Texas Principles II Exam 2024/2025 – Champions School Q&A, Verified Answers & Complete Study Guide

Texas Principles 2 Q & A - Champions School of Real Estate 1. The TREC residential contract forms are: Drafted by the Broker Lawyer Committee 2. Wrongful or criminal deception intended to result in financial or personal gain is called: fraud 3. Under the Deceptive Trade Practices Act, are defined as tangible chattels: goods 4. If a seller will continue to occupy the property for one month after the closing, the buyer and seller should: Enter Seller's Temporary Residential Lease 5. The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: 90 days 6. a seller's disclosure notice is not required: at a foreclosure sale 7. The type of law that deals with the relationship between the parties to a transaction, sales agents, and brokers are: agency laws 8. is the body of laws and regulations enacted by federal and state legislative bodies. : Statutory Laws 9. extend above the surface without limitation : air rights 10. Any man-made addition to land that is permanent, and is considered to become part of the land is known as a(n) . : improvements 11. A(n) is an entity created for the benefit of another. : trust 12. an option contract is: unilateral contract 13. is not a requirement of a valid contract. : earnest money 14. If a person has been judged to be incompetent, a contract is because the person never could enter into a contract in the first place. : void 15. The five essential elements of a valid and enforceable contract are, Consideration, Offer and Acceptance, Legal purpose, In writing and . : competent parties 16. A(n) is an agreement between two or more parties to do something or to refrain from doing something. : contract 17. When an individual owns real property, he or she is said to have a (n) in that property. : freehold estate 18. If the property violates zoning, the owners must request a , which is permitted to violate the rules. : variance 19. An example(s) of an appurtenance would be: easements 20. There is no upper limit on the value of a Texas homestead. T/F: True 21. A(n) is an area of land separating one land use from another. : buffer zone 22. The French term means a life estate that is based on the life of another. : pur autre vie 23. In a residential lease with a "right of first refusal" provision: The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else 24. A is an employment agreement between the seller and the broker. : listing agreement 25. A(n) is one that combines some of the elements of a sale with a lease. : lease- purchase agreement 26. Before closing, severe damage to or destruction of property under contract: can result in termination of the contract 27. The four major types of listing agreements are : exclusive agency, net listing, exclusive right 28. In a lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. : percentage lease 29. A(n) is a type of seller financing wherein the owner retains title to the property while the purchaser takes possession of the premises and pays on the principal. : contract for deeds 30. Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable?: stature of frauds 31. 31. If a broker receives more than one offer on a property: all must be presented to the seller unless the seller instructed the broker otherwise 32. a counteroffer is: a rejection, a new offer, able to be withdrawn prior to acceptance 33. 32. A seller choosing to receive a buyer's earnest money after the buyer defaults on a contract is an example of: liquidated damage 34. 33. The most common form of financing used by buyers is: third party financing 35. 34. The Special Provisions paragraph of the contract allows license holders to insert: factual business details statements not addressed in the contract, information for which there is no TREC-promulgated addendum, lease or mandatory form. 36. 36. An offer by a prospective purchaser can be terminated prior to acceptance due to: expiration fo a specified time period, bankruptcy of either party , a change in law that renders the contract illegal. 37. 37. A(n) is a provision in a contract that requires that a certain act or event happens for the contract to be binding on the party.: contingency 38. 38. The Lead-Based Paint Disclosure is: federal requirement for a resident property built before 1978 39. 39. The closing date specified in a contract is usually a(n )" " date.: on or before date 40. 40. In Texas, real estate contracts are subject to satisfactory inspections.: false 41. 41. A(n) to a contract is an attachment that adds or further describes the rights and duties of the parties.: addendum 42. 42. The term is synonymous with contingent.: subject to 43. Texas Veteran's Housing Assistance Program loans can be: FHA, VA, conventional 44. The least common form of mortgage financing is: selling financing 45. Real estate agents play a role that includes arranging for the pre-qualification / pre-approval of buyers. :true 46. The is the percentage of the lesser of the appraised value or sales price that the lender will loan. : loan to value ratio (LTV) 47. If the loan factor is $5.53 on a $200,000 loan, taxes are $2400/year and insurance is $1800/year, what is the monthly PITI payment? 1456 48. A is a pledge of real estate as security for the repayment of a debt. : mortgage 49. A written history of all instruments and happenings that may affect title is called: abstract of a title 50. When the title history of a parcel of land has been researched back to the original conveyance by the government, the history is said to go back to the .: Sovereignty of the soil 51. is the process by which a lender exercises its power of sale under a mortgage that is in default. : foreclosure 52. occurs when an individual dies, leaving no valid will.: interstate succession 53. A(n) description of property is a requirement for a valid deed.: legal 54. occurs when an individual acquires title from the rightful owner through hostile, actual, and continuous occupation of the land for the statutory period. : adverse possession 55. RESPA regulates closings on: 1 to 4 family residential property with federally funded financing 56. of RESPA prohibits any person who, pursuant to any agreement or understanding, gives or receives a fee or a thing of value for the referral of settlement business.: section 8 57. implements the Real Estate Settlement Procedures Act. : Regulation X 58. Ongoing expenses such as property taxes and property owner association fees that are divided between the buyer and the seller at closing are called .: Prorations 59. Rule P-53 of the Texas Department of Insurance states that Title Companies: Cannot provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single firm, Cannot provide continuing education classes unless they charge the market rate for those classes 60. A yearly tax bill is $2400 and has not been paid. The property has sold and closing is July 30th. How much will be owed at closing for taxes? (Use a 365- day year, round to the nearest dollar and the seller pays for closing day.) : $1387 61. Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to keep the property. Bill is determined to complete the purchase and acquire the property. The only default remedy in the contract that could result in Bill acquiring the property is . : specific performance 62. Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has: Engaged in unlawful practice of the law 63. The four economic characteristics of land are: scarcity, fixity, situs and . modification 64. Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for $199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offer? Joe should present the offer to the seller 65. An abstract of title is: a complete written history 66. an option is: unilateral contract 67. A seller is going to continue to occupy a property for two days after closing. In this case, the parties should use the Buyer's Temporary Residential Lease form. T/F 68. A contract in which only one party is obligated to perform is a contract. : Unilateral Contract 69. For tax prorations: if taxes are not paid at or prior to closing the buyer shall pay for the current year, If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available, The tax proration may be calculated taking into consideration any change in the exemptions that will affect the current year's taxes 70. is the right of the government to regulate and control the way land is used. : police power 71. A seller of coastal property abutting tidally influenced water must provide the: Notice Regarding Coastal Area Property 72. RESPA prohibits , which is considered an abusive practice. : Kickbacks 73. A claim, lien, charge, or liability attached to and binding real property is a(n) . : encumbrance 74. A(n) is a provision in a contract that requires that a certain act or event happens for the contract to be binding on the party.: waiver 75. At closing, the contract is::fully executed 76. FHA loans include two mortgage insurance premiums that must be paid by the borrower. They are the: UFMIP and Annual Premium 76. are changes that are made to the original contract, such as changes to the closing date or changes to the sales price, down payment, and/or the amount financed. : amendments 77. According to the Deceptive Trade Practices Act (DTPA), brokerage falls under the category of .: services 78. law is a body of law based on "common sense" and local custom.: common 79. Which kind of rights extends above the surface of property without limitation?: air rights 80. is the legal procedure whereby secured property may be sold to satisfy a borrower's unpaid promissory note. : foreclosure 81. The five essential elements of a valid and enforceable contract are, competent parties, offer and acceptance, legal purpose, in writing and . consideration 82. The SAFE Act mandated the term . Residential Mortgage Loan Originator 83. A(n) occurs when a new contract is substituted for an existing one. : novation 84. A(n) is a business venture that is owned by one individual. : sole proprietorship 85. A(n) is a listing in which the real estate broker's commission is the difference between the minimum net established by the seller and the price that the buyer is willing to pay. : net listing 86. The requirements for a valid lease are, competent parties, let and take agreement, in writing and . : Description of the properties 87. of an offer means that the accepting party does so with no change to the contract whatsoever. : acceptance 88. The ensures that all consumers are given an equal chance to obtain credit.: Equal Credit Opportunity Act 90. The formal judicial proceeding to prove the validity of a will and to distribute the assets of a decedent's estate is called: probate 91. A is a deed with no guarantees or warranties. : quitclaim deed 92. A is the borrower's unconditional promise to repay the lender. : promissory note 93. A "Section 502 Loan" is insured by the . : USDA 94. is evidence an individual has of his or her right to possess the land.: Probate 95. A(n) mortgage covers more than one piece of property. :blanket 96. Real property conveyed by will is called a . devise 97. An offer may be withdrawn at any time prior to its acceptance by the offeree (T/F) : True 98. The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and . :periodic tenancy 99. Buyers' and sellers' marital status is not required in the contract? : true 100. Which of the following is a physical characteristic of land? : indestructibility 101. Which disclosure is provided to comply with federal requirements for properties built before 1978? : Lead-Based Paint Disclosure 102. If the loan factor is $4.49 and the loan amount is $357,500, taxes are $7300/year and the insurance is $3103 per year, what is the monthly PITI payment? 2472 103. A loan assumption might be desirable because the loan assumption cost is usually less than a new loan 104. Earnest money is deposited in an escrow account when: the contract is signed by all parties and acceptance is communicated 105. Jake (Seller) and Sarah (Buyer) entered into a contract for the sale of Jake's personal residence. In the contract, Jake promised to deliver a seller's disclosure of property condition within 5 days of the effective date of the contract. Jake never delivered the disclosure as promised. Which of the following statements is true? Sarah has the right to terminate the contract and receive a refund of earnest money prior to closing (Page 24) 106. Damage or destruction of property under contract prior to closing: May result in termination of the contract 107. When a party is considering consulting an attorney for advice in a transaction an agent should: never discourage the use of an attorney