TEXAS STATE PORTION REAL
ESTATE EXAM 2 QUESTIONS AND
ANSWERS12
Which of the following actions would be mandated by RESPA? - ANSWERS-Provision of a good
faith estimate
Canyon Properties in Killeen, Texas owns a two-family dwelling that generates a 12.5% return on
its value, or an annual return of $17,000. What would the value of this property be in terms of
an income approach to value? - ANSWERS-An income approach estimates the value of a
property based on its monetary returns (or the returns it could be expected to generate). In this
case, the calculation is completed by multiplying the amount of investment returns ($17,000) by
the multiplier 8 (because 100% is divisible by 12.5% exactly 8 times). The product, and
estimated value of the property, is $136,000.
Tenancy in common: - ANSWERS-ownership by two or more people with an undivided interest
and no right of survivorship
a graduated payment mortgage - ANSWERS-offers lower monthly payments in the beginning
that gradually increase at predetermined times over the life of the loan
expropriation - ANSWERS-allows the government to take private property for a public use that is
sanctioned by a federal or state legislative body as long as the owner is "justly compensated"
What is the MOST accurate description of the mission of the Texas Real Estate Commission? -
ANSWERS-The mission of the Texas Real Estate Commission is to assist and protect consumers
of real estate services. The primary goal of the TREC is to protect the consumer.
, What happens if I renew timely and request active status but do not complete my MCE? -
ANSWERS-If you renew your license on an ACTIVE status without first completing MCE, you will
be required to pay an additional $200 deferral fee and complete the MCE within 60 days of the
renewed license. Your license will remain active during this time.
Peter Davilla is a real estate licensee who works as a residential rental locator for an Austin
property management company. In preparing advertisements of available properties, he must
adhere to all of the following guidelines EXCEPT which one? - ANSWERS-Advertisements placed
in a publication that receives an advance/contingent fee must include a disclaimer to that end.
Errors and Omissions Insurance - ANSWERS-Generally covers a broker and their associates for
errors and mistakes made in common listing and selling activities.
If broker owns <10% than they need $1,000,000 in insurance.
Late MCE Requirements - ANSWERS-$200 deferral fee, complete MCE within 60 days of
renewed license.
Penalty fee: $250.
Filing fee: $20.
Change Salesperson Sponsorship - ANSWERS-Broker notifies salesperson in writing and returns
sales license to commission for inactive status.
License Maintenance/Renewal - ANSWERS-Salesperson- 18 semester hours and 15 MCE hours
every 2 years to include 3 ethics and 3 legal.
Broker- 15 hours MCE every 2 years to include 3 ethics and 3 legal (if sponsoring sales then 6
mandatory broker responsibility)
Appeals of Denial - ANSWERS-Appeal within 10 days of denial notice receipt, if no prevail then
can appeal district court.
ESTATE EXAM 2 QUESTIONS AND
ANSWERS12
Which of the following actions would be mandated by RESPA? - ANSWERS-Provision of a good
faith estimate
Canyon Properties in Killeen, Texas owns a two-family dwelling that generates a 12.5% return on
its value, or an annual return of $17,000. What would the value of this property be in terms of
an income approach to value? - ANSWERS-An income approach estimates the value of a
property based on its monetary returns (or the returns it could be expected to generate). In this
case, the calculation is completed by multiplying the amount of investment returns ($17,000) by
the multiplier 8 (because 100% is divisible by 12.5% exactly 8 times). The product, and
estimated value of the property, is $136,000.
Tenancy in common: - ANSWERS-ownership by two or more people with an undivided interest
and no right of survivorship
a graduated payment mortgage - ANSWERS-offers lower monthly payments in the beginning
that gradually increase at predetermined times over the life of the loan
expropriation - ANSWERS-allows the government to take private property for a public use that is
sanctioned by a federal or state legislative body as long as the owner is "justly compensated"
What is the MOST accurate description of the mission of the Texas Real Estate Commission? -
ANSWERS-The mission of the Texas Real Estate Commission is to assist and protect consumers
of real estate services. The primary goal of the TREC is to protect the consumer.
, What happens if I renew timely and request active status but do not complete my MCE? -
ANSWERS-If you renew your license on an ACTIVE status without first completing MCE, you will
be required to pay an additional $200 deferral fee and complete the MCE within 60 days of the
renewed license. Your license will remain active during this time.
Peter Davilla is a real estate licensee who works as a residential rental locator for an Austin
property management company. In preparing advertisements of available properties, he must
adhere to all of the following guidelines EXCEPT which one? - ANSWERS-Advertisements placed
in a publication that receives an advance/contingent fee must include a disclaimer to that end.
Errors and Omissions Insurance - ANSWERS-Generally covers a broker and their associates for
errors and mistakes made in common listing and selling activities.
If broker owns <10% than they need $1,000,000 in insurance.
Late MCE Requirements - ANSWERS-$200 deferral fee, complete MCE within 60 days of
renewed license.
Penalty fee: $250.
Filing fee: $20.
Change Salesperson Sponsorship - ANSWERS-Broker notifies salesperson in writing and returns
sales license to commission for inactive status.
License Maintenance/Renewal - ANSWERS-Salesperson- 18 semester hours and 15 MCE hours
every 2 years to include 3 ethics and 3 legal.
Broker- 15 hours MCE every 2 years to include 3 ethics and 3 legal (if sponsoring sales then 6
mandatory broker responsibility)
Appeals of Denial - ANSWERS-Appeal within 10 days of denial notice receipt, if no prevail then
can appeal district court.
