Real Estate Exam 5 Study

which type of an estate doesn't end automatically when the stated event or condition occurs?

fee simple subject to a condition subsequent

Specific Performance

is defined as a legal act that requires a party to carry out the legal terms of a contract.

prepaid items

items a seller paid in advance and that the buyer must reimburse at closing, such as utilities

Explanation of the escrow agent's role in the transaction

Escrow

What are the documents that the title company provides to a Texas buyer along with a title commitment?

Evidence of exceptions in the title commitment

What the earnest money must be applied to first and thereafter

Expenses

In texas, the information about brokerage services form is

required by law

by signing the non realty items addendum in texas, what is the seller representing or warranting?

that they own the property and it's free and clear of all encumbrances

The buyer's insurance policy will cover the seller's possession

Fales.

The Buyer's Temporary Residential Lease allows the buyer to lease the property for up to 120 days before closing.

False

What does the term "unallowable cost" refer to?

Fees the buyer isn't allowed to pay which the seller is responsible for.

How does earnest money encourage the buyer not to breach the agreement of sale?

If the buyer breaches the contract, the seller may remedy the breach by keeping the earnest money as well as the property

Joy is a licensee preparing the contract for her buyer client, who's purchasing a condominium. Which of the following is a true statement?

Joy should not use the New Home Contract (Completed Construction)

Joy is a licensee preparing the contract for her buyer client, who's purchasing a condominium. Which of the following is a true statement?

Joy should not use the New Home Contract (completed construction)

what is a down payment

the amount of money the buyer plans to bring to the table as part of the closing costs

Renting prior to possession

the buyer's temporary residential lease form allows the buyer to rent the property from the seller until the closing.

what is the equitable right of redemption

the curing of the default prior to the foreclosure of sale

who or what entity prepares the resale certificate that's provided to a prospective buyer of a subdivision property or condominium?

the owners association

What information is required to complete the Promissary note paragraph in the seller financing addendum to the texas sales contract?

the terms for repayment of the loan

Which types of forms are the Property Located Seaward of the Gulf Intracoastal Waterway and the Coastal Area Property?

Promulgated Addenda

Which of the following is a responsibility of the Texas Real Estate Commission, as provided in The Texas Real Estate License Act?

Rulemaking authority for real estate licensees that has the full force and effect of the law

The Texas notice that advises the buyer to have the abstract or title policy examined by an attorney is required by which of the following pieces of legislation?

Texas Real Estate License Act (TRELA)

What's one key difference between the One to Four Family Residential (Resale) Contract and the New Home Contract (Incomplete Construction)?

The New Home Contract (Incomplete Construction) doesn't contain improvements, accessories or exclusions

What happens if during a sales transaction process, the property that is under contract is damaged or destroyed? Which party is responsible for keeping the property insured until the buyer takes possession?

The Seller

What happens if a buyer completes the Addendum for Property Subject to Mandatory Membership in a Property Owners Association and requests the seller to obtain, pay for and deliver the subdivision information, but doesn't receive it?

The buyer may terminate the contract at any time prior to closing and have their earnest money refunded.

Which of the following statements about TAR's Release of Earnest Money form is true?

The form releases all parties, brokers, and title companies from all liability under the contract.

to effect a transfer of title by deed in Texas, what must occur?

The grantor must deliver the deed to the grantee and the grantee must accept it.

Why do government loans limit the amount of fees a buyer pays?

To make qualification easier

By using the TAR Release of Earnest Money form, who is released from liability under the contract?

Transaction parties, licenses, brokers, title compnay

Buyers will be required to pay rent from the day they move in until the day of closing.

True

The Possession paragraph of the TREC One to Four Family Residential Contract (Resale) will need to be correctly marked when there is a temporary lease between the buyer and the seller of the property

True

The Seller's Temporary Residential Lease is used when the seller needs to stay in the property past the closing date

True

Mediation cost less than litigation

true

Mediation is considered private because it's between the involved parties and an unbiased third party

true

according to TREC's Consumer Protection Notice, how many recovery funds does TREC adminster?

two

what type of information do resale certificates provide to prospective buyers?

anticipated fees and rules of governance

at the time of closing, the buyer and the seller agents will close on which contract?

brokerage agreement

Failure to remove a contingency by the agreed upon date

buyer

Earnest money, attorney fees, and other costs associated with the failure to comply with the release of the escrow funds.

damages

Chapter 27 of the Texas Property Code specifies that, in order to recover damages for a construction defect, buyers must notify the contractor __________ days before the date they file suit to recover damages.

60

Which of the following addenda is required as part of the TREC residential one to four family (resale) contract if the seller wants to retain all or a portion of the property's mineral estate?

Addendum for reservation of oil, gas and other minerals.

Closing has occurred and the seller is not vacating the property for another 15 days. The seller no longer owns the property, and yet he remains there. The seller and buyer have completed the Seller's Temporary Residential Lease form. who would be considered the landlord in this circumstance?

The buyer

In a short sale, what happens if the lienholder refuses or withdraws their consent prior to closing or funding?

The contract is terminated and the buyer's earnest money is refunded.

How would the delay in closing be handled within the sales transaction in Texas?

The parties can complete and sign an Amendment to the Contract Form

The deposit will be refunded at the time of funding and closing, if the tenant adheres to the terms of the contract.

True

Chin is selling his ranch and has agreed to allow the contract to be adjusted after the effective date of the contract, based on the results of the survey, which has not yet been completed. According to the Farm and Ranch contract, what is the amount by which the sales price may be adjusted?

maximum of 10%

Recission, suit for specific performance, liquidated damages, and acceptance of partial performance are all examples of what?

options a wronged party has to remedy a breach of contract

The Texas Non realty items addendum is used for

personal property that will be conveyed from the seller to the buyer

Casualty loss

physical damage to or destruction of a house, barn, garage, or other improvement on a property

litigation

process a judge or jury makes a decision based on the facts from both sides

Chapter 27 of the Texas property code requires that buyers follow certain procedures in order to ________.

recover damages for construction defects

How long is a member of TREC's term

six years

why are lenders required to provide the loan estimate and closing disclosure forms to loan applicants and borrowers?

so borrowers can compare loans and make decisions regarding the affordability of loans offered

according to the addendum for property subject to mandatory membership in a property owners association, within how many days of receiving subdivision information does the buyer have to terminate the contract?

three

what's the purpose of the subdivision information, including resale certificate for property subject to mandatory membership in a property owners association form?

to provide information about the property owners association fees, rules of governance, issues and finances

How the escrow funds will be released in the case of terminated contract

Demand

The Seller's Temporary Residential Lease allows the seller to lease the property for up to 120 days past closing.

False

It's important that crops and other assets be correctly entered on the __________ Contract

Farm and Ranch

For which of the following homes should the New Home Contract (completed construction) be used?

Harvey is purchasing a home that was recently built.

The parties were scheduled to close January 15 but now wish to close January 10. What Texas form must be completed and signed?

No form is needed, as long as the parties agree and have met all of their contractual obligations.

Which of the following describes the Annexation section of the title notices paragraph provided in the TREC One to Four Family Residential Contract (Resale) in Texas?

Required by Texas Property Code if property may now or later be included in the extra territorial jurisdiction of municipality

Which of these is part of the "subdivision information" as defined in the Addendum for Property Subject to Mandatory Membership in a Property Owners Association?

Resale certificate

The buyer need to move into the property they are purchasing 10 days prior to closing.

Seller shall deliver possession of the property to buyer according to a buyer's TREC promulgated temporary lease form

The seller needs to stay in the home four days after the two parties close on the property.

Seller will deliver possession of the property to buyer according to a seller's TREC promulgated temporary lease form

The buyer has been looking forward to closing on her new home and plans to move in as soon as the paperwork is signed

Seller will deliver possession of the property to the buyer upon closing and funding of the property

TREC is charged with passing rules to enforce, interpret and explain the provisions of which of the following

Texas Real Estate License Act

Vanessa has had her Texas real estate broker's license for 12 years. What law or organization stipulates the requirements Vanessa must follow to keep her license?

Texas Real Estate License Act

The Addendum for Property Subject to Mandatory Membership in a Property Owners Association is meant to do which of the following?

Make buyers aware of the CC&Rs that govern the neighborhood of the house they're purchasing

The __________ method of property description is used for the Farm and Ranch Contract

Metes and Bounds

Oliver has elected to exercise his unrestricted right to terminate his sales contract under Paragraph 5 of the contract and has notified the seller of this decision using the Notice of Buyers Termination of Contract. He delivered the notice prior to the expiration of the option period. Given this information, which of the following statements is true?

Oliver will have all of his earnest money refunded.

how many "back up" offers can be submitted on one Addendum for "Back-Up" Contract form?

One

Finley's tenancy comes with an automatic renewal clause. Which of the following type of tenancy does he have?

Periodic estate

Which of the following insures the buyer against loss because of title issues and must be furnished by the seller to the buyer?

The title insurance owner's policy

What's the purpose of the Special Provisions paragraph of the One to Four Family Residential Contract (Resale)?

To clarify facts in the contract

What is the purpose of the Broker Lawyer Committee?

To draft contract forms

What is the purpose of the Addendum for Reservation of Oil, Gas and other Minerals?

To give the seller the opportunity to reserve all or a portion of the property's mineral estate

TREC's Sellers Temporary Residential Lease Form is used anytime the seller wishes to remain in the property past closing.

When that happens, the buyer who at that point owns the property, is considered 'the landlord' in the temporary lease, under 'parties' and the seller is the 'tenant'

In which of the following Texas real estate transactions must a Seller's Temporary Residential Lease be completed?

When the seller will remain in the property after closing

In the TREC One to Four Family Residential Contract (Resale), the Title Policy paragraph has checkboxes to indicate which of the following?

Whether the seller or buyer will pay for the title policy

Chip is your developer client who's about to sell several lots in his new subdivision. He asks you what his disclosure requirements are. How do you answer him?

You must disclose all known defects and issues that would impact a buyer's decision to buy

quentin is the seller in a texas contract for deed agreement. What type of rights to the property does he have during the contract for deed process?

legal title rights

The New Home Contract (Completed Construction) doesn't contain __________ in the property section, which is a key difference between this contract and the One to Four Family Residential Contract.

Improvements, accessories or exclusions

Which of the following statements about the owner's title insurance policy is true?

It insures the buyer against loss due to title defect under the provisions of the title policy, which are subject to existing exclusions and a list of exceptions

Which of the following is true about the resale certificate that the condominium owners association should prepare?

It must have been prepared within the last 3 months.

arbitration

both parties present their argument to an unbiased third party who then makes a determination after hearing both sides of the story

Per the addendum for property subject to mandatory membership in a property owners association form, who pays any deposits for reserves that might be required by the property owners assocation?

buyer

Which of the following statements about waiving the contingency and the Addendum for Sale of Other property by buyer is true?

buyers can waive the contingency, but they have to notify the seller and make an additional deposit

the court has granted Mr. Kennedy the authority to follow through with his deceased client's wishes and sell the property. what type of deed will Mr. kennedy use to convey the property?

executor's deed

accrued items

expenses that have been incurred but aren't due yet, such as property taxes

Mediation takes place in a courtroom with a judge

false

a holographic will is a will that is

handwritten

Mediation

is the process whereby an unbiased third party facilitates communication between disputing parties to enable an agreement that is satisfactory to both parties