Champions Real Estate Marketing SAE | 122
Questions and Answers 100% Correct
Most common reason a property fails to sell is – Answer price
Matching human needs with goods or services to meet those needs is the process
of – Answer marketing
_________ is a key personality trait of a successful agent –
Answer problem solving
3 Ways Sales Agents Add Value to the Buying Process – Answer Counseling,
Negotiating, and Managing the transaction
Four P’s of marketing real estate – Answer product, promotion, price and
place
How can you know your product? – Answer Inspect company listings
- Travel your geographic area
- Practice writing offers
- Do net sheet calculations on your own house
AIDA – Answer (The four psychological
steps of a sale: attention, interest, desire and action).
states that rational buyers will pay no more for a
property than they would for an equally desirable,
comparable property. – Answer The principle of substitution in real estate
valuation
Marketing to a specific age group is sometimes called – Answer generational
selling
An acronym for the psychological steps of a sale is – Answer AIDA
A willingness to change and grow your marketing plan demonstrates to concept of
_. – Answer adaptation
To be an effective problem solver, it is beneficial to understand …. – Answer
basic human needs and the psychological
steps involved in a sale
defined as expected benefits to be received as a result of ownership – Answer
amenities
Objectives should be – Answer measurable and achievable as well as timely.
Goals should be – Answer attainable, flexible, measurable, and time frame
shot gun method – Answer often the preferred choice for new agents until
they realize that they can’t possibly take
on such a large-scale market
4 types of buyers – Answer -first time buyers
-relocators
-upgraders
-investors
communication is – Answer transcribing and receiving/ talking and listening
Marketing budget goals should be set for a minimum
of , realistically more – Answer 6 months
drive the market – Answer consumers
Agents should “listen” not only to what the client is
saying, but also to ________. – Answer body language
To be an effective problem solver, a real estate agent should understand the
__ involved
in a sale. – Answer psychological
Exam: Law of Agency – Champions | 60
Questions and Answers 100% Correct
Which of the following has the authority to suspend or revoke a Texas real estate license? – Answer
TREC
Which of the following is an element of a listing agreement? – Answer the agreement to pay a stated
commission, usually a percentage of the sales price
the IRS considers which of the following a violation of independent contractor status? – Answer
salesperson is told to work set hours, guaranteed a monthly minimum wage, has his licensing fees paid
by the broker
the TAR buyer representation agreement in or text book: – Answer authorizes intermediary,
authorizes the buyer to give the agent complete loyalty, establishes an exclusive market area
The amendments in 1996 to the License Act state that an agent is not liable for a misrepresentation or
concealment of material fact by a party if: – Answer The licensee did not know of the falsity of the
misrepresentation
One who hires an agent to represent him is called a: – Answer principal
It is always a good idea to have: – Answer The seller fill out the Seller’s Disclosure Notice
A real estate brokerage firm that practices buyer agency only has a lot of intermediary transactions. –
Answer false
Which of the following is a statutory defense for a lawsuit brought about by DTPA? – Answer Written
information obtained from a government record
A licensee is not liable for a misrepresentation or a concealment of a material fact made by a party to a
real estate transaction if the seller did not disclose it to the agent. – Answer true
Actual awareness of a falsity, deception, or unfairness of an act under DTPA is known as: – Answer
knowingly
The TREC was established in: – Answer 1949
an exemption to using the Information About Brokerage Services form is: – Answer a lease for not
more than 1 year
listings can be terminated at any time by mutual agreement – Answer true
fiduciaries are: – Answer Held to the highest degree of good faith, Required to exclude selfish
interest, Require to make disclosures of all relevant facts
According to TREC advertising rules, the definition of advertisement includes all of the following, EXCEPT:
- Answer Communication from a licensee to his or her client
real estate agents owe certain non-fiduciary duties to customers such as: – Answer honesty and
fairness
an unlicensed assistant may: – Answer host an open house
the best way to create an agency relationship is to do so: – Answer in writing
a licensee must present the information about brokerage services form: – Answer at the first
substantive discussion of a possible transaction
when actions lead another person to assume that one is an agent, this is known as: – Answer
ostensible agency
Real Estate Finance I-CHAMPIONS | 68 Questions
and Answers 100% Verified | Latest 2023-2024
The minimum downpayment on a VA loan is:
(a) 2% of the sales price
(b) 0% of the sales price
(c) 3.75% of the sales price
(d) 1% of the sales price – Answer B
_ is the process of creating a new mortgage loan.
(a) Origination
(b) Funding
(c) Underwriting
(d) Servicing
- – Answer A
A veteran can have more than one VA loan:
(a) If the prior VA loan was paid in full and the property disposed of
(b) The prior VA loan was assumed by an eligible veteran who substituted their
entitlement
(c) A or B
(d) Under no circumstances – a VA loan is a “once in a lifetime” benefit - – Answer C
are not-for-profit organizations that exist to serve their members.
(a) Mortgage companies
(b) Credit unions
(c) Insurance companies
(d) One that cannot be financed – Answer B
A qualifying ratio that compares the borrower’s proposed house payment to their
gross monthly income is the _.
(a) Back ratio
(b) Appraisal ratio
(c) Front ratio
(d) Loan to value ratio – Answer C
Periodic payment amounts such as principal & interest, estimated escrow,
estimated monthly payment, and _ must be disclosed in the Projected
Payments section of the Loan Estimate form.
(a) Mortgage Insurance
(b) Homeowner’s insurance
(c) Property value
(d) Estimated inspection cost – Answer A
__ relates to Federal Government spending.
(a) Monetary policy
(b) Legislative policy
(c) Reserve requirement
(d) Fiscal policy – Answer D
In the Closing Disclosure, prepaids include homeowner’s and mortgage insurance
premiums, prepaid interest, property taxes, and a maximum of __
additional items.
(a) 13
(b) 3
(c) 7
(d) 9 – Answer B
When calculating the monthly payment, the lender will add an amount equal to:
(a) Twelve months insurance and six months taxes
(b) 1/12 of the annual taxes and insurance
(c) 1/12 of the annual loan amortization
(d) An amount sufficient to create the escrow account – Answer B
Which of the following is true regarding FHA loans?
(a) An FHA loan requires a CRV
(b) Ratios may be exceeded with compensating factors
(c) FHA loans require a minimum 5% down payment
Champions School of Real Estate – Exam Prep |
177 Questions and Answers 100% Verified |
Latest 2023-2024
Buyer Representation Agreement – Answer An employment contract obligating a broker to
act as a fiduciary to a buyer
Implied Agency – Answer Agency as a result of customary, usual or typical conditions
Broker – Answer A properly licensed party who serves a principal in an agency relationshipalso called an agent
Client – Answer A party represented by a broker in an agency relationship – also called a
principal
Duties of an Agent – Answer An agent owes his client obedience, loyalty, disclosure,
confidentiality, accounting and reasonable care (old car)
customer – Answer A third party – one a broker is working with, but who is not represented
by that broker
Exclusive Agency Listing – Answer A listing where one broker is the exclusive agent and will
earn a commission if the property is sold, unless the seller sells it himself- the seller is
competing with his broker
Ostensible Agency – Answer Agency as a result of the actions of an agent and the response
of other to those actions
Agency by Ratification – Answer Agency is established when an agent acts without
permission of the principal and the principal accepts or ratifies those actions.
Blind Ad – Answer An advertisement that does not clearly indicate the licensed status of the
party placing the ad – real estate licensees are prohibited from placing blind ads.
Duties of Principal – Answer A principal owes his agent compensation, reimbursement,
indemnification and performance
Procuring Cause of Sale – Answer The effort that results in the sale of property – the act of
bringing a ready, willing and able buyer to a seller resulting the sale of the seller’s property
Exclusive right to sell – Answer A listing where one broker will earn a commission when the
property is sold, no matter who sells it
Listing Agreement – Answer An employment contract obligating a broker to act as a
fiduciary to a seller
Agency by Estoppel – Answer A principal fails to maintain due diligence over his agent and
as a result the court prevents the principal from denying the agency relationship
Dual Agent – Answer A broker who has the written permission of both the buyer and the
seller to represent both parties in a single transaction
Management Agreement – Answer An employment contract obligating a broker to act as a
fiduciary to a property owner
Sherman Anti-Trust Act – Answer Federal law that preserves business competition by
prohibiting monopolies, monopolistic practices and restraint of trade- in real estate the biggest
impact is on commissions- always negotiable
Agency – Answer The fiduciary relationship between a broker and a principal or a broker
and a client
Universal Agency – Answer A principal gives an agent the power to transact matters of all
types for him
Designated Agent – Answer A license appointed by a broker in a dual agency situation to
work with either the buyer or the seller in the transaction.
Commission – Answer A negotiated compensation in a broker’s employment contract.
Fiduciary – Answer A party acting for another in a position of trust – a broker, an agent
Public Responsibilities – Answer The responsibilities a broker has to customers or third
parties including honesty, fairness and disclosure of material facts
General Agency – Answer A principal gives an agent the power to bind him in a particular
trade or business
intermediary – Answer A broker in Texas who has the written permission of both the buyer
and the seller to represent both parties in a single transaction
Champions Real Estate Finance | 188
Questions and Answers 100% Correct
Loan-to-Value Ratio (LTV) – Answer The percentage of the lesser of the
appraised value or sales price that the lender will lend.
ex: If a borrower is approved for an 80% loan, it means that the lender will loan up
to 80% of the sales price or appraised value, whichever is lower.
Package Mortgage – Answer Includes both real and personal property (
fixtures and furnishings)
Blanket Mortgage – Answer Covers more than one piece of property.
Wraparound Mortgage – Answer Method of financing which preserves the
low, existing interest rate on the original note.
Open-End Mortgage – Answer Permits additional borrowing on the same
note. This is sometimes called a credit card mortgage or a home equity line of
credit – HELOC.
Budget Mortgage – Answer The monthly house payment includes principal,
interest, taxes and insurance (known as PITI)
Collateral -Dependent Loans – Answer A hard money loan is a specific type of
asset-based financing in which a borrower receives funds secured by the value of
a parcel of real estate.
Character – Answer Is a measure of the willingness of a borrower to make ontime payments. Credit character is revealed in the borrower’s credit report.
Capacity – Answer Is a measure of the borrower’s ability to repay the debt,
and is demonstrated through current earnings and job stability.
Capital – Answer Is the sum of all assets that the borrower has accumulated.
Collateral – Answer Is something of value that can be pledged as security for
repayment.
Yield – Answer Is the return that the investor recieves over the life of the loan.
(Also known as profit)
Originator – Answer The process of creating a new mortgage loan, including
all steps taken by a lender to attract and qualify a borrower.
Mortgage Broker – Answer Typically functions as a middleman between the
borrower and the lender, negotiating, selling or arranging loans to be delivered to
larger investors. At one time originated up to 80% of all mortgage loans. (Back on
the rise)
Mortgage Banker – Answer Entities which provide their own funds for the
purpose of providing mortgage financing, as opposed to commercial
banks/savings associations. (Held, or “Warehoused”)
Correspondent Lender – Answer Usually smaller in scale than mortgage
bankers or brokers, these lenders typically extend loans with their own funds, at
their own risk.
Processing – Answer Once application is complete the file moves into this
phase.
Underwriting – Answer The detailed process of evaluating a borrower’s loan
application to determine the risk involved for the lender.
Closing – Answer The consummation of a real estate transaction in which all
appropriate documents are signed and the proceeds of the mortgage loan are
then disbursed by the lender.
Servicing – Answer Includes collecting monthly payments, maintaining records
of payments and balances, collecting and paying taxes and insurance ( and
managing escrow and impound funds) remitting funds to the note holder, and
following up on delinquencies.
Supply and Demand – Answer an economic concept that states that the price
of a good rises and falls depending on how many people want it and depending
on how much of the good is available.
Funding – Answer The process of transferring funds to a title or escrow
company for disbursement
The Safe Act – Answer Designed to enhance consumer protection and reduce
fraud. (Key component of HERA)
M1 – Answer Is defined as the sum of currency held by the public and
transaction deposits at depository institutions.
M2 – Answer Is defined as M1 plus saving deposits, small-denomination time
deposits (those issued in amounts of less than $100,000) and retail money market
mutual funds shares.
Fiat Money – Answer Is currency that is not backed by any precious metals at
all.
Monetary Policy – Answer Is the maintenance of a stable money supply that
provides for growth in the economy while keeping inflation in. The federal
reserves is responsible for this policy in the United States.
Fiscal Policy – Answer Federal Government spending. Approved by Congress.
At the treasury level, funds can be raised to pay for government spending by
raising taxes and increasing borrowing.
Federal Reserve (The Fed) – Answer is the central bank of the United States
Monetary inflation – Answer When there is an excess of money supply in the
market.
Principles of Real Estate 1- Champions School of
Real Estate Actual Questions and Answers
a freeway has made commuting to a distant suburban neighborhood easier, resulting in an increase in
new home sales. This increase in sales is an example of the economic characteristic of
A.) scarcity
B.) Fixity
C.) Situs
D.) Modification – Answer D.) Modification
The supply of Real Estate is affected by
A.) Land cost
B.) Building codes
C.) Government regulations
D.) All of these – Answer D.) All of these
The least important factor affecting demand for real estate is:
A.) Population Growth
B.) Personal Preference
C.) Availability of Credit
D.) Transportation Systems – Answer B.) Personal Preference
A lawsuit was tried on a real estate matter. The judge ruled in the case, citing the decision of a judge in a
similar case that was tried ten years ago. The judges decision in the case was most likely based upon:
A.) Statutory Law
B.) Civil Law
C.) Common Law
D.) Local ordinance – Answer C.) Common Law
A license holder was tried in a state district court on a complaint arising from a real estate transaction.
The court ruled that, among other transgressions, the defendant had violated the Texas Real Estate
License Act. This decision of the judge was based upon:
A.) Statutory law
B.) Civil Law
C.) Common Law
D.) Local Ordinance – Answer A.) Statutory Law
RMLOs in Texas are licensed through:
A.) Texas Real Estate Commission
B.) National Mortgage Bankers Association
C.) Texas Department of Savings and Mortgage Lending
D.) Texas savings and loan board – Answer C.) Texas Department of Savings and Mortgage Lending
A Freeway has made commuting to a distant suburban neighborhood easier, resulting in an increase in
new home sales. This increase in sales is an example of the economic characteristics of:
A.) Scarcity
B.) Fixity
C.) Situs
D.) Modification – Answer D.) Modification
Air Rights are commonly leased or conveyed in:
A.) Cell tower leases
B.) Condominiums
C.) Outdoor Advertising
D.) All of these are correct – Answer D) all of these
Building, roads and fences are all examples of:
A.) Personal Property
B.) Private Property
C.) Improvements
D.) Public Property – Answer C.) Improvements
If a tenant fails to remove trade fixtures from the leased premises, the fixtures become the property of
the landlord through:
A.) Remediation
B.) Adverse Possession
C.) Accession
D.) Descent – Answer C.) Accession
Effective in 1976, manufactured homes have been built according to a building code administered by:
A.) Local building departments
B.) State code enforcement
C.) HUD
D.) FHA – Answer C.) HUD
Homes that are built in sections according to local building codes and assembled on the job site are
known as:
A.) Trailers
B.) Mobile Homes
C.) Modular Homes
D.) Site built Homes – Answer C.) Modular Homes
Manufactured home dealers and sales people in Texas are licensed by:
A.) TREC
B.) The TDHCA
C.) The TALCB
D.) TRELA – Answer B.) The TDHCA
Real Estate Exam Prep (Champions; Texas) | 160
Questions and Answers with Complete Solutions
appurtenance – Answer term used to describe rights, privileges or improvements that belong to and
pass with the land
improvements – Answer man’s additions to the land such as building and landscaping
personal property – Answer also called chattel or personality; a right or interest in smiting of a
temporary or movable nature and includes anything not classed as real property. Real property becomes
personal property through severance.
bill of sale – Answer ownership of chattel or personality is transferred via this, also called a nonrealty item addendum
fixture – Answer item that was personal property but has been attached in such a way that it has
become real property such at tv brackets
installed – Answer often indicates a permanent attachment
annexation – Answer the process of attaching an item of personal property to real estate such that it
becomes a fixture
severance – Answer the process of real property becoming personal. Fixture is uninstalled and
becomes personal property again
trade fixtures – Answer term used for fixtures in commercial transactions. installed by a tenant to
carry out a business and may be removed prior to the termination of the lease. If they are not removed
they become real property and pass to the landlord
emblements – Answer crops that are cultivated annually. Considered the personal property of the
farmer who cultivated them. Ownership can be transferred with a bill or sale, or farmer may make
arrangements to return to the property and harvest them one time.
physical characteristics of real property – Answer non homogeneity-no two exactly alike; immobilitycannot be moves; indestructibility-will always be there
economic characteristics of real property – Answer scarcity-naturally desirable; modification-change
or improve; fixity-not liquid assets; situs-prestige location.
nonhomogeneity – Answer one of three physical characteristics of land; no two pieces are exactly
alike
immobility – Answer one of three physical characteristics of land; land cannot be moved
indestructibility – Answer one of three physical characteristics of land; land is durable and will always
be there
scarcity – Answer one of four economic characteristics of land; land is in short supply where demand
is great (geographic considerations)
modification – Answer one of four economic characteristics of land; land use and value are greatly
influenced by improvements made by man to land and to surrounding parcels of land
fixity – Answer one of four economic characteristics of land; land and buildings and other
improvements to land are considered fixed or permanent investments (not liquid)
situs – Answer one of four economic characteristics of land; location preference from an economic
rather than a geographic standpoint
Champions Real Estate – Principles 1 Exam 2023-
2024 | 105 Questions and Answers with Complete
Solutions
brokerage – Answer the aspect of the real estate business that pertains to
overseeing the needs of the parties and completing a transaction; a brokerage
transaction may or may not involve agency relationships
The role of a property manager – Answer Generally responsible for the day to
day operations of the property, maintenance, and tenant relations
How are home inspectors licensed? – Answer Home inspectors are licensed in
Texas by TREC.
Real Estate Development – Answer most often involves the acquisition of land
for development into residential subdivisions, retail centers and other commercial
uses.
National Association of Realtors (NAR) – Answer the nationwide association is
divided into state associations, and further divided into local associations or
boards. The local associations or boards operate the MLS in markets throughout
the US.
The benefits of home ownership include: – Answer Pride of Ownership,
Occupancy, Tax Benefits, Investment, Security: POOTIS=m
Physical Characteristics of Land: Indestructibility – Answer Indestructibility
refers to the fact that land cannot be destroyed. The other two characteristics are
immobility and non-homogeneity (uniqueness)
Demand for real estate is affected by: – Answer 1. Growth in employment
- Personal preference
- Availability of credit
as well as transportation systems and Federal government policy
Common Law vs. Statutory Law – Answer Common Law was developed in
England and based on common sense and local custom; under this system, a court
looks to the findings of prior courts when rendering a decision
Statutory law is enacted by federal and state legislative bodies
What is the purpose of the Texas Real Estate Licensing Act (TRELA 1939)? –
Answer The purpose of TRELA is to protect the public against unscrupulous
brokers and sales agents.
What is TREC (1949)? – Answer TREC was created by the state legislature in
- It has 9 members who carry out the provisions in TRELA.
TREC has been granted powers by the Legislature to: – Answer -File actions
against a license holder on its own notion
-Assess admin. penalties of up to $5k per day against offending licensed and
unlicensed officials
-Promulgate forms which are mandatory for license holders
- Suspend or revoke licenses of violators
-Subpoena books, records, witnesses and file suit with the AG to enforce
subpoena
as well as issue licenses, enact rules and regulations, place a license holder on
probation, require education
Land – Answer the surface of the earth extending downward to the center of
the earth and upwards above the surface extending to infinity; includes trees,
crops and water
Rights to land are considered “severable”… – Answer the ability for different
individuals to own the different rights of the same piece of land
Surface Rights – Answer The owner of surface rights has the ability to develop
(improve) the surface, and to use resources extracted from or near the surface
including stone, gravel, water, and limestone.
Improvements are: – Answer any man-made addition to the land that is
permanent and considered to become part of the land
Personal Property – Answer things of a temporary or movable nature that are
not part of the real property; known as personalty or chattel. If personal property
is being transferred with real property, a bill of sale is used to accomplish the
transfer
Fixtures are: – Answer Personal property that has become attached to the
land.
The process of attaching personal property so that it becomes real property is
called: – Answer Annexation
Severance – Answer removing fixtures to create personal property
The courts apply 3 tests to determine if something is a fixture. These include: –
Answer 1. The intention of the parties when the item was installed
- The method of attachment
and adaptation of the property
Emblements – Answer Annual crops; considered personal property and may
be harvested by the owner of the crop; ensures that the tenant will be allowed to
harvest even if they lose possession of the property prior to harvest time
Rights that are associated with ownership of real property are referred to as the
owner’s: – Answer Bundle of rights
ad valorem tax – Answer A tax levied according to value, generally used to
refer to real estate tax. Property taxes create the highest priority lien against real
property
_ is considered to be the best type of ownership as it places the least
number of limitations and most rights on the owner – Answer Fee simple
absolute ownership or fee simple ownership
Law of Agency – Champions School of
Real Estate Questions and Answers
The principal is also known as – Answer client
fiduciary relationship – Answer a relationship founded on trust and
confidence
Agency Relationship – Answer Exists when one person (the agent) acts for, or
on
behalf of another person (the principal).
the principal – Answer is the one who hires and gives authority to the agent
Texas Real Estate License Act TRELA – Answer Was passed 1939. The purpose
is to protect the public against unscrupulous brokers and sales agents.
Texas Real Estate Commission TREC – Answer Was created to enforce and
administer TRELA in 1949. The purpose of this act is to protect the public against
unscrupulous brokers and sales agents.
A licensed broker may not pay a commission to or otherwise compensate a person
directly or indirectly for performing an act of a broker unless the person is… –
Answer a license holder or a real estate broker licensed in another state
TRELA may suspend or revoke a license or take other disciplinary action if the
license holder, while engaged in real estate brokerage engages in… – Answer
conduct that is dishonest or in bad faith or that demonstrates untrustworthiness
a broker works FOR – Answer a client
a broker works WITH – Answer a customer
how does a buyer become a client – Answer by entering into a buyer
representation agreement with the broker
Subagent – Answer A license holder not associated with the seller’s broker,
but who is representing the seller through a cooperative agreement, often
through membership in a Multiple Listing Service (MLS), with the seller’s broker.
An agency relationship exists when one person, the _ acts for, or on behalf of another person, the __ – Answer agent, principal
which of the following is grounds for suspension or revocation of license by TREC?
- Answer splitting commission with a person other than a license holder
The commission can deny licensure to an applicant based on the applicant’s
___________ – Answer moral character
Ostensible Agency – Answer exists when actions lead another person to
assume that one is an agent.
Agency by Ratification – Answer Occurs when an agent acts without prior
authorization, and the principal, upon learning of this action, accepts it.
agency coupled with an interest – Answer When a broker is the owner of a
property that is being sold, or when a broker is interested in buying a property, we
have agency coupled with an interest
Agency Authority – Answer or rights, may also be a result of “the norm”, or
what is considered customary in the business
Implied Authority – Answer an agent’s authority to do things not specifically
authorized in order to carry out express authority
Fiduciaries – Answer are held to the highest amount of good faith, are
required to exclude all selfish interest, are prohibited from putting themselves in
positions where personal interest and representative interest will conflict and
must, in any direct dealing with the principal, make full disclosure of all relevant
facts and give the latter an opportunity to obtain independent advice
Champions School of Real Estate-Principles
of Real Estate II | 123 Questions and Answers
Appraisal – Answer an appraiser’s opinion of value, used to determine market
value property to secure the loan
Loan to Value Ratio – Answer Percentage of value or sales price that a lender
is willing to finance
Desk Review – Answer an appraisal that simply reviews a checklist of items as
they analyze the appraisal report for completeness and acceptable conclusions
Field Review – Answer An independent 3rd party appraiser will be contracted
to review the appraisal report to verify accuracy of data, elements and procedures
used.
Limited Appraisals – Answer an exterior only or drive by inspection
Highest and Best use – Answer the legal use that gives the greatest return in
money or amenities.
Principal of contribution – Answer the value of a property is equal to the sum
of the contributory value of each of its component parts. Cost does not equal
value
Principle of change – Answer Change is constant, and are always effecting
value
Principle of Anticipation – Answer the purchase price is affected by the
expectation of future appeal and benefits
Principle of Substitution – Answer value of commodity is influenced by the
cost of acquiring a substitute or comparable item
Principal of Conformity – Answer value is maximized when there is a
reasonable degree of homogeneity or sameness in a neighborhood.
Principle of Increasing and Decreasing Returns – Answer improve but don’t
over improve; improve property when the value added by the improvement
exceeds the cost of the improvement.
Principle of Supply and Demand – Answer Demand is great and supply is
short, prices increase; supply is high demand is low prices decrease
Principle of regression – Answer lower priced properties in the area will cause
a decline in the value of the subject property
Principle of Competition – Answer Absence of competition will cause prices to
increase in the marketplace; increased competition tend to bring prices down
Characteristics of Value – Answer Demand
Utility
Scarcity
Transferability
Demand – Answer must be sufficient demand for the property for it to have
value
Utility – Answer Must be able to fulfill a need.
Scarcity – Answer If a type of property is to abundant it has reduced value. If
Market is flooded values will be flat
Transferability – Answer If the property cannot be transferred, it is of little
value.
Market Value – Answer The most probable price a property should bring in a
competitive and open market.
Ad Valorem – Answer according to value
Champions Real Estate Exam Prep (Texas) | 665
Questions and Answers 100% Verified | Latest
Update 2024
In _ the Texas Real Estate Commission was established to administer and enforce the TRELA. – Answer 1949 TREC has only _ promulgated lease forms. – Answer 2
In the TAR® Seller’s Disclosure the seller should .
a. prepare the disclosure when the listing is taken
b. be the only one completing this form or any part of it
c. none of the above
d. both a and b – Answer d. both a and b
The statute provides that the sender’s message must contain clear and
conspicuous notice that the message is an advertisement or solicitation.
a. CAN-SPAM
b. Interstate Land Sales Full Disclosure Act
c. Do Not Call
d. Junk Fax Prevention Act – Answer CAN-SPAM
A is a possible polluter who may be held liable under CERCLA for the
contamination of a property or resource.
a. Safe Harbor
b. EBR
c. PRP
d. TMARR – Answer PRP
If you hire a mold remediator he must give you a Certificate of Mold Remediation
no later than days after work is complete. – Answer 10
In order to comply with the , contracts for the conveyance of an interest
in real estate or leases for a term of more than one year must be in writing.
a. SAFE Act
b. Statute of Frauds
c. Statue of Limitations
d. RESPA – Answer Statute of Frauds
A unilateral contract is said to lack _.
a. Mutuality
b. Fairness
c. Agreement
d. Signatures – Answer Mutuality
Contracts with a person who lacks mental capacity can be either void or
___.
a. Implied
b. Unilateral
c. Voidable
d. Express – Answer voidable
All of the land in the U.S. is held under the __ system.
a. Feudal
b. Freedom
c. Statutory
d. Allodial – Answer Allodial
The main reason(s) for homestead laws include(s):
a. Preventing the foreclosure of the homestead under any circumstances
b. Prevention of the forced sale of a home by creditors
c. Protection of a creditor’s interests in a debtor’s property
d. All of these are correct – Answer
In many states, recognized statutory estates include .
a. community property
b. riparian right
c. reservation
d. encroachment – Answer community property
Only a may earn a commission and only a may sue to collect a
commission.
a. broker, agent
b. agent, broker
c. broker, broker
d. none of the above – Answer broker, broker
Regardless of representation, all buyers should be provided with a(n)
disclosure of representation at first contact.
a. oral
b. written
c. email
d. all of these are correct – Answer d. all of these are correct
This _ is an employment contract.
a. listing agreement
b. buyer-representation
c. both a and b
d. none of the above – Answer c. both a and b
What does a real estate agent do with multiple offers on a property?
a. He/she can choose the best offer for the client.
b. He/she can hold all offers until one comes in that is over the asking price.
c. He/she may present the highest offers only.
d. He/she must present all offers to the client. – Answer d. He/she must
present all offers to the client.
An offer can be communicated by .
a. letter
b. phone
c. either a or b
d. must be done orally – Answer c. either a or b
A permanent marker installed on the land by a surveyor is called .
a. a monument
b. metes
c. bounds
d. a lot – Answer a. a monument
Ownership of real property can be divided among ___.
a. surface rights
b. air rights
c. subsurface rights
d. any and all of the above
Which of the following is NOT considered a common addenda form?
a. Exclusive Right to Sell
b. Financing addendum
c. Mineral reservations
d. Lead-based paint
Which of the following is true of an addendum to a contract?
a. It is a provision in a contract that requires that a certain act or event happens in
order for the contract to be binding on the party.
b. It is synonymous with contingent
c. It is an attachment that adds or further describes the rights and duties of the
parties.
d. All of these are correct – Answer d. any and all of the above
Champions – Principles of Real Estate 1 – Chapter 1:
Introduction to Real Estate Questions and Answers
100% Verified
Brokerage – Answer overseeing the needs of the parties to a real estate transaction and seeing it to
its completion
Property Management – Answer management of residential and commercial properties on behalf of
investor-owner; day-to-day operations, maintenance, tenant relations
Real Estate Development – Answer most often involves the acquisition of land for development into
residential subdivisions, retail centers and other commercial uses.
Economic Characteristics of Land – Answer scarcity, modification, fixity, situs
Modification – Answer value is affected by man-made changes to the land; improved transportation
Fixity – Answer Land and additions to the land take a long period of
time to pay for itself; cannot be moved
Situs – Answer Refers to the economic location of real estate; “location, location, location”; based on
the preferences people have for specific characteristics in property, and the fact that location dominates
those preferences
Statutory Law – Answer body of laws and enacted by federal and state legislative bodies
Appraisal – Answer Providing a professional opinion of the value of real property
Apartment Locator – Answer locates units for tenants in multifamily complexes; must have license
Champions – Principles of Real Estate I
Questions and Answers 100% Verified
Appraisal is the business of: – Answer Providing a professional opinion of the value of real property
A professional association whose local affiliates own and operate MLS systems throughout the United
States is the: – Answer NAR
RMLOs in Texas are licensed through – Answer Texas Department of Savings and Mortgage Lending
Indestructibility, a physical characteristic of land, is also known as: – Answer Durability
A freeway has made commuting to a distant suburban neighborhood easier, resulting in an increase in
new home sales. The increase in sales is an example of the economic characteristic of: – Answer
Modification
The supply of real estate is affected by: – Answer land cost, building codes, government regulation
The least important factor affecting demand for real estate is: – Answer Personal preference
A lawsuit was tried on a real estate matter. The judge ruled in the case, citing the decision of a judge in a
similar case that was tried ten years ago. The judge’s decision in the case was most likely based upon: –
Answer Common law
A license holder was tried in a state district court on a complaint arising from a real estate transaction.
The court ruled that, among other transgressions, the defendant had violated the TRELA. This decision of
the judge was based upon: – Answer Statutory law
Rights that are associated with the ownership of real property are often referred to as the owner’s: –
Answer Bundle of rights
Surface, subsurface and air rights are said to be: – Answer Severable
Air rights are commonly leased or conveyed in: – Answer (1) Cell tower leases
(2) condominiums
(3) Outdoor Advertising
Buildings, roads and fences are all examples of: – Answer Improvements
If a tenant fails to remove trade fixtures from the leased premises, the fixtures become the
property of the landlord through:
a. Remediation
b. Adverse possession
c. Accession
d. Descent – Answer Accession
Effective in 1976, manufactured homes have been built according to a building code administered by:
a. Local building departments
b. State code enforcement
c. HUD
d. FHA – Answer HUD
Homes that are built in sections according to local building codes and assembled on the job site are
known as: – Answer Modular homes
Manufactured home dealers and sales people in Texas are licensed by: – Answer The TDHCA
Champions School of Real Estate (Real
Estate Salesperson State Prep Exam 1)
TREC has the power to order witnesses to appear and/or produce records of documents for its
investigations and hearings. This is called subpoena power. If a license holder fails to respond to a
subpoena, what can TREC do?
(a) TREC can assess an administrative penalty against the license holder for up to $4,000.
(b) TREC can immediately revoke the license of the license holder without a hearing.
(c) TREC can file suit with the Attorney General to enforce the subpoena.
(d) TREC can file charges of felony against the license holder, based on fraud. – Answer (c) TREC can
file suit with the Attorney General to enforce the subpoena.
A license holder in violation of the TRELA has recieved a summons from TREC that a hearing will be held
regarding the possible revocation or suspension of his license. The license holder fails to respond to the
summons. What will TREC do?
(a) Schedule a hearing in the county court where the license holder practices real estate
(b) Schedule a hearing at the TREC office in Austin
(c) Schedule a hearing in the district court serving the license holder – Answer (b) Schedule a hearing
at the TREC office in Austin
With the knowledge and consent of her broker/employer, an unlicensed assistant is showing property to
prospective buyers. What is true about this situation?
(a) The broker and unlicensed assistant are both guilty of a third degree felony
(b) Both the broker and unlicensed assistant can be fined an administrative penalty of $5,000 per day
(c) Only the unlicensed assistant can be fined by TREC for this activiy
(d) Only the broker can be fined by TREC for this activity – Answer (b) Both the broker and the
unlicensed assistant can b fined an adiministrative penalty of $5,000 per day
TREC has recieved an application for a Texas Real Estate Sales License from Mary. Mary has completed all
her educational requirements, and passed the state exam. At this point TREC will begin the background
check. Which of the following statements is FALSE?
(a) TREC has no time limit for determining integrity
(b) TREC has 30 days to complete the background check
(c) TREC has 30 days to notify Mary of a decision to dissaprove her application
(d) Mary has 10 days to appeal a denial of her application – Answer (b) TREC has 30 days to complete
the background check
Marcos was a Texas licensed Real Estate Sales agent for some time. He then chose to become inactive
and TREC has been holding his license in inactive status. He now wishes to activate the license. What will
he have to do?
(a) Apply through a broker, pay $50 and take a 30-hour continuing education course
(b) Apply through a broker, pay $200 and take a 30-hour continuing education course
(c) Apply through a broker, pay $50 and take a 18-hour continuing education course
Champions Real Estate License Exam
Prep Chapters 1 & 2
Real Property – Answer Consists or land, improvements attached to the land, benefits, rights and
ownership interests that go with the land.
Appurtenance – Answer Used to describe rights, privileges or improvements that belong to and pass
with the land.
Personal Property – Answer a right or interest in things of a temporary or movable nature; anything
not classified as real property
-AKA chattel or personalty
Fixture or Annexation – Answer An item of personal property that has been converted to real
property by being permanently affixed to the realty.
Severance – Answer Process of real property becoming personal
Tests of Fixtures – Answer -Method of attachment
-Adaptation to the property (custom or stock items)
-The intention of the parties attaching the fixture
Trade fixtures – Answer Fixtures installed by a tenant in order to carry out a business and they may
be removed from leased property prior to the termination of the lease
Emblements – Answer Are crops cultivated annually
-considered personal property
-ownership can be transferred with a bill of sale
Characteristics of Real property – Answer Physical Characteristics:
- Immobility
- Indestructibility
- Uniqueness
Economic Characteristics: - Scarcity
- Improvements/Modifications
- Permanence of Investment/Fixity
- Area Preference/Situs
Legal Descriptions – Answer -Metes and bounds
-Lot, block, and subdivision
-Rectangular survey system aka the gov survey system
Public and Private Land Use Controls (Encumbrances) – Answer -Police Power
-Eminent Domain (Gov taking private property but compensating property owners aka condemnation)
-Taxation
-Escheat (dies leaving no will)
Private Controls, Restrictions, and Encroachments – Answer Most common: CC&Rs- deed covenants,
conditions and restrictions (deed restrictions, HOA, or POA)
Encumbrance – Answer A limit on a property, or a limit on a property’s owner’s rights, that may or
may not also be a cloud on the title
-Reservation: imposed by the grantor, like a mineral right or easement
-Encroachment: when a structure or improvement overlaps or trespasses onto another’s property, must
be disclosed
-Easement: allows limited use or enjoyment of another’s land: express or implied
Champions Real Estate Exam: Law of Agency |
286 Questions and Answers | Updated 2023-2024
This person hires an agent – Answer The Principal
The agent works on behalf of this person – Answer the client (principal)
This type of agency allows for the greatest range of authority – Answer Universal
This is provided to the agent when there is written documentation that the agency relationship exists. –
Answer Express authority
This is the most limited of all the agency relationships – Answer Special agency
This type of agency is created when a 3rd party believes that an agent has authority that has NOT been
granted by a principal – Answer Agency by Estoppel
This type of agency is created when actions lead another person to assume that one is an agent
(Example- you have a key to neighbors home and show the property) – Answer Ostensible Agency
If a buyer hasn’t signed a buyer’s rep agreement, then who is representing the buyer? – Answer No
one
This establishes a relationship with a broker – Answer The Buyer/Tenant Representation agreement
This can be written or oral – Answer Disclosure of Representation
These are required to place their own selfish interests behind that of their clients. – Answer
Fiduciaries
A licensee isn’t required to provide the IABS when… – Answer the licensee meets with a party that is
already represented
A broker is obligated to treat who honestly? – Answer client, customer, and agents
Broker must have written consent to act as… – Answer an intermediary
IABS form is the property of… – Answer TREC
Broker Bob is the broker/owner of ABC Realty. Agent Bill at ABC Realty is a listing agent. Agent Sue, also
at ABC Realty, is working with a buyer who is being represented by the firm. Agent Sue’s buyer wants to
purchase Agent Bill’s listing
In the above transaction, Broker Bob will: – Answer Remain neutral and refrain from providing advice
and opinion to either party
The IABS should contain – Answer How the broker will be compensated
Broker Steve, having no agents, is a solo practitioner. He has a client buyer that wants to purchase one of
his listings. The process that Broker Steve must use is: – Answer Intermediary without appointments
A fiduciary relationship is based on – Answer trust
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe’s listing. The buyer that Agent Sean is working with has chosen to not enter into an
agency relationship with City Realty.
In the above transaction, who is representing the buyer? – Answer No body because the buyer is a
customer.
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe’s listing. The buyer that Agent Sean is working with has chosen to not enter into an
agency relationship with City Realty.
In the above transaction, who is City Realty representing? – Answer The seller, because City Realty is
a subagent of ABC Realty in this transaction
Agent Joe at ABC Realty has a listing. Agent Sean at City Realty has a buyer who wishes to
purchase Joe’s listing. The buyer that Agent Sean is working with has chosen to not enter into an
agency relationship with City Realty.
What type of transaction is this? – Answer cooperative (co-op)
An exemption to using the Information About Brokerage Services form is: – Answer a lease for less
than 1 year with no sale anticipated
A licensee not associated with the client’s broker but who is representing the client through a
cooperative agreement with the client’s broker is known as: – Answer Subagent
This must be in at least 10 point type, must have the exact language prescribed in the License Act
and must be provided to a buyer or seller at the first substantive discussion of a real estate
transaction – Answer IABS (Information About Brokerage Services)
Jeffrey wants to see property that your company has listed; he does not want to be represented.
The agent must: – Answer give Jeffrey the IABS form
A licensee must present the Information About Brokerage Services form: – Answer at the first
substantive discussion of a real estate transaction
A licensee has a listing with a seller and has a buyer’s representation agreement signed with a
buyer who desires to purchase this agent’s listing. How is the agent operating? – Answer as a nonappointed associate in an Intermediary relationship
TREC was established in: – Answer 1949
Which of the following is the real estate licensing authority in Texas? – Answer TREC
A termination date in a listing agreement must be: – Answer definite
Which of the following is NOT an agent’s duty to a client? – Answer Trust
These are the duties: OLDCAR: Obedience, loyalty, disclosure, confidentiality, accounting, reasonable
care
The duty of _ means that an agent must follow all of the lawful instructions of
the client. – Answer obedience
Jerome is a licensed agent who desires to sell his mother’s home. Jerome has the property
listed with his brokerage firm and finds a buyer himself to buy mom’s home. Jerome should: – Answer
Disclose to the buyer in writing that the seller is his mother.
If an agent sells their own property, acting as a principal, the agent must: – Answer disclose to the
party in writing that they are a licensed agent
Confidential information between client and agent should be: – Answer kept confidential forever
In most states other than Texas, the most common method of dealing with in-house
transactions between client buyers and sellers is: – Answer dual agency
When handling escrow funds for clients, the License Act requires that funds be deposited in
a “reasonable time”. A reasonable time is defined as: – Answer 2 business days
The listing agreement should contain: – Answer the legal description of the property
Chapter 4 National Real Estate Exam
Prep (Champions School of Real estate)
Express contract – Answer Contract that is written or stated
Implied contract – Answer Contract by actions or evidence
Unilateral Contract – Answer binds only one party. Example an option
Option contract – Answer The right to purchase property within a definite time at a specified price
Bilateral contract – Answer Exchange of promises, binds both parties.
Required elements of a contract – Answer 1. Competent parties
- Offer and acceptance
- Legal purpose
- In writing
- Consideration
Executed (Fully executed) – Answer When all the terms and conditions of the contract have been
met and carried out.
Executory – Answer A contract that is signed, but not yet carried out
Void or Invalid Contract – Answer No contract at all, not enforceable by law
Voidable Contract – Answer An agreement that may be terminated by one of the parties
Champions School of Real Estate Terms
| Updated 2023-2024
Appurtenance – Answer rights, privilege or improvements that belong to and
pass with the land
Personal Property Synonyms – Answer -Chattel
-Personality
Annexation – Answer -Fixtures are attached to property via _
Emblements – Answer -crops cultivated annually
-personal property
-can remove crops one year after and then forfeit the right to the crops if not
removed
Characteristics of Real Property – Answer PHYSICAL
-Nonhomogeneity (unique)
-Immobility (you cannot move it)
-Indestructibility (durability-cannot be destroyed)
ECONOMIC CHARACTERISTICS
-Scarcity (short supply where demand is great)
-Modification (use and value influenced by improvements)
-Fixity (things fixed to the land/improvements)
-Situs (location preference)
Legal Property Descriptions – Answer -Metes and Bounds
-Plat/Lot and Block
-The Rectangular Survey System
Metes and Bounds – Answer A method of land description which involves
identifying distances and directions and makes use of both the physical
boundaries and measurements of the land.
-include termination points (markers and monuments), degrees, minutes, etc.
-OLDEST method of land description
Lot and Block – Answer A method of land description frequently used after
land has been subdivided into building lots; also referred to as the recorded plat
method. (Must have a plat map to find the property)
-MOST COMMON method for residential listings
Rectangular Survey System – Answer -Also called the Public Land Survey or
Government Survey System
-Was used by the US Land Office Survey to parcel land west of the Appalachian
Mountains
-Divides land into a series of rectangular parcels.
-includes base lines, meridians, townships (36 sections) and sections (1 sq. mi. or
640 acres (1 acre=43,560 sq. ft.)
Private Land Controls – Answer -MOST COMMON: CC&Rs
-CC&Rs: deed covenants, conditions and restrictions or Deed Restrictions or Deed
Covenants (HOA/POA)
-Deed Restrictions: to control land use, development and methods and materials
for construction
Public Land Controls – Answer -Governmental rights in land (PETE)
-Police Power (ex. Zoning=most common)
-Eminent Domain
-Taxation
-Escheat (property reverts to state when someone dies intestate and no heirs)
Easement Appurtenant – Answer -has one dominant estate and one servient
estate
-Dominant Estate: Landlocked; uses road access from servient estate
-Servient Estate: serves the dominant estate by providing the road for access
-goes with the land
Easement in Gross – Answer -belongs to a person or corporation
-ex.: utility easement
Adverse Possession – Answer -squatters rights due to statute of limitations (
-occupancy must be hostile, visible or open, actual or notorious, continuous and
distinct for the statutory period)
Lis Pendens (Litigation Pending) – Answer A notice filed in the public record of
a pending legal action affecting the title to or possession of property.
Types of Ownership – Answer -Estate in Severalty, Sole Ownership or Tenancy
in Severalty: ownership by one
-Tenancy in Common: ownership by 2+ without rights of survivorship (most
common type of joint ownership)
-Joint Tenancy: ownership by 2+ with rights of survivorship (poor man’s will)
-Tenancy by the Entirety: type of joint tenancy (co-owners are married to each
other-avoids probate)
-In Trust: held by one party for the benefit of another
-Syndicate: 2+ parties join together to create and operate a real estate investment
-Special Types of Ownership:
-Time Shares: part ownership coupled with right to exclusive use for a specified
number of days without the responsibility of full ownership AKA:”interval
ownership” and is a branch of tenancy in common.
-Cooperative or “Co-ops”: investment for residents. Land and buildings are owned
by a corporation and residents must buy shares in the corporation in exchange for
a proprietary lease on the unit. corporation pays mortgage, taxes and
maintenance
-Condominium: each unit is separate legal ownership. tenancy in common
interest in all common areas. property taxes are assessed on each unit separately ,
monthly condo fees.
Tenancy In Common – Answer -ownership by 2+ people
-most common
-willable
-estate of inheritance
-unequal interest allowed
-title passes at probate
Joint Tenancy – Answer -ownership by 2+ people
-poor man’s will
-right of survivorship
-last man standing
-unity of time, title, posession, interest
-avoids probate-title passes at death
Types of Estates – Answer -Freehold Estate (ownership)
-Leasehold Estate (leasing)
Freehold Estates – Answer *OWNERSHIP
-Fee simple/Fee simple absolute
-Fee simple defeasible (determinable or condition subsequent)
-Life Estate (with reversion or pur autre vie)
Freehold Estate Bundle of Rights – Answer -Right to Disposition (sell, will to
heirs, encumber or lease)
-Right to Exclusion (exclude others)
-Right to Possession (right to use, enjoy, occupy)
-Right to Quiet Enjoyment (use uninterrupted by former owners)
Leasehold Estates – Answer -gives possession without ownership
-Four types:
-Estate for Years
-Periodic Tenancy
-Estate at Will or Tenancy at Will
-Tenancy at Sufferance
Leasehold Estate Clauses and Provisions – Answer -Right to Quiet Enjoyment
-Right of First Refusal (has the right to match or better any offer before the
property will be sold to someone else)
-Subletting
-Assignment (transfer all rights and liabilities to new tenant under existing lease
-Forcible Entry and Detainer (Eviction)
-Expiration: end of lease agreement
-Termination: end of lease (cut short or expiration)
-Mutual Rescission: When a lease is terminated by agreement of both parties
-Constructive Eviction: when tenant ends lease because of landlord’s lack of
upkeep and building is uninhabitable
Champions Principles of Real Estate 2 | 91 Actual
Questions and Answers 100% correct | Latest
Update 2023-2024
appraisal – Answer value of a property maybe affected by social, economic,
govt and environmental influences
Loan-to-Value Ratio (LTV) – Answer The percentage of value or sales price that
a lender is willing to finance.
limited appraisal report – Answer exterior only/drive by inspection. deemed
as low risk loan
highest and best use of property – Answer legal use that gives the greatest
return
Principal of Contribution – Answer cost does not equal value
Residential Mortgage Loan Originators (RMLO) – Answer Must be certified
licence holders and is mandated by the SAFE ACT (TX dept of savings and
mortgage lending)
Principle of Anticipation – Answer purchase price is affected by the
expectation of future appeal and benefits
Principal of Substitution – Answer value of a commodity is influenced by the
cost of acquiring subsitute or comparable item
Principal of progression – Answer value of properties around yours goes up;
so does yours
Principal of Regression – Answer The Value of more expensive home placed in
a neighborhood of less expensive homes will drop in value
Market Value – Answer the most probable price a property should bring in a
competitive and open market under fair conditions requisit to a fair sale.
appraisal process – Answer The value of a property may be affected by social,
economic, governmental and environmental influences. An appraiser must always
be aware of these influences and possible changes in them that could affect
market value.
Three approaches to value – Answer (1) The Sales Comparison Approach
(2) The Cost Approach,
(3) The Income Approach.
Sales Comparison Approach – Answer A value for existing properties method
for comparing similar properties to the subject property. this is the best indicator.
Market Data Approach – Answer aka: sales comparison approach
Physical Deterioration – Answer Loss of value of a building from its
reproduction cost, resulting from wear and tear over time.
Functional Obsolescence – Answer loss of desirability of the style, layout or
function of an element of property over time
External Obsolescence – Answer Losses of property value caused by forces or
conditions beyond the borders of the property. ie. zoning, highways
promissary note – Answer evidence of a lean. simply a note
Foreclosure – Answer secured property may be sold ti satisfy the unpaid
promissory note.
Primary Mortgage Market – Answer the loan origination market where
borrowers and lenders negotiate mortgage terms
funding – Answer transferring funds to a title co for disbursement when loan
is approved.
Principles of Real Estate 1- Champions Quiz | 79
Actual Questions and Answers 100% correct |
Latest Update 2023-2024
Contracts with a person who lacks mental capacity can be – Answer either
void or voidable
Community property is a concept of – Answer Spanish law, and marriage is
regarded as a partnership.
Intermediary Without Appointments. – Answer an agent will have the
opportunity to sell their own listing.
Oil and gas companies employ – Answer a large number of individuals with a
real estate background.
The NFIP – Answer offers flood insurance
The NFIP offers flood insurance to – Answer homeowners, renters, and
business owners
The vast majority of homes built in the United States are – Answer site built.
When a condominium is sold, three interests are created: – Answer fee simple
ownership of the unit, fee simple ownership in an undivided interest in the
common areas, and an easement to the airspace occupied by the unit.
The Bureau [CFPB] is responsible for enforcing – Answer federal consumer
financial law
To convert 152,460 square feet of land: – Answer 152,460 / 43,560 = 3.5
Exclusive agency agreements – Answer list their properties with a broker,
primarily to expose their properties through the multiple listing service
Easements may be created by – Answer grant, reservation, implied grant,
prescription, necessity, condemnation.
The Texas Real Estate Commission consists of – Answer of nine members and
three members who represent the public.
cooperative sale with single buyer representation – Answer If the buyer
purchases a property listed by another firm
If the buyer purchases a property listed by another firm, – Answer The listing
firm represents the seller, and the selling firm represents the buyer
Community property – Answer marriage is regarded as a partnership.
Mutual Consent – Answer Offer and Acceptance
An estate in severalty – Answer involves ownership of real estate by one
individual or entity.
Real estate brokers recommend this listing – Answer grants an exclusive right
to sell the property during the listing term.
exclusive right to sell – Answer A commission is paid even if the property is
sold by the owner
TREC has promulgated sales contract forms for most residential properties
including – Answer One-to-Four Family Residential Contract (Resale), New
Home Contract (Incomplete Construction), New Home Contract (Completed
Construction), Unimproved Property Contract, Residential Condominium Contract
(Resale), Farm and Ranch Contract.
Liens can be – Answer specific or general
Violation of the law is – Answer a civil offense
Champions Exam Prep: State | 68 Questions and
Answers 100% correct | Latest Update 2023-2024
TREC has received an application for a Texas Real Estate Sales License from Mary.
Mary has completed all her educational requirements, and passed the state exam. At this point TREC will
begin the background check.
What is FALSE?
(a) TREC has no time limit for determining integrity
(b) TREC has 30 days to complete the background check
(c) TREC has 30 days to notify Mary of a decision to disapprove her application
(d) Mary has 10 days to appeal a denial of her application – Answer False: TREC has 30 days to
complete the background check.
DEF: TREC has no limit on days to review your application or complete your background check.
They have 30 days to notify you of their decision and you have 10 days to appeal that decision.
Marcos was a TX licensed Real Estate Sales agent for some time. He then chose to become inactive and
TREC has been holding his license in inactive status. He now wishes to activate the license.
What will he have to do? – Answer Apply through a broker, pay $50 and take a 18-hour
continuing education course
A license holder has defaulted on his student loans.
As a result of this TREC will? – Answer Refuse to renew the license, unless and until, the loan
payments are brought up to date.
Does the IABS disclose agency or personal interest? – Answer Agency Interest
When a license holder markets his own property he should? – Answer Inform the buyer that he is a
license holder, and the owner of the property.
DEF: Per TRELA you must always disclose self, spouse, parent or child is involved in a real estate
transaction.
The IABS discloses agency not personal interest. There is no TREC promulgated form solely intended for
this disclosure although paragraph 4 of the TREC contracts are now used for this. Not mentioning your
personal interest in a transaction is illegal.
A Texas broker may pay a commission to?
(a) A foreign broker who doesn’t negotiate in Texas
(b) A licensed attorney in Texas
(c) An in-house employee of a principal
(d) Any unlicensed person for a referral – Answer A foreign broker who doesn’t negotiate in Texas.
DEF: Any licensed broker outside of Texas is considered a foreign broker and may be paid a referral fee
out of your commission.
Attorneys must also have a real estate license. In-house employees must have a license.
Only licensed brokers in Texas can receive a real estate commission in Texas.
Which of the following actions is NOT a violation of the TRELA?
(a) A broker offers a guaranteed buy back of a property for a set price, if the purchaser is not happy with
the investment after a two-year period of ownership
(b) A broker guarantees a buyer that an investment property will appreciate over the next two years
(c) Selling real estate by lottery
(d) Placing a sign to sell or lease real property with only the verbal consent of the owner – Answer
Putting your money where your mouth is and signing a contract to purchase with a two year close date
to buy it back yourself is legal.
You can’t guarantee a future profit verbally as this is illegal.
Selling real estate by lottery and putting a sign in the yard on verbal consent is also illegal.
A sales agent wished to transfer to a new broker. When may he engage in the business?
(c) When his fees and sponsorship forms have been mailed to TREC – Answer When fees and
sponsorship forms have been mailed to TREC.
Which of the following is the responsibility of the broker?
(a) The listing advertisements of the sales agents he sponsors
(b) The CE of the license holders he sponsors
Principles of Real Estate 1- Champions School of
Real Estate | 102 Questions and Answers 100%
correct | Latest Update 2023-2024
A freeway has made commuting to a distant suburban neighborhood easier, resulting in an increase in
new home sales. This increase in sales is an example of the economic characteristic of
(a) scarcity
(b) Fixity
(c) Situs
(d) Modification – Answer D
The supply of Real Estate is affected by
(a) Land cost
(b) Building codes
(c) Government regulations
(d) All of these – Answer D
The least important factor affecting demand for real estate is:
(a) Population Growth
(b) Personal Preference
(c) Availability of Credit
(d) Transportation Systems – Answer B
A lawsuit was tried on a real estate matter. The judge ruled in the case, citing the decision of a judge in a
similar case that was tried ten years ago. The judges decision in the case was most likely based upon:
(a) Statutory Law
(b) Civil Law
(c) Common Law
(d) Local ordinance – Answer C
A license holder was tried in a state district court on a complaint arising from a real estate transaction.
The court ruled that, among other transgressions, the defendant had violated the Texas Real Estate
License Act. This decision of the judge was based upon:
(a) Statutory law
(b) Civil Law
(c) Common Law
(d) Local Ordinance – Answer A
RMLOs in Texas are licensed through:
(a) Texas Real Estate Commission
(b) National Mortgage Bankers Association
(c) Texas Department of Savings and Mortgage Lending
(d) Texas savings and loan board – Answer C
A Freeway has made commuting to a distant suburban neighborhood easier, resulting in an increase in
new home sales. This increase in sales is an example of the economic characteristics of:
(a) Scarcity
(b) Fixity
(c) Situs
(d) Modification – Answer D
Air Rights are commonly leased or conveyed in:
(a) Cell tower leases
(b) Condominiums
(c) Outdoor Advertising
(d) All of these are correct – Answer D
Building, roads and fences are all examples of:
(a) Personal Property
(b) Private Property
(c) Improvements
(d) Public Property – Answer C
If a tenant fails to remove trade fixtures from the leased premises, the fixtures become the property of
the landlord through:
(a) Remediation
(b) Adverse Possession
(c) Accession
(d) Descent – Answer C
Effective in 1976, manufactured homes have been built according to a building code administered by:
(a) Local building departments
(b) State code enforcement
(c) HUD
(d) FHA – Answer C
Champions Commercial Real Estate | 328 Questions
and Answers 100% correct | Latest Update 2023-2024
Buffer Zone – Answer an area of land separating one land use from another
Variance – Answer permission to violate the rules
Police Power – Answer the right of the government to regulate and control the way land is used
Downsizing – Answer Changing the zoning of a property to lower the value use
Zoning – Answer the most common example of police power
Texas Property Code – Answer arranges Texas Statute Law into a logical order, making it more
accessible and understandable
Security Deposit – Answer is any advance of money, other than a rental application deposit of an
advance payment of rent that is intended primarily to secure performance under a lease of commercial
property
Variances – Answer are often requested prior to the construction to avoid violation of the rules
Title 8 Landlord & Tenant – Answer The most important chapter of the Texas Property Code for
property managers and landlords
Noncormfing use of land – Answer a change in zoning can cause?
Manufactured Homes – Answer are built in a factory and are built to a nation-wide building code
Trust Account – Answer account managed by one party for the benefit of another in a banking
institution authorized to do business in Texas
Safe Harbor Policy – Answer determines whether or not an advertisement is clear and conspicuous
Advertisement – Answer a written or oral statement or communication by or on behalf of a license
holder or service provider
Trust Money – Answer clients’ money
Trust Account – Answer an account managed by one party for the benefit of another in a banking
instistution authorized to do business in Texas
Sales Agent – Answer Should not maintain a trust account
Open Carry and Concealed Carry Signage – Answer must appear in contrasting colors with block
letters at least one inch in height
30.06 – Answer establishments that will permit open carry on their premises, but prohibit concealed
carry
30.07 – Answer Prohibits open carry on he premises
Deceptive Trade Practices Act (DTPA) – Answer allows an aggrieved consumer to sue a seller of goods
for damages
Goods – Answer Tangible chattels
Services – Answer means work, labor or repair of goods. Brokerage is an example
Consumer – Answer an individual, corporation, partnership, or government source who seeks to
acquire
Producing Cause – Answer requires proof that the act or omission was a significance factor in
bringing about the injury
Force Majeure – Answer Circumstances beyond the tenant of landlord’s control that could affect
performance of the contract
Term – Answer beginning and ending date
Demised premises – Answer spaces transferred from the landlord to the tenant by the lease
CAM – Answer includes hallway, lawn and elevator maintenance
Indemnify – Answer Defend
Gross Lease – Answer a lease of property where the landlord pays charges regularly incurred in
ownership, such as taxes
Net Lease – Answer in addition to rent, the tenant pays expenses such as taxes
Single Net Lease (N) – Answer tenant pays rent and property taxes
Double Net Lease (NN) – Answer tenant pays rent, property taxes, and property insurance
Triple Net Lease (NNN) – Answer tenant pays rent, property taxes, property insurance, and
maintenance. (landlord is still responsible for structural repairs)
Feasibility Period – Answer Also known as due diligence period
UCC Search – Answer filed with the county clerk by an equipment leasing company notifying the
public that there is a prior lease/lein on the equipment and that it cannot be seized by a landlord
Percentage Lease – Answer a lease in which all or part of the rental is based on the gross receipts of
the tenant’s business. in the retail environment, a percentage lease obligates the tenant to pay a base
rent and a percentage of gross sales.
LEED – Answer a building certification program for properties that are “green”
Preventative Maintenance – Answer servicing a property and its equipment in order to prevent
mechanical failure and keep property values high
BOMA – Answer An organization that advocates on the part of the building owners and managers
Deferred Maintenance – Answer deterioration of a property due to delayed maintenance
Mitigation – Answer methods used to lower levels of radon in buildings
EMF’s (electromagnetic fields) – Answer Energy Fields given off by power lines
Asbestos – Answer material previously used to insulate pipes in chimneys and roofs
Radon – Answer odorless, colorless, gas that is naturally produced by the decay of radioactive
materials in rocks underground
ESA (Environmental Site Assessments) – Answer assessment carried out by a qualified environmental
professional to determine whether or not a property has been contaminated by any previous or current
activities
Law of Contracts – CHAMPIONS TEST
Actual Questions and Answers 100% correct
| Latest Update 2023-2024
Wrongful or criminal deception intended to result in financial or personal gain is called: – Answer
fraud
The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: –
Answer 90 days
_ extend above the surface without limitation. – Answer air rights
An example(s) of an appurtenance would be: – Answer easements
There is no upper limit on the value of a Texas homestead. – Answer true
A(n) _ is one that combines some of the elements of a sale with a lease. – Answer lease
purchase agreement
Which of the following requires a contract for the conveyance of real estate to be in writing to be
enforceable? – Answer statute of frauds
If a broker receives more than one offer on a property: – Answer All must be presented to the seller
unless the seller has instructed the broker otherwise
The most common form of financing used by buyers is: – Answer third party financing
A(n) __ is a provision in a contract that requires that a certain act or event happens in order for
the contract to be binding on the party. – Answer contingency
The Lead-Based Paint Disclosure is: – Answer A federal requirement for residential property built
prior to 1978
In Texas, real estate contracts are subject to satisfactory inspections. – Answer false
The term _ is synonymous with contingent. – Answer subject to
Real estate agents play a role that includes arranging for the pre-qualification / pre-approval of buyers. –
Answer true
Rule P-53 of the Texas Department of Insurance states that Title Companies: – Answer Cannot
provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single
firm, Cannot provide continuing education classes unless they charge the market rate for those classes
Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are
ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to
keep the property. Bill is determined to complete the purchase and acquire the property. The only
default remedy in the contract that could result in Bill acquiring the property
is________________________. – Answer specific performance
Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that
he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem
and entered the following text to Paragraph 11: “Seller and Buyer agree that Seller will remain in the
Property for 7 days after closing and funding.” In this case, Elmer has: – Answer Engaged in the
unlawful practice of law
The four economic characteristics of land are: scarcity, fixity, situs and __. – Answer
modification
Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for
$199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for
the property. Knowing the seller’s “bottom line,” what should Joe do with the offer? – Answer Joe
should present the offer to the seller
Champions Law of Contracts September 2023 Test
Review Actual Questions and Answers 100% correct
Temporary leases – Answer have a maximum limit of 90 days
Brokerage (under DTPA) – Answer Is a service
Seller’s Disclosure – Answer Must be delivered or Buyer can terminate
Common Law – Answer Based on common sense
Air Rights – Answer Extend above the surface without limitation
Physical Characteristics of Land – Answer immobility
indestructibility
nonhomogeneity
Economic Characteristics of Land – Answer scarcity, modification, fixity, situs
Sole Proprietorship – Answer A business owned by one person
Co-op – Answer Owner does not own their specific unit
A Contract – Answer is an agreement by 2 or more people to do or refrain from doing something
Option – Answer example of unilateral contract
Unilateral Contract – Answer Only one party is obligated to perform
Essential Elements of a Contract – Answer COLIC (Competent parties), Offer and acceptance, Legal
Purpose, In Writing, Consideration
Marital Status – Answer Not required in contract
Fully executed contract – Answer When sale closes
Novation – Answer a new contract is substituted for an existing one
Police Power – Answer Right of the government to regulate and control the way land is used
Variance – Answer If property violates zoning, owner must request
Encumbrance – Answer a claim, charge, or liability that attaches to real estate
Notice of Coastal Area Properties – Answer Required disclosure for sale of coastal properties
Termination of Contract – Answer Damage or destruction of property may result in
Net Listing – Answer Commission is difference between net set by seller, and price buyer is willing to
pay
Four types of leasehold estates – Answer Estate for years, periodic tenancy, tenancy at will, tenancy
at sufferance
Lease Requirements – Answer Competent Parties, let and take, in writing, description of property,
Consideration