Texas Principles of Real Estate II Final Exam:
Questions & Answers: Graded A
1. What is the name of the sworn statement in which the seller assures the title
company (and the buyer) that there are no liens, unpaid bills for repairs or
improvements, or undisclosed defects in the title? - ANSWER: affidavits as to
debts and liens
2. Tax incentives that cover the cost of energy-efficient improvements, EEMs, and
Energy Star-qualified homes are examples of: - ANSWER: green initiatives
3. Which of the following borrowers would be MOST likely to use a graduated-
payment mortgage? - ANSWER: young borrower starting their career,
anticipating an income raise in the next several years
4. Which type of loan is exempt from RESPA? - ANSWER: loans on vacant land
5. Which TILA regulation requires a disclosure statement where lenders must make
certain loan facts known to borrowers? - ANSWER: Regulation Z
6. The most common formal organization of a syndicate is that of a(n): -
ANSWER: LLC
7. Which of the following BEST describes why RESPA was passed? - ANSWER:
to ensure meaningful disclosure of closing costs in a real estate transaction
8. Property manager William hires an HVAC specialist to repair a broken air
conditioner in an apartment.
This is an example of: - ANSWER: corrective maintenance
9. Which of the following is TRUE? - ANSWER: A Texas real estate license does
NOT allow agents and brokers to act as appraisers or home mortgage originators
10. A handwritten will created solely by the maker (and not witnessed) is called a: -
ANSWER: holographic will
11. Ashley just bought a house. To purchase the house, she got a loan for $400,000
with 3 discount points. How much did she pay for the discount points? -
ANSWER: One discount point costs 1% of the loan amount; therefore, one
discount point cost $4,000 in Ashley's case. Ashley paid $12,000 for 3 discount
points.
, Texas Principles of Real Estate II Final Exam:
Questions & Answers: Graded A
12. What is the difference between actual and constructive notice? - ANSWER:
Constructive notice is the assumption that a diligent individual can search the
public record to gain knowledge; actual notice is direct or first-hand knowledge.
13. The investment strategy of taking on debt in order to realize a greater return is
known as: - ANSWER: Leverage
14. What is an easement by prescription? - ANSWER: An easement by
prescription is granted after the dominant estate has used the property in a
hostile, continuous, and open manner for a statutorily prescribed number of
years. This type of easement is also called a prescriptive easement.
15. A new $350,000 home is being built in a neighborhood of mostly $200,000
homes. Although the home has many updates and is in better condition than the
surrounding houses, its value is significantly less than the price.
Which value principle of appraisal explains this?
- ANSWER: principle of regression, which states that a subject property
situated in the midst of lower-value homes will experience a downward pull on its
own value.
16. What is investment gain? - ANSWER: Investment gain has to do with the
increase in a property's value due to active and purposeful development of a
property.
17. How many feet are in a mile? - ANSWER: 5,280 feet
18. What is a quitclaim deed? - ANSWER: A quitclaim deed provides the grantee
with the least protection of any deed, while putting the least liability on the
grantor. It carries no covenants nor warranties and conveys only such interest
that the grantor may have when the deed is delivered.
19. Alexis owns a fried chicken restaurant, Tender Times. When her area is rezoned
from commercial to residential, Alexis is allowed to continue operating Tender
Times in the same location.
20. What is this an example of? - ANSWER: While the use of the property
originally conformed to zoning, that was no longer the case once the rezoning
took place. So the present (commercial) use would be considered a
nonconforming use, which is where a once-permissible-but-no-longer-permitted
use is grandfathered in.
Questions & Answers: Graded A
1. What is the name of the sworn statement in which the seller assures the title
company (and the buyer) that there are no liens, unpaid bills for repairs or
improvements, or undisclosed defects in the title? - ANSWER: affidavits as to
debts and liens
2. Tax incentives that cover the cost of energy-efficient improvements, EEMs, and
Energy Star-qualified homes are examples of: - ANSWER: green initiatives
3. Which of the following borrowers would be MOST likely to use a graduated-
payment mortgage? - ANSWER: young borrower starting their career,
anticipating an income raise in the next several years
4. Which type of loan is exempt from RESPA? - ANSWER: loans on vacant land
5. Which TILA regulation requires a disclosure statement where lenders must make
certain loan facts known to borrowers? - ANSWER: Regulation Z
6. The most common formal organization of a syndicate is that of a(n): -
ANSWER: LLC
7. Which of the following BEST describes why RESPA was passed? - ANSWER:
to ensure meaningful disclosure of closing costs in a real estate transaction
8. Property manager William hires an HVAC specialist to repair a broken air
conditioner in an apartment.
This is an example of: - ANSWER: corrective maintenance
9. Which of the following is TRUE? - ANSWER: A Texas real estate license does
NOT allow agents and brokers to act as appraisers or home mortgage originators
10. A handwritten will created solely by the maker (and not witnessed) is called a: -
ANSWER: holographic will
11. Ashley just bought a house. To purchase the house, she got a loan for $400,000
with 3 discount points. How much did she pay for the discount points? -
ANSWER: One discount point costs 1% of the loan amount; therefore, one
discount point cost $4,000 in Ashley's case. Ashley paid $12,000 for 3 discount
points.
, Texas Principles of Real Estate II Final Exam:
Questions & Answers: Graded A
12. What is the difference between actual and constructive notice? - ANSWER:
Constructive notice is the assumption that a diligent individual can search the
public record to gain knowledge; actual notice is direct or first-hand knowledge.
13. The investment strategy of taking on debt in order to realize a greater return is
known as: - ANSWER: Leverage
14. What is an easement by prescription? - ANSWER: An easement by
prescription is granted after the dominant estate has used the property in a
hostile, continuous, and open manner for a statutorily prescribed number of
years. This type of easement is also called a prescriptive easement.
15. A new $350,000 home is being built in a neighborhood of mostly $200,000
homes. Although the home has many updates and is in better condition than the
surrounding houses, its value is significantly less than the price.
Which value principle of appraisal explains this?
- ANSWER: principle of regression, which states that a subject property
situated in the midst of lower-value homes will experience a downward pull on its
own value.
16. What is investment gain? - ANSWER: Investment gain has to do with the
increase in a property's value due to active and purposeful development of a
property.
17. How many feet are in a mile? - ANSWER: 5,280 feet
18. What is a quitclaim deed? - ANSWER: A quitclaim deed provides the grantee
with the least protection of any deed, while putting the least liability on the
grantor. It carries no covenants nor warranties and conveys only such interest
that the grantor may have when the deed is delivered.
19. Alexis owns a fried chicken restaurant, Tender Times. When her area is rezoned
from commercial to residential, Alexis is allowed to continue operating Tender
Times in the same location.
20. What is this an example of? - ANSWER: While the use of the property
originally conformed to zoning, that was no longer the case once the rezoning
took place. So the present (commercial) use would be considered a
nonconforming use, which is where a once-permissible-but-no-longer-permitted
use is grandfathered in.
