Texas Promulgated Contracts Prep Test

3: Earnest money must be deposited by the close of business on the _______________________.

2nd working day

4: Which of the following real estate entities must use the State of Texas promulgated forms?

A former real estate professional who is the owner of a real estate firm

The Real Estate Broker-Lawyer Committee

A former real estate professional who is the owner of a real estate firm

6: Maynard is not a citizen of the U.S.A. He can still obtain a license if he is which of the following?

A lawfully admitted alien

6: An illegal contract is:

A void contract

5: Barry is a vet and wants to buy a 4-plex. If he applies with the Texas Veterans Home Loan program he will:

Be turned down

Each State is allowed to determine its own Statute of Limitations in regard to starting a civil lawsuit or pursue litigation for an injury. However when a crime is involved, such as fraud, there is not Statute of Limitations. This is due to:

Criminal statutes

9: The standard Schedule B exclusions are:

Deed restriction Stand by fees Taxes and assessments

7: All of the following are correct facts concerning FHA loans with the exception of:

FHA guarantees all of its loans

2: Rachel was stunned to receive a letter from a man stating the property she recently purchased actually belongs to him. What policy would Rachel turn to as protection in this matter?

Her title insurance

2: Select the correct statement regarding rollback taxes and Section 13 of the New Home Contract:

If additional taxes are due on the property because of development of the property the seller will pay the additional tax The seller is the developer The subject home is a new home

5: If you were comparing the Family Residential Contract 20-14 with the two contracts for new construction (Form 24-14 and Form 23-14), the changes would be found in what portion of the form?

In the property conditions section

7: All notices from one part to the other must be _____________________ and are effective when mailed to, hand-delivered at, or transmitted by fax or electronic transmission.

In writing

10: When a buyer gives a termination fee to the seller, the money?

Is kept by the seller

3: The VA will allow its loan guarantee program when the loan:

Is lower than the appraised value of the property

5: When only one party of a performing couple accepts an offer:

It is not a contract

9: Janis sold her house to the Olsen family. She agreed to the TREC Form 40-9 for a loan contingency. She also set a time limit for the Olsen family of 45 days. What happens at the end of 45 days if there is no loan from the Olsens'?

Janis can terminate the contract

5: If the buyer is moving to the area prior to closing, how can the buyer possess the property prior?

Leasing the property from the seller

8: The term that states the house purchase is dependent on the buyer obtaining a loan from a lender is called:

Loan contingency clause

2: Under State and the Federal Sherman Anti-trust laws, commission must be:

Negotiable

1: Form 23-14 is used for:

New home contract completed construction

9: Form 24-14 is used for:

New home contract completed construction

6: Why is the Lead Paint Disclosure form not required of new home sales?

New homes are exempt

The court has decided Lenny, the buyer has damaged the seller by not only providing the required funds at closing but purposely preventing another interested buyer from making an offer. This inaction on the part of the buyer is called by the courts:

Non-performance of a contract

4: When does earnest money need to be turned in?

Not later than the second working day after the broker receives it

1: If the appraised value of a subject home is lower than the sale price of the home, the VA purchaser is:

Not obligated to go through with the deal

8: When making multiple amendments to a transaction how many amendment forms are needed?

One

A void contract is:

One that is not in effect, Not binding, Not valid

6: Normally in Texas earnest money is:

Paid to and held in escrow by title insurance companies for the seller

10: Stan is a citizen has completed all the course requirements and is 19 years of age. What else must he do in order to receive a license?

Pass the dang State Exam!

5: The legal term that denotes that all the contract terms have been met by the parties is called:

Performance

4: Julie, the licensed salesperson received a very low offer from a party wishing to purchase her client's property. Julie must:

Present all offers to her clients

6: Paul is using a TREC form for a contract that is dated February 2003. Priscilla who works in the same office has a TREC form dated May 2016. Which form is correct?

Priscilla's form because this form is the latest updated TREC form and the most current

1: A business entity must:

Prove they have errors and omissions insurance

7: Martha is going from an inactive to an active salesperson. What procedure requirement must she fulfill first?

Provide proof of attending at least 15 hours of approved continuing education as specified under Section 1101.455 during the two years preceding the date of her application to active status.

1: TREC does all of the following except:

Provides legal advice to the public on private contractual matters

10: TREC provides:

TREC real estate forms

10: Real estate forms used to sell property in Texas are known as:

Texas Real Estate Commission's promulgated contract forms

4: What does the statement in the 3rd party financing addendum mean that states "the buyer shall apply promptly for all financing?"

That the buyer must not procrastinate

3: Who works with the Texas Real Estate Commission in drawing up the real estate promulgated forms?

The Real Estate Broker-Lawyer Committee

8: All of the following statements are incorrect with the exception of:

The VA loan program does not allow second mortgages. If the appraised value is less than the purchase price, the Vet has to make up the difference with cash

2: Tom is applying for a salesperson license. Which of these statements is NOT correct?

Tom must type up a resume

4: Where in the addendum would other details be placed that are not addressed in Addendum to the Purchase and Sales Agreement?

Under special provisions

2: In what section would you find the escrow completion date in the contract?

Under the closing section

5: Sam receives an offer on his property. The potential buyer would like the house but offers $40,000 less than Sam's listed price. Sam said no, but offered a price $20,000 less. The buyer's original offer is now:

Void

At the time of signing one of the parties was intoxicated. The next day that person could not remember signing the contract. This signed contract is now:

Voidable

When one of the parties to a contract can back out of a contract this is referred

Voidable

6: When do the requirements of the Texas property code NOT apply relating to security devices?

When the residential lease is 90 days or less

4: Schedule D of the title commitment would show:

Who owns the title policy

5: Jerry has 5 years of active experience as a licensed salesperson. How many more hours of experience is necessary to apply for the broker license?

Zero

8: Form 20-13 gives the opportunity for licensees to disclose?

they are representing a family member they have more than a 10% business interests in the property they are representing they represent a trust where the licensee is a trustee

1: One to Four Family Residential Contract (Resale) (Form ID: 20-13) - Page 1 will specify:

The names of the buyer(s) and the seller(s)

9: A licensed business entity must have Errors and Omissions insurance coverage in the amount of:

$1,000.000

2: The mortgage that usually has a long term loan period is which of the following?

1st mortgage

In Texas, if an offer is drawn up by the buyer and his/her agent without an expiration date then the offer could be valid for:

4 years

9: A buyer wishes to make an offer. But first she wants to know if there are other offers and if so what these offers are. Select the best answer.

A buyer can establish requirements when presenting their offer

5: When a title company provides title insurance for property, it is said to be:

A commitment

8: In order for a contract of sale to be formed, one party has to make an offer and the other parry:

Accepts the offer as made

3: An applicant for a salesperson license needs to complete which of the following educational courses?

Agency law Contract law Contract forms and addendums

3: Fran, a licensee has received four offers for a listed property. What does the State of Texas require?

All offers must be presented

8: When writing up TREC Form 25-11 for a farm purchase, the information will include which of the following?

All will be included

3: A buyer wants to move in prior to the closing and start fixing up the place. If the buyer and seller use the TREC Buyer's Temporary Lease Form, early move in would addressed in what section?

Alterations clause

9: Sometimes a purchase and sale contract has to be changed. The main aspect to remember is the existing contract will cancel unless the change is done by a(an):

Amendment

1: The residential housing for the single family up to a 4-plex cannot be used for:

Apartment building

10: Any personal property acquired on a sales contact is sold:

As is

7: The 4 year Statute of Limitations applies to which of the following?

Contract offers without an expiration date

7: Upgrades would be entered in what portion of the New Home Contract - Incomplete?:

Cost adjustments

4: Barbara is a designated broker for Even Realty. She had a disagreement with the unlicensed owners and pulled her license. All the salespersons:

Cease real estate activities

8: Sean is looking at a new subdivision that will allow a buyer to purchase a lot and then have a house constructed on the parcel. Sean needs to:

Check the Home Owner Association rules and bylaws before deciding to purchase the lot

1: If a buyer pays an option fee for the right to cancel without cause, the inspection must be:

Completed within the specified option period or lose the right to cancel

Hiding information is called:

Concealment

7: Which of the following would require the most disclosure documents, CCRs, and resale certificates?

Condominium unit

3: The earnest money presented by the buyer is important because it is part of the sales contract procedure. The earnest money is which of the following?

Consideration offered by the buyer

5: A homeowner purchased his new home early in the year and is fed up with the Homeowner Association. He wants to sell immediately. Which contract form would you use for selling his home?

TREC Form 20-14

1: Randall, a licensed real estate agent, is writing up the real estate contract for a farm. Randall will be using which TREC Form?

TREC Form 25-11 Farm and Ranch Contract

8: Broker Janis had to terminate salesperson Hana. Broker Janis must do which of the following?

Send Janis's license into TREC

6: The Texas Veterans Home Loan is for purchasing:

Single family residence homes

3: Tom and Maggie are buying a home in a new development from Star Homes; the developer. Tom and Maggie are signing a promissory note to Star Homes. Who is offering the loan?

Star Homes

10: The term that means the time period during which a party may file a civil lawsuit for injury:

Statute of Limitations

5: The Resale Residential Contract Form that TREC requires to be used for single homes up to a 4-plex structure is called:

TREC Form 20-13

Any amendment to the contract must be ratified by:

The buyer and the seller

4: Inserting the phrase "this offer is subject to cancellation by the buyer at any time prior to acceptance of this offer" will show the seller all of the following except:

The buyer is not really interested

7: Which of the following statements forms a purchase contract?

The buyer offers to purchase at the seller's price and the seller accepts

7: Select an example of "consideration" that is necessary for the contract to be binding?

The buyer writes an earnest money check and presents it to the seller

9: The word indemnity means to restore a loss. If the seller leases the subject property after closing, what happens if the wiring in the house causes a fire?

The buyer's insurance would pay

6: Who must sign and date the sales agreement?

The buyers and the sellers

9: The earnest money section of The Resale Residential Contract Form 20-13 would show which of the following?

The cash deposit amount for the offer The name of the institution that will hold the earnest money Any additional earnest money that will be sent to escrow prior to closing

6: All of the following are on the TREC amendment form except:

The date and time of closing

10: Closing date refers to:

The date the escrow company is to close the transaction

10: What does the "finish out" date refer to in the New Home Contract - Incomplete?

The finishing work necessary to be performed on the new home

9: Who appoints the one public member of the Real Estate Brokers Committee (REBLC)?

The governor

6: When going into a subdivision to buy land and build, one of the biggest challenges you will face if you want to park your boat, RV and fly a flag would be?

The homeowners association rules

2: All of the following would be part of the earnest money agreement with the exception of:

The licensee's fee

7: Jamie wants to make an offer on a house below the listed price. You should warn Jamie that:

The offer can be rejected

8: When the buyer moves into the subject home in escrow prior to closing, what happens if the transaction falls through?

The seller has to sue for eviction

4: TREC Form 9-12 is used when?

The seller is selling a parcel of land

2: What happens if the seller needs to remain in the subject home beyond closing?

The seller will then pay rent to the buyer Both parties will sign a TREC addendum regarding the details of this arrangement The addendum will be attached to the Purchase and Sales Agreement

7: The term "holding over" means:

The seller/tenant needs longer possession after the closing date

8: Boundary claims against a homeowner would be protected against by their:

Title insurance

10: At closing what is required of the seller?

To deliver the general warranty deed and to deliver a clear title