TEXAS REAL ESTATE EXAM; STATE PORTION |
COMPLETE QUESTIONS AND 100% VERIFIED
ANSWERS | 2026 UPDATE | LATEST VERSION
• real property -✓✓ the tangible real estate and intangible rights associated with the
ownership of real estate
-transfers by deed or will
• personal property -✓✓ a right or interest in things of a temporary or movable nature;
anything not classed as real property (chattel, personalty)
-transfers by a bill of state
• fixture -✓✓ personal property that has been attached in such a way as to make it real
property
-"installed" often indicates permanent attachment
-annexation: the process of attaching
-severed: real property becoming personal property
• trade fixture -✓✓ objects affixed to leased property that are owned by and necessary
for the tenant's trade or business
-accession: acquiring property if trade fixtures are not removed prior to the termination
of the lease
• legal land description methods -✓✓ metes and bounds, the rectangular survey system,
lot-block-tract system, monuments
• physical characteristics of land (DUI) -✓✓ -durability
-uniqueness
-immobility
• economic characteristics of land (SAFE) -✓✓ -situs
-alteration
-fixity
-economic scarcity
• encumbrance -✓✓ any claim or liability attached to real property that may lessen the
owner's bundle of rights or the value of the property
-lien, claim, liability, judgment, encroachment, lease, easement, deed restriction, etc.
-release is the best way to get rid of it
• lien -✓✓ a charge against property as security for a debt
,• voluntary lien -✓✓ when a person takes actions that places a lien on his or her own
property
-example: taking out a mortgage or home improvement loan
• involuntary lien -✓✓ property owner doesn't take any action to initiate them
-created by law
-can be statutory or equitable
-statutory: federal tax liens, ad valorem tax liens, judgement liens
-equitable: arise out of common law and include seller (vendor) or buyer (vendee) liens
• encroachment -✓✓ a physical intrusion on someone else's property without direct
permission
• deed restrictions (CC&R's) -✓✓ sets limits on how the property may be used by the
owner (covenants, conditions, & restrictions)
-created by the grantor
• easement -✓✓ a right to use part or all of another individual's land or property for a
specific purpose and length of time
• estate -✓✓ an interest in real property
• freehold estate -✓✓ the property owner has actual ownership and possession of the
land, which lasts for an unspecified period of time
• statutory estate -✓✓ created by law
-community property & homestead in Texas
• forms of ownership -✓✓ -individual ownership
-co-ownership
-held in trust
• types of co-ownership -✓✓ -tenancy in common
-joint tenancy
-community property
-partnerships
• held in trust -✓✓ a property is held by one party for the benefit of another
• police power -✓✓ power given to a municipality to regulate and control the character
and use of property for the health, safety and general welfare ofthe public
-most common example: zoning
, • eminent domain -✓✓ the power of the government to take private property from an
owner at all times
-condemnation: the process of taking private property
• property taxes -✓✓ "ad valorem" taxes (according to value)
-unpaid taxes create automatic lien (highest priority) on the property
• special assessment -✓✓ taxes levied on property to pay for public improvements
• escheat -✓✓ if an individual dies without a will or surviving spouse, their property will
pass to the state
• water rights -✓✓ -riparian rights: flowing water
-littoral rights: lakes or oceans
-transferred by deed or conveyance
• market value -✓✓ the price a willing seller will sell for, and the price a willing buyer will
pay, when neither is acting under exceptional pressure
• characteristics of value (DUST) -✓✓ -demand
-utility
-scarcity
-transferability
• Comparative Market Analysis (CMA) -✓✓ an informal system for establishing the value
of real property which works by comparing the prices of recently sold, pending, and
currently-for-sale homes that are similar in size and features to the subject property
• appraisal -✓✓ an estimate of present value
-an opinion
-appraisers most often asked to determine market value
• approaches to appraisal -✓✓ -market or sales comparison approach
-income approach
-cost approach
• market or sales comparison approach -✓✓ comparisons with known sales in the same
area
• income approach -✓✓ property value = net operating income / capitalization rate (rate
of return)
• cost approach -✓✓ value = land value + building replacement cost - depreciation
COMPLETE QUESTIONS AND 100% VERIFIED
ANSWERS | 2026 UPDATE | LATEST VERSION
• real property -✓✓ the tangible real estate and intangible rights associated with the
ownership of real estate
-transfers by deed or will
• personal property -✓✓ a right or interest in things of a temporary or movable nature;
anything not classed as real property (chattel, personalty)
-transfers by a bill of state
• fixture -✓✓ personal property that has been attached in such a way as to make it real
property
-"installed" often indicates permanent attachment
-annexation: the process of attaching
-severed: real property becoming personal property
• trade fixture -✓✓ objects affixed to leased property that are owned by and necessary
for the tenant's trade or business
-accession: acquiring property if trade fixtures are not removed prior to the termination
of the lease
• legal land description methods -✓✓ metes and bounds, the rectangular survey system,
lot-block-tract system, monuments
• physical characteristics of land (DUI) -✓✓ -durability
-uniqueness
-immobility
• economic characteristics of land (SAFE) -✓✓ -situs
-alteration
-fixity
-economic scarcity
• encumbrance -✓✓ any claim or liability attached to real property that may lessen the
owner's bundle of rights or the value of the property
-lien, claim, liability, judgment, encroachment, lease, easement, deed restriction, etc.
-release is the best way to get rid of it
• lien -✓✓ a charge against property as security for a debt
,• voluntary lien -✓✓ when a person takes actions that places a lien on his or her own
property
-example: taking out a mortgage or home improvement loan
• involuntary lien -✓✓ property owner doesn't take any action to initiate them
-created by law
-can be statutory or equitable
-statutory: federal tax liens, ad valorem tax liens, judgement liens
-equitable: arise out of common law and include seller (vendor) or buyer (vendee) liens
• encroachment -✓✓ a physical intrusion on someone else's property without direct
permission
• deed restrictions (CC&R's) -✓✓ sets limits on how the property may be used by the
owner (covenants, conditions, & restrictions)
-created by the grantor
• easement -✓✓ a right to use part or all of another individual's land or property for a
specific purpose and length of time
• estate -✓✓ an interest in real property
• freehold estate -✓✓ the property owner has actual ownership and possession of the
land, which lasts for an unspecified period of time
• statutory estate -✓✓ created by law
-community property & homestead in Texas
• forms of ownership -✓✓ -individual ownership
-co-ownership
-held in trust
• types of co-ownership -✓✓ -tenancy in common
-joint tenancy
-community property
-partnerships
• held in trust -✓✓ a property is held by one party for the benefit of another
• police power -✓✓ power given to a municipality to regulate and control the character
and use of property for the health, safety and general welfare ofthe public
-most common example: zoning
, • eminent domain -✓✓ the power of the government to take private property from an
owner at all times
-condemnation: the process of taking private property
• property taxes -✓✓ "ad valorem" taxes (according to value)
-unpaid taxes create automatic lien (highest priority) on the property
• special assessment -✓✓ taxes levied on property to pay for public improvements
• escheat -✓✓ if an individual dies without a will or surviving spouse, their property will
pass to the state
• water rights -✓✓ -riparian rights: flowing water
-littoral rights: lakes or oceans
-transferred by deed or conveyance
• market value -✓✓ the price a willing seller will sell for, and the price a willing buyer will
pay, when neither is acting under exceptional pressure
• characteristics of value (DUST) -✓✓ -demand
-utility
-scarcity
-transferability
• Comparative Market Analysis (CMA) -✓✓ an informal system for establishing the value
of real property which works by comparing the prices of recently sold, pending, and
currently-for-sale homes that are similar in size and features to the subject property
• appraisal -✓✓ an estimate of present value
-an opinion
-appraisers most often asked to determine market value
• approaches to appraisal -✓✓ -market or sales comparison approach
-income approach
-cost approach
• market or sales comparison approach -✓✓ comparisons with known sales in the same
area
• income approach -✓✓ property value = net operating income / capitalization rate (rate
of return)
• cost approach -✓✓ value = land value + building replacement cost - depreciation
