Real Estate Exam: Principles of Real Estate 1 - Questions and Answers, Exams of Real Estate Management

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Real Estate Exam: Principles of Real Estate 1 questions

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The purpose of the TRELA is to... CORRECT ANSWER protect the public against unscrupulous brokers and salespersons. What is required to obtain a license in Texas? CORRECT ANSWER be a resident of Texas at least 18 yrs. of age at the time of application, be of good moral character, must show competency by passing the exam If the licensee pays a commission to any unlicensed person, places a sign offering a property without the written permission of the owner, sells real estate by lottery this can happen.... CORRECT ANSWER A license can be revoked or suspended by the TREC How long does a consumer have to file a complaint with TREC against a licensee? CORRECT ANSWER Four years Who promulgates real estate contract forms in Texas? CORRECT ANSWER The Broker Lawyer Committee Which economic characteristic of land describes location preference from an economic point of view? CORRECT ANSWER situs What is often considered the most important test of a fixture? CORRECT ANSWER Intentions of the parties Which of the following is an example of an encroachment? CORRECT ANSWER The neighbor's fence is on your land. PETE: police power, eminent domain (gvt. takes private land for public use), Taxation, Escheat (gvt. Takes title of land where owner has no heirs or will) CORRECT ANSWER The government's rights in land

A property description that is considered an informal reference is CORRECT ANSWER a street address. The highest priority lien against real property is CORRECT ANSWER property tax The type of ownership in which the person has the most rights is called CORRECT ANSWER fee simple Texas is a community property state. What is true about community property? CORRECT ANSWER Property inherited by one spouse can remain separate property of that spouse. When property has only one owner it is called CORRECT ANSWER severalty Property held by two or more owners with rights of survivorship is CORRECT ANSWER joint tenancy A lease with a specific starting and ending date is called CORRECT ANSWER an estate for years or tenancy for years. When the landlord pays all of the expenses of the property and then tenant pays only the rent, this is called CORRECT ANSWER a gross lease An easement can be terminated by CORRECT ANSWER merger Deeds require the signature of CORRECT ANSWER the grantor The deed that gives the buyer the greatest protection is called CORRECT ANSWER the general warranty deed

The law requiring real estate contracts to be in writing is called CORRECT ANSWER The Statute of Frauds Contracts that are signed and carried out are called CORRECT ANSWER executed When one of the parties of the contract dies, the contract is... CORRECT ANSWER binding on the heirs if possible If the parties of a contract agree to terminate the contract, it is called CORRECT ANSWER mutual rescission TREC promulgated forms are CORRECT ANSWER mandatory for licensees Where do individuals go to borrow money? CORRECT ANSWER The Primary Market Loans that meet FMNA guidelines are called CORRECT ANSWER conforming loans What is a point? CORRECT ANSWER 1% of the loan amount The pledge of real property as security for a debt is called CORRECT ANSWER a mortgage The major advantage of a Deed of Trust to a lender is CORRECT ANSWER power of sale A mortgage becomes a lien when it is CORRECT ANSWER recorded The document that is evidence of a borrower's promise to repay a loan is called a CORRECT ANSWER note

When a lender collects principal, interest, taxes, and insurance (PITI) as part of a monthly payment, this is called CORRECT ANSWER a budget loan When a buyer purchases a property and takes over the payments and liability on an existing loan it is called CORRECT ANSWER a straight assumption A loan that covers two or more pieces of property on one note is called CORRECT ANSWER a blanket loan The most common approach for the appraisal of residential properties is the CORRECT ANSWER Market Data Approach The characteristics of value of land include demand, utility, scarcity, and transferability but not this... CORRECT ANSWER taxes Using the Cost Approach, the appraiser will calculate CORRECT ANSWER land value+ building replacement cost- depreciation Regulates closings on 1-4 residential properties with federally related financing CORRECT ANSWER RESPA When lower value properties in an area cause a decline in the value of the subject property this is called CORRECT ANSWER Regression Higher value properties cause an increase in the value of the subject property is called CORRECT ANSWER Progression 1 acre= how many sq. ft.? CORRECT ANSWER 43,560 sq. ft.

tax rate x assessed value= CORRECT ANSWER Tax qualifying ratio x gross monthly income= CORRECT ANSWER Monthly PITI capitalization rate x market value= CORRECT ANSWER Net income % x total= CORRECT ANSWER Part Part divided by the total = CORRECT ANSWER % Part divided by the % = CORRECT ANSWER total