Texas Principles of Real Estate II (Final
Exam Study Guide
What is the name of the sworn statement in which the seller assures the title company (and the buyer)
that there are no liens, unpaid bills for repairs or improvements, or undisclosed defects in the title? ANS:
affidavits as to debts and liens
Tax incentives that cover the cost of energy-efficient improvements, EEMs, and Energy Star-qualified
homes are examples of: ANS: green initiatives
Which of the following borrowers would be MOST likely to use a graduated-payment mortgage? ANS:
young borrower starting their career, anticipating an income raise in the next several years
Which type of loan is exempt from RESPA? ANS: loans on vacant land
Which TILA regulation requires a disclosure statement where lenders must make certain loan facts
known to borrowers? ANS: Regulation Z
The most common formal organization of a syndicate is that of a(n): ANS: LLC
Which of the following BEST describes why RESPA was passed? ANS: to ensure meaningful disclosure of
closing costs in a real estate transaction
Property manager William hires an HVAC specialist to repair a broken air conditioner in an apartment.
This is an example of: ANS: corrective maintenance
Which of the following is TRUE? ANS: A Texas real estate license does NOT allow agents and brokers to
act as appraisers or home mortgage originators
, A handwritten will created solely by the maker (and not witnessed) is called a: ANS: holographic will
Ashley just bought a house. To purchase the house, she got a loan for $400,000 with 3 discount points.
How much did she pay for the discount points? ANS: One discount point costs 1% of the loan amount;
therefore, one discount point cost $4,000 in Ashley's case. Ashley paid $12,000 for 3 discount points.
What is the difference between actual and constructive notice? ANS: Constructive notice is the
assumption that a diligent individual can search the public record to gain knowledge; actual notice is
direct or first-hand knowledge.
The investment strategy of taking on debt in order to realize a greater return is known as: ANS:
Leverage
What is an easement by prescription? ANS: An easement by prescription is granted after the dominant
estate has used the property in a hostile, continuous, and open manner for a statutorily prescribed
number of years. This type of easement is also called a prescriptive easement.
A new $350,000 home is being built in a neighborhood of mostly $200,000 homes. Although the home
has many updates and is in better condition than the surrounding houses, its value is significantly less
than the price.
Which value principle of appraisal explains this? ANS: principle of regression, which states that a subject
property situated in the midst of lower-value homes will experience a downward pull on its own value.
What is investment gain? ANS: Investment gain has to do with the increase in a property's value due to
active and purposeful development of a property.
How many feet are in a mile? ANS: 5,280 feet
What is a quitclaim deed? ANS: A quitclaim deed provides the grantee with the least protection of any
deed, while putting the least liability on the grantor. It carries no covenants nor warranties and conveys
only such interest that the grantor may have when the deed is delivered.
Exam Study Guide
What is the name of the sworn statement in which the seller assures the title company (and the buyer)
that there are no liens, unpaid bills for repairs or improvements, or undisclosed defects in the title? ANS:
affidavits as to debts and liens
Tax incentives that cover the cost of energy-efficient improvements, EEMs, and Energy Star-qualified
homes are examples of: ANS: green initiatives
Which of the following borrowers would be MOST likely to use a graduated-payment mortgage? ANS:
young borrower starting their career, anticipating an income raise in the next several years
Which type of loan is exempt from RESPA? ANS: loans on vacant land
Which TILA regulation requires a disclosure statement where lenders must make certain loan facts
known to borrowers? ANS: Regulation Z
The most common formal organization of a syndicate is that of a(n): ANS: LLC
Which of the following BEST describes why RESPA was passed? ANS: to ensure meaningful disclosure of
closing costs in a real estate transaction
Property manager William hires an HVAC specialist to repair a broken air conditioner in an apartment.
This is an example of: ANS: corrective maintenance
Which of the following is TRUE? ANS: A Texas real estate license does NOT allow agents and brokers to
act as appraisers or home mortgage originators
, A handwritten will created solely by the maker (and not witnessed) is called a: ANS: holographic will
Ashley just bought a house. To purchase the house, she got a loan for $400,000 with 3 discount points.
How much did she pay for the discount points? ANS: One discount point costs 1% of the loan amount;
therefore, one discount point cost $4,000 in Ashley's case. Ashley paid $12,000 for 3 discount points.
What is the difference between actual and constructive notice? ANS: Constructive notice is the
assumption that a diligent individual can search the public record to gain knowledge; actual notice is
direct or first-hand knowledge.
The investment strategy of taking on debt in order to realize a greater return is known as: ANS:
Leverage
What is an easement by prescription? ANS: An easement by prescription is granted after the dominant
estate has used the property in a hostile, continuous, and open manner for a statutorily prescribed
number of years. This type of easement is also called a prescriptive easement.
A new $350,000 home is being built in a neighborhood of mostly $200,000 homes. Although the home
has many updates and is in better condition than the surrounding houses, its value is significantly less
than the price.
Which value principle of appraisal explains this? ANS: principle of regression, which states that a subject
property situated in the midst of lower-value homes will experience a downward pull on its own value.
What is investment gain? ANS: Investment gain has to do with the increase in a property's value due to
active and purposeful development of a property.
How many feet are in a mile? ANS: 5,280 feet
What is a quitclaim deed? ANS: A quitclaim deed provides the grantee with the least protection of any
deed, while putting the least liability on the grantor. It carries no covenants nor warranties and conveys
only such interest that the grantor may have when the deed is delivered.
