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Principles 1 Aceable Practice Tests – Q’s And
A’s
What is the money in the Recovery Trust Account used for? A) To pay an aggrieved party who has won a judgment against a licensee for damages from a real estate transaction B) To pay commission that agents were wrongfully deprived of C) For taxes for the state of Texas D) For TREC to recover the funds to keep their computer systems up to date Correct Ans - A) To pay an aggrieved party who has won a judgment against a licensee for damages from a real estate transaction Wesley just bought a house with a creek that flows along the south boundary. He wants to use the water to irrigate his garden. Through which set of rights is he entitled to use this water? A) Water Rights B) Littoral Rights C) Riparian Rights D) Agricultural Use Rights Correct Ans - C) Riparian Rights According to the canons of professional ethics, what two things MUST be linked to a brokerage's website? A) A sample contract and TREC Notice of Representation No. 24 B) The Canons of Professional Ethics and the listing agreement C) The IABS Notice and the Consumer Protection Notice TREC No. CN 1- D) The Consumer Protection Notice and the NAR Code of Ethics Correct Ans - C) The IABS Notice and the Consumer Protection Notice TREC No. CN 1-
A couple owns property as community property. If one spouse dies testate (that is, with a will) and had children outside of this marriage, how will the community property be distributed? A) It all goes to the surviving spouse B) The deceased spouse's 1/2 share will go to his or her children C) The deceased spouse's 1/2 share will be split between the surviving spouse and the children of the deceased spouse D) According to the will Correct Ans - D) According to the will Which of these owners or groups of owners are MOST likely to take title as tenants in common with no rights of survivorship? A) David and Julie, a married couple B) Sarah and Sally, an unmarried couple C) Jim, an unmarried single guy D) Tomato Real Estate Holdings, a corporation Correct Ans - B) Sarah and Sally, an unmarried couple Which of the following is an example of a statutory lien? A) An equitable lien B) A mortgage C) A vendor's lien D) An IRS tax lien Correct Ans - D) An IRS tax lien What is the difference between personal property and real property? A) Personal property is an unattached, moveable asset not considered real estate. Real property is land, improvements, and its corresponding rights. B) Personal property can be turned into real property, but real property can't be turned into personal property. C) Personal property includes all real property.
D) Temporarily reassign one agent to another supervising broker Correct Ans - C) Get written consent from both parties According to what legal concept do contracts involving the sale or transfer of real estate need to be in writing? A) Parol evidence rule B) Statute of frauds C) Statute of limitations D) Power of attorney Correct Ans - B) Statute of frauds Before a new license holder can engage in the practice of real estate, who must receive a copy of that sales agent's license? A) Any broker involved in a transaction with that sales agent B) The broker that is sponsoring the sales agent C) Texas REALTORS® D) The National Association of REALTORS® Correct Ans
- B) The broker that is sponsoring the sales agent "Beginning at the intersection of Main Street, and Oakgrove Lane, proceed due north 300 feet to the creek; then due east 500 feet, more or less, to the U.S.G.S. benchmark; then proceed due south 300 feet to the maple tree, then proceed west about 500 feet, returning to the point of beginning." is an example of a legal description using which type of survey method? A) Metes and bounds B) Rectangular survey C) Lot and block D) Recorded plat Correct Ans - A) Metes and bound The first 9 articles of the NAR Code of Ethics are known as the: A) Duty of Confidentiality
B) Duties to the Commission C) Duties to Clients and Customers D) Duties to the Association Correct Ans - C) Duties to Clients and Customers What is the name given to the recipient of advantage or gain from an act or instrument such as a trust, will, or insurance policy? A) Trustee B) Beneficiary C) Trustor D) Mortgagee Correct Ans - B) Beneficiary For a married couple that has lived in their home for the past three years, how much of a capital gains tax exemption are they eligible for? A) $250, B) $ C) $375, D) $500,000 Correct Ans - D) $500, All of the following are examples of legal descriptions of property EXCEPT: A) 8647 Notting Hill Drive, Berkshire, Colorado 52467 B) SW 1/4 of NW 1/4 of NE 1/2 of T3N R4E of Meridian 16 C) Lot A, Block 2 of Shady Tree Subdivision, Madison County, Wisconsin D) Lot E, Block 14 of West Lake Village, Orange County, Texas Correct Ans - A) 8647 Notting Hill Drive, Berkshire, Colorado 52467 Texas offers several exemptions for reduction of property taxes including the: A) Homestead tax exemption B) Urban exemption
C) Their sponsoring broker only D) a licensed escrow officer or title professional Correct Ans - C) Their sponsoring broker only Which is NOT one of the canons of professional ethics? A) Integrity B) Justice C) Fidelity D) Competency Correct Ans - B) Justice Under the ECOA, it is illegal for lenders to discriminate on the basis of: A) Marital status B) Credit score C) Debt D) Employment Correct Ans - A) Marital status In what kind of contract is only one of the parties obligated to perform? A) Bilateral B) Multilateral C) Unilateral D) Implied Correct Ans - C) Unilateral The goal of the Community Reinvestment Act is to: A) Encourage investment in specific communities B) Provide tax breaks to lower income communities C) Provide affordable housing to lower income communities D) Ensure credit availability in all communities Correct Ans - D) Ensure credit availability in all communities Which of these is the best summary of the NAR Code of Ethics Article 16: Respect Existing Agreements?
A) Contracts must be used for all agency relationships. B) Don't attempt to steal away someone else's clients. C) An agent cannot use a contract to gain a new client. D) A broker has a limited amount of agency agreements they can be party to. Correct Ans - B) Don't attempt to steal away someone else's clients. An agent knows that a previous owner of a property passed away in his sleep in one of the bedrooms. Is the agent required to disclose this to the buyer? Why or why not? A) No, because deaths are never required to be disclosed, regardless of the cause. B) No, because the death was due to natural causes, and not due to a defect on the property. C) Yes, because all deaths must be disclosed, regardless of the cause. D) Yes, because the death happened in the home, not outside. Correct Ans - B) No, because the death was due to natural causes, and not due to a defect on the property. Which of the following can be used to determine air rights, as well as condominium ownership boundaries? A) Metes and bounds B) Recorded plat C) Rectangular survey D) Vertical land description Correct Ans - D) Vertical land description The Fair Housing Act includes the protected classes of: A) Race, color, religion, national origin, sex, disability, family status
A) All land is not worth same amount B) Land is scarce C) Land is desirable D) Land is cannot be moved Correct Ans - D) Land is cannot be moved In a breach of contract scenario, which of these four options would allow the wronged party (the seller) to keep the earnest money that had been put up by the buyer? A) Rescission B) Forfeit C) Suit for specific performance D) Suit for compensatory damages Correct Ans - B) Forfeit What is unique about an exclusive right-to-sell listing agreement? A) The broker acts as a general agent for the client in all business dealings. B) There are multiple brokers working to sell the same property. C) The broker gets compensation regardless of who sells the property. D) The broker represents both the seller and the buyer. Correct Ans - C) The broker gets compensation regardless of who sells the property. Which one of these situations would title insurance protect against?
A) After purchasing a home and living in it, Terrence is contacted by the heir of a deceased former owner who claims the home is actually hers. B) Theresa moves into a new home. Within a few months, the roof has developed a major leak, despite getting an all clear during the inspection. C) Unbeknownst to him, Tomas's new home had faulty wiring. The resulting fire did thousands of dollars of damage to the structure. D) A 500-year storm causes Trudy's house to flood, despite not appearing on any FEMA floodmaps for her area. Correct Ans - A) After purchasing a home and living in it, Terrence is contacted by the heir of a deceased former owner who claims the home is actually hers. Which of these is an agent's fiduciary duty to put the client's interests first, including over those of the agent? A) Special agent B) Self-dealing C) Estoppel D) Loyalty Correct Ans - D) Loyalty Which of these people is eligible to apply for a Texas real estate license? A) Ulrich is 17, a Texas resident, and a U.S. citizen. B) Victor is 30 and visiting Texas on a tourist visa from his home country of Canada. C) Wendy is 85, lives in Texas, and is an undocumented immigrant.
C) Real Estate Procedures Policy D) Fair Housing Act Correct Ans - D) Fair Housing Act How do insurance companies find past claims filed by people or on property to determine their insurability? A) Get a CLUE report B) Do a title search C) Research deed history D) Look at a survey Correct Ans - A) Get a CLUE report Which term refers to the fact that no two tracts of land are the same? A) Uniqueness B) Fixity C) Durability D) Situs Correct Ans - A) Uniqueness Which of these people would be described as a cooperating broker? A) Barry posted a listing to the MLS on behalf of a seller. B) Ann brought a buyer to another broker's listing. C) Caroline is helping a landlord find a tenant for her building. D) David is supervising an agent who is working with a seller. Correct Ans - B) Ann brought a buyer to another broker's listing. Why can't brokers draft their own contracts for transfers of real property?
A) That is an example of commingling B) It could potentially violate housing discrimination law C) It's considered an unauthorized practice of law D) It's considered a form of misrepresentation Correct Ans - C) It's considered an unauthorized practice of law The act of converting real property into personal property is called: A) Affixation B) Severance C) Annexation D) Close association Correct Ans - B) Severance Which of the following scenarios describes a fee simple determinable estate? A) Karl willed his home to his nephew on the condition that his replica Trevi fountain be properly maintained. When Karl's daughter noticed the fountain had been torn down in favor of a hot tub, she sued and gained possession of the home. B) Kaspar signed a lease with his landlord that allows him full use of the landlord's property as long as Kaspar pays him monthly rent. C) Kylie owns a lakefront property. For the duration of her lifetime, she has the right to use, occupy, and/or dispose of the property as she sees fit. She can also will her property title to her children after her death D) Kandace donated a property to the local dog rescue with the condition that is would ONLY be used for dogs. When they started taking in cats, ownership automatically reverted to Kandace. Correct Ans - D) Kandace donated a property to the local dog rescue with the
The Fair Housing Act does not cover: A) Residences outside of city limits B) Apartment units C) Transactions made with license holders D) Non-dwelling buildings Correct Ans - D) Non- dwelling buildings Which of the following is a downside to living in a co-op? A) Residents do not own shares B) They include residential units alongside nonresidential units C) There are never common areas D) One resident's actions can harm the entire cooperative Correct Ans - D) One resident's actions can harm the entire cooperative What type of estate causes the title to automatically revert to the original owner if the deed requirements regarding property use are violated? A) Fee simple condition subsequent B) Fee simple determinable C) Dower/curtesy D) Legal life estate Correct Ans - B) Fee simple determinable The act of severance is the most common way to convert: A) Industrial property into commercial property B) Residential property into commercial property C) Real property into personal property D) Personal property into real property Correct Ans - C) Real property into personal property
When a party makes changes to an offer and then presents a new offer, it is called a(n): A) Breach of contract B) Forbearance C) Counteroffer D) Addendum Correct Ans - C) Counteroffer Conga installed her family's candelabras on the wall in her dining room when she first moved in. Ten years later, when she gets ready to move, she removes the candelabras from the walls so she can take them with her. What process did Conga go through when she removed the candelabras? A) Severance B) Affixation C) Adaptation D) Annexation Correct Ans - A) Severance When a person owns a tract of earth, improvements, and the full bundle of rights associated with their property, they can be said to own: A) Land B) Real property C) Personal property D) Mineral rights Correct Ans - B) Real property Which of these is an individual with whom a license holder has no agency relationship nor fiduciary duties but to whom fairness and honesty are still required? A) Client B) Principal C) Agent D) Customer Correct Ans - D) Customer
If a tenant were to buy and install new cabinets for their kitchen, they would: A) Belong to the landlord upon expiration of the lease B) Be purchased by the landlord upon the expiration of the lease C) Be removed from the property at the expense of the tenant D) Go with tenant upon the expiration of the lease Correct Ans - A) Belong to the landlord upon expiration of the lease Which one of these actions would be illegal under Texas's Open Beach Law? A) Rudy sunbathed on the beach in front of someone else's beach house. B) Sarah bought beachfront property, and built a house several hundred feet back from the top of the dunes and vegetation. C) Quincy built a private cabana on the beach in front of his beach house. D) Thalia put up a temporary sun shelter at the high tide line, then took it home with her at the end of the day. Correct Ans - C) Quincy built a private cabana on the beach in front of his beach house. What is the term for a rejection of an offer to buy or sell made with the simultaneous substitution of a new offer? A) Counteroffer B) Responsive offer C) Terminated offer D) Alternate offer Correct Ans - A) Counteroffer Which of the following would NOT be considered real property (and would therefore be considered personal property)? A) An industrial warehouse B) A motorcycle C) A home
D) A 10-acre soybean field Correct Ans - B) A motorcycle Who manages and holds the legal title to a property on behalf of the beneficiary in a trust? A) Lessee B) Tenant C) Trustee D) Trustor Correct Ans - C) Trustee A ceiling fan, still in its original packaging and NOT attached to the ceiling, is an example of: A) Real property B) An emblement C) Personal property D) An improvement Correct Ans - C) Personal property What is an exclusive right to sell listing agreement? A) An exclusive agreement in which the listing broker receives a commission if the property is sold unless the seller brings the buyer B) An agreement that exclusively names the listing broker but pays commission to anyone who brings the buyer C) An exclusive agreement in which the listing broker receives a commission if the property is sold even if the seller brings the buyer D) An agreement that allows the listing broker exclusively to determine who purchases the property Correct Ans - C) An exclusive agreement in which the listing broker receives a commission if the property is sold even if the seller brings the buyer In which type of residential property does a resident hold no actual ownership in the property, but instead holds a proprietary lease as a stockholder?
