Promulgated Contract Forms
According to TREC contract forms, how many days does the title company have to provide the title commitment to the buyer? a) 5 days after the effective date of the contract b) 20 days after the effective date of the contract c) 5 days after the title company receives the contract d) 20 days after the title company receives the contract
b) 20 days after the effective date of the contract
The lead-baed paint disclosure: a) Requires the buyer to have a lead inspection within 10 days b) Allows the buyer to waive the right to lead inspection c) Requires the seller to remediate the presence of any lead found in an inspection d) Is required for all properties built before 1988
b) Allows the buyer to waive the right to a lead inspection
TREC promulgated contracts allow they buyer to have the property inspected: a) By anyone personally selected by the buyer b) By inspectors licensed by TREC or otherwise permitted by law c) No more than three times d) At any time by any person selected by the buyer's agent
b) By inspectors licensed by TREC or otherwise permitted by law
If a license holder is receiving compensation from a residential service company, the compensation must be: a) Reported to TREC b) Disclosed to the parties using the appropriate TREC form c) Kept quiet d) Reported to the attorney general for action
b) Disclosed to the parties using the appropriate TREC form
The buyer may terminate the contract and receive a refund or earnest money if lender-required repairs: a) Exceed 1% of the sales price b) Exceed 5% of the sales price c) Exceed 3% of the sales price d) Exceed $10,000
b) Exceed 5% of the sales price
The Third Party Financing Addendum would NOT be used for ___. a) VA loans b) FHA loans c) Conventional loans d) Seller financing
b) FHA loans
The commission agreement between the broker and the seller is usually found in the ___. a) Sales contract b) Listing agreement c) Buyer representation agreement d) IABS
b) Listing agreement
In connection with a residential sale in Texas, a T-47 Department of Insurance of affidavit will be used when the: a) Lender requires the buyer to purchase a new survey on the property b) Seller is providing an existing survey c) Title company is requiring a new survey d) Seller has agreed to pay for a new survey
b) Seller is providing an existing survey
A ___ is a person who is used to buy property in order to conceal the identity of the actual owner. a) Scarecrow b) Straw Buyer c) Wickerman d) Stool Pigeon
b) Straw Buyer
Federal law provides that when selling a home built before 1978: a) All lead-based paint must be removed b) The buyer must be provided with the pamphlet "Protect Your Family From Lead in Your Home c) The buyer must have lead testing performed prior to closing d) The seller must complete a Lead-Based Paint Disclosure only if there is a concern that property might be contaminated
b) The buyer must be provided with the pamphlet "Protect Your Family From Lead in Your Home
What is the difference between a void contract and a voidable contract? a) A void contract is invalid from the beginning, and a voidable contract is one that meets all the requirements of the law b) A void contract is entered into with a minor, and a voidable contract is one created to perform an illegal act c) A void contract is invalid from the beginning, and a voidable contract is one that cannot be forced against one or more of the parties. d) A void contract is a bilateral contract, and a voidable contract is a unilateral contract
c) A void contract is invalid from the beginning, and a voidable contract is one that cannot be forced against one or more of the parties.
When a party to a contract fails to perform under the contract, he/she is in ___. a) Escrow b) Mediation c) Default d) Arbitration
c) Default
During the time between execution and closing/funding, a contract is a(n): a) Tentative contract b) Voidable contract c) Executory contract d) Fully executed contract
c) Executory contract
According to the Farm and Ranch Contract, windmills, tanks, fences, gates and sheds are considered ___. a) Crops b) Accessories c) Improvements d) Reservations
c) Improvements
An offer is presumed to have been delivered to the principal when it is delivered to the agent under the legal doctrine of ___. a) Laches b) Novation c) Imputed Notice d) Implied Agency
c) Imputed Notice
The state of Texas encourages the parties to resolve all conflicts and disputes through alternative dispute resolution procedures such as ___. a) Suing for monetary damages b) Going to court c) Mediation d) Termination of the contract
c) Mediation
The earnest money is: a) Always 5% of the purchase price b) Set by the TREC c) Negotiated between the parties d) Always equal to the option fee
c) Negotiated between the parties
Madison is writing up a contract on a townhouse unit for which the buyer will have fee simple ownership and pay a monthly HOA for the upkeep on common areas. Which promulgated contract should she use? a) Residential Condominium Contract b) Unimproved Property Contract c) One to Four Family Residential Contract d) Residential Townhome Contract
c) One to Four Family Residential Contract
The loan amount in Paragraph 3B of the sales contract includes: a) The amount of the mortgage insurance b) The loan plus origination fees c) Only the amount borrowed by the borrower d) The loan amount minus the earnest money
c) Only the amount borrowed by the buyer
Jen and Ric are purchasing their first home together, but cannot quality for traditional financing. The seller of the property agrees to help them out by financing the purchase of the home. Which promulgated form would Jen and Ric's agent use for this transaction? a) Third Party Financing Addendum b) Loan Assumption Addendum c) Seller Financing Addendum d) Non-Realty Items Addendum
c) Seller Financing Addendum
If a home is to be sold, with the lender's consent, at a price less than the outstanding balance on a mortgage, the sale is known as a(n)__. a) Deed in lieu of foreclosure b) Foreclosure c) Short sale d) Distress sale
c) Short sale
Which statement regarding the Broker-Lawyer Committee is CORRECT? a) The Broker-Lawyer Committee was created enforce the Texas Real Estate License Act b) All of the members Broker-Lawyer Committee must be licensed real estate brokers c) The Broker-Lawyer Committee was created to draft and revise standardized contract forms for use by real estate license holders d) The Broker-Lawyer Committee's primary duty is to protect the interests of the Texas real estate license holders
c) The Broker-Lawyer Committee was created to draft and revise standardized contract forms for use by real estate license holders
How long is the option period in Paragraph 5B of the TREC One to Four Family Residential contract? a) 7 days b) 10 days c) The negotiated number of days as specified in the contract d) 15 days
c) The negotiated number of days as specified in the contract
What is TRUE of the paragraph regarding Earnest Money in the 1-4 Family Residential Contract? a) Earnest money is required to make the contract valid b) Time is not of the essence for this paragraph c) Time is of the essence of this paragraph d) The paragraph states the standard dollar amount of earnest money is required for a valid contract.
c) Time is of the essence for this paragraph.
The title company is: a). A party to the contract b) Not a party to the contract c) Liable for the performance of the parties d) Responsible for arranging financing for the buyer
b) Not a party to the contract
The process of dividing ongoing expenses such as taxes and POA fees between the buyer and seller at closing is called ____. a) Assessment b) Proration c) Collections d) Accounting
b) Proration
When should a license holder advise a client to consult an attorney? a) At first contact with the client b) before signing the contract if the client does not understand the effect of signing the sales contract or the terms or conditions in the agreement c) After the contract has been signed by all parties d) a license holder should never advise a client to consult an attorney
b) before signing the contract if the client does not understand the effect of signing the sales contract or the terms or conditions in the agreement
Buyer Sarah is purchasing a residential property. She plans to live in the home and operate a daycare business out of it. Having mentioned this to her agent, the agent should: a) Write a paragraph describing the business in Paragraph 11, Special Provisions b) Disclose the daycare using a TREC Special Use addendum c) Specify the use as a daycare in Paragraph: Objections d) Not mention the daycare because the future use of a property is not an issue
c) Specify the use a daycare in Paragraph 6: Objections
A buyer has made a full price offer on a property and has asked for permission to move in 30 days before closing. The seller has accepted the price and terms and communicated that acceptance to the buyer. How should the buyer's agent handle the buyer's occupancy before closing? a) The buyer's agent should use the TREC Buyer's Temporary Lease Addendum b) The buyer's agent should enter the terms of the lease in Paragraph 11 (Special Provisions) of the contract. c) The buyer's agent should use the TREC Seller's Temporary Lease Addendum d) The agent should use the Texas REALTORS residential lease agreement
a) The buyer's agent should use the TREC Buyer's Temporary Lease Addendum
A buyer terminates the contract within the option period, how many days does the seller have to refund the option fee? a) The option fee is never refunded to the buyer b) The seller has 7 days c) The seller has 5 days d) The seller has 3 days
a) The option fee is never refunded to the buyer
Which of the following statements regarding loan assumptions is CORRECT? a) The original borrower on a note is not necessarily released from ongoing liability for repayment on a mortgage when a purchaser assumes the mortgage b) The seller has no liability when his or her loan is assumed c) Loan assumptions take less time to process because there is less paperwork for the lenders d) Fees on a loan assumption are generally much higher than that of a new loan
a) The original borrower on a note is not necessarily released from ongoing liability for repayment on a mortgage when a purchaser assumes the mortgage
The Buyer and Seller Temporary Residential Lease forms are good for any period up to ___. a) 14 days b) 30 days c) 60 days d) 90 days
d) 90 days
What are some common amendments that might be made to the original contract? a) Repairs that the seller agrees to perform b) Changes to the closing date c) Changes to the sales price, down payment and/or amount financed d) All of these are correct
d) All of these are correct
The Notice to Prospective Buyer form: a) Advises buyers to have an abstract examined or obtain title insurance b) Informs buyers they must have TREC-licensed inspectors inspect the property c) Notifies buyers that the lever of water impoundments that adjoin the property may fluctuate d) Informs buyers that the property is located in a public improvement district (PID)
a) Advises buyers to have an abstract examined or obtain title insurance
If a buyer is concerned about the presence of endangered species, toxic, substances, or wetlands on a property, the agent should: a) Attach the Environmental Assessment Addendum to the contract b) Avoid the property at all costs c) Write in Paragraph 11, Special Provisions, that the contrast is subject to an environmental review d) Explain to the buyer that the environmental issues are rarely a problem
a) Attach the Environmental Assessment Addendum to the contract
Accessories are commonly conveyed to the ___ in the sale. a) Buyer b) Seller c) Escrow agent d) Selling broker
a) Buyer
Which type of contract is NOT assignable? a) Buyer's Representation Agreement b) Purchase Contract with no contingencies c) Lease d) None of these contracts are assignable
a) Buyer's Representation Agreement
___ is not a requirement of a valid contract. a) Earnest money b) Legal subject matter c) Mutual assent d) Competent parties
a) Earnest money
Texas law requires all real estate license holders to give the ___ to prospective buyers, tenants, sellers, and landlords. a) Information About Brokerage Services b) Short Sale Addendum c) Addendum for "Back-Up Contract" d) Lead-Based Pain Addendum
a) Information About Brokerage Services
___ occurs when a buyer assumes and agrees to pay the seller's existing mortgage. a) Loan assumption b) Conventional financing c) 100% financing d) Commercial financing
a) Loan assumption
Another name for blockbusting is ___. a) Panic peddling b) Steering c) Chunking d) Puffing
a) Panic peddling
A(n) property is one where a particular event has affected the desirability of said property. a) Stigmatized b) Undesirable c) Unsellable d) Forecloased
a) Stigmatized
A buyer has negotiated a contract with a seller allowing for a 10-day termination option period. On the 7th day he received an inspection report, and decided to terminate based on the results of the inspection. How long does he have to provide the seller with the notice to terminate? a) Until midnight of the final day of his option period b) until 6pm of the final day of the option period c) Until 5pm of the final day of the option period d) Until 10pm of the final day of the option period
c) Until 5pm of the final day of the option period
The Smith's property is on the market, and their agent has received a full price offer from the Johnsons. The agent has presented the offer to Mr. and Mrs. Smith, who have accepted the offer by signing it. When is this contract valid? a) Immediately b) After all of the parties have a written copy c) When the Johnsons have received communication of the acceptance d) At closing
c) When the Johnsons have received communication of the acceptance
If a seller has no green card or Social Security Number, the escrow agent will: a) Refuse the transaction b) Withhold 20% of the price from a foreign seller of the U.S. property c) Withhold an amount that complies with tax laws and deliver it to the IRS d) Not do anything
c) Withhold an amount that complies with tax laws and deliver it to the IRS
The Smiths have received an offer on their home. What course of action can the Smiths take in regard to the offer on their home? a) Accept b) Reject c) Counteroffer d) All of these are courses of action the Smiths can take
d) All of these are courses of action the Smiths can take
Settlement and other expenses include: a) Releases of existing liens b) Appraisal fees c) Loan application fees d) All of these are included in settlement and expenses
d) All of these are included in settlement and expenses
For a valid option to exist: a) The option fee must be paid to the escrow agent b) All of the banks in the Termination Paragraph must be filled in c) The fee must be paid within three days of the effective date of the contract d) All of these are required for a valid option to exist
d) All of these are required for a valid option to exist
An exception to a license holder using a TREC-promulgated contract form would be if: a) The broker does not want to use the forms b) The license holder prepared his or her own form c) The sale is for vacant lot in a subdivision d) An attorney-prepared form is used
d) An attorney-prepared form is used
An offer can be communicated by ____. a) Phone b) Hand delivery c) E-mail d) An offer may be communicated by any of these methods
d) An offer may be communicated by any of these methods
According to the TREC Third Party Financing Addendum, buyer approval is obtained when the terms of the loan described are available, and the buyer has satisfied all of the lender's requirements related to the buyer's ___. a) Credit history and employment record b) Income and credit history c) Assets and income d) Assets, income and credit history
d) Assets, income and credit history
When a seller wishes to retain certain fixtures or accessories, these items are called ___. a) Personal property b) Reservations c) Exceptions d) Exclusions
d) Exclusions
A license holder might be guilty of the unlawful practice of law if he or she: a) Writes a will for a client b) Advises a buyer regarding title issues c) Drafts lengthy and complex provision in special provisions d) Performs any of these actions could result in a real estate license being suspended or revoked by TREC
d) Performs any of these actions could result in a real estate license being suspended or revoked by TREC
A broker has received 3 offers on a hot new listing. He must: a) Present the lowest offer first to make the other offers look more attractive b) Present the best offer first c) Present only the offers that he feels are in the seller's best interest d) Present al offers in no required order
d) Present al offers in no required order
TREC has promulgated forms for most ___. a) Lease purchase transactions b) Cooperatives c) Commercial leases d) Residential transactions
d) Residential transactions
According to Paragraph 8.A. in the TREC 1-4 Family Residential Resale Contract, agency coupled with an interest must be disclosed. An agent must also disclose if they are acting on behalf ___. a) Spouse, sibling, or child b) Spouse, parent, o in-law c) Paren, child or sibling d) Spouse, parent or child
d) Spouse, parent or child
If a provision in an addendum contradicts a provision in the main body of the contract: a) the provision in the addendum prevails b) The provision in the contract prevails c) An attorney must be consulted d) TREC must get involved in the transaction
d) TREC must get involved in the transaction
Who is responsible for filling in the effective date of a contract after the last party signs? a) The selling agent b) The listing agent c) The last party to sign d) The broker
d) The broker
In a lease with a "right of first refusal" provision: a) The price is sent when the lease agreement is negotiated b) The tenant has promised to buy the property c) The TREC promulgated form must be used d) The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else
d) The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else
Which of the following falls under the category of "good funds"? a) Cash on hand b) Personal checks c) Debit card payments d) Wire transfers
d) Wire transfers
