Unit 11 - Common Contract Mistakes (Questions)

What is a marketable title? A) A title that has no defects that could carry over as a problem for the new owners at whatever time they decide to sell B) A title for desirable property C) A title that is at market price D) A title that is available to the entire market without any discrimination

A title that has no defects that could carry over as a problem for the new owners at whatever time they decide to sell

Which of the following would cause a cloud on title? A) Gap in the chain of title B) All of these C) Missing the name of the grantor D) A recorded lien that was paid off but not released

All of these

Which of the following should happen when an agent writes in special provisions? A) The agent should make sure that there is not a TREC-promulgated lease or form that addresses what the principal is attempting. B) The agent should make sure that there is not a TREC-promulgated addendum that addresses what the principal is attempting. C) The agent should make sure that it is a factual statement or business detail and not a legal right or remedy that the agent is writing. D) All of these should happen.

All of these should happen.

Failing to mark all the appropriate boxes in a TREC-promulgated contract form could likely lead to all of the following EXCEPT A) delays in the transaction. B) looking incompetent. C) contention between the parties. D) a commission bonus.

a commission bonus.

A title that has no defects that could carry over as a problem for the next property owners is called A) a suit to quiet title. B) a marketable title. C) an encumbered title. D) a certified title.

a marketable title.

A single man is purchasing a home. How would his name be BEST recorded on the contract? A) Mr. Fitzgerald B) D. Fitzgerald C) Daniel Scott Fitzgerald, a single person D) Daniel Fitzgerald

Daniel Scott Fitzgerald, a single person

Default is addressed in sales contracts only when there is reason to believe that issues might arise before closing. True False

False

It is okay to leave checkboxes and lines blank in contracts when the situation being discussed does not apply to the transaction. True False

False

Marital status does not need to be indicated on real estate contracts in Texas as long as full legal names of the parties are used. True False

False

Street addresses are sufficient descriptions of property and can be used in sales contracts when a legal description is unavailable. True False

False

The distinction between real and personal property is clear to buyers, sellers, and license holders. True False

False

Most contracts state that the seller is responsible for providing what type of title to the property? A) Indefeasible B) Clear C) Marketable D) Absolute

Marketable

Which of the following cloud on title is minor? A) All of these B) Misspelling of a grantor's name C) Missing name of grantor D) A gap in the chain of title

Misspelling of a grantor's name

The seller has planted championship roses on the side of the house and would like to remove them from the property and transplant them elsewhere. These roses were never discussed during contract negotiations. The contract was agreed to. What will happen to the roses? A) They will escheat to the state. B) Roses are personal property that the seller will remove and transplant as she wishes. C) The seller should address this with the buyer after closing. D) Roses are real property and will convey with the property.

Roses are real property and will convey with the property.

Which of the following is FALSE about TREC-promulgated contracts? A) The contracts contain checkboxes that can easily be overlooked. B) All of these are false. C) The contracts are long, so an agent must be prudent in filling them in. D) Signatures, initials, and an effective date are required on the contract. Only initials are required on all addenda and amendments.

Signatures, initials, and an effective date are required on the contract. Only initials are required on all addenda and amendments.

The seller asks her agent to add a clause to the contract that allows her to terminate the contract if she can't find and purchase another home. What should the agent do? A) Get a lawyer to help the agent write the clause for the seller. B) Use boilerplate language found in a legal advice blog on the internet. C) Offer to write the clause for the seller in special provisions. D) Suggest that the seller have an attorney draft the clause.

Suggest that the seller have an attorney draft the clause.

Which of the following forms should be used if the sale closes, but possession does not occur at closing? A) Notice of Buyers Termination of Contract form B) TREC Temporary Residential Lease form C) TREC Amendment Form D) An appropriate addendum

TREC Temporary Residential Lease form

In a contract, the agent recorded that the buyer was "Nathan Henderson and Amber Henderson." Which of the following observations is MOST correct? A) The agent has done the best at this point. B) The agent would need to check with the State Attorney General's office to be sure of the legal status of the buyer before proceeding. C) The agent should include the relationship between Nathan and Amber. D) The agent should never fill in the name; the buyers and sellers should fill in their own names.

The agent should include the relationship between Nathan and Amber.

Which of the following items should NOT be in the special provisions paragraph of the TREC-promulgated contracts? A) All of these should be in special provisions. B) The contract is contingent upon the buyers selling their current house. C) The buyer wants the refrigerator left. D) The buyer is to do a final walk-through.

The contract is contingent upon the buyers selling their current house.

Who is usually responsible for providing marketable title to the property? A) The buyer B) The title company C) The mortgage company D) The seller

The seller

Any addenda that are included as part of the contract just need to be signed and dated by the parties and attached to the contract. True False

The statement is false. The addenda that are part of the contract need to be identified in paragraph 22 of the TREC-promulgated contracts.

"Yvonne Leigh Jones, a single person" is an acceptable way to list a buyer in a sales contract. True False

True

A legal right or remedy states what will happen if someone does or does not do a particular act. True False

True

The Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) provide that "signatures" made via electronic means are just as binding as hand-written ones. True False

True

The Special Provisions paragraph of the TREC-promulgated contracts is meant only for factual statements and business details applicable to the sale. True False

True

Which of the following is FALSE regarding real and personal property? A) Issues regarding real and personal property in real estate transactions can lead to frustration, arguments, and possibly litigation if not handled properly. B) The distinction between the two is not easy to make for buyers, sellers, and agents. C) Items of real and personal property are of concern only to the buyers and sellers and their attorneys; agents need not concern themselves with these matters. D) Care should be taken to negotiate for and to document decisions regarding personal property in the sale of real property.

Items of real and personal property are of concern only to the buyers and sellers and their attorneys; agents need not concern themselves with these matters.

Matters regarding personal property in a real estate transaction A) are nonexistent because personal property cannot be conveyed in the sale of real estate. B) can lead to problems with the transaction and possibly even litigation if not handled correctly. C) are of concern only to the buyers and sellers and their attorneys; agents need not concern themselves with these matters. D) are rare and generally not a problem.

can lead to problems with the transaction and possibly even litigation if not handled correctly.