Modern Real Estate Practice in Texas 18E Principles II Exam

Question 1

A single-family residence does NOT reach its full value because it is located in an industrial area. This illustrates the appraisal principle of:

Answer 1

Conformity

Question 2

The market value of a property is a) the average price a property should bring b)the highest price a property should bring c)the lowest price a property should bring d) the most probable price a property should bring

Answer 2

the most probable price a property should bring

Question 3

What should be done to the sales price of the comparable property if it is missing features that are present in the subject property?

Answer 3

it should be increased

Question 4

Which creates a lien against the property as security for the debt? a) Promissory note b) Land trust c) deed of trust d) recorded will

Answer 4

deed of trust

Question 5

Charging interest in excess of the maximum rate of interest set by state law is called

Answer 5

usury

Question 6

Which originate loans with either their own money or funds borrowed from other institutions? a) none of these b) mortgage brokers c) mortgage bankers d) both of these

Answer 6

mortgage bankers

Question 7

Donna gives Tom a general warranty deed that does NOT mention an existing mortgage lien on the property. This is a violation of the covenant:

Answer 7

against encumbrances

Question 8

What kind of notice refers to information that is available in the public record?

Answer 8

constructive

Question 9

A brief history of all the documents affecting title is

Answer 9

an abstract of title

Question 10

What kind of title policy is guaranteed for the amount paid for the property?

Answer 10

owner’s

Question 11

a bedroom without a closet is an example of what type of depreciation?

Answer 11

functional obsolescence

Question 12

the final step in the cost approach for estimating value of property is to a) estimate the amount of accrued depreciation b) estimate the value of the land as if it were vacant c) add estimated land value to the depreciated cost of the building and other site improvements d) deduct accrued depreciation from construction costs

Answer 12

add estimated land value to the depreciated cost of the building and other site improvements

Question 13

In an amortized loan, the initial payments are applied mainly to:

Answer 13

the interest

Question 14

a loan that is not insured or guaranteed by a government agency against default of the borrower is called:

Answer 14

conventional loan

Question 15

the purpose of the real estate settlement procedures act (RESPA) is to

Answer 15

ensure that buyers and sellers know all settlement costs