Principles of Real Estate 1 EXAM REVIEW-with 100% verified solutions 2024-2025, Exams of Business Fundamentals

Download Principles of Real Estate 1 EXAM REVIEW-with 100% verified solutions 2024-2025 and more Exams Business Fundamentals in PDF only on Docsity! Principles of Real Estate 1 EXAM REVIEW-with 100% verified solutions 2024-2025 Which of the following is an example of a limited common element? Parking Space A married couple buys a home for $400,000. Five years later, they sell it for $550,000. How much of their sale is taxable capital gain? $0. They get a $500,000 capital gains tax exclusion, and they made $150,000 in profit, so all of their profit is excluded from taxation. Arthur, Beatrice, Candace, Dmitri, and Evenlyn bought a property does each of them own? 20%. They share the unity of interest, they each own an equal share 1/5 or 20 percent. The following are all common types of unilateral contracts, EXCEPT Purchase Agreements Reward offers, contests, and commissions are common types of unilateral contracts that you are likely to encounter. An owner lives in a single family dwelling but only owns the building. The homeowners association owns and maintains the grounds, the pool, and the exercise room. All of the owners in the area share the common areas. What does the owner live in? A condominium Which of the following is NOT a unique characteristic of land that also sets it apart from personal property? Malleability One way land is special and separate from personal property is that it has three unique physical characteristics, inmobility, indestructibility and non homogeneity. According to what legal concept do contracts involving the sale or transfer of real estate need to be in writing? Statute of Frauds The statute of frauds that real estate contracts be in writing in order to be enforceable in court. Attachments can be natural or manmade. Those that are manmade are commonly known as what? Fixtures Manmade attachments to land are commonly known as fixtures In what kind of contract is only one of the parties obligated to perform? Unilateral A unilateral contract, where one of the contracting parties is bound to act. It is a contract made between two or more parties in which only one of those parties makes a promise or otherwise accepts an obligation An agent owes the duty of obedience to which of the following people? The client (the principal) The duties of an agent to the principal include fidelity and loyalty, and reasonable care, and competency, obedience, accounting, and disclosure. Which of these are TRELA's protected classes? Race, color, religion, sex, disability, familial status, national origin, and ancestry. Net listings and open listings are the same thing FALSE An open listing allows multiple real estate brokers (and the owners themselves) the right to sell a property. A net listing, on the other hand, dictates the broker's commission based on the difference between the listing price and sales price. In terms of scope of authority general, what are the three classifications of agency? Special, general, universal In terms of scope of authority granted, three classifications of agency are special, general, and universal. What is the name of the database that contains information on any claims made in the past five years by owners on specific properties? Comprehensive Loss Underwriting Exchange (CLUE) The database that contains information on any claims made in the past five years by owners on specific properties is called the Comprehensive Loss Underwriting Exchange (CLUE) Which of these duties is the obligation of an agent to carry out the legal and ethical instructions of their client? Obedience On the section map provided, which area is the SE 1/4 of the NE 1/4 of the S 1/2 C. is the SE 1/4 of the S 1/2. How much capital gains tax exemption is a married couple that has lived in their home for the past three years eligible for? $500,000. A married couple that has lived in a primary residence for two of the past five years is eligible for a $500,000 capital gains tax exemption. If demand for real estate falls. then: Supply will increase, lowering prices If demand for real estate falls, then supply will increase, lowering prices. The inverse is true as well. If there is more demand for real estate, then there will be less supply and prices will be higher. Which of these people would best be described as a cooperating broker? Ann brought a buyer to another broker's listing. If an individual faces civil or criminal liability, does that preclude any disciplinary action from the Texas Real Estate Commission? No, disciplinary action from the Texas Real Estate Commission does not relieve the person from civil or criminal liability. What is an exclusive right to sell listing agreement? An exclusive agreement in which the listing broker receives a commission if the property is sold even if the seller brings the buyer An exclusive right to sell agreement is an exclusive agreement in which the listing broker receives a commission if the property is sold even if the seller bring the buyer themselves. Treating everyone fairly is a good way to Avoid housing discrimination A license holder can avoid housing discrimination but using a uniform system for service that treats everyone fairly. What does the Community Reinvestment Act require of banking institutions? To meet the credit needs of the communities they operate in The Community Reinvestment Act requires banks to meet the credit needs of the neighborhoods they operate in by making loans to the people in those neighborhoods. What is gratuitous agency? When the real estate agent works for free and receives no commission When an agent is held to the obligations of an agency relationship, despite the fact that no compensation is offered or paid, they are providing gratuitous agency. A CLUE report will report will tell insurance companies about a person or property's previous claims. How does a title company establish a chain of title by looking at historical records A chain of title is established by looking at historical records. Universal federal title database is not a real thing. Requirements to become a Texas Real Estate License Holder include All choices are correct. An active broker returns a sales agent's license to the commission and they place it in an inactive status. What is the most likely explanation for what prompted these events? The sponsorship of the license holder by that broker terminated When the association of a sponsoring broker and a license holder is terminated, the broker immediately returns the sales agent's license to the commission. The commission changes the status of an unsponsored sales agent license holder to an inactive status, provided the license is not expired. Which of the following provides the BEST definition of a freehold estate? An estate with full ownership for an undetermined or unspecified period of time and the right of disposition or right to convey the interest An acre lot is how many square feet 43,560. square feet What type of ownership would a corporation most likely have? Ownership in severalty Ownership in severalty is ownership by a single person or entity. Corporations are legally people, so a single corporation would own their property in severalty. What is the main difference between how real and personal property are conveyed? Real property is conveyed by deed, personal property is conveyed with a bill of sale When are there no exemptions to the applicability of the federal fair housing law? When a real estate licensee is involved. Grandma owner property that she wants to pass on to Junior when she dies. She places it in a trust, managed by Ms. Manager. In this scenario, what term best describes Ms. Manager? Trustee If a tenant were to buy and install new cabinets for their kitchen, they would belong to the landlord upon expiration of the lease. If a tenant installs new kitchen cabinets in their apartment, generally speaking, these cabinets are considered fixtures, and thus revert to the landlords' possession when the lease agreement expires. How are married couples most likely to hold property in the state of Texas? Community Property Texas homestead laws would protect a primary residence from being seized and used as collateral by Credit card companies Texas homestead laws protect houses from general creditors, but not from mortgage or tax foreclosure. What does the term real property NOT include? Chattel Refers to an item in which ownership does not transfer with land through a conveyance instrument such a deed or will What of the following provides the BEST definition for addenda? Documents containing additional terms, information, or obligations that are attached to a contract Addenda, are documents containing additional terms, information, or obligations that are attached to a contract. An example would be Which type of listing is an agreement between a broker and an owner in which the owner retain the right to sell the property while the broker may market the property as well? Exclusive Agency How would a property owner ensure that their property is covered in the event of a flood buy a separate flood insurance policy The first 9 articles of the NAR Code of Ethics are known as the Duties to Clients and Customers The Fair Housing Act does not cover non-dwelling buildings What information does a benchmark provide that a monument does not? Elevation What does real property have that real estate does not have? A bundle of rights Which of the responsibility of the Texas Commission on Environmental Quality (TCEQ) Enforcing federal and state laws about water rights According to the Canons of Professional Ethics, a broker should never Knowingly misrepresent a property Which of the these properties can be said to be held in severalty? Ursula owns a home by herself Which of these is the increase in the value of an asset? Capital Gain A plat is used in which method of land description? Lot and block method Which of these is a protected class under the ECOA? Use of public assistance If the seller has accepted the prospective buyer's offer but has not informed the buyer of acceptance yet, can the prospective buyer still revoke their offer? Yes, A prospective buyer has the right to revoke their offer if they or their agent have not received notice of the seller's acceptance. If an applicant fulfills all requirements for licensure but has not found a sponsoring broker yet, are they able to get licensed. Yes, the applicant can receive an inactive license from the commission. What was the purpose of ECOA? To reduce credit discrimination Which of the following serves as the basis of all real estate law in the United States? The United States Constitution Which of the below most directly affects the economic scarcity of real estate? Desire for land in a certain area How does an abstract of title differ from a chain of title? Chain of title is exhaustive, abstract of title is an abbreviated history Attachments can be natural or manmade. Those that are manmade are commonly known as Fixtures Limited and General are the name of the two kinds of what? Partnership