Law of Contracts

The Buyer's Temporary Residential Lease form is used when a buyer takes possession of the purchased property within ___ prior to closing

90 days

Which of Hesse is an invalid contract?

A contract to sell a home that neither party owns

Which of these contract is voidable, and not void?

A contract with a minor (under 18 years of age) for something not considered a life necessity

When one is granted a life estate "Pur Autre Vie", the estate ends upon he death of:

A designated third party

When most people think of property ownership, they think of which of these?

A fee simple absolute

A common potential delay in a real estate transaction might be:

A late appraisal that did not support the purchase price

A legal claim made on another person's property to secure or ensure payment of a debt is:

A lien

A "straw borrower" is which of the following?

A pawn in a mortgage fraud scheme

A promissory note is:

A promise to pay a debt owed to another.

In this scenario, the borrower takes out a loan and uses he loan to pay the down payment for their mortgage. The loan not only covers for the missing part of the down payment, it also leaves he impression that the down payment was entirely covered by he borrower. What is this scheme known as?

A silent second mortgage scheme

A contingency in a real estate contract is best described by which of the following

A specific event or condition that must occur or be removed for the offer/purchase agreement to be valid

A contract assignment is best described by which of the following

A transfer of rights or obligations of a contract to a third party

When properly recorded, ___ does not require probate to transfer the real property

A transfer on death deed

An amendment to a real estate contract must always include which of he following

All

An appraisal which comes in below the sales price of a property may result in which of the following

All

Consideration can be:

All

In order to avoid disputes over whether certain items are or are not included in a real estate sale which of he following should be done?

All

TREC forms are promulgated for the purpose of:

All

The TREC Promulgated One to Four Family Residential Contract (Resale) can be identified by which of the following?

All

The bundle of rights includes which of the following:

All

Which of Hesse is not an element necessary to form a contract?

All

Which of these events could be the cause of a last minute collapse of a home sale?

All

a "good and indefensible" title is the same as which of these?

All

Most of the DTPA-based claims that occur are based on

Allegations of misrepresentation

Promulgated forms:

Are mandatory for use when a situationally appropriate form exists

The basic contract type that most people are familiar with is which of the following

Bilateral

Lenders will look at these factors when considering whether to approve a loan

Both

The rule of capture grants a landowner the right to pump as much groundwater as desired without liability for damage of others, except when:

Both

The TREC has interpreted "in a timely manner" of the escrow deposit to be:

By the end of the second business day following final signing of the offer/contract agreement

Which of these was not considered as a common contingency, addendum, or amendment?

Change of contracting parties (novation)

CLO in our real estate finance discussion stands for:

Computer Loan Origination

The first step for a serious home buyer is:

Contracting a lender before looking for a home

Which of these is not and indicator for a potential buyer's financial capacity when applying for a loan?

Credit card limits

The Broker-Lawyer Committee does which of the following?

Drafts and revises contract forms for use by real estate licensees.

Which of these was NOT one of the key court rulings?

Earlier agreements supersede later agreements

Annual cultivated crops are referred to as

Emblements

Which of these IS NOT a power held by the government in Texas?

Eminent domain for private use

A clause which establishes the conditions under which a party or parties can back out of a contract agreement without breaching the contract is an:

Escape clause

A contract where one party still has a material obligation to perform is classified as which of these?

Executory

Which of these is NOT a natural process by which land changes?

Expulsion

The state of Texas does not allow the exercise of eminent domain

For private purposes

Involuntary alienation may occur through which of these methods?

Foreclosure

TREC- promulgated means

Forms approved by the Texas Real Estate Commission

A contract that is discharged has been"

Fulfilled or terminated by other means

An option contract:

Gives the optioned the right of first refusal

Which of these items would no be likely to fall into a grey area between personal and real property

HVAC system

A contract often created by a court based on the actions of the parties and not a written agreement is called a(n):

Implied contract

The major distinction between "lien theory" and "title theory" states is best described by which of these?

In lien theory states, the borrower holds title, and in title theory states, he lender holds the title.

The form that generally precedes the rest in most sales transactions is which of these?

Information about brokerage services

Which of these IS NOT a form of involuntary alienation?

Inheritance

Privity of contract

Is a requirement for an individual o be able to bring suit against another breach of contract

An acceptance of an offer that changes one or more terms:

Is not a true acceptance, but a counteroffer

The real estate sales contract becomes an offer as soon as:

It has been prepared and signed by the purchaser

Mortgage fraud can take many forms, but always involves which of these?

Knowingly misrepresenting or omitting material information during the mortgage lending process

The Texas statute of fraud dictates that:

Leases lasting longer than one year must be executed in writing

The DTPA is designed and directed to "be ____ to promote its underlying purposes, which are to protect consumers against false, misleading, and deceptive business practices".

Liberally construed and applied

Encumbrances include all of these, except which one?

Life estates

The term "situs" refers to

Location from an economic point of view

The Real Estate Commission (TREC) has the authority to do which of the following?

Make rules for real estate professionals.

Usury refers to which of the following?

Making loans with excessive or punitive levels of interest

Which of these is NOT a type of REIT?

Market REIT

Material facts about a property

Must be disclosed by the seller

To legally convey property in Texas, one must use the wording:

No specific wording is required so long as the intent to convey is clear

The TILA-RESPA loan processing documentation went into effect at which of these point?

October 2015

At what point has an acceptance of an offer been completed?

Once the offer or has been notified of the offeree's acceptance

Promulgated addenda forms may be found in paragraph 22 of which form?

One to four family residential contract (resale)

The most commonly used promulgated residential sales contract form is the:

One to four family residential contract (resale)

In $11, special provisions of the one to four residential sale contract, which of these stated purposes is true

Only factual statements and business details applicable to the sale are allowed

___ is the legal process to prove or confirm that a will is valid, and distribute the dependent's estate to their descendants

Probate

A __ is a written promise to pay a debt

Promissory note

Forms published and promoted by the trec for use in the Texas real estate profession are referred to as which of the following?

Promulgated forms

Items and costs that may be prorated in a property sale include which of these choices?

Property taxes

Which of these is not a physical characteristic of real property?

Scarcity

A ___ clause states that a contract remains valid even if one provision of the contract is rendered invalid

Severability

Which of these is NOT a form of ownership by multiple people?

Severalty

Which of these IS NOT one of the basic five tests to determine if an object or item is a fixture?

Size of the object

Which process requires the breaching party to complete their contractual obligations?

Specific performance

What is the most significant law to the real estate profession in Texas?

TRELA - The Real Estate License Act

A title contingency generally requires which of these

That the property title be marketable

The property rights held by individuals when they own or rent real estate are known as which of the following?

The bundle of rights

If both parties to a legal contract are mutually mistaken with regard to a material fact, which of the following is accurate?

The contract is voidable

One of the most common and controversial aspects of a sale agreement is which of these

The identification of real vs. personal property

The truth-in-lending disclosure and the good faith estimate are now combined into what form for use in most residential transactions?

The loan estimate

An amendment must always reference which of the following

The original contract

Hypothecation is best described by which of these?

The process of a buyer signing a promissory note to repay a debt and the lender taking an underlying equitable right in the property

Escheat is best defined by which of these selections

The reversion (or descent) of real property ownership back to the state where no heirs to an estate are named or can be located

_____ in the instruction manual on how the transaction will be conducted

The sales contract

Even though an oral contract may be legally valid, they are not to be used in real estate for which f these reasons?

The statute of frauds requires that contracts involving real property be in writing

A "cloud" on a title means:

There is a possibility of another person or entity having a claim on the property

Professional home inspectors have no vested interest in the sale of he house, which is important for which of the following reasons?

They are no obligated to either buyer or seller

Before signing a purchase contract, the licensee must give a buyer written advice:

To have the abstract covering the property examined by an attorney of he buyer's section, or to obtain an owner's title insurance policy prior to closing

In Texas, the amount of a security agreement that a landlord may charge is:

Unlimited by law

The two forms of alienation are which of these selection?

Voluntary and involuntary

Must a real estate agent present all offers to a seller?

Yes, unless the seller instructs otherwise

Modifications made to a real estate contract after the agreement is signed should use:

the amendment to contract form