Law of Contacts - Check Knowledge

Title that a reasonable buyer would accept as clear. Abstract Title Torrens System Title Marketable Title

Marketable Title

What is the consideration in the contract? $650,000 $675,000 $25,000 $200

$650,000

A legal description that uses terminal points and angles and has a point of beginning.

Metes and Bounds

The right to enter the land and explore for and recover oil, gas, and other minerals is Appropriative Rights Mineral Rights Easement Rights Water Rights

Mineral Rights

Contracts can be discharged due to: Death of the buyer or seller Unilateral acceptance Loss of license by one of the brokers A change in law that makes the performance illegal

A change in law that makes the performance illegal

When the accepting party of the offer makes no changes to the contract whatsoever.

Acceptance

Occurs when an individual acquires title from the rightful owner through hostile, actual, and continuous occupation of the land for the statutory period Adverse possession Condemnation Plottage Foreclosure

Adverse possession

Unauthorized practice of law includes: Recommending a Client to seek the Advice of an Attorney Advising a Person regarding the Validity or Sufficiency of an Instrument or of Title to Real Property Using a Contract Form Promulgated by TREC Using a Contract Form from a Governmental Agency

Advising a Person regarding the Validity or Sufficiency of an Instrument or of Title to Real Property

Any change in the ownership of real property Holographic Alienation Erosion Patent

Alienation

What are some ways Jay can handle this issue to minimize the risk of liability for him and his broker? Require the Smiths to document the ceiling stain Document the steps he took to encourage honesty and full disclosure Make sure he and his broker are covered by Errors and Omissions insurance All of these are correct

All of these are correct

Forms that describe changes to a contract

Amendment

Nick has been looking for a home for his family ever since he got a big promotion. He hires real estate agent Anna who negotiates a 5.5% commission on the sale. Anna helps Nick purchase a home listed at $325,900, for $300,000. If Nick were to refuse to pay the commission what would happen? Anna's broker could sue Nick Nick would automatically be arrested Nick is not legally bound to pay the commission Anna could sue Nick

Anna's broker could sue Nick

The process of attaching personal property in such a way that it becomes real property. Emblement Chattel Annexation Fixture

Annexation

_____________ licensed in Texas may represent clients in real estate transactions without a license. 900 Auctioneers Attorneys Sellers

Attorneys

_________________ may call an auction without the need for a real estate license so long as no other real estate services are being provided. TREC - Promulgated Refusal Conveys Auctioneers

Auctioneers

The sudden loss of land due to the actions of water Avulsion Nuncupative Formal Erosion

Avulsion

No warranty of title is provided by the grantor. General Warranty Deed Bargain and Sale Deed Gift Deed Special Warranty Deed Quitclaim Deed

Bargain and Sale Deed

A contract requiring both parties to perform certain duties

Bilateral Contract

An agreement that is binding on both parties.

Bilateral Contract

The Texas Real Estate License Act requires the _______________to advise the buyers that they should have the title to the real estate verified by obtaining an abstract and have the buyer's own attorney examine it, or obtaining a policy of title insurance. Sales Agent Escrow Agent Broker Seller

Broker

A _______________ Temporary Residential Lease is for use when the buyer occupies the property for no more than 90 days prior to closing. Texas Real Estate Commission Seller's Buyer's Auctioneers

Buyer's

Damage to or destruction of property Metes and Bounds Special Provisions Casually Loss Earnest Money Counteroffer

Casualty Loss

List of all owners from the first to the current owner Proration Abstract of Title Title Insurance Policy Subrogation Clause Chain of Title

Chain of Title

Consummation of a contractual real estate transaction in which all appropriate documents are signed and the proceeds of the loan are disbursed by the lender Foreclosure Closing Servicing Promissory Note Underwriting

Closing

All of the following are examples of police power except Zoning Building Codes Condemnation Buffer Zone

Condemnation

The action of the government when it takes private land Escheat Eminent Domain Condemnation Police Power

Condemnation

All of the following are mortgage lending activities except: Conservatorship Loan Processing Servicing Origination

Conservatorship

This agency is responsible for enforcing federal consumer financial law and has the authority to oversee banks, credit unions, and non-bank businesses related to mortgages, payday lenders, and private education lenders. Equal Credit Opportunity Act Truth in Lending Act Community Reinvestment Act SAFE Act Consumer Financial Protection Bureau

Consumer Financial Protection Bureau

An agreement between two parties to do something or refrain from doing something.

Contract

_______________ is the law that determines a valid and enforceable contract.

Contract Law

A license holder must not prepare any document that ___________ any interest in real property. Seller's or Buyer's Refusal or Auctioneers Conveys or Affects

Conveys or Affects

Owners of a ________________ do not actually own their unit but do have an ownership share in the corporation that owns the building.

Cooperative

______________ are small lenders who have the funds necessary to extend loans at their own risk, usually selling their loan to a larger wholesale lender. Correspondent Lender Mortgage Banker Mortgage Broker Mortgage Company

Correspondent Lender

The CC&Rs are found in a recorded document called: Reliction Document Deed Declaration of Restrictions POA Regulations

Declaration of Restrictions

All of the following are requirements of a valid lease except: Let and take agreement Adequate consideration Delivery Competent Parties

Delivery

One of the options of the offeree when the offer is received.

Do Nothing

Find location and disclose Underground storage of fuel tank Asbestos Lead Radon EMF's

EMFs

Payment placed into escrow to show that the buyer is serious in intent to purchase Metes and Bounds Special Provisions Casually Loss Earnest Money Counteroffer

Earnest Money

When the contract becomes binding on both parties

Effective Date

Annual crops that are produced with labor are called: Severance Emblement Personalty Annexation

Emblement

Annual crops that are considered personal property even though they are attached to the land

Emblements

The right the government has to take private land for public use. Police Power Escheat Eminent Domain Condemnation

Eminent Domain

A lease can be discharged for many reasons except: At the end of their term Eviction By condemnation By constructive eviction

Eviction

Items that are not conveyed with the property

Exclusions

The seller lists with only one broker and agrees to pay the broker commission even if the owner sell the property himself or herself. This is the listing most brokers prefers. Net listing Exclusive Right to Sell Open listing Exclusive agency

Exclusive Right to Sell

What type of contract has been created between the Joplins and Steve? Implied Void Voidable Express

Express

All contracts are assignable, no exceptions. True False

False

An inspector in Texas is licensed by the Texas Department of Insurance. True False

False

Because inspectors are licensed through the State Board of Insurance, they may provide warranties for appliances and systems. True False

False

Conventional loans are either guaranteed or insured by the federal government. True False

False

Corporations are created easily by an oral or written agreement. True False

False

Curtesy is the interest of a wife in her husband's estate. True False

False

Fee simple ownership is defeated by death. True False

False

Foreclosure is one example of voluntary alienation. True False

False

Lead-based paint is a special concern in the basement areas of certain homes. True False

False

Lenders may use the High Cs of good lending to determine ability and willingness to make timely payments. True False

False

Penalties for violation of anti-trust laws include fines and possible prison sentences. True False

False

Texas homestead laws limit an urban homestead to 10 acres, but do not put a limit on rural homesteads. True False

False

The Statute of Frauds requires that contracts for the conveyance of an interest in real estate for a term of six months or less must be in writing. True False

False

The Texas Real Estate Commission was created in 1939 to administer the provisions of the License Act. True False

False

The best time to get the parties to sign a contract is during drinks at a local bar because everyone is relaxed. True False

False

The owner of surface rights does not have the ability to develop the surface and to use resources extracted from or near the surface. True False

False

The person who pledges the property to secure the debt is called the mortgagee. True False

False

Simon has received multiple offers on his home the first 4 days it has been on the market. He decides to stop allowing showings on the home and is ready to look closely at all the offers. Gary - his listing agent - has five offers in hand, and the top two offers are very close in amount. He receives two more last-minute offers, one that is submitted orally during a phone conversation and one that is well below asking price and lower than all of the other offers. Which offers should Gary present to Simon? Gary should present only those offers that include the complete contract and all needed addenda. Gary should present the first five offers since the last one was so low and it came after Simon decided to stop showing his home. Gary should present all offers. Gary should present only the top two since they will offer the most benefit to the seller.

Gary should present all offers.

Gives the purchaser the best degree of protection General Warranty Deed Bargain and Sale Deed Gift Deed Special Warranty Deed Quitclaim Deed

General Warranty Deed

Love and affection are the consideration General Warranty Deed Bargain and Sale Deed Gift Deed Special Warranty Deed Quitclaim Deed

Gift Deed

Used when the consideration is love and affection Tax Deed Guardian's Deed General Warranty Deed Gift Deed

Gift Deed

This method of legally describing property uses an overlay of a grid on the land and is also known as the Public Lands Survey System.

Government Survey System

Used to convey a minor's interest Tax Deed Guardian's Deed General Warranty Deed Gift Deed

Guardian's Deed

A buyer may pay for an option on a property to: Create an enforceable contract on the buyer Obligate the buyer to purchase the property Show the seller how serious the buyer is about purchasing the property Hold the property while the buyer is having inspections performed

Hold the property while the buyer is having inspections performed

A handwritten will Title by Descent Holographic Probate Title by Devise

Holographic

Handwritten wills Sovereignty of the soil Torrens System Restriction Holographic

Holographic

A condominium complex has a manager who is employed by the _____________ to maintain the value of the property.

Homeowner's Association

Condominiums are established un laws referred to as __________________.

Horizontal Property Acts

_______________ refers to the fact that land cannot be moved. You must go to the land.

Immobility

A contract created by behavior

Implied Contract

What element of the contract creates an enforceable contract meeting the criteria of the Statute of Frauds? Competent Parties Consideration Offer and Acceptance In Writing

In Writing

Subject to a satisfactory inspection

Inspection Contingency

Calculate the amount of property tax the seller will owe at closing. Closing is set for August 20th and the seller will pay for closing day. The annual tax bill is $3650 and has not been paid. August 20th is the _____________ day of the year. 212th 232nd 240th 200th

Jan 1 - Aug 20 = 232 232nd

Ownership by two or more with the right of survivorship. Community Property Tenancy in Common Joint Tenancy Trust

Joint Tenancy

The surface of the earth extending downward to the center of the earth and upward above the surface to infinity. Real Estate Real Property Improvements Land

Land

One of certainty and accuracy that someone could go to the ground and identify the land.

Legal Description

_______________ refers to the fact that value is affected by man-made changes to the land. These changes could be off-site as well like an improved transportation system.

Modification

question. Once you have selected an option, select the submit button below This type of lease is one in which in addition to paying rent, the tenant also pays expenses such as taxes, insurance, and maintenance. Percentage Lease Net Lease Graduated Lease Gross Lease

Net Lease

The seller set a minimum sales price. Any price above the minimum is given to the broker as commission. This listing may not be placed in the MLS. Net listing Exclusive Right to Sell Open listing Exclusive agency

Net listing

A buyer is purchasing a home and wants to assume a seller's existing FHA loan. The sales price is $170,000. The seller's existing loan balance is $128,000. Will there be a change in the rate of interest charged if assumed? Yes No

No

Is the HipRocket group itself an actual violation of anti-trust laws? No Yes

No

With regard to Michael and Kathleen's discussion about Surrealty, could it be a potential violation of anti-trust laws if they were not discussing access to the HipRocket group, and just agreeing that they did not like working with them? No Yes

No

_______________ refers to the fact that no two pieces of land are the same. They cannot occupy the same place on earth, making them unique.

Non-homogeneity

A new contract is substituted for an existing contract.

Novation

A will that cannot be used to transfer ownership of real property Avulsion Nuncupative Formal Erosion

Nuncupative

The person who makes an offer

Offeror

The broker agrees not tell private information to another person during the term of this agreement or after unless required by law to do so.

Paragraph 10 Confidentiality

The representation agreement may include more documents than just the Buyer/Tenant Representation Agreement. If so, the documents should be listed.

Paragraph 16 Addenda

This ends tenancy in common by dividing the land into separate pieces. Trustee Severalty Possession Partition

Partition

All of the following are types of contracts except: Property Management Agreement Buyer Representation Agreement Listing Agreement Performance Agreement

Performance Agreement

Things of a temporary or movable nature

Personal property

The combination of turning two or more properties into one Adverse possession Condemnation Plottage Foreclosure

Plottage

The four unities of joint tenancy are time, title, interest, and ______________. Survivorship Separate Beneficiary Possession

Possession

A theory of water law based on the idea that "first in time is first in right." Alluvion Accretion Littoral Prior Appropriation

Prior Appropriation

Limitations placed in a deed when the property is conveyed to a new owner.

Private Deed Restrictions

In a co-op, the owner buys a share of the corporation, and has a ________________ on the unit.

Proprietary Lease

All of these terms are synonyms for a contract for deed except: Installment contract Land contract Cash for deed agreement Purchase agreement

Purchase agreement

No guarantees, warranties, or covenants General Warranty Deed Bargain and Sale Deed Gift Deed Special Warranty Deed Quitclaim Deed

Quitclaim Deed

Used to fix a cloud on the title, having no guarantees, warrantees, or covenants Quitclaim Deed Bargain and Sale Deed Correction Deed Special Warranty Deed

Quitclaim Deed

Mitigation Underground storage of fuel tank Asbestos Lead Radon EMF's

Radon

All that encompasses the land with the addition of all man-made additions to the land. Real Property Real Estate Land Improvements

Real Estate

Created by the Legislature in the 1970s to collect and compile data about real estate in Texas

Real Estate Center

Administered by TREC to protect aggrieved individuals who suffer a monetary loss due to illegal acts of license holders

Real Estate Recovery Trust Account

A __________________ is the borrower's unconditional promise to repay, and includes the amount borrowed, payment amount, due date and rate of interest. short sale VA USDA Real estate lien note

Real estate lien note

When a tenant has the right to match or better an offer the landlord may receive on the property before the property can be sold to someone else, it is called: Tenancy at will Right of first refusal Sale and leaseback Graduated lease

Right of first refusal

The right to use water from a river or stream that borders a property Alluvion Riparian Littoral Accretion

Riparian

This act is designed to enhance consumer protection and reduce fraud by ensuring that RMLOs receive training and are licensed or certified. It established the NMLSR. Equal Credit Opportunity Act Truth in Lending Act Community Reinvestment Act SAFE Act Consumer Financial Protection Bureau

SAFE Act

_______________ comes from the theory of supply and demand. A limited supply causes an increase in price.

Scarcity

The title commitment is broken into sections called Sections Parts Schedules Chapters

Schedules

The ______________________ exists for the purchase and sale of existing mortgages to investors creating liquidity for lenders. Mortgage Bankers The Federal Reserve Underwriters Secondary market

Secondary market

Sending monthly payment statements, collecting monthly payments, and following up on delinquencies Foreclosure Closing Servicing Promissory Note Underwriting

Servicing

Detaching a fixture from the real property to create personal property. Personalty Annexation Emblement Severance

Severance

A _________________ may take place when a seller is unable to sell his or her property at or above what the seller owes the lender. Promissory note Short sale Foreclosure Truth in Lending Act

Short Sale

When the buyer closes, If the buyer is financing the property, the buyer will: Select all that apply Sign a Deed of Trust Sign a deed Title Insurance Authorize Payoff of Their Loan Sign a Promissory Note Escrow Service Provide Title Insurance

Sign a Deed of Trust Sign a Promissory Note

When the seller closes, the seller will: Select all that apply Sign a Deed of Trust Sign a deed Title Insurance Authorize Payoff of Their Loan Sign a Promissory Note Escrow Service Provide Title Insurance

Sign a deed Authorize Payoff of Their Loan Provide Title Insurance

The government is the original owner of all land Sovereignty of the soil Torrens System Restriction Holographic

Sovereignty of the soil

Terms that are not covered in the standard contract forms or addenda Metes and Bounds Special Provisions Casually Loss Earnest Money Counteroffer

Special Provisions

_______________ is the body of laws and regulations enacted by federal and state legislatures. Much of what was once embodied in common law is now codified in statutes passed at the state and federal level.

Statutory Law

Includes the rights to deed oil, gas, and other minerals

Subsurface Rights

The ability to use extracted resources such as stone, gravel, and limestone

Surface Rights

When a seller provides an existing survey for a buyer, the seller must also provide a Texas Department of Insurance form called: A Hold Harmless Affidavit A Seller Survey Affidavit T-47 Affidavit M-80 Affidavit

T-47 Affidavit

Used to convey title when the property is sold by the government at a tax sale Tax Deed Guardian's Deed General Warranty Deed Gift Deed

Tax Deed

Ownership by two or more entities in undivided interest and is the most common type of co-ownership. Joint Tenancy Tenancy in Common Interest Estate in Severalty

Tenancy in Common

The _____________ was created by the Legislature in 1949. Lease-Purchase Texas Real Estate Commission Auctioneers TREC- Promulgated

Texas Real Estate Commission

The central banking system in the United States is called: The Primary Market Federal Home Loan Mortgage Corporation The Federal Reserve Fannie Mae

The Federal Reserve

The lender's title policy is called The title policy for the lender The Mortgagee's Title Policy The Title Commitment The owner's title policy

The Mortgagee's Title Policy

When a license holder adds provisions to contracts that go beyond factual business detail, the agent is engaged in: A legal activity The unauthorized practice of law Something that requires a broker to do An impromptu event

The unauthorized practice of law

When a person dies without a will and is not married and has no children, the property goes to: The State The Federal Government The County Government Their Heirs

Their Heirs

What is a phrase commonly inserted into a contract to ensure that certain tasks must be completed as stipulated? Impossibility Act Stipulation of performance Time is of the essence The four corners rule

Time is of the essence

Known as interval ownership, a ____________ is commonly used for ownership of a vacation property.

Timeshare

The evidence an individual has as to her or his right to possess land. Abstract Title Torrens System Title Marketable Title

Title

Subject to a title examination

Title Contingency

A property owner obtains a certificate of title that is recorded in the public records Abstract Title Torrens System Title Marketable Title

Torrens System

Under this system, a property owner obtains a certificate much like an automobile title that is recorded in the public records Sovereignty of the soil Torrens System Restriction Holographic

Torrens System

A novation may include new parties to a contract. True False

True

Commission rates and other means by which brokers are compensated by sellers and buyers are always negotiable between the parties. True False

True

Consideration is always monetary. True False

True

In many rural homes, water is provided from an on-site well. True False

True

Mutuality is found in bilateral contracts. True False

True

Refrigerators are generally considered to be items of personal property that are not included in a sale of real estate. True False

True

When a homestead property is sold at tax auction the owner has: Two Year Right of Redemption Escheat Rights Property Tax Consultant Rights Allodial Rights

Two Year Right of Redemption

Government loans are divided into three categories: FHA, VA, and _________. USDA Truth in Lending Act Underwriting SAFE Mortgage Licensing Act

USDA

Recommend water testing Underground storage of fuel tank Asbestos Lead Radon EMF's

Underground storage of fuel tank

A contract that must have competent parties, offer and acceptance, legal purpose, consideration, and be in writing

Valid Contract

Permission to violate a zoning law Buffer Zone Variance Eminent Domain Downzoning

Variance

A lien that is placed on the property against the wishes of the property owner.

Voluntary Lien

All of the following are part of the subsurface except: Gas Water Other Minerals Oil

Water

A buyer is purchasing a home and wants to assume a seller's existing FHA loan. The sales price is $170,000. The seller's existing loan balance is $128,000. If the loan is assumed by the buyer, can the seller be released from further liability for repayment of the loan? Yes No

Yes

A buyer is purchasing a home and wants to assume a seller's existing FHA loan. The sales price is $170,000. The seller's existing loan balance is $128,000. Is this loan assumable? Yes No

Yes

A foreign broker or a broker from another state may collect ____________ from a Texas broker, as long as that broker does not negotiate in Texas. a Commission Conveys 900 Affects

a Commission

Nick has been looking for a home for his family ever since he got a big promotion. He hires real estate agent Anna who negotiates a 5.5% commission on the sale. Anna helps Nick purchase a home listed at $325,900, for $300,000. How much does Anna's broker collect in commission? $166,500 $18,333 $16,500 $54,545

$16,500

Calculate the amount of property tax the seller will owe at closing. Closing is set for August 20th and the seller will pay for closing day. The annual tax bill is $3650 and has not been paid. The per diem tax rate is: $10 $5 $25 $50

$3650 / 365 = 10 $10

A buyer is purchasing a home and wants to assume a seller's existing FHA loan. The sales price is $170,000. The seller's existing loan balance is $128,000. If the loan is assumed, what is the seller's equity in the property? $128,000 $0 $170,000 $42,000

$42,000

A buyer is purchasing a home and wants to assume a seller's existing FHA loan. The sales price is $170,000. The seller's existing loan balance is $128,000. What downpayment is required for the loan assumption? $4,480 $42,000 $128,000 $5,950

$42,000

The rights that extend above the surface without limitation. Water Rights Subsurface Rights Air Rights Surface Rights

Air Rights

Abatement plan outlines Underground storage of fuel tank Asbestos Lead Radon EMF's

Asbestos

The property value for tax purposes. Mills Inverse Condemnation Assessed Value Condemnation

Assessed Value

All of the following are examples of improvements except: Building Patio Ceiling Fan Fence

Ceiling Fan

The process by which the government exercises its right of eminent domain Adverse possession Condemnation Plottage Foreclosure

Condemnation

In a ________________, an owner has separate legal ownership of their unit.

Condominium

Also called an installment contract, a land contract or a real estate contract Buyer-agency agreement Contract for deed Listing Agreement Option Agreement Lease

Contract for deed

The Broker-Lawyer Committee _______________ promulgated forms. Defends Monitors Drafts Initiates

Drafts

An intrusion of one's property onto another's property. Littoral Avulsion Encroachment Appurtenance

Encroachment

A claim, lien, charge, or liability attached to and binding real property.

Encumbrance

A contract created by offer and acceptance

Express Contract

An agreement made orally or in writing.

Express Contract

A USDA loan is commonly referred to as a Section 8 loan. True False

False

To obtain a sales agent license in the state of Texas, the applicant must be at least 21 years of age at the date of the application. True False

False

Under federal law all sellers of homes built prior to 1968 must provide to the buyer a disclosure of their knowledge of possible lead-based paint hazards. True False

False

Veterans who were discharged under any conditions, even dishonorable, can apply for a VA loan. True False

False

The best deed offering protection all the way to the sovereignty of the soil Tax Deed Guardian's Deed General Warranty Deed Gift Deed

General Warranty Deed

Contract that is created by behavior.

Implied Contract

Any man-made additions to the land that are permanent

Improvements

Man-made additions to the land that are permanent and are part of the land. Improvements Real Property Land Real Estate

Improvements

_______________ refers to the fact that land cannot be destroyed. It is permanent.

Indestructibiltiy

The most important test of a fixture. Intention of the Party Emblement Adaptation Method of Attachment

Intention of the Party

There is no duty to remediate Underground storage of fuel tank Asbestos Lead Radon EMF's

Lead

Rights or privileges in land that are less than ownership, but exist Buyer-agency agreement Contract for deed Listing Agreement Option Agreement Lease

Lease

This type of transaction allows a tenant to buy the property at a preset price and terms for a given period of time but does not obligate the buyer to purchase. Contract for Deed Assignment Lease - Option agreement Installment contract

Lease - Option agreement

This type of transaction obligates the tenant to purchase the property at a preset price at some agreed to time and terms. Lease - Purchase agreement Real estate contract Executory contract Lease - Option agreement

Lease - Purchase agreement

A lease with an option to purchase is commonly known as _____________ agreement. Texas Real Estate Commission Lease-Purchase Refusal Buyer's

Lease-Purchase

The sales agent must inform the other seller if he or she is licensed to practice real estate in Texas

License Holder Disclosure

A type of contract that cannot be assigned.

Listing Agreement

Employment agreement for listing broker Buyer-agency agreement Contract for deed Listing Agreement Option Agreement Lease

Listing agreement

A legal description that uses a recorded plat.

Lot and block

Legal description of property Metes and Bounds Special Provisions Casually Loss Earnest Money Counteroffer

Metes and Bounds

The Government National Mortgage Association, established in 1968, operates the __________________. Mortgage-backed securities program Primary market FHA VA

Mortgage-backed securities program

A mortgage is a pledge of real estate as security for repayment of a debt. The borrower is known as the _______________. SAFE Mortgage Licensing Act VA Federal Reserve Mortgagor

Mortgagor

Kathleen thinks this a good idea and asks Michael how to join the group on HipRocket. Michael tells her that it's an "open group" as far as HipRocket is concerned, mainly because the brokers don't want to break antitrust rules. He then tells her to keep it a secret from Surrealty because no one wants to work with the agents from that firm. Kathleen agrees to keep it quiet and interjects that she doesn't want to work with the agents at Surrealty either. Does the fact that the HipRocket group is classified as "open" protect the brokers from violations of antitrust laws? No Yes No, if they take additional steps to exclude others Yes, if they take additional steps to exclude others

No, if they take additional steps to exclude others

Requires the entry of buyers' and sellers' contact information

Notices

An agreement that gives the buyer the right to buy but only the seller is bound to the agreement.

Option

The Texas Department of Insurance Rule _______________ addresses the relationship between the title company and real estate license holders. T-47 P-53 SB 489 TREC Rule 535.2

P-53

The client agrees to work exclusively through the broker in acquiring property and negotiate the acquisition of the property in the market area only through the broker, informing others that the client is working exclusively with the broker.

Paragraph 6 Client's Obligation

This paragraph addresses whether the buyer client will allow the broker to represent the seller and the buyer at the same time.

Paragraph 8 Intermediary

The broker informs the client that the broker may have other clients who may be interested in similar properties in the same market area.

Paragraph 9 Competing Clients

Things that are temporary or moveable and are not part of the real property. Emblement Adaptation Personalty Fixture

Personalty

When a joint tenant passes away, the decedent's share immediately passes to the other joint tenants. This is commonly called: Inherited Property Trust Co-ownership Poor Man's Will

Poor Man's Will

The formal judicial proceeding to prove or confirm the validity of a will Title by Descent Holographic Probate Title by Devise

Probate

The building of a file that will be used to make an underwriting decision is called: Funding Processing Origination Servicing

Processing

Requires proof that the act or omission was a significant factor in brining about injury

Producing Cause

A significant federal law that affects lenders is the ___________________. This federal law was passed to ensure that banks would serve the needs of the community in which they were chartered to do business. Community Reinvestment Act SAFE Mortgage Licensing Act FHA Real estate lien note

SAFE Mortgage Licensing Act

Shanay and Travis are a hardworking couple who have been saving for a home for their family, but life keeps getting in the way. The house next door to her family goes on the market, and Shanay's parents decided to gift her the house. What is the status of Shanay and Travis's new home? Community Property Separate Property

Separate Property

Steve purchases a home. Four years later, he asks his girlfriend to move in. He pays all the bills associated with the house. She pays for cable, groceries, and half of the entertainment budget. What is the status of Steve's home? Community Property Separate Property

Separate Property

_______________ refers to the location of the property or land from an economic stand point, not geographic. This is location, location, location!

Situs

A lien that is created by law.

Statutory Lien

Prevents a property owner from collecting on a claim from both the title company and the seller Proration Abstract of Title Title Insurance Policy Subrogation Clause Chain of Title

Subrogation Clause

The rights to oil, gas, and other minerals and extend to the center of the earth. Subsurface Rights Water Rights Air Rights Surface Rights

Subsurface Rights

The right to develop or improve the surface and to use resources extracted from or near the surface including stone, gravel, water, and limestone. Air Rights Subsurface Rights Water Rights Surface Rights

Surface Rights

In Texas, a real estate license holder may not write all of the following transaction agreements, except: Contract for deed Lease - Option purchase agreement TREC promulgated sales contract Lease - Purchase agreement

TREC promulgated sales contract

The option fee must be delivered to the listing broker or the seller within 3 days of the effective date of the contract

Termination Option

Created by the Legislature in 1949 to carry out the provisions of TRELA

Texas Real Estate Commission

Risks to a buyer in a contract for deed include all of the following except: The seller may not be able to deliver clear title in the future The buyer may fail to make payments to the seller An unscrupulous seller may mortgage the property without the buyer's knowledge The seller could file bankruptcy, encumbering the title

The buyer may fail to make payments to the seller

The market where buyers and mortgage lenders come together to create and negotiate a mortgage transaction is called: Non-depository mortgage lending The primary market Origination The secondary market

The primary market

A title company will defend the title in court and pay for actual loss in which situation? A violation or building ordinance is discovered after closing The buyer loses a portion of land due to water A lien created by the buyer's financing The title company missed a judgement, tax, or special assessment

The title company missed a judgement, tax, or special assessment

Contract between the title company and the insured Proration Abstract of Title Title Insurance Policy Subrogation Clause Chain of Title

Title Insurance Policy

The owner of a _____________ usually owns a small front or backyard with their unit.

Townhouse

Fixtures that are needed to carry out a business. Annexation Trade Fixture Emblement Personalty

Trade Fixture

A contingency is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. True False

True

Voluntary alienation happens with documents like a will, power of attorney, or a deed. True False

True

A contract that is binding only on one party.

Unilateral Contract

Because of the payment of $200 and the agreement to allow the buyers to terminate for the first 7 days, what type of contract has been created? Void Contract Bilateral Contract Unilateral Contract Implied Contract

Unilateral Contract

An agreement that was never valid.

Void Contract

A buyer is purchasing a home and wants to assume a seller's existing FHA loan. The sales price is $170,000. The seller's existing loan balance is $128,000. Will the buyer be required to qualify for the assumption? Yes No

Yes

Nick has been looking for a home for his family ever since he got a big promotion. He hires real estate agent Anna who negotiates a 5.5% commission on the sale. Anna helps Nick purchase a home listed at $325,900, for $300,000. If Anna gets half (50%) of her broker's commission, how much does Anna make on the deal? $83,250 $8,250 $9,166 $27,272

$8,250

Calculate the amount of property tax the seller will owe at closing. Closing is set for August 20th and the seller will pay for closing day. The annual tax bill is $3650 and has not been paid. The amount of tax owed by the seller at closing is _______________. $2320 $2000 $3650 $1825

10x232 = $232 $2320

A loan servicer must acknowledge receipt of a borrower's inquiry within how many business days? 15 business day 30 business days 10 business days 20 business days

20 business days

A lender must provide the Home Loan Toolkit to a borrower within how many days of the loan application? 10 business days 3 business days 7 calendar days 5 business days

3 business days

If a lawsuit is filed, all of the following defenses could potentially help Myra EXCEPT: Written documents from the roofing contractor which show that Myra was basing her statements on their written claims and guarantees. A signed seller's disclosure that provides details about how the roof was actually installed A signed document showing that Myra advised Kristina to get a home inspection but she declined. A certificate showing that Myra took an online class about visual roof inspections

A certificate showing that Myra took an online class about visual roof inspections

Which of the following transactions is regulated by RESPA? A house purchased with financing An apartment building purchased with financing A house purchased with cash A 30 acre farm purchased with financing

A house purchased with financing

Under this system of title, the purchaser does not receive a physical title. Abstract Title Torrens System Title Marketable Title

Abstract Title

Complete history of the title to the property Proration Abstract of Title Title Insurance Policy Subrogation Clause Title

Abstract of Title

What options does Simon have when responding to the offers? Deliberate, agree, counter balance, or obligate Accept, reject, counter offer, or do nothing Accept, reject, rescind, or relegate Remand, agree, delineate, or delay

Accept, reject, counter offer, or do nothing

Eviction is referred to as: Action of forcible detainer Assignment Lease option Gross lease

Action of forcible detainer

Creates the highest priority lien, getting paid first at foreclosure. Ad Valorem Taxes M and M Lien Mortgage IRS Taxes

Ad Valorem Taxes

A custom-made and installed fireplace screen is a fixture through this test: Method of Attachment Personalty Annexation Adaptation

Adaptation

Attachment to a contract that further describes the rights and duties of the parties

Addendum

_______________ understanding the relationship between the parties to a transaction, sales agents, brokers, and others is vitally important. The level of service provided to a buyer, seller, landlord, or tenant is determined by the presence of or lack of an agency agreement with the broker.

Agency Law

Related to financing contingencies due to a maximum loan amount being a percentage of the lesser of the sale price or appraised value

Appraisal Contingency

A right or privilege or improvement that belongs to and passes with the land but is not necessarily part of the land. Appropriative Right Encroachment Mineral right Appurtenance

Appurtenance

All of the following are about water rights except: Riparian Appropriative Littoral Appurtenance

Appurtenance

Transfers all the rights related to the contract to another party.

Assignment

When a tenant transfers all of his rights and liabilities under the lease to another person, it is called: Eviction Sublet Assignment Termination

Assignment

Barbara is the buyer's agent for Lin. She submits an offer package on Lin's behalf and is careful to include the Third Party Financing Addendum, so the contract will be contingent on Lin's ability to secure financing for $210,000 within 14 days. Lin's offer is accepted. As her financing deadline approaches, Lin's lender decides that she is only eligible to borrow $200,000. What additional amendments, contingencies, or addenda may be used if Lin and the seller decide to proceed with the sale at a lower sales price? Barbara must submit the Change in Financing Addendum on Lin's behalf. Barbara must submit an amendment that reflects the new, lower sales price. There is no need for Barbara to submit any additional amendments or addenda. Barbara must submit the Counter to the Original Offer addendum on Lin's behalf.

Barbara must submit an amendment that reflects the new, lower sales price.

Barbara is the buyer's agent for Lin. She submits an offer package on Lin's behalf and is careful to include the Third Party Financing Addendum, so the contract will be contingent on Lin's ability to secure financing for $210,000 within 14 days. Lin's offer is accepted. As her financing deadline approaches, Lin's lender decides that she is only eligible to borrow $200,000. What should Barbara do to make sure she is fulfilling her fiduciary responsibilities to Lin? Barbara should keep Lin informed of her options as well as the approaching deadline(s). Barbara should back off and let Lin make her own decisions. Barbara should encourage Lin to hire an attorney to look for a loophole in the contract. Barbara should encourage Lin to back out of the contract.

Barbara should keep Lin informed of her options as well as the approaching deadline(s).

Offers the least amount of protection, giving no guarantees or warrantees. The grantor implies ownership or the right to sell. Quitclaim Deed Bargain and Sale Deed Correction Deed Special Warranty Deed

Bargain and Sale Deed

Established by TREC to write mandatory residential contract forms for license holders

Broker-Laywer Committee

Employment agreement for selling broker Buyer-agency agreement Contract for deed Listing Agreement Option Agreement Lease

Buyer-agency agreement

The educational requirements for the broker are __________ hours. Buyers

Buyers 900 Sellers Affects

Personal property is also known as: Chattel Emblement Annexation Fixture

Chattel

_______________ is a body of law developed in England and based upon "common sense" and local custom, which has expanded over the years as a result of prior court decisions.

Common Law

Townhouses are connected to each other by a ____________.

Common Wall

A contract is only an offer until the party accepting the final change informs the other party.

Communicated

Arthur was driving to work one day when a work truck plowed into his car. Arthur and his attorney successfully sue the driver's company for compensation for pain and suffering. He and his wife are embroiled in a contentious divorce, and she lays claim to the settlement. What is the status of Arthur's settlement? Community Property Separate Property

Community Property

Concept of Spanish law stating marriage is a partnership. Under this concept, property owned by both spouses cannot be conveyed without both signatures. Co-ownership Trust Community Property Tenancy by the Entirety

Community Property

Edgar and Kaycee purchase their first home together after ten years of apartment living. They separate, and Kaycee and her sister buy a home together with funds they receive from a sizable family inheritance. Two years later, they finalize the divorce. What is the status of the home Edgar and Kaycee purchased together? Community Property Separate Property

Community Property

Eric and his wife divide up their assets during the divorce. What is the status of the home they purchased together? Community Property Separate Property

Community Property

Eric is a married individual who inherited his grandfather's house after his death. He and his wife bought a home together, but divorced five years later. What is the status of Eric's grandfather's house? Community Property Separate Property

Community Property

This act was passed to ensure that banks and insurance companies serve the needs of the community in which they were chartered to do business. It prohibits redlining. Equal Credit Opportunity Act Truth in Lending Act Community Reinvestment Act SAFE Act Consumer Financial Protection Bureau

Community Reinvestment Act

Used to fix a mistake on a previous deed Quitclaim Deed Bargain and Sale Deed Correction Deed Special Warranty Deed

Correction Deed

Rejection of an offer coupled with a new offer Metes and Bounds Special Provisions Casually Loss Earnest Money Counteroffer

Counteroffer

Mr. and Mrs. Smith have hired Jay to list the home they have been renting out for the last five years. When Jay first walked through the home with the Smiths, he noticed a large water stain on the living room ceiling. He also noted that the roof was not in the best condition. When Jay received the signed Seller's Disclosure from the Smiths, he noticed that they listed the roof's age at 8 years and did not indicate that it had any condition issues. He also noticed that the Smiths had painted over the stain on the ceiling. Jay should: Discuss his observations with the Smiths, inform them of the potential liability issues, encourage them to be honest, ask that they disclose the ceiling stain, and suggest that they look into the issue since it may not have been reported by the tenants. Ignore the issue since the seller is responsible for the accuracy of the Seller's Disclosure. Discuss his observations with the Smiths, inform them of their legal duty to disclose all material defects related to the property, encourage them to be honest about the stain, document their efforts to contact the tenants, and request a roof certificate. Document the stain on the ceiling and ask a roofer to give him an opinion about the roof

Discuss his observations with the Smiths, inform them of the potential liability issues, encourage them to be honest, ask that they disclose the ceiling stain, and suggest that they look into the issue since it may not have been reported by the tenants.

Passed in 1974, this act covers all creditor who regularly extend credit, prohibiting discrimination and ensuring that all consumers are given an equal chance to obtain credit. Equal Credit Opportunity Act Truth in Lending Act Community Reinvestment Act SAFE Act Consumer Financial Protection Bureau

Equal Credit Opportunity Act

The gradual loss of land over time as the land bordering a river or stream washes away Holographic Alienation Erosion Patent

Erosion

The gradual loss of land over time is called Avulsion Nuncupative Formal Erosion

Erosion

Ownership by one person or entity. Tenancy in Common Co-ownership Trust Estate in Severalty

Estate in Severalty

The seller lists the property with only one broker but reserves the right to sell the property and not pay commission. The seller and broker compete to bring the buyer. Net listing Exclusive Right to Sell Open listing Exclusive agency

Exclusive agency

A contract that has been agreed to, signed by the parties, and the acceptance communicated to the offeror.

Executed Contract

A contract that is binding on the parties even though certain contractual duties have not yet been performed

Executory Contract

A contract that is binding on the parties, with one or more of the parties having contractual duties that have not been performed.

Executory Contract

A contingency to a contract is an attachment that adds or further describes the rights and duties of the parties. True False

False

A double net lease is one in which the tenant pays rent and property taxes only. True False

False

A periodic tenancy is a lease with a definite beginning date and definite ending date. True False

False

A short sale is used when the buyer must move in quickly, closing the transaction in less than 14 days. True False

False

A sole proprietorship is a venture owned by a couple. True False

False

According to the TREC-promulgated contract forms, all representations made by seller and buyer "survive closing," which means that both parties remain liable beyond closing for their representations made in the contract. True False

False

Any seller concession or combination of concessions which exceeds 3 % of the established reasonable value of the property is considered excessive and unacceptable for VA-guaranteed loans. True False

False

Appraisal contingencies are not related to financing contingencies because lenders use appraisals to determine the amount of money they will lend on a property. True False

False

General partners are not involved in the day to day operations. They are the investor. True False

False

In Texas, an individual under the age of 21 is considered a minor. True False

False

In a lien theory sate, the mortgage transfers the title of the property to the lender from the borrower until the debt is satisfied. True False

False

Involuntary alienation requires an absence of force. True False

False

Property that was owned before marriage falls under community property once a couple is married. True False

False

The CAN-SPAM Act of 2003 involves an agreement among two or more competitors not to do business with another competitor for the purpose of inducing the other competitor to change its business practices. True False

False

The contract cannot be delivered to the title company by the seller's agent, only by the buyer's agent. True False

False

The contract does not have to include a title contingency. True False

False

The deed of trust is a four-party mortgage including, the borrower, the lender, the trustee, and an attorney. True False

False

The general presumption is that an individual signing a contract has not taken the time to read it and understand it. True False

False

The promissory note pledges the property to secure the debt. True False

False

The right the government has to acquire ownership from the rightful owner for public use is called condemnation. True False

False

The time period between the signing of a contract and closing is always 30 to 45 days. True False

False

Non-depository mortgage loan originators include all but the following: Mortgage Bankers Fannie Mae Correspondent Lenders Mortgage Brokers

Fannie Mae

Fanola just listed her beautifully appointed home with Angela who took the time to carefully enter all information into the MLS. Among the information in the MLS is that the Sub-Zero Pro-Series refrigerator, which retails for upwards of $7,000, can convey with the property. This was a major selling point for Tandy, who put in an offer after falling in love with the home's state-of-the-art chef's kitchen. Tandy's buyer's agent draws up the contract, but does not attach the Non-Realty Items Addendum to the contract. When Fanola moves, she takes her fancy refrigerator with her, leaving Tandy in the cold with an expensive hole in the kitchen. Since no one mentioned the conveyance of the refrigerator, she simply took it with her. Tandy is incensed, claiming that since her agent told her that the MLS advertised the refrigerator as part of the property, it should have been conveyed with the property, regardless of whether it was mentioned in the contract. She insists that the shiny, stainless-steel side-by-side is her property. What is true of this situation? Fanola is under no obligation to return the professional-grade refrigerator because it is an accessory and not a built-in improvement an

Fanola is under no obligation to return the professional-grade refrigerator because it is an accessory and not a built-in improvement and its conveyance was not mentioned in the contract.

The _____________________ is the central banking system of the United States. USDA FHA Federal Reserve Truth in Lending Act

Federal Reserve

_______________ refers to the fact that land, and additions to the land such as buildings, take a long period of time to pay for themselves. Land cannot be moved.

Fixity

Personal property that has become attached to the land in such a way to become part of the real property. Emblement Adaptation Fixture Personalty

Fixture

Legal procedure whereby the secured property may be sold to satisfy the unpaid promissory note Foreclosure Closing Servicing Promissory Note Underwriting

Foreclosure

The process by which a lender exercises its power of sale under a mortgage that is in default Adverse possession Condemnation Plottage Foreclosure

Foreclosure

__________________ is the legal procedure whereby the secured property may be sold to satisfy the unpaid promissory note. Federal Reserve Foreclosure Short sale Underwriting

Foreclosure

A will written by an attorney Avulsion Nuncupative Formal Erosion

Formal

__________ stipulates that a contract that is clear, not ambiguous, and states that the terms for performance under the contract may be determined by a reading of the entire contract. Discharge of a contract Time is of the essence Anti-ambiguity clause Four corners rule

Four corners rule

This GSE was established in 1970 for the purpose of purchasing mortgages in the secondary market: Fannie Mae Government National Mortgage Association Freddie Mac Federal National Mortgage Association

Freddie Mac

All the terms of the agreement have been met and the sale closes.

Fully Executed Contract

What can Gary do to look out for his client's best interest? Gary can make sure that all offerors know that this is a multiple offer situation, so they can all make their highest and best offers. Gary can try to get a better offer by disclosing the amount of the first offer to all offerees in hopes of starting a bidding war. Hold back the highest offers for a few days in hopes that Simon will allow more showings and get an even higher offer. Present the cash offer first since it is not likely to fall through later due to financing issues.

Gary can make sure that all offerors know that this is a multiple offer situation, so they can all make their highest and best offers.

In this type of lease, the tenant pays rent and the landlord pays the costs associated with ownership including the utilities. The tenant only pays rent. Graduated lease Percentage lease Net lease Gross Lease

Gross Lease

How can Gary help Simon evaluate the offers? He can present the best offers first so that Simon is more able to focus on the ones with the highest yield. He can prepare net sheets on the offers being considered so Simon can compare all of the details and better determine the bottom line for each offer. He can point out the offers with the highest sales price and the largest cash down payments. He can prepare a spreadsheet on the offers being considered so Simon can see details of the financial strengths and weaknesses of each buyer, as well as the amount each one is asking for in seller concessions.

He can prepare net sheets on the offers being considered so Simon can compare all of the details and better determine the bottom line for each offer.

Really a type of tenancy in common ownership, a timeshare or _______________ is part ownership of a property coupled with the right to occupy for a certain amount of time throughout the year.

Interval Ownership

A mortgage lien.

Involuntary Lien

A right given by law to certain creditors to have debts paid out of the property of a defaulting debtor.

Lien

Barbara is the buyer's agent for Lin. She submits an offer package on Lin's behalf and is careful to include the Third Party Financing Addendum, so the contract will be contingent on Lin's ability to secure financing for $210,000 within 14 days. Lin's offer is accepted. As her financing deadline approaches, Lin's lender decides that she is only eligible to borrow $200,000. Which of the following options is NOT available to Lin? Lin can choose not to take any action. Lin can choose to put $10,000 cash extra in order to make up the difference. Lin can attempt to re-negotiate the price of the home as long as Barbara submits a new or amended contract. Lin can terminate the contract and forfeit her earnest money.

Lin can terminate the contract and forfeit her earnest money.

Myra owns Dirt Cheap Realty and is representing Owen in the sale of a home. Owen has durable power of attorney for his elderly mother, who is incapacitated, and he is helping his mother liquidate her assets. Shortly after Myra lists the home, Owen decides to sell the home to his niece, Kristina, who is just moving back to the area. Myra recommends that she be allowed to represent both parties and indicates that she can save them money this way because she will do the whole transaction for only 4%. They agree to allow Myra to represent them both, because they believe this will help Kristina pocket the extra 2%. Kristina is a bit concerned about buying an older home because of the maintenance and upkeep. When Myra is showing the home, she proudly discusses the "new roof" that Owen had put on about two years ago. Myra has heard good things from a couple of other license holders about the roofer, so she tells Kristina that the roofer only uses the top-of-the line material, so the roof should last a very long time. Myra mentions that most people get a home inspection, but Kristina declines to have the home inspection since her uncle is selling the home. Shortly after moving into the home, Kristina finds out that the roof leaks when it rains, and the roof has two layers of shingles. Only the top layer is relatively new, and the underlayment is badly deteriorated in places. The roof decking is rotten in several places and needs to be replaced. The roofer recommends that Kristina have the entire roof re-done and gives her a price quote of $10,000. When Myra told Kristina that the roofing contractor only uses "top-of-the-line material" and that the roof should last a very long time, she was most likely guilty of: Intentional Fraud Misrepresentation Puffery An Unconscionable Action

Misrepresentation

Natalie's client, Jordan, has submitted an offer on his dream property. He was very excited and emotional when she informed him that the seller accepted his offer from among three other strong offers. While writing up the contract, Natalie enters into Paragraph 11, Special Provisions, that the contract is contingent upon the sale of his current home as Jordan will not be able to afford two mortgage payments per month. His house has been listed, and has generated some interest, but he does not yet have a buyer. What is true of this situation? Natalie should not have written the contingency into Paragraph 11 of the contract because TREC promulgates an addendum specifically for that purpose. This could be considered unauthorized practice of law. Natalie was correct in her approach to the contingency for the sale of Jordan's existing home. It is up to her to protect the best interests of her client. There is no precedent for making a contract contingent upon the sale of another property. This is not a situation that the real estate community encounters with any frequency. All purchase contracts in Texas already contain language making them contingent upon the sale of an existing property.

Natalie should not have written the contingency into Paragraph 11 of the contract because TREC promulgates an addendum specifically for that purpose. This could be considered unauthorized practice of law.

A seller of coastal property abutting tidally influenced water must provide Notice Regarding Coastal Area Property Gulf Intracoastal Waterway Declaration Information Regarding Tidal Water Notice Navigable Water Disclosure

Notice Regarding Coastal Area Property

The seller lists the property with as many brokers as she or he wishes and may even sell the property without having to pay commission to any broker. There may be a controversy as to who is the procuring cause of the sale. Net listing Exclusive Right to Sell Open listing Exclusive agency

Open listing

Gives a potential buyer or tenant the right to purchase or lease a property Buyer-agency agreement Contract for deed Listing Agreement Option Agreement Lease

Option agreement

Besides agreeing that the broker will receive a fee after it is earned and payable, this paragraph determines from whom the broker will seek payment.

Paragraph 11 Broker's Fees

This paragraph explains that commission rates are a matter of negotiation and that brokers and sales agents may not discriminate while providing services. It also tells the buyer to have an abstract of title examined by an attorney or to obtain a title policy.

Paragraph 18 Additional Notices

The client grants the broker the exclusive right to act as the Client's real estate agent for the purpose of acquiring property in the market area.

Paragraph 2 Appointment

Market area means that area in the State of Texas within the perimeter boundaries specifically detailed in this paragraph.

Paragraph 3 Definitions

The License Act requires a broker to have a definite termination date in a listing agreement and a buyer/tenant representation agreement.

Paragraph 4 Term

The original conveyance of land by the sovereign is usually done with this document Sovereignty of the soil Torrens System Erosion Patent

Patent

This type of leasehold estate automatically renews for a like period of time until the landlord or tenant gives notice to terminate: Estate for years Periodic tenancy Tenancy at sufferance Tenancy at will

Periodic tenancy

Borrower's unconditional promise to repay Foreclosure Closing Servicing Promissory Note Underwriting

Promissory Note

Division of taxes and POA fees between the buyer and the seller Proration Abstract of Title Title Insurance Policy Subrogation Clause Title

Proration

Some residential leases contain a right of first ______________, giving the tenant the right to purchase the leased property by matching or bettering any offer before the property will be sold to someone else. Attorneys Conveys Lease-Purchase Refusal

Refusal

A limitation placed on the new owner by the grantor Torrens System Restriction Holographic Alienation

Restriction

The ______________________ was designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators, and for the establishment of a nationwide mortgage licensing system and registry for the residential mortgage industry. Truth in Lending Act Community Reinvestment Act Foreclosure SAFE Mortgage Licensing Act

SAFE Mortgage Licensing Act

Which section of RESPA sets limits on the amounts a lender may require a buyer to put in an escrow account for taxes and insurance? Section 7 Section 8 Section 9 Section 10

Section 10

Which section of RESPA prohibits kickbacks, unearned fees, and referral fees? Section 9 Section 10 Section 7 Section 8

Section 8

A ______________ Temporary Residential Lease for use when the seller occupies the property for no more than 90 days after closing. 900 Seller's Affects Auctioneers

Seller's

Fernando and his family has a company that owns several commercial properties. When he and his wife, who is a doctor and not involved in the family business, begin divorce proceedings, she inquires about the family's holdings. What is the status of his family's commercial holdings? Community Property Separate Property

Separate Property

Nadine inherits $40,000 from her grandfather's estate. She deposits the check into her and her husband's savings account into which they both deposit funds each month. Six year's later, Nadine and her husband use their savings to purchase a vacation home. She and her husband part ways amicably. What is the status of the vacation home? Community Property Separate Property

Separate Property

Property owned by a married person but not the spouse is considered: Estate in Severalty Separate Property Community Property Tenancy in Common

Separate Property

The seller will defend to through the seller's period of ownership, used by executors and trustees Quitclaim Deed Bargain and Sale Deed Correction Deed Special Warranty Deed

Special Warranty Deed

Title will be warranted and defended against claims made during the period of grantor's ownership General Warranty Deed Bargain and Sale Deed Gift Deed Special Warranty Deed Quitclaim Deed

Special Warranty Deed

The Dodd-Frank Consumer Protection Act directed the Bureau to combine which two disclosures? Consumer Protection Notice and IABS TILA-RESPA Representation Disclosure and Agency Disclosure Sellers Disclosure and the IABS

TILA-RESPA

Failure to use ____________ forms, a form written by an attorney, or a form required by a party can result in a license revocation or suspension by TREC. TREC - Promulgated Texas Real Estate Commission Conveys Refusal

TREC- Promulgated

This type of leasehold estate is created when the lease has expired and the tenant refuses to move out and the tenant is not paying rent. Periodic tenancy Tenancy at will Estate for years Tenancy at sufferance

Tenancy at sufferance

What conditions are present in this situation that give Kristina the right to file a lawsuit against Myra and Dirt Cheap Realty? The Misrepresentation violates the NAR Code of Ethics and fraud can be proven. The Misrepresentation was a key element in Kristina's decision to purchase the property and the buyer was harmed by the purchase. The Misrepresentation was Calculated and Devious. The Misrepresentation was witnessed by a third party and the roof repairs exceed the allowable threshold.

The Misrepresentation was a key element in Kristina's decision to purchase the property and the buyer was harmed by the purchase.

The major functions of a title company are: Select all that apply Sign a Deed of Trust Sign a deed Title Insurance Authorize Payoff of Their Loan Sign a Promissory Note Escrow Service Provide Title Insurance

Title Insurance Escrow Service

A person who inherits property through intestate succession receives Title by Descent Holographic Probate Title by Devise

Title by Descent

A person who inherits property through a will receives Title by Descent Holographic Probate Title by Devise

Title by Devise

A contract for an illegal purpose is void. True False

True

A cooperative sale is one in which one broker lists the property and a different broker sells it. True False

True

A corporation is considered a distinct legal entity under the law and may own real estate and other assets. True False

True

A deficiency is a condition that, in the inspector's reasonable opinion, adversely and materially affects the performance of a system or component or constitutes a hazard. True False

True

A financing contingency is a special concern for both buyer and seller. True False

True

A freehold estate includes certain rights or privileges referred to as the bundle of rights. True False

True

A partnership can be created with a simple written agreement or it may be created orally. True False

True

A person entering into a contact who is under the influence of narcotics could be considered mentally impaired. True False

True

An S Corporation eliminates the double taxation issue of a large corporation. True False

True

An option contract is binding on both parties. True False

True

Any transfer of ownership is called alienation. True Falsw

True

Common time frames in an escape clause are 24, 48 or 72 hours. True False

True

Condemnation requires compensation by the government entity taking the property. True False

True

Corporations are owned by the board of directors. True False

True

Engaging in real estate services without first obtaining a license is a Class A Misdemeanor in the state of Texas. True False

True

For property to qualify for the USDA Rural Housing Program, the home must be located in an approved rural area. True False

True

Foreclosure is the legal process used by the lender to sell the property when the borrower is in default of the promissory note. True False

True

If the seller agrees to do repairs, or agrees to a financial adjustment for needed repairs, an amendment to the contract will be needed. True False

True

Inspectors must use TREC-promulgated inspections forms to provide for uniformity in inspections. True False

True

Involuntary alienation occurs against the will of the owner. True False

True

It is best for both the buyer and the seller if the buyer is pre-qualified or pre-approved to purchase the home he/she wants to purchase. True False

True

Leases are generally discharged at the end of their term, assuming that there are no further obligations on the part of landlord or tenant. True False

True

Limited partnerships have both general partners and limited partners. True False

True

Mortgage loans are secured loans and are preferred by lenders over unsecured loans. True False

True

Mortgages can be in one of two forms, a standard mortgage and a deed of trust. True False

True

Once the terms of a contract have been negotiated and agreed to, and the contract has been signed by all parties, the transaction process begins. True False

True

Partnerships must have at least one limited partner. True False

True

Property owners can assess and remediate their own properties without a license. True False

True

Residential inspectors must complete 130 hours of coursework which may be taken at Champions School of Real Estate. True False

True

Seller financing is the least common form of mortgage financing. True False

True

Shrubs, trees, and landscaping are considered improvements and go with the property. True False

True

Some unscrupulous sellers have been known to mortgage the property without the buyer's knowledge. True False

True

Texas is one of nine states that adhere to the concept of community property. True False

True

The ADA is an expansive law that affects almost all public accommodations. True False

True

The FHA is not a lender, but a mortgage insurance program that protects the lender from loss in the event of default by the borrower by insuring the full amount of the loan. True False

True

The Real Estate Center is funded by TREC through the collection of administrative penalties. True False

True

The Real Estate Center was created in the 1970's to house data and publications that are available to all. True False

True

The Texas Real Estate Commission will investigate a complaint from a broker about another broker that failed to pay a commission. True False

True

The Texas Real Estate License Act was enacted in 1939 to protect real estate sales agents from unscrupulous brokers. True False

True

The agent uses sale information from the MLS data to show a seller the market value of the property. True False

True

The best type of ownership is conditional fee ownership. True False

True

The front ratio is used to qualify a borrower for a loan based upon the proposed house payment and the borrower's gross monthly income. True False

True

The home inspector might cite deficiencies, but those never require additional inspections. True False

True

The listing agreement and buyer representation agreement are employment contracts. True False

True

The primary benefit to a sole proprietorship is that the owner has total control of the business. True False

True

The remainderman in a life estate receives fee simple ownership upon the death of the life tenant. True False

True

Trade specialists do not have to be licensed by TREC to give an opinion in their specialty area. True False

True

Transaction checklists can be used by both the buyer's and seller's agents to help keep the transaction on track. True False

True

When a lease agreement comes to the end of the lease period, it is discharged, and is terminated. True False

True

While the Broker Information section of TREC-promulgated contracts contains information regarding a fee split, it is not a fee-splitting agreement with the listing broker, because brokers are not parties to the contract. True False

True

An entity created for the benefit of another. Survivorship Separate Property Trust Beneficiary

Trust

The ________________________ is a U.S. federal law designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangement and all costs. Federal Reserve Truth in Lending Act Truth in Lending Act Community Reinvestment Act

Truth in Lending Act

This federal law is designed to protect consumers in credit transactions by requiring clear disclosure of key terms of the lending arrangements and all costs. Equal Credit Opportunity Act Truth in Lending Act Community Reinvestment Act SAFE Act Consumer Financial Protection Bureau

Truth in Lending Act

Detailed process of evaluating a borrower's loan application to determine the risk involved for the lender Foreclosure Closing Servicing Promissory Note Underwriting

Underwriting

________________ is the process of approving or denying a loan based on an evaluation of the property, the applicant's creditworthiness and ability to repay the debt. Real estate lien note Underwriting Community Reinvestment Act Foreclosure

Underwriting

Sales Agent Sally has sent an offer for her clients, the Joplins, who would like to purchase a house they saw listed by ABC Realty and Sales Agent Connie. ABC Realty represents a seller named Steve. The property is being offered for $675,000. The Joplins have offered $650,000 because of the comparable sales their agent showed them while preparing the offer. The offer contains a 15 day contingency for the Joplins to secure financing and a 7 day termination option for which they paid $200. The offer Sally prepared is written on a TREC promulgated One to Four Family Residential Contract (Resale) form. Once Steve and his agent, Connie have reviewed the offer, Steve agrees to the terms of the offer, signs the One to Four Contract form and has Connie send the signed agreement back to the buyers' agent. Assuming that Steve and the Joplins are competent, is this a valid contract? No, because the Contract Price is Less than the List Price. No, because it has an Option Period. No, because of the Financing Contingency. Yes, because it meets the Four Elements of a Valid Contract.

Yes, because it meets the Four Elements of a Valid Contract.