Introduction to Modern Real Estate Practice

Question 1

A real estate license holder who locates dwelling units for prospective tenants

Answer 1

Apartment locator

Question 2

Duplex, triplex, or fourplex residences are all considered ___________ ________

Answer 2

Multi-family residences

Question 2

Primarily made up of property that is used for business.

Answer 2

Commercial real estate

Question 3

Includes commercial property used for:
Manufacturing, Storage, Distribution centers, Research, Warehousing, Data centers, Storage Units

Answer 3

Industrial Property

Question 4

Involves locating property, deciding how it can be best used, and then building on it

Answer 4

Property Development

Question 5

Examples include ranches, farms, and acreage tracts in subdivisions

Answer 5

Rural properties

Question 6

States that a REALTOR® may provide a service they are not specialized in only after fully disclosing their lack of experience, or if the REALTOR® obtains assistance from someone competent in the field, in which case, the client must be informed.

Answer 6

Article 11

Question 7

What does Article 11 state?

Answer 7

A realtor must disclose their lack of experience in a field to the client.

Question 8

To review and revise curriculum standards, course content, and instructor certification requirements for both Qualifying and Continuing Education courses

Answer 8

The function of the Education Standards Advisory Committee

Question 9

Consists of 12 members appointed by the Commission

Answer 9

Education Standards Advisory Committee

Question 10

Who is on the Education Standards Advisory Committee?

Answer 10

Consists of 12 members, including license holders, education members, and a public representative

Question 11

Occur naturally

Answer 11

Physical characteristics of real estate

Question 12

Human-made

Answer 12

Economic characteristics

Question 13

The actual piece of the earth, including anything below the surface of the land and the air above it.

Answer 13

Land

Question 14

Made up of the land & any improvements attached to it

Answer 14

Real estate

Question 15

Real estate PLUS the bundle of rights that come with ownership of it

Answer 15

Real property

Question 16

Describes items that can easily be removed from the land

Answer 16

Personal property

Question 17

Which of the following is not a feature of real estate?
a.) Only an owner has the right to use a property
b.) Property ownership can be transferred without transferring the property to another location.
c.) The person in possession of a property may not be the owner
d.) Property value is determined by the use of the land & the location of the property.

Answer 17

a.) - Only an owner has the right to use a property

Question 18

The economic characteristic that informs the economic principle of supply and demand

Answer 18

Scarcity

Question 19

The cost of real estate in a metropolitan area has gone up dramatically over the past year because an increasing number of people has been moving to that area, and there are only a finite number of parcels of land that are close to the downtown area. This is an example of:

Answer 19

Scarcity

Question 20

What term identifies an economic preference for a certain location?

Answer 20

Situs

Question 21

Refers to the fact that real estate exists in a fixed location and cannot be moved

Answer 21

Fixity

Question 22

The relative difficulty of converting an asset to cash without loss of value

Answer 22

Illiquidity

Question 23

Which term refers to the permanence of land?

Answer 23

Fixity

Question 24

The price for which a property will sell if offered openly under normal conditions

Answer 24

Market Value

Question 25

________ & ________ move in opposite directions.

Answer 25

Supply and price

Question 26

Responsible for all laws in Texas

Answer 26

The Texas Legislature

Question 27

The laws that affect the owners of real estate are referred to as

Answer 27

Property rights

Question 28

What contains Fair Housing laws, community property laws, and homestead laws?

Answer 28

State constitutions & U.S. Constitution

Question 29

2 main functions are to: 1.) Enforce all real estate-related statutes 2.) To adopt & enforce new rules

Answer 29

2 main functions of the Texas Real Estate Commission (TREC)

Question 30

A Texas law that requires a commission, called the Sunset Commission, to evaluate every state agency every 12 years

Answer 30

Sunset Act

Question 31

Has the authority to enforce all the statutes contained in the Real Estate License Act, and adopt and enforce new rules

Answer 31

The Commission

Question 32

Chapter 1102 of the _______ ____________ _______ governs the practice of Texas Real Estate inspectors.

Answer 32

Texas Occupations Code

Question 33

Role is to provide education and guidance to improve the practice of their members

Answer 33

The role of professional organizations

Question 34

Must belong to at least one board in Texas.

Answer 34

A REALTOR®

Question 35

Made up of three 30-hour courses that are required for first-time license holders prior to renewing their license two years after they received their license.

Answer 35

Graduate, REALTOR® Institute (GRI)

Question 36

An impartial, qualified appraiser's opinion of the value of a specific property on a specific date, supported by relevant market information.

Answer 36

An appraisal

Question 37

A method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself

Answer 37

Cost to replace

Question 38

A property appraisal method that estimates value by comparing the subject property to the sales prices of similar properties in the same market area

Answer 38

Sales comparison approach

Question 39

A method of estimating the value of a property by applying a rate of return to the net income it produces

Answer 39

Income approach

Question 40

The appraiser will compare estimates they made based on the cost approach, sales comparison approach, and/or income capitalization approach.

Answer 40

Reconciliation

Question 41

Also known as the direct sales comparison approach or market data approach.

Answer 41

Sales comparison approach

Question 42

A report that compares the prices of sold homes that are similar to the subject property

Answer 42

Comparative market analysis

Question 43

- Can be performed by agents - Usually done for free - Simple, casual estimate

Answer 43

Comparative market analysis

Question 44

- Requires an appraiser's license - Usually done for a fee - Formal & detailed - Required by most lenders

Answer 44

Appraisal

Question 45

- Estimate market value of property - Use a sales comparison approach

Answer 45

Both an appraisal & a CMA

Question 46

The process used by a hired sales agent to determine the potential selling price or estimated value of a real estate property.

Answer 46

A Broker Price Opinion (BPO)

Question 47

A market condition in which the number of properties for sale does not meet the demand (number of people looking to buy).

Answer 47

Seller's Market

Question 48

The average number of months it will take to sell a house in a buyer's market is:

Answer 48

6 months or more

Question 49

When an appraisal report is not available, which of the following provides the BEST data for setting a listing price?

Answer 49

The price willing buyers have recently paid for similar properties in the area

Question 50

A seller is more likely to want to work with an agent who uses the words "________ __________" rather than "________ __________."

Answer 50

price adjustment price reduction

Question 51

False statement, either spoken or written, that is made unintentionally

Answer 51

misrepresentation

Question 52

The NAR® Code of Ethics is reviewed and updated _______ _______.

Answer 52

every year

Question 53

Has an agency relationship with you or your broker

Answer 53

Client

Question 54

Any other party in the transaction that doesn't have an agency relationship with you

Answer 54

Customer

Question 55

A person involved in a contract for sale, lease, or agency

Answer 55

Party

Question 56

Many license holders find that providing a party with the ____________ ______ ____________ ___________ __________ to be the most convenient way to fulfill their obligation with respect to the written statement requirement.

Answer 56

Information About Brokerage Services Notice

Question 57

To avoid _______________, a license holder should only give factual information from reputable sources, avoid speculation, and point potential buyers to the resources that can help with questions that you shouldn't answer.

Answer 57

misrepresentation

Question 58

Carelessness in the work that needs to be accomplished.

Answer 58

Negligence

Question 59

Usually occurs when a license holder attempts to facilitate a type of transaction that they have never attempted

Answer 59

Incompetence

Question 60

Avoid getting into trouble for misrepresentation by...

Answer 60

citing the source of any information you provide

Question 61

A form every seller is required to provide with a potential buyer with the contract

Answer 61

Seller's Disclosure Notice

Question 62

The illegal act of a license holder mixing their own money with a client’s or customer’s money

Answer 62

Commingling

Question 63

The act of a broker or sales agent using a client’s or customer’s money for their own use

Answer 63

Conversion

Question 64

refers to any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win anything of value, whether such scheme or procedure is called a pool, lottery, raffle, gift, gift enterprise, sale, policy game, or some other name.

Answer 64

Lottery

Question 65

An exaggeration to accomplish a goal, such as a sale

Answer 65

Puffing

Question 66

What is the only scenario in which you do NOT need a real estate license to sell or lease a property?

Answer 66

If you are not receiving any commission from the sale of your

Question 67

TRUE or FALSE: Employees working for a commercial firm do not have to have a real estate license if they are selling property owned by their firm.

Answer 67

TRUE

Question 68

Which of the following actions does NOT require a real estate license? A.) Selling a portion of a joint ownership in a property B.) Showing the listing of a broker or licensed sales agent C.) Handling funds in property management D.) Supervising licensed people

Answer 68

A.) Selling a portion of a joint ownership in a property

Question 69

A plea in a criminal court in which the defendant accepts the punishment without admitting guilt.

Answer 69

Nolo contendere

Question 70

When does an inactive license become active?

Answer 70

When the license holder joins a brokerage

Question 70

Allows an applicant to find out if TREC will grant them a license before they spend too much time and money

Answer 70

Moral Character Determination Form

Question 71

Has characteristic of indestructibility

Answer 71

Land

Question 72

Created solely by demand for land in particular areas

Answer 72

Economic Scarcity

Question 73

Land is most valuable when it is in...

Answer 73

short supply and in high demand

Question 74

Responsible for enforcing TRELA.

Answer 74

Texas Real Estate Commission (TREC)