Texas Real Estate State Practice Exam

What does RESPA regulate?

1. Property zoning regulations

2. Rental agreements in commercial properties

3. Transfer of property ownership

4. Closing on 1-4 family residential property

The correct answer is: Closing on 1-4 family residential property

RESPA, which stands for the Real Estate Settlement Procedures Act, primarily regulates the closing process of residential properties, specifically focusing on transactions involving 1-4 family homes. The main goal of RESPA is to ensure that consumers receive adequate disclosures regarding the costs associated with the closing process, thereby preventing abusive practices and helping them make informed decisions. By overseeing the procedures involved in real estate settlements, RESPA protects consumers from unnecessarily high settlement charges and ensures transparency. This regulation mandates disclosure of certain information, such as loan terms, closing costs, and settlement procedures, allowing buyers and sellers to understand the costs they will incur during the transaction. The other options do not align with RESPA's regulatory focus. Property zoning regulations are governed by local government planning and zoning laws, rental agreements in commercial properties involve different statutes and regulations, and while RESPA affects property ownership transfers in a broader sense, it specifically targets the closing process for residential properties. Thus, focusing on the closing of 1-4 family residential properties accurately captures the primary intent of RESPA.