Promulgated Contracts

To receive a daily rate of $40 in a buyer's or seller's lease, the monthly rate would have to be set at which of these monthly rates?

$1,200

How much will a bank be financing on a $240,000 home where the buyer puts 20% down?

$192,000

New homes present a greater likelihood that the property owner will direct the licensee to use: A.) A form other than one promulgated by TREC B.) An attorney to prepare the contract C.) None of these D.) One of the promulgated forms

A.) A form other than one promulgated by TREC

Which of the New Home Contracts includes the Page 8 construction defect language? A.) Neither of them B.) Both of them C.) New Home Contract (Completed) D.) New Home Contract (Incomplete)

B.) Both of these

The mineral Estate does Not include which of these? A.) Gas B.) Oil C.) Iron D.) The right to sign a mineral lease covering any part of the property

C.) Iron

Which of these IS NOT a potential reason for terminating a contract? A.) Impossibility B.) Rescission C.) Substantial performance D.) Specific Performance

D.) Specific Performance

What is the proper method for calculating the rent in a buyer's or seller's lease agreement?

The charge should be a daily charge based on a desired 30-day monthly rental rate

If a buyer is required to put 20% down on a $240,000 offering price, how much do they need for a down payment?

$48,000

Which of these forms is for general consumer or client information, and not directly related to a sale? A.) Both of these B.) Neither of these C.) Information About Brokerage Services D.) Consumer Information Form

A.) Both of these

Which form of financing does the "Third Party Financing Addendum" NOT cover? A.) Seller financing B.) Texas Veterans Loans C.) VA Guaranteed Loans D.) Conventional loan financing

A.) Seller financing

An amendment must always include reference to all of these, except: A.) Parties B.) The title report C.) The original contract D.) Date of ratification

B.) The title report

Failure to timely transmit an offer to a seller may result in which of the following? A.) Lawsuits B.) License suspension C.) Any of these D.) License revocation

C.) Any of these

"Subdivision Information" means which of the following? A.) A current copy of the restrictions applying to the subdivision and bylaws and rules of the Association B.) A resale certificate, all of which are described by Section 207.003 of the Texas Property Code C.) Both of these D.) Neither of these

C.) Both of these

What are the two major forms of modifying a contract discussed above? A.) Addenda B.) Neither of these C.) Both of these D.) Amendment

C.) Both of these

How much earnest money does Texas state law require to validate a real estate sale contract?

No earnest money is required

Most warranties or RSCs have a ______ life span, but often may be renewed.

One-year

Which of these settlement expenses generally will not be attributed to the seller? A.) Releases of existing liens, including prepayment penalties and recording fees. B.) Release of Seller's loan liability C.) Preparation of Deed D.) Inspection and appraisal fees

D.) Inspection and appraisal fees

Failure to present an offer is which of the following? A.) Prerogative of the listing agent B.) Unauthorized practice of law C.) Allowable act if the offer is not in writing D.) Violation of a licensee's fiduciary duties

D.) Violation of a licensee's fiduciary duties

Paragraph 3 is different only in the Farm and Ranch Contract because:

The sales price can be adjusted by the survey

Which of these is a potential remedy for a Casualty Loss under Section 14 of the TREC 1-4? A.) Termination of the contract with earnest money returned to the buyer B.) All of these 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

B.) All of these

Which of these IS NOT listed as a reason for termination? A.) The property does not satisfy Property Approval in accordance with the Third Party Financing Addendum to the contract B.) All of these are reasons for terminations C.) The unrestricted right of Buyer to terminate the contract under Paragraph 23 of the Contract D.) Buyer elects to terminate under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice

B.) All of these are reasons for terminations

The Loan Assumption Addendum warning(s) include(s) which of the following? A.) Advising the seller to use the TREC Release of Liability Addendum if the seller is concerned with being at risk of retaining liability on the assumed notes. B.) Both of these C.) Advising the buyer not to sign the contract with our examining the notes and deed of trust if the buyer has any concerns about future adjustments or other factors impacting the terms. D.) Neither of these

B.) Both of these

In the Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement if restoration has not been approved by the Closing Date, the parties option(s) is/are: A.) Failure to obtain release approval will not delay closing B.) Either of these C.) Neither of these D.) The contract will terminate and the earnest money will be refunded to Buyer

B.) Either of these

The TREC 1-4 Section 11 can be used only for which of these? A.) Adding terms to the loan agreement B.) Factual statements and business details applicable to the sale C.) Adding legal provisions D.) Specifying desired inspections

B.) Factual statements and business details applicable to the sale

A title endorsement is a(n): A.) Notarized copy of the title B.) None of these C.) Title approved by the local Clerk of the Court or equivalent recording agent D.) Professionally recommends title company

B.) None of these

Which of these IS NOT a red flag for potential real estate fraud? A.) Inflated price and/or appraisal B.) Occasional price reductions C.) False statements concerning the reasons for a price reduction D.) Frequent requests to remove the property from the MLS (a violation of MLS rules) or to increase the price in the MLS

B.) Occasional price reductions

The Addendum for Property Subject to Mandatory Membership in a Property Owners Association gives the buyer the choice to which of the following? A.) Neither of these B.) Receive or not to receive the Subdivision Information C.) Receive or not to receive the Seller's Disclosure D.) Both of these

B.) Receive or not to receive the Subdivision Information.

Paragraph 7 regarding disclosures is different from the TREC 104 in all of the contracts except for which of the following? A.) Unimproved Property Contract B.) Residential Condominium Contract C.) New Construction Contract (Complete) D.) Farm and Ranch Contract

B.) Residential Condominium Contract

The buyer is obligated to pay the buyer's broker's fees generally only under which of the following situations? A.) Both of these B.) The commission is agreed to in a buyer's representation agreement C.) The commissions are not listed in the MLS D.) Neither of these

B.) The commission is agreed to in a buyer's representation agreement

The Short Sale Addendum protects both the buyer and seller because of which of these? A.) The addendum dictates that the contract is binding on the lender regardless of their approval B.) The parties have contractually agreed performance requirements and seller's ability to perform these obligations is subject to lender approval C.) Neither of these reasons D.) Both of these reasons

B.) The parties have contractually agreed performance requirements and seller's ability to perform these obligations is subject to lender approval

If Buyer and Seller execute a back-up contract, complete with the earnest money deposit, and the back-up contract becomes the primary effective on a Monday (in a week with no holidays), unless otherwise agreed, what is the deadline for the broker to deposit the buyer's earnest money? A.) Tuesday by 5pm B.) Wednesday by 5pm C.) Wednesday midnight D.) Not until primary offer falls through

B.) Wednesday by 5pm

To be a legally competent party to a contract, business entities (such as corporation, limited liability companies, and limited liability partnerships) must:

Be in compliance with state requirements by filing annual documents and complying with assumed business name requirements

The "Paragraph 8" language in the New Home Contracts pertains to which of the following?

Broker fees

According to TREC a "reasonable time" within which to deposit the escrow check is:

By the end of the second business day following formation of the contract.

Which of these Farm and Ranch Contract sections IS NOT distinguished from the TREC 1-4? A.) 13 Prorations B.) 7 Property Conditions C.) 15 Default D.) 6 Title Policy and Survey

C.) 15 Default

Which of these contract situations is voidable and not inherently void? A.) One party was coerced into signing against their will B.) A property manager is directed to exclude a specific category of people C.) A contract with a person not of legal competence at the forming of the contract D.) One party's obligation is to commit a crime.

C.) A contract with a person not of legal competence at the forming of the contract.

If there is a field in a promulgated form for which you have no information to include, your safest option is which of the following? A.) Any of these B.) Run a line through it C.) Place a "N/A" (not applicable) so it is clear that the buyer/buyer's agent is aware that the section exists and was not just overlooked. D.) Just leave it blank

C.) Place a "N/A" (not applicable) so it is clear that the buyer/buyer's agent is aware that the section exists and was not just overlooked.

To waive a contingency on the Addendum for Sale of Other Property by Buyer, one must do all of these except which of these? A.) Deposit the additional earnest money with the escrow agent in a timely manner. B.) Notify the seller in writing within the timeframe for fulfilling the contingency C.) Provide evidence to support a decision to waive the contingency D.) All of these

C.) Provide evidence to support a decision to waive the contingency

Which of these IS NOT included in the Seller's Disclosure? A.) Deferred maintenance or other repairs that may be necessary B.) Violations of deed restrictions on the property C.) Psychological stigmas, e.g., a violent death on the property D.) Any defects or malfunctions in critical systems known to the seller

C.) Psychological stigmas, e.g., a violent death on the property

Which of these generally will not include a structure of any sort in the sale? A.) Farm and Ranch Contract B.) New Home Contract (Completed Construction) C.) Unimproved Property Contract D.) Residential Condominium Contract (Resale)

C.) Unimproved Property Contract

Which of these IS NOT an exemption from Fair Housing laws? A.) Single-family housing sold or rented without the use of a broker B.) Housing operated by organizations and private clubs that limit occupancy to members C.) Where there is racial discrimination under the Civil Rights Act of 1866 D.) Owner-occupied buildings with no more than four units

C.) Where there is racial discrimination under the Civil Rights Act of 1866

The be able to effectively use the option provided under Section 5 Earnest Money and Termination, the option must be signed and paid for by which of these points? A.) Within three days of making the original offer B.) The signing of the contract C.) Within 3 days of the parties signing the contract D.) At any point in the process

C.) Within 3 days of the parties signing the contract

Which of these is an exemption to the "legal capacity" requirement to form a contract? A.) Neither of these is correct B.) The other party had no knowledge of the party's lack of legal capacity C.) Both of these are correct D.) A contract for a life necessity

D.) A contract for a life necessity

The Real Estate License Act was created to: A.) Protect the public interests from dishonest or incompetent brokers or salespersons B.) Protect licensed brokers and salesperson from unfair or improper competition C.) Maintain high standards in the real estate profession D.) All of these

D.) All of these

Which of these sections is included in the Residential Condominium Contract and not in the TREC 1-4? A.) Section 2 (B)- Deals with the Declaration, Bylaws and Association rules, and whether a prospective buyer has received all of this documentation B.) Section 2 (D)- Covers rights of first refusal that may exist in the Association or other members of the Association C.) Section 2 (C)- Addresses the form and the delivery of the Resale Certificate (known as "the Certificate") D.) All of these

D.) All of these

The escrow agent is not which of these? A.) A party to the contract B.) Liable to the loss of any earnest money caused by the failure of any financial institution in which the earnest money has been deposited (unless the financial institution is acting as escrow agent). C.) Liable for interest on the earnest money D.) Any of these

D.) Any of these

Before signing a purchase contract, the licensee must give a buyer written advice to: A.) Have the abstract covering the property examined by an attorney of the buyer's selection B.) Obtain an owner's title insurance policy prior to closing C.) Neither of these D.) Both of these

D.) Both of these

Which of these is a difference between the One to Four Family Residential Contract (Resale) and the Farm and Ranch Contract? A.) The One to Four Family Residential Contract (Resale) addresses membership in property owners associations B.) Neither of these C.) The Farm and Ranch Contract includes a section on the Texas Agricultural Development District D.) Both of these

D.) Both of these

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.) If the property is subject to transfer fees C.) Notice that the property is or is not subject to HOA or other mandatory ownership fees D.) Names and boundaries of local school districts

D.) Names and boundaries of local school districts

Which of these contracts does not include rollbacks taxes in Section 13? A.) Unimproved Property Contract B.) None of these C.) Farm and Ranch Contract D.) One to Four Family Residential Contract (Resale) [TREC 1-4]

D.) One to Four Family Residential Contract (Resale) [TREC 1-4]

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.) Mentions of the survey are deleted C.) Certain deferred maintenance and related costs are exempted from proration D.) Paragraph 7 disclosures

D.) Paragraph 7 disclosures

Which of these applies specifically to New Home Contracts? A.) None of these B.) Lead-Based paint and hazards disclosure C.) Flooding impact disclosure D.) R-value insulation factor disclosure

D.) R-value insulation factor disclosure

Which of these is generally considered to be a "seller's cost"? A.) Loan-related inspection fees B.) Credit reports C.) Loan application fees D.) Releases of existing liens, including prepayment penalties and recording fees

D.) Releases of existing liens, including prepayment penalties and recording fees

Which of these IS NOT a promulgated sales contract? A.) New Construction (Incomplete) B.) New Construction (Completed) C.) Farm and Ranch Contract D.) Seller's Temporary Residential Lease

D.) Seller's Temporary Residential Lease

Which of these properties built before 1978 is exempt from the lead-based paint hazard disclosure? A.) Condominiums B.) None of these C.) Single Family Dwellings D.) Senior/disabled housing (where no child under six will reside)

D.) Senior/disabled housing (where no child under six will reside)

Before leasing the property back to a seller or leasing it ahead of closing to a buyer, both parties need to pay attention to the effect that leasing will have on which of the following? A.) The title commitment B.) The Seller's disclosure C.) The title Policy D.) Their insurance coverage

D.) Their insurance coverage

Which of the following IS NOT a warning on the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway? A.) To read and not sign the contract until fully understanding the notice B.) To take caution because beach erosion can change the shoreline and the legal status of a structure's location C.) To beware of legal risks inherent with purchase of this property D.) To be forewarned that the property may be subject to tsunami warnings.

D.) To be forewarned that the property may be subject to tsunami warnings.

To promulgate means which of the following?

Officially announce, publish, make known to the public; or to formally announce a state or a decision by a court.

In most circumstances, the licensee will obtain two checks from the prospective buyer when writing the offer:

One for earnest money payable to the escrow or title company, and one for the option money payable to the seller

TREC 1-4 is another name for which contract?

One to Four Family Residential Contract (Resale)

_________ is the form that licensees are most likely to work with the most frequently.

One to Four Family Residential Contract (Resale) [TREC 1-4]

Using a Seller's Leasing Agreement, once the closing is completed, the buyer becomes the ______________, while the seller becomes the ____________.

Owner and landlord; renter

Which category of disclosure do "psychological stigmas" fall into in Texas?

Permitted

If the title company is unable to deliver the title commitment within 20 days:

The time for delivery is automatically extended up to 15 days or 3 days before the closing date, whichever is sooner.

What is the statutory minimum price for a termination option under Section 5 Earnest Money and Termination Option?

There is no statutory minimum

The DTPA only applies to real estate transactions in situations involving: A.) Any of these B.) An unconscionable action or course of action that cannot be characterized as advice, judgment, or opinion C.) An express misrepresentation of a material fact that cannot be characterized as advice, judgment, or opinion D.) A failure to disclose information known by the licensee at the time of the transaction if the non-disclosure was intended to induce the consumer into a transaction they would not have entered if they were aware of the undisclosed information.

A.) Any of these

The best method(s) for adding special provisions is which of the following? A.) Both of these B.) Neither of these C.) Add a special provisions Addendum, and insert the wording "See Special Provisions Addendum attached hereto and incorporated herein" in Section 11. D.) Insert the desired language in the Section 11 Special Provisions section

A.) Both of these

Accepting the "property in its present condition" in Section 7 of the TREC 1-4: A.) Does not waive the right to request seller repairs based upon professional inspections performed later. B.) Waives the right to inspection C.) Precludes the use of any professional inspectors D.) None of these

A.) Does not waive the right to request seller repairs based upon professional inspections

Section 11 Special Provisions of the TREC 1-4 can be used only for which of the following? A.) Factual statements and business details applicable to the sale B.) Both of these C.) Neither of these D.). Alterations of text or addition of provisions that are generally legal in nature

A.) Factual statements and business details applicable to the sale

The unauthorized practice law would include all of these actions by a licensee, except: A.) Inserting minor handwritten notes on the contract initialed by all parties. B.) Advising clients that there are no potential tax repercussions to an investment property purchase. C.) Development of a new contract form tailored to each client. D.) Advising clients to waive their legal rights to pursue damages in court.

A.) Inserting minor handwritten notes on the contract initialed by all parties.

Which of these IS NOT an item properly suited to inclusion in a Non-Realty Items Addendum? A.) Smart Car B.) Refrigerator C.) Couch D.) Washer/dryer

A.) Smart Car

Most multi-page promulgated contracts have a blank space at the top of each page after page one for which of the following? A.) The address of the property central to the transaction B.) Use by the County only C.) Use by the MLS only D.) All of these

A.) The address of the property central to the transaction

Which of these DOES NOT mean that a contract might not or will not likely stand up in court?

Valid

The Texas Association of Realtors (TAR) Code of Ethics states that an offer should be presented to the client:

At the earliest opportunity

The Information About Brokerage Services handout should be provided to a prospect:

At the first substantive discussion

In the Back-up Addendum, it states that an amendment or modification of the First Contract:

Will not terminate the first contract

A title insurance "commitment" provides a buyer:

With the terms and conditions under which the title company will be issuing the title insurance policy

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.

5

Which paragraph of the TREC 1-4 contract already includes a "time is of the essence" clause?

5

How many multiple back-up offers can be in line at one time?

Texas law only allows for one back-up at a time.

In the Short Sale Addendum, who is responsible for contacting the lender's Loss Mitigation Department?

The listing agent and the sellers

Restrictive covenants are regulations which can include which of the following? A.) Dictating minimum residence size B.) All of these C.) Number of homes per lot D.) Types of construction allowed and not allowed.

B.) All of these

Which of these IS NOT an Addendum listed in TREC 1-4 Section 22 Agreement of Parties? A.) Addendum for Inclusion and Exclusion of Personal Property B.) Addendum for Property Subject to Mandatory Membership in a Property Owners Association C.) Environmental Assessment, Threatened or Endangered Species and Wetlands Addendum D.) Buyer's Temporary Residential Lease

A.) Addendum for Inclusion and Exclusion of Personal Property

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.) All of these

TRELA states unequivocally that it is illegal for a licensee to draw, i.e., create or develop which of the following their own? A.) A will B.) All of these C.) A deed of trust D.) A deed

B.) All of these

A person is not engaged in real estate brokerage, regardless of whether the person is licensed under this chapter, based solely on engaging in which of the following activities? A.) Any of these B.) Constructing, remodeling, or repairing a home or other building C.) Entering into an obligation to pay another person that is secured by an interest in real property D.) Sponsoring, promoting, or managing, or otherwise participating as a principal, partner, or financial manager of, an investment in real estate

A.) Any of these

If the property is damages or destroyed after the contract's effective date, and Seller fails to fix due to factors beyond their control, Buyer may: A.) Any of these B.) Extend the time for performance up to 15 days and the Closing Date will extended as necessary C.) Terminate the contract and the earnest money will be refunded to buyer D.) Accept the Property as is with an assignment of insurance proceeds, if permitted by Seller's carrier, and receive credit equal to the deductible from Seller at closing

A.) Any of these

Which of these is a part of the Seller Financing Agreement? A.) Buyer's Credit Approval B.) All of these C.) Promissory Note D.) Deed of Trust

B.) All of these

In Section 6 (B) of the TREC 1-4, the agreement calls for the seller to furnish the buyer a title commitment within ____ days.

20

Which paragraph of the TREC 1-4 contract lists the different addenda that are available?

22

The Condominium Resale Certificate is filled outlay which of these parties?

A representative of the home or property owners association

The offer to purchase does not become a "contract" until which of the following acts?

Acceptance on exact terms of an offer/counteroffer is communicated to the other party or their representatives and has been signed by both parties

The Texas Association of Realtors (TAR) 1904 Release of Earnest Money Form is for which of the following?

Acknowledging that there is an agreement between the parties that the contract is terminated.

When a property is purchased and then quickly resold at a value artificially inflated by phony appraisals it is called which of these?

False flipping

An executory contract is one that does which of the following?

Still has a material duty needing to be performed

The Broker-Lawyer Committee was established by:

The Real Estate License Act

The Texas Real Estate Commission (TREC) was created by which of these?

The Real Estate License Act

A "release clause" in a mortgage agreement would allow which of the following without additional lender approval?

To section off a portion of the property, the equivalent value of which has been paid off, and sell off that portion if desired.

HUD's primary concern is to ensure that any occupancy standards are not so strict as:

To undo protections of families with children

An option is a form of which kind of contract?

Unilateral