Real Estate Exam Prep (Champions;
Texas) Questions and Answers 2023
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 personalty; 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 personalty is transferred via this, also
called a non-realty 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; immobility- cannot 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
legal description – Answer- created and determined by a surveyor. Three legal methods
of land description: metes and bounds, lot, block and subdivision and the Rectangular
Survey System. Does not need to be included in a lease agreement.
metes and bounds – Answer- legal land description method; use terminal point and
angles and always have a point of beginning. monument (permanent surveyor markers)
may be added. Most common in farm and ranch.
lot, block and subdivision method – Answer- most common description used in
residential listings. derived from a recorded map called a plat
plat – Answer- recorded map
most common method of legal land description – Answer- lot, block and subdivision
method
rectangular survey system – Answer- legal land description method; uses base lines,
meridians, townships and sections – located in ranges.
Township (survey system) – Answer- contains 36 sections (part of rectangular survey
system)
Section (survey system) – Answer- contains 640 square acres (part of rectangular
survey system)
640 acres – Answer- 1 square mile
Champions real estate finance Exam
Questions with Verified Answers
mortgage Broker – Answer- Functions as a middleman between the borrower and the
lender, negotiating, selling or arranging loans to be delivered to large investors
Mortgage Banker – Answer- Provide their own funds for the purpose of providing
mortgage financing
Correspondent Lender – Answer- Smaller in scale then mortgage bankers or brokers,
these lenders typically extended loans with their own funds at their own risk
Origination – Answer- The process of creating a new mortgage loan
Underwriting – Answer- Detailed process of evaluating a borrowers loan application to
determine the risk involved for the lender
Closing/Settlement – Answer- Consummation of a contractual real estate transaction in
which all appropriate documents are signed and the proceeds of the mortgage loan are
then distributed by the lender
Funding – Answer- The process of transferring funds into a title or escrow company for
disbursement
Housing and Economic Recovery Act of 2008 (HERA) – Answer- Designed to assist with
recovery and revitalization of America’s residential housing market
SAFE Act (Secure & Fair Enforement of Mortgage Licensing Act) – Answer- Sets a
minimum standard for licensing and registering mortgage loan originators.
M1 – Answer- Sum of currency held by the public and transaction deposits at depository
institutions
M2 – Answer- M1 plus savings accounts, certificates of deposit, and other liquid assets
monetary policy – Answer- Maintenance of a stable money supply that provides for
growth in the economy while keeping inflation in check. Federal reserve is responsible
for monetary policy
fiscal policy – Answer- Federal government spending.
The Federal Reserve – Answer- The central banking system of the United States
Monetary inflation – Answer- Excess of money supply in the market
discount rate – Answer- Interest rate a Reserve Bank charges eligible financial
institutions to borrow funds on a short term basis.
federal funds rate – Answer- Is the rate that the federal reserve charges banks for
unsecured loans most of which are for a very short term (sometimes overnight) banks
use these to meet their liquidity requirements when withdrawals threaten to exceed
cash on hand
US Treasury – Answer- Primarily responsible for raising funds to finance the operations
of the US government. Management of fiscal policy
Office of the Comptroller of the Currency (OCC) – Answer- charters and regulates
national banks
US Mint – Answer- Make US coins
Department of housing and urban development (HUD 1965) – Answer- Create strong
sustainable inclusive communities and quality affordable homes.
The Federal Housing Administration (FHA) – Answer- Provides mortgage loans made by
FHA approved lenders through the United States and its territories
Community Development Block Grant (CDBG) – Answer- Help communities with
economic development, Job opportunities and housing rehabilitation
Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 – AnswerPromote the financial stability of the United States by improving accountability and
transparency in the financial system, to end “to big to fail” to protect the American
taxpayer by ending bailouts to protect consumers from abusive financial services
practices and other purposes
Consumer Financial Protection Bureau (CFPB) – Answer- Examine and enforce
consumer protection regulations for all mortgage related business. Established under
Dodd-Frank
Community Reinvestment Act – Answer- A law requiring lenders to meet the needs of
the community in which they are charted to do business.
Redlining – Answer- a practice in which banks refuse to make loans to people living in
certain geographic locations
Equal Credit Opportunity Act (ECOA) 1974 – Answer- Ensures all consumers are given
an equal chance to obtain credit
Real estate Investments / champions
Exam Questions with correct Answers
if you are holding undeveloped land, your goal as an investment is: – Answerappreciation
land is referred to as _ because it can be seen touched – Answer- tangible
Formaldehyde gas is: – Answer- Colorless
Local governments can use which of the following to enforce subdivision requirements?
- Answer- Police Power
The time limitation on deed restrictions is typically __ due to changes that
render the original
restriction irrelevant. – Answer- 25-35 years
Which of the following is a rating used for investment opportunities? – Answer- All of
these are ratings used for investment opportunities
Which phase assessment defines the steps needed to clean up contaminated areas of
a property? – Answer- Phase III Assessment
The , authorized in 1954, was the first program of Urban Planning Assistance - Answer- Subdivision Act
Which of the following are potentially responsible parties for clean-up costs of an
environmental problem? – Answer- The party who transported the waste
The right of includes the right to sell or mortgage property and the right to
determine the
duration of the ownership term. – Answer- Disposition
from which country’s laws did community property stem? – Answer- Spain
A is a written instrument by which a grantor conveys an ownership interest in real property to a grantee – Answer- Deed Which of the following would be considered a trade fixture? – Answer- Dentist Chair In a lease, the landlord is referred to as the ___. – Answer- Lessor
The lessee in a lease agreement is also known as the – Answer- Tenant
___ compensates a seller for taking a property off the market for an
extended period of time – Answer- Earnest Money
is typically stated as a monthly charge to be paid by the tenant at the
beginning of each month – Answer- Rent
A(n) is the legally designated person who would be entitled to receive a
deceased person’s
property in absence of a will. – Answer- Heir
Profit realized in the sale, exchange or disposition of a capital asset is considered
. – Answer- Capital Gain Income
In determining capital gains on inherited property, the basis of value generally becomes
market value as of
__. – Answer- The date of the decedent’s death
In terms of qualifying for low-income housing tax credits, _ means the initial
lease term extends to
6 months or more. – Answer- Nontransient
The gross rent charged to a tenant living in low-income housing cannot exceed % of the qualifying income level for the tenant’s family size – Answer- 30 Which of the following costs of the principal residence can a homeowner deduct from ordinary taxable income? – Answer- All of these costs are allowable tax deductions The IRS defines a(n) __ as one in which the taxpayer receives at least one
payment after the year of
sale. – Answer- Installment Sale
_ is also known as earned income. – Answer- Active
The main difference between a commercial loan and a residential loan is that the lender
and investor
expect the __ to repay the commercial loan. – Answer- Property being
acquired
A(n) permits the lender to share in all the benefits derived from the property –
Answer- Equity participation
The “banker’s rate” considers a day _ of the annual rate. – Answer- 1/360
Champions Real Estate Finance Exam
with complete solutions
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 assetbased 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 on-time
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.
Champions Real Estate Finance Exam
Questions and Answers 2023
_ is the consummation of a contractual real estate transaction in which all appropriate documents are signed, and the mortgage loan proceeds are disbursed by the lender. – Answer- Closing The primary determinants of real estate values are supply and . – AnswerDemand
is something of value that can be pledged as security for repayment of a loan. –
Answer- Collateral
Servicing includes which of the following activities? – Answer- Maintaining records of
payment
The monetary policies of the ___affects interest rates and the availability of funds. – Answer- Federal Reserve An excess supply of money in the market results in monetary . – Answer- Inflation
Which agency insures deposits in banks and thrift institutions for up to $250,000? –
Answer- The Federal Deposit Insurance Corporation
The _ is the interest rate a reserve bank charges eligible financial institutions to borrow funds on a short-term basis. – Answer- Discount rate Raising taxes and increasing borrowing are two ways at the treasury level to: – AnswerRaise funds to pay for government spending The Fed uses three primary monetary policy tools to influence the cost and availability of credit: open market operations, the discount rate, and . – Answer- Reserve
requirements
When the costs of production and services increase, causing manufacturing prices to
rise, it is called . – Answer- Cost-push inflation
Which of the following transactions is exempt from RESPA? – Answer- Temporary loans
Under the __, the use of certain terms in an advertisement triggers the need for full
disclosure of lending terms. – Answer- Truth in Lending Act
Principles of Real Estate 1 – Champions
Exam Questions and Answers
Leasehold Estates – Answer- possession and use of property without ownership
Estate for years (tenancy for years) – Answer- any lease with a specific starting and
ending date. Survives the death or sale of the property
Periodic Tenancy/periodic estate – Answer- lease that automatically renews itself for like
periods. example month to month. Requires notice to terminate
Estate at Will – Answer- Very loose agreement, terminates on death or sale of the
property
Tenancy in Sufferance – Answer- created when a tenant remains on the property after a
lease has expired
Requirements of a Valid Lease – Answer- Competent parties, let and take agreement,
adequate consideration (rent), legal purpose, property description
Emblements – Answer- Annual crops. Even though attached to the land they remain
personal property through harvest
Recovery Trust Account – Answer- Payments may not exceed $50,000 for single
transaction and $100,000 per licenseholder
Estate – Answer- the interest or nature of interest a person has in real property.
Bundle of Rights – Answer- Rights associated with property ownership
Fee simple absolute – Answer- Best type of ownership – Always a state of inheritance
Fee simple defeasible – Answer- Ownership that can be voided if a condition or
requirement for use of land is not met
Life Estate – Answer- ownership for the duration of someone’s life. Owner is called the
life tenant. At the end of the tenant’s life the property goes back to the original grantor
( life tenant with reversion) or to a 3rd party (remainderman)
TREC time to file a complaint – Answer- 4 years from incident date
Agency – Answer- relationship that exists when one person (agent) acts on behalf of
another person (the principal or client). Fiduciary relationship based on trust
Types of Agency – Answer- Universal – full authority to conduct business on behalf of
the clint – POA. Minors , Imprisonment, Militar
General – right to represent individual in a particular type of transaction. Property
Manager to Owner
Agent to Broker
Special – most limited – agent performs limited duties for the principal. Agent to Client.
Broker to Client
Legal Descriptioin – Answer- Used in sales contracts and agreement
IABS (Information about Brokerage Services) – Answer- Provides consumers with
necessary information regarding agency relationships with licenseholders. Must be
provided to all potential parties at first substantive discussion.
TRELA (Texas Real Estate License Act) – Answer- The purpose is to protect the public
against unscrupulous brokers and agents
Fixtures – Answer- Personal property that has become attached to the land in such a
way as to become real property., Annexation – attaching, Severance – removing
Fixtures are transferred to new owner unless specifically excluded.
Intermediary – Answer- broker who appoints agents to represent parties in an in house
transaction. Remains neutral Must have written consent of both parties
Steering – Answer- Taking buyers away from any neighborhood based on race, color,
religion, national origin, sex, familial status or handicap
Blockbusting – Answer- attempt to induce panic selling in a neighborhood for financial
gain
Termination of Listing – Answer- upon completion, by mutual rescission, condemnation
of property, revocation of broker’s license, at anytime by broker or principal, expiration
of contract, death or incapacity of either party, bankruptcy of either party, abadoment by
the agent
Familial Status Exemption – Answer- Specifically designated for elderly under. HUD, is
occupied by person 62 and older, 80% is occupied by person 55 and older
Stigmatized property – Answer- property where there has been a murder, haunting, or in
the vicinity of a known sexual offender
In House Sale – Answer- a sale in which both the selling agent and the listing agent are
from the same firm.
Principles of Real Estate 1- Champions
School of Real Estate Questions and
Answers 2023
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
Principles of real estate II (Champions)
Exam with complete solutions
Functional obsolescence – Answer- Refers to the loss in desirability of the style, layout
or function of an element of a property over time
Sales comparison – Answer- best indicator of value for existing properties
highest and best use – Answer- the legal use for property that gives the greatest return
in money and/or amenities
external obsolescence – Answer- the loss in value of a property caused by factors
outside the property itself
principle of contribution – Answer- suggests the value of a property is equal to the sum
of the contributory value of each of its components. most important aspect is that cost
does not equal value
most important aspect of principle of contribution – Answer- cost does not equal value
(for example…swimming pool)
principle of change – Answer- forces acting on a parcel of land are always affecting the
value of the land
principle of anticipation – Answer- the purchase price is affected by the expectation of
future appeal and benefits
principle of substitution – Answer- the value of a commodity if influenced by the cost of
acquiring a substitute or comparable item.
principle of conformity – Answer- value is maximized when there is a reasonable degree
of homogeneity in a neighborhood
principle of increasing and decreasing returns – Answer- when the value added by an
improvement exceeds the cost…do not over improve.
principle of supply and demand – Answer- when demand is high and supply is short,
prices go up – and vice versa
principle of regression – Answer- presence of lower-priced properties in the area will
cause a decline in the value of the subject property
principle of progression – Answer- presence of higher-priced properties in the area will
cause an increase in the value of the subject property
principle of competition – Answer- the absence of competition will cause prices to
increase in the marketplace. Increased competition will bring prices down.
characteristics of value – Answer- DUST; demand, utility, scarcity, transferability
market value – Answer- the most probable pice a property should bring in a competitive
and open market under all conditions requisite to a fair sale.
types of appraisal reviews – Answer- desk review and field review`
desk review – Answer- a type of appraisal review. reviews cover a checklist of items as
they analyze the appraisal report
field review – Answer- a type of appraisal review. many lenders, especially high LTV
loans, will order a field review of the appraisal. Independent third-party appraiser will
review the report, then verify the information.
limited appraisal – Answer- a type of appraisal review. some lenders accept this drive-by
type of review for low LTV or low risk loans.
ad valorem taxes – Answer- based on the assessed value of the property and the
existing tax rate.
assessed value – Answer- value set on the property for tax purposes. never a reliable
estimate of market value
USPAP – Answer- standards that have been established by the Appraisal Standards
Board of the Appraisal Founation
appraisal – Answer- an appraiser’s opinion of value
URAR – Answer- Universal Residential Appraisal Report; Fannie Mae 1004
three approaches to value – Answer- sales comparison approach, cost approach,
income approach
chronological age – Answer- the actual age of the property in years
effective age – Answer- estimate of age based on the condition of the property
Gross Rent Multiplier – Answer- part of income approach, used if there are a lot of rental
properties in the area.
Champions Real Estate Exam Prep
National Ch 7 Questions and Answers
Mortgage Loans – Answer- Most common choice for financing real property. Can be
conventional or non-conventional
Conventional Loan – Answer- Neither federally insured nor guaranteed
Non-conventional Loan – Answer- Federally insured/guaranteed mortgage loans to
encourage ownership (FHA, VA, USDA)
Contract for Deed – Answer- A means by which the seller passes possession but retains
title to the property until the total or a substantial portion of the purchase price is paid.
Installment contract. The two parties here are the vendor (owner) and the vendee
(buyer).
Hypothecation – Answer- The action of pledging real property as security for a debt
Promissory Note – Answer- A written promise to pay a specified amount of money on
demand or at a definite time
Lien Theory – Answer- When mortgage loan is used for purchase of real property, at
closing the buyer receives the title and the lender has a lien
Title Theory – Answer- At closing the lender receives the title and will hold it until the lien
is satisfied or paid off
Deed of Trust – Answer- Used instead of a traditional mortgage in Texas. Parties are
borrows (trustor), lender (beneficiary), and trustee
Power of Sale Clause – Answer- Allows for non-judicial foreclosure
Trustee (Deed of Trust) – Answer- Acts in fiduciary relationship with beneficiary,
released lien when not is paid or forecloses in the event of default
Mortgagor – Answer- “Gets the door” – buyer/borrower
Mortgagee – Answer- “Gets the fee” – lender
Primary Market – Answer- Market where consumers go to borrow money (mortgage
bankers, mortgage brokers, banks, credit unions)
Secondary Market – Answer- Market where lenders go for money. Exists for the
purchase and sale of existing mortgages to investors → greater liquidity to residential
real estate market
Conforming Loans – Answer- Loans qualified to be purchased in the secondary market.
Meet purchase requirements of Fannie Mae and Freddie Mac
Secondary Market Warehousing Agencies – Answer- Fannie Mae, Freddie Mac, Ginnie
Mae
Freddie Mac Forms – Answer- Used to ensure loans can be sold in secondary market
Fixed-Rate Amortized Loan – Answer- Equal, regular payments of principal and interest
until loan is repaid
Interest Paid In Arrears – Answer- Paid at the end of each payment period
Term Loan – Answer- Straight-loan, interest only paid until end of the term when the
entire principal is repaid (zero amortization)
Blanket Loan – Answer- Covers more than one piece of property. Contains release
clause
Release Clause – Answer- Allows borrower to obtain partial release of specific lots by
making required lump sum payments
Package Loan – Answer- Includes real property plus personal property (i.e. a furnished
condo)
Budget Loan – Answer- Includes PITI in monthly payments (principal, interest, taxes,
insurance)
Balloon Loan – Answer- Partially amortize with final payment substantially larger than
others → benefit of lower interest rate, disadvantage of high cost of refinancing
Participation Loan – Answer- Two or more lenders invest in one loan
Shared Appreciation Mortgage – Answer- Lenders collect principal and interest and
shares in profits when the property is sold
Open-End Mortgage – Answer- Permits additional borrowing on the same loan (HELOC
- home equity line of credit)
Adjustable Rate Mortgage (ARM) – Answer- A loan characterized by a fluctuating
interest rate, usually one tied to a bank or savings and loan association cost-of-funds
index, index + fixed percent margin (ex: treasury bills + 2%)
Texas Real Estate Exam Prep (From
PearsonVUE and & Champions National
Exam Prep) Graded A
property owner has decided to do some landscaping work on his yard. he has planted a
tree surrounded by some flowering shrubs. The tree and shrubs are an example of:
a) encroachments
b) improvements
c) surface rights
d) emblements – Answer- b) improvements
A property owner has a waterfront lot on a stream. He has the right to use the water
from the stream. What is this right called?
a) riparian
b) littoral
c) appropriative
d) appropriation – Answer- a) riparian
A commercial tenant is aware that his lease will expire at the end of the month. He has
begun to disassemble his display cabinets and shelves. Which of the following
statements about this is true?
A) he cannot take them without first obtaining written permission from the landlord.
b) if the landlord wants them, he can pay the tenant and the tenant must leave them
c) The tenant can take these as they are trade fixtures
d) he must disclose to the landlord that he plans to take them – Answer- c) the tenant
can take these as they are trade fixtures
A seller is attending the closing on his property. The title company has discovered an
unsatisfied M&M lien on the property. Which of the following is the most likely reason for
the lien?
a) a workman on the property left tools behind
b) unpaid personal property taxes
c) plumbing work that was completed but never paid for
d) a judgment – Answer- c) plumbing work that was completed but never paid for
A listing agent went to inspect a seller’s property hoping to list it for sale. The seller told
the listing agent that his neighbor’s satellite dish trespasses on his property. This is an
example of:
a) annexation
b) encroachment
c) appurtenance
d) license – Answer- b) encroachment
A father gives his son a life estate on a property. The son leases the property. The
tenant dies. What happens to the property?
a) it reverts to the father
b) it goes to the remainderman
c) it goes back to the son until he dies
d) it goes to the son’s heirs – Answer- c) it goes back to the son until he dies
A man leaves his second wife a life estate in their home after which the property goes to
his children from his first marriage. The children:
a) are remaindermen
b) have fee simple determinable
c) have a life estate
d) have a dominant interest in the property – Answer- a) are remaindermen
Which of the following statements about an easement is true?
a) an easement is a benefit to the servient property owner
b) an easement is an encroachment
c) an easement is a benefit to the dominant property owner
d) an easement in gross belongs to or passes with the land – Answer- c) an easement is
a benefit to the dominant property owner
P, Q, and R are joint tenants, P wants to sell the property, but Q and R do not. What
can P do?
a) file an injunction against the other owners
b) seek a writ of execution
c) file a suit for partition
d) get a release – Answer- c) file a suit for partition
A, B and C are joint tenants. C dies. B sells his share to D. What type of ownership do A
and D have?
a) joint tenants
b) tenants by the entirety
c) tenants in common
d) tenants in severalty – Answer- c) tenants in common
Under what right can the government change property use from commercial to
residential only?
a) Police Power
b) Eminent Domain
c) Taxation
d) Escheat – Answer- a) Police Power
Ownership of the common areas of condominiums is most likely to be:
a) joint tenancy
b) tenancy by the entirety
c) tenancy in common
d) sole ownership – Answer- c) tenancy in common
What should a buyer do to ensure that he is getting the best title to real property?
a) get an attorney’s opinion of title
b) get title insurance
c) get a special warranty deed
d) get a general warranty deed – Answer- d) get a general warranty deed
Which covenant in a deed guarantees that the owners will not suffer or be disturbed by
any claims in the property?
a) the covenant of seizen
b) the covenant against encumbrances
c) the covenant of quiet enjoyment
d) the covenant of warranty forever – Answer- c) the covenant of quiet enjoyment
Excess money at a foreclosure sale goes to:
a) the borrower
b) the lender
c) the courts
d) the trustee – Answer- a) the borrower
The required distance between buildings and a federally protected endangered species
wetlands, two incompatible uses, is an example of:
a) space determined by deed restrictions
b) Condemnation
c) a buffer zone
d) space determined by zoning – Answer- c) a buffer zone
After defaulting on a real estate loan, a borrower is able to pay off the loan prior to the
foreclosure sale. This is called:
a) right of first refusal
b) right of redemption
c) deed in lieu of foreclosure
d) an equitable estate – Answer- b) right of redemption
A couple purchased a condominium. The complex has an exercise room for all
residents. The couple does not use the exercise room and does not want to pay the
monthly fee for the use of the facility. What can they do to avoid this fee?
A) they can deduct the appropriate amount from their monthly condo fees
b) they can have an attorney send a letter to the homeowner’s association stating their
intention to not pay and then stop paying the fee.
C) they must pay the fee as they have a tenancy in common interest in all common
areas.
Law of Contracts – CHAMPIONS TEST
2023 (Answered)
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 / preapproval of buyers. – Answer- true
Rule P-53 of the Texas Department of Insurance states that Title Companies: – AnswerCannot 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___________________________. – Answerspecific 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
An abstract of title is: – Answer- a complete written history of title
an option is: – Answer- a unilateral contract
A seller is going to continue to occupy a property for two days after closing. In this case,
the parties should use the Buyer’s Temporary Residential Lease form. – Answer- false
A contract in which only one party is obligated to perform is a______ contract. –
Answer- unilateral
For tax prorations: – Answer- If taxes are not paid at or prior to closing the buyer shall
pay for the current year, If taxes for the current year vary from the amount prorated at
closing, the parties shall adjust the prorations when tax statements for the current year
are available, The tax proration may be calculated taking into consideration any change
in the exemptions that will affect the current year’s taxes
is the right of the government to regulate and control the way land is used. –
Answer- police power
A seller of coastal property abutting tidally influenced water must provide the .
- Answer- Notice Regarding Coastal Area Property
RESPA prohibits __, which is considered an abusive practice. – Answerkickbacks
Champions Real Estate NATIONAL TEST
(chs 1-2) Final Exam with complete
solutions
Real Property – Answer- consists of land, improvements, attached to the land, benefits,
rights, and ownership interests that go with the land.
Appurtenance – Answer- is often used to describe rights, privileges, and improvements
that belong to and pass with the land
Improvements – Answer- man’s additions to the land such as buildings and landscaping
Personal property – Answer- is a right or interest in something of a temporary or
movable nature and includes anything not classed as real property (chattel or
personalty)
Bill of Sale – Answer- ownership is transferred with this document
Fixture – Answer- an item that was personal property; however, it has been attached in
such a way that it has become real property
Annexation – Answer- “the process” of attaching a fixture to a property in a way that it
becomes real property
Severance or “severed” – Answer- “the process” of real property becoming personal
property will be described by this
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. If
these fixtures are not removed prior to termination of the lease, they become real
property and pass to the landlord.
Emblements – Answer- crops cultivated annually. even though they are attached to the
ground, they are considered the personal property of the farmer who cultivated them.
They are not automatically part of the sale of a farm or ranch.
Land’s 3 physical characteristics: – Answer- 1. Nonhomogeneity
- Immobility
- Indestructibility
- Nonhomogeneity – Answer- no two pieces of land are exactly alike. a more current
turn is uniqueness. each piece of land is unique - Immobility – Answer- land cannot be moved – a person must go to the land
- Indestructibility – Answer- durability – it will always be there
land’s four economic characteristics: – Answer- 1. Scarcity - Modification
- Fixity
- Situs
- Scarcity – Answer- in short supply, where demand is great – (a lot in Manhattan is
more valuable than a lot in upstate New York). Scarcity is usually based on geographic
considerations. - Modification – Answer- land use and value are greatly influenced by improvements
made by man to land and to surrounding parcels of land. - Fixity – Answer- land and buildings and other improvements to land are considered
fixed or permanent investments – they are not liquid assets. - Situs – Answer- location preference, or location from an economic rather than a
geographic standpoint. This can change over time as people change.
Legal Description – Answer- this is created and determined by a surveyor. it is a
necessary part of a contract or conveyance (deed, listing, sales contract, etc.) in order
for that document to be enforceable. (methods: metes and bounds, lot and block, the
rectangular survey system)
3 methods of land description: – Answer- 1.) Metes and Bounds
2.) Lot and Block
3.) The rectangular (Government) Survey System - metes and bounds description – Answer- use terminal points and angles and always
have a p.o.b. (point of beginning). this method uses compass directions, degrees, and
minutes. the p.o.b. is also the end. might include the use of street names.
this is the OLDEST and MOST COMMON method of land description. monuments,
permanent surveyor markers, are often the starting point for a metes and bounds
description, and can be essential to the accuracy of that description. (monuments can
be manmade – an iron pipe, or natural – a stand of timber, an old oak tree, etc.) - Lot & Block system (for legal description) – Answer- these descriptions are derived
from a recorded map, called a “plat.” this is the most common description used in residential listing agreements
Champions School Ch. 1 – Intro to Real
Estate Exam Questions and Answers
brokerage – Answer- the aspect of the real estate business that pertains to overseeing
the needs of the parties and completing a transaction.
RMLOs – Answer- Are also know as mortgage brokers
NAR – Answer- The largest trade organization representing real estate professionals
Value – Answer- A fair return or equivalent in goods, services, or money for something
exchanged
appraisal – Answer- the business of providing a professional opinion of the value of real
property
mortgage lending – Answer- business of providing money to individuals or corporations
for the conditional transfer or pledge of real estate as security for payment of a debt
Property Management – Answer- the management of residential and commercial
properties on behalf
of the investor-owner of the property.
Apartment Locators – Answer- work for firms that specialize in locating units for tenants
in multi-family
complexes
Apartment Locators. License or no license? – Answer- license
Home Inspectors – Answer- licensed in Texas by the Texas Real Estate Commission
(TREC). The inspectorcandidate must complete a series of courses and pass the state exam
Real Estate Development – Answer- most often involves the acquisition of land for
development into residential subdivisions, retail centers and other commercial uses.
Oil & Gas Companies – Answer- employ a large number of individuals with a real estate
background
Institute of Real Estate Management (IREM) – Answer- An international community of
real estate managers dedicated to ethical business
practices, maximizing the value of investment real estate, and promoting superior
management
Texas “Principles 1” (study & HW)
Champions School of Real Estate study
guide latest updated
Trec Commision Membership – Answer- _______ has 9 Members (6
brokers, 3 public) appointed by governor. They serve 6 year staggered term.
Texas Real Estate Borker Lawyer Committee – Answer- ____ has 13
Members (6 brokers, 6 lawyers, 1 public)
Licensed by TREC – Answer- -18 years old
-a US citizen or lawfully admitted alien
resident of the state
Above are general Eligibility Requirements to be…
buying, selling or leasing an easement pertaining to telecommunicaton, utility, railroad
or pipeline services. – Answer- A certificate is required separate of the license when…
Payments into Trust Account – Answer- ____ ensures the availability of a
sufficient amount to pay on anticipated claims on the trust account.
acting negligently or incompetently, commingling money and soliciting or selling offers
for the sale of real estate by means of a lottery – Answer- A commission may suspend
or revoke a license for…
the district court in the county where the administrative hearing was held. – Answer- In
order for an appeal to be made on a decision by the commission, it must be taken to…
“Information about brokerage services” form – Answer- When dealing with a client it is
mandatory to give them a copy of the…
Fidelity, Integrity, Competency – Answer- The three Canons for professional ethics and
conduct for Real Estate Licensees are…
That agent has to join the “NAR” National Association of Realtors – Answer- Under what
circumstances can a person be called a “Realtor?”
FEDERAL LAW where the only protected class was Race. No one can discriminate
because of RACE. – Answer- What was the Fair Housing Laws or Civil Rights Act of
1866?
Civil Rights Act of 1968 – Answer- What amended the Civil Rights Act of 1866 to include
race, color, national origin, and religion?
Civil Rights Act of 1974 – Answer- What amended to include Sex (Male or Female)?
Civil Rights Act of 1988 – Answer- What amended to include Handicap and Familial
status?
Handicapped – Answer- having a physical or mental disability (including hearing,
mobility, visual impairment, chronic mental illness and AIDS) that substantially limits one
or more major life activities is defined as…
Steering – Answer- Illigal practice of directing home seekers to a particular
neighborhood based on fair housing protected classes.
refuse to take the listing – Answer- If a seller asks agent to discriminate, the agent
must…
ADA Americans with Disabilities Act – Answer- Enacted in 1992 and deals with
commercial property only
Personal Property – Answer- Things not attached to the land are considered…
Chattel – Answer- also known as Personal Property
Bill of Sale – Answer- How is Personal Property sold?
Personal Property – Answer- Plants (Annual or fructus industrials or emblements) are
classified as…
Appurtenances – Answer- right or privilege to land that goes with the land when
ownership changes such as parking lot spaces, easements, right or ways
Fixture – Answer- was personal property but then became real estate because it has
been attached to the land
Tests of a fixture – Answer- method of attachment (annexation)
Fitness or adaptation to property
Intention of the parties
Trade fixture – Answer- attached to the property under a commercial lease
Riparian Rights – Answer- What are rights to another’s land who borders a stream or
river?
Littoral Rights – Answer- What are rights to another’s land who borders a lake?
Accretion – Answer- What is it called when land is increased in size because of natural
deposit of rock and soil usually caused by water movement?
Alluvion – Answer- the land that has been created by Accretion
Reliction – Answer- dry land that results when water withdraws from the land
Avulsion – Answer- sudden removal of land by water
Erosion – Answer- the gradual wearing away of land and rock by water
Physical Characteristics of land – Answer- immobility, indestructibility, and nonhomogeneity are all…
economic characteristics of land – Answer- scarcity, modification, improvements,
permanence of investment, area preference.
Situs – Answer- Area Preference is called _.
Four types of legal descriptions of land – Answer- Metes and Bounds, Rectangular
survey system, recorded plats, and reference to documents other than maps are all…
metes and bounds – Answer- legal land description most used in the US using distance
and direction to define and describe the boundaries of a property
Rectangular survey system – Answer- legal land description using latitude, longitude
lines, standard parallels and base lines to divide the earth into ares
640 – Answer- How many acres in each square mile
43560 – Answer- How many square feet are in an acre?
Recorded plat – Answer- Legal land description which divides larger plats into smaller
plots when land is divided in lots.
Police Power – Answer- _____ in real estate applies to planning laws,
building codes, fire codes, rent control and health codes.
Eminent Domain – Answer- What is it called when government can take privately owned
real estate for public use?
condemnation – Answer- the process of eminent domain is called…
Escheat – Answer- __ is when one dies without a will or heirs the government
takes it as it no longer has an owner basically going back to the state.
Principles of Real Estate 1- Champions
Quiz with complete solutions
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
Passed in 1973 – Answer- DTPA allows an aggrieved consumer to sue a seller of goods
for damages
Units in a cooperative – Answer- are most often owned by a corporation
Indestructibility, a physical characteristic of land, is also known as: – Answer- Durability
A professional association whose local affiliates own and operate MLS systems
throughout the United States is the: – Answer- NAR
Appraisal is the business of: – Answer- Providing a professional opinion of the value of
real property
The least important factor affecting demand for real estate is – Answer- Personal
preference
Air rights are commonly leased or conveyed in – Answer- Cell tower leases,
Condominiums, Outdoor advertising
Principles 1 Real Estate Champion
School Exam Questions and Answers
2023
What are the 4 economic Characteristics of land – Answer- 1,Scarcity, 2, Modification,
3,Fixity 4, Situs
Scarcity – Answer- Supply and demand, When there is shortage of something that and
individual wants the price goes up.
Situs – Answer- The location of the property or land from an economic not geographic
viewpoint. Preference people have based on location. Location Location Location….
Ad Valorem Taxes – Answer- Taxes on real properties (according to value)
TRELA Texas Real Estate License Act – Answer- The purpose is to protect the public
against unscrupulous brokers.
TREC Texas Real Estate Commission – Answer- Created in 1949 Can assess
administrative penalties of up to $5000 per day against offending licensed and
unlicensed individuals
Improvement – Answer- Any man made addition to the land that is permanent and is
considered to become part of the land. Building, landscaping, fences, patios ect…
Fixture – Answer- Personal property that has become attached to the land in such a way
as to become real property
Severance – Answer- Removing fixtures by detaching them from real property or
uninstalling them
(should be removed prior to listing)..or ‘does not convey’
Intention of the Parties – Answer- When an item was installed .. most important test
Method of Attachment – Answer- How the item was attached to the property
Adaptation to the property – Answer- How the item fits the property
Emblements – Answer- Annual crops produced with labor
Even though attached to the land the crop is personal property. Tenant will still be
allowed to harvest annual crop even if not in possession of the land
Townhomes – Answer- Sold as distinct living unit individual lot share common walls.
Owner of the townhome owns the property beneath the structure.
Homeowners Insurance – Answer- A contract between the insurance company and
policyholder protection fire, wind, hail, theft, flood, vandalism, loss or damage to
contents, and personal liability (Hazards such as flood or windstorms are additional)
Factors that affect insurance premiums – Answer- 1;Age and Condition 2; The home
replacement cost 3; Location 4; Availability of local fire protection 5; The policy claims
history 6; The policyholder credit score
Agency – Answer- An agency relationship exists when one person (the agent) acts for,
or on-behalf of another person (the principal is known as the client). The principal is one
who hires the agent and gives authority to the agent. This relationship is a fiduciary
(trust) relationship
Universal Agency – Answer- Has full authority to conduct business on behalf of the
client. (power of Attorney
General Agency – Answer- Broker has agents that work for them. A general agent may
bind the principal, meaning that the agent may sign certain contracts and agreements in
the name of the principal. Agent can sign for the broker
Special Agency – Answer- (Most Limited) known as the ‘limited agency’. The special
agent is NOT able to bind the principal because they are not allowed to sign or accept
any terms or conditions on behalf of the principal. A broker who sells directly w/ a client
(no agent under the broker). The listing agreement establishes a special agency
relationship between the broker and seller
Agent Duties – Answer- Obedience, Loyalty, Disclosure, Confidentiality, Accounting,
Reasonable care (OLD CAR)
Trust – Answer- Not A DUTY
Customer – Answer- When a potential buyer contacts an agent for information regarding
a property
Client – Answer- An agreement with broker and agency
Intermediary Relationships – Answer- Broker reps both the buyer and seller Broker
remains neutral and avoids negotiating. The broker must first get written consent of both
parties
Intermediary with appointments – Answer- The appointed associate will give advice and
opinion (which means negotiate) to their respective parties. The broker must make the
appointments in writing using the Intermediary Relationship Notice
Law of Agency – Champions School of
Real Estate Exam 2023 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
General Agent – Answer- has less authority than the universal agent. Has the right to
represent his or her principal in a particular type of transaction or business. One
common example of a general agent in real estate is the property manager.
As agents, our fiduciary duties and responsibilities include – Answer- OLD CAR
Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Reasonable care
Obedience – Answer- an agent is obligated to follow all o the lawful instructions of a
client
The commission may suspend or revoke a license or take other disciplinary action if the
license holder, while acting as a broker or sale agent… – Answer- commingles money
that belongs to another person with the license holders own money
Law of Agency – Champions Exam
Questions and Answers (Graded A)
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
TEXAS State Real Estate Exam Prep
(Champions School of Real estate
Chapters 1-6)
TREC was created in to administer the provisions of the license act which
passed in . – Answer- 1949, 1939
Trec has the authority to make and _. – Answer- Rules,
regulations
TREC consists of how many members? – Answer- Nine members – six licensed brokers
and 3 members of the public. All are appointed by governor and approved by senate
The broker lawyer committee – Answer- writes the promulgated contract forms.
The broker lawyer committee consists of: – Answer- 13 members. 6 brokers appointed
by trec and 6 lawyers appointed by the state bar association. 1 is a public member
appointed by governor
Penalties for unlicensed activity – Answer- Class A misdemeanor, not to exceed $4000
for each penalty, or up to 1 year in prison or both. Each day a violation continues may
be considered a separate violation.
Administrative penalties for unlicensed activity – Answer- up to $5,000 per day for
violation of the license act, by any person, licensed or unlicensed.
Real estate recovery trust account – Answer- ($50,000 max per transaction and
$100,000 max for any one licensee.)
If fund falls below $1 mill, trec can charge all licensee’s a $10 fee until balance goes
back up to $1.7 million. If balance is above $3.5 million, Trec reduces value by flushing
excess to the general fund of of texas.
Non-resident broker – Answer- A broker with a Texas Real Estate brokers license, but
no home or office in Texas
Trec has the authority to license _____________________. – Answer- Real
estate inspectors
Fidelity – Answer- license holder is a fiduciary to his client. faithfulness; loyalty
Integrity – Answer- Will avoid misrepresentation by commission or omission
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
Unenforceable Contract – Answer- A valid contract rendered unenforceable by some
statute or law.
Mutual rescession – Answer- When parties agree to cancellation, the contract is
terminated.
Default – Answer- Is non-performance of a duty under a contract
Liquid damages – Answer- Money damages set out in the contract
Punitive damages – Answer- punish the defaulting parties
Compensatory damages – Answer- Set to cover the actual injury or economic loss
Champions Real Estate Marketing SAE
Exam with complete solutions
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 – Answerproblem 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 – Answeramenities
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
In which emotional phase is the buyer ready to buy? – Answer- Act
Gathering data, analyzing it and drawing conclusions based on it describes – Answermarketing research
Analyzing strengths, weaknesses, opportunities, and threats is referred to as a –
Answer- SWOT analysis
A report prepared by an agent to help a seller realistically price their property is a –
Answer- CMA
SWOT – Answer- strength, weakness, opportunities and threats – marketing research
analysis
CMA – Answer- comparative market analysis
Two kinds of market research – Answer- primary and secondary
primary research is focused – Answer- customer, examples email surveys,
mail surveys, closed transactions
Real estate Investments / champions
Exam 2023 Questions with Verified
Answers
if you are holding undeveloped land, your goal as an investment is: – Answerappreciation
land is referred to as _ because it can be seen touched – Answer- tangible
Formaldehyde gas is: – Answer- Colorless
Local governments can use which of the following to enforce subdivision requirements?
- Answer- Police Power
The time limitation on deed restrictions is typically __ due to changes that
render the original
restriction irrelevant. – Answer- 25-35 years
Which of the following is a rating used for investment opportunities? – Answer- All of
these are ratings used for investment opportunities
Which phase assessment defines the steps needed to clean up contaminated areas of
a property? – Answer- Phase III Assessment
The , authorized in 1954, was the first program of Urban Planning Assistance - Answer- Subdivision Act
Which of the following are potentially responsible parties for clean-up costs of an
environmental problem? – Answer- The party who transported the waste
The right of includes the right to sell or mortgage property and the right to
determine the
duration of the ownership term. – Answer- Disposition
from which country’s laws did community property stem? – Answer- Spain
A _ is a written instrument by which a grantor conveys an ownership interest in
real property to a
grantee – Answer- Deed
Which of the following would be considered a trade fixture? – Answer- Dentist Chair
In a lease, the landlord is referred to as the _. – Answer- Lessor
The lessee in a lease agreement is also known as the – Answer- Tenant
__ compensates a seller for taking a property off the market for an
extended period of time – Answer- Earnest Money
is typically stated as a monthly charge to be paid by the tenant at the
beginning of each month – Answer- Rent
A(n) is the legally designated person who would be entitled to receive a
deceased person’s
property in absence of a will. – Answer- Heir
Profit realized in the sale, exchange or disposition of a capital asset is considered
. – Answer- Capital Gain Income
In determining capital gains on inherited property, the basis of value generally becomes
market value as of
__. – Answer- The date of the decedent’s death
In terms of qualifying for low-income housing tax credits, _ means the initial
lease term extends to
6 months or more. – Answer- Nontransient
The gross rent charged to a tenant living in low-income housing cannot exceed % of the qualifying income level for the tenant’s family size – Answer- 30 Which of the following costs of the principal residence can a homeowner deduct from ordinary taxable income? – Answer- All of these costs are allowable tax deductions The IRS defines a(n) __ as one in which the taxpayer receives at least one
payment after the year of
sale. – Answer- Installment Sale
_ is also known as earned income. – Answer- Active
The main difference between a commercial loan and a residential loan is that the lender
and investor
expect the __ to repay the commercial loan. – Answer- Property being
acquired
A(n) __ permits the lender to share in all the benefits derived from the property –
Answer- Equity participation