Texas Principles of Real Estate Final Exam 2
Questions & Answers: Latest Updated
What purpose do the Bureau of Land Management, Forest Service, Fish and Wildlife
Service, and National Parks System serve? - ANSWER- They are federal agencies that
control public land.
The escrow fees are $500 to be split equally between the parties. How should this
appear on the closing statement? - ANSWER- $250 debit to buyer, $250 debit to seller.
Jennifer and Mallory, a buyer and a seller, are going through the closing process of their
real estate transaction. In their transaction, like in most sales transactions, two closings
will take place - ANSWER- The closing of the sale and the closing of the buyer's loan.
Which of these is an example of voluntary alienation? - ANSWER- Marjorie wills her
home to her children.
Cheryl is comparing two properties and she wants to know the acreage of each
property. One property is 695 ft. x 834 ft. The other property is 928 ft. x 294 ft. What are
the properties' respective acreages? - ANSWER- 13.3 acres and 6.26 acres
What has been the impact of the FHA's practice of insuring (protecting) approved
lenders of FHA loans against losses? - ANSWER- It expanded the pool of potential
homebuyers that lenders were willing to underwrite loans for.
Property owners and property managers MUST clarify factors such as the manager's
duties and responsibilities, the owner's purpose, an allocation of costs, and the scope of
authority through: - ANSWER- A written property management agreement.
Which of these scenarios would be most likely to result in the granting of a conditional-
use permit? - ANSWER- Amy wants to build a bed and breakfast in an area zoned for
residential use.
Marvin took out a loan of $15,000 to remodel his house at a 5% interest rate. If no
principal had been repaid, how much would he owe in interest after a year? - ANSWER-
$750
, Sally, a landlord, charges her tenant a late fee. The lease specifies that there will be a
late charge for late rents, the tenant is two full days late, and the late fee is equal to the
total monthly rent due.
Under Texas regulations, what would be the best Sally's tenant argument against
paying the late fee be? - ANSWER- That a late fee equal to the monthly rent due is
unreasonable.
What are restrictive covenants? - ANSWER- Non-governmental limitations that control
how buyers of lots within residential subdivisions use their land.
Which of the following is an example of inverse condemnation? - ANSWER- The
government takes some of Leslie's farmland to expand a highway. The government
does NOT provide just compensation for the land acquisition.
A variable lease is a leasehold agreement in which the base rent changes. Variable
leases can take the form of: - ANSWER- A graduated lease or index lease.
Which is NOT one of the three approaches to value? - ANSWER- Anticipation
What is a periodic estate? - ANSWER- A fixed lease period in which the lease is
automatically renewed at the end of each lease period until the landlord or tenant acts
to terminate it.
Which of the following is NOT one of the minimum requirements for a deed to be valid in
Texas? - ANSWER- The deed must be signed by a municipal agent.
Which of the following BEST describes why RESPA was passed? - ANSWER- To
ensure meaningful disclosure of closing costs in a real estate transaction.
What is a special purpose vehicle (SPV)? - ANSWER- A limited corporate entity created
with a specific objective.
What is the legal process by which a court determines the validity of a will and
establishes the assets of a decedent and who will inherit those assets? - ANSWER-
Probate
Ian shops for a new loan with his broker, Barry. Barry helps Ian use a CLO to compare
prices until Ian finds the best one. Barry tells Ian a fee of 0.5% of the loan amount has
been earned, but Ian doesn't think much of it, thinking that Barry will pay that fee.
Questions & Answers: Latest Updated
What purpose do the Bureau of Land Management, Forest Service, Fish and Wildlife
Service, and National Parks System serve? - ANSWER- They are federal agencies that
control public land.
The escrow fees are $500 to be split equally between the parties. How should this
appear on the closing statement? - ANSWER- $250 debit to buyer, $250 debit to seller.
Jennifer and Mallory, a buyer and a seller, are going through the closing process of their
real estate transaction. In their transaction, like in most sales transactions, two closings
will take place - ANSWER- The closing of the sale and the closing of the buyer's loan.
Which of these is an example of voluntary alienation? - ANSWER- Marjorie wills her
home to her children.
Cheryl is comparing two properties and she wants to know the acreage of each
property. One property is 695 ft. x 834 ft. The other property is 928 ft. x 294 ft. What are
the properties' respective acreages? - ANSWER- 13.3 acres and 6.26 acres
What has been the impact of the FHA's practice of insuring (protecting) approved
lenders of FHA loans against losses? - ANSWER- It expanded the pool of potential
homebuyers that lenders were willing to underwrite loans for.
Property owners and property managers MUST clarify factors such as the manager's
duties and responsibilities, the owner's purpose, an allocation of costs, and the scope of
authority through: - ANSWER- A written property management agreement.
Which of these scenarios would be most likely to result in the granting of a conditional-
use permit? - ANSWER- Amy wants to build a bed and breakfast in an area zoned for
residential use.
Marvin took out a loan of $15,000 to remodel his house at a 5% interest rate. If no
principal had been repaid, how much would he owe in interest after a year? - ANSWER-
$750
, Sally, a landlord, charges her tenant a late fee. The lease specifies that there will be a
late charge for late rents, the tenant is two full days late, and the late fee is equal to the
total monthly rent due.
Under Texas regulations, what would be the best Sally's tenant argument against
paying the late fee be? - ANSWER- That a late fee equal to the monthly rent due is
unreasonable.
What are restrictive covenants? - ANSWER- Non-governmental limitations that control
how buyers of lots within residential subdivisions use their land.
Which of the following is an example of inverse condemnation? - ANSWER- The
government takes some of Leslie's farmland to expand a highway. The government
does NOT provide just compensation for the land acquisition.
A variable lease is a leasehold agreement in which the base rent changes. Variable
leases can take the form of: - ANSWER- A graduated lease or index lease.
Which is NOT one of the three approaches to value? - ANSWER- Anticipation
What is a periodic estate? - ANSWER- A fixed lease period in which the lease is
automatically renewed at the end of each lease period until the landlord or tenant acts
to terminate it.
Which of the following is NOT one of the minimum requirements for a deed to be valid in
Texas? - ANSWER- The deed must be signed by a municipal agent.
Which of the following BEST describes why RESPA was passed? - ANSWER- To
ensure meaningful disclosure of closing costs in a real estate transaction.
What is a special purpose vehicle (SPV)? - ANSWER- A limited corporate entity created
with a specific objective.
What is the legal process by which a court determines the validity of a will and
establishes the assets of a decedent and who will inherit those assets? - ANSWER-
Probate
Ian shops for a new loan with his broker, Barry. Barry helps Ian use a CLO to compare
prices until Ian finds the best one. Barry tells Ian a fee of 0.5% of the loan amount has
been earned, but Ian doesn't think much of it, thinking that Barry will pay that fee.
