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Texas Real Estate National Exam Test Prep
Multiple Choice With Correct Questions And
Answers 2025
A property owner has decided to do some landscaping work on his yard. He has planted a tree surrounded by some flowering shrubs. The tree and shrubs are an example of: a. encroachments b. improvements c. surface rights d. emblements - correct answerB A property owner has a waterfront lot on a stream. He has the right to use the water from the stream. What is this right called? a. riparian b. littoral c. appropriative d. appropriation - correct answerA A tenant is aware that his lease will expire at the end of the month. He has begun to disassemble his display cabinets and shelves. Which of the following statements about this is true? a. he cannot take them without first obtaining written permission from the landlord b. if the landlord wants them, he can pay the tenant and the tenant must leave them c. the tenant can take these as they are trade fixtures d. he must disclose to the landlord that he plans to take them - correct answerC A seller is attending the closing on his property. The title company has discovered an unsatisfied M&M lien on the property. Which of the following is the most likely reason for the lien? a. a workman on the property left tools behind b. unpaid personal property taxes
c. plumbing work that was completed but never paid for d. a judgment - correct answerC A listing agent went to inspect a seller's property hoping to list it for sale. The seller told the listing agent that his neighbor's satellite dish trespasses on his property. This is an example of: a. annexation b. encroachment c. appurtenance d. license - correct answerB A father gives his son a life estate on a property. The son leases the property. The tenant dies. What happens to the property? a. it reverts to the father b. it goes to the remainderman c. it goes back to the son until he dies d. it goes to the son's heirs - correct answerC A man leaves his second wife a life estate in their home after which the property goes to his children from his first marriage. The children: a. are remaindermen b. have fee simple determinable c. have a life estate d. have a dominant interest in the property - correct answerA Which of the following statements about an easement is true? a. an easement is a benefit to the servient property owner b. an easement is an encroachment c. an easement is a benefit to the dominant property owner d. an easement in gross belongs to or passes with the land - correct answerC P, Q and R are joint tenants. P wants to sell the property, but Q and R do not. What can P do? a. file an injunction against the other owners b. seek a writ of execution c. file a suit for partition d. get a release - correct answerC A, B and C are joint tenants. C dies. B sells his share to D. What type of ownership do A and D have?
b. right of redemption c. deed in lieu of foreclosure d. an equitable estate - correct answerB The required distance between buildings and a federally protected endangered species wetlands is an example of: a. space determined by deed restrictions b. Condemnation c. a buffer zone d. space determined by zoning - correct answerC A couple purchased a condominium. The complex has an exercise room for all residents. The couple does not use the exercise room and does not want to pay the monthly fee for the use of the facility. What can they do to avoid this fee? a. they can deduct the appropriate amount from their monthly condo fees b. they can have an attorney send a letter to the homeowner's association stating their intention to not pay the fee and then stop paying the fee. c. they must pay the fee as they have a tenancy in common interest in all common areas. d. they can lease their condo and as landlords they would not have to pay the fee. - correct answerC Which of the following is personal property? a. a lease b. a fixture c. an easement d. a freehold - correct answerA A landlord leased space in his new retail property to an inexperienced business person. Based on location and the type of business, the landlord believes it will be a great success. What type of lease can he enter into with the tenant that will allow the landlord to benefit from the tenant's success? a. a percentage lease b. a net lease c. a gross lease d. a sale and leaseback - correct answerA A buyer has purchased a property and after closing the seller will continue to occupy the property. This is an example of:
a. subletting b. assignment c. sale and leaseback d. a ground lease - correct answerC Your clients will be able to qualify for financing for a property they wish to purchase in about six months, after they have had an opportunity to reduce their consumer debt. They have found a property that they would like to purchase now. What type of agreement can they enter into with a seller that will allow them to occupy the property now and purchase it within the six months? a. sale and leaseback b. right of first refusal c. lease with an option to buy d. graduated lease - correct answerC Tenants have signed a 3-year lease on a property. In the second year the owner dies and his heirs inherit the property. They give the tenants notice to vacate. What is true? a. the tenants can stay until the end of the lease b. the tenants have to move if the new owners give them 30 days notice c. the tenants must move immediately d. the tenants can stay until the new owner has them evicted - correct answerA A developer decides to build a commercial property in the middle of a residential subdivision. What is required? a. approval from surrounding property owners b. a variance c. a non-conforming use designation d. this would violate deed restrictions and cannot be done - correct answerB A zoning ordinance would affect which of the following? a. a buffer zone b. traffic at certain hours of the day c. the concentration of housing in a residential area d. the style and appearance of construction - correct answerC If a person dies without a will, who receives their estate: a. spouse and children b. siblings c. escheat to state
d. all leases must be in writing to comply with the Statute of Frauds - correct answerC Your client is an investor who would like to have the right to purchase a commercial tract for $5 million for the next six months. What type of contract should he enter into with the seller? a. an earnest money contract b. an option contract c. a bilateral contract d. a right of first refusal - correct answerB A signed sales contract that has not yet gone to closing is: a. fully executed b. executory c. unilateral d. voidable - correct answerB When does an offer become a contract? a. when it is accepted and acceptance is communicated b. when it is accepted c. when it is closed d. at closing and funding - correct answerA Which of the following statements is true about the duties of an agent according to the common law of agency? a. an agent must disclose all facts to clients and customers b. an agent must treat both clients and customers with honesty and fairness c. an agent supports and defends the position of all customers d. an agent has a fiduciary duty to clients and customers - correct answerB A property manager is hired and signs a management agreement with the owner. At this time, the property manager is: a. a special agent b. a universal agent c. a general agent d. a limited agent - correct answerC A buyer and seller have negotiated a contract on the seller's property with a closing set for June 14th, time is of the essence. On June 12th the listing agent calls the buyer's
agent and tells him the seller will be unable to close on the 14th. The seller can close on the 16th. At this time, what is true? a. the contract is terminated b. the contract is void c. the contract is voidable by the buyer d. the contract is voidable by either party - correct answerC A licensee is representing a seller in a commercial transaction. The property is under contract and all contingencies have been met. The listing agent learns the State Department of Transportation has authorized the construction of an exit ramp to the interstate right behind the commercial property. The exit ramp will greatly increase the value of the seller's property. What should the agent do? a. tell the seller and help the seller to void the contract with the buyer. b. tell the seller and encourage the seller to complete the negotiated sale c. keep the information to himself d. tell the seller and convince the seller to speak with an attorney about voiding the contract - correct answerB A listing agent is showing his listing to a buyer customer and notices a problem with the exterior of the property that he missed when he listed the property. What should he do? a. point it out to the buyer as it is a material fact b. ignore it unless the buyer questions him about it c. ignore it, but recommend inspections d. say nothing until he has had a chance to discuss it with his seller client - correct answerA A buyer's agent has accidentally forwarded confidential information about his buyer's financial background to the listing agent. What is true? a. the buyer's agent is guilty of negligence and the listing agent must disclose the information to the seller b. the buyer's agent is guilty of negligence and the listing agent must keep the information confidential c. the buyer's agent is not guilty of anything because it was an accident and the listing agent must disclose it to the seller d. the buyer's agent is not guilty of anything because it was an accident and the listing agent must keep the information confidential. - correct answerA What is the difference between replacement cost and market value?
Which of the following facts about a listed property must be disclosed? a. death due to structural defects b. death due to HIV c. suicide on the property d. a sex offender lives next door - correct answerA A lead paint disclosure is required for all properties built before: a. 1968 b. 1972 c. 19 78 d. 1995 - correct answerC Which of the following statements about lead is NOT true? a. the lead paint disclosure is required for all properties built before 1978 b. the lead paint disclosure allows an inspection for 10 days after the date of the contract c. the lead paint disclosure allows a buyer to waive the right to an inspection d. the property owner must remediate the presence of lead - correct answerD CERCLA is administered by: a. the EPA b. the CFPB c. HUD d. the superfund - correct answerA Which of the following used in 1978 is both extremely hazardous and friable? a. lead b. asbestos c. radon d. EMFs - correct answerB Which of the following properties would be the least desirable neighbor? a. a landfill b. greenfields c. brownfields d. blackfields - correct answerC A seller must keep a copy of the lead paint disclosure he provided to the buyer for:
a. 1 year b. 2 years c. 3 years d. The seller does not have to keep a copy after her provides it to the buyer. - correct answerC It has been found that mold can develop due to: a. installing gutters on a house b. using blown in insulation c. air tight windows and doors found in newer construction d. using recycled building materials - correct answerC General liability insurance will: a. protect a company's assets if someone is injured on company property b. shield a broker for liability for the actions of sales license holders he sponsors c. protect for property damage caused by flooding d. replace E&O insurance if a broker is incorporated. - correct answerA A condominium owner's policy will most likely cover the owner if: a. someone drowns in the condominium pool b. there is a fire in the elevator c. a guest slips in the kitchen d. someone gets hurt in the hallway - correct answerC A condominium complex has liability insurance. This is least likely to cover: a. a unit owner's carpet damaged by a broken water pipe b. faulty equipment in the gym results in an injury to a resident c. a car accident in the parking lot hurts a visitor to the complex d. a resident has a heart attack in the lobby - correct answerA Accurate record keeping is the responsibility of all brokers. If a broker's computers are stolen, what steps could have been taken to protect records? a. Offsite or cloud storage b. data encryption c. an alarm system d. an armed security guard - correct answerA A license holder has just attended a training seminar about technology in real estate and is excited about using social media with her clients. Which of the following statements about social media in real estate is NOT true?
a. the landlord does not have to provide a special space for this tenant b. the landlord only has to provide an assigned space if the tenant requests it before leasing the apartment c. the landlord must provide an assigned reserved space for the tenant d. the landlord must provide an assigned reserved space for the tenant near to the tenant's unit. - correct answerD An investor has 15 rent houses. He has hired an agent to lease the houses. Which of the following actions by the agent would NOT be in violation of fair housing laws? a. refusing to show the houses to anyone over 75 years old b. refusing to show the houses to any unmarried pregnant women c. refusing to show the houses to any single parents with children d. refusing to show the houses to any Hispanic couples - correct answerA Which of the following would NOT be an operating expense included in the property manager's operating budget? a. property taxes b. mortgage payments c. insurance d. reserves for repairs - correct answerB Which of the following would be most likely to hire a property manager? a. an association b. a corporation c. FIRREA d. NAR - correct answerA A broker is running short of funds to meet this month's operating expenses. He places a client's earnest money deposit in his business account and uses it to pay his rent. After his next closing, he replaces the client's deposit in his trust account. The broker: a. is guilty of conversion b. is guilty of commingling c. is not guilty of any crime because he replaced the funds before they were needed d. is guilty of fraud and embezzlement - correct answerA Which of the following is NOT an example of due diligence in a sales contract?
a. the seller orders the deed to be prepared and agrees to pay for the buyer's title policy b. a broker completes a CMA for a buyer client prior to the buyer making an offer c. a buyer obtains a survey because he suspects an encroachment d. a buyer has property inspected to be sure all features are functioning properly - correct answer A sales agent just obtained a listing. The seller has told the agent that she needs to sell the property because she is going through a divorce. What must the salesperson do? a. suggest marketing the property at a below market value price to sell it more quickly b. obtain the signatures of all owners on the listing agreement c. recommend an appraisal to determine the best list price d. tell the seller to list the property for sale as is - caveat emptor - correct answerB Wetlands typically contain which of the following? a. saturated soil b. navigable waters c. ground water contamination d. industrial water waste - correct answerB What is the maximum amount of time allowed for a victim to file a Fair Housing complaint? a. 4 years b. 3 years c. 24 months d. there is no time limit for filing a complaint. - correct answerC A property manager notices that the building stucco needs repair. He notifies the landlord and recommends a contractor. The landlord uses the contractor who does not do a good job. The new stucco leaks and mold grows. The tenant becomes ill from the mold. Who is responsible? a. the landlord b. the property manager c. the contractor d. the tenant - correct answerA
at least one business day before closing. - correct answerA Which of the following closings would be covered by RESPA? a. a mobile home b. a retail shopping center c. an apartment complex d. a condominium - correct answerD When does the buyer under contract for deed get title to the property? a. when the contracts are signed and delivered b. when the final loan payment is made c. when the buyer takes occupancy of the property d. when the seller dies - correct answerB What is another name for Contract for Deed? a. installment contract b. real estate sales contract c. deed of trust d. non-conforming loan - correct answerA What department of the government oversees the FHA insurance program? a. HUD b. CFPB c. EPA d. VA - correct answerA A buyer is aware that interest rates should go down over the next few months. What type of loan should he get to enable him to buy now and take advantage of declining rates in the future? a. term loan b. Reverse Annuity Mortgage c. ARM d. balloon loan - correct answerC Which of the following is unlikely to have a negative impact on a seller's credit score? a. a short sale b. a foreclosure c. a straight assumption d. an assumption subject to - correct answerC
In rental properties, increased demand can be the result of: a. a shortage of renters b. high mortgage interest rates c. low bond interest d. functional obsolescence - correct answerB Which of the following would not be eligible for a VA loan? a. a disabled veteran b. the parents or siblings of a veteran c. an active duty veteran d. a retired veteran - correct answerB What is required of a loan servicer before foreclosing on a VA loan? a. the VA must be notified before the foreclosure b. the lender must have proof that the borrower received the foreclosure notice c. the lender must advertise the foreclosure in the local newspaper d. there are no extra lender requirements for foreclosure of a VA loan - correct answerA Who must be notified to take money out of the trust account in a real estate transaction? a. the buyer b. the seller c. both buyer and seller d. all parties associated with the transaction - correct answerC How is earnest money recorded on the closing disclosure? a. Debit to the seller b. Debit to the buyer c. Credit to the seller d. Credit to the buyer - correct answerD What type of mortgage loan would allow the property owners to borrow additional funds at future dates? a. An HELOC b. An ARM c. A package mortgage d. A participation loan - correct answerA
An office space is 24 feet long and 27 feet wide with 10-foot ceilings. The owner wants to carpet the office. How many square yards of carpet does he need? a. 72 b. 216 c. 648 d. 1944 - correct answerA A property is listed for $399,500. It sells for $396,000. The negotiated commission is 6% and will be split evenly between the selling broker and the listing broker. The selling broker pays his sales associate 60% of the broker's commission. How much does the selling broker earn? a. $11, b. $4, c. $7, d. $5,940 - correct answerB A developer has 2,178,000 sq.ft. of property. He sells 80% of it for $5,000 an acre. What is the total sale price? a. $200, b. $100, c. $250, d. $125,000 - correct answerA An office building has a potential gross rent of $20,000 per month. It has a vacancy rate of 15%. Yearly expenses for the property total $115,000. If the owner is earning a 10% rate of return, what is the value of the building? a. $204, b. $240, c. $890, d. $1,250,000 - correct answerC What is the minimum monthly income your buyers need to qualify for a $200,000 loan at 6% for 30 years if lenders are qualifying at 28%? (The loan factor is $6.00). Monthly taxes and insurance will be $900. a. $7,5 00 b. $6, c. $4, d. $7,686 - correct answerA A sale is closing on June 15th and the annual property tax bill has not been paid. The house is assessed at $350,000 and the tax rate is $2.50 per $100. Using a 360-day
year, how much will the seller owe for taxes at closing (to the nearest dollar) and how will this be shown on the CD? a. $4375 debit the seller/credit the buyer b. $4375 credit the seller/debit the buyer c. $4010 debit the seller/credit the buyer d. $4010 debit the buyer/credit the seller - correct answerC An owner sold his house for $250,000 with a $50,000 take back. (A take back is seller financing. The seller receives a note for this amount at closing and will collect this amount over the agreed-upon term of the loan.) He paid off his loan of $138,500 and he paid a 5% commission. He had closing costs of $10,000. How much did the seller net at closing? a. $227, b. $177, c. $89, d. $39,000 - correct answerD John is purchasing a lot 125 feet wide and 127 feet deep for $5.65 a square foot plus $15 a front foot. (A front foot refers to frontage and is the width of the lot.) How much will he pay for the lot? a. $89,693. b. $91,568. c. $238, d. $200,000 - correct answerB
