trade or business. One example of a trade fixture is a

Real Estate Principles 1 Flashcards The answer is trade fixture. A trade fixture is an article attached by a tenant to a building for use in conducting a trade or business. One example of a trade fixture is a display counter. A trade fixture is the personal property of the tenant and can be removed by the tenant on or before the expiration of the lease. The tenant is responsible for any damage to the property caused by its removal. A fixture, such as a built-in kitchen cabinet, when permanently attached to a building, becomes part of the real property and cannot be removed when the owner sells the property.A tree is cut down for lumber so that the real property (tree) is now personal property (lumber). The process is called The answer is all of these. For example, with full-replacement coverage, the insurance company pays for replacing the property (whatever the current cost is) with no reduction for depreciation. Under a standard settlement, the insurance company will settle for the actual cash value of the property, which is the original cost minus depreciation. If the homeowner carries coverage of less than 80% of the full replacement cost of the dwelling, the loss will be settled either for the actual cash value or for a percentage of the replacement cost.Income tax deductions on loan interest on first and second homes are The answer is severance. When the tree is detached from the property, what was real property is made personal property.A first-time homebuyer may make a penalty-free withdrawal from an IRA of up to The demand for real estate is affected by which of the following?The answer is population.For example, the movement of people to the western and southern states creates a greater demand for housing in those areas. Other factors affecting demand are demographics and employment and wage levels.What has been the impact on housing to date of environmental concerns such as climate change and the potential for an increase in hurricanes and flooding from severe storms?The answer is that prices of homes with water views have been largely resilient to environmental factors. Although climatologists believe coastline dwellings will be destroyed by climate change, that fear has not translated to deterioration of prices. Brokers should, however, be mindful of climate forecasts as they work with buyers.The answer is mutual agreement. Discharge or resignation may leave one of the parties liable for breach of contract.If a homeowner who has NOT hired a broker agrees to accept an offer brought to him by a broker, he may create Upon receiving a real estate license in Texas, which organization(s) are license holders required to join?

• The National Association of REALTORS® and Texas

Land Title AssociationB) The National Association of Home Builders and National Association of Real Estate AppraisersC) The Texas Association of

REALTORS®***D)None of theseAlthough membership in professional organizations can be important to individual career development, none are required under state law. It is likely, however, that new license holders hoping to work in specific brokerages will be required to join a specific organization as a condition of employment.Warehouses, factories, and research facilities are classified as which kind of property?The answer is industrial.Industrial property includes factories, warehouses, and research and development

facilities. Agricultural property includes farms, orchards, timberland, ranches, and hatcheries. Special-purpose property includes churches, government land, and schools.Commercial property includes retail stores, shopping malls, office buildings, theaters, and parking lots.

The answer is loyalty. Acting in self-interest would be putting loyalty to self ahead of loyalty to the principal. For example, brokers may not take advantage of confidential information to the principal's disadvantage, buy property they have listed without the principal's knowledge and consent, or profit from the agency beyond the agreed commission.Clients who have signed listing agreements may "fire" their broker. Is a broker permitted to fire a client?The answer is Texas law is silent on the issue. Brokers should, however, be cautious about who they appoint to represent buyers and sellers. Sales agents have differing strengths and weaknesses, including ability to negotiate, and clients are entitled to benefit from those talents.Which duty requires the broker to keep the principal fully informed at all times of all information the broker obtains that could affect the principal's decisions?The answer is brokers may assign desk duty to employees, but may negotiate contracts with independent contractors that include desk duty expectations. If brokers expect independent contractors to work desk duty, that expectation should be included in the contract and open to discussion.Broker X represents a prospective buyer. When he calls to schedule an appointment to show a property listed by another broker, X must The answer is no. Although banking practices have become more rigid over the years, lenders still can be flexible based on the character of the borrower, their credit, and their capacity to pay. Often a sales agent's relationship with a lender can be the difference in a marginal buyer securing the home they'd like.Insurance companies settle property insurance claims on the basis of which of the following?The answer is $10,000. The maximum penalty-free withdrawal from an IRA for a first-time homebuyer is

$10,000.

Lenders may use a conservative rule-of-thumb formula that the monthly cost of buying a home (PITI payment) should NOT exceed what percentage of the borrower's gross monthly income?A parcel of land near an airport that has streets, sewers and utilities, but is currently undeveloped in terms of homes or other buildings, is called The answer is real estate because the streets, sewers, and utilities represent "improvements." Street and other improvements are attached to the earth.The legal theory of separating surface rights from subsurface rights and air rights is called?The answer is lateral severance.What real estate discipline is represented by BOMA?The answer is BOMA represents building owners and managers.BOMA is a national group almost exclusively involved in issues concerning large-scale commercial enterprises-everything from planning to meeting environmental-quality goals and building security.The answer is surface rights because Texas law places it under surface rights. Subsurface water is bundled under the surface estate under Texas law.The bundle of rights refers to an owner's right to Does the lack of permanence of investment have an impact on development potential for a community?The answer is yes, lack of forward-looking infrastructure makes investors leery of committing to projects. Projects often are built with razor-thin margins and sharing the cost of infrastructure improvements can kill a deal.