Texas Real Estate Principles 1 (Practice Exam) Questions and Answers | Latest Version | 2025/2026 | Correct & Verified

Texas Real Estate Principles 1 (Practice Exam) Questions and Answers | Latest Version | 2025/2026 | Correct & Verified What type of lease requires tenant to pay property expenses in addition to rent? Net lease What appraisal principle states that buyers will not pay more than cost of a substitute? Principle of substitution What appraisal principle considers future benefits of ownership? Principle of anticipation What appraisal approach compares similar recently sold properties? Sales comparison approach What appraisal approach estimates value based on income production? Income approach What appraisal approach estimates value by cost to replace minus depreciation? Cost approach 2 What type of depreciation is caused by poor design or outdated features? Functional obsolescence What type of depreciation is caused by external neighborhood factors? Economic obsolescence What document secures a promissory note in Texas? Deed of trust What document states the borrower’s promise to repay a loan? Promissory note What ownership system applies to married couples in Texas? Community property What property is owned before marriage or acquired by gift or inheritance? Separate property What notice informs consumers about agency relationships in Texas? Information About Brokerage Services (IABS) What Texas law prohibits discrimination in housing based on protected classes? 3 Fair Housing Act What term describes private land-use restrictions? Deed restrictions What legal process removes a lien from title once debt is paid? Release of lien What interest remains after a loan is paid in full? Equity What body of law governs relationships between private property owners? Private law What bundle-of-rights element allows an owner to sell or give away property? Right of disposition What type of estate provides ownership with no conditions or limitations? Fee simple absolute What physical object permanently attached to land is considered real property? Fixture 4 What form of ownership gives two or more people undivided interests with no survivorship? Tenancy in common What governmental power allows land to be taken for public use with compensation? Eminent domain What governmental power allows regulation of land use for public welfare? Police power What governmental power allows property to be taxed? Taxation What governmental power allows the