State: Texas | Category: Real Estate | All tests in this Category:
Practice Test 1 Practice Test 21. Texas allows acceptance to be effective when mailed if properly addressed and stamped. This is commonly known as the:
The mailbox rule states that an acceptance sent by mail is effective upon dispatch, provided it is properly addressed and stamped, which is a standard concept in Texas contract law.
2. Which document describes liens, encumbrances, and other requirements that must be cleared before title can transfer in a Texas closing?
The Title Commitment lists the current state of title, including liens and encumbrances that must be addressed before the deed can convey clear title.
3. A subordination clause most benefits which party?
The trustor benefits because a new loan can take priority over an existing loan, allowing for additional financing options.
4. Which adjustment is made when a comparable has fewer bathrooms than the subject?
Since the comparable is inferior (fewer bathrooms), value is added to it to equate it to the subject property's features.
5. Who is typically responsible for requesting and obtaining the payoff statement from a lender to clear a lien at closing in Texas?
The title company or closing agent typically requests payoff statements from lenders to ensure liens are satisfied at closing.
6. Under the Texas Residential Real Estate Contract (TREC), by when must the earnest money deposit be delivered to the escrow agent after the Effective Date?
TREC contracts require the earnest money to be deposited into the escrow account by the end of the second business day after the Effective Date, to demonstrate the buyer's serious intent.
7. Which statement best describes a judgment lien in Texas?
A judgment lien arises from a court judgment and can attach to the debtor's real property to satisfy the judgment.
8. Who may adopt building codes and amendments in Texas?
Local governments typically adopt and amend building codes to reflect local needs, though state-level adoption of base codes is common as well.
9. The property tax in Texas is based on which value?
Texas property taxes are based on the appraised (market) value determined by the County Appraisal District. Exemptions reduce that value to determine taxable value.
10. Which remedy is commonly available in Texas for breach of a real estate contract due to the uniqueness of real property?
Because real property is unique, specific performance (forcing transfer as agreed) is a common remedy in Texas courts for breach of a real estate contract.
11. A mortgage loan where only interest is paid during the term and the principal is due at the end is called:
A straight note, also called an interest-only loan, requires the borrower to pay only interest during the term. The entire principal is due as a lump sum at maturity.
12. A lien that arises from a contractor or supplier who performs work or furnishes materials to improve real property is known as a:
Mechanic's (or materialmen's) liens arise when labor or materials are furnished to improve real property and attach to the property to secure payment.
13. A junior mortgage is usually:
A junior mortgage is secondary to the primary mortgage and is repaid after the first lien in case of default.
14. A lien that is used to secure unpaid HOA assessments is typically created by:
HOA liens arise from delinquent HOA assessments and are typically created through the HOA's governing documents and proper filing.
15. A ceiling fan permanently installed in a home is classified as:
A permanently installed ceiling fan is considered a fixture, thus part of real property.
16. Which of the following is considered a physical component of real property?
Soil is a tangible part of the land, whereas rights like water or minerals are interests, not physical components.
17. If a tenant stays beyond the lease term and the landlord accepts rent without a new agreement, the tenancy typically becomes:
Acceptance of rent after expiration creates an implied periodic tenancy, extending possession to the next rental period unless terminated properly.
18. Effective gross income is calculated by:
Effective gross income = potential gross income – vacancy and collection losses, representing the actual expected income from the property.
19. Which of the following can be created by a will or deed and allow possession for a fixed period after the death of the holder?
Life estates can be created by will or deed; possession lasts for the life of the measuring person.
20. What is the proper license term used for a real estate professional who works under a sponsored broker in Texas?
The licensed individual who performs real estate activities under a broker is typically called a Real Estate Sales Agent (salesperson).
21. Which adjustment is made when a comparable property is smaller than the subject?
If a comparable is smaller than the subject, its price is increased to make it comparable to the subject property.