Free Texas Property Practice Test — LicenseIQ

Question 1

Marketable title means title that is:

Accepted Answer

Marketable title is reasonably free from defects and insurable - not necessarily perfect.

Question 2

A real estate licensee who is not an attorney may:

Accepted Answer

Licensees may complete attorney-prepared forms but may not draft contracts, amendments or addenda or give legal advice - that is the unauthorized practice of law.

Question 3

A neighbor's new garage extends two feet over the property line. This is an:

Accepted Answer

An encroachment is an improvement that intrudes onto another's land; a survey establishes the boundary.

Question 4

A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

Accepted Answer

Gaps in the chain or unreleased liens are clouds that must be cleared (e.g., by quitclaim deed or quiet title action) before title is marketable.

Question 5

When do unpaid Texas property taxes for the prior year generally become delinquent?

Accepted Answer

Taxes become delinquent February 1 if the bill was mailed on or before January 10.

Question 6

Which property is presumed to be community property in Texas?

Accepted Answer

§3.003(a) presumes that property possessed by either spouse during or on dissolution of marriage is community property.

Question 7

What is the general purpose of the Texas Real Estate Recovery Trust Account?

Accepted Answer

The account reimburses aggrieved persons for actual damages caused by specified license holder misconduct when the judgment cannot be collected.

Question 8

The closing date is October 20. The lender's appraisal comes in low and the lender will not approve the property. Under Paragraph 2B of TREC 40-11, what is the latest date the buyer may terminate and get the earnest money back?

Accepted Answer

Property Approval termination must be on or before the 3rd day before the Closing Date: October 20 - 3 = October 17. The buyer must give notice plus the lender's written statement of reasons.

Question 9

A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

Accepted Answer

EGI = $240,000 - 8% = $220,800; value = $220,800 x 6 = $1,324,800.

Question 10

What standard of proof must a spouse meet to show that property is separate rather than community?

Accepted Answer

§3.003(b) requires clear and convincing evidence to overcome the community property presumption.

Question 11

Which is the most common and desirable way a real estate sales contract terminates?

Accepted Answer

Contracts ideally end by performance. They can also end by mutual agreement, impossibility, operation of law, or breach.

Question 12

A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

Accepted Answer

In an exclusive right-to-sell listing, the listing broker earns a commission no matter who procures the buyer, even the owner. (Reclassified to section 6 / CORE.)

Question 13

A property is assessed at $280,000 and the tax rate is 22 mills. What is the annual tax?

Accepted Answer

1 mill = $1 per $1,000. $280,000 / 1,000 = 280; 280 x 22 = $6,160.

Question 14

How many members serve on the Texas Real Estate Commission?

Accepted Answer

TRELA provides for nine governor-appointed members: six licensed brokers and three public members. Six is tempting because it is the number of broker seats, not the total.

Question 15

Which item would most likely be considered personal property rather than a fixture?

Accepted Answer

Items easily removed without damage, like a plug-in refrigerator, are usually personal property. Carpeting cut to fit, built-ins and HVAC are adapted or attached fixtures.

Question 16

The government's power to take private property for public use with just compensation is:

Accepted Answer

Eminent domain (exercised through condemnation) allows taking for public use with just compensation. Escheat applies when an owner dies without a will or heirs.

Question 17

The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

Accepted Answer

Substitution: a buyer will pay no more than the cost of an equally desirable alternative.

Question 18

The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

Accepted Answer

Daily rent = $1,800 / 30 = $60. Buyer owns days 11-30 = 20 days. 20 x $60 = $1,200, credited to the buyer because the seller collected rent for days the buyer will own.

Question 19

Which document is recorded in the county records and makes the property collateral for a loan?

Accepted Answer

The mortgage creates the lien and is recorded. The promissory note is the borrower's personal promise to repay and is not recorded.

Question 20

When a tenant in common dies, that owner's share:

Accepted Answer

Tenancy in common has NO right of survivorship, so a deceased co-owner's interest passes by will or to heirs. Automatic passage to co-owners describes joint tenancy.

Question 21

The four unities required to create a joint tenancy are:

Accepted Answer

PITT: joint tenants must take equal interests, at the same time, by the same deed, with equal rights of possession.

Question 22

A wife inherits a lake house from her aunt during her marriage. How is the lake house classified?

Accepted Answer

Property acquired by gift, devise, or descent during marriage is separate property under Family Code §3.001.

Question 23

A husband owns a home as his separate property, and the couple lives there as their homestead. Can he sell it without his wife's signature?

Accepted Answer

Family Code §5.001 requires the other spouse's joinder to sell, convey, or encumber the homestead, whether it is separate or community property.

Question 24

What must every Texas real estate advertisement include?

Accepted Answer

TREC's advertising rules require the broker's licensed or registered assumed name in every ad. License numbers are not required.

Question 25

What is the aggregate fair market value limit on exempt personal property for a Texas family?

Accepted Answer

§42.001 exempts personal property up to $100,000 for a family and $50,000 for a single adult.

Texas real estate property practice test

1. Marketable title means title that is:

2. A real estate licensee who is not an attorney may:

3. A neighbor's new garage extends two feet over the property line. This is an:

4. A title search shows owner A conveyed to B, but the next record shows C as owner with no deed from B. This is an example of:

5. When do unpaid Texas property taxes for the prior year generally become delinquent?

6. Which property is presumed to be community property in Texas?

7. What is the general purpose of the Texas Real Estate Recovery Trust Account?

8. The closing date is October 20. The lender's appraisal comes in low and the lender will not approve the property. Under Paragraph 2B of TREC 40-11, what is the latest date the buyer may terminate and get the earnest money back?

9. A commercial property has potential gross income of $240,000 and an 8% vacancy allowance. Using a gross income multiplier of 6, what is the estimated value?

10. What standard of proof must a spouse meet to show that property is separate rather than community?

11. Which is the most common and desirable way a real estate sales contract terminates?

12. A listing agreement in which the broker earns a commission regardless of who sells the property is a(n):

13. A property is assessed at $280,000 and the tax rate is 22 mills. What is the annual tax?

14. How many members serve on the Texas Real Estate Commission?

15. Which item would most likely be considered personal property rather than a fixture?

16. The government's power to take private property for public use with just compensation is:

17. The principle that a property's value tends to be set by the cost of an equally desirable substitute is:

18. The seller of a rental property collected $1,800 rent for the month on the 1st. Closing is on the 10th, and the seller owns the day of closing (30-day month). What is the rent proration?

19. Which document is recorded in the county records and makes the property collateral for a loan?

20. When a tenant in common dies, that owner's share:

21. The four unities required to create a joint tenancy are:

22. A wife inherits a lake house from her aunt during her marriage. How is the lake house classified?

23. A husband owns a home as his separate property, and the couple lives there as their homestead. Can he sell it without his wife's signature?

24. What must every Texas real estate advertisement include?

25. What is the aggregate fair market value limit on exempt personal property for a Texas family?

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