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Real Estate Final > Skill Builder > Flashcards

Skill Builder Flashcards

1
Q

A property owner has decided to do some landscaping work on his yard. He has planted a tree
surrounded by some flowering shrubs. The tree and shrubs are an example of:

A

Improvements

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2
Q

A property owner has a waterfront lot on a stream. He has the right to use the water from the stream. What is this right called?

A

Riparian

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3
Q

A commercial tenant is aware that his lease will expire at the end of the month. He has begun
to disassemble his display cabinets and shelves. Which of the following statements about this is
true?

A

The tenant can take these as they are trade fixtures

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4
Q

A listing agent went to inspect a seller’s property, hoping to list it for sale. The seller told the
listing agent that his neighbor’s satellite dish trespasses on his property. This is an example of:

A

encroachment

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4
Q

A seller is attending the closing on his property. The title company has discovered an unsatisfied
M&M lien on the property. Which of the following is the most likely reason for the lien?

A

Plumbing work that was completed but never paid for

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5
Q

A father gives his son a life estate on a property. The son leases the property. The tenant dies.
What happens to the property?

A

It goes back to the son until he dies

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6
Q

A man leaves his second wife a life estate in their home, after which the property goes to his
children from his first marriage. The children are what

A

remaindermen

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7
Q

Which of the following statements about an easement is true?

A

An easement is a benefit to the dominant property owner

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8
Q

P, Q and R are joint tenants. P wants to sell the property, but Q and R do not. What can P do?

A

File a suit for partition

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9
Q

A, B, and C are joint tenants. C dies. B sells his share to D. What type of ownership do A and
D have?

A

Tenants in common

Upon your death, your share goes to your heirs, at probate. Unequal shares are permitted. You may sell your share without the permission
of the other owners. In the absence of any other instructions, the title company will always
assume tenancy in common with equal shares

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10
Q

Under what right can the government change property use from commercial to residential only?

A

Police Power

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11
Q

Ownership of the common areas of condominiums is most likely to be:

A

tenancy in common

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12
Q

What should a buyer do to ensure that he is getting the best title to real property?

A

Get a general warranty deed

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13
Q

Which covenant in a deed guarantees that the owners will not suffer or be disturbed by any claims on the property?

A

The covenant of quiet enjoyment

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14
Q

Excess money at a foreclosure sale goes to:

A

The borrower

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15
Q

After defaulting on a real estate loan, a borrower is able to pay off the loan prior to the foreclosure sale. This is called:

A

right of redemption

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16
Q

The required distance between buildings and a federally protected endangered species wetlands,
two incompatible uses, is an example of:

A

A buffer zone

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17
Q

A couple purchased a condominium. The complex has an exercise room for all residents. The
couple does not use the exercise room and does not want to pay the monthly fee for the use of
the facility. What can they do to avoid this fee?

A

They must pay the fee as they have a tenancy in common interest in all common areas.

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18
Q

Which of the following is personal property?

A

A lease

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19
Q

A landlord leased space in his new retail property to an inexperienced business person. Based on
location and the type of business, the landlord believes it will be a great success. What type of
lease can he enter into with the tenant that will allow the landlord to benefit from the tenant’s
success?

A

A percentage lease

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20
Q

A buyer has purchased a property, and after closing, the seller will continue to occupy the property. This is an example of:

A

Sale and leaseback

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21
Q

Your clients will be able to qualify for financing for a property they wish to purchase in about
six months after they have had an opportunity to reduce their consumer debt. They have found a
property that they would like to purchase now. What type of agreement can they enter into with
a seller that will allow them to occupy the property now and purchase it within the six months?

A

Lease with an option to buy

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22
Q

Tenants have signed a 3-year lease on a property. In the second year, the owner dies, and his
heirs inherit the property. They give the tenants notice to vacate. What is true?

A

The tenants can stay until the end of the lease.

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23
Q

A developer decides to build a commercial property in the middle of a residential neighborhood.
What is required?

A

A variance

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24
Q

A zoning ordinance would directly affect which of the following?

A

The concentration of housing in a residential area

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25
Q

If a person dies without a will, who receives their estate:

A

spouse and children

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26
Q

A metes and bounds description will always:

A

have a point of beginning

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27
Q

What are the requirements/criteria for real estate to have value?

A

Demand, Utility, Scarcity, Transferbility

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27
Q

What are the requirements/criteria for real estate to have value?

A

Demand, Utility, Scarcity, Transferbility

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28
Q

What principle of value defines the most important factor for appraisal?

A

Highest and Best Use

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29
Q

What approach would an appraiser most likely use to value a residential rent house in a neighborhood where a majority of the homes are leased?

A

Income Approach

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30
Q

A licensed broker is advertising that he will perform a free appraisal if you contact him for a listing appointment. He is not in violation of the law:

A

If he is a licensed appraiser

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31
Q

Which of the following is NOT an example of functional obsolescence?

A

Deferred maintenance

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32
Q

According to the Statute of Frauds, which of the following leases must be in writing?

A

A lease for more than 1 year

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33
Q

Your client is an investor who would like to have the right to purchase a commercial tract for $5 million within the next six months. What type of contract should he enter into with the seller?

A

Option contract

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34
Q

A signed sales contract that has not yet gone to closing is:

A

Executory

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35
Q

When does an offer become a contract?

A

When it is accepted, and acceptance is communicated

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36
Q

Which of the following statements is true about the duties of an agent according to the common law of agency?

A

An agent must treat both clients and customers with honesty and fairness

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37
Q

A property manager is hired and signs a management agreement with the owner. At this time, the property manager is:

A

a general agent

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38
Q

A buyer and seller have negotiated a contract on the seller’s property with a closing set for June 14th; time is of the essence. On June 12th, the listing agent calls the buyer’s agent and tells him
the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is true?

A

The contract is voidable by the buyer.

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39
Q

A licensee is representing a seller in a commercial transaction. The property is under contract, and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller’s property. What should the agent do?

A

Tell the seller and encourage the seller to complete the negotiated sale.

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40
Q

A listing agent is showing his listing to a buyer customer and notices a problem with the exterior
of the property that he missed when he listed the property. What should he do?

A

Point it out to the buyer as it is a material fact.

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41
Q

A buyer’s agent has accidentally forwarded confidential information about his buyer’s financial background to the listing agent. What is true?

A

The buyer’s agent is guilty of negligence, and the listing agent must disclose the information to the seller.

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42
Q

What is the difference between replacement cost and market value?

A

Depreciation

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43
Q

Economic life is defined as:

A

Years of profitable use

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44
Q

A buyer is interested in purchasing a home. He has a home inspection, and the inspector notifies the buyer that the house has 60 amp service. The inspector states that 100 amp service is usual and customary for a home of this size. This inspector has identified an example of ______.

A

Functional obsolescence

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45
Q

An underage college student signs a lease, then discloses his age to the landlord. What is true?

A

The contract is voidable at the minor’s option.

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46
Q

An underage college student signs a lease, then discloses his age to the landlord. What is true?

A

The contract is voidable at the minor’s option.

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47
Q

A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol. How do you proceed?

A

Send the seller home in a cab and tell them to return at another time.

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48
Q

A seller comes into the office to sign a contract. The seller is stumbling and smells of alcohol. How do you proceed?

A

Send the seller home in a cab and tell them to return at another time.

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49
Q

A sales agent had a listing, and the property did not sell. The listing expired. During the term of the listing, the seller had disclosed confidential information to the agent. Several months later, the agent has a buyer client interested in purchasing the same property. How long must the seller’s private information be kept confidential?

A

The duty of confidentiality never expires, and the agent must keep that information
confidential forever

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50
Q

Which of the following is an example of economic obsolescence?

A

Air pollution

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51
Q

A broker is most often in what kind of agency relationship:

A

A special agent

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52
Q

A high-rise condominium property is advertised as having the “Most beautiful view of the city.”
This ad is best described as:

A

Puffing

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53
Q

Which of the following facts about a listed property must be disclosed?

a. Death due to structural defects
b. Death due to HIV
c. Suicide on the property
d. A sex offender lives next door

A

a. Death due to structural defects

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54
Q

A lead paint disclosure is required for all properties built before:

A

1978

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55
Q

A lead paint disclosure is required for all properties built before:

A

1978

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56
Q

Which of the following statements about lead is NOT true?

a. The lead paint disclosure is required for all properties built before 1978
b. The lead paint disclosure allows an inspection for 10 days after the date of the contract
c. The lead paint disclosure allows a buyer to waive the right to an inspection
d. The property owner must remediate the presence of lead

A

d. The property owner must remediate the presence of lead

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57
Q

CERCLA is administered by:

A

the EPA

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58
Q

Which of the following used in 1978 is both extremely hazardous and friable?

A

Asbestos

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59
Q

Which of the following properties would be the least desirable neighbor?

a. A landfill
b. Greenfields
c. Brownfields
d. Blackfields

A

c. Brownfields

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60
Q

A seller must keep a copy of the lead paint disclosure he provided to the buyer for:

A

3 years

61
Q

It has been found that mold can develop due to:

A

Airtight windows and doors found in newer construction

62
Q

General liability insurance will:

A

protect a company’s assets if someone is injured on company property

63
Q

A condominium owner’s policy will most likely cover the owner if:

A

a guest slips in the owner’s kitchen

64
Q

A condominium complex has liability insurance. This is least likely to cover:

A

a unit owner’s carpet damaged by a broken water pipe

65
Q

Accurate record-keeping is the responsibility of all brokers. If a broker’s computers are stolen,
what steps could have been taken to protect records?

A

Offsite or cloud storage

65
Q

Accurate record-keeping is the responsibility of all brokers. If a broker’s computers are stolen,
what steps could have been taken to protect records?

A

Offsite or cloud storage

66
Q

A licensee has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statements about social media in real estate is NOT true?

A

An agent with permission to advertise a property on social media does not have to worry about protecting confidential information about the client

67
Q

A sales agent is showing a property. He trips inside the house, causing major damage to property
of the owner. What type of insurance will cover this accident?

A

Liability insurance

68
Q

Prior to its amendments, the Civil Rights Act of 1968 prohibited discrimination based on:

A

National origin

69
Q

An agent working with immigrant buyers must be careful:

A

not to steer the buyers to a neighborhood, based on the language they speak

69
Q

An agent working with immigrant buyers must be careful:

A

not to steer the buyers to a neighborhood, based on the language they speak

70
Q

An agent is accused of discrimination. What will HUD do?

A

Try mediation followed by a lawsuit if mediation fails

71
Q

A mobility-impaired tenant has leased an apartment in a complex with unassigned parking. He has requested an assigned reserved space near his unit. What is true?

A

The landlord must provide an assigned reserved space for the tenant near the tenant’s unit

72
Q

An investor has 15 rent houses. He has hired an agent to lease the houses. Which of the following actions by the agent would NOT be in violation of fair housing laws?

A

Refusing to show the houses to anyone over 75 years old

73
Q

Which of the following would NOT be an operating expense included in the property manager’s operating budget?

A

Mortgage payments

74
Q

Which of the following would be most likely to hire a property manager?

A

An association

75
Q

A broker is running short of funds to meet this month’s operating expenses. He places a client’s earnest money deposit in his business account and uses it to pay his rent. After his next closing, he replaces the client’s deposit in his trust account. The broker:

A

is guilty of conversion

76
Q

Which of the following is NOT an example of due diligence in a sales contract?

A

A broker completes a CMA for a buyer client prior to the buyer making an offer

77
Q

A sales agent just obtained a listing. The seller has told the agent that she needs to sell the property because she is going through a divorce. What must the salesperson do?

A

Obtain the signatures of all owners on the listing agreement

78
Q

Wetlands typically contain which of the following?

A

Saturated soil

79
Q

What is the maximum amount of time allowed for a victim to file a Fair Housing complaint
with the courts?

A

24 months

79
Q

What is the maximum amount of time allowed for a victim to file a Fair Housing complaint with the courts?

A

24 months

80
Q

A property manager notices that the building stucco needs repair. He notifies the landlord and recommends a contractor. The landlord uses the contractor who does not do a good job. The new stucco leaks, and mold grows. The tenant becomes ill from the mold. Who is responsible?

A

The landlord

81
Q

An apartment building owner has renovated and modified several units to be handicapped accessible. Can he advertise this accommodation?

A

Yes

82
Q

An apartment building owner has renovated and modified several units to be handicapped accessible. Can he advertise this accommodation?

A

Yes

83
Q

Another term used to describe wetlands is:

A

mire

84
Q

What is the purpose of a property management trust account?

A

To hold tenant security deposits

84
Q

What is the purpose of a property management trust account?

A

To hold tenant security deposits

85
Q

A salesperson designed an innovative technology in the office that would substantially improve service to clients. He must:

A

obtain permission from his broker before using it

86
Q

Every broker must display the Equal Housing Opportunity Poster in his office. The poster is usually distributed by:

A

HUD

87
Q

When should an agent advise a client to get title work done?

A

before closing

88
Q

What is considered evidence against a broker accused of discrimination?

A

failure to display the equal housing poster in their office

89
Q

Regulation Z applies to:

A

all real estate loans

90
Q

The main purpose of Regulation Z is:

A

to notify borrowers of the true cost of credit

91
Q

What is a requirement of the CFPB?
a. Lenders must provide borrowers with the LE form at the time of or within three business days of application.
b. Lenders must provide borrowers with a good faith estimate of closing costs.
c. Lenders must provide borrowers with a CD form at the time of loan application or
within three days of application.
d. The updated CD must be made available to the borrower at least one business day
before closing

A

a. Lenders must provide borrowers with the LE form at the time of or within three business days of application.

92
Q

Which of the following closings would be covered by RESPA?

a. A mobile home
b. A retail shopping center
c. An apartment complex
d. A condominium

A

d. A condominium

93
Q

When does the buyer under contract for deed get title to the property?

A

When the final loan payment is made

94
Q

What is another name for Contract for Deed?

A

Installment contract

95
Q

What is another name for Contract for Deed?

A

Installment contract

96
Q

What department of the government oversees the FHA insurance program?

A

HUD

97
Q

A buyer is aware that interest rates should go down over the next few months. What type of
loan should he get to enable him to buy now and take advantage of declining rates in the future?

A

ARM

98
Q

Which of the following will NOT harm or negatively impact a seller’s credit score?

a. A short sale
b. A foreclosure
c. A straight assumption
d. An assumption subject to

A

A straight assumption

99
Q

In rental properties, increased demand can be the result of:

A

High mortgage interest rates

100
Q

In rental properties, increased demand can be the result of:

A

High mortgage interest rates

101
Q

Which of the following would not be eligible for a VA loan?

a. A disabled veteran
b. The parents or siblings of a veteran
c. An active-duty veteran
d. A retired veteran

A

b. The parents or siblings of a veteran

101
Q

Which of the following would not be eligible for a VA loan?

a. A disabled veteran
b. The parents or siblings of a veteran
c. An active-duty veteran
d. A retired veteran

A

b. The parents or siblings of a veteran

102
Q

What is required of a loan servicer before foreclosing on a VA loan?

A

The VA must be notified before the foreclosure.

103
Q

Who must be notified to take money out of the trust account in a real estate transaction?

A

Both buyer and seller

104
Q

Who must be notified to take money out of the trust account in a real estate transaction?

A

Both buyer and seller

105
Q

How is earnest money recorded on the closing disclosure?

A

Credit to the buyer

105
Q

How is earnest money recorded on the closing disclosure?

A

Credit to the buyer

106
Q

What type of mortgage loan would allow the property owners to borrow additional funds at future dates?

A

An open loan

107
Q

Mary and John are married with grown children. Both are intestate. If John dies and Mary immediately becomes the owner of their home, what type of ownership did they have?

A

Tenancy by the entirety

108
Q

One of the property owners in a subdivision is violating the deed restrictions. What can the other property owners do to get him to comply?

A

Seek an injunction from the courts

109
Q

Your property borders a non-navigable waterway and you have riparian rights. You have built a 10-foot pier at the water’s edge. How do you measure your property?

A

To the middle of the waterway

110
Q

Mary, a single woman, has no children. She owns real property and dies intestate. What happens to her real property?

A

The court will appoint an administrator and it will be distributed to her heirs by the Law of Descent.

111
Q

A property owner has a gas station on his land. The zoning committee changes the zoning to R-1. What must the property owner do?

A

Nothing – his property is automatically considered a non-conforming use.

112
Q

A property owner receives a notice that his land is in an improvement district. What does this mean?

A

He will receive an additional tax bill.

113
Q

A property owner has installed a chain link fence on his property. He has received an official notice requiring the removal of this type of fence. This fence is most likely a violation of:

A

Deed restrictions or deed covenants

114
Q

A single property is regulated by building codes, zoning and deed restrictions. The rules are in conflict with one another. Which must the property owner obey?

A

The property owner must obey whichever rules are the strictest or most limiting.

115
Q

In a contract for deed, the seller is the?

A

vendor

116
Q

A property is advertised as “For Sale by Owner.” The seller owns 2 homes. The seller offers and chooses the buyer based on the buyer’s national origin. Neither party is represented by a broker. Is the seller in violation of Fair Housing Laws?

A

no because their actions do not involve a broker

117
Q

A builder has a blanket loan on a parcel of land and sells a lot from the parcel. How can he deliver a deed to the buyer at closing?

A

He pays off the cost of the lot

118
Q

How do you find the Gross Income Multiplier (GIM)?

A

GIM = price/annual rent

119
Q

Net income = ?

A

Net income = Gross income - operating expense

120
Q

Which of the following transactions would not qualify for VA financing?

a. senior apartment complex
b. fourplex where one unit will be occupied by the owner
c. single family home
d. a rural home on 10 acres

A

a. senior apartment complex

it’s an investment property and not eligible for a VA loan

121
Q

A client is abandoned by the agent. What can the client do?

A

find another agent

122
Q

An investor owns a 10 unit duplex complex containing 20 apartments. Last year all the apartments were occupied for 6 months. One apartment was vacant for 5 months and 2 apartments were each vacant for 1 month. What was the occupancy for the property last year?

A

The complex has 20 units available for 12 months each = 240 months for occupancy.

5+1+1 = 7 empty months.

240 - 7 = 233 occupied months

233 = ?% of 240.

233/240 = 97% occupancy

123
Q

Which of the following terms BEST describes personal property that, by its attachment to real property, is regarded as real estate?

a. trade fixture
b. emblements
c. fixture
d. improvement

A

fixture

124
Q

A salesperson who completes a written listing agreement with a seller is helping to create a contractual relationship between?

A

the broker and the seller

125
Q

The income approach determines an investment property’s value based on what?

A

income or return

126
Q

when a buyer purchases a property subject to a seller’s existing mortgage, which of the following statements is correct?

a. the buyer assumes liability for the debt.
b. the seller’s obligations under the existing mortgage remain unchanged
c. the seller’s credit history can never be adversely affected by this transaction
d. the buyer must have an exceptional credit history to qualify for this type of assumption.

A

b. the seller’s obligations under the existing mortgage remain unchanged

127
Q

John and Mary bought a house as tenants in common. If mary dies, what happens to the ownership of the property?

A

John retains ownership of his portion and the rest goes to Mary’s heirs when her estate is probated

128
Q

a buyer files a lawsuit against a listing broker because, after closing, termite damage was discovered on the property. the listing broker had no knowledge of any termite problems on the property, and the seller did not disclose any termite problems. What type of insurance will protect the broker in this situation?

A

Errors and omissions insurance

129
Q

who does title insurance protect?

A

the buyer

130
Q

a buyer purchases a home for $250,000. He secures a loan with an LTV of 100%. Which of the following types of loans did he most likely procure?

a. conventional loan with PMI
b. FHA loan with MIP
c. non-conforming loan
d. VA guaranteed loan

A

d. VA guaranteed loan

a VA loan will usually have a 100% LTV

131
Q

Net annual income = ?

A

Net annual income = cap rate x market value

132
Q

The option period in a contract ends:

A

at 5:00 pm on the day mentioned in the contract

133
Q

An HOA can ban which of the following?

a. political signs
b. flags of the USA or any branch of the military service
c. dog breeds
d. privacy fences

A

d. privacy fences

134
Q

A license holder in violation of the TRELA has received a summons from TREC that a hearing will be held regarding the possible revocation or suspension of his license. The license holder fails to respond to the summons. What will TREC do?

a. schedule a hearing in the county court where the license holder practices real estate
b. schedule a hearing at the SOAH (State Office of Administrative Hearings) in Austin
c. schedule a hearing in the district court serving the license holder
d. schedule a hearing at the main office or business address of the license holder

A

b. schedule a hearing at the SOAH (State Office of Administrative Hearings) in Austin

If you fail to respond to a summons, TREC will schedule your hearing in Austin. You have waived your right to a hearing at a county, district court or at your office by ignoring TREC

135
Q

Which of the following actions is NOT a violation of the Texas Real Estate License Act?

a. A broker offers a guaranteed buy back of a property for a set price, if the purchaser is not happy with the investment after a two - year period of ownership
b. a broker guarantees a buyer that, based on past performance, an investment property will appreciate over the next two years
c. selling real estate by lottery
d. placing a sign to sell or lease real property with only the verbal consent of the owner

A

a. A broker offers a guaranteed buy back of a property for a set price, if the purchaser is not happy with the investment after a two - year period of ownership

136
Q

a court order directing the county sheriff to seize and sell property of a debtor to satisfy a lien is:

A

a writ of execution

  • a writ of execution is used to enforce payment of a lien
  • an injunction is a court order to stop a behavior or practice
  • a lis pendins is a legal notice that a lawsuit has been filed but not yet heard in court
  • a judgment is a general lien on a property
137
Q

In discussing property taxes, which of the following statements would be false?

a. property taxes are an automatic lien on real property
b. property taxes are a general lien
c. property taxes are paid first at foreclosure
d. property taxes are based on the assessed value and the tax rate

A

b. property taxes are a general lien

138
Q

which of the following about foreclosure is false?

a. notice must be received by the borrower 21 days before the sale
b. notice must be mailed to the borrower 21 days before the foreclosure sale
c. notice must be posted at the door of the county courthouse

A

a. notice must be received by the borrower 21 days before the sale

139
Q

a residential single-family home neighborhood was never fully built out. the developer has sold a tract of land in the middle of the subdivision to a group of investors who plan to build an industrial park on the land. the result of this will be many new jobs for the area. based on appraisal principles what will happen to the value of the homes in the immediate vicinity of the industrial park?

A

the value of the homes will decrease. the principle of conformity addresses this situation. Properties have maximum value when they are surrounded by similar properties

140
Q

a listing agreement is:

a. a bilateral contract
b. terminated by the death of the listing agent
c. an employment contract
d. a conveyance

A

c. an employment contract

141
Q

all of the following are penalties for violation of the Federal Fair Housing Act except:

a. fines
b. up to one year in jail
c. injunctions
d. assessment of attorney fees

A

b. up to one year in jail

Violation of Fair Housing Laws is a civil offense. Criminal penalties (jail) are not used. Fines, injunctions and assessment of attorney fees are all possible penalties

142
Q

an apartment complex is advertising for new tenants. which of the following statements in advertising would violate Fair Housing Laws?

a. no drugs
b. no students
c. no alcohol
d. no alcoholics

A

d. no alcoholics

alcoholics are considered to be handicapped, and therefore advertising no alcoholics would violate the law.

143
Q

In which document would you find the loan amount and an unconditional promise to pay?

A

the note

144
Q

a business organization in which a member or manager is not generally held liable for debts, obligations or liabilities of the company is called:

A

an LLC

an LLC is a business organization in which a member or manager is not generally liable for the debts of the company. A sole proprietor has total liability and in a corporation or S corporation, shareholders have limited liability

145
Q

How many square feet/acre

How many feet/mile

A
  • 43,560 square feet/acre

* 5,280 feet/mile

Real Estate Final (12 decks)

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