TREC Promulgated Contract Forms #351 Final
What is NOT included in unimproved property contract Form 9-11? Termination option Background check on the buyer Federal tax required Default
Background check on the buyer
When there are problems with the title of a property, this condition is called: Possession Performance Clouds on title Waste
Clouds on title
Marcy is 17 and married. Her spouse is stationed in the Middle East. She purchased a home shortly before Stan, her husband returns to the United States. Select a problem that exists with this situation. Offer and acceptance issue Competency issue Consideration issue This is a valid binding contract
Competency issue
If the tenant of either Temporary Lease Form fails to comply with any provisions of the lease they would be considered to be in: Default Holding over Indemnity Compliance
Default
If a buyer failed to meet the terms of the contract the buyer becomes a: Tendered buyer Default buyer Default seller Tendered seller
Default buyer
Fees that are NOT part of escrow would include: Interviews conducted to the neighboring residents of the property in question to determine if they know of any disputes within the neighborhood Survey fees Fees to prepare all the closing documents Bank required inspection fees
Interviews conducted to the neighboring residents of the property in question to determine if they know of any disputes within the neighborhood
Failure to notify the Commission of an affiliation with another company: Is deemed a violation of TREC regulations Is okay as long as the other company has been approved by TREC Is not considered a violation Is okay if notice is given within 60 days after the contract
Is deemed a violation of TREC regulations
When only one party of a performing couple accepts an offer: It remains an offer It becomes a contract It is a listing It is a counteroffer
It remains an offer
Select the correct statement regarding mineral rights: Mineral rights may not be passed on to future buyers Mineral rights may not be passed on to future generations Land with mineral rights attached has more value to the buyer Land with mineral rights attached has less value to the buyer
Land with mineral rights attached has more value to the buyer
In the State of Texas who is allowed to use a customized real estate contract? The real estate brokerage company The salesperson The broker Lawyers licensed to practice in Texas
Lawyers licensed to practice in Texas
One of the benefits for those who serve in the military is: Obtaining a low guaranteed home loan through Department of Veteran Affairs Free housing Purchasing multiple homes All of these
Obtaining a low guaranteed home loan through Department of Veteran
What does "acceptance of property condition mean"? "As is" Without any defects With all defects All of these
On the Form there are two boxes: AS IS and AS IS with these specific repairs and treatments. If the second box is not checked by the buyer with a list the items needing repair, then everything is "as is".
When receiving an offer, Julie is allowed to: Stall an offer Tell a buyer she won't present it because the offer is too low Provide no advice for low offers Provide advice to her client regarding a ridiculous offer
Provide advice to her client regarding a ridiculous offer
The commission may issue a temporary moral character determination. This is called: Provisional determination Prohibition ruling Protective determination Protected determination and ruling
Provisional determination
When do the requirements of the Texas property code NOT apply relating to security devices? When the residential lease is 90 days or less When the residential lease is 120 days or less When the residential lease is more than 30 days When the residential lease is more than 1 week
The security device clause only applies when the temporary lease exceeds 90 days or more.
TOE refers to: Today or eventually Time of event Trust options evaluated Time is of the essence
Time is of the essence
In what section would you find the escrow completion date in the contract? Under miscellaneous In the address section With the terms of the sale Under the closing section
Under the closing section
All of the following would be included in Addendum 10-6 with the exception of: A closing date is specified Addendum verifies there is a contingency in the agreement A statement of what happens if the buyer's current house doesn't sells and the buyer backs out Under this arrangement the earnest money is never returned
Under this arrangement the earnest money is never returned
A contract is considered executed? When both parties agree to the negotiated contract and both parties sign the final sales contract When a buyer comes forth with an offer When a seller counters an offer with several changes When the parties involved verbally agree to mutual terms
When both parties agree to the negotiated contract and both parties sign the final sales contract
Schedule D of the title commitment would show: Liens on the property Who owns the title policy Claims on the property The legal description of the property
Who owns the title policy
May a person not living in Texas hold a license to practice real estate in Texas? As long as they pay the $10 fee Yes, if they have been a resident of a municipality whose boundary is on the Texas border and all other requirements are met No, a person must be a resident of Texas for the required period of time No, any person wishing to practice real estate in Texas must also reside in Texas
Yes, if they have been a resident of a municipality whose boundary is on the Texas border and all other requirements are met
Texas has lost about one-half of its original wetlands as a result of________________. agricultural conversions overgrazing urbanization all of the above
all of the above
Inserting the phrase "this offer is subject to cancellation by the buyer at any time prior to acceptance" will show the seller all of the following except: Quick action is necessary The seller should make a decision The seller should accept or make a counter The buyer is not really interested
his shows that the buyer is not only interested but they want a quick response from the seller.
All of the following statements are incorrect with the exception of: The VA allows the veteran/buyer to take out a second mortgage The VA is allowed to obtain any form of financing to make up the property's sale price from the appraisal's price The veteran is allowed to pay cash for the difference between the appraised value and the asking price
The VA is allowed to obtain any form of financing to make up the property's sale price from the appraisal's price
Which of these would NOT be a requirement of a lender for a standard mortgage loan? A FICO score of at least 625 A 30% down payment An appraisal to determine the value of the home Verification of employment
A 30% down payment
When a seller holds a lien on the property, the right of foreclosure is specified in: First Right of Refusal Power of Attorney A Deed of Trust A Living Will
A Deed of Trust
The exception to using the State of Texas promulgated forms: A lawyer licensed to practice in Texas A buyer drafting his/her own real estate contract A former real estate professional who is now the owner/broker of a real estate firm A seller drafting his/her own real estate contract
A lawyer licensed to practice in Texas
What would be an example of a good faith effort that the court would take into account and not penalize a party for failing to complete? The party deliberately failed to meet the requirements One party stopped answering their phone in efforts to stall proceedings The party in question went on an extended vacation A party suffered a serious heart attack and was in a coma for two weeks
A party suffered a serious heart attack and was in a coma for two weeks
The Texas VA Loan Program has what kind of rating from the Better Business Bureau? C B A A+
A+
Bill has a listing that is located on the coast of Texas. Which form might he use to accompany a purchase and sale agreement? Addendum for Coastal Property Notice to Prospective Buyer Notice of Buyer's Termination of Contract Loan Assumption Addendum
Addendum for Coastal Property
The unimproved property contract will not have: Seller's disclosure notice of construction Seller's disclosure of lead-based paint Seller's disclosure of repairs needed All are correct
All are correct
A void contract is: One that is not in effect Not binding Not valid All of these
All of these
For a short sale to occur the lender who has a lien on the property being sold: Must sign a lienholder's consent and agreement form The lender who has a lien on the property being sold must provide the seller with a signed release on the lien The lender must legally allow the owner transfer to be legally recorded with the county All of these
All of these
Patrick is a tenant whose lease just ran out. He is served by the landlord a notice that he must move within three days. What are Patrick's rights? The landlord does not have to renew Patrick's lease The landlord does not need cause for a non-renewal of a lease The landlord may evict when unauthorized roommates are also residing in the unit All of these
All of these
Revocation means: To renounce To annul To rescind All of these
All of these
Select the correct statement regarding rollback taxes and Section 13 of the New Home Contract: If additional taxes are due on the property because of development of the property the seller will pay the additional tax The seller is the developer The subject home is a new home All of these
All of these
The standard Schedule B exclusions are: Deed restriction Stand by fees Taxes and assessments All of these
All of these
What happens if the seller needs to remain in the home after the closing date? The TREC Form 15-5 Seller's Temporary Residential Lease is filled out and signed by all involved parties TREC Form 15-5 is attached to the purchase and sales contract The addendum TREC FORM 15-5 is signed and dated by all parties All of these
All of these
Which is an example of a restriction that an HOA can have and state in an HOA Membership Addendum 36-8? No outside barbequing No leaves in the street during autumn Paying $11,000 annually for membership All of these
All of these
Zella is writing up the TREC addendum for the rototiller that will be included in the sale of the house and property. What information should she include on the addendum? The price the seller is asking Where the rototiller is currently being stored A detailed description of the rototiller All of these
All of these
When may a buyer back out of a contract after receiving a signed HOA development agreement? If the seller becomes aware of material changes in the subdivision information and notifies the buyer If any of the information provided the buyer is too restrictive If either of the HOA material changes or is incorrect before closing All of these are correct
All of these are correct
Which of the following would not be considered a common expense assessment? Yearly assessment for the upkeep on the grounds Unit owner patio furniture for her deck Association fees Special assessments
Another good reason to read over the fine print before buying into a condominium is to know what other additional costs you will be paying as the owner of the condo.
Gabe is not pre-approved for a loan. His realtor should suggest what be included with the offer for the house since Gabe is not pre-approved? A notation that Gabe may not be approved The TREC Form 40-6 Third Party Financing Addendum for credit approval A petition to speed up the transaction Additional earnest money
Financing Addendum for credit approval
The purpose of Form 24-13 is for? New homes sales Established homes Improvements made to the home Equipment that goes with the sale Form 24-13 New Home Contract (Completed) is for new homes.
Form 24-13 New Home Contract (Completed) is for new homes.
The term to describe the arrangement that is recommended by a judge for two or more parties settle their disagreement through a 3rd party to help resolve the conflict is called: Meditation Mediation Medium Mitigation
Mediation
Micky has his house for sale and finds another house. Mickey makes an offer on the house that is found and puts an addendum attached to his offer. This addendum states that Mickey may back out of his offer if his present home does not sell. Mickey's house DOES SELL but in the meantime Mickey finds another house he likes better so he backs out of the first offer he made. What is the situation now? Mickey is in default Mickey must choose between the two houses Mickey's first offer automatically terminates Mickey's second offer is the valid one
Mickey is in default
When the buyer and the seller use TREC Form 16-5, the Buyer's Temporary Residence Lease Form, who may give legal advice on the interpretation of this form? The real estate licensee The insurance company involved The attorney for each party TREC because they developed the form
The attorney for each party
A Texas business entity may only act as a broker if: The business has been in operation for at least 10 years They pay a $10 fee They are from another state The business holds a license
The business holds a license
To obtain an environmental report from a professional, who is responsible for paying this report? Always it is the seller The buyer The real estate agency The State of Texas
The buyer
Any amendment to the contract must be ratified by: The buyer The seller The real estate salesperson The buyer and the seller
The buyer and the seller
Aaron, the buyer tells the seller he is selling the property "as is": The buyer should insist on full disclosure before agreeing to the sale The buyer should now negotiate a lower price The buyer should be relieved she has found her fixer-upper The buyer should have the house inspected immediately after closing
The buyer should insist on full disclosure before agreeing to the sale
All may be reasons the owner would become the lender with the exception of: The buyer is a relative of the owner The tenant wants rent to apply to the purchase of the subject property The buyer has bad credit The buyer would hold title to the property
The buyer would hold title to the property
Who must sign and date the sales agreement? The buyers and the sellers The sellers and their attorney The buyers and their attorney The licensee that is involved with the sale
The buyers and the sellers
All of the following would be necessary regarding the affidavit with the exception of: A written document is necessary The document must be signed by the seller stating the information is true The buyer would be given a copy of the affidavit The county Treasurer must also be given a copy
The county Treasurer must also be given a copy
All of the following are TREC earnest money requirements with the exception of: The earnest money is held by the third party The earnest money is held by the seller The earnest money is held by the broker in the firm's trust account The earnest money may be held by an escrow company
The earnest money is held by the seller
Wetlands cover about ____________________acres of Texas. 7.6 million 6.1 million 4.2 Million 400
7.6 million
How are surveys negotiated? Between the buyer and seller The buyer pays The bank will pay for the survey The seller pays
Between the buyer and seller
What is mutual termination? The buyer has decided to end the contract The seller has decided to end the contract Both parties have decided to move ahead with the sale Both parties have decided to terminate the contract
Both parties have decided to terminate the contract
Once a real estate contract is formed: One party must perform Both parties must perform One party may back out Either party may back out
Both parties must perform
Crops would be listed under: Accessories Exclusions Easements Reservations
Exclusions
Earl is including a labeled photograph showing all the machinery that he is including in the sale of his farm property. This would be considered a: Sales document Contract Testimony Exhibit
Exhibit
Shana is at an open house and feels uneasy because the real estate professional recently did not have any business cards nor was he wearing any name tag. Instead, he scribbled down a phone number to reach him. What is the best way for Shana to make sure this person is properly licensed? Ask the homeowner of the property Go to TREC's website to learn if this licensee is listed on their licensee list or call TREC's toll free number Assume the person is licensed Call the person and test their knowledge
Go to TREC's website to learn if this licensee is listed on their licensee list or call TREC's toll free number
When a client needs additional coverage with their standard title policy they would need to: Have a specific endorsement added to their standard title policy Apply for an additional policy Place a lien on their property All of these
Have a specific endorsement added to their standard title policy
Title and closing fees would not cover: Cost of a title search Issuance of the title commitment Title insurance policy Hazard insurance
Hazard insurance
When might the commission waive the education requirement for an applicant? If the applicant has been licensed in Texas prior as a broker or salesperson within 6 months preceding the date the application is filed If the applicant has been licensed in the past 3 months If the applicant is a college graduate If the applicant has already passed the state exam
If the applicant has been licensed in Texas prior as a broker or salesperson within 6 months preceding the date the application is filed
What does the rollback tax statement say in Section 13 in Form 14-12 New Home? If there are additional taxes on the property the seller (developer) will pay the additional tax The condominium buyer agrees to pay all additional prorations The condominium association pays additional tax None of these
If there are additional taxes on the property the seller (developer) will pay the additional tax
The broker representing the owner: Places their work with the owner first Places their interests with the buyer first Places their interest first with any potential buyer Puts themselves ahead of who they represent
Places their work with the owner first
Paul is using a TREC form for a contract that is dated February 2003. Priscilla who works in the same office has a TREC form dated May 2014. Which form is correct? Paul's form because it was the original TREC contract form Paul's form because it allows him to fill in the blanks Priscilla's form because this form is the latest updated TREC form and the most current Paul's because he paid TREC for the right to use this older form
Priscilla's form because this form is the latest updated TREC form and the most current
The term to describe a home warranty that buyers may purchase is called: Residential Service Contract Commercial Indemnity Clause Residential Indemnity Clause Probate Agreement
Residential Service Contract
The State's Statute of Limitations time period is decided by: A judge hearing the case The State The jury The Federal government
The State
Wendy, the potential buyer has an option fee attached to her offer. During the option period she has all of the following options with the exception of: She may terminate her offer without reason She may get an option refund within 10 days of paying the option fee She has the right to have the property inspected She may have the property re-inspected
She may get an option refund within 10 days of paying the option fee
What is the length of the term for a public member on the Broker-Lawyer Committee? Two years Four years Five years Six years
Six years
What would be listed under Section 6, Exception Documents? A portion of the owned property to be excluded from the sale The items within the house the rancher wants to sell The farm animals that are pets The right for the farmer to continue fishing on the stream after the property is sold
Some of the rancher's land is located away from the main location and leased to other ranchers.
TREC provides: Residential leases Forms for commercial property in all states Property management contracts TREC real estate forms
TREC only provides forms for a real estate transaction that are intended to be used by trained licensed real estate brokers or salespersons
All of the following would be considered practicing law with the exception of: Telling a client they must seek legal counsel Giving advice to a client who is appearing before a judge Preparing a legal document Advising a client on what the legal document they are looking at is all about and what they need to do
Telling a client they must seek legal counsel
Where are the applicant's fingerprints sent to? Texas Department of Justice Texas Department of Public Safety Texas Department of Labor and Industries Texas Department of Internal Affairs
Texas Department of Public Safety
What is not covered by Addendum 44-2 for Oil, Gas, and Other Minerals? Sale of those rights by addendum Addendum for a Backup of these rights Water, sand, and gravel are covered normally by standard contracts Addendum for Reservation of Oil, Gas, and Other Minerals covers water, sand, and gravel
Water, sand, and gravel are covered normally by standard contracts