PRINCIPLES OF REAL ESTATE 2
(TEXAS)CORRECT QUESTIONS &
ANSWERS
Appraiser must be aware of? - ANSWER market cycles economic force political actions
The principle of appraisal that states "value is influenced by the cost of acquiring a
comparable replacement" is: - ANSWER principle of substitution
The presence of a higher-priced property in an area causing an increase in the value of
the surrounding properties is an example of the ________ - ANSWER principle of
progression
The appraisal method most commonly used as the best indicator of value for existing
properties is the - ANSWER Sales Comparison Approach
2. Buyers agent has a better understanding of the buyer's ability to pay.
3. The buyers agent can avoid showing properties that buyer can't afford
The secondary market is funded by.... - ANSWER investors
The type of loan most likely to contain a release clause, allowing the borrower to obtain
partial releases of specific lots by making required lump sum payments is: - ANSWER
Blanket mortgage
The consummation of a real estate transaction in which all the appropriate documents
are signed and the proceeds of the loan are disbursed is known as... - ANSWER closing
Authority for cleanup of hazardous substances under CERCLA is granted to all of the
following, EXCEPT: - ANSWER Property owners' associations is NOT
Interstate Land Sales Full Disclosure Act provides for.... - ANSWER The act was
passed to protect consumers from fraud in the sale or lease of land
the right of Government to take private property for public use is what? - ANSWER
eminent domain
One of the rights that the US Government does NOT retain in land is.... - ANSWER
Allodial
The Government right in land that includes the right to regulate and control the way land
is used.... - ANSWER Police Power
, When a landowner sues the Government in order to force it to buy his or her land, it
is........ - ANSWER Inverse Condemnation
A Residential Mortgage Loan (RMLO) must be licensed with...... - ANSWER Texas
Department of Savings &Mortgage Lending
When a lending institution becomes the owner of a property through foreclosure, the
property becomes an asset of the company and is classified as: - ANSWER Real Estate
Owned (REO)
A sponsoring broker must: - ANSWER 1.Must advise a sales agent in writing of the
scope of the sales agent's authorized activities under License act
2.Maintain written policies to ensure the competency of a supervised sales agent,
3.Require that sales agents are adequately trained in the area in which they practice,
and recieved educational instruciton.
A Real Estate Investment Syndicate may be organized a....... - ANSWER limited or
general partnership, or a corporation
Some of the tax advantages of investing in real estate are: - ANSWER 1.Tax-sheltered
income
2.Favorable capital gains tax treatment
3. Deferred taxation on exchanges
The increase in the value of a parcel due to market forces is...... - ANSWER Passive
Appreciation
Personal advantages for investing real estate are....... - ANSWER 1. A hedge against
inflation
2. A higher than average rate of return
3. The ability to leverage (use borrowed money to make money)
The two largest issuers of REMICs are: - ANSWER Fannie Mae and Freddie Mac
What is NOT required of a Valid Lease? - ANSWER Recording!
The TREC buyer and seller temporary lease agreements are for periods: - ANSWER 90
days or less
A lease for a period of more than one year must be in writing to comply with the _____ -
ANSWER Statute of Frauds
An agreement that allows a tenant the right to match or better any offer the landlord
may receive on the property before the property will be sold to someone else.... -
ANSWER Right of First Refusal
(TEXAS)CORRECT QUESTIONS &
ANSWERS
Appraiser must be aware of? - ANSWER market cycles economic force political actions
The principle of appraisal that states "value is influenced by the cost of acquiring a
comparable replacement" is: - ANSWER principle of substitution
The presence of a higher-priced property in an area causing an increase in the value of
the surrounding properties is an example of the ________ - ANSWER principle of
progression
The appraisal method most commonly used as the best indicator of value for existing
properties is the - ANSWER Sales Comparison Approach
2. Buyers agent has a better understanding of the buyer's ability to pay.
3. The buyers agent can avoid showing properties that buyer can't afford
The secondary market is funded by.... - ANSWER investors
The type of loan most likely to contain a release clause, allowing the borrower to obtain
partial releases of specific lots by making required lump sum payments is: - ANSWER
Blanket mortgage
The consummation of a real estate transaction in which all the appropriate documents
are signed and the proceeds of the loan are disbursed is known as... - ANSWER closing
Authority for cleanup of hazardous substances under CERCLA is granted to all of the
following, EXCEPT: - ANSWER Property owners' associations is NOT
Interstate Land Sales Full Disclosure Act provides for.... - ANSWER The act was
passed to protect consumers from fraud in the sale or lease of land
the right of Government to take private property for public use is what? - ANSWER
eminent domain
One of the rights that the US Government does NOT retain in land is.... - ANSWER
Allodial
The Government right in land that includes the right to regulate and control the way land
is used.... - ANSWER Police Power
, When a landowner sues the Government in order to force it to buy his or her land, it
is........ - ANSWER Inverse Condemnation
A Residential Mortgage Loan (RMLO) must be licensed with...... - ANSWER Texas
Department of Savings &Mortgage Lending
When a lending institution becomes the owner of a property through foreclosure, the
property becomes an asset of the company and is classified as: - ANSWER Real Estate
Owned (REO)
A sponsoring broker must: - ANSWER 1.Must advise a sales agent in writing of the
scope of the sales agent's authorized activities under License act
2.Maintain written policies to ensure the competency of a supervised sales agent,
3.Require that sales agents are adequately trained in the area in which they practice,
and recieved educational instruciton.
A Real Estate Investment Syndicate may be organized a....... - ANSWER limited or
general partnership, or a corporation
Some of the tax advantages of investing in real estate are: - ANSWER 1.Tax-sheltered
income
2.Favorable capital gains tax treatment
3. Deferred taxation on exchanges
The increase in the value of a parcel due to market forces is...... - ANSWER Passive
Appreciation
Personal advantages for investing real estate are....... - ANSWER 1. A hedge against
inflation
2. A higher than average rate of return
3. The ability to leverage (use borrowed money to make money)
The two largest issuers of REMICs are: - ANSWER Fannie Mae and Freddie Mac
What is NOT required of a Valid Lease? - ANSWER Recording!
The TREC buyer and seller temporary lease agreements are for periods: - ANSWER 90
days or less
A lease for a period of more than one year must be in writing to comply with the _____ -
ANSWER Statute of Frauds
An agreement that allows a tenant the right to match or better any offer the landlord
may receive on the property before the property will be sold to someone else.... -
ANSWER Right of First Refusal
