Question 1

Which of the following could be considered an act of omission by a license holder in a real estate transaction?

Accepted Answer

Failing to inquire if freshwater is available to a rural property

Answer

Failing to interpret the terms of a default provision in a commercial lease

Answer

Failing to provide advice as to how a property could be qualified for an  agricultural valuation

Answer

Failing to interpret the terms of an easement listed on the commitment for title insurance

Question 2

Consider the following scenario. Mary, a license holder, is an agent for buyer Phyllis. Mary is searching the MLS for properties to show Phyllis. Mary's primary search criteria is properties that have the largest commission to the buyers agent. If Mary uses this criteria as her sole determination of which properties to show her client, Mary would violate which canon of the Canons of Professional Ethics and Conduct?

Accepted Answer

Fidelity

Answer

Competency

Answer

Integrity

Answer

Loyalty

Question 3

Whose responsibility is it to determine the geographic competency of a sales agent?

Accepted Answer

The broker who sponsors the agent

Answer

The local trade association

Answer

The sales agent

Answer

Texas Real Estate Commission

Question 4

How can a license holder demonstrate geographic competency?

Accepted Answer

Being informed on local market issues and industry developments

Answer

Going to school in the local area

Answer

Living in the area for a minimum of 3 years

Answer

Understanding different specializations in real estate brokerage

Question 5

What is a license holder best practice in assisting clients with their Seller's Disclosure Notice?

Accepted Answer

Provide available choices of Seller's Disclosure Notice forms

Answer

Always use their local trade association's Seller's Disclosure Notice form

Answer

Always use TREC's Seller's Disclosure Notice form

Answer

Let the seller find and use the Seller's Disclosure Notice form the seller wants to use

Question 6

Why should "love letters" from potential buyers be avoided?

Accepted Answer

Basing decisions on the information contained in a "love letter" may be in violation of fair housing laws

Answer

Offers containing a "love letter" must be the last offers presented to the seller

Answer

The are excluded from  the MLS

Answer

The agent must help draft the letter which creates additional work for the agent

Question 7

What is a best practice for a license holder if the seller's current survey contains a copyright symbol?

Accepted Answer

Recommend that the seller get permission from the surveyor to reuse the survey with their buyer

Answer

Give the survey to the buyer with a T-47

Answer

Upload the survey into MLS for publication

Answer

Recommend that the seller get a lawyer to evaluate the validity of the copyright on the survey

Question 8

Which of the following is NOT a type of water source in Texas?

Accepted Answer

Pumped Water

Answer

Surface water

Answer

Diffused surface water

Answer

Groundwater

Question 9

Who owns surface water in Texas?

Accepted Answer

The State of Texas in trust for the people

Answer

The county through which the water flows

Answer

The United States federal government

Answer

The private landowner adjacent to the water

Question 10

Who regulates groundwater in Texas?

Accepted Answer

Groundwater Conservation Districts (GCD)

Answer

The Texas Railroad Commission (TRRC)

Answer

The Environmental Protection Agency (EPA)

Answer

Texas General Land Office (GLO)

Question 11

Regarding water rights, if the seller of a property is required to provide a Seller's Disclosure Notice, what knowledge must the seller disclose?

Accepted Answer

Whether the property is in the jurisdiction of a groundwater conservation district or subsidence district

Answer

Any defect in a neighboring water well

Answer

Knowledge of the characteristics of the aquifer below the property

Answer

Knowledge of any desired future conditions of the groundwater management area

Question 12

What is the most important advice a license holder should give a client about the mineral rights to a property?

Accepted Answer

Consult an attorney

Answer

Contact the Texas Railroad Commission to determine what mineral rights the seller owns

Answer

Contact the Texas Railroad Commission to get their form to reserve mineral rights

Answer

Visit the real property records office at the county courthouse and research the mineral rights

Question 13

What form should a license holder use when a seller wishes to reserve some or all of the seller's mineral rights?

Accepted Answer

Addendum for Reservation of Oil, Gas and Other Minerals

Answer

Non-Realty Item Addendum

Answer

Amendment to Contract

Answer

Farm & Ranch Contract

Question 14

What is the first step in a property owner's ad valorem tax valuation protest?

Accepted Answer

An informal review with an appraisal district representative to gain an understanding of the reasoning behind the proposed valuation

Answer

File a formal protest with the Texas Attorney General's Ad Valorem Taxation Division using their forms

Answer

Write a certified letter to the Chief Appraiser of the appraisal district explaining the reasons for the disagreement in valuation

Answer

Write a certified letter to the Texas Comptroller explaining the reasons for the disagreement in valuation within 30 days of the date of the appraisal district's rendering of value

Question 15

Regarding ad valorem taxes, license holders should NOT:

Accepted Answer

Offer opinions about ad valorem methodology (unless the license holder holds an appraisal license)

Answer

Assist their clients in finding an ad valorem tax consultant

Answer

Provide their clients with a Comparative Market Analysis of the property

Answer

Provide their clients with a Broker's Price Opinion of the property

Question 16

Which is NOT a property tax exemption or special valuation available to a property owner in Texas?

Accepted Answer

Home improvement exemption

Answer

Over age 65 exemption

Answer

Agricultural valuation

Answer

Wildlife valuation

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