REAL ESTATE PRINCIPLES EXAM 2025/2026 QUESTIONS
WITH ANSWERS RATED A+
✔✔Land and Real Estate property - ✔✔must be described in a distinguishable manner
from personal property.
✔✔4 Economic Characteristics of Land - ✔✔Scarcity
Modification
Fixity
Situs
✔✔Indestructibility or durability - ✔✔Land cannot be destroyed
✔✔Immobility - ✔✔land cannot be moved, owner must go to the land
✔✔Non-homogeneity - ✔✔no 2 parcels of land is the same.
✔✔Scarcity - ✔✔supply and demand. Shortage of what people want price goes up; less
land price increases, more land price decreases
✔✔Modification - ✔✔value is affected by man-made changes to the land itself or offsite
improvements
✔✔Fixity - ✔✔land and addition to land take a long time to pay for themselves.
✔✔Situs - ✔✔Location of property or land from and economic not geographic viewpoint
✔✔value - ✔✔fair return in goods, services or money for something exchanged. The
monetary worth of something.
✔✔Real Estate Value - ✔✔determined by personal preference which is subjective
✔✔Supply and demand - ✔✔high demand=low inventory, price increases
Low Demand=high inventory, price decreases
✔✔Supply is restricted by - ✔✔Land costs
construction
taxation
economics
building and zoning ordinances
Growth policies of cities
✔✔Demand is affected by - ✔✔Growth in employment
transportation systems
, personal preference
availability in credit
Federal Govt policy
✔✔Value is affected by - ✔✔Federal income Tax policy
supply of money
monetary policy of fed reserve
interest rates
✔✔Local economic cycles and RE values are affected by - ✔✔Availability of
employment
population trends
availability of trained workforce
local govt policy
✔✔Agency Law - ✔✔Relationship between parties to a transaction-salesperson,
brokers and others.
Level of service provided by presence or lack of agency agreement with broker
✔✔Contract Law - ✔✔License holder understands elements of a contract
Assist in creation of a valid and enforceable agreement
Understand different forms of property ownership
✔✔Common Law - ✔✔Law based on common sense and local custom
✔✔Statutory law - ✔✔Law and regulation enacted by federal and state legislation
✔✔TRELA-Texas Real Estate Licencing Act - ✔✔Protects public against unscrupulous
broker and agents
✔✔TREC Texas Real Estate Commission - ✔✔created in 1949
9 member commission, appointed by governor, serves 6 year term, 6 members are RE
brokers, 3 Members are public
✔✔Appraisal - ✔✔Providing a professional opinion of the value of real propery
✔✔RMLO's in TX are licensed through the - ✔✔Texas Dept of Savings and Mortgage
Lending
✔✔Land - ✔✔Surface of the earth extending to the center and upward above the
surface to infinity, includes natural things-trees, crops and water
✔✔Real Estate - ✔✔all that is encompassed in land, with the addition of all man-made
additions to the land, such as roads, houses and commercial buildings
WITH ANSWERS RATED A+
✔✔Land and Real Estate property - ✔✔must be described in a distinguishable manner
from personal property.
✔✔4 Economic Characteristics of Land - ✔✔Scarcity
Modification
Fixity
Situs
✔✔Indestructibility or durability - ✔✔Land cannot be destroyed
✔✔Immobility - ✔✔land cannot be moved, owner must go to the land
✔✔Non-homogeneity - ✔✔no 2 parcels of land is the same.
✔✔Scarcity - ✔✔supply and demand. Shortage of what people want price goes up; less
land price increases, more land price decreases
✔✔Modification - ✔✔value is affected by man-made changes to the land itself or offsite
improvements
✔✔Fixity - ✔✔land and addition to land take a long time to pay for themselves.
✔✔Situs - ✔✔Location of property or land from and economic not geographic viewpoint
✔✔value - ✔✔fair return in goods, services or money for something exchanged. The
monetary worth of something.
✔✔Real Estate Value - ✔✔determined by personal preference which is subjective
✔✔Supply and demand - ✔✔high demand=low inventory, price increases
Low Demand=high inventory, price decreases
✔✔Supply is restricted by - ✔✔Land costs
construction
taxation
economics
building and zoning ordinances
Growth policies of cities
✔✔Demand is affected by - ✔✔Growth in employment
transportation systems
, personal preference
availability in credit
Federal Govt policy
✔✔Value is affected by - ✔✔Federal income Tax policy
supply of money
monetary policy of fed reserve
interest rates
✔✔Local economic cycles and RE values are affected by - ✔✔Availability of
employment
population trends
availability of trained workforce
local govt policy
✔✔Agency Law - ✔✔Relationship between parties to a transaction-salesperson,
brokers and others.
Level of service provided by presence or lack of agency agreement with broker
✔✔Contract Law - ✔✔License holder understands elements of a contract
Assist in creation of a valid and enforceable agreement
Understand different forms of property ownership
✔✔Common Law - ✔✔Law based on common sense and local custom
✔✔Statutory law - ✔✔Law and regulation enacted by federal and state legislation
✔✔TRELA-Texas Real Estate Licencing Act - ✔✔Protects public against unscrupulous
broker and agents
✔✔TREC Texas Real Estate Commission - ✔✔created in 1949
9 member commission, appointed by governor, serves 6 year term, 6 members are RE
brokers, 3 Members are public
✔✔Appraisal - ✔✔Providing a professional opinion of the value of real propery
✔✔RMLO's in TX are licensed through the - ✔✔Texas Dept of Savings and Mortgage
Lending
✔✔Land - ✔✔Surface of the earth extending to the center and upward above the
surface to infinity, includes natural things-trees, crops and water
✔✔Real Estate - ✔✔all that is encompassed in land, with the addition of all man-made
additions to the land, such as roads, houses and commercial buildings
