Texas Real Estate Final Exam Flashcards

Texas Real Estate Final Exam Flashcards What is 75% of $250,000?a. $187,500b. $182,500c.$62,500d. none of the above

A. $187,000

Under eminent domain, if the parties cannotagree to property value, which type of lawsuitwill be filed by a city to take the property forpublic use?a. annexationb. injunctionc.condemnationd. specific performance

• Condemnation

Which of the following deeds provides the purchaserwith the least protection in regards tocovenants and/or warranties given by theseller?a. trustee'sb. special warrantyc. general warrantyd. quitclaim Which of the following is NOT an annual operatingexpense used in income approachappraising?a. real estate taxesb.debt service to fund outstanding loanbalancesc. property casualty insuranced. property management and leasing fees If a property generates a negative cash flow, inorder to be

an attractive investment to aprospective purchaser:a. there

must be a substantial down payment.b. there must be a large depreciable base.c. there must be a substantial increase inproperty value.d. there must be little deferred maintenance.

• There must be a substantial increase in property value

The best definition of a material fact is that it:a. reveals only

information about the physicalcondition of a property.b. is an agreed upon condition of thepurchase agreement.c. is a factor a builder considers whenselecting building materials.d. is anything important to any personmaking a decision.

• is anything important to any person making a decision.

The most accurate way to uniquely locate andbound a parcel of real property is to usea. a topographical map.b.latitude and longitude bearings.c. the assessor parcel number.d. a metes and bounds survey.Broker A represents a seller. Broker B showsthis same seller's home to an unrepresentedbuyer. What kind of agency exists in thisscenario?a. subagencyb. cooperating brokeragec. cooperationd. fiduciary agency Abby is purchasing a home with a mortgageloan and is paying for an appraisal of the property.The appraisal is

made to determine:a. if Abby got a good deal.b. if the seller

had the house priced right.c. if the value of the collateral satisfies thelender's underwriting guidelines for theloan.d.whether the buyer's financing requirementsmeet the underwriting guidelines for theloan

• if the value of the collateral satisfies thelender's

underwriting guidelines for theloan.Commercial banks prefer to make short-termloans like construction loans and 90-day businessloans. The reason for their preference isa. the source of their funds is primarily fromCDs (Certificates of Deposit).b. the source of their funds is primarily fromsavings accounts.c. the source of their funds is primarily fromchecking accounts.d. the source of their funds is primarily fromissuing bonds.What is the difference between a competitivemarket analysis and a comparative marketanalysis?a. sold comparables usedb. amenity differences between thecomparablesc. adjustments for time of sale, such as locationand property conditiond. properties currently for sale in the samemarket area

The Federal Housing Administration (FHA),which operates under the Department ofHousing and Urban Development (HUD),encourages lenders to make home loans bya.lending money to private lenders.b. insuring qualified loans.c. purchasing loans from primary lenders.d.guaranteeing a portion of the loan.If there is some question about an item beingreal property or personal property, the bestdeterminant isa. the value of the item.b. the agreement of the parties.c. the appraiser's opinion.d. the title company's ruling.Which of the following is NOT an example of apublic land use control?a. spacing between residential and commercialpropertiesb. gas water heater exhaust systemc.percentage of brick veneer on home exteriord. easements for wetland drainage In an independent contractor agreement, thebroker must make clear to the agenta. his working hours.b. all company policies and procedures.c. the agent's responsibility for paying his ownincome taxes.d. the agent's income tax rate.The closed sales price of an income propertydivided by its

gross monthly rent equals the:a. estimated market value.b.

capitalization rate.c. gross income multiplier.d. gross rent multiplier

• Gross rent multipier

If Bob and Sally own a property together andthe deed to the property gives no indication asto what tenancy exists, they would own theproperty asa. tenants in common.b.stockholders in a corporation.c. joint tenants.d. general partners.What is the purpose of the Truth-in-LendingAct (TILA)?a.The TILA enforces Regulation Z.b. The TILA ensures disclosure of clear andfull information regarding the true cost ofcredit.c. The TILA regulates the APR.d. The TILA ensures that lenders receive fulldisclosure of credit and income informationfrom borrowers.Fines for non-compliance under Regulation Zare imposed by which jurisdiction?a. municipal courtb. county courtc.state attorney general's officed. Federal Reserve If a homeowner has a first mortgage loanbalance of $63,250, a second mortgage loanbalance of $12,000, and unpaid taxes of $3,015,how much equity does he have in his $100,000home?a. $25,000b. $21,735c. $100,000d.

$24,750

Which of the following actions by a landlord isNOT discriminatory under the Federal FairHousing Act?a.refusing to lease in regards to age of childrenb. refusing to lease based on the fact that thetenant has a petc. not showing property to tenants because oftheir country of origind. not leasing to people with certain physicalhandicaps Every broker in town has a listing with thecommercial property at the corner of Main andElm. What type of agreements do they have?a. exclusive agency listingsb.open listingsc. net listingsd. exclusive right to sell listings An encumbrance that states a monetary interestin someone's property is calleda. an encroachment.b. a deed restriction.c. an estate at sufferance.d. a lien Which of the following will terminate anagency relationship?a. death of the customerb. death of the salespersonc. death of the clientd. divorce of spouses in a common agency For there to be a valid right to purchase orterminate, an option contract must containa. notice to terminate.b. at least seven days to back out of theagreement.c. dollar consideration.d. a right of rescission.A listing agent wanting to give a seller maximumprotection from subsequent claims bythe buyer would strongly recommenda. that the seller cover all obvious propertydefects with cosmetic treatments.b. that the buyer have the property thoroughlyinspected prior to closing.c.that the seller offer the property "as is."d. that the buyer sign a "hold harmless" agreementagainst the seller.

A borrower can expect to pay a mortgageinsurance premium (MIP) fora. an 80% LTV conventional loan.b. a VA (Department of Veterans Affairs) loan.c. a graduated payment loan.d. an FHA 203(b) loan.A broker may define the sponsored agent's generaldutie s and authority, but nota. the scope of his activities.b. the scope of his authority.c. company policies and procedures.d. how the agent does his business.The form of ownership that would give aninvestor the greatest flexibility when selling hisor her interest would bea.a general partnership.b. ownership in severalty.c. joint tenancy.d. a limited partnership.What is the indicated value of a home if theothers in the neighborhood sold recently forbetween $160,000 and $167,000, and the subjecthouse has a pool (valued at $8,000 by theappraiser) that the others do not have?a.$168,000b. $175,000c. between $168,000-$175,000d.between $160,000-$175,000 Under the Truth-in-Lending Act, the cost ofcredit extended must be expressed asa. the discount rate.b. the prime interest rate.c. the actual percentage rate.d. the annual percentage rate.Which method of foreclosure is used in a deedof trust mortgage lien?a. non-judicial power of saleb. judicial court ordered salec. sheriff's sale at the courthoused. deed in lieu of accepted by lender Market data approach appraising may requireadjustments of sold comparables by anappraiser for all of the following

EXCEPT:a. sale date of comparable.b. replacement cost of

structure.c. financing made available by seller.d. lot size and location.

• replacement cost of structure

The term that describes the percentage of theappraised

value of a property that a lender willfinance is called:a.

loan-to-value ratio.b. owner's equity.c. certificate of reasonable value.d. capital investment

• Loan-to-Value

Personal property may become real property bythe process

of:a. devise.b. reliction.c. attachment.d. alienation.

• Attachment

A comprehensive buyer representationagreement would address thea. buyer's desired property description.b. duties of the agent, termination date, andcompensation agreement.c. agent's contact information.d. family contact names and numbers.

• Which of the following phrases is NOT discriminatoryin

an advertisement to lease a nonexemptone hundred-unit apartment complexunder the current Federal Fair Housing Act?a. no handicapped alterations will be madeb. adults only, no childrenc. no smoking on premisesd. females only Pamela, who lives in a suburb in which manyhomes are rented, decides to open a rentalagency in order to assist her friends in findingsuitable renters. Pamela's conduct isa.acceptable because it is relatively small inscope.b.acceptable because it involved only Pamela'sfriends.c.unacceptable because it involves an activityfor which a real estate license is required.d. unacceptable unless she makes a voluntarycontribution to the Recovery Account.A hairdresser told a broker about a client whowas looking for a new house. The brokercontacted the hairdresser's client and sold hima home. May the broker pay the hairdresserfor the lead?a. absolutely notb. yes, but not more than $50c. a gift with a value of not more than $50 maybe givend. only a thank you note is permitted When a broker represents a buyer, this meansthat the sponsored salespersona. represents the seller.b.represents the buyer.c. represents either the buyer or the seller.d. is an intermediary between the broker andthe buyer

• When dealing with a prospective buyer, thelisting agent

must reveal which of the following?a. The previous owner had AIDS.b. The property has been rezoned.c. The principal of the nearby school has justbeen fired.d. The previous owner committed suicide86. Upon obtaining the seller's signature on a listingagreement, the broker or salesperson isobligated toa. advertise the property in the

local paper oron the broker's website.b. set up a listing file and obtain an identificationnumber from the broker's preferredtitle company.c. cooperate with other brokers in the areawho might have a ready, willing, and ablebuyer for the property.d. provide the seller with a copy of theagreement that is legible, true, signed,and correct.87.For a document to be eligible for recording atthe county courthouse, the document must bea. drafted by a Texas-licensed attorney.b. witnessed by two persons with legalcapacity.c. in English and acknowledged in the presenceof a public official.d. in any language as long as it is witnessed bytwo lawful citizens and is notarized.88. The rules of the Texas Real Estate Commissionprohibit a licensee from creating language andentering it in contract forms that define thelegal rights and remedies of the parties. Whichof the following would be acceptable languageto enter in the "special provision" paragraph ofa Texas Real Estate Commission promulgatedcontract form?a. "This transaction is contingent upon thesale of the purchaser's present home."b. "Buyer reserves the right to terminate thiscontract for any reason within eight (8) daysof the effective date."c. "Buyer will do a walk-through inspectionduring the four (4) hours immediately precedingclosing."d. "This contract is contingent upon satisfactoryappraisal in the amount of the saleprice."89.What term identifies a broker who has writtenauthority to represent both the buyer and theseller in a real estate transaction?a. facilitatorb. mediatorc. intermediaryd.general agent90. What state law requires leases for more thanone year to be reduced to writing and toinclude a legal description of the property to beoccupied by the tenant?a.Truth-in-Lending Lawb. Hardness Tenant Actc. Statute of Fraudsd. Sherman and Clayton Acts-TEXAS REAL ESTATE SALES EXAM 1-4391. Salesperson Judy Jones is employed by A to ZRealty, Inc. Judy learns that A to Z's broker ofrecord missed her licensing renewal deadline.When Judy questions the broker about this, thebroker laughs and says, "Don't worry. There isalways a grace period to renew." Judy knowsthat this is not true, but decides not to say anymore about it. Judy's conduct isa.acceptable because she was following theadvice of her broker.b. acceptable because the license at issue is nother own.c. unacceptable because upon expiration ofher sponsoring broker's license, Judy's salespersonlicense is inactive.d. unacceptable because Judy, as a real