Real Estate Exam: Principles II

The Canons of Professional Ethics and Conduct provide for

Fidelity, Integrity and Competency

TREC has subpoena power. If a licensee fails to respond to a subpoena , TREC may

file suit to enforce the subpoena.

TREC will investigate the actions of a licensee if

they receive any written and signed complaint received no later than the fourth anniversary of the date of the incident.

The Broker Lawyer Committee

writes TREC promulgated contract forms.

TREC has a real estate recovery trust account. What is true about this account?

Every applicant for a real estate license in Texas pays $10.00 for the account, Money in the account can be invested , If the balance in the account goes over $3.5 million, the excess goes to the general revenue fund.

Payments out of the real estate recovery trust account are limited to:

$50,000 per transaction regardless of the number of claimants and $100,000 per licensee.

TREC may suspend or revoke a license if

the licensee Comingles broker funds with client's funds, sells real property by lottery, places a sign offering a property for sale or lease without a written consent from the owner.

The TREC may assess an administrative penalty

of up to 5,000 per violation on any person in Texas who violates the rules of the TREC.

One who represents another from whom he has derived authority is called

an agent.

A licensee who represents a party must disclose this representation

at first contact.

The duties of a broker in a fiduciary relationship do NOT include

compensation, but DO include PLC (Performance, Loyalty and Care)

The principal's duties to an agent include

CRIP: compensation, reimbursement, indemnification, and performance.

The listing most commonly found on the MLS is

the Exclusive Right to Sell

When a broker in Texas is representing the buyer and seller in a single transaction he is

an intermediary

Listing agreements can be terminated by

death of either party, abandonment, mutual agreement.

When a Texas broker appoints associates to the parties in a transaction this is called

intermediary with appointments.

Appointed associates under an intermediary may

give advice and opinions to their respective parties.

The intermediary relationship notice

names the appointed associates.

An example of involuntary alienation is property transfered by

adverse possession.

The deed that contains no warranties of ownership is the

quitclaim deed.

The Federal law that prohibits kickbacks or non-disclosures in a real estate closing is

RESPA

RESPA

Applies to 1-4 family residential properties

Competent parties for a real estate transaction include

a person 18 years of age or older.

A contract that binds one party but not the other is called

unilateral

These are annually cultivated crops, attached to the land, and are personal property.

Emblements

When real property is sold

fixtures remain with the property

Loss of value due to lack of modernization is called

functional obsolescence

When an appraiser is using the Market Data approach, comps should be

no more than 6 months old

The appraisal approach used for rental properties is the

income approach

The appraiser will use the cost approach to value for

a church

When preparing an appraisal, the appraiser will

define the problem, apply the correct approach, and prepare his report

The appraisal principle that tells the owner that he should not over improve his property is the .

principle of increasing and decreasing returns

Official property value for tax purposes is called

assessment value

The appraisal principle that says there is maximum value in with sameness or similarity is

the principle of conformity

The economic characteristic of real property that describes the impact of improvements is

modification

A lien to secure payment for work or materials is called an

M& M lien

A pledge or real property as security for a debt is called a

mortgage

In a deed of trust the lender is called a

beneficiary

The primary purpose of the FHA is to

insure loans

Loans that are not FHA or VA guaranteed are called

Conventional

Another name for Contract for deed is

Land Contract or Installment Land Contract.

A lease that automatically renews itself is

periodic tenancy.

A loan has a PITI payment is called a

budget loan

A person who brings a lender and a borrower together for a fee is called a

Mortgage Broker

Legal possession of real property without ownership is a

leasehold estate

Rent stated in a lease agreement is called

contract rent

A lease with a specific starting and ending date is called

estate for years

The TREC's buyer's/seller's temporary lease agreement is for

periods of 90 days or less

The law requiring the removal of barriers and ease of access is

Americans with Disabilities Act

Requirements of the ADA include

wheelchair access, Braille markings on elevator control keys, flashing alarm lights for the hearing impaired

Causing panic selling in a neighborhood is called

Blockbusting

Which building is exempt from ADA?

A private club

An example of compliance with Federal Fair Housing Act is

practicing fair housing, placing the equal housing sign in the office window, signing VAMA, (Voluntary Affirmative marketing Agreement) having a standard having a standard office procedure for working with customers, and regular office meetings on fair ho

The Federal Fair Housing Act prohibits discrimination of

race, religion, and sex

The Equal Housing Poster mentions discrimination in the .

sale or leasing of residential housing

A house sold for $100,000. The loan amount was $80,000. The borrower paid 3 points. How much did the borrower pay for points?

80,000X.03= $2,400

The assessed value of a property is $90,000. The tax rate is $3.42 per hundred. What are the annual taxes?

90,000 divided by 100= 900X3.42= 3,078

A yearly tax bill is $8788. The property has sold and closing is on May 30th. How much will be owed for taxes? (Use 30 day months and round to the nearest dollar)

$8,788 Divided by 12= $732 month X 5 = 3,660 Debit Seller Credit Buyer

The listing broker's half of commission was $4392. The commission rate was 5%. What was the sale price of the property?

4392 X 2= 8784 Divided by .05= $175,680