TX 122 Real Estate Principles II-Lesson 5

Question 1

What is the primary role of a real estate broker?

Answer 1

Acts as an agent or intermediary between parties in real estate transactions.

Question 2

What is the responsibility of a sales agent in Texas?

Answer 2

Works for the broker, providing services to prospective buyers and sellers.

Question 3

What does FSBO stand for?

Answer 3

For Sale By Owner.

Question 4

What is ‘farming’ in real estate?

Answer 4

Target marketing in a particular geographic area or property type.

Question 5

Define property management.

Answer 5

Operation, control, and oversight of real estate.

Question 6

What type of relationship do property managers typically have with landlords?

Answer 6

Brokerage relationship, often as an agent.

Question 7

List three general duties of property management.

Answer 7

• Establish rent schedule
• Qualify tenants
• Supervise maintenance

Question 8

What is a key aspect of resort sales specialization?

Answer 8

Brokering second homes in resort areas.

Question 9

What has led to a surplus of timeshares on the market?

Answer 9

Original purchasers aging and attempting to resell their units.

Question 10

What is ‘investment real estate’?

Answer 10

Properties bought for rental or investment, ranging from condos to large developments.

Question 11

What is the goal of a broker when locating investment properties?

Answer 11

To find properties within the client’s budget that provide desired returns.

Question 12

What are some methods of investment analysis?

Answer 12

• Rate of return
• Internal rate of return
• Gross rent multiplier

Question 13

What is a challenge when marketing raw land?

Answer 13

It often involves longer-term projects than selling developed properties.

Question 14

What does ‘agricultural real estate’ include?

Answer 14

Land used for producing agricultural commodities or products.

Question 15

What is the USDA’s role in farmland value research?

Answer 15

Researching trends in farmland values and the effects of economic factors.

Question 16

What are CSAs in agriculture?

Answer 16

Community Supported Agriculture organizations that market directly to local consumers.

Question 17

What does REO stand for?

Answer 17

Real Estate Owned.

Question 18

What happens to properties classified as REO?

Answer 18

They are properties taken as collateral for a loan after foreclosure.

Question 19

What is a short sale in real estate?

Answer 19

A sale where proceeds are less than the amount owed on the property.

Question 20

True or False: A short sale is preferable to foreclosure for the borrower.

Answer 20

True.

Question 21

What must agents exercise when dealing with short sales?

Answer 21

Extreme caution due to potential pitfalls.

Question 22

What is one of the main risks of short sales?

Answer 22

They often take longer to complete and can fall apart at the last minute.

Question 23

What is a short sale in real estate?

Answer 23

A short sale is a transaction where a property is sold for less than the amount owed on the mortgage, typically requiring lender approval.

Question 24

What should agents be cautious about when conducting short sales?

Answer 24

Agents should be cautious of the pitfalls involved in short sales and the limited control sellers have over transaction terms.

Question 25

Who dictates the terms and conditions of a short sale?

Answer 25

The lender typically dictates the terms and conditions of the short sale.

Question 26

What must agents disclose to clients in a short sale transaction?

Answer 26

Agents must disclose that the seller will incur losses and may need to pay closing costs.

Question 27

What is the impact of a short sale on a seller's credit?

Answer 27

A short sale will negatively impact the seller's credit.

Question 28

What are the fiduciary duties of an agent in a short sale?

Answer 28

Fiduciary duties include confidentiality, accounting, reasonable care and diligence, loyalty, obedience, accountability, and full disclosure.

Question 29

What is dual agency in real estate?

Answer 29

Dual agency occurs when an agent represents both the buyer and the seller in a transaction.

Question 30

In Texas, what is required for an agent to act as a dual agent?

Answer 30

Informed consent from both the buyer and seller is required for an agent to act as a dual agent in Texas.

Question 31

What guidelines should agents follow for risk management in short sales?

Answer 31

Agents should follow company-mandated risk management procedures and adhere to TRELA and REALTOR@ Code of Ethics.

Question 32

What advice should agents give to distressed borrowers considering short sales?

Answer 32

Agents should advise borrowers to be quick, persistent, prepared, and willing to ask for help.

Question 33

What is the role of an attorney in a short sale process?

Answer 33

An attorney can send a letter to the lender requesting a modification or short sale.

Question 34

What is the difference between REO and foreclosure properties?

Answer 34

REO properties are owned by the lender, while foreclosure properties are in the process of being foreclosed.

Question 35

What is a foreclosure auction?

Answer 35

A foreclosure auction is a public sale of a property that occurs when the property owner defaults on their mortgage.

Question 36

What is the primary responsibility of a leasing agent?

Answer 36

The primary responsibility is to bring tenants to the landlord or property owner/manager.

Question 37

What defines single family residential properties?

Answer 37

Single family residential properties are defined as one to four family homes.

Question 38

How do real estate professionals typically earn their income?

Answer 38

Real estate professionals earn income through commissions upon successful completion of transactions.

Question 39

What is the importance of competition in real estate?

Answer 39

Competition allows consumers to save money and access a variety of services in home buying and selling.

Question 40

What are antitrust laws designed to protect in real estate?

Answer 40

Antitrust laws protect competition and prevent restrictions like price fixing and monopolistic practices.

Question 41

What is the minimum level of service a broker must provide to clients?

Answer 41

A broker must inform clients of material information and answer questions related to the transaction.

Question 42

What is commercial real estate brokerage?

Answer 42

Commercial real estate brokerage involves representing clients in the acquisition, sale, and leasing of commercial properties.

Question 43

What should a brokerage with specialized claims enforce?

Answer 43

A brokerage should enforce a continuing education and update policy to ensure brokers remain educated in their specialty.

Question 44

What can lead to disciplinary action against a broker?

Answer 44

Acts of negligence, dishonesty, or misrepresentation can lead to disciplinary action against a broker.

Question 45

What is the primary responsibility in property management?

Answer 45

The primary responsibility is to maximize the return on the investment.

Question 46

What is the consequence of a false claim of being a specialist in real estate?

Answer 46

It could result in disciplinary action and economic consequences for the broker.

Question 47

What is the primary responsibility of a leasing agent?

Answer 47

To bring tenant to the landlord or property owner/manager ## Footnote The leasing agent also prepares lease agreements.

Question 48

What is the primary responsibility in property management?

Answer 48

To maximize the return on the investment ## Footnote This involves overseeing the management of property assets.

Question 49

What responsibilities are associated with investments in real estate?

Answer 49

Managing the financial assets of another ## Footnote This includes ensuring profitability and financial growth.

Question 50

What is unique about short sales in real estate?

Answer 50

Special addendums are required ## Footnote Short sales involve selling a property for less than the amount owed on the mortgage.

Question 51

What types of properties are included in commercial real estate?

Answer 51

Office space, retail space, factories, warehouses ## Footnote Retail space includes shopping centers and strip malls.

Question 52

True or False: A broker can allow an unqualified licensee to manage a transaction without consequences.

Answer 52

False ## Footnote Allowing unqualified individuals to manage transactions can lead to disastrous consequences.

Question 53

Fill in the blank: The party who brings a tenant to a landlord or property manager and prepares a lease agreement is a _______.

Answer 53

Leasing agent