TEXAS AUSTIN INSTITUTE REAL ESTATE FINAL EXAM MARCH 2023

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The responsibilities of the Texas Real Estate Commission include all of the following EXCEPT: a. granting licenses to applicants b. regulating brokerage fees c. protecting the public interest d.... regulation the activities of licensees b. regulating brokerage fees The Texas Real Estate Broker-Lawyer Committee consists of how many members? a. 13 b. 9 c. 62 d. 18 a. 13 AD A Competitive Market Analysis (CMA) is most often prepared by a/an: a. inspector b. lender c. real estate agent d. appraiser c. real estate agent A real estate agent is allowed to do a Competitive Market Analysis (CMA). Only an appraiser can do an appraisal. A person appointed by a court to settle the estate of a deceased person when the executor cannot perform or refuses to perform is: a. another executor b. a legatee c. an administrator d. a devisee c. an administrator Brokers often act as an intermediary and are involved in extensive negotiations between an owner and a tenant in: a. commercial leasing b. apartment locating c. selling homes d. listing homes a. commercial leasing The Appointment paragraph of the Texas Association of Realtors® buyer representation agreement gives the agent the right to represent the buyer in a. all of Texas b. the market area c. only one county d. only one city b. the market area A buyer representation agreement must include: a. a definite termination date b. the street address of the property the buyer wishes to buy c. the list price of the property the buyer wishes to buy d. a protection period a. a definite termination date A listing agreement between a seller and broker, or a buyer agreement between a buyer and broker, is an example of: a. Special agency b. General agency c. Gratuitous agency d. Dual agency a. Special agency The Texas Real Estate Commission consists of _______. The commission members serve for _____ terms. a. 9 members --- 6 year b. 6 members --- 9 year c. 13 members --- 6 year d. 6 members --- 13 years a. 9 members --- 6 year 6 of the members are brokers and 3 are public members. They are appointed by the governor for six year terms. You/your spouse live in community property sale. Which of the following would be considered separate property? a. the boat your spouse owned before the marriage b. a duplex given to you by your parents after the marriage c. stocks your spouse received as a gift after marriage d. all would be separate property d. all would be separate property Who are the parties to the buyer representation agreement? a. the buyer and the seller b. the buyer and the broker c. the buyer and the salesperson d. the buyer and the lender b. the buyer and the broker The buyer representation agreement is between the buyer and the broker. It will be signed by the buyer and the broker or the broker's sponsored salesperson. All parties to the transaction must be treated honestly and fairly, but only the client is owed a fiduciary relationship. a. True b. False a. True A fiduciary relationship is a relationship of trust. The broker must always put the client's interest above the broker's interest. AD All of the following would be cause to suspend or revoke a license being held by a broker or salesperson under the Real Estate License Act EXCEPT: a. knowingly making a substantial misrepresentation b. acting in the dual capacity of a broker and undisclosed principal in any transaction c. failing to specify in a listing contract a definite termination date which is not subject to prior notice d. revealing to an owner an offer which your knowledge and experience convince you to be well below "fair market value" d. revealing to an owner an offer which your knowledge and experience convince you to be well below "fair market value" Answers "A", "B", and "C" are all listed in the license act as reasons the real estate license could be revoked. Answer "D" is the correct answer. A license is required to give the client advice and opinions, and your knowledge and experience would be an example of advice and opinions. What is NOT considered community property? a. rental income from separate property after marriage. b. property in ones own name after marriage c. rental income from property after marriage d. separate property aquired before marriage d. separate property aquired before marriage An applicant for a broker or salesperson has ______ to satisfy the requirements after they file the application. a. 6 months b. 1 year c. 90 days d. 6 weeks b. 1 year A broker earns his commission when: a. a ready, willing, and able buyer has entered into a contract. b. a prospect makes a below listing price offer for the property c. the seller withdraws the property from the market d. the broker advertises the property. a. a ready, willing, and able buyer has entered into a contract. When working with the buyer as a customer, the broker may: a. Show property to the buyer b. Fill out an offer for the buyer c. Collect a commission for the transaction d. All of the above d. All of the above The broker may not give advice and opinions to the buyer customer. TRELA states a broker may act as an intermediary between parties to a real estate transaction if: a. the broker obtains written consent from each party for the broker to act as an intermediary in the transaction b. the written consent of the parties states the source of the expected compensation to the broker c. Neither A or B d. Both A and B d. Both A and B A defect that is known to the seller and hidden from the buyer is a: a. material defect b. zoning defect c. Intermediary defect d. latent defect d. latent defect What course is available when a broker and a salesperson have a dispute over the commission split on a transaction? a. filing a joint complaint with TREC b. filing individual complaints with TREC c. seeking mediation, arbitration, or civil court action d. complaining to the seller's attorney c. seeking mediation, arbitration, or civil court action The Texas Real Estate Commission will not hear a dispute between licensees. The licensees may seek arbitration before a local board if the are Realtors�. They may also sue each other in court of law. According to The Real Estate License Act of Texas a broker acting as an intermediary in a transaction may: a. appoint somone to work with the seller and not the buyer b. appoint subagents to work with the parties c. appoint associated licensees to work with the parties d. appoint someone to work with the buyer and not the seller c. appoint associated licensees to work with the parties Listing contracts obtained by a real estate salesman are considered to be: a. the salesman's own property b. his personal property c. the property of the employing broker d. negotiable instrument c. the property of the employing broker All listing agreements and all buyer representation agreements are taken in the name of the sponsoring broker and become the property of the sponsoring broker. AD The "Seller's Disclosure of Property Condition" must be delivered to the buyer in all of the following transactions EXCEPT: a. for sale of commercial property b. if the seller has not resided on property in the last year c. when the seller is not assisted by a licensed real estate agent d. if the buyer has lived on the property as a tenant. a. for sale of commercial property A Sellers's Disclosure Notice is not required on a sale of commercial property. It is only used for the sale of homes. A seller who is using or not using a real estate agent is required to give the notice. If a seller orders the licensee to discriminate, the licensee: a. May not take the listing unless the seller agrees not to discriminate b. Must report the seller to HUD c. May take the listing and obey the sellers orders d. Make take the listing but cannot collect a commission a. May not take the listing unless the seller agrees not to discriminate A licensee is not allowed to discriminate and must refuse to work with someone who asks them to discriminate. In order for the agent to sue for a commission in a court of law, the agent must: a. no agreement is required b. an agent is not allowed to sue the principal c. have a written agreement with the principal d. the agent is allowed to sue if he has written or verbal agreement are employment with the principal c. have a written agreement with the principal In order for the broker to collect a commission the broker must be licensed and employed. The listing agreement and buyers representation agreement are employment agreements. According to the Information About Brokerage Services, a broker may act as a buyer's agent, a seller's agent, a subagent, or an intermediary. a. True b. False a. True The information on the Information About Brokerage Services form is from the TRELA. The Information About Brokerage Services is used to inform the public about the ways the public can work with an agent. The One to Four Residential Contract (Resale) is the form used to make an offer on a property. It becomes the contract when: a. a lawsuit affects the property. b. the buyer has signed the form. c. the offer is made to the seller. d. all parties have signed. d. all parties have signed. The offer must be signed by the buyer and seller. At this point the offer becomes a contract. At the closing a. all documents will be signed b. all doors and windows must be locked c. seller will receive the sales price for the property d. both A and C d. both A and C All document will be signed at closing including the seller signing the deed and the buyer signing the loan documents. A contract by which the owner agrees with another person that he shall have the right to buy the property at a fixed price, within a certain period of time is called: a. an escrow sales contract b. a sale and leaseback c. a "time is of the essence" provision d. an option d. an option The buyer has the right (not the obligation) to buy, but the seller is obligated to sell. The buyer must pay consideration to the seller in order for the contract to be enforceable. This is usually a small amount of money. Express agency may be created by an oral or written agreement. In this agreement the duties of the broker are stated. a. True b. False a. True he listing agreement and the buyers representation agreement create an expressed agency. A broker is not allowed to commingle funds. Commingle means to: a. Spent the client's money b. Receive a commission from a customer c. Place the client's money in the broker's account d. Pay the client a rebate c. Place the client's money in the broker's account An agent may have his license suspended because he commingles funds. What is the status of a contract if the seller does not make the buyer aware of a property being located within a municipal utility district? a. voidable by the buyer b. void c. voidable by the seller d. voidable by the buyer or the seller a. voidable by the buyer The buyer can cancel the contract or the buyer can continue with the contract. A municipal utility district is also called a MUD. The Texas Water Code requires the seller give the buyer notice relating to the tax rate and bond indebtedness of the district before execution of the contract AD When the broker is aware of the agency relationship and has disclosed the relationship to all parties to the transaction, it is: a. intentional dual representation b. unintended dual representation c. universal agency d. special representation a. intentional dual representation Implied agency can result in unintended dual representation. When a listing agent shows his own listings to an unrepresented buyer, the agent should make sure the buyer understands whom the agent represents. Who would NOT have to have a real estate license to practice real estate in Texas? a. apartment locators b. raw land sales person c. an attorney from Texas d. timeshare salesperson c. an attorney from Texas An apartment locator, a person who sells land, and a timeshare salesperson are all required to have a real estate license to practice real estate in Texas. An attorney licensed in Texas may do a real estate transaction without having a real estate license. Combining the principal's funds with the licensee's personal funds is a. considered to be commingling. b. establishing an escrow account. c. necessary in real estate speculation. d. standard practice to ensure commission. a. considered to be commingling. The commission may suspend or revoke a license of a person found guilty of commingling. The licensee may not place a client or customer's money in the licensee's personal account or in the firms working account. An applicant who fails an examination: a. may apply for reexamination but must wait 7 days before retaking the national portion of the test b. must retake and pass a 30-hour principles class before applying for reexamination c. will only be allowed to retest after a six-month wait d. may apply for reexamination by filing a request accompanied by the proper fee d. may apply for reexamination by filing a request accompanied by the proper fee An applicant who fails an examination may retake the examination. The applicant has one year from the time of application in which to pass the examination. The applicant may retake the examination as many times as necessary to pass the test. Failure on the part of the agent to advise the purchaser of real property in writing that he should have the abstract covering the property examined by an attorney of his own selection, or that he should be furnished with a policy of title insurance shall: a. be a violation of the Consumer Protection Act b. subject the agent to a fine of not less than $100 or more than $500 c. preclude purchaser from occupancy until title is insured d. preclude payment of, or recovery of, any commission agreed to be paid on the sale d. preclude payment of, or recovery of, any commission agreed to be paid on the sale A real estate licensee is instructed by the TRELA to advise a buyer to obtain an abstract or title insurance policy. If the licensee does not do this he cannot collect a commission and his licensee may be revoked. The Simons have defaulted on their loan payments and are behind in paying the rest of their bills, so their home is being sold in a foreclosure auction. Of the many liens against it, which will have first claim on the proceeds of the sale? a. the first mortgage recorded b. unpaid real estate taxes c. mechanics lien d. home equity loan b. unpaid real estate taxes Unpaid real estate taxes always have first priority in a foreclosure. The remaining liens would be in the order in which they were recorded at the county clerk's office. Mark and Mary Smith and been married for 11 years and have no agreement concerning inherited property. They live in a community property state. Mary inherits a property and rents is to a tenant. Income from the property is: a. Mary's separate property b. the community property of both Mark and Mary c. Mark's separate property d. required by law to be kept in a trust account b. the community property of both Mark and Mary The house Mary inherited would be her separate property, but the income from the property would be the community property of both Mark and Mary. The listing agreement must be in writing to satisfy: a. The Statute of Frauds b. The fair housing laws c. TREC d. The broker a. The Statute of Frauds The Statute of Frauds is a law that requires documents to be in writing. Deeds and listing agreements are examples. "The whole system or set of rules made by the government of a town, state, or country" is the definition of: a. Real Estate b. Moral c. Ethics d. Law d. Law Ethics is rules of behavior based on ideas about what is good and bad. Moral is based on what you think is right and good. The practice of directing home seekers to a neighborhood because of race, religion, color, national origin, sex, handicap, or familial status is: a. Steering b. Blockbusting c. Fair housing d. ADA a. Steering Blockbusting is the practice of agents persuading property owners to sell their homes quickly because of the fear of declining value resulting from a minority group moving into the neighborhood. AD The listing is always taken in the name of the ___________ and becomes the property of the ______________.: a. broker-----salesperson b. salesperson-----seller c. broker-----broker d. broker-----seller c. broker-----broker The listing belong to the sponsoring broker and is the sponsoring brokers name. The Texas Property Code requires the seller of a dwelling of not more than one unit deliver a Seller's Disclosure Notice to a buyer if the dwelling is a resale property. If the buyer has not received the notice before signing the contract, the buyer may: a. terminate the contract within 7 days after receiving the notice. b. terminate the contract within 14 days after receiving the notice c. terminate the contract, but must have the sellers permission d. reduce the sales price even if the seller does not agree. a. terminate the contract within 7 days after receiving the notice. If the buyer has not received the Seller's Disclosure Notice when the contract is signed he may request the seller deliver the notice. The buyer may terminate the contract for any reason within 7 days after the buyer receives the notice and the earnest money will be refunded to the buyer. An agent is on his way to make a presentation to his client, the seller, on an offer he received earlier that day. The agent is involved in a car accident while an unlicensed assistant is also in the car with him. The agent is taken to the hospital while the assistant is unharmed. What should the assistant do? a. make the presentation himself b. call the agent's broker so she can make the presentation c. just go back to the office and let the agent deal with it at a later date d. discuss the offer with the seller over the phone b. call the agent's broker so she can make the presentation The unlicensed person cannot present an offer or discuss an offer with the seller. The agent's broker could present the offer to the seller. When the broker is a subagent of the seller, he is working with the buyer as a: a. Client b. Subagent c Customer d. Intermediary c Customer Subagency requires two sponsoring brokers. One of the brokers has a seller client. The other broker has a buyer customer. Sally is selling her home and has listed it with a broker. She is required to give a Seller's Disclosure Notice form to thebuyer. The most likely person to fill out this form is the: a. broker b. inspector c. buyer d. seller d. seller The Seller's Disclosure Notice is filled out by the seller because it�s a disclosure of information the seller knows about the property. The Texas Real Estate Commission may suspend or revoke a license or take other disciplinary action authorized by Chapter 1101 if the license holder, while acting as a broker or salesperson: a. acts negligently or incompetently b. commingles money that belongs to another person with the license holder's money c. solicits, sells or offers for sale real property by means of a lottery d. all of the above d. all of the above There are many reasons given in the TRELA for revoking a real estate license. An agent must be competent, is not allowed to commingle money, and may not use a lottery to sell a property. The owner of property that is sold at a tax sale has the right to redeem the property after the tax sale. This is: a. statutory redemption b. equitable redemption c. discount redemption d. public redemption a. statutory redemption If the property was homestead of agricultural property the owner has 2 years to redeem the property. If the property was not homestead or agricultural, the owner only has 6months in which to redeem the property. Errors and Omissions Insurance is malpractice: a. Required by TREC b. Offered by insurance companies in Texas c. Sponsored by TAR d. Free from NAR b. Offered by insurance companies in Texas E and O insurance is usually carried at the broker level. When a contract appears to be good and binding but, in fact, one of the parties may legally reject it, the contract is said to be: a. valid b. voidable c. void d. unenforceable b. voidable A voidable contract binds only one party to the contract, the other party is not bound to the contract. Example: A contract with a minor. The minor is not bound to the contract. Therefore the contract is voidable. Extravagant statements that a reasonable person would recognize as exaggeration is: a. puffing b. fraud c. commingling d. boycotting a. puffing Puffing is making something sound better than it is. AD Information About Brokerage Services must always be printed in _______ point type. a. 8 b. 10 c. 12 d. 14 b. 10 The Texas Real Estate Licensing Act states that the Information About Brokerage Services form must always be in at least 10 point type. Most real estate licensees make their living from: a. residential brokerage b. commercial brokerage c. property management d. apartment locating a. residential brokerage A real estate license allows a licensee to do any type of transaction but there are more residential transactions. Therefore, more agents do residential real estate. When the salesperson leaves the sponsorship of the broker, the buyer's agreement: a. remains with the broker. b. is cancelled. c. is always given to the salesperson. d. doubles in length. a. remains with the broker. All listing agreements and all buyer representation agreements are taken in the name of the broker and become the property of the broker. An example of loyalty is: a. Helping a buyer client negotiate a lower price for the property b. The salesperson not disclosing to the buyer client that the salesperson is the owner of the property c. The broker not disclosing to the seller client that the broker is the buyer of the property d. Both B and C a. Helping a buyer client negotiate a lower price for the property A broker must always be loyal to their client. Loyalty is putting the client's interest above the agent's interest. The National Association of Realtors (NAR) was founded in: a. Texas b. 1908 c. Oklahoma d. 1968 b. 1908 NAR is the largest trade association in the United States. TREC will investigate a complaint if: a. the complaint is in writing and signed b. the complaint is submitted within 4 years of the incident c. the complaint is not an anonymous complaint d. all of the above d. all of the above The signed written complaint must give reasonable cause for an investigation. The broker or his sponsored salespersons must always discuss the types of agency offered by the company with the seller or buyer so the seller or buyer can make a decision about how they wish to be represented. a. True b. False a. True Information about Brokerage Services must also be given at the first substantive dialogue about a property. What are the Canons of Professional Ethics and Conduct for brokers and salesmen? a. competency, integrity, fidelity b. trust, honesty, faith c. revernce, business, friendly d. fiduciary, principal, knowledge a. competency, integrity, fidelity The licensee owes his client competency, integrity, and fidelity. Fidelity is considered the most important. It is relationship of trust between the broker and his client. Commissions are paid to the salespersons and the broker associates by the: a. other salespersons b. other brokers c. clients and customers d. sponsoring broker d. sponsoring broker A broker may pay other brokers and his sponsored agents. A salesperson may not pay anyone. When the TAR Residential Leasing and Property Management Agreement is used the broker becomes an employee of the owner. a. True b. False b. False The broker is employed by the owner but is an independent contractor. The broker is not an employee of the owner. The Texas Real Estate Commission(TREC) promulgates a short sale addendum to be used in a short sale. This Short Sale Addendum is to be signed by the: a. listing agent b. buyers agent c. lien holder d. buyer and seller d. buyer and seller Both the buyer and the seller must sign the form, but the agents and the lien holder do not have to sign. The lender has already given permission for the seller to short sell the property and would not need to sign the Short Sale Addendum that is attached to the contract. The type of mortgage most often used in Texas is: a. a deed of trust b. seller financing c. term loan d. wrap a. a deed of trust A deed of trust is a type of mortgage on the property. There are three parties in the deed of trust. The lender, the trustee, and the borrower. A broker has no sponsored salespersons. The broker has taken a listing for a house and has signed a buyer representation agreement with a buyer. The broker has shown the buyer several homes and the buyer wants to buy the house listed by the broker. What may the broker do? a. the broker must tell the buyer to get an agent from another company b. the broker must quickly find two salespersons to sponsor and then appoint the seller to one and the buyer to the other c. the broker must give advice and opinions to both the seller and buyer d. the broker must become an intermediary and may not give advice and opinions to the seller and buyer d. the broker must become an intermediary and may not give advice and opinions to the seller and buyer The Texas Real Estate Licensing Act states that a sole broker acting as a direct intermediary for the seller and buyer may not give advice and opinions to the seller and buyer. The Code of Ethics requires the buyer's agent to disclose to the seller's agent that they represent the buyer at the: a. first contract. b. first face to face metting c. first substantive dialogue d. first formal meeting a. first contract. Broker's must always disclose to each other who they represent in the transaction. This must be done at the first contact between the two brokers. The 10-year statute of adverse passion requires that the claimant: a. Cultivate the property b. Use or enjoy the property c. Take possession of the property d. All of the above d. All of the above The 10-year statute of adverse passion is the most common used statute. The 25-year statute is absolute. A listing broker is considered to have earned the commission: a. When the sales contract is signed by the seller and the buyer and the broker b. At closing and funding c. When the broker producers a ready, willing, and able buyer d. When the listing agreement expires c. When the broker producers a ready, willing, and able buyer The commission is earned when the broker procures a ready, willing, and able buyer, but the commission will not be paid until closing and funding. Proration of items in a real estate closing is made usually as of the date of: a. recording the deed b. the mortgage payment c. buyer's walkthrough d. closing d. closing In Texas the seller is responsible for the day of closing unless stated otherwise. The aggregate amount recoverable from the Real Estate Recovery Fund by all claimants for losses caused by one licensee shall NOT exceed: a. $40,000 b. $60,000 c. $80,000 d. $100,000 d. $100,000 Payments from the recovery account arising out of a single transaction may not exceed $50,000 regardless of the number of claimants. Claims against a single licensee may not exceed a total of $100,000 until the licensee has reimbursed the trust account for all amounts paid. An agent is working with a buyer as a customer. The agent shows the buyer a property listed with another real estate firm. The agent: a. has become an intermediary b. is a subagent of the listing broker c. is doing something illegal d. must pay the listing broker a fee b. is a subagent of the listing broker The agent is a subagent of the listing broker because the buyer is a customer, not a client. The core real estate course, Law of Agency, was established by an amendment to the TRELA in: a. 1948 b. 1993 c. 1987 d. 1968 b. 1993 Prior to 1993 there was NO Law of Agency core real estate course. The course became mandatory for new salesperson applicants beginning September 1, 1994. An agent who may perform any acts or transactions the principal may perform is a: a. universal agent b. special agent c. seller agent d. general agent a. universal agent To be eligible to receive a license under Chapter 1101 a person must at the time of application be at least 21 years of age. a. True b. False b. False A person must be 18 years old in order to be eligible to receive a license. A broker deposits a principle's funds into the broker's personal bank account. This is: a. allowed in the contract b. commingling c. channeling d. allowed if the amount is less than $1,000 b. commingling Commingling is mixing the client or customers money ith the licensee's money. A licensee can lose their license for commingling. When the buyer is represented as a client, a fiduciary duty is owed to the: a. buyer b. seller c. agent d. buyer and seller a. buyer The broker always owes a fiduciary duty to the client Which of the following is NOT one of the duties of an agent? a. loyalty b. confidentiality c. possesion d. accounting c. possesion An agent owes fudiciary duty to the client. An agent owes Obedience, Loyalty, Disclosure, Confidentiality, Accountability and Reasonable Care to the client. Remember OLD CAR Which of the following is required to have a Texas real estate license in order to sell a property in Texas? a. a builder b. a person licensed as a salesperson in another state c. an attorney-in-fact d. an owner selling his own property b. a person licensed as a salesperson in another state A person licensed as a salesperson in another state may not sell a property in Texas without first obtaining a Texas real estate license. An attorney-in-fact working under a power of attorney would not need a license to sell that person's property. A builder is not required to have a license because he is selling his own property. Who can pay money to a licensed salesperson to perform sales activities for a house a broker has listed sale for? a. The seller under the listing b. Any licensed broker involved in the transaction c. The salesperson's sponsoring broker and no one else. d. The related entities in the sale, the title company, or the mortgage company. c. The salesperson's sponsoring broker and no one else. Only a sponsoring broker may pay his sponsored salesperson. A broker may not pay salespeople from another firm. Salespersons may only accept commissons from their sponsoring broker. Homesteads in Texas are not limited in size. a. True. A person may homestead all property that the person owns. b. False. A rural homestead is limited to 200 acres for a married couple and 100 acres for a single person c. False. An urban homestead is limited to no more than 10 acres of land. d. Both B and C. d. Both B and C. A homestead is limited in size in Texas. A homestead is a constitutional right but if a person wants a homestead tax exemption the person must file with the tax assessor Any person, partnership, association, or corporation who authorizes or employs another, called an agent, to perform certain acts on his, her or its behalf is BEST called the: a. seller b. broker c. principal d. assignor c. principal The principal is often referred to as the client and the third party is called the customer. The practice of directing home seekers to a neighborhood because of race, religion, color, national origin, sex, handicap, or familial status is: a. Steering b. Blockbusting c. Fair housing d. ADA a. Steering Blockbusting is the practice of agents persuading property owners to sell their homes quickly because of the fear of declining value resulting from a minority group moving into the neighborhood. The TRELA does not require disclosure if a death occurred on a property by: a. natural causes b. suicide c. accident unrelated to the condition of the property d. all of the above d. all of the above A murder on the property and an accidental death resulting from an accident related to a condition on the property must be disclosed. The aggregate amount recoverable from the Real Estate Recovery Fund by all claimants for losses caused by one licensee shall NOT exceed: a. $40,000 b. $60,000 c. $80,000 d. $100,000 d. $100,000 Payments from the recovery account arising out of a single transaction may not exceed $50,000 regardless of the number of claimants. Claims against a single licensee may not exceed a total of $100,000 until the licensee has reimbursed the trust account for all amounts paid. Commingling, as used in the Real Estate License Act, is: a. a meeting of brokers and salesmen b. when a broker places escrow money into the company's operating account c. placing the client's money in a trust account d. when the broker places personal funds into the company's operating account b. when a broker places escrow money into the company's operating account Commingling is mixing the client or customer's money with the company's operating account or the agent's personal account. Commingling is grounds for suspension or revocation of the agent's real estate license. John is a salesperson sponsored by Mr. Jim, the broker for Blue Realty. He wishes to move his license to Green Realty and be sponsored by Ms. Jane. When John terminates his relationship with Blue Realty, how long does Mr. Jim have to return John's license to TREC. a. 30 days b. 90 days c. immediately d. the license doesn't have to be returned to TREC c. immediately Chapter 1101 Sec. 1101.367 (a) requires the broker to immediately return the salesperson license to the commission The TAR Residential Buyer/Tenant Representation Agreement states that the broker will seek payment of commission first from the seller, landlord, or their agents. If such persons refuse or fail to pay, the broker will be paid by the: a. Buyer customer b. Tenant customer c. Client d. None of the above c. Client The broker will be paid by the buyer client if the broker cannot collect a commission from the seller, landlord, or their agents If Mr. James' home is sold at a forced sale for property taxes, how much time does he have to regain the legal title to the property? a. two days b. two weeks c. two months d. two years d. two years In Texas a person's homestead or land used for agriculture may be redeemed within 2 years after the tax sale. All the other property must be redeemed with 6 months. A broker with a buyer's representation agreement in place is more likely to show all properties that meet the needs of the buyer. These could include: a. FISBOs b. foreclosures c. property not yet on the market d. All of the above d. All of the above A broker with a buyer's representation agreement will try to show all properties that fit the needs of the buyer. The broker represents the buyer as a client and will try to show the best properties to the buyer. In the TAR Residential Real Estate Listing Agreement Exlusive Right to Sell form, the broker is authorized to execute documents in the name of or on behalf of the Seller concerning the Property. a. True b. False b. False The listing agreement DOES NOT give the listing broker the right to execute documents (sign a contract) in the name of or on behalf of the seller. The seller must execute documents for himself. Examples of employment agreements are the: a. listing agreement b. buyer's representation agreement c. both A and B d. neither A or B c. both A and B The property management agreement is also an employment agreement. The agreements are between the broker and their clients. A broker representing a buyer: a. Will disclose this to the listing broker b. Will reject subagency if offered by the listing broker c. Does not need to disclose representation d. Both A and B d. Both A and B A broker must always disclose who the broker represents to all of the principals involved in the transaction. Texas does not have a disclosure law. This means: a. A deed is not used. b. The name of the new owner is not allowed to be his deed. c. The buyer does not have to disclose to the public the amount that was paid for the property. d. The deed is never recorded at the county clerk's office. c. The buyer does not have to disclose to the public the amount that was paid for the property. Some states require the price the property sold for to be disclosed to the public. Texas does not have this law. The Texas Real Estate Commission is composed of: a. 3 broker members and 6 public members b. 6 brokers and 6 lawyers c. 6 broker members and 3 public members d. all the commission members must be licensed brokers for 5 years c. 6 broker members and 3 public members The 9 members are appointed by the governor. A person is required to have a real estate license if: a. They are a public official in the conduct of official duties b. They are employed by a new home builder and are only selling his homes c. they are an on-site manager of an apartment complex d. they are selling a ranch for a person from another country d. they are selling a ranch for a person from another country The public official, the employee of a new home builder, and the on-site manager of an apartment complex are not required to have a real estate license when they are doing real estate transactions for their employer. In order to become a broker the salesperson must have experience points. The number of experience points required is a. 270 b. 3600 c. 4 d. 300 b. 3600 A salesperson must have an active license for four of the previous five years. The salesperson receives the points for doing real estate transactions. The salesperson must acquire points in each year of the four years. The ___________ amendments to the fair housing laws protect families with children. Anyone under the age of _________ is considered to be a child. a. 1988-----18 b. 1988-----21 c. 1974-----18 d. 1974-----21 a. 1988-----18 The Civil Rights Act of 1968 was amended in 1988 to include handicap and familial status. Handicap includes persons infected with AIDS or the HIV virus. A person may not sell, lease, or transfer an easement or right-of-way used for utility, railroad, or pipeline service for another compensation unless the person: a. holds a real estate license issued by TREC b. holds a certificate of registration issued by TREC c. either A or B d. neither A or B c. either A or B This person would be called a right of way agent and TREC requires they have a real estate license or a certificate issued by TREC. In an intermediary situation, if the broker appoints one of his salespersons to work with the seller, he must a. appoint a salesperson to work with the buyer b. appoint himself to work with the buyer c. appointments are not made in intermediary d. appointments are only made to the seller a. appoint a salesperson to work with the buyer In an intermediary situation, if an appointment is made to the seller, an appointment must also be made to the buyer. The broker is the intermediary and cannot be appointed. Agency is the act of representing someone in the purchase, sale, or lease of a property. Subagency is the act of representing: a. a lending institution b. a principal who is represented by an agent c. a department of the federal government d. an anonymous purchaser b. a principal who is represented by an agent A principal is also called a client. Two companies are always involved in subagency. Example: Company A has taken a listing on a property and represents the seller as a client. Company B is working with a buyer customer. Company B becomes the subagent of Company A. The broker represents both the seller and the broker in the same transaction. The preferred method for representing both parties in the same transaction is: a. subagency b. dual agency c. intermediary d. the broker is not allowed to represent the seller and the buyer in the same transaction c. intermediary The Texas Real Estate Licensing Act states that if the broker represents both parties in the same transaction, the broker must become an intermediary. ______________ states that a broker must maintain a written policies and procedures manual for the company. a. TREC b. ABOR c. TAR d. IREM a. TREC TREC ---- Texas Real Estate Commission, ABOR ---- Austin Board of Realtors, TAR ---- Texas Association of Realtors, IREM ---- Institute of Real Estate Management John owns a building that contains asbestos ceiling tile. The tiles are in good shape. Must John have the tiles removed? a. yes b. asbestos was never used in ceiling tile c. no the tiles may be encapsulated d. no but a mold remdiation certification must be issued. c. no the tiles may be encapsulated Asbestos does not always have to be removed. If it is in good shape is may be encapsulated. Encapsulate means to enclose completely. Example: The ceiling tiles could be painted. The ______ index lists in alphabetical order all sellers named in the documents recorded in a year. a. grantor b. grantee c. lis pendens d. tract a. grantor The grantor index is the sellers index and the grantees index is the buyers index. Who are the parties to the seller's listing agreement? a. the seller and the buyer b. the seller and the broker c. the seller and the salesperson d. the seller and the lender b. the seller and the broker The seller's listing agreement is between the seller and the broker. It will be signed by the seller and the broker or the broker's sponsored salesperson. When the salesperson leaves the sponsorship of the broker, the buyer's agreement: a. remains with the broker. b. is cancelled. c. is always given to the salesperson. d. doubles in length. a. remains with the broker. All listing agreements and all buyer representation agreements are taken in the name of the broker and become the property of the broker. Mary owns community and separate property. She is married and has children. She dies testate. How is the property divided? a. community property goes to her husband while the separate property goes to their children b. it would be decided by the courts c. in accordance with her will d. the property would be divided equally between the husband and the children c. in accordance with her will Testate means Marry has a will. The best answer of the ones given is "in accordance with her will" the property would not be divided equally between the husband and the children. In the last several years, a. Subagency has become more popular in residential real estate. b. Buyer representation is not used in residential real estate. c. Few brokers are allowing subagency. d. None of the above c. Few brokers are allowing subagency. More and more buyers want to be represented by an agent. They want to be clients and do not want to remain customers. Subagency requires the buyer to be a customer not a client. TRELA does not apply to: a. an attorney licensed in this state b. an on-site manager of an apartment complex c. a public official while engaged in offical duties d. all of the above d. all of the above An attorney licensed in this state, an on-site manager of an apartment complex, and a public official engaged in real estate transactions as part of their official duties are not required to have a real estate license. What must a Buyer's Representative Agreement have? a. Fair Housing disclosure b. a buyer's acceptable mortgage payment c. buyer's credit history d. a termination date d. a termination date All listing agreements and buyers representation agreements must have a termination date and cannot automatically renew. What advise would an agent give to a seller? a. Advise about market conditions and financing options b. Advise about preparing the property for sale and negotiating contracts c. Both A and B d. None of the above c. Both A and B The agent is representing the seller as a client and owes advice and opinions to the seller. Which one of the following is NOT one of the duties an agent owes to a client? a. obedience b. loyalty c. reasonable care d. hope d. hope The agent owes obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care to the client. A buyers representation agreement is only enforceable a. Within the market area named in the agreement b. In one county. c. With one broker in each city d. Limited to two brokers a. Within the market area named in the agreement The buyer may sign a buyers representation agreement with more than one broker as long as the market area is different in each agreement. An idividual managed several properties for several owners. Is this person required to have a real estate license? c. only if the properties are within the city limits d. only if the owners want him/her to market the property for sale. a. yes b. no a. yes The individual would be a property manager and a property manager is required to have a real estate license. If the person was an on-site manager at an apartment complex he would not have to have a license. Broker Bob and Broker Jim both claim to be entitled to the commission from the sale of a property located in Texas. They have asked TREC to decide who is entitled to the commission. Will TREC make the decision? a. No, TREC does not become involved in commission disputes between licensees b. Yes, TREC will hear the case c. No, only a salesperson can collect a commission d. Yes, if the brokers complete the correct forms. a. No, TREC does not become involved in commission disputes between licensees TREC will not become involved in commission disputes between brokers. If the brokers are both members of TAR, the brokers may take the case to arbitration before the TAR board. Information About Brokerage Services must be given to potential buyers, sellers, tenants, and landlords at the: a. time of first meeting. b. after the listing is taken. c. at the closing. d. first substantive dialogue about a property. d. first substantive dialogue about a property. Information About Brokerage Services gives information concerning the ways a broker can represent a person. It gives information about buyer's agency, seller's agency, intermediary, and subagency. John Brooks, a broker, is doing business as ABC Realty. Is it necessary for him to file an assumed name at the county clerk's office? a. yes b. no c. it depends on the county d. it depends on how many sales associates he has a. yes He would file a dba (doing business as) with the county clerk's office. ABC Realty would become his assumed name. A sponsoring broker's license is suspended two years. What effect does this have on the salesperson affiliated with the broker? a. salespersons' licenses will also be suspended for two years. salespersons' license will also suspended for one year c. salesperson may continue to do business for the broker d. salespersons' licenses will become inactive with TREC d. salespersons' licenses will become inactive with TREC When a sponsoring broker dies or his license is suspended, revoked, or expires, the licenses of his sponsored salespeople will become inactive with TREC. The salespeople cannot do real estate transactions without a sponsoring broker. In Texas, if two or more persons are named as owners and there is no specific indication as to how they are taking title, they are presumed to be: a. joint tenants b. tenants in common c. separate owners d. joint owners b. tenants in common Tenants in common is the most common form of co ownership in Texas. If a group of owners want to take ownership of property as joint tenants with the right of survivorship, the ownership must be created by an attorney. A _______ is created by using the words " love and affection" as the consideration for the deed. a. Consideration Deed b. Correction Deed c. Guardian Deed d. Gift Deed d. Gift Deed The consideration in a gift deed is often "$10 and love and affection". The consideration in a general warranty deed is often "$10 and other good and valuable consideration". A seller made a counteroffer on the buyers offer. The buyer signed the counteroffer and the agent delivered it to the seller. Meanwhile, the buyer made an offer on another property that was accepted. Which of the following is true? a. the first offer is valid b. the second offer is valid c. neither offer is valid d. both offers are valid d. both offers are valid The counteroffer from the seller was accepted by the buyer. The second offer was accepted by the seller. Both offers have been accepted and both are valid. Beginning January 1, 2012, an applicant for a real estate broker license will need at least 4 years of active exerience as a license holder during the preceding 5 years. a. TRUE b. FALSE a. TRUE TRELA changed the requirements for a broker's license from 2 years to 4 years on 1/1/2012 Can there be more than one intermediary in the same transaction? a. yes, if the seller and buyer are represented by different companies, brokers from each company may be intermediaries. b. yes if both the seller and buyer agree c. no, one broker must be a subagent of the other d. no d. no The sponsoring broker of the firm involved in the intermediary transaction is the intermediary. Agency is always take at the broker level. A broker has shown a property to a customer. The customer assumes from the broker's actions and words that the agent represents the customer. This is: c. Implied Agency d. Express agency a. Agency by ratification b. Gratutious agency c. Implied Agency The broker has implied from his words and actions that he represents the buyer even though he does not. The agent should always make it clear to a customer that the agent does not represent them. The broker representing the owner is referred to as the seller's broker or the listing broker: a. True b. False a. True The broker representing the buyer is referred to as the buyer's broker, the other broker or the selling broker. Which of the following are legal to include in a listing agreement? a. the list price b. a protection period c. a definite termination date d. all of the above d. all of the above All are legal to include in a listing agreement. The list price is the price the seller wants to sell the property for. The protection period protects the broker for a time period after the listing agreement ends. All listing agreements must have a termination date. In 1993 the legislature created: a. buyers agency b. statutory dual agency c. intermediary d. subagency b. statutory dual agency In 1993, statutory dual agency became a part of TRELA. It was removed from TRELA in 1996 and intermediary was put into TRELA. The Texas Real Estate Commission has the power to: a. establish standards of conduct and ethics for licensees b. enforce all rules and regulations necessary for the performance of its duties c. issue a real estate license to a person who qualifies for a license d. all of the above c. issue a real estate license to a person who qualifies for a license TREC has the power to issue licenses to qualified persons and may establish standards of conduct for the persons licensed under the Act. All of the following are examples of different ways of giving real estate legal description EXCEPT: a. metes and bounds b. the recorded mailing address c. lot and block d. the rectangular survey b. the recorded mailing address Meats and bounds, lot and block, and the rectangular survey are all forms of legal descriptions. A street address is an informal reference and cannot be used as a legal description. A real estate salesperson would use a competitive market analysis, or CMA, to help a seller price his residential property. An appraisal approach similar to the CMA is the: a. Supply and demand approach b. Market-data approach c. Cost approach d. Income approach b. Market-data approach Residential property is appraised using the market-data approach. The market-data approach uses information from other properties that have sold to find the value for the subject property. Supply and demand approach is not an approach in appraisal. A property management agreement between a broker and an owner is an example of: a. Special agency b. General agency c. Gratuitous agency d. Dual agency b. General agency A general agency relationship allows the broker to bind the client to an agreement. The broker will bind the owner of the property to a lease with a tenant. The only person who is allowed to give legal advice is: a. Broker for the seller b. Salesperson c. Attorney d. Broker for the buyer c. Attorney A broker and salesperson are not allowed to give legal advise to anyone. Only attorneys can give legal advice. [Show More]

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