Promulgated Contracts 5
Which of these IS NOT an item properly suited to inclusion in a Non-Realty Items Addendum? A) Refrigerator B) Smart Car
B
An option is a form of which kind of contract? A) Executed B) Unilateral C) Executory D) Bilateral
B
TRELA, the reigning real estate law today, was established in: A) 1979 B) 1955 C) 1987 D) 1940
B
The Seller and Buyers Temporary Lease can be used for leasing up to: A) 30 days B) 90 days
B
If Buyer and Seller execute a back-up contract effective on a Monday (in a week with no holidays) with a 10-day option to terminate, unless otherwise agreed, what is the deadline for depositing the buyer's earnest money? A) Wednesday midnight B) Not until primary offer falls through C) Wednesday by 5pm D) Tuesday by 5pm
C
What are the two major forms of modifying a contract discussed above? A) Neither of these B) Addenda C) Amendments D) Both of these
D
A title endorsement: A) is the cost of initiating a title insurance policy B) is an addition or limitation of coverage that is attached to a title insurance policy C) is a term used for the whole title policy D) is the fee paid to the title agent who arranges the title insurance policy
B
According to TREC 1-4 section 10.(A), any possession by Buyer prior to closing or by seller after closing which is not authorized by a written lease will establish: A) A breach of contract B) A tenancy at sufferance relationship between the parties C) A standard landlord-tenant relationship D) A de facto leasehold estate
B
An oral contract for the lease of a property for one year or less has a statute of limitation of: A) Three years B) Two years C) Four years D) One year
B
For how many days is a $5 earnest money and termination option valid? A) 15 days B) The length of the option period is set by the contracting parties C) None of these is correct D) 10 days
B
How much earnest money does Texas state law require to validate a real estate sale contract? A) A minimum of 3% of the sale price B) No earnest money is required C) A minimum of $1000 D) A minimum of 1% of the offer price
B
If a buyer makes the decision to terminate a sales contract, _ must be used to ensure the buyer's release of obligation. A) notarized affidavit B) TREC Notice of Buyer's Termination of Contract form C) Release of Earnest Money form D) TAR Form 784
B
If one or the other parties to a transaction defaults, the other party may: A) have all of their sale demands met B) sue for specific performance C) get a reduction in sale price D) also default on certain contractual obligation
B
If the timing of an agreement being executed is crucial to the agreement, the contract should state: A) that the contract is void if timing is not adhered to B) that time is of the essence C) that any deviation from deadlines will be considered a breach of contract D) that a reduction in purchase price relative to delays will be made
B
One difference between the TREC Unimproved Property Contract and the others is: A) it contains a "land lease" section B) the seller's responsibility to disclose knowledge of six potential issues C) it does not contain a "property condition" section D) the seller has a responsibility to have the property lines marked
B
TREC allows the use of forms that are not promulgated: A) if an experienced broker writes the form B) if they are prepared by the owner, or by an attorney and required by the property owner C) under no circumstances D) in very unique circumstances
B
TRELA specifically prohibits real estate licensees from the dangerous mistake of: A) reducing their commissions B) engaging in the unauthorized practice of law C) holding licenses
B
The Broker-Lawyer Committee: A) Promulgates TREC's Texas contract forms B) Develops forms of TREC to adopt and promulgate at their discretion C) Does both of these D) Does neither of these
B
The Promissory Note section of the Seller's Financing Addendum includes: A) 5% penalty on installment payments paid more than 10 days past their due date B) All of these C) 1.5% per month or highest lawful rate, whichever is lower, for mature unpaid amounts D) Prepayment without penalty
B
The Short Sale Addendum protects both the buyer and seller because: A) Neither of these reasons B) The parties have contractually agreed performance requirements and seller's ability to perform these obligations is subject to lender approval C) The addendum dictates that the contract is binding on the lender regardless of their approval D) Both of these reasons
B
The TREC 1-4 states that Broker's Fees: A) Are set by local practice B) Are handled in a separate agreement C) Are covered in a Broker's Fees addendum D) Are to be handle in the listing agreement
B
The unauthorized practice of law would include all of these actions by a licensee, except: A) Advising clients to waive their legal rights to pursue damages in court B) Inserting minor handwritten notes on the contract initialed by all parties C) Advising clients that there are no potential tax repercussions to an investment property purchase D) Development of a new contract form tailored to each client
B
The use of paragraph 11 (special provisions) of the One to Four Family Residential Contract is restricted to: A) the addition of legal provisions B) factual statements and business details applicable to the sale C) any necessary information not included elsewhere D) the modification of text
B
Using the Addendum for Reservation of Oil, Gas, and Other Minerals, a seller can reserve: A) Any portion of their mineral estate rights B) Both of these C) Neither of these D) All of their mineral estate rights
B
VA will not restore Seller's VA entitlement except under which of these conditions? A) Buyer has sufficient unused VA entitlement remaining B) All of these C) Buyer is otherwise qualified D) Buyer is a veteran
B
When a buyer makes a "backup offer" on a pending property, they must submit: A) proof of interest B) An Addendum for "Back-Up" Contract C) a better offer than the accepted offer D) their credit standing
B
When a licensee receives a verbal offer on a property: A) they should reject it on behalf of the owner B) they should present it to the owner as quickly as possible C) they do not need to present it to the owner as it is not official D) they should try to negotiate a better deal for the client before presenting it
B
Which of these IS NOT a potential reason for terminating a contract? A) Substantial Performance B) Specific performance C) Impossibility D) Rescission
B
Which of these IS NOT a warning issued on the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway? A) Be prepared to move or demolish any structure determined to be too close to the shoreline even if it was legal when built or purchased B) All of these are warnings on the Addendum C) Take caution because beach erosion can change the shoreline and, along with it, change the legal status of a structure's location D) Beware of legal risks inherent with purchase of this property
B
Which of these forms generally should be attached to the buyer's original contract offer? A) Buyer's Termination of Contract B) Addendum for Sale of Other Property C) Addendum for Reservation of Oil, Gas, and Mineral Rights D) Addendum for Back-up Contract
B
Which of these forms is for general consumer or client information, and not directly related to a sale? A) Neither of these B) Both of these C) Consumer Information Form D) Information About Brokerage Services
B
Which of these is NOT listed as a potential damages item for wrongfully failing or refusing to sign a release acceptable to the escrow agent within 7 days of receipt of the request? A) The earnest money B) Broker's fee
B
Which of these is not a subject of the Paragraph 6E Title Notices? A) If the property is located within a Public Improvement District B) Names and boundaries of local school districts C) Notice that the property is or is not subject to HOA or other mandatory ownership fees D) If the property is subject to transfer fees
B
Which of these property types does not have a specific TREC promulgated sales form? A) Unimproved land B) Rental and investment properties C) Condominium properties D) Farm and ranch properties
B
Section 11 Special Provisions of the TREC 1-4 can be used only for: A) Alterations of text or addition of provisions that are generally legal in nature B) Both of these C) Factual statements and business details applicable to the sale D) Neither of these
C
A contract for deed is a classic example of a(n): A) Executed contract B) Voidable contract C) Unenforceable contract D) Executory contract
D
According to the One to Four Family Residential Contract, who pays for the title policy? A) The buyer and seller equally B) The seller C) The buyer D) Whoever is specified
D
An amendment to a contract must always include: A) the parties involved B) the date of ratification C) reference to the original contract D) all of these things
D
Contract sections that are NOT the same across all TREC promulgated forms include: A) Federal tax requirements B) Representations C) Escrow D) Property conditions
D
Earnest money _ to make a valid offer in Texas. A) is only required in multiple offer situations B) is required C) may or may not be required by the owner D) is not required
D
Identification of the buyer and seller must include: A) Only enough to identify the individuals B) Use of any nickname C) History of name changes D) Full name and marital status of all parties
D
Modifications to promulgated forms must: A) be necessary B) be approved by a judge C) be minimal D) be initialed by the appropriate parties
D
Residential service companies offer home warranty contracts for maintenance, repair, or replacement of all or any parts of these, except for: A) Plumbing B) Appliances C) HVAC D) Furniture
D
Section 2 Property of the New Construction Contracts includes only which of these as a specific subsection that is used in the 1-4 Residential Contract Section 2 Property? A) Exclusions B) Accessories C) Improvements D) Reservations
D
The Notice to Prospective Buyers protects licensees by: A) explaining the sale process step by step B) fulfilling the requirements for explaining buyer agency C) advising buyers that an accepted offer does not make a sale final D) advising buyers to have title documents reviewed by an attorney
D
The Sellers and Buyers Temporary Leases can be used for leasing up to: A) 60 days B) 30 days C) 180 days D) 90 days
D
The TREC Residential Condominium Contract includes section not present in TREC 1-4, including: A) Broker's fees B) Earnest money C) Special Provisions D) the Resale Certificate
D
The offer becomes a sales contract when: A) Presented to the seller who verbally approves B) Signed by the buyer/offeror C) All of these D) It is accepted, signed by the seller, and acceptance communicated to the buyer or buyer's agent
D
The settlement section of the TREC 1-4 determines: A) the exact schedule according to which closing activities occur B) the cost of repairs that the buyer has requested be completed C) the commission amount each broker receives D) the cost that need to be handled at closing and designates who is to take how much of the responsibility for these costs
D
Unless otherwise agreed, the Option Fee must be delivered to the seller by: A) Seven days prior to closing B) None of these is correct C) By 5 pm two business days after the sales contract was executed D) Third day after the sales contract was executed
D
Which of these Farm and Ranch Contract sections IS NOT distinguished from the TREC 1-4? A) Section 7 Property Conditions B) Section 13 Prorations C) Section 6 Title Policy and Survey D) Section 15 Default
D
Which of these contract does not include rollback taxes in Section 13? A) None of these B) Farm and Ranch Contract C) Unimproved Property Contract D) One to Four Family Residential Contract (Resale) [TREC 1-4]
D
Which paragraph is different from the TREC 1-4 in all five of the other property sales contracts? A) Section 12 B) Section 6 C) Section 14 D) Section 13
D
The TREC 1-4 states that if the property involved in a transaction is damaged, at no fault of either party, one remedy is to allow time for repairs by extending the closing date by up to: A) 45 days B) 15 days C) 7 days D) 30 days
B
A buyer who indicates that they will "accept the property in it's present condition (as is)" is agreeing: A) that they will have no additional requests relating to property condition B) that no inspection will be done C) not to ask for any repairs at any point during the transaction D) that they are not asking for any repairs at this point, leaving future repair requests open
D
Paragraph 10 on the TREC 1-4 covers what subject? A) Possession B) Special Provisions C) Addenda D) Closing
A
Which of these is generally considered to be a "seller's cost"? A) Releases of existing liens, including prepayment penalties and recording fees B) Loan application fees
A
A contract for non-life necessities with a person lacking legal capacity is: A) Voidable B) Void C) Unenforceable D) Valid
A
An assignment of right is: A) A transfer of rights or duties under a contract from a current party to a contract to another party B) Designation of a party's obligation under a contract C) The conveyance of the bundle of rights by the seller to the buyer at the conclusion of the contract D) All of these are correct
A
An attachment added to the end of a contract and incorporated in the contract terms is called an: A) Addendum B) Exemption C) None of these D) Amendment
A
If a buyer needing to sell another property chooses not to use the addendum then fails to come up with the funds, they risk: A) All of these B) Losing their earnest money C) Being found in default D) A lawsuit from the seller who could file a legal action for specific performance or other remedies
A
If a contracted buyer and seller cannot agree to a resolution on repair costs: A) the contract will terminate B) the purchase price will be reduced by 5% C) a judge will decide D) no repairs will be performed
A
Section 2 Property of the New Construction Contract does not include which of these? A) None of these are included B) Accessories C) Improvements D) Exclusions
A
Section 7 Property Conditions (D)(2) of the TREC 1-4 contract should be used: A) to identify specific repairs evident to buyer that buyer requires as a condition to purchase B) to waive the right to an inspection C) to insert "subject to inspection" D) to list the inspections desired
A
Texas' promulgated One to Four Family Residential Contract (Resale) Section _ allows the buyer a grace period in which they can cancel the deal without risking their escrow deposit. A) 23 B) 22 C) 7 D) 11
A
The Environmental Assessment & Threatened or Endangered Species & Wetlands Addendum provides assessment opportunities for: A) All of these B) Endangered species C) Wetlands D) Environmental hazards
A
The current One to Four Family Residential Contract (Resale) is form number: A) 20-16 B) 20-13 C) 20-12 D) 20-14
A
When filling out the One to Four Family Residential Contract, the names of the parties should be accompanied by: A) their marital status, if applicable B) none of these C) their social security numbers D) their dates of birth
A
Which form of financing doe the "Third Party Financing Addendum" NOT cover? A) Seller financing B) VA Guaranteed loans C) Conventional loan financing D) Texas Veterans Loans
A
Which of these IS NOT included in the Seller's Disclosure? A) Psychological stigmas, e.g., a violent death on the property B) Deferred maintenance or other repairs that may be necessary C) Violations of deed restrictions on the property D) Any defects or malfunctions in critical system known to the seller
A
Which of these IS NOT listed as a potential damages item for wrongfully failing or refusing to sign a release acceptable to the escrow agent within 7 days of receipt of the request? A) Broker's fees B) The earnest money C) Reasonable attorney's fees D) All costs of suit
A
Which of these generally will not include a structure of any sort in the sale? A) Unimproved Property Contract B) New Home Contract (Completed Construction) C) Residential Condominium Contract (Resale) D) Farm and Ranch Contract
A
Which of these is a potential remedy for a Casualty Loss under section 14 of the TREC 1-4? A) All of these B) Termination of the contract with earnest money returned to the buyer C) Acceptance of the property "as is", with an agreement to receive proceeds of any insurance coverage allowable, with other compensation from seller, e.g., reduced price, or, with no compensation and buyer absorbs any costs D) Extension of the closing date of up to 15 for seller to fix the damage
A
A title endorsement is a(n): A) Professionally recommended title company B) Notarized copt of the title C) None of these D) Title approved by the local Clerk of the Court or equivalent recording agent
C
According to TREC a "reasonable time" within which to deposit the escrow check is: A) By the end of the day following signing B) Within 72 hours C) By the end of the second business day following formation of the contract D) By the end of the day of signing
C
Executed and Executory contracts are differentiated by: A) by their structure B) by their validity C) their stage of fulfillment D) by their enforceability
C
For items for which a promulgated addendum is provided the proper way to include the item is: A) By inserting language in section 11 B) All of these C) Through use of the addendum D) Through the use of the addendum or inserting language in section 11
C
How many promulgated sales contracts are there? A) Three B) Five C) Six D) Ten
C
Option fees and earnest money: A) are nearly the same thing B) are exactly the same thing C) are very different D) are interchangeable
C
Section 12B of the TREC 1-4, referred to in the text as an "escape clause" allows that: A) either party to the transaction may cancel the agreement if the other party misses a deadline B) if either party has a change of heart regarding the transaction, they may cancel it within 30 days C) if any expense exceeds an amount clearly stated in the contract for such expense the responsible party may terminate the contract unless the other party agrees to pay such excess D) none of these are correct
C
Section 7 Property Conditions (D)(2) of the TREC 1-4 contract should be used: A) To list the inspections desired B) To insert "Subject to inspections" C) To identify specific repairs evident to buyer that buyer requires as a condition to purchase D) To waive the right to an inspection
C
TREC 1-4 Paragraph 6C lists what options for providing the survey to buyer within a number of days after the effective date of this contract set by the parties' agreement? A) Seller furnishes to Buyer and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit) B) Seller, at Seller's expense, shall furnish a new survey to Buyer C) All of these D) Buyer shall obtain a new survey at Buyer's expense
C
Texas' promulgated One to Four Family Residential Contract (Resale) 5 does which of the following ? A) Requires the buyer to submit a fee at the time of the offer for an option period in which they can cancel the deal without risking their escrow deposit B) Provides a space to add legal information C) Allows the buyer a grace period in which they can cancel the deal without risking their escrow deposit D) Provides a list of addenda available
C
The "Seller Financing Addendum" covers all of these EXCEPT: A) credit terms B) title insurance C) use of the property D) buyer credit
C
The Broker-Lawyer Committee was established by: A) Texas Real Estate Commission B) Texas Bar Association C) The Real Estate License Act D) Texas Association ot REALTORS
C
The Real Estate License Act was created to: A) Protect licensed brokers and salespersons from unfair or improper competition B) Maintain high standards in the real estate profession C) All of these D) Protect the public interests from dishonest or incompetent brokers or salespersons
C
The TAR 1904 form is properly used to: A) Allow a seller to unilaterally terminate a contract B) Release the money to the first party filing for it C) Acknowledge termination of a contract and release earnest money according to the terms of the agreement D) Terminate a contract and release the earnest money
C
The TREC Farm and Ranch promulgated contract includes considerations that do not apply to the other types of contracts, including: A) surface leases B) crops C) all of these D) equipment
C
The escrow officer in a One to Four Family Residential sale: A) is not liable for interest on earnest money B) is not a party to the contract C) has all of these protections D) not liable for any losses of escrow money attributable to the failure of a financial institution unless the financial institution is acting as escrow agent
C
What is/are the seller's options when receiving an offer? A) Counter B) Accept C) All of these D) Reject
C
When a temporary lease is used between seller and buyer, one item that is particularly important to be communicated is: A) utility proration B) pet policy C) insurance on the property D) activity restrictions
C
Which Paragraph of the TREC 1-4 contract lists the different addenda that are available? A) 10 B) 23 C) 22 D) 9
C
Which of the New Home Contracts includes the Page 8 construction defect language? A) Neither of them B) New Home (Completed) C) Both of them D) New Home (Incomplete)
C
Which of these IS NOT a difference between the Condominium Sales contract and the TREC 1-4? A) Expenses include Association fees and deposits B) Certain deferred maintenance and related costs are exempted from proration C) Paragraph 7 disclosures D) Mentions of the survey are deleted
C
Which of these IS NOT a promulgated sales contract? A) Farm and Ranch Contract B) New Construction (completed) C) Seller's Temporary Residential Lease D) New Construction (Incomplete)
C
Which of these IS NOT a termination of contract form? A) All of these are used B) Notice of Buyer's Termination of Contract C) Short Sale Addendum D) TAR 1904 Release of Earnest Money form
C
Which of these IS NOT an addendum listed in TREC 1-4 section 22 Agreement of Parties? A) Addendum for Property Subject to Mandatory Membership in a Property Owners Association B) Buyer's Temporary Residential Lease C) Addendum for Inclusion and Exclusion of Personal Property D) Environmental Assessment, Threatened of Endangered Species and Wetlands Addenedum
C
Which of these IS NOT listed as a reason for termination? A) The unrestricted right of Buyer to terminate the contract under Paragraph 23 of the Contract B) Buyer elects to termintae under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice C) All of these are reasons for termination D) The Property does not satisfy Property Approval in accordance with the Third Party Financing Addendum to the contract
C
Which of these IS NOT part of the subdivision information referenced by the Addendum for Property Subject to Mandatory Membership in a Property Owners Association? A) The resale certificate from a property owner's association B) The bylaws C) The title commitment D) Rules and regulations
C
Which of these is an exemption to the "legal capacity" requirement to form a contract? A) The other party had no knowledge of the party's lack of legal capacity B) Neither of these is correct C) A contract for a life necessity D) Both of these are correct
C