following?
Credit to the buyer
Credit to the seller
Debit to the seller
Debit to the buyer
Buyer Brad is selling his home to seller Sally with a closing date of January 30. Brad’s taxes for the last year were $3,756.75. How much is Brad’s share of the taxes, using a 360-day-year statutory proration?
$324.00
$319.07
$313.06
$308.77
Buyer Brad is selling his home to seller Sally with a closing date of January 31. Brad’s taxes for the last year were $3,756.75. How much is Sally’s share of the taxes, using a 365-day-year statutory proration.
$3,433.25
$3,396.52
$3,386.22
$3,437.68
What are accrued items at closing?
Expenses that have been prepaid by the buyer but not fully used up.
Expenses that are owed by the buyer and paid by the seller
Expenses that have been prepaid by the seller but not fully used up.
Expenses that are owed by the seller but will later be paid by the buyer
