Real Estate Test 1, Real Estate Test 2, Real Estate
Test 3, Real Estate Study Questions/ 700 Q&A.
Under TREC regulations, the prohibition of referral fees and rebates without prior approval from
the client does NOT apply to which of the following? - Answer: Compensation from settlement
companies
An escape clause establishes the conditions under which a party or parties can back out of a
contract agreement without - Answer: Breaching the contract
Determining if an item is a "fixture" on a property includes consideration of which of these? -
Answer: The intent of the installer at the time of the property's sale.
A seller's disclosure must, at a minimum, provide: - Answer: A warranty against any other claims
made on the property. or the seller's disclosure honesty and to the best of seller's knowledge.
Page 1 of 149
,Armand is the legal guardian of Seraphina while she is in recovery from major surgery following
a brain aneurysm. While in control, Armond sells Seraphina's life estate to Desmond. A month
later, Seraphina is fully recovered, livid about the sale, and seeks to cancel the agreement, but
Desmond is determined to take it to court. Which of the following BEST describes the outcome
of the situation? - Answer: ?The contract is voidable because the life estate was not subject to a
sale by Seraphina, therefore, her guardian lacked the authority to sell in the first place.
The mortgage clause that allows a borrower to separate and alienate a portion of a mortgaged
property is which of these? - Answer: Severance clause
Esther is selling her home to Estelle. The home was built in 1976 and has had three owners
since. One had HIV, one was murdered in a random killing on the property, and one was a family
from the middle east who moved back there without becoming citizens here. Which of these
disclosures is required for Esther (or her agent) to provide? - Answer: The lead-based paint
disclosure because the home was built before 1978.
The standard steps in risk management are - Answer: identity, analyze, plan, track, control,
communicate
Which of these lists best represents debits generally applied to the seller's closing cost? -
Answer: ?Broker commissions, home repairs agreed in the sales contract, outstanding property
taxes or assessments, amounts credited to buyers for repairs agreed to in the sales contract,
and the payoffs of any other outstanding mortgages or liens.
Desmond of Diogenes Realty was a very innovative managing broker, including writing his own
advertising, contracts, marketing materials, and listing agreements? In spite of complete success
in his endeavors without a single complaint from a client, he receives notice from TREC that his
is facing potential disciplinary action. What did he do wrong? - Answer: Writing his own
contracts is an unauthorized practice of law.
Page 2 of 149
,Which of the following relationships require a written agreement? - Answer: An agreement to
represent a seller
Desomond is selling his rental income home to Serphina with closing taking place on March 15.
He has paid the $3200 property taxes for the year, and $275 insurance bill for he month as well
as water and garbage for the property at $110 per month, plus he has already collected the
$1200 monthly rental for March and April. And the parties agreed to split the $400 escrow
service fee. How much will Seraphina be credited and how much will she be debited? - Answer:
$2533.50 for annual taxes $137.50 for one-half month's insurance and another $55 for one half
months utilities, and $200 for her half of the escrow fee for a total of $2,926. She will be
credited with $1,800 in rent.
Elmo bought a property for an agreed price of $450,000. He put down $125,000 and financed
the remainder with a 30-year conventional loan with interest fixed at 4.25% and monthly taxes
incorporated into the monthly payments at $145 per month. What would Elmo's monthly
payment be? - Answer: $1,590
The Fair Housing Act is enforced by the Office of Fair Housing and Equal Opportunity, which is
part of which of these government agencies? - Answer: Department of Housing and Urban
Development (HUD)
Which of these sets of criteria BEST represents the basic elements of a sales comparison
approach (aka market comparison approach)? - Answer: Date of sale, location, physical
features, terms and conditions of the sale
Punitive damages are added to some judgments for what purpose? - Answer: To punish the
offender and to discourage others from offending practice.
Page 3 of 149
, A broker assessing exposure, hazard, peril and loss is most likely addressing issues of - Answer:
risk management
A license registration holder must repay the real estate recovery trust account the full amount
of a payment made on their behalf within how many days after the date the commission
provides notice to them? - Answer: 30 ?
Which of the following is NOT one of the criteria for determining the "highest and best use" of
real property? - Answer: Minimally Intrusive
A party requiring a specific action prior to proceeding with a contract can set that action up in
the contract as which of these? - Answer: Addenda
A rental complex valued at $873,000 with a capitalization rate of 7% has net operating income
of: - Answer: $61,110
The single most important item generally needed to obtain a Veterans Administration loan is
which of the following? - Answer: The certificate of eligibility
Elvira and Armand had a signed offer and acceptance completed inspections, and secured
financing when Elvira discovered that Armand was not the owner as he claimed to be, but was a
nephew of the owner by the same name. What is the effect on the contract? - Answer: It is void
The comprehensive Environmental Response, Compensation, and Liability Act was updated in
1986 by the: - Answer: CERLA
Which of the following is a unilateral contract? - Answer: Elvira paid Desmond $1,000 to give
her two weeks to decide if she will buy his home at their agreed price.
Page 4 of 149
Test 3, Real Estate Study Questions/ 700 Q&A.
Under TREC regulations, the prohibition of referral fees and rebates without prior approval from
the client does NOT apply to which of the following? - Answer: Compensation from settlement
companies
An escape clause establishes the conditions under which a party or parties can back out of a
contract agreement without - Answer: Breaching the contract
Determining if an item is a "fixture" on a property includes consideration of which of these? -
Answer: The intent of the installer at the time of the property's sale.
A seller's disclosure must, at a minimum, provide: - Answer: A warranty against any other claims
made on the property. or the seller's disclosure honesty and to the best of seller's knowledge.
Page 1 of 149
,Armand is the legal guardian of Seraphina while she is in recovery from major surgery following
a brain aneurysm. While in control, Armond sells Seraphina's life estate to Desmond. A month
later, Seraphina is fully recovered, livid about the sale, and seeks to cancel the agreement, but
Desmond is determined to take it to court. Which of the following BEST describes the outcome
of the situation? - Answer: ?The contract is voidable because the life estate was not subject to a
sale by Seraphina, therefore, her guardian lacked the authority to sell in the first place.
The mortgage clause that allows a borrower to separate and alienate a portion of a mortgaged
property is which of these? - Answer: Severance clause
Esther is selling her home to Estelle. The home was built in 1976 and has had three owners
since. One had HIV, one was murdered in a random killing on the property, and one was a family
from the middle east who moved back there without becoming citizens here. Which of these
disclosures is required for Esther (or her agent) to provide? - Answer: The lead-based paint
disclosure because the home was built before 1978.
The standard steps in risk management are - Answer: identity, analyze, plan, track, control,
communicate
Which of these lists best represents debits generally applied to the seller's closing cost? -
Answer: ?Broker commissions, home repairs agreed in the sales contract, outstanding property
taxes or assessments, amounts credited to buyers for repairs agreed to in the sales contract,
and the payoffs of any other outstanding mortgages or liens.
Desmond of Diogenes Realty was a very innovative managing broker, including writing his own
advertising, contracts, marketing materials, and listing agreements? In spite of complete success
in his endeavors without a single complaint from a client, he receives notice from TREC that his
is facing potential disciplinary action. What did he do wrong? - Answer: Writing his own
contracts is an unauthorized practice of law.
Page 2 of 149
,Which of the following relationships require a written agreement? - Answer: An agreement to
represent a seller
Desomond is selling his rental income home to Serphina with closing taking place on March 15.
He has paid the $3200 property taxes for the year, and $275 insurance bill for he month as well
as water and garbage for the property at $110 per month, plus he has already collected the
$1200 monthly rental for March and April. And the parties agreed to split the $400 escrow
service fee. How much will Seraphina be credited and how much will she be debited? - Answer:
$2533.50 for annual taxes $137.50 for one-half month's insurance and another $55 for one half
months utilities, and $200 for her half of the escrow fee for a total of $2,926. She will be
credited with $1,800 in rent.
Elmo bought a property for an agreed price of $450,000. He put down $125,000 and financed
the remainder with a 30-year conventional loan with interest fixed at 4.25% and monthly taxes
incorporated into the monthly payments at $145 per month. What would Elmo's monthly
payment be? - Answer: $1,590
The Fair Housing Act is enforced by the Office of Fair Housing and Equal Opportunity, which is
part of which of these government agencies? - Answer: Department of Housing and Urban
Development (HUD)
Which of these sets of criteria BEST represents the basic elements of a sales comparison
approach (aka market comparison approach)? - Answer: Date of sale, location, physical
features, terms and conditions of the sale
Punitive damages are added to some judgments for what purpose? - Answer: To punish the
offender and to discourage others from offending practice.
Page 3 of 149
, A broker assessing exposure, hazard, peril and loss is most likely addressing issues of - Answer:
risk management
A license registration holder must repay the real estate recovery trust account the full amount
of a payment made on their behalf within how many days after the date the commission
provides notice to them? - Answer: 30 ?
Which of the following is NOT one of the criteria for determining the "highest and best use" of
real property? - Answer: Minimally Intrusive
A party requiring a specific action prior to proceeding with a contract can set that action up in
the contract as which of these? - Answer: Addenda
A rental complex valued at $873,000 with a capitalization rate of 7% has net operating income
of: - Answer: $61,110
The single most important item generally needed to obtain a Veterans Administration loan is
which of the following? - Answer: The certificate of eligibility
Elvira and Armand had a signed offer and acceptance completed inspections, and secured
financing when Elvira discovered that Armand was not the owner as he claimed to be, but was a
nephew of the owner by the same name. What is the effect on the contract? - Answer: It is void
The comprehensive Environmental Response, Compensation, and Liability Act was updated in
1986 by the: - Answer: CERLA
Which of the following is a unilateral contract? - Answer: Elvira paid Desmond $1,000 to give
her two weeks to decide if she will buy his home at their agreed price.
Page 4 of 149
