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Texas Real Estate Exam 2024: Questions and Answers, Exams of Real Estate Management

A collection of questions and answers related to the texas real estate exam. It covers various topics relevant to real estate principles, practices, and laws. The document can be a valuable resource for individuals preparing for the exam, offering insights into common exam questions and their correct answers.

Typology: Exams

2024/2025

Available from 03/26/2025

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TEXAS REAL ESTATE EXAM 2024 QUESTIONS AND 100% CORRECT ANSWERS
"When an easement allows the use of a neighboring property which automatically transfers upon
the sale of either dominant or servient property, it is called what type of easement? - CORRECT
ANSWER Easement Appurtenant"
"Linda purchased a fee simple interest for the private use of a residential property for one week
every single year. What did Linda purchase? - CORRECT ANSWER resort timeshare"
"What is the highest form of land ownership which includes the full and complete bundle of
property rights? - CORRECT ANSWER fee simple absolute"
"What type of ownership would allow two or more owners to have various unequal percentages
of ownership? - CORRECT ANSWER Tenancy in common"
"Tenancy in Severalty is best described as: - CORRECT ANSWER One property owner"
"Which of the following is NOT one of the four land use controls? - CORRECT ANSWER
Intestate"
"What is the general purpose for cities to acquire building permits? - CORRECT ANSWER to
require a minimum level of construction standards"
"The interest rate banks charge to their preferred customers is called: - CORRECT ANSWER
the prime rate"
"Paul owns an older residential property in an area now zoned for commercial use. Paul decides
to renovate the home into a laundry mat. The change in the properties functionality for Paul's
financial gain is an example of what: - CORRECT ANSWER highest and best use"
"Jon's Tire Store is being built across the street from Big Bob's Tires. What appraisal principle
describes this situation? - CORRECT ANSWER competition"
"Buyer Sam purchased a run down residential home in a neighborhood with many nice well kept
properties. Sam intends to renovate the home and resell it for a profit. Considering the nicer
homes in the neighborhood help raise his property value, what appraisal principle is Sam
leveraging? - CORRECT ANSWER progression"
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TEXAS REAL ESTATE EXAM 2024 QUESTIONS AND 100% CORRECT ANSWERS

"When an easement allows the use of a neighboring property which automatically transfers upon

the sale of either dominant or servient property, it is called what type of easement? - CORRECT

ANSWER Easement Appurtenant"

"Linda purchased a fee simple interest for the private use of a residential property for one week

every single year. What did Linda purchase? - CORRECT ANSWER resort timeshare"

"What is the highest form of land ownership which includes the full and complete bundle of

property rights? - CORRECT ANSWER fee simple absolute"

"What type of ownership would allow two or more owners to have various unequal percentages

of ownership? - CORRECT ANSWER Tenancy in common"

"Tenancy in Severalty is best described as: - CORRECT ANSWER One property owner"

"Which of the following is NOT one of the four land use controls? - CORRECT ANSWER

Intestate"

"What is the general purpose for cities to acquire building permits? - CORRECT ANSWER to

require a minimum level of construction standards"

"The interest rate banks charge to their preferred customers is called: - CORRECT ANSWER

the prime rate" "Paul owns an older residential property in an area now zoned for commercial use. Paul decides to renovate the home into a laundry mat. The change in the properties functionality for Paul's

financial gain is an example of what: - CORRECT ANSWER highest and best use"

"Jon's Tire Store is being built across the street from Big Bob's Tires. What appraisal principle

describes this situation? - CORRECT ANSWER competition"

"Buyer Sam purchased a run down residential home in a neighborhood with many nice well kept properties. Sam intends to renovate the home and resell it for a profit. Considering the nicer homes in the neighborhood help raise his property value, what appraisal principle is Sam

leveraging? - CORRECT ANSWER progression"

"During the appraisal process the appraiser will NEVER adjust the price of the: - CORRECT

ANSWER subject property"

"While working on an appraisal report, appraiser Jake finds that the comparable property is superior to the subject property with more amenities. How will Jake make adjustments to arrive

at a value of the subject property? - CORRECT ANSWER subtract value from comparable"

"Which one of the following loan types does NOT require a downpayment? - CORRECT

ANSWER VA loan"

"Discount points are a way lenders are able to charge prepaid interest in order to lower the

interest rate over the life of the loan. What is the cost of the discount points based on? -

CORRECT ANSWER the loan amount"

"Mark is not able to make his entire mortgage payment on time each month and has fallen behind on payments. Because of his failure to pay, his lender, ABC Home Loans, sent him notice that they are calling for the remaining mortgage balance to be pid in full in one lump sum immediately. This

is an example of a(n)? - CORRECT ANSWER acceleration clause"

"Some loans are structured where the Lender places a portion of each payment the borrower makes into a special account to pay the property taxes at the end of each year. What is the

account called? - CORRECT ANSWER escrow account"

"Which of the following loan types would have the highest down payment? - CORRECT

ANSWER conventional loan"

"Agent Anna has a home listed for sale and shows the home to the Quinns whom she does not

have a buyer's agency agreement with. The Quinns are: - CORRECT ANSWER customers"

"What duty requires a licensee to follow the principal's orders and requests as long as they are

not unethical or illegal? - CORRECT ANSWER obedience"

"Disclosure law specifics vary by state, however, in which type of transaction would the seller's

property disclosure generally NOT be required? - CORRECT ANSWER residential foreclosure"

"A listing agreement in writing creates which form of agency? - CORRECT ANSWER express

agency"

"To be enforceable real estate contracts must be in writing according to the: - CORRECT

ANSWER Statute of Frauds"

"All parties entering into a real estate contract must be doing so on their own free will and not

under duress. Which of the following is NOT a requirement to enter into a real estate contract? -

CORRECT ANSWER Parties must be US Citizens"

"A valid contract must contain valuable consideration which means: - CORRECT ANSWER

something clearly offered for something else in exchange" "In order for a contract to convey ownership in a property transaction the contract must include:

CORRECT ANSWER a legal description"

"Which of the following is NOT a requirement for a contract to be valid and enforceable? -

CORRECT ANSWER notarization"

"In a real estate transaction, when someone is forced into a contract by intimidation or some

other type of coercion it is called: - CORRECT ANSWER duress"

"A contract that does not have all the necessary elements of a contract is: - CORRECT ANSWER

void" "LeAnn entered into a contract that called for $1,000 in monetary damages if the contract was

breached. The $1,000 in the contract is referred to as: - CORRECT ANSWER liquidated

damages" "Once all terms of a contract have been fulfilled and the transaction has closed the contract status

is said to be fully: - CORRECT ANSWER executed"

"John signs a six-month lease on an apartment beginning January 1st and ending June 30th. His lease does not automatically renew and no notice is required on his part to vacate on the

expiration date. What type of lease did John sign? - CORRECT ANSWER Estate for years"

"What duty does an agent acting as a property manager owe a property owner? - CORRECT

ANSWER fiduciary duties"

"A property management contract should include all of the following EXCEPT: - CORRECT

ANSWER signature of the tenant"

"Sally wants to transfer the title of her property to her granddaughter. Which of the following are

ways to voluntarily transfer title to a property: - CORRECT ANSWER will, grant, deed"

"When someone passes away with a valid will in place it is referred to as: - CORRECT ANSWER

testate" "A title search revealed a lien on a property which creates a cloud on the title. How may the

landowner go about resolving this title issue? - CORRECT ANSWER Paying the debt and filing a

stratification of judgment"

"What type of title bears the most protection for the property owner: - CORRECT ANSWER

warranty deed"

"On closing day who signs the deed to transfer the property from seller to buyer? - CORRECT

ANSWER the seller"

"When agents get together and have a discussion on regarding setting a fixed commission rate so

that they are all charging the same rate, this conversation violates what act? - CORRECT

ANSWER Sherman AntiTrust Act"

"What duty requires an agent to place the clients best interest above all others? - CORRECT

ANSWER loyalty"

"Steve tells Listing Agent Shelly his basement leaks but ONLY when it rains hard for a long periods of time so no need to mention it to buyers. He insists it's really no big deal. Which of the following

is true? - CORRECT ANSWER Shelly cannot withhold known material facts"

"Sharon purchased a home for $100,000 with an 6% annual interest rate. Her payments are $

per month. How much of her first payment will go to principal? - CORRECT ANSWER $300"

“An insurance policy which combines personal liability insurance and hazard insurance coverage

for a dwelling and its contents is called - CORRECT ANSWER homeowner's insurance"

"What is the status of a contract when all of the terms have been fulfilled and the transaction has

been closed? - CORRECT ANSWER fully executed"

"Surface Rights, Air Rights, and Subsurface Rights are all rights that can be sold by a property

owner while still retaining the property itself. These rights are known as: - CORRECT ANSWER

severable rights" "The city of Brownwood plans to build a new water treatment facility but the land that is required

is privately owned. Eminent domain allows the city to: - CORRECT ANSWER Take possession of

the land against the owner's wishes, yet the owner must be compensated"

"When the appraised value of a property is given, it is based on: - CORRECT ANSWER

Comparable sales" "Agent Brook is preparing for a listing appointment and has gathered information to prepare a report of recent market data for the seller to review. The report agents reconcile to obtain a reasonable list price for a property based on current listings, recent sales, and expireds would be

called: - CORRECT ANSWER Comparative Market Analysis"

"The beautiful town of Big Bear is experiencing a fast influx of new residents. There are few homes on the market and no new construction developments in the works. What will this do to

the price of the existing homes in the area? - CORRECT ANSWER The prices will increase"

"Homeowner Paul is selling his home without a real estate agent. He places an advertisement stating "Owner Financing 3% down payment" is Paul's advertisement in violation of the Truth in

Lending Act? - CORRECT ANSWER No, property owners are not regulated by TRIL advertising

requirements" "FHA loans require that borrowers provide protection to the lender in case of loan default. What

must the borrower pay for to provide this protection to the lender? - CORRECT ANSWER

mortgage insurance premium" "Fair housing regulations apply not only to real estate agents but also lenders. When a lender denies a mortgage application solely based on the racial demographics of the neighborhood the

property is located in the lender is guilty of: - CORRECT ANSWER redlining"

"Terry received a conventional 30 year loan to purchase his home. Thanks to some large extra payments Terry will have his home paid for in only 17 years. Which of the following loan terms

could charge Terry an extra fee for paying off the home so soon? - CORRECT ANSWER

prepayment penalty" "Mortgages that are escrowed break down the monthly payment four ways. Each payment pays a

portion towards PITI, which stands for: - CORRECT ANSWER Principal, Interest, Taxes,

Insurance" "Melissa went on a listing appointment and the sellers were asking legal questions. Questions she

felt certain she knew the answers to, what should Melissa do? - CORRECT ANSWER suggest

they seek legal counsel" "Agent Terry convinces an owner to list his property way under market value. Terry sells the property to his brother Mark without disclosing the relationship to the buyer in writing. Mark

turns around and sells the property for a profit to split with Terry. This is an example of: -

CORRECT ANSWER Self Dealing"

"Agent Paula found a buyer for her listing, the seller accepted the buyer's offer, and both parties received copies of the contract documents. The seller decides one week prior to closing they no

longer want to sell the home. What could happen? - CORRECT ANSWER the seller owes Paula

commission" "New agent Matt is listing a home for sale which was built in 1965. What disclosure should Matt

have the seller complete due to the age of the home? - CORRECT ANSWER lead based paint

disclosure" "Part of agent Connie's listing packet includes a form for the seller to complete that covers the components of the home for sale and the seller's knowledge of the condition of such items. This

form is referred to as: - CORRECT ANSWER seller's disclosure"

"Mary and Mark are buying their first home, which was built just 3 years ago. After touring the property which seems to be in good repair, they waive their right to a home inspection not anticipating any issues. After closing, and moving in they find that some of the duct work in the crawl space has fallen and is no longer attached causing all the air to be released under the home. They are upset that the seller did not mention the issue, and when asked the seller states they

had no idea that had happened. Is the seller at fault for not disclosing this issue to the buyers? -

CORRECT ANSWER No, the seller had no knowledge of the issue"

"In compliance with fair housing regulations any deed restriction or covenant that would prohibit

the conveyance of the property to a member of a protected class is: - CORRECT ANSWER is not

legal, considered void, and unenforceable"

"Only showing homes in a certain part of town to people of a certain nationality is called? -

CORRECT ANSWER steering"

"A hispanic man called a landlord regarding a home for rent online. The landlord tells him the property is already rented. His white friend then called the landlord to inquire about the property

and he arranged an appointment to show him the home. This is discrimination based on -

CORRECT ANSWER race"

"Broker Ben has E&O Insurance and is selling an investment property that he owns. He has made a few false statements and misrepresentations, but he really needs to sell the property fast. What

would happen is someone were to sue him for his false statement? - CORRECT ANSWER E&O

insurance will not cover negligence of a Broker selling property he owns" "Karen recently sold a home for 6% commission. If her commission was $20,700, how much did

the property sell for? - CORRECT ANSWER $345,000"

"Agent Amanda just closed on a home that sold for $525,000. Her commission rate was 5% with a 50/50 co-broker with the selling broker, and a 60% split with her broker. How much did Amanda

receive? - CORRECT ANSWER $7,875"

"A new roof costs $7,500 and the economic life of the roof is 30 years. Using the straight line

depreciation method, what would the value of the roof be after 5 years? - CORRECT ANSWER

"David, a broker, has recently finalized a deal for the purchase of one of his listings. The buyer has

given him earnest money. What must David do next with the earnest money? - CORRECT

ANSWER deposit the money in an escrow account"