THE CE SHOP PRINCIPLES OF REAL
ESTATE I EXAM REVIEW QUESTIONS
AND ANSWERS
Homestead exemptions _____ property taxes for all homeowners by protecting a
certain amount of a Texas home's value from tax. - Answer-Decrease
Which stage of the real estate cycle is considered the bottom? - Answer-Depression
According to the Uniform Electronic Transactions Act and the Uniform Real Property
Electronic Recording Act of 2005, when are electronic transactions legally enforceable?
- Answer-Both parties agree to conduct the transaction electronically
What is the purpose of licensing? - Answer-To protect the public by requiring certain
education, training, and standards of licensees
Juan has decided to invest his small inheritance in real estate. He is drawn to the fact
that he can add a building where there wasn't one previously and immediately increase
the value of his investment. Which economic characteristic of real property is this? -
Answer-Improvements
A legally competent party means that an individual has the capacity, legally and
______, to enter into a contract. - Answer-Mentally
Which of the following would be a violation of the Texas Deceptive Trade Practices—
Consumer Protection Act (DTPA)? - Answer-Misrepresenting the facts about the
reasons for a price decrease
The Recovery Trust Account should maintain a balance of at least what amount? -
Answer-$1.7 Million
Before being issued a real estate license in Texas, the candidate must submit which of
the following to TREC? - Answer-A legible set of candidates fingerprints
Dana is a licensed broker in Texas. She has one primary location from which she
conducts most of her business. However, she does have two additional branch
locations. What must be included on all branch license certificates? - Answer-The
address at which the broker's office is located
Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah
was unable to pay, so the court placed a ______ on her home. - Answer-Judgment lien
An area of 640 acres is equal to ______. - Answer-One square mile
,What does the parol evidence rule state? - Answer-In certain cases, oral evidence can
be used to support or complete an otherwise incomplete or ambiguous contract.
IRA funds distributed under the first-time home buyer program require that borrowers
use them within ___________ to acquire, build or improve a residence, and for closing
costs. - Answer-120 days
Which of these statements accurately describes finance- and housing-related
legislation? - Answer-The Fair Housing Act of 1968 prohibited discrimination in the sale,
rental, and financing of housing based on race, color, religion, or national origin.
Which federal act protects consumers from unwanted email solicitations? - Answer-
CAN-SPAM Act of 2003
Under a land trust, the owner directs a ______ to hold title to the real estate. - Answer-
Corporate fiduciary
What's the best definition of real property? - Answer-Real estate, plus all of the
interests, benefits, and rights included in ownership
You've just purchased a rural property, and the attorney at the closing tells you, "You
have a dominant estate." What does that mean to you? - Answer-You'll be using an
easement across your neighbor Jim's property.
Property owners who live on or next to water have certain rights. An example of one of
these rights includes ______. - Answer-Littoral
A Texas applicant must provide two forms of identification at the testing center. What
types of ID are acceptable? - Answer-One picture ID and one with your signature
Which of the following best describes what a listing agreement is? - Answer-A legally
binding, written contract between a property seller and a listing broker
At least 60 days prior to filing a lawsuit under DTPA, what is the consumer required to
do? - Answer-Provide a written notice to the person against whom the suit is to be filed
Which of the following forms is required by law, and is the listing agent's responsibility to
have the seller complete and sign (for property that was built prior to 1978)? - Answer-
Lead-Based Paint Addendum
In which of the following situations is it okay for a Texas broker acting as an
intermediary to disclose any confidential information about a party to the transaction? -
Answer-When it is required by law or court order
, Whose interests are protected by homeowners insurance? - Answer-The buyer and
lender
What's the term for a lender refusing to lend in a specific area, often based on the
area's minority make-up? - Answer-Redlining
Which agency enforces Title II under the Americans with Disabilities Act of 1990, when
it relates to state and local public housing, housing assistance, and housing referrals? -
Answer-Department of Housing and Urban Development
Which of the following is a legitimate reason to terminate a buyer agency agreement? -
Answer-The term of the agreement has expired.
The Recovery Trust Account exists for the benefit of whom? - Answer-The account is
established for the benefit of the public.
Robert and Sarah enter into a contract for Sarah to purchase Robert's home. Robert
decides he doesn't want to sell, and is elated when he finds out that Sarah's only 17
years old. Can Sarah force Robert to sell? - Answer-Yes, Sarah can require that Robert
fulfill the contract terms.
Zack enters into a contract to buy Olivia's home. Per the terms of the contract, Zack
must put down a $10,000 earnest money deposit and have the property inspected
within five days. In reality, he puts down a $12,000 deposit and has the property
inspected within two days. This is an example of ______. - Answer-Performance of the
contract
Which of these policies is an example of discrimination based on familial status? -
Answer-A landlord charges an extra $100 security deposit for each child living in a
property.
In the real estate market, when supply exceeds demand, it means what? - Answer-
There are more homes than buyers and prices will be lower.
Physical characteristics of land include its immobility, indestructibility, and ______. -
Answer-Uniqueness (nonhomogeneity)
What is the key difference between assignment and novation of a contract? - Answer-
Novation releases the original party from all obligations, while assignment does not.
What's a datum? - Answer-A point, surface, or line used as a reference for measuring
elevations
Which ownership type is defined by four unities: time, title, interest, and possession? -
Answer-Joint Tenancy
ESTATE I EXAM REVIEW QUESTIONS
AND ANSWERS
Homestead exemptions _____ property taxes for all homeowners by protecting a
certain amount of a Texas home's value from tax. - Answer-Decrease
Which stage of the real estate cycle is considered the bottom? - Answer-Depression
According to the Uniform Electronic Transactions Act and the Uniform Real Property
Electronic Recording Act of 2005, when are electronic transactions legally enforceable?
- Answer-Both parties agree to conduct the transaction electronically
What is the purpose of licensing? - Answer-To protect the public by requiring certain
education, training, and standards of licensees
Juan has decided to invest his small inheritance in real estate. He is drawn to the fact
that he can add a building where there wasn't one previously and immediately increase
the value of his investment. Which economic characteristic of real property is this? -
Answer-Improvements
A legally competent party means that an individual has the capacity, legally and
______, to enter into a contract. - Answer-Mentally
Which of the following would be a violation of the Texas Deceptive Trade Practices—
Consumer Protection Act (DTPA)? - Answer-Misrepresenting the facts about the
reasons for a price decrease
The Recovery Trust Account should maintain a balance of at least what amount? -
Answer-$1.7 Million
Before being issued a real estate license in Texas, the candidate must submit which of
the following to TREC? - Answer-A legible set of candidates fingerprints
Dana is a licensed broker in Texas. She has one primary location from which she
conducts most of her business. However, she does have two additional branch
locations. What must be included on all branch license certificates? - Answer-The
address at which the broker's office is located
Joshua won his lawsuit against Savannah. The judge awarded him $30,000. Savannah
was unable to pay, so the court placed a ______ on her home. - Answer-Judgment lien
An area of 640 acres is equal to ______. - Answer-One square mile
,What does the parol evidence rule state? - Answer-In certain cases, oral evidence can
be used to support or complete an otherwise incomplete or ambiguous contract.
IRA funds distributed under the first-time home buyer program require that borrowers
use them within ___________ to acquire, build or improve a residence, and for closing
costs. - Answer-120 days
Which of these statements accurately describes finance- and housing-related
legislation? - Answer-The Fair Housing Act of 1968 prohibited discrimination in the sale,
rental, and financing of housing based on race, color, religion, or national origin.
Which federal act protects consumers from unwanted email solicitations? - Answer-
CAN-SPAM Act of 2003
Under a land trust, the owner directs a ______ to hold title to the real estate. - Answer-
Corporate fiduciary
What's the best definition of real property? - Answer-Real estate, plus all of the
interests, benefits, and rights included in ownership
You've just purchased a rural property, and the attorney at the closing tells you, "You
have a dominant estate." What does that mean to you? - Answer-You'll be using an
easement across your neighbor Jim's property.
Property owners who live on or next to water have certain rights. An example of one of
these rights includes ______. - Answer-Littoral
A Texas applicant must provide two forms of identification at the testing center. What
types of ID are acceptable? - Answer-One picture ID and one with your signature
Which of the following best describes what a listing agreement is? - Answer-A legally
binding, written contract between a property seller and a listing broker
At least 60 days prior to filing a lawsuit under DTPA, what is the consumer required to
do? - Answer-Provide a written notice to the person against whom the suit is to be filed
Which of the following forms is required by law, and is the listing agent's responsibility to
have the seller complete and sign (for property that was built prior to 1978)? - Answer-
Lead-Based Paint Addendum
In which of the following situations is it okay for a Texas broker acting as an
intermediary to disclose any confidential information about a party to the transaction? -
Answer-When it is required by law or court order
, Whose interests are protected by homeowners insurance? - Answer-The buyer and
lender
What's the term for a lender refusing to lend in a specific area, often based on the
area's minority make-up? - Answer-Redlining
Which agency enforces Title II under the Americans with Disabilities Act of 1990, when
it relates to state and local public housing, housing assistance, and housing referrals? -
Answer-Department of Housing and Urban Development
Which of the following is a legitimate reason to terminate a buyer agency agreement? -
Answer-The term of the agreement has expired.
The Recovery Trust Account exists for the benefit of whom? - Answer-The account is
established for the benefit of the public.
Robert and Sarah enter into a contract for Sarah to purchase Robert's home. Robert
decides he doesn't want to sell, and is elated when he finds out that Sarah's only 17
years old. Can Sarah force Robert to sell? - Answer-Yes, Sarah can require that Robert
fulfill the contract terms.
Zack enters into a contract to buy Olivia's home. Per the terms of the contract, Zack
must put down a $10,000 earnest money deposit and have the property inspected
within five days. In reality, he puts down a $12,000 deposit and has the property
inspected within two days. This is an example of ______. - Answer-Performance of the
contract
Which of these policies is an example of discrimination based on familial status? -
Answer-A landlord charges an extra $100 security deposit for each child living in a
property.
In the real estate market, when supply exceeds demand, it means what? - Answer-
There are more homes than buyers and prices will be lower.
Physical characteristics of land include its immobility, indestructibility, and ______. -
Answer-Uniqueness (nonhomogeneity)
What is the key difference between assignment and novation of a contract? - Answer-
Novation releases the original party from all obligations, while assignment does not.
What's a datum? - Answer-A point, surface, or line used as a reference for measuring
elevations
Which ownership type is defined by four unities: time, title, interest, and possession? -
Answer-Joint Tenancy
