Practice Exam PDF

Practice Exam Your score: 77% You have passed the exam. Passing score: 70.0 SCORING BREAKDOWN Correct: 77/100 Incorrect: 23/100...

Practice Exam Your score: 77% You have passed the exam. Passing score: 70.0 SCORING BREAKDOWN Correct: 77/100 Incorrect: 23/100 Review answers below Question 1 The seller of property that may be subject to a private transfer fee must provide the prospective buyer with which written notice? Addendum for Property Subject to Mandatory Membership in Property Owners Association Notice of Additional Tax Liability Notice of Obligations Related to Public Improvement District Private Transfer Fee Obligation The Private Transfer Fee Obligation notice notifies a prospective buyer that the property may be subject to a private transfer fee. Question 2 A legally competent party means that an individual has the capacity, legally and ______, to enter into a contract. Financially  Mentally Morally Purposefully For someone to be considered legally competent, that person must have the capacity, legally and mentally, to enter into a contract. This means, among other requirements, that the person is of majority age. Question 3 Where might a legal description be found? At the county recorder's office or online county offices, or through a title company. Only at the county recorder's office Only at the registry of deeds Only through the title company A legal description may be found at the county recorder's office, or online county offices, or through a title company. Question 4 Putting clients' interests ahead of all others describes which fiduciary duty? Confidentiality Disclosure  Loyalty Reasonable skill and care This is a description of the fiduciary duty of loyalty. Question 5 What type of timeshare gives ownership of the property for a certain number of weeks per year in perpetuity? Eternal timeshare Timeshare estate Timeshare in perpetuity Timeshare use interest This is a timeshare estate, which conveys ownership, not simply the right to use a property. Question 6 An individual enters into a contract to acquire real property in return for some form of consideration. On the contract, this individual is regarded as the ______. Agent Broker Buyer Seller A buyer is any person who contracts to acquire real property in return for some form of consideration. Question 7 What may an owner place on the land to limit the use of the property, even after it's sold? Charter Deed restriction Lis pendens Subordination agreement An owner may place a deed restriction on a property to preserve the use of the property or to preserve the quality of the neighborhood. Question 8 Which of these statements about fair housing for people with disabilities is true? A person with a disability should not be prevented from making reasonable accommodations and may also request accessibility accommodations. People with disabilities have priority over other renters when an accessible unit is available to lease. 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. Refusing to allow a person with a disability to make reasonable accommodations is a prohibited act, as is refusing to make reasonable accessibility accommodations. Question 9 When are listing agents no longer obligated to present offers to clients? The client verbally requests it. The licensee has been paid commission. The parties have a signed contract. The sale has closed. Licensees should continue to submit offers until the transaction closes. Question 10 What does the lot and block system use to develop a property's legal description? Compass headings and directions Plat references Principal meridians and base lines Townships and sections The lot and block system uses plat references to develop a property's legal description. Question 11 What kind of contract exists after closing? Executed Executory Implied Voidable An executed contract is one in which the parties have met all terms of the contract. Question 12 Which of the following would be considered personal property? Built-in microwave Custom curtains Free-standing TV In-ground pool If the item is permanently attached to the real property, it becomes real property. Personal property, also known as chattel, is attached temporarily. Question 13 As a business entity, is a brokerage firm eligible to be licensed in Texas? No, because only persons may be licensed in Texas  No, because unlicensed individuals may work for the brokerage firm Yes, a business entity consisting of unlicensed partners is eligible for a license Yes, a business entity is eligible for a license provided it's managed by a designated broker A broker's license can be held by a person or an entity, such as a corporation or partnership. To be eligible, the business entity must designate a broker with an active license as a managing officer. Question 14 A sales agent works under the supervision of a broker. Which of the following is true? The agent can be either an employee or an independent contractor. The agent can receive compensation directly from clients. The agent must be an employee. The agent must be an independent contractor. Sales agents must work under the supervision of a broker, but they can be employees or independent contractors. Question 15 Which of the following is a legitimate reason to terminate a listing agreement? It's a buyer's market. The sellers aren't happy with the offers they are receiving.  The seller's close relative dies suddenly. The term of the agreement has expired. There is nothing to stop a listing agreement from being terminated if the term of the agreement has expired. Question 16 What property might a licensee specializing in special purpose real estate try to sell? Church Office building Orchard Shopping center Churches, schools, and cemeteries are examples of special purpose real estate. Question 17 Which entity reviews and implements the ESAC's recommendations? The National Association of REALTORS® The Texas Legislature The Texas Real Estate Commission U.S. Congress The ESAC makes recommendations for improvements to real estate education to the Texas Real Estate Commission who then implements them. Question 18 What kind of water rights are granted to those whose land abuts a river or stream? Doctrine of appropriation Groundwater Littoral Riparian This describes riparian water rights. Land acquired before 1895 carries these rights. Remember that riparian and river both start with "R." Question 19 A contractor built a property prior to the completion date specified in the contract. What is this an example of? Non-performance Partial performance Performance Voiding If all terms of the contract have been met, this is contract performance. Question 20 Under the Fair Housing Act, which of the following is prohibited when advertising Texas housing? Advertising housing based on price or square footage Advertising housing to a broad audience without restrictions Advertising housing to a specific group based on their race, religion, or national origin Advertising housing with information about nearby schools Advertising housing with preferences based on protected classes such as race, religion, or national origin violates the Fair Housing Act, regardless of the specific group targeted. Question 21 What is the maximum payment amount for a claim from the Recovery Trust Account for a single transaction? $10,000 $100,000 $5,000 $50,000 Trust account payments for a single transaction must not exceed $50,000. Question 22 What must a licensee do when selling their own property, according to the NAR Code of Ethics?  Disclose the interest to all parties to the transaction. Offer cooperating broker compensation. Offer the property for sale within the firm before offering it to the general public. Reduce the commission by half. Personal interest in a property, whether direct or indirect, must be disclosed in writing to all parties. Question 23 In Texas, TREC is charged with passing rules to enforce, interpret, and explain the provisions of which entity or law? Texas Real Estate Research Center The Real Estate Broker-Lawyer Committee The Real Estate License Act The Texas Association of REALTORS® TREC is responsible for administering the laws of The Real Estate License Act (TRELA). Question 24 Which of these groups is a protected class under the NAR Code of Ethics? Age Creed  National origin Veterans According to the NAR Code of Ethics, a person's national origin can't be used to discriminate against that person. Question 25 How large is a section used in the rectangular survey system? 640 acres 640 miles 640 square feet One acre Sections are one square mile, or 640 acres. Question 26 Once all licensees have been enrolled in the Rap Back program, the DRE ______. Will continue to enforce the 10-day reporting requirement Will eliminate the 10-day reporting requirement Will not be concerned with anything to do with licensee convictions Will require licensees to self-report criminal convictions The self-reporting requirement will be eliminated once all licensees are enrolled in the Rap Back program. Question 27 Which type of power gives the government the authority to do what's right for the public good, and the owner may or may not be compensated? Eminent domain Escheat Police power Taxation Police power gives the government the authority to do what's right for the public good. The owner may or may not be compensated for property taken under police power. Question 28 What are the four types of government powers? City, county, state, and federal Condemnation, necessity, prescription, and gross Easement, encroachment, erosion, and encumbrance Taxation, eminent domain, escheat, and police power The four types of government power are taxation, eminent domain, escheat, and police power. Question 29 In which of the following scenarios is impossibility of contract performance occurring? Both parties fully meet the terms of the contract. Due to circumstances beyond their control, the parties can't legally or practically do what they've agreed to do. One or both parties have completed only a portion of the terms agreed to in the contract. One party didn't meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract. Impossibility of performance of a contract occurs when the parties can't legally or practically do what they've agreed to do, due to circumstances beyond their control. Question 30 Which act created an agency to investigate antitrust practices? Attorney General Act Clayton Act Federal Trade Commission Act Sherman Antitrust Act The Federal Trade Commission Act created the FTC. This agency investigates practices and will stop companies and individuals from committing antitrust violations. Question 31 What is a leasehold estate for an unknown period of time in which either party is permitted to terminate the lease by giving notice to the other? Estate at will Estate for years Freehold estate Life estate An estate at will is an estate for an unknown period of time, with either party permitted to terminate the lease by giving notice to the other. Question 32 In the eyes of the law, why do people under age 18 lack contractual ability? They have insufficient resources. They lack intelligence. They're immature. They're minors. A minor doesn't have contractual ability because they're not of legal age. Question 33 What language may be included in a contract after the assignor's name to make it clear that the contract is assignable?  "And/or assigns" "Buyer beware" "Spouse or partner" "Time is of the essence" The phrase "and/or assigns" helps make it clear that the contract is assignable. Question 34 What's an easement? A method for containing a hazardous substance The illegal building of a structure or object on another's property The right of the government to take private property for the good of the public The right to cross over or otherwise use another's land for a specified purpose An easement allows a person the right to use or cross over another's property for a specific reason. Question 35 Which of the following does the Texas Free Enterprise and Antitrust Act of 1983 make unlawful? Any consumers performing real estate services for another for compensation without a license Any contract, combination or conspiracy resulting in increased competition within the state  Any contract or conspiracy resulting in the substantial decrease of competitive trade or commerce within the state Discriminating against consumers using race, ethnicity, or gender Texas antitrust laws work to eliminate any practices that result in less competition or a restraint of trade. Question 36 What does "real estate" refer to under TRELA's general provisions? Any interest in real property, including a leasehold, located in or outside of Texas Any interest in the discovery of natural resources A potential lucrative industry in Texas The liquidation of one's belongings within their home Under the terms of the Subchapter A, "real estate" refers to any interest in real property, which includes interest in a leasehold, in or outside of the state of Texas. Question 37 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? Exclusive agency Exclusive right-to-sell Open listing  Seller prefers The word "agent" here is the clue. This is how an exclusive agency agreement works. Question 38 Under what conditions can a licensee contact sellers who are under an exclusive listing agreement with another agent, according to the Texas Canons of Professional Ethics and Conduct? To arrange a showing to a buyer To persuade them to break their listing contract To provide an appraisal that may allow them to raise their asking price To share important information about their current representation A licensee can only contact sellers who are under an exclusive listing agreement in order to arrange a showing to a buyer, and then only if the seller and listing agent agree to this approach. Question 39 Which of the following is an example of an easement? A homeowner installed a basketball hoop six inches over the property line. A path providing neighborhood access to a pond cuts through someone's property. The city seized a formerly private parcel of land for public use. The state took ownership of a property when no heirs could be located following the owner's death. An easement allows a person the right to use or cross over another's property for a specific reason. Residents of a neighborhood using the path that crosses through Hillary's property is an example. Question 40 A licensee tells a potential client that all licensees in the area charge a 2% commission fee. What antitrust violation does this imply? A tie-in arrangement Group boycotting Market allocation Price fixing By stating that licensees won't work for less than 2%, the firm implies there's a price fixing agreement in place. Question 41 The Texas Deceptive Trade Practices-Consumer Protection Act (DTPA) protects consumers against real estate licensees who ______. Are ambitious, gregarious, and use heavy amounts of advertising to sell real estate Are new to real estate and aren't familiar with all the ins and outs of a real estate transaction Have a five-year plan to own several brokerages and foster client relationships in which repeat business plays a large factor Use lies, misrepresentations, fraud, or other deceptive practices or acts to advertise or sell real estate The DTPA protects consumers against real estate licensees who use false, misleading, or deceptive actions or practices in the advertising, offering for sale, selling, or leasing of personal property or real property. Question 42 A real estate contract written for an illegal purpose is ______. Permissible and valid Void Voidable only by the buyer Voidable only by the seller Contracts must be written for a lawful objective. A contract for an illegal purpose is void. Question 43 Who is a person who's been placed in a position of loyalty and trust in a real estate transaction? Attorney in fact Client Fiduciary Mortgage lender A fiduciary is someone has been placed in a position of loyalty and trust. A real estate licensee who's working with a client is a fiduciary. Mortgage lenders and attorneys-in-fact are also fiduciaries. Question 44 In what way or ways do consumers compensate brokers for their services? As a fee for service only As a flat fee, fee for service, and/or percentage of sale As a flat fee only As a percentage of the sales price only Consumers generally compensate brokers for their services in the form of a percentage of the sales price of the property, but other options include a flat fee or fee for service. Question 45 What is it called when one party to a contract transfers the contractual rights and obligations to another but remains liable for the contract terms? Assignment Execution Novation Termination Parties to a contract can assign their rights and obligations under the contract to a new party. This technique is most often used by wholesalers, and is generally allowable only if specifically agreed to in the contract. Question 46 Two firms charge the same commission rates. For this to be price fixing, what must occur? An agreement between competing firms to standardize commission rates An agreement between individual licensees in a single firm to fix commission rates An offer of a cooperating brokerage commission A public announcement of commission rates charged Agreement (or collusion) between two firms must exist for this to be an antitrust violation. Question 47 What pre-licensing education must an applicant for an initial sales agent license in Texas complete? Six 30-hour courses of qualifying education Three 30-hour courses and two 4-hour legal update courses Three 30-hour courses of qualifying education Two 90-hour courses of qualifying education Sales agent applicants must complete 180 hours (six 30-hour courses) of sales agent-qualifying courses before applying for a license. Question 48 If a party to a contract lacks legal capacity but enters into a contract anyway, which party may void the contract? Both parties  The broker The party lacking legal capacity The party possessing legal capacity If the party doesn't have legal capacity and enters into a contract anyway, the contract is voidable by the party lacking legal capacity. So an adult can't hold a minor to a contract; however, the minor can hold the adult to the contract. Question 49 How do you determine the cost of purchasing land? Divide the cost per unit by the land area Divide the land area by the cost per unit Multiply the land area by $100 per acre Multiply the land area by the cost per unit The cost of purchasing land is the land area multiplied by the cost per unit. Question 50 Which of the following actions, when performed by a Texas licensee, violates the Canons of Professional Ethics and Conduct? Including the brokerage name and main phone number on an advertisement Making a reasonable effort to ensure all parties to a written agreement have a copy of that agreement  Preparing a written agreement that accurately states a purchase price Preparing a written agreement that falsely states a purchase price Written agreements should accurately state parties to the transaction and details of the transaction, such as purchase price. Question 51 Which duty requires licensees to provide both clients and customers with quality, knowledgeable, and prudent service, and to live up to the trust placed in them? Confidentiality Loyalty Obedience Reasonable skill and care This is a description of the duty of reasonable skill and care, and it's owed to both clients and customers. Question 52 What's the purpose of the Equal Credit Opportunity Act (ECOA)? To increase employment To prevent discrimination in lending To prevent discrimination in transportation  To simplify credit card applications The ECOA is designed to prevent discrimination in financing by requiring lending decisions to be based on creditworthiness, and not personal characteristics. Question 53 Why would a buyer want to know if any easements or encroachments exist on a property? Both easements and encroachments are illegal. The buyer could end up in court. Easements and encroachments affect the property's lot size, enjoyment, and use, which can affect its value. The buyer may need this information to provide evidence for litigation. The buyer will have to remove these before the property can be re-sold. A property's lot size, enjoyment, use, and value can be impacted by easements or encroachments. Question 54 A Texas seller makes a discriminatory request about selling their home to someone of a specific race or national origin. What should the licensee communicate to their broker? Agree with the seller's request but inform the broker to document it for record keeping. Avoid discussing the situation with the broker to prevent unnecessary conflict. Inform the broker of the seller's request and seek guidance on proceeding within legal and ethical guidelines. List the property while quietly disregarding the seller's discriminatory request. Failing to inform the broker or acting on the seller's request violates the Fair Housing Act and puts both the licensee and the brokerage at risk of legal and professional consequences. Question 55 A licensee is unhappy with a company's products and recommends another licensee avoid the company. The second licensee agrees and spreads the word among other licensees. What's this an example of? A tie-in arrangement Group boycotting Market allocation Price fixing This is group boycotting because it involves a group of licensees agreeing to not do business with another company. Question 56 A church in Houston owns two apartments, which are used as housing for its ministerial staff. It doesn't rent the apartments to individuals who don't attend the church. Is this legal in Texas? No, this is housing discrimination. Yes, as long as it does not charge more than $250 per month. Yes, as long as it does not discriminate based on race, color, or national origin. Yes, as long as it does not own more than two units. According to Texas law, religious organizations can limit rental accommodations to members of their organization as long as they do not discriminate based on race, color, or national origin. Question 57 When measuring elevations, what is used instead of a point of beginning? Datum Equator Monument Sea level Instead of a point of beginning, these elevations are measured with reference to a data line, point, or surface, referred to as a datum. Question 58 Which of the following elements is always required for a real estate contract to be valid? Attorney review Consideration Earnest money Profit For a contract to be legally binding, an offer and an acceptance must be supported by consideration, which is defined as something of value offered by both parties. Earnest money is one type of consideration, but earnest money isn't required for a contract to be valid. Question 59 A seller disclosed the location of a nearby stream but said his basement had never flooded. A home inspection after a contract was signed showed the basement flooded recently. What's true about this situation? The buyer can't invalidate the contract and must sue the seller. The buyer can't invalidate the contract, since this information was discovered after the contract was signed. The seller has committed fraud, which invalidated the buyer's consent. This is a clear case of misrepresentation by the home inspector. Because the seller has committed fraud, the buyer's consent has been invalidated. Question 60 What is it called when a broker pays the buyer a portion of the broker's commission? A bonus A kickback A rebate A violation of antitrust law A broker may legally rebate a portion of their commission to a principal to the transaction, as long as that payment is strictly a rebate. Although this option is illegal in some other states, it is legal in Texas. Question 61 Which area of real estate law covers lease agreements?  General property law Landlord-tenant Law of agency The law of contracts Landlord-tenant law covers different aspects of the relationship between landlord and tenant, such as lease agreements. Question 62 What's market allocation? Agreeing with a competing firm on how to split a market Deciding to own the market with aggressive marketing strategies Deciding which clients you will work with, and which you won't Partnering with a branch office to dominate a market Antitrust violations usually involve agreements between competitors. Question 63 In contract law, when does partial performance occur? When a party acknowledges receipt of the contract When a party does some, but not all, of what the party has agreed to do  When a party meets all terms of the contract When a party rejects all terms of the contract An example would be when a seller agreed to paint a house prior to closing, but neglected to paint the back side. A buyer would likely accept partial performance to close on time and may ask for a seller credit to pay for the additional work needed. Question 64 Which of the following tests refers to how and whether the item is attached to the property? Adaptability of the item to the land's use Agreement of the parties Intention in placing item on land Method of annexation Method of annexation refers to how and whether the item is attached to the property. This is the "M" in "MAIA." Question 65 Where should a licensee report threats of violence for refusing to violate fair housing law? HUD Law enforcement officials The governor's office  The National Fair Housing Alliance Threatening violence is a criminal act that should be reported to law enforcement. Question 66 In Texas, who is responsible for supervising associated licensees and reviewing transactional paperwork and advertising? The associate broker's The broker's The broker's and the associate broker's The sales agent's It's a broker's responsibility to review transactional paperwork and advertising. Each broker is also responsible for the acts of their affiliated licensees. Question 67 Can a complaint be filed with the Texas Workforce Commission Civil Rights Division (TWCCRD) against a Texas licensee for an out-of-state transaction? No. All complaints to the TWCCRD must be for Texas property. Yes, but only if the home is new construction Yes, if the complainants are Texas residents Yes, if they do so within one year Complaints must be for property located in the state of Texas, so the complaint cannot be filed with the TWCCRD. A complaint could be lodged in the state where the property is located or through HUD. Question 68 What happens when a municipality completes an "in rem" foreclosure? The foreclosure process is circumvented. The municipality must sell the property no sooner than 18 months post-foreclosure. The municipality obtains title to the property. The taxpayer has provided a deed in lieu of foreclosure. An in rem foreclosure is quite common and allows the municipality to obtain title and sell the property. Question 69 Which of the following best describes a lease agreement? A legally binding, written contract between a landlord and a listing licensee A legally binding, written contract between a landlord and a tenant A legally binding, written contract between a tenant and a buyer licensee A legally binding, written contract between a tenant and a listing licensee A lease agreement is a binding, written contract entered into by a landlord and the tenant to whom the property is being leased. Question 70 At what age does a person become eligible for real estate licensure in Texas? 16 18 20 21 The minimum age to obtain a real estate license in Texas is 18. Question 71 In what way is a townhome similar to a condominium? They are both detached structures. They are both multi-family dwellings. They both typically have detached garages. They both typically have HOA dues. Like condominiums, townhomes are single-family homes, and they both often have a homeowners association to which owners must pay dues. Question 72 Which statement describes a code of ethics? Guidelines for conduct  Laws that licensees must abide by Rules used by law enforcement officers Something licensees don't need to worry about unless they join the NAR A code of ethics is a defined set of guidelines for ethical conduct. Question 73 Which natural resource would involve surface rights? Gas Limestone Minerals Oil Surface rights are the rights to use the surface of the earth, which include limestone, as well as underground water, strip-mined coal, gravel, and iron ore Question 74 What is the purpose of the IABS form in Texas? To create an agency agreement To disclose the sales price To explain agency relationships and obligations  To start a sales contract The IABS provides information on agency options and duties. It is not a contract or a sales document. Question 75 Does an on-site manager of an apartment complex in Texas need a real estate license? No, a real estate license is not required. No, but certification is required. Yes, a broker license is required. Yes, a sales agent license is required. Certain people who work with real estate aren't required to hold licenses. An on-site manager of an apartment complex in Texas is not required to have a real estate license. Question 76 Which one of the following options best describes the purpose of a sales contract? It identifies the buyer's agent/buyer agency relationship's terms. It identifies the landlord/tenant relationship's terms. It identifies the listing agent/buyer agency relationship's terms. It identifies the terms of a real estate sale between the seller and the buyer. The sales contract identifies the terms of a real estate sales transaction between the seller of the property and the buyer. Question 77 What does a CLUE report show? All of the insurance claims on a property for a certain number of years The buyer's credit score The home's purchase price The outstanding mortgage amount A CLUE report shows all of the insurance claims on the property for a certain number of preceding years, and details whether the claims were paid, what types of claims they were, and whether or not any repairs were made. Question 78 Which of these situations represents an illegal tie-in arrangement? A licensee agrees to rebate a portion of the commission earned when her buyer client buys a house if the client also lists her current home with the licensee. A licensee gives buyer clients a list of home inspectors and encourages them to call several who are both on and not on the list to find one who meets their needs. A licensee tells her buyer client she won't perform any brokerage services for him unless he signs an agency agreement. A licensee tells his seller client he'll only represent her if the client uses a specific company to close her transaction. A tie-in arrangement includes making use of one service dependent on the client obtaining another specific service or agreeing to provide some service only if the client refrains from doing business with another third-party vendor. Question 79 To what properties does the Texas seller's disclosure of property condition law apply? All properties All property transfers All residential properties All single-family residential properties The law requires sellers of single-family residential properties to disclose material defects that a prospective purchaser could not discover through ordinary care and diligence-or that might not be discovered in an investigation. Question 80 To what type of estate does pur autre vie apply? Fee simple Freehold estate Homestead Leasehold Pur autre vie means for the life of another. This term comes into play with freehold estates of inheritance. Question 81 How should a licensee respond if seller clients make a request that is a fair housing violation? "I can't technically do that, but I could choose to advertise only in publications that target a white readership." "I'm sorry that you feel that way. I am obligated to obey the requests of my clients, but I'm going to need you to write up your request and sign it, so there's no way I can get in trouble for fair housing violations." "It would be illegal to limit the search based on race or religion or anything like that, but I promise I'll find you the most qualified buyer I can, and we'll sell this house for the highest price possible." "Let's keep this off the record. As long as we can come up with other reasons to disqualify the buyers you don't want, we'll be okay. We just need to make sure it looks legitimate from the outside." As a licensee, you need to market your listings to all potential buyers and help the seller get the best price. Question 82 Which of the following is an example of price fixing? A brokerage requires all licensees to offer a fair cooperative brokerage fee. Three brokerages agree to purchase office supplies together to obtain a bulk discount. Three brokerages determine a standard commission rate. Three brokerages discuss the compensation of associated independent contractor licensees. Collusion must occur on pricing for the public in order for price fixing to occur. Question 83 What will happen when brokers fail to respond to a TREC complaint within the required timeframe? Nothing because a response isn't required. They'll be in violation. They'll have committed a criminal offense. They'll lose their license. Brokers should never ignore a TREC complaint. They should instead respond to TREC within 14 days. Not doing so is a violation. Question 84 Your client is a traveling salesperson. What type of housing would the client likely prefer? Condominium, for its easy living Condominium, for its higher cost Single-family, because it costs less Single-family, for its flexibility Condominiums offer easier living than single-family homes do, due to no yard work or exterior maintenance requirements. Question 85 What type of conduct is unethical according to the Texas Canons of Professional Ethics and Conduct? A licensee discloses that a listed property contains a material defect, even though the seller asked that it not be disclosed. A licensee documents that clients disagreed with her advice on pricing their property. A licensee doesn't show potential buyers a home because he believes they aren't a cultural fit with the neighborhood. A licensee reports a colleague he suspects of engaging in fraud. This is a discriminatory behavior called "steering." All discriminatory behavior is prohibited by the Texas canon of discriminatory practices. Not only is this behavior unethical, but it violates both state and federal fair housing law. Question 86 What did HUD find in the Texas Housers vs. the State of Texas case? Texas violated Title VI and Section 109 by disproportionately awarding disaster relief to white neighborhoods. Texas was found to have awarded disaster relief funding equally to all neighborhoods. Texas was found to have discriminated against white neighborhoods by withholding disaster relief funding. Texas was found to have fairly distributed disaster relief funding without any discrimination. HUD determined that Texas violated fair housing laws by disproportionately allocating disaster relief funds to white neighborhoods, disadvantaging Black and Hispanic communities. Question 87 What physical characteristic of land states that it cannot be destroyed? Immobility Indestructibility Permanence of investment Uniqueness This is also one reason that land can't be depreciated in the way that improvements on the land can. Question 88 Which of the following could a listing agreement be considered? A contract between a seller and a buyer A cooperative agreement between two brokerage firms An employment contract between a brokerage firm and a licensee An employment contract between a licensee representing the brokerage company and a seller A listing agreement is an employment contract between a licensee representing the brokerage company and a seller. Question 89 In an addendum to the purchase and sale contract, the seller agreed to perform work but was unable to finish before closing. What is this an example of? A void contract Contract execution Legal purpose Partial performance Because the seller hasn't fully completed the items agreed to in the contract, the seller has only partially performed the contract. The buyer can accept the partial performance or seek other legal remedies. Question 90 What is the area of specialty for an individual who helps people buy and sell office buildings and shopping centers? Commercial Industrial Residential Special purpose Office buildings, shopping centers, and hotels are examples of commercial properties. Question 91 Which of the following is the best definition of a broker in Texas?  A person who can sponsor and supervise other license holders who sell, exchange, purchase, or lease real estate A person who, for a commission or other valuable consideration, performs specific real estate-related acts for another person A person who has demonstrated honesty, trustworthiness, and integrity in their licensure application A person who sells, exchanges, purchases or leases real estate in the state of Texas While all of the these things may be true of a broker in Texas, the Texas Real Estate License Act defines a broker essentially as a person who, for a commission, performs for another person, certain real estate-related acts, including, selling, exchanging, purchasing or leasing real estate. Question 92 Is a license holder liable if another party to a real estate transaction conceals information about that transaction? No, the license holder is never liable for the actions of other. No, the license holder was not aware of the dishonesty and is not liable. Yes, the license holder is always liable for the actions of others. Yes, the license holder must make it their responsibility to learn if someone is being dishonest. A license holder is not liable if the license holder has no knowledge that a party to the real estate transaction were concealing information or being dishonest. Question 93 Which of the following updates to the TREC One to Four Family Residential Contract (Resale) requires the seller to provide certain notices regarding property conditions? A change to Paragraph 21 requires including both agents' contact information. A modification to Paragraph 9B(5) regarding the private transfer fee responsibility. A new section in Paragraph 6 for listing required notices like MUD or PID disclosures. A revision to Paragraph 7F for the seller's obligation to repair the property before closing. That's correct! The 2023 changes added a new section to Paragraph 6, requiring the seller to list any required notices in the contract, such as MUD or PID disclosures. Question 94 When does a buyer's market occur? When both supply and demand are high When both supply and demand are low When supply is high and demand is low When supply is low and demand is high A buyer's market occurs when supply is high and demand is low. Question 95 In what way is a townhome similar to a single-family detached home? It often has a detached garage.  It's also detached. Ownership includes both the structure and the land. They're always multi-story. Townhomes and single-family detached homes are similar because ownership includes both the structure and the land. Question 96 Which physical characteristic of land says that one piece of land isn't exactly like another and is not interchangeable? Immobility Indestructibility Permanence of investment Uniqueness One piece of land isn't exactly like another. This is the concept of non-homogeneity. Question 97 A(n) ______ is an offer to purchase a specific piece of real estate, but without the obligation to buy it. Buyer agency agreement Listing agreement  Option agreement Sales contract An option agreement, or option, is an offer to purchase a specific piece of real estate, but without the obligation to buy it. Question 98 Although she was not part of writing up the sales contract between the seller and the buyer, Trisha believes she should be compensated for finding the buyer and shepherding the transaction to its conclusion. Her reason for making this assertion is likely based on ______. The belief that the seller "stole" her client The concept of procuring cause The fact that she is a real estate licensee The writ of habeas corpus Trisha may contend that she started the chain of events that led to the sale and was the procuring cause for the sale. Question 99 Which of the following is a legitimate reason to terminate a lease agreement? The landlord doesn't like renting to tenants with pets. The tenant isn't happy with constant rent hikes. The tenant isn't happy with how the apartment complex is maintained.  The term of the agreement has expired. A lease agreement can be terminated by expiration of the term of the agreement. Question 100 Which type of an estate does NOT end automatically when the stated event or condition occurs? Fee simple absolute Fee simple determinable Fee simple subject to a condition subsequent Freehold This is a description of a fee simple subject to a condition subsequent. The grantor can reclaim ownership by taking action.