Texas Real Estate Exam PREP Questions and Answers 100% Solved

Texas Real Estate Exam PREP Questions and Answers 100% Solved An unlicensed assistant is showing property for her broker. Which of the following penalties would apply and to whom? Both the broker and the unlicensed assistant would be subject to fines by TREC The listing presentation went welland the seller has agreed to list with the broker. The listing agreement has not been signed but the broker has an appointment with the sell The broker must wait for the written permission to place the sign Can you rebate part of your commission to a client The license holder must have the written permission of her sponsoring broker and the party she represents. A Texas broker has received a referral of a buyer from a broker in Mississippi. The buyer has worked with the Texas broker and found a property to buy. The buyer has asked the Texas broker to supply him with a TREC contract form. The broker has provided the form to the buyer. The buyer has taken the form to his friend, the Mississippi broker, who has helped the buyer to fill in the blanks on the form and offered some negotiation tips to the buyer. The buyer has returned the form to the Texas broker. The Texas broker presented the offer to the seller and the seller has accepted the offer. The transaction has closed and the Texas broker has received a commission. Can the Texas broker share his commission with the Mississippi broker? Yes, because the Mississippi broker did not negotiate in Texas Which of the following legal documents can be prepared by a Texas real estate licensee? A contract addendum Based on SB 489, when must disclosure of representation be provided? First contact When a broker represents a party under an exclusive agreement, the broker must: Present offers to or from the party John has listed a property at 123 Main St. The seller's have not disclosed some structural defects. Although John has viewed the property he didn't detect the undisclosed defects. Bob, a licensee from another real estate company shows the listing on Main St. to a buyer- customer. Bob introduces himself to the sellers as a subagent representing them. The sellers admit the undisclosed defects to Bob and ask Bob not to mention them either. Bob agrees a Bob and his broker and the sellers, but not John or his sponsoring broker What is the difference between a broker in an intermediary position and an appointed associate under intermediary? The appointed associate can give advice and opinions to one party in the transaction, but the broker cannot give advice and opinions to any party . According to the contract, who is responsible for providing the appropriate notices for property located in a statutory tax district? The seller All of the following are found in the TREC 1-4 Family Resale Contract except: If lender required repairs exceed 10% of the price the buyer may terminate the contract If a broker accepts an earnest money deposit, when must the deposit be placed in a trust account? By the close of business of the second business day after the execution of the contract The Civil Rights Act of 1866 prohibits discrimination based on: color Which of the following advertisements would be in violation of the Federal Fair Housing Act of 1968 as it was amended in 1988? Apartment for rent: no single parents with children. A property sells after the listing expires. The broker may still be entitled to a commission if: the property is now a FSBO and is sold during the protection period to a buyer procured by the listing broker. Which of the following closings would be regulated by RESPA? condo Two brokers are discussing commissions at a social function with the intention of setting a rate for their market. After the function, they never act on their conversation. What is true? The discussion is a violation of Anti-Trust law. The Smiths purchased their home for $200,000 with an LTV of 80%. They have repaid $27,000 of their original loan amount. They have just sold the home for $229,000. What is their equity at closing? 96000 In many instances a lender will require a buyer to purchase PMI when financing the purchase of a home. What does PMI do? Insures the lender's exposure of risk, usually the top 25-30% of the loan amount. Which of the following can be used to protect a lender from loss of interest income? a prepayment penalty When does the vendee receive the deed in Contract for Deed financing? After he makes the final loan payment who is the vendee the buyer who is the vendor is the 'seller,' Where would you find PMI? On a high LTV conventional loan. A lot is sold for $100,000 with a 90% LTV. The seller has agreed to pay three discount points and an origination point for the buyer at closing. How much will the seller owe at closing? $3,600.00 What type of loan does a borrower have if the monthly payment includes principal, interest, 1/12th of the annual property taxes and 1/12th of the annual homeowner insurance premium? a budget mortgage An agreement allowing a tenant to match or better any purchase offer the landlord receives before the property will be sold to another is called: right of first refusal A new tenant has moved into a retail property. The landlord is convinced the new business will thrive in this location. What lease agreement can the landlord negotiate that would be most favorable to the landlord in this case? a percentage lease In a property manager's quarterly report to the owner, which of the following would be considered an operating expense? property maintenance/repainting When a landlord allows the property to become so run-down that the tenants are forced to leave, this is called: constructive eviction When a license holder is also a principal to the transaction, he must disclose this dual role: if asked A broker has a one-on-one relationship with a client. This is an example of: brokerage When a broker sponsors a license holder, the license holder usually remains an independent contractor. If a broker moves an independent contractor to employee status, the broker MUST: pay payroll tax A sales agent would most likely use a GRM when to help a client who: contesting property taxes on a residential property An individual has applied for credit and the application has been denied. What federal law states that the individual is now entitled to a free copy of his/her credit report? The Fair Credit Reporting Act A young couple wants to purchase a home and take title so that if one spouse dies, the other immediately becomes the sole owner of the property. They ask their agent how to do this. The agent should: talk to attorney about title Joe received payment from his title insurance company to compensate him for a defect in his title. Subsequently he was awarded a judgment against the seller, and collected the funds from the seller, to compensate him for the same defect. The title company has claimed the right to a refund from Joe. What clause in the title policy allows the title company to make this claim? subrogation A buyer who wants to be sure that he is getting good title to a property should rely on: general warranty deed At closing a seller learns that he has an unsatisfied M&M Lien on his property. This is most likely the result of: a fence built but not paid for Which of the following situations would require an appraisal? A court-ordered partition is dividing a joint tenancy broker has listed his own property for sale. Which of the following statements is true? must always disclose duel role A buyer's written offer was presented to a seller. The seller sent a written counteroffer to the buyer. The counteroffer expires at 5 pm on Friday. Which of the following is true? The seller may withdraw any time before the buyer accepts the counteroffer. A seller was unaware of the presence of asbestos on his property. The buyer's inspection has found that asbestos is present. Which of the following statements is true? there is no duty for the seller to perform asbestos abatement. CERCLA is under the administration of EPA Using the Cost Approach, determine the value of a three story building that measures 100' x 65' where replacement cost is $150 per square foot, with a lot valued at $75000 and total depreciation of $40,000. 100' x 65' x 3 stories = 19,500 sq. ft. x $150 = $2,925,000. $75,000 + $2,925,000 - $40,000 = $2,960,000. A landlord and tenant negotiate a verbal lease agreement on the phone for an 8 month term. The tenant later decides not to move in. What term best describes the lease agreement these two parties had? valid and enforceable Which of the following would be a violation of the Sherman Anti-Trust Act? An MLS service requiring a minimum commission rate for listings it accepts. An increase in interest rates will: cause the demand for rentals to rise A broker has accepted a buyer's deposit check and placed one half of the deposit in the escrow account and the other half in his operating account. He has used the funds in the operating account to pay his office expenses. The broker is guilty of: conversion When a license holder is also a principal to the transaction, he must disclose this dual role: even if the license holder only has an economic interest in the property A broker has a one-on-one relationship with a client. This is an example of: agency A sales agent would most likely use a GRM when to help a client who: is interested in purchasing a residential rental property TREC has the power to order witnesses to appear and/or produce records of documents for its investigations and hearings. This is called subpoena power. If a license holder fails to respond to a subpoena, what can TREC do? TREC can file suit with the Attorney General to enforce the subpoena. A license holder in violation of the TRELA has received a summons from TREC that a hearing will be held regarding the possible revocation or suspension of his license. The license holder fails to respond to the summons. What will TREC do? hold meeting in Austin With the knowledge and consent of her broker/employer, an unlicensed assistant is showing property to prospective buyers. What is true about this situation? Both the broker and unlicensed assistant can be fined an administrative penalty of $5,000 per day Marcos was a Texas licensed Real Estate Sales agent for some time. He then chose to become inactive and TREC has been holding his license in inactive status. He now wishes to activate the license. What will he have to do? Apply through a broker and take an 18-hour continuing education course if necessary What could cause TREC to deny an application for a Real Estate License? Failure of the applicant to successfully demonstrate honesty, integrity and trustworthiness. Which of the following actions is NOT a violation of the Texas Real Estate License Act? broker offers a guaranteed buy back of a property for a set price, if the purchaser is not happy with the investment after a two-year period of ownership Which of the following is the responsibility of the broker? The listing advertisements of the sales agents he sponsors Which of the following is true and demonstrates the difference between the role of a Broker-Intermediary and the role of a Sales Agent-Appointee? The sales agent may give advice and opinions to one party in the transaction What is required in order for a broker to act as an intermediary? The broker must have the written permission of the seller and the buyer, including information on how the broker is to be paid John has listed the property at 17 Oak St. The sellers have received and accepted an offer from the buyers. The buyers have received the survey and it shows an encroachment that the sellers did not previously disclose. The buyers are not willing to purchase the property in this condition. What action on the part of the buyers must be taken? The buyers have the number of days mentioned in the contract to address survey problems with the sellers According to the TREC One to Four Family Residential Contract, who is responsible for paying the owner policy of title insurance? The party stipulated in the contract Who is responsible for filling in the effective date of the real estate sales contract? the agent of the party accepting the final offer What TREC promulgated form should be incorporated into the contract when a buyer wants to obtain possession before the closing and funding of the transaction? buyers temporary lease When must the option fee be delivered? the buyer has 3 days to deliver the option fee to the seller or seller's agen Which statement about Texas Homestead protection is FALSE? Homestead protection will prevent foreclosure for unpaid property taxes John sold his waterfront property to some buyers and provided the Notice of Coastal Area Property. The house on the property was behind the vegetation line at the time of the sale. Several months after the sale, a hurricane caused a considerable amount of beach erosion and the structure is now seaward of the vegetation line. What is true? The state can force the removal of the structure Broker Bob has a listing contract and a buyer's representation agreement, and so is acting as intermediary in a transaction. The buyer tells Bob that if he is successful in purchasing the property, he plans to buy all the surrounding property too. What should Bob tell the seller? Nothing, as this is confidential information from the buyer A Texas broker may pay a commission to: A foreign broker who doesn't negotiate in Texas Without proper authorization, a sales agent may accept a commission directly from: His broker May has listed the property at 123 Main St. The sellers have told her that the property has 2,000 sq. ft. May has verified the square footage and entered this information correctly into the MLS. John, a license holder from another firm, shows the property to some buyer customers. He tells them that the property has 2,500 sq. ft. Who is liable for this misrepresentation? John and his broker When must representation be disclosed and in what form? Orally or in writing at first contact Who is responsible for filling in the effective date of the real estate sales contract? The broker Which of the following is NOT found in the TREC 1-4 Family Resale Contract? If lender required repairs exceed 20% of the sales price the buyer may terminate the contract Which of the following statements about multiple offers is true? A broker with multiple offers must present all offers, but there is no required order of presentation When a license holder markets his own property, he should: Inform the buyer that he is a license holder, and the owner of the property Littoral rights are ____________. A landowners lawful claim to use and enjoy the water of a large lake or ocean bordering the owned property . Riparian Rights An owner's rights in land that borders on or includes a stream, river, or lake. These rights include access to and use of the water. An appraiser requires a property to have four characteristics to have value. They are: DUST demand, utility, scarcity and transferability.