Real Estate Principles and Practices Quiz
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Questions and Answers

What may an owner place on the land to limit the use of the property, even after it's sold?

  • Deed restriction (correct)
  • Subordination agreement
  • Lis pendens
  • Charter

    • Which of these statements about fair housing for people with disabilities is true?

  • People with disabilities have priority over other renters when an accessible unit is available to lease.
  • Refusing to allow a person with a disability to make reasonable accommodations is a prohibited act. (correct)
  • Property owners/landlords are not required to make reasonable accommodations that are not free.
  • Property that is sold or rented to a person with a disability must be renovated to meet ADA standards.

    • When are listing agents no longer obligated to present offers to clients?

  • The sale has closed. (correct)
  • The licensee has been paid commission.
  • The client verbally requests it.
  • The parties have a signed contract.

    • What does the lot and block system use to develop a property's legal description?

    <p>Plat references</p> Signup and view all the answers

    What kind of contract exists after closing?

    <p>Executed</p> Signup and view all the answers

    Which of the following would be considered personal property?

    <p>Free-standing TV</p> Signup and view all the answers

    What must a buyer do to be considered as acquiring real property?

    <p>Enter into a contract and provide some form of consideration.</p> Signup and view all the answers

    How does personal property differ from real property?

    <p>Personal property can exist independently of real estate.</p> Signup and view all the answers

    What is an antitrust violation in the context of agreements between firms?

    <p>An agreement to standardize commission rates between competing firms</p> Signup and view all the answers

    What pre-licensing education is required for an initial sales agent license in Texas?

    <p>Six 30-hour courses of qualifying education</p> Signup and view all the answers

    If a minor enters into a contract, which party has the right to void it?

    <p>The party lacking legal capacity</p> Signup and view all the answers

    What is the formula for determining the cost of purchasing land?

    <p>Cost per unit multiplied by land area</p> Signup and view all the answers

    Which action constitutes a violation of the Canons of Professional Ethics and Conduct for a Texas licensee?

    <p>Preparing a written agreement that falsely states a purchase price</p> Signup and view all the answers

    Which duty involves providing clients with quality and knowledgeable service?

    <p>The duty of care</p> Signup and view all the answers

    What is NOT required for a Texas sales agent license applicant?

    <p>Completion of eight 30-hour courses</p> Signup and view all the answers

    What constitutes an agreement between individual licensees in a single firm?

    <p>Setting commission rates</p> Signup and view all the answers

    In which type of listing agreement does a seller contract with one listing agent but reserve the right to locate the buyer and only pay the listing agent if an agent locates the buyer?

    <p>Exclusive agency</p> Signup and view all the answers

    Under what circumstances can a licensee contact sellers who are under an exclusive listing agreement with another agent?

    <p>To arrange a showing to a buyer</p> Signup and view all the answers

    Which of the following is an example of an easement?

    <p>A path providing neighborhood access to a pond cuts through someone's property.</p> Signup and view all the answers

    What antitrust violation is implied when a licensee tells a potential client that all licensees in the area charge a 2% commission fee?

    <p>Price fixing</p> Signup and view all the answers

    The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) protects consumers against real estate licensees who _____.

    <p>fail to disclose material facts about properties</p> Signup and view all the answers

    Which type of listing agreement allows multiple agents to represent the seller, with no exclusive rights granted?

    <p>Open listing</p> Signup and view all the answers

    What is a key characteristic of an exclusive right-to-sell listing agreement?

    <p>Only one agent is given the exclusive right to sell the property.</p> Signup and view all the answers

    Which statement is true about easements and property use?

    <p>Easements need to be recorded in public records to be enforceable.</p> Signup and view all the answers

    What type of housing would a traveling salesperson likely prefer due to its ease of living?

    <p>Condominium, for its easy living</p> Signup and view all the answers

    Which action is considered unethical under the Texas Canons of Professional Ethics and Conduct?

    <p>A licensee doesn't show a home to potential buyers based on cultural fit</p> Signup and view all the answers

    What did HUD find in the Texas Housers vs. State of Texas case regarding disaster relief funding?

    <p>Texas was found to have violated Title VI by favoring white neighborhoods</p> Signup and view all the answers

    Which physical characteristic of land indicates that it cannot be destroyed?

    <p>Indestructibility</p> Signup and view all the answers

    What is a common unethical behavior in real estate practice as per ethical guidelines?

    <p>Failing to disclose a property's material defect</p> Signup and view all the answers

    Which behavior is an example of steering in real estate transactions?

    <p>Directing clients towards or away from certain neighborhoods based on race</p> Signup and view all the answers

    What is a key reason that distinguishes land from other types of property?

    <p>Land has no depreciation unlike improvements</p> Signup and view all the answers

    What could potentially conflict with the ethical responsibilities of a licensed real estate agent?

    <p>Prioritizing personal relationships over professional obligations</p> Signup and view all the answers

    What must sellers of single-family residential properties disclose to prospective purchasers?

    <p>Material defects not easily discoverable</p> Signup and view all the answers

    Pur autre vie applies specifically to which type of estate?

    <p>Freehold estate of inheritance</p> Signup and view all the answers

    How should a licensee respond to seller clients making requests that violate fair housing laws?

    <p>Deny the request but assure success in selling the property.</p> Signup and view all the answers

    Which scenario illustrates price fixing?

    <p>Brokerages agreeing on a standard commission rate</p> Signup and view all the answers

    What consequence may occur if brokers fail to respond to a TREC complaint in time?

    <p>They will be in violation of regulations.</p> Signup and view all the answers

    Which statement is a correct understanding of fair housing requirements for licensees?

    <p>Licensees must market to all potential buyers without discrimination.</p> Signup and view all the answers

    What does the term 'material defect' refer to in property transactions?

    <p>Major issues affecting value and safety unknown to buyers</p> Signup and view all the answers

    In the context of brokerage practices, which of the following is NOT a sign of collusion?

    <p>Establishing a fair brokerage fee across licensees</p> Signup and view all the answers

    What is the main objective of the Equal Credit Opportunity Act (ECOA)?

    <p>To prevent discrimination in lending practices</p> Signup and view all the answers

    Why is it important for a buyer to investigate easements or encroachments on a property?

    <p>They can affect the property's lot size, use, and enjoyment</p> Signup and view all the answers

    What should a licensee do if a seller makes a discriminatory request regarding a property sale?

    <p>Inform the broker and seek legal and ethical guidance</p> Signup and view all the answers

    What does group boycotting entail in the context of licensees and companies?

    <p>A group of licensees agreeing to avoid certain businesses</p> Signup and view all the answers

    Is it legal for a church in Texas to restrict its apartments for use only by its ministerial staff?

    <p>Yes, if the church operates as a non-profit</p> Signup and view all the answers

    Which of the following is an example of reasonable skill and care owed to a client?

    <p>Providing thorough market analysis before advising a client</p> Signup and view all the answers

    Why is reasonable skill and care important in real estate transactions?

    <p>It protects licensees from liability</p> Signup and view all the answers

    What duty does confidentiality impose on licensees?

    <p>To keep all client information private unless authorized</p> Signup and view all the answers

    Study Notes

    Exam Answers and Concepts

    • Question 1: The seller must provide a "Private Transfer Fee Obligation" notice.

    • Question 2: A legally competent party has the legal capacity to enter into a contract, typically meaning they are of legal age.

    • Question 3: A legal description can be found at the county recorder's office, online county offices, or through a title company.

    • Question 4: Putting clients' interests ahead of all others describes the fiduciary duty of confidentiality.

    • Question 5: A "timeshare estate" gives ownership for a specific number of weeks per year, in perpetuity.

    • Question 6: An individual entering a contract to acquire real property is considered the buyer.

    • Question 7: Deed restrictions limit property use even after a sale.

    • Question 8: People with disabilities have the right to reasonable accommodations.

    • Question 9: Listing agents are no longer obligated to present offers to clients when the parties have a signed contract.

    • Question 10: Plat references are used in the lot and block system to develop a property's legal description.

    • Question 11: An executed contract exists after closing.

    • Question 12: A free-standing TV is considered personal property (as opposed to a built-in microwave, which is real estate).

    • Question 13: A brokerage firm is a business entity and is eligible for a license managed by a designated broker.

    • Question 14: A sales agent can be either an employee or an independent contractor.

    • Question 15: The sellers are not happy with the offers they are receiving.

    • Question 16: Examples of special purpose real estate include churches, schools, and cemeteries.

    • Question 17: The National Association of REALTORS® reviews and implements the ESAC's recommendations.

    • Question 18: Riparian rights are granted to landowners whose property borders a river or stream.

    • Question 19: A contractor building a property before the completion date is an example of performance.

    • Question 20: Advertising housing to a specific group based on their race, religion, or national origin is prohibited.

    • Question 21: The maximum payment from the Recovery Trust Account is $50,000 for a single transaction.

    • Question 22: A licensee selling their own property must disclose their interest to all parties.

    • Question 23: TREC is responsible for administering the provisions of the Real Estate License Act (TRELA).

    • Question 24: Age and creed are protected classes under the NAR Code of Ethics.

    • Question 25: A section in the rectangular survey system covers 640 acres.

    • Question 26: The DRE will continue to enforce the 10-day reporting requirement for licensees.

    • Question 27: Police power grants the government the authority to act for the public good.

    • Question 28: The four types of government power are taxation, eminent domain, escheat, and police power.

    • Question 29: Impossibility of contract performance occurs when the parties can't legally or practically perform their agreed-upon actions because of external events.

    • Question 30: Federal Trade Commission Act established an agency for investigating antitrust practices.

    • Question 31: An estate at will is a leasehold estate of unspecified duration, allowing either party to terminate by notice.

    • Question 32: Minors lack contractual ability in the eyes of the law as they are not of legal age.

    • Question 33: "And/or assigns" language makes a contract assignable.

    • Question 34: An easement is the right to use another's land for a specific purpose.

    • Question 35: Any contract that reduces competition in Texas is unlawful under the Texas Free Enterprise and Antitrust Act.

    • Question 36: "Real estate" under TRELA includes any interest in real property, including leaseholds, inside or outside Texas.

    • Question 37: An exclusive agency listing allows a seller to work with multiple agents while retaining the right to sell themselves.

    • Question 38: A licensee can contact sellers under an exclusive listing agreement to arrange a showing, only with the consent of the seller and the listing agent.

    • Question 39: An example of an easement is a path that allows neighborhood access to a pond.

    • Question 40: Stating that licensees won't work for less than 2% implies a price fixing agreement.

    • Question 41: The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) protects consumers from deceptive practices in real estate.

    • Question 42: A contract for an illegal purpose is void .

    • Question 43: A fiduciary is someone placed in a position of loyalty and trust, such as a real estate licensee working with a client.

    • Question 44: Consumers usually compensate brokers via a percentage of the sale price.

    • Question 45: Assignment is the act of transferring rights and obligations in a contract.

    • Question 46: An agreement between competing firms to set a standardized commission rate is price fixing.

    • Question 47: Sales agent applicants must complete six 30-hour courses plus two 4-hour legal courses.

    • Question 48: The party lacking legal capacity (in this case a minor) can void the contract.

    • Question 49: Land cost is calculated by multiplying the land area by the cost per unit.

    • Question 50: Including the brokerage name and phone number in an advertisement is not unethical.

    • Question 51: A licensee's duty is to provide quality, knowledgeable, and prudent service, keeping in mind the trust placed in them.

    • Question 52: The purpose of the Equal Credit Opportunity Act (ECOA) is to prevent lending discrimination.

    • Question 53: A buyer wants to know about easements and encroachments to assess the property's value, size, and enjoyment.

    • Question 54: Licensees must inform their brokers of discriminatory seller requests.

    • Question 55: Group boycotting occurs when licensees agree not to do business with another company.

    • Question 56: A church renting apartments to its staff isn't discriminatory if it doesn't discriminate based on race, color, etc.

    • Question 57: A datum is the reference point for measuring elevations instead of a point of beginning.

    • Question 58: Consideration is required for a valid real estate contract.

    • Question 59: A seller's misrepresentation that invalidates the buyer's consent enables the buyer to invalidate the contract.

    • Question 60: A kickback occurs when a broker pays part of a client's commission to another person.

    • Question 61: Landlord-tenant law governs lease agreements.

    • Question 62: Market allocation occurs when competing firms agree on market territories.

    • Question 63: Partial performance occurs when a contracting party partially fulfills the terms agreed upon.

    • Question 64: The method of annexation refers to how an item is attached to the land.

    • Question 65: HUD is responsible for reporting threats of violence to fair housing law.

    • Question 66: The broker is responsible for supervising associated licensees, reviewing paperwork/advertising.

    • Question 67: Complaints about out-of-state transactions can't be filed in Texas.

    • Question 68: A municipality completes "in rem" foreclosure by obtaining title to the property.

    • Question 69: A lease agreement is a legally binding agreement between a landlord and tenant.

    • Question 70: The legal age for obtaining a Texas real estate license is 18.

    • Question 71: Townhomes and condominiums are similar because they are typically HOA-managed.

    • Question 72: A code of ethics gives ethical guidelines.

    • Question 73: Limestone is a surface right.

    • Question 74: The IABS form in Texas is used to explain agency relationships and obligations.

    • Question 75: An on-site manager of an apartment complex in Texas does not need a real estate license.

    • Question 76: A sales contract identifies the terms of a transaction between a seller and buyer.

    • Question 77: A CLUE report shows prior insurance claims on a property.

    • Question 78: A licensee agreeing to rebate a commission on a property if the buyer also lists their house is an illegal tie-in.

    • Question 79: Texas seller's disclosure laws typically apply to single-family residential properties.

    • Question 80: Pur autre vie applies to estates for the lifetime of another person.

    • Question 81: Licensees should respond to a fair housing violation in writing that shows that they were not aware of their own possible wrongdoing.

    • Question 82: Three similar brokerages establishing a standard commission rate is price fixing.

    • Question 83: Failure to respond to a TREC complaint within 14 days is a violation.

    • Question 84: A traveling salesperson likely prefers a single-family home for flexibility in location.

    • Question 85: A licensee disclosing a material defect even if requested not to is unethical.

    • Question 86: HUD determined that Texas violated fair housing laws by disproportionately allocating disaster relief funds.

    • Question 87: Indestructibility is a physical characteristic of land.

    • Question 88: A listing agreement is an employment contract between a broker and a licensee.

    • Question 89: A partial performance occurs when a seller hasn't done all the things they were contracted to do.

    • Question 90: A commercial real estate professional specializes in properties like office buildings and shopping centers

    • Question 91: A broker in Texas is a licensed individual who performs specific real estate acts.

    • Question 92: A license holder is not liable for dishonest actions of a third-party.

    • Question 93: Updates to the TREC contract require sellers to provide disclosures.

    • Question 94: A buyer's market exists when supply is high and demand is low.

    • Question 95: A townhome often has a detached garage, just like a single-family home.

    • Question 96: Uniqueness is the characteristic of land that it is not interchangeable.

    • Question 97: A listing agreement is an offer to purchase a property without any obligation to buy it.

    • Question 98: Trisha's assertion is based on the concept of procuring cause, claiming she was instrumental in finding the buyer.

    • Question 99: A legitimate reason to terminate a lease is if the agreement's term expires.

    • Question 100: A fee simple subject to a condition subsequent does not end automatically when the condition happens.

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    Description

    Test your knowledge on crucial real estate concepts including property rights, fair housing regulations, and agent duties. This quiz covers topics such as legal descriptions, contracts, and ethical standards in real estate practice. Perfect for aspiring real estate professionals and those interested in the industry.

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