Principles of Real Estate 1 Study Guide
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Questions and Answers

What type of damage does Windstorm Insurance specifically cover?

  • Earthquake damage
  • Flood damage
  • Wind and hail damage (correct)
  • Fire damage

Who underwrites Windstorm Insurance in Texas?

  • Federal Insurance Administration
  • Private insurance companies
  • The Texas Department of Insurance
  • Texas Windstorm Insurance Association (TWIA) (correct)

Windstorm Insurance is primarily designed for properties located in which region?

  • Mountain areas
  • Urban city centers
  • Along the gulf coast (correct)
  • The desert region

Which of the following is NOT covered by Windstorm Insurance?

<p>Water damage from flooding (C)</p> Signup and view all the answers

What is the main purpose of Windstorm Insurance?

<p>To protect properties from wind and hail damage (B)</p> Signup and view all the answers

What is the primary purpose of a monument in a metes and bounds survey?

<p>To serve as a reference for the point of beginning (D)</p> Signup and view all the answers

Which legal description method is most commonly used in residential subdivisions?

<p>Lot and Block (A)</p> Signup and view all the answers

What is the primary obligation of a real estate broker or sales agent regarding integrity?

<p>To exercise prudence and caution (C)</p> Signup and view all the answers

What happens if an amount is paid on your behalf regarding your license?

<p>Your license can be revoked or suspended. (B)</p> Signup and view all the answers

What do covenants, conditions, and restrictions (CC&Rs) represent?

<p>Private agreements regarding property use (C)</p> Signup and view all the answers

Misrepresentation by acts of omission refers to which of the following?

<p>Failing to disclose critical information (C)</p> Signup and view all the answers

What must occur before a revoked or suspended license can be reissued?

<p>The account must be repaid in full with interest. (D)</p> Signup and view all the answers

Which system overlays a grid of vertical and horizontal lines onto land for property descriptions?

<p>Government Survey System (C)</p> Signup and view all the answers

Which of the following statements is NOT aligned with the integrity obligation of a license holder?

<p>Exaggerating property value to attract buyers (B)</p> Signup and view all the answers

How much does each applicant for licensure contribute to the Trust Account?

<p>$10 (D)</p> Signup and view all the answers

What does exercising integrity specifically help to avoid for a real estate agent?

<p>Misrepresentation through omission or commission (B)</p> Signup and view all the answers

What is a recorded plat?

<p>The design and layout of a new subdivision (B)</p> Signup and view all the answers

Which of the following statements is incorrect regarding license payment issues?

<p>License issues will resolve without any payment. (B)</p> Signup and view all the answers

In the context of a real estate agent's responsibilities, the term 'prudence' most closely means?

<p>Being cautious and careful in decision-making (B)</p> Signup and view all the answers

What is a consequence of having an account paid on your behalf?

<p>Your license may be suspended until repayment is made. (D)</p> Signup and view all the answers

Which of the following roles is NOT typically considered a real estate sales agent?

<p>A property investor buying real estate (C)</p> Signup and view all the answers

Which of the following activities is NOT associated with the functions of a real estate sales agent?

<p>Actively managing rental properties (D)</p> Signup and view all the answers

What common feature do auctioneers and real estate sales agents share?

<p>Both sell properties for a commission (B)</p> Signup and view all the answers

Which of the following best defines the role of an apartment locator?

<p>An agent who assists clients in finding rental apartments (B)</p> Signup and view all the answers

Which of the following terms encompasses the broadest range of activities related to real estate?

<p>Buying options, locating, and assisting in property transactions (D)</p> Signup and view all the answers

What is the definition of procuring cause of sale?

<p>An individual who brings about the completion of a contract through uninterrupted activities (B)</p> Signup and view all the answers

Which statement most accurately defines the Deceptive Trade Practices Act?

<p>A Texas law protecting consumers from misleading practices (A)</p> Signup and view all the answers

What characterizes the practice of puffing in marketing?

<p>Employing subjective opinions and exaggerated claims (C)</p> Signup and view all the answers

Which of the following statements about mold is true?

<p>Mold is a form of fungi that can exist both indoors and outdoors (A)</p> Signup and view all the answers

Which of the following best describes a common misconception about puffing?

<p>Puffing is acceptable as it does not constitute misrepresentation (C)</p> Signup and view all the answers

Flashcards

Real Estate Sales Agent

A person who finds and helps clients buy, sell, rent, or lease properties.

Apartment Locator

A person who helps clients buy, sell, or rent properties for a fee.

Auctioneer

A person who helps clients buy, sell, or rent properties for a fee.

Real Estate Attorney

A lawyer who helps clients with real estate transactions and may share a commission with a real estate agent.

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Real Estate Professional

Any person who acts as an intermediary in real estate transactions, including buying, selling, renting, leasing, or appraising properties.

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License Revocation

Your drivers license can be taken away if someone else pays your licensing fees.

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License Suspension

A temporary pause of your driving privileges.

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Repaying the Account

Paying back the amount owed, plus interest.

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Trust Account

A fund used to help people who have lost their license for unpaid fees.

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Applicant Contribution

Each person applying for a license contributes to the Trust Account.

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Windstorm Insurance

Insurance specifically designed to cover damage caused by wind and hail in Texas.

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Texas Windstorm Insurance Association (TWIA)

The organization in Texas responsible for providing windstorm insurance coverage.

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Texas Gulf Coast

The geographic region in Texas where windstorm insurance is most commonly purchased.

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Wind and Hail Damage

Specific types of damage covered by windstorm insurance.

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Properties Along the Gulf Coast

Types of properties typically insured under windstorm insurance.

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Integrity in Real Estate

A real estate broker or sales agent must show honesty and ethical behavior when fulfilling their duties.

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Prudence and Caution

Being careful and cautious to prevent making false statements about a property, either intentionally or unintentionally.

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Misrepresentation by Omission

Not providing all the necessary information about a property, intentionally or unintentionally.

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Misrepresentation by Commission

Making false statements about a property, either intentionally or unintentionally.

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Avoiding Misrepresentation

A real estate professional must avoid making false statements about a property, whether by neglecting to provide information or by actively making false claims.

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Procuring cause of sale

The person directly responsible for a contract being finalized, through a continuous chain of actions.

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Deceptive Trade Practices Act

A Texas law protecting consumers from unfair business practices.

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Puffing

Marketing that uses subjective opinions and exaggerated claims, but not outright lies.

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Mold

A type of fungus found both inside and outside.

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Metes and Bounds

A legal description of land using terminal points and angles, starting with a specified point on the ground. This is the most common method for legal descriptions.

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Monument

A permanent marker placed by a surveyor to define a starting point in a metes and bounds survey.

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Lot and Block

A legal description system that uses a recorded map or plat to define property. It's common for residential areas.

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Government Survey System

A type of legal description that uses a grid system overlaid on land to define property. It was established by Congress in 1785.

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Deed Restrictions

Restrictions placed on land use in a deed, often found in subdivisions, that are agreements between property owners.

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Study Notes

Principles of Real Estate 1 Study Guide

  • Brokerage: Oversees the needs of parties in real estate transactions, ensuring completion.
  • Appraisal: Providing a professional opinion on the value of real property.
  • Appraiser: Licensed/certified individual determining real property value.
  • Mortgage Lending: Providing funds for real estate purchases, secured by the property.
  • Property Management: Managing residential/commercial property for investors.
  • Property Manager Responsibilities: Day-to-day operations, maintenance, tenant relations, and account keeping.
  • Apartment Locator: Locating units for tenants in multi-family complexes.
  • Home Inspection: Providing a limited visual inspection of a property.
  • Real Estate Development: Acquiring land for residential/commercial projects.
  • Petroleum Landman: Oil/gas company employee handling title work for mineral ownership.
  • Benefits of Homeownership: Security, investment, occupancy, and tax benefits.
  • Physical Characteristics of Land: Indestructible, immobile, and nonhomogeneous.
  • Economic Characteristics of Land: Scarcity, modification, fixity, and situs.
  • Supply and Demand: An economic relationship of quantity of a commodity.
  • Demand: Affected by credit availability, personal preferences, and employment growth.
  • Common Law: Body of law based on English common sense and local customs.
  • Statutory Law: Enacted by federal/state legislative bodies.
  • Texas Real Estate License Act: Passed in 1939 to protect the public against unscrupulous brokers/sales agents in real estate transactions.
  • Texas Real Estate Commission: Nine-member commission created in 1949 to carry out licensing act provisions.
  • Land: Surface of Earth, downward to center, and upward to infinity, including natural elements.
  • Bundle of Rights: Rights pertaining to land ownership, including improvements.
  • Real Property: Physical real estate plus associated rights.
  • Improvements: Any permanent man-made addition to the land.
  • Emblements: Annual crops produced with labor, considered personal property.
  • Subsurface Rights: Rights to resources like oil, gas, and minerals.
  • Fixtures: Personal property becoming part of real property due to attachment.
  • Air Rights: Rights above the surface, which can be leased, sold, or mortgaged.
  • Severance: Process of real property becoming personal property.
  • Wind Rights: Right to utilize wind above a property, used to generate energy.
  • Personal Property: Movable items, not considered part of the land.
  • Allodial System: Land owned privately by individuals.
  • Police Power: Government's right to regulate land use (most commonly through zoning).
  • Eminent Domain: Government's right to take private land for public use.
  • Taxation: Government's right to tax real property.
  • Escheat: Process where government takes ownership of property if owner dies with no will and no heirs.
  • Freehold Estates: Fee simple, ownership with most rights in land.
  • Leasehold Estates: Land interests less than freehold estates, such as estates for years, periodic estates, and estates at will.
  • Single Family Home: Independent, non-attached dwelling.
  • Condominium: Multi-unit complex with individual ownership of units and shared common areas.
  • Cooperative: Buildings owned by a corporation, with occupants owning shares in the corporation.
  • Townhome: Distinct living units with shared walls.
  • Mixed-Use Development: Buildings combining various uses (residential, commercial, retail).
  • Timeshare: Right to occupy a property for a specified period.
  • Capital Gain: Profit on the sale of an asset.
  • Equity: Market value of property less outstanding debt.
  • Homeowners Insurance: Contract covering structure, contents, and liability.
  • Comprehensive Loss Underwriting Exchange (CLUE): Claims history database for insurance.
  • Windstorm Insurance: Insurance for wind and hail damage on properties.
  • Flood Insurance: Insurance for flood damage (often not included in standard homeowners insurance).

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Principles of Real Estate 1 Study Guide PDF

Description

Explore the essential concepts of real estate in this study guide. From understanding brokerage and appraisal to property management and mortgage lending, this quiz covers critical aspects that every real estate professional should know. Prepare for your exam and enhance your knowledge in this dynamic field.

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