Real Estate Test 1, Real Estate Test 2, Real Estate
Test 3, Real Estate Study Questions/ 700 Q&A.
A business entity may not act as a broker unless: - Answer: The entity's designated broker is a
licensed individual broker in active status and on record as in good standing.
Desmond's property was assessed at $295,000, appraised at $315,000, listed at $329,000 and
sold for $319,000. What is the market price of Desmond's home? - Answer: $319,900
The Texas information About Brokerage Service (ABS) is best described by which of these
options? - Answer: A mandatory form that contains a full disclosure of the actual representation
agreement and is only intended for use with active clients.
A real estate license owes ALL parties at least the minimum duties of which of these following
sets of choices? - Answer: Fair dealing and honestly, loyalty, confidentiality and obedience.
Page 1 of 149
,Which of the following is NOT an acceptable advertisement for a rental property under fair
housing laws? - Answer: Quiet community for single professionals with strong English language
skills.
To be enforceable, a liquidated damages statement in a sales contract must do which of these? -
Answer: Clearly state the exact nature of damages for which the liquidated damages would be
appropriate.
A party who has paid for the option to purchase a home by a set time and a set price has what
further obligation in the contract? - Answer: Purchase the property by he agreed time and at
the agreed price.
Seraphina is buying a new home for $354,000. She has already put 20% down and owes the
balance, plus the $400 escrow fee, five months of the annual $3600 annual property taxes and
$900 annual insurance premium, as well as one week of the $280 utility bills for the month.
How much does she need to bring to the closing? - Answer: $286,100
Under TREC regulations, the prohibition of referral fees and rebates without prior approval from
the client does NOT apply to which of the following? - Answer: Compensation from settlement
companies
An escape clause establishes the conditions under which a party or parties can back out of a
contract agreement without - Answer: Breaching the contract
Determining if an item is a "fixture" on a property includes consideration of which of these? -
Answer: The intent of the installer at the time of the property's sale.
A seller's disclosure must, at a minimum, provide: - Answer: A warranty against any other claims
made on the property. or the seller's disclosure honesty and to the best of seller's knowledge.
Page 2 of 149
,Armand is the legal guardian of Seraphina while she is in recovery from major surgery following
a brain aneurysm. While in control, Armond sells Seraphina's life estate to Desmond. A month
later, Seraphina is fully recovered, livid about the sale, and seeks to cancel the agreement, but
Desmond is determined to take it to court. Which of the following BEST describes the outcome
of the situation? - Answer: ?The contract is voidable because the life estate was not subject to a
sale by Seraphina, therefore, her guardian lacked the authority to sell in the first place.
The mortgage clause that allows a borrower to separate and alienate a portion of a mortgaged
property is which of these? - Answer: Severance clause
Punitive damages are added to some judgments for what purpose? - Answer: To punish the
offender and to discourage others from offending practice.
A broker assessing exposure, hazard, peril and loss is most likely addressing issues of - Answer:
risk management
A license registration holder must repay the real estate recovery trust account the full amount
of a payment made on their behalf within how many days after the date the commission
provides notice to them? - Answer: 30 ?
Which of the following is NOT one of the criteria for determining the "highest and best use" of
real property? - Answer: Minimally Intrusive
A party requiring a specific action prior to proceeding with a contract can set that action up in
the contract as which of these? - Answer: Addenda
A rental complex valued at $873,000 with a capitalization rate of 7% has net operating income
of: - Answer: $61,110
Page 3 of 149
, The single most important item generally needed to obtain a Veterans Administration loan is
which of the following? - Answer: The certificate of eligibility
Elvira and Armand had a signed offer and acceptance completed inspections, and secured
financing when Elvira discovered that Armand was not the owner as he claimed to be, but was a
nephew of the owner by the same name. What is the effect on the contract? - Answer: It is void
The comprehensive Environmental Response, Compensation, and Liability Act was updated in
1986 by the: - Answer: CERLA
Which of the following is a unilateral contract? - Answer: Elvira paid Desmond $1,000 to give
her two weeks to decide if she will buy his home at their agreed price.
Esther is selling her home to Estelle. The home was built in 1976 and has had three owners
since. One had HIV, one was murdered in a random killing on the property, and one was a family
from the middle east who moved back there without becoming citizens here. Which of these
disclosures is required for Esther (or her agent) to provide? - Answer: The lead-based paint
disclosure because the home was built before 1978.
The standard steps in risk management are - Answer: identity, analyze, plan, track, control,
communicate
Which of these lists best represents debits generally applied to the seller's closing cost? -
Answer: ?Broker commissions, home repairs agreed in the sales contract, outstanding property
taxes or assessments, amounts credited to buyers for repairs agreed to in the sales contract,
and the payoffs of any other outstanding mortgages or liens.
Page 4 of 149
Test 3, Real Estate Study Questions/ 700 Q&A.
A business entity may not act as a broker unless: - Answer: The entity's designated broker is a
licensed individual broker in active status and on record as in good standing.
Desmond's property was assessed at $295,000, appraised at $315,000, listed at $329,000 and
sold for $319,000. What is the market price of Desmond's home? - Answer: $319,900
The Texas information About Brokerage Service (ABS) is best described by which of these
options? - Answer: A mandatory form that contains a full disclosure of the actual representation
agreement and is only intended for use with active clients.
A real estate license owes ALL parties at least the minimum duties of which of these following
sets of choices? - Answer: Fair dealing and honestly, loyalty, confidentiality and obedience.
Page 1 of 149
,Which of the following is NOT an acceptable advertisement for a rental property under fair
housing laws? - Answer: Quiet community for single professionals with strong English language
skills.
To be enforceable, a liquidated damages statement in a sales contract must do which of these? -
Answer: Clearly state the exact nature of damages for which the liquidated damages would be
appropriate.
A party who has paid for the option to purchase a home by a set time and a set price has what
further obligation in the contract? - Answer: Purchase the property by he agreed time and at
the agreed price.
Seraphina is buying a new home for $354,000. She has already put 20% down and owes the
balance, plus the $400 escrow fee, five months of the annual $3600 annual property taxes and
$900 annual insurance premium, as well as one week of the $280 utility bills for the month.
How much does she need to bring to the closing? - Answer: $286,100
Under TREC regulations, the prohibition of referral fees and rebates without prior approval from
the client does NOT apply to which of the following? - Answer: Compensation from settlement
companies
An escape clause establishes the conditions under which a party or parties can back out of a
contract agreement without - Answer: Breaching the contract
Determining if an item is a "fixture" on a property includes consideration of which of these? -
Answer: The intent of the installer at the time of the property's sale.
A seller's disclosure must, at a minimum, provide: - Answer: A warranty against any other claims
made on the property. or the seller's disclosure honesty and to the best of seller's knowledge.
Page 2 of 149
,Armand is the legal guardian of Seraphina while she is in recovery from major surgery following
a brain aneurysm. While in control, Armond sells Seraphina's life estate to Desmond. A month
later, Seraphina is fully recovered, livid about the sale, and seeks to cancel the agreement, but
Desmond is determined to take it to court. Which of the following BEST describes the outcome
of the situation? - Answer: ?The contract is voidable because the life estate was not subject to a
sale by Seraphina, therefore, her guardian lacked the authority to sell in the first place.
The mortgage clause that allows a borrower to separate and alienate a portion of a mortgaged
property is which of these? - Answer: Severance clause
Punitive damages are added to some judgments for what purpose? - Answer: To punish the
offender and to discourage others from offending practice.
A broker assessing exposure, hazard, peril and loss is most likely addressing issues of - Answer:
risk management
A license registration holder must repay the real estate recovery trust account the full amount
of a payment made on their behalf within how many days after the date the commission
provides notice to them? - Answer: 30 ?
Which of the following is NOT one of the criteria for determining the "highest and best use" of
real property? - Answer: Minimally Intrusive
A party requiring a specific action prior to proceeding with a contract can set that action up in
the contract as which of these? - Answer: Addenda
A rental complex valued at $873,000 with a capitalization rate of 7% has net operating income
of: - Answer: $61,110
Page 3 of 149
, The single most important item generally needed to obtain a Veterans Administration loan is
which of the following? - Answer: The certificate of eligibility
Elvira and Armand had a signed offer and acceptance completed inspections, and secured
financing when Elvira discovered that Armand was not the owner as he claimed to be, but was a
nephew of the owner by the same name. What is the effect on the contract? - Answer: It is void
The comprehensive Environmental Response, Compensation, and Liability Act was updated in
1986 by the: - Answer: CERLA
Which of the following is a unilateral contract? - Answer: Elvira paid Desmond $1,000 to give
her two weeks to decide if she will buy his home at their agreed price.
Esther is selling her home to Estelle. The home was built in 1976 and has had three owners
since. One had HIV, one was murdered in a random killing on the property, and one was a family
from the middle east who moved back there without becoming citizens here. Which of these
disclosures is required for Esther (or her agent) to provide? - Answer: The lead-based paint
disclosure because the home was built before 1978.
The standard steps in risk management are - Answer: identity, analyze, plan, track, control,
communicate
Which of these lists best represents debits generally applied to the seller's closing cost? -
Answer: ?Broker commissions, home repairs agreed in the sales contract, outstanding property
taxes or assessments, amounts credited to buyers for repairs agreed to in the sales contract,
and the payoffs of any other outstanding mortgages or liens.
Page 4 of 149
