TEXAS PRINCIPLES OF REAL
ESTATE 2 FINAL EXAM PREP
2025/2026 ACCURATE QUESTIONS
AND VERIFIED CORRECT
SOLUTIONS WITH RATIONALES ||
100% GUARANTEED PASS
<LATEST VERSION>
1. Absolute auction - ANSWER ✔ an auction in which there is no reserve or
restriction on price; also known as a no-reserve auction
2. Abstract of title - ANSWER ✔ an abbreviated history of a property,
including info on any transfers, grants, wills, conveyances, liens, and
encumbrances
3. Acceleration clause - ANSWER ✔ a clause in a security instrument
(mortgage/deed of trust) which makes the entire loan amount due
immediately upon default
4. Acquisition - ANSWER ✔ the process of gaining ownership or control of
real property or an interest in real property
5. Acreage - ANSWER ✔ A unit of area measurement used to determine the
size of land; 1 acre = 43,560 square feet
6. Actual eviction - ANSWER ✔ The process by which a tenant is expelled
from a property
,7. Adjustable-rate mortgage (ARM) - ANSWER ✔ a mortgage with an interest
rate that can be adjusted based on fluctuations in the cost of money
8. Adverse possession - ANSWER ✔ involuntary transfer of title from an
owner who does not use or inspect their land for a number of years to
another person who has some claim to the land and takes possession
9. Affidavit as to debts and liens - ANSWER ✔ a 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
10.Estate for years - ANSWER ✔ a leased possession of property for a certain,
specific period of time; also known as a tenancy for years
11.Evidence of title - ANSWER ✔ constructive or actual notice of real property
ownership
12.External obsolescence - ANSWER ✔ loss in value caused by negative forces
outside the property which are beyond the control of the owner
13.Feasibility study - ANSWER ✔ A detailed analysis of the viability of an
idea
14.Federal Agricultural Mortgage Corporation - ANSWER ✔ a government-
sponsored enterprise (GSE) providing a secondary market for agricultural
and rural mortgage loans; also known as Farmer Mac
15.Federal Deposit Insurance Corporation - ANSWER ✔ independent agency
that provides deposit insurance to depositors in U.S. banks
16.Federal funds rate - ANSWER ✔ the rate banks charge other banks to lend
money — the Fed indirectly controls this rate
17.Federal Home Loan Bank System - ANSWER ✔ eleven private, wholesale
regional U.S. banks chartered to regulate member organizations, set reserve
requirements, establish discount rates, and provide insurance for depositors
,18.Federal Home Loan Mortgage Corporation (Freddie Mac) - ANSWER ✔ a
government-sponsored enterprise created in 1970 to further support the
secondary mortgage market, and specifically, to support smaller thrift banks
19.Federal National Mortgage Association (Fannie Mae) - ANSWER ✔ a
government-sponsored enterprise created to act as a secondary mortgage
market facility that could purchase, hold, and sell FHA-insured loans
20.Federal Reserve - ANSWER ✔ the nation's central bank operates to
maintain sound credit conditions, help counteract inflationary and
deflationary trends, and create a favorable economic climate
21.Who is the lessee in a lease agreement? - ANSWER ✔ Tenant
22.An annual budget that includes income and expenses for a property's
operation. - ANSWER ✔ operating budget
23.Which economic principle is related to supply and demand? - ANSWER ✔
competition
24.What type of real estate investment may meet the definition of being a
security and must adhere to the rules and regulations of the Securities and
Exchange Commission? - ANSWER ✔ Real Estate Syndicate
25.Rico is an appraiser who is performing a valuation on a property. What's
another term for what Rico is doing? - ANSWER ✔ Formal appraisal
26.Which of the following is a type of zoning action? - ANSWER ✔ motorium
27.At what level are budgeting, site plan review, and building codes controlled?
- ANSWER ✔ local
28.When does power of attorney terminate? - ANSWER ✔ Upon the death of
the grantor
29.Which of these is NOT considered a residential property? - ANSWER ✔ A
hotel with fewer than 20 rooms
, 30.Who is responsible for obtaining evidence of title and title insurance? -
ANSWER ✔ The buyer
31.Public restrictions - ANSWER ✔ Use of real proeprty are those associated
with goverments intervetion
32.Eminent domain - ANSWER ✔ Power given to government agencies to take
private property for public use or purpose
33.Taxation - ANSWER ✔ Right of the government to tax the owners of
private property to raise revenue for both general purposes and special
assessments, which have a defined purpose
34.Escheat - ANSWER ✔ Process by which private property reverts to the
government when the owner dies without heirs and without a will (intestate)
35.Police power - ANSWER ✔ Government's authority to regulate the health,
safety, welfare, and morals of its citizens
36.Power of eminent domain - ANSWER ✔ Permits the government to take
private property under from an owner for the public good, paying fair market
value (just compensation)
37.Physical taking - ANSWER ✔ When the government actually takes and
occupies private land for what is indisputably a public purpose, such as
building a public building or establishing a public road or utility easement
38.Regulatory taking - ANSWER ✔ When the government does not physically
take private real property, but places an excessive amount of restrictions on
the use that can be made of land
39.Comprehensive plan - ANSWER ✔ Official public document that acts as a
long-range, general guide for growth and development
40.Zoning - ANSWER ✔ Regulation by a municipality of the use of land
located with the municipality's corporate limits as well as the regulation of
the buildings and structures located thereon
ESTATE 2 FINAL EXAM PREP
2025/2026 ACCURATE QUESTIONS
AND VERIFIED CORRECT
SOLUTIONS WITH RATIONALES ||
100% GUARANTEED PASS
<LATEST VERSION>
1. Absolute auction - ANSWER ✔ an auction in which there is no reserve or
restriction on price; also known as a no-reserve auction
2. Abstract of title - ANSWER ✔ an abbreviated history of a property,
including info on any transfers, grants, wills, conveyances, liens, and
encumbrances
3. Acceleration clause - ANSWER ✔ a clause in a security instrument
(mortgage/deed of trust) which makes the entire loan amount due
immediately upon default
4. Acquisition - ANSWER ✔ the process of gaining ownership or control of
real property or an interest in real property
5. Acreage - ANSWER ✔ A unit of area measurement used to determine the
size of land; 1 acre = 43,560 square feet
6. Actual eviction - ANSWER ✔ The process by which a tenant is expelled
from a property
,7. Adjustable-rate mortgage (ARM) - ANSWER ✔ a mortgage with an interest
rate that can be adjusted based on fluctuations in the cost of money
8. Adverse possession - ANSWER ✔ involuntary transfer of title from an
owner who does not use or inspect their land for a number of years to
another person who has some claim to the land and takes possession
9. Affidavit as to debts and liens - ANSWER ✔ a 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
10.Estate for years - ANSWER ✔ a leased possession of property for a certain,
specific period of time; also known as a tenancy for years
11.Evidence of title - ANSWER ✔ constructive or actual notice of real property
ownership
12.External obsolescence - ANSWER ✔ loss in value caused by negative forces
outside the property which are beyond the control of the owner
13.Feasibility study - ANSWER ✔ A detailed analysis of the viability of an
idea
14.Federal Agricultural Mortgage Corporation - ANSWER ✔ a government-
sponsored enterprise (GSE) providing a secondary market for agricultural
and rural mortgage loans; also known as Farmer Mac
15.Federal Deposit Insurance Corporation - ANSWER ✔ independent agency
that provides deposit insurance to depositors in U.S. banks
16.Federal funds rate - ANSWER ✔ the rate banks charge other banks to lend
money — the Fed indirectly controls this rate
17.Federal Home Loan Bank System - ANSWER ✔ eleven private, wholesale
regional U.S. banks chartered to regulate member organizations, set reserve
requirements, establish discount rates, and provide insurance for depositors
,18.Federal Home Loan Mortgage Corporation (Freddie Mac) - ANSWER ✔ a
government-sponsored enterprise created in 1970 to further support the
secondary mortgage market, and specifically, to support smaller thrift banks
19.Federal National Mortgage Association (Fannie Mae) - ANSWER ✔ a
government-sponsored enterprise created to act as a secondary mortgage
market facility that could purchase, hold, and sell FHA-insured loans
20.Federal Reserve - ANSWER ✔ the nation's central bank operates to
maintain sound credit conditions, help counteract inflationary and
deflationary trends, and create a favorable economic climate
21.Who is the lessee in a lease agreement? - ANSWER ✔ Tenant
22.An annual budget that includes income and expenses for a property's
operation. - ANSWER ✔ operating budget
23.Which economic principle is related to supply and demand? - ANSWER ✔
competition
24.What type of real estate investment may meet the definition of being a
security and must adhere to the rules and regulations of the Securities and
Exchange Commission? - ANSWER ✔ Real Estate Syndicate
25.Rico is an appraiser who is performing a valuation on a property. What's
another term for what Rico is doing? - ANSWER ✔ Formal appraisal
26.Which of the following is a type of zoning action? - ANSWER ✔ motorium
27.At what level are budgeting, site plan review, and building codes controlled?
- ANSWER ✔ local
28.When does power of attorney terminate? - ANSWER ✔ Upon the death of
the grantor
29.Which of these is NOT considered a residential property? - ANSWER ✔ A
hotel with fewer than 20 rooms
, 30.Who is responsible for obtaining evidence of title and title insurance? -
ANSWER ✔ The buyer
31.Public restrictions - ANSWER ✔ Use of real proeprty are those associated
with goverments intervetion
32.Eminent domain - ANSWER ✔ Power given to government agencies to take
private property for public use or purpose
33.Taxation - ANSWER ✔ Right of the government to tax the owners of
private property to raise revenue for both general purposes and special
assessments, which have a defined purpose
34.Escheat - ANSWER ✔ Process by which private property reverts to the
government when the owner dies without heirs and without a will (intestate)
35.Police power - ANSWER ✔ Government's authority to regulate the health,
safety, welfare, and morals of its citizens
36.Power of eminent domain - ANSWER ✔ Permits the government to take
private property under from an owner for the public good, paying fair market
value (just compensation)
37.Physical taking - ANSWER ✔ When the government actually takes and
occupies private land for what is indisputably a public purpose, such as
building a public building or establishing a public road or utility easement
38.Regulatory taking - ANSWER ✔ When the government does not physically
take private real property, but places an excessive amount of restrictions on
the use that can be made of land
39.Comprehensive plan - ANSWER ✔ Official public document that acts as a
long-range, general guide for growth and development
40.Zoning - ANSWER ✔ Regulation by a municipality of the use of land
located with the municipality's corporate limits as well as the regulation of
the buildings and structures located thereon
