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0121 Real Estate Principles I questions & answers.
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0121 Real Estate Principles I questions & answers.
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0121 Real Estate Principles I questions& answers.
Q. The Real Estate License Act or TRELA is Chapter 1101 and 1102 of which regulation? ANS -A. Texas
Occupations Code
Q. Which of the following statements about the Sunset Act is TRUE? ANS -A. The Sunset Act requires the
reviews of all state agencies.
Q. According to the Texas Real Estate Commission Rule 531.18, what document must be prominently
displayed in each broker's or inspector's place of business? ANS -A. Consumer Information Form 1-1
Q. How does The Real Estate Commission determine a license applicant's competency? ANS -A. The
state's real estate licensing exam
Q. Of the following statements, which one DOES NOT describe a condition of eligibility for
compensation? ANS -A. The broker must receive payment only from the principal.
Q. What term identifies an economic preference for a certain location? ANS -A. Situs
Q. How may real property be turned into personal property? ANS -A. Severance
Q. Which of the following terms refers to an item in which ownership transfers through a bill of sale
rather than a conveyance instrument such as a deed or will? ANS -A. Personal property
Q. Plants that are cultivated and harvested are considered personal property and referred to as _____.
ANS -A. Real property
Q. Which term refers to the investment permanence of land? ANS -A. Fixity
,Q. What is the CORRECT definition of "real property"? ANS -A. additionally includes the bundle of rights
such as the right to disposition
Q. Which one of the following rights is NOT associated with property ownership? ANS -A. Feudal rights
Q. What is the CORRECT definition of a fixture? ANS -A. Personal property permanently attached to the
real property.
Q. What is the primary difference between a townhouse and a condominium? ANS -A. Ownership of a
townhouse includes land ownership
Q. What is unique about the ownership of a cooperative (co-op) property vs. any other residential type
of property? ANS -A. Owns shares like a stock
Q. Which type of property is a development or subdivision that may include common elements such as
parks and recreational areas, shopping or offices in addition to residential dwellings? ANS -A. Planned
Unit Development (PUD)
Q. Which type of report identifies any insurance claims made on a parcel of real estate in the past five
years? ANS -A. CLUE (Comprehensive Loss Underwriting Exchange)
Q. Real estate taxes are called _______ taxes. ANS -A. Ad valorem
Q. Which of the following types of homeownership does the owner have stock and a lease rather than
ownership? ANS -A. Co-ops
Q. What type of property has multiple owners of a residence, typically in a recreational environment or
desirable vacation spots, who share the right of possession for a specific period of time with the other
owners? ANS -A. Timeshares
Q. The primary benefit of the Texas Homestead Act is to _______. ANS -A. Protect the home owner from
creditors that do not have specific or tax liens.
, Q. What is required for a broker to act as an intermediary between parties to a real estate transaction?
ANS -A. Broker obtains written consent from each party.
Q. As the seller's agent, which of the following duties does Ms. Smith NOT owe to the buyer? ANS -A.
The duty of confidentiality
Q. When should a real estate agent who represents one party in a proposed real estate transaction
disclose his or her agency relationship to others involved in the same transaction? ANS -A. At the first
contact.
Q. Which one of the following actions should an intermediary broker AVOID? ANS -A. Tell the buyers
that the seller might accept a lower price without the seller's knowledge.
Q. What must a broker do to act as an intermediary in a real estate transaction? ANS -A. Obtain written
consent of the parties that includes the statement clarifying who will pay the broker fee.
Q. Using the general terms of agency law, which party is authorized to represent another party? ANS -A.
The Agent
Q. In a typical real estate transaction, the principal could be any of the following EXCEPT _______. ANS -
A. Broker.
Q. Broker Bob is negotiating a transaction between Seller A and Buyer B; he is acting as an agent for
Seller A only. Seller A's primary interest is to obtain the full listing price for his property. Buyer B wants
to pay the lowest possible price for the property. What would Broker Bob be required to do? ANS -A. To
get seller A the full price.
Q. Which of the following is NOT an example of intentional fraud? ANS -A. A Realtor THINKS there are
hardwood floors under the carpet, when in fact, there is not.
Q. Real estate agents have the authority of which type of agent? ANS -A. Special agent.
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