Promulgated Contract Forms

The client

A Texas licensee may only strike through a clause or line item if it is not applicable to the transaction and the deletion is at the request of ______. The buyer's agent The client The managing broker The seller's agent

A (Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement)

Toby is a seller who is willing to allow the buyer to assume his mortgage. In addition, to the Loan Assumption Addendum, what other addendum might Toby consider using if he'd like to limit his responsibility if the buyer defaults on the loan? A. Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement B. Non-Realty Items Addendum C. Seller Financing Addendum D. Third Party Financing Addendum

C (The selection of the title company and who will pay for the title policy)

What about the owner's policy of title insurance can be negotiated in the TREC One To Four Family Residential Contract (Resale)? A. The amount of the title policy coverage and when the title policy will be issued B. The selection of the title company and the amount of the title policy coverage C. The selection of the title company and who will pay for the title policy D. Who will pay for the title policy and when the title policy will be issued

Exception

When a real estate transaction involving a governmental agency takes place, the forms used in the transaction will need to be provided by that agency. This is what is known as an ______ to TREC's rule. Addition Amendment Exception Omission

Both parties

Wendell's buyer client has made an offer on a property that's already under contract. Wendell needs to add the TREC Addendum for Back-Up Contract to the sales contract. Who's required to sign this addendum? Both parties Nobody The attorneys for both parties The buyer of the first contract

Normal wear and tear

Under a residential service contract, if anything goes wrong with covered appliances or systems due to ___________________ during the year that's covered, the issuer will provide repair or replacement. Damage to the dwelling Natural disasters Normal wear and tear War or civil unrest

VA Entitlement

A _____________ is a financial guaranty from the government to repay a portion of the home mortgage in the event of default. Loan assumption Mortgage liability Release of liability VA entitlement

D (Whether the buyer or the seller will pay for the title policy)

Besides the name of the title company, which of the following information is needed in the Title Policy paragraph of the TREC One To Four Family Residential Contract (Resale)? A. A list of exceptions B. Amount of the insurance coverage C. Date the title policy will be issued D. Whether the buyer or the seller will pay for the title policy

D (The termination option won't be a part of the sales contract)

Frank is a buyer who wants an option to purchase but doesn't want to pay the seller an option fee. He puts "0" for the option fee amount in Paragraph 23 Termination Option in the TREC residential resale contract. What does this mean? A. The buyer retains the right to terminate the contract for any reason. B. The option period will be limited to three days. C. The seller will have the right to terminate the contract for any reason. D. The termination option won't be a part of the sales contract.

Innocent Misrepresentation

Megan, a seller, tells the party buying her home that the property will soon be part of the public water system. She makes this claim based on erroneous information supplied to her by the city. The buyer relies upon this information and moves forward with the purchase of the home. This is an example of ______. Duress Fraud Innocent misrepresentation Undue influence

A (By closing or the number of days specified, whichever is earlier)

According to the Objections paragraph of the TREC One to Four Family Residential Contract (Resale) , how much time does the buyer have to object to title defects after receiving the commitment, exception documents, and survey? A. By closing or the number of days specified, whichever is earlier B. Within 15 days C. Within 30 days D. Within three days of closing

A commitment

Before the title company will issue an insurance policy to a Texas buyer, which of the following must the seller furnish to the buyer? A commitment A copy of the deed An amendment to the contract A Residential Real Property T-47 affidavit

Non-realty items

Items of personal property included in a Texas sale are considered ______ and can be negotiated in an addendum of the same name. Accessories Exclusions Improvement Non-realty items

D (Write "rejected" on Kevin's offer)

Your seller client, William, had multiple offers to consider. He decided to move forward with Ryan's offer, and reject the offer from Kevin. What should your client do with the offer from Kevin? A. Ignore the offer from Kevin B. Send a non-acceptance letter to Kevin C. Sign the offer from Kevin D. Write "rejected" on Kevin's offer

Valuable

xWhich of the following types of consideration can be an exchange of money for a promise, an exchange of an item of value for money, or an agreement between the parties to do or not do something? Good One-time Valuable Valueless

C (Yes, because Jenna is acting on behalf of her spouse)

Jenna, a license holder, is acting on behalf of her spouse, Dan, who's making an offer on a property. Is Jenna required to provide a written license holder disclosure notice to the other party in the transaction? A. No, because Jenna is not a party to the transaction. B. No, because the disclosure does not apply to spouses. C. Yes, because Jenna is acting on behalf of her spouse. D. Yes, because the disclosure is required for all transactions.

C ("A VA entitlement is a financial guaranty from the government to repay a portion of a VA loan in the event of default. Because the VA entitlement is a specific amount, the parties may apply to have the VA entitlement restored once the loan is assumed")

Zelda is a Texas licensee working with a buyer and she's explaining the Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement. Which of the following explanations accurately describes what restoration of seller's VA entitlement means? A. "A VA entitlement is a financial guaranty from the government. Restoration of the Seller's VA entitlement means that the buyer becomes eligible for the protection that the VA loan offers." B. "A VA entitlement is a financial guaranty from the government. Restoration of the seller's VA entitlement means that the seller can qualify for loans to restore a fixer-upper." C. "A VA entitlement is a financial guaranty from the government to repay a portion of a VA loan in the event of default. Because the VA entitlement is a specific amount, the parties may apply to have the VA entitlement restored once the loan is assumed." D. "A VA entitlement is a financial guaranty from the government to repay a portion of a VA loan in the event of default. Restoration of the seller's VA entitlement means that the seller is released from liability for the VA loan."

A (In the Buyer's Credit Approval paragraph)

Allison is helping her buyer complete a Seller Financing Addendum to a sales contract. Where should she put that the buyer needs a $40,000 loan at a 6% fixed rate from the seller to be paid back in 120 monthly payments? A. In the Buyer's Credit Approval paragraph B. In the Credit Documentation paragraph C. In the Deed of Trust paragraph D. In the Promissory Note paragraph

the seller

Although who pays for the title policy can be negotiated, in Texas, it's customary for the ________ to pay for the title policy that the seller furnishes to the buyer. The brokerage The buyer The seller Title company

B (No, because license holder disclosure is not required when acting on behalf of siblings)

Brad, a Texas license holder, is acting on behalf of his brother, Ben, who's selling his home. Is Brad required to provide a written license holder disclosure notice to the other party in the transaction that he's acting on his brother's behalf? A. No, because Brad is not allowed to represent family members in a sales transaction in Texas. B. No, because license holder disclosure is not required when acting on behalf of siblings. C. Yes, because Brad is acting on behalf of his sibling. D. Yes, the disclosure is required for all transactions.

A (Loan Assumption Addendum)

Buyer Nick is making an offer to purchase a home for $250,000. He's paying $50,000 of that in cash as closing, and would like to assume the sellers' mortgage loan of $200,000. Which addendum to the TREC residential One to Four Family (resale) contract will Nick need to complete? A. Loan Assumption Addendum B. Seller Financing Addendum C. Short Sale Addendum D. Third Party Financing Addendum

Consideration

Carl and Sadie, who are neighbors, got into a disagreement about early-morning noise on the weekends. The two came to an agreement: Carl promised to not mow the lawn before 10 a.m., and Sadie promised to put bark collars on her dogs in the early morning hours. Their promises represent the ______ in their agreement. Consideration Flaw Legal competency Undue influence

B (Give notice to the buyer that the contract is terminated within seven days of the expiration of the delivery date)

Chandra is a seller who is considering financing a loan for a buyer. According to the Seller Financing Addendum, the buyer agreed to deliver credit documentation within five days of the effective date of the contract. That time has passed, and Chandra has not received the credit documentation, so she decides to terminate the contract. What must Chandra do next? A. Collect the earnest money, since the buyer is in breach of contract. B. Give notice to the buyer that the contract is terminated within seven days of the expiration of the delivery date. C. Nothing; the contract will automatically terminate. D. Return the earnest money to the buyer.

D (The appraised value of the property or the reasonable value of the property)

Government-insured loans have an additional provision, which is described in paragraph D of the Third Party Financing Addendum to the TREC residential One to Four Family (resale) contract. Specifically, the buyer is not obligated to purchase the property unless the buyer is given a written statement containing what information? A. Buyer approval B. Creditworthiness of the seller C. Property approval D. The appraised value of the property or the reasonable value of the property

15 days

How many days after receiving the buyer's list of objections to defects, exceptions, or encumbrances to title does the seller have to cure the objections under the TREC One to Four Family Residential Contract (Resale)? 10 days 15 days 20 days Five days

20

How many days does the Texas seller have to deliver a "commitment for title insurance" to the buyer under the terms of the TREC One To Four Family Residential Contract (Resale)? 10 15 20 35

D ("Seller financing is when the seller extends credit to the buyer for the purchase of the property. The buyer then pays back the loan with interest, over time")

How would a licensee explain seller financing to a buyer? A. "Seller financing is another term for comparing the listing price of the property to the market." B. "Seller financing is when the buyer assumes the seller's mortgage loan." C. "Seller financing is when the seller accepts the buyer's third-party financing arrangements as part of the offer." D. "Seller financing is when the seller extends credit to the buyer for the purchase of the property. The buyer then pays back the loan with interest, over time."

D (Nothing; the buyer's credit is deemed approved if the seller does not terminate the contract within seven days of the date of delivery of the credit documentation)

If Alex, a seller, approves of the buyer's credit documentation, which the buyer delivered on time according to the terms of their Seller Financing Addendum, what must Alex do to show his approval of the seller financing? A. Alex must give notice that the contract is terminated. B. Alex must give notice to the buyer that the buyer's credit has been approved. C. Alex must return the credit documentation to the buyer. D. Nothing; the buyer's credit is deemed approved if the seller does not terminate the contract within seven days of the date of delivery of the credit documentation.

D (Kathleen Leary and Trent Carpenter are unmarried persons buying a property together)

If buyers are identified as "Kathleen Leary and Trent Carpenter, as tenants in common," which of the following is true? A. Kathleen Leary and Trent Carpenter are divorced from one another. B. Kathleen Leary and Trent Carpenter are married. C. Kathleen Leary and Trent Carpenter are partners. D. Kathleen Leary and Trent Carpenter are unmarried persons buying a property together.

B (Buyer's right to object)

If the buyer doesn't object in writing within the time allotted in the Objections paragraph of the TREC One to Four Family Residential Contract (Resale), which of the following is waived? A. Buyer's objections to title defects B. Buyer's right to object C. Buyer's right to terminate the contract D. Seller's duty to cure objections

C (The buyer must specify the exact amount in the contract)

If the buyer is putting earnest money down, which of the following statements is true? A. The buyer can require the seller to subtract that amount from the asking price. B. The buyer has to pay for an escrow account to be set up and managed. C. The buyer must specify the exact amount in the contract. D. The earnest money must be in the form of cash and personally delivered to the seller.

Earnest money

If the noteholder fails to consent to the assumption of the loan, either party may terminate the contract by notice to the other party and the ______________ will be refunded to the buyer. Cash down payment Earnest money Monthly loan payment Taxes and insurance interest payment

C (Residential Real Property Affidavit T-47)

If the seller wants to provide an existing survey of the property, what other document is required under the Title Policy and Survey section of the TREC residential resale contract? A. Lead-Based Paint Addendum B. Notice to Prospective Buyer C. Residential Real Property Affidavit T-47 D. Seller's Disclosure of Property Condition

D (The time for delivery is automatically extended by 15 days, or to three days before closing, whichever occurs earlier)

If the title company doesn't deliver the title commitment within 20 day after receiving a copy of the TREC One To Four Family Residential Contract (Resale), what happens next? A. The buyer may terminate the contract. B. The contract is automatically terminated. C. The seller may terminate the contract. D. The time for delivery is automatically extended by 15 days, or to three days before closing, whichever occurs earlier.

C (A lease that is for one year or less)

In Texas, which of the following real estate contracts does not have to be in writing to be enforceable? A. A contract for the sale of goods totaling $500 or more B. A contract that conveys the ownership or interest in real property C. A lease that is for one year or less D. A prenuptial agreement

Cash down payment

In paragraph 3 of the TREC One to Four Family Residential Sales Contract (Resale), the______ plus the sum of all financing will equal the sales price offered. Broker's commission Cash down payment Cost of the title policy Earnest money

D (The first payment due after closing)

In the Loan Assumption Addendum, when does the buyer agree to pay the initial payment toward the loan? A. At closing B. By the end of the month of closing C. By the first of the month after closing D. The first payment due after closing

B (Whether the seller or the buyer will pay for the title policy)

In the TREC One To Four Family Residential Contract (Resale), the Title Policy paragraph has checkboxes to indicate which of the following? A. To indicate which exceptions apply to the title policy B. Whether the seller or the buyer will pay for the title policy C. Whether the title policy will be issued to the seller or to the buyer D. Whether the title policy will issued in the amount of the sales price or in the amount of the financing

A (Good consideration is a gift)

In what way does good consideration differ from valuable consideration? A. Good consideration is a gift B. Good consideration is a promise to do something C. Good consideration is llegal. D. Valuable consideration must always be in cash, but good consideration may be a loan.

D (Yes, whether or not the property is subject to mandatory membership in any property owners association(s))29

Is any response required in the sub-paragraphs of the Title Notice section of the TREC One to Four Family Residential Contract (Resale)? A. No, these sub-paragraphs do not require any additional information in the contract B. Yes, whether or not the property is in a public improvement district C. Yes, whether or not the property is situated in a statutory tax district D. Yes, whether or not the property is subject to mandatory membership in any property owners association(s)

A lawful objective

Jack and Al, who are neighbors, enter into an agreement not to permit their real estate agents to sell their homes to families of color. This agreement lacks ______, so it's void. A lawful objective A mutual agreement A purpose Two parties

Property Condition

Janice is helping her buyer, Sue, make an offer to purchase Tom's property using the TREC One to Four Family Residential Contract (Resale). Where in the sales contract can Janice reserve the right for Sue to access the property for inspections? Inspections and Disclosures Possession Property Condition Representations

Tortious interference

Joan decided to bring a lawsuit against you since you failed to present her with the offer in a timely manner. What type of lawsuit is this? Unintentional tort Tortious interference Defamation Strict liability

Letter of non-acceptance

Juan and Natalie are preparing to send written notice that they are not accepting an offer from a potential buyer, but that they'd like the offeror to consider submitting a new offer (the couple even gives the offeror some ideas of how to make the new offer more acceptable). What is the type of the letter they will send? Letter of first recognition Letter of first refusal Letter of non-acceptance Letter of reference

June

June is buying Tom's property. Who will pay for a roof inspection if June hires an inspector (who charges $300), according to the Property Condition section of the TREC One To Four Family Residential Contract (Resale)? June June's agent The listing firm Tom

D (Karen must withdraw the counter-offer to Fred before responding to James's offer)

Karen, the seller, has sent a counter-offer to Fred, a potential buyer. Before Fred accepts the counter-offer on the Texas property, Karen receives another offer from James that is even better. She wants to accept James's offer. What should Karen do? A. Karen is free to counter the offer from James. B. Karen must let Fred know of the offer from James. C. Karen must wait to hear from Fred. D. Karen must withdraw the counter-offer to Fred before responding to James's offer

D (Third Party Financing Addendum)

Kay Waters is seeking first and second mortgage loans from her bank and a mortgage broker in order to finance the purchase of a property. When she completed the TREC sales contract, which addendum will she use to describe her financing? A. Loan Assumption Addendum B. Seller Financing Addendum C. Short Sale Addendum D. Third Party Financing Addendum

D (A TREC-promulgated addendum form)

Kimmy's buyer clients want the seller to leave behind the workbench that is in the basement—something that was not originally identified as an inclusion in the original Texas sales contract. Which of the following will Kimmy use to indicate the change? A. A letter of request from the buyers to the seller B. An amendment form C. An electronically generated memo D. A TREC-promulgated addendum form

C (Residential Real Property Affidavit T-47)

Koby is a Texas seller who has a recent property survey that he would like to provide to the buyer's lender and title company. Koby swears and notarizes a statement about any changes to the property since the existing survey. What document does Koby use to provide his statement? Lead-Based Paint Addendum Notice to Prospective Buyer Residential Real Property Affidavit T-47 Seller's Disclosure of Property Condition

A ("This means that the deadline for depositing the option fee and the time frame for the option period will be strictly enforced. You don't want to miss these deadlines")

Nancy is explaining the termination option to her buyer client. How would she explain that "time is of the essence" for the termination option? A. "This means that the deadline for depositing the option fee and the time frame for the option period will be strictly enforced. You don't want to miss these deadlines." B. "This means that the time frame for the option period must be three days." C. "This means that you can negotiate the time period for this option with the seller." D. "This means that you must comply with these terms within a reasonable amount of time."

D (Nick is required to disclose his relationship to the seller in writing prior to the parties entering into the contract)

Nick, a Texas license holder, is helping his son, Peter, locate a home he can afford to buy and is acting as Peter's agent. Peter has found a property that he wants to make an offer on. Which of the following statements regarding this situation is true? A. As a license holder in Texas, Nick is not allowed to represent family members in a sales transaction. B. Nick does not have to disclose his relationship to the seller because he is acting as the buyer's agent. C. Nick has to deliver Peter's offer in person to the seller and disclose his relationship if the seller accepts the offer. D. Nick is required to disclose his relationship to the seller in writing prior to the parties entering into the contract.

D (The termination option will not be part of the contract)

Robin, a buyer, has offered to pay an option fee to the seller within three days of the effective date of the contract. Robin put her check for the option fee in the mail and, unfortunately, the seller received it six days after the effective date of the contract. What happens next? A. The contract is automatically terminated. B. The earnest money is refunded to Robin. C. The option period is extended for an additional three days. D. The termination option will not be part of the contract.

Must be a lawyer

Samantha, a licensee, helped her client buy his home by assisting with legal advice. Assuming Samantha hasn't violated any laws, we know that Samantha ________. Doesn't need a real estate license Must be a lawyer Must have a broker license Must have at least a sales agent license

A (Simone must disclose in writing to the other party that she holds a real estate license)

Simone is a trustee for her children's trust fund. Simone is also a broker. When she buys or sells investment property on behalf of that trust, which of the following is required by Texas law? A. Simone must disclose in writing to the other party that she holds a real estate license. B. Simone must disclose that she is a trustee. C. Simone must provide a copy of her license to the other party. D. Simone must verbally inform all parties that she holds a real estate license.

C (In the Sales Price section)

Soon-Yi Chin is making an offer to purchase a three-bedroom, three-bath house on the outskirts of Austin. She is offering $270,500 for the property. Where on the TREC residential One to Four Family (resale) sales contract should she indicate the price she's offering? A. In the Price Offered Addendum B. In the Purchase Offer section C. In the Sales Price section D. In the Third Party Financing Addendum

B (The Kents' purchase offer)

Texas licensee Alexandra is helping her clients, the Kents, fill out the Sales Price section of the TREC residential One to Four Family (resale) contract. What amount will they put in this space? A. The difference between the down payment and loan amounts B. The Kents' purchase offer C. The seller's listing price D. The seller's listing price, minus the down payment and loan amounts

D (Withdraw their counter-offer to Conner)

The Butlers have countered an offer from Conner, but then they receive an even better offer from Audrey. What should the Butlers do before accepting Audrey's offer? A. Accept the offer from Conner. B. Reject the offer from Conner. C. Send a letter of non-acceptance to Conner. D. Withdraw their counter-offer to Conner.

D (Unpaid principal balance of the loan)

The Loan Assumption Addendum requires some information about the seller's mortgage, including the name of the lender, interest rate, and any loan assumption fee, monthly payment, and ______. A. A loan amortization table B. Resolution from the lender's board of directors C. The seller's credit report D. Unpaid principal balance of the loan

Total principal balance

The Loan Assumption Addendum states, "If the __________________ of all assumed loans varies in an amount greater than $500 at closing, either party may terminate this contract and the earnest money will be refunded to buyer unless the other party elects to pay the excess of variance." Assumption fee Monthly payment Tax and insurance payment Total principal balance

$500

The Loan Assumption Addendum to the TREC residential One to Four Family (resale) sales contract allows for a variance of ______ in the amount of the total principal balance at time of closing. $1,000 $1,500 $500 Whatever the parties agree to

(Texas Real Estate License Act) TRELA

The 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 Property Code (Texas Real Estate License Act) TRELA Texas Utilities Code Texas Water Code

Option period

The option fee and the ______ are part of the terms of the termination option in the TREC residential One To Four Family (resale) contract. Broker's fee Closing date Option period Origination fee

C (To make contractual terms crystal clear to the parties involved and to protect the parties involved)

The purpose of promulgated forms in Texas is ______. A. To employ the Texas Broker-Lawyer Committee B. To make all transactions seamless by requiring all transactions to use one form, no exceptions C. To make contractual terms crystal clear to the parties involved and to protect the parties involved D. To prohibit lawyers from creating their own real estate transaction forms

D (Buyers can terminate the contract and have their earnest money refunded)

Under the terms of the TREC One to Four Family Residential Contract (Resale), what recourse do buyers have if a seller is unable to deliver the title commitment and exception documents to the buyer within the allotted time, due to factors beyond the seller's control? A. Buyers can demand that the sales price be lowered. B. Buyers can request the deadline for delivery be extended by another 15 days. C. Buyers can sue the seller for damages. D. Buyers can terminate the contract and have their earnest money refunded.

D (The contract is in writing and signed by the parties)

Valid real estate contacts require competent parties, a legal description, consideration, a lawful objective, mutual agreement, and _______. A. A reasonable sales price B. At least 10% earnest money C. At least three addenda D. The contract is in writing and signed by the parties

D (Third Party Financing Addendum)

Veteran Shirley Beckles is seeking VA-guaranteed financing to purchase a three-bedroom, two-bath home in Dallas. Which addendum will she need to include in the TREC residential One to Four Family (resale) contract? A. Loan Assumption Addendum B. Seller Financing Addendum C. Short Sale Addendum D. Third Party Financing Addendum

B (Give notice to the buyer that the contract is terminated within seven days of the date of delivery of the credit documentation)

Vinnie is a seller who is considering financing a loan to a potential buyer. In the Seller Financing Addendum, Vinnie agreed to a delivery date five days after the effective date of the sales contract. The buyer delivered the documentation on time, but Vinnie doesn't approve the buyer's credit. What must Vinnie do to terminate the contract? A. Collect the earnest money, since the buyer is in breach of contract. B. Give notice to the buyer that the contract is terminated within seven days of the date of delivery of the credit documentation. C. Nothing; the contract will automatically terminate. D. Return the earnest money to the buyer.

B (Evidence of exceptions in the title commitment)

What are the documents that the title company provides to the buyer along with a title commitment? A. Agreement by a title company to issue title insurance under certain conditions B. Evidence of exceptions in the title commitment C. Insurance against financial loss if title to real estate is defective D. Promises that appear on a deed and prohibit or require specific use of the property

C (The deadline for delivery is automatically extended)

What happens if the seller is unable to furnish the buyer with the commitment and exception documents within 20 days after the title company has received a signed copy of the TREC One to Four Family Residential Contract (Resale) ? A. The buyer's earnest money is refunded. B. The contract is automatically terminated. C. The deadline for delivery is automatically extended. D. The seller must pay a late fee.

C (The seller keeps the option fee and may get to keep the buyer's earnest money)

What happens when a Texas buyer who has paid the seller an option fee under the TREC residential One to Four Family (resale) contract terminates the contract after the option period expires? A. The buyer gets both the option fee and the earnest money back. B. The seller keeps the earnest money and the buyer gets the option fee back. C. The seller keeps the option fee and may get to keep the buyer's earnest money. D. The seller keeps the option fee, and the buyer gets the earnest money back.

D (The seller keeps the option fee, and the buyer gets the earnest money back)

What happens when a buyer who has paid the seller an option fee terminates the contract during the option period? A. The buyer gets both the option fee and the earnest money back. B. The seller keeps the earnest money, and the buyer gets the option fee back. C. The seller keeps the earnest money and the option fee. D. The seller keeps the option fee, and the buyer gets the earnest money back.

A (An agreement by a title insurer to issue the final title insurance policy on the property)

What is a title commitment? A. An agreement by a title insurer to issue the final title insurance policy on the property B. A request by the buyer to conduct a title search C. A title insurance policy D. Proof of ownership

B (This paragraph is the buyer's agreement to deliver documents that show creditworthiness within a certain time period)

What is the purpose of the Credit Documentation paragraph of the Seller Financing Addendum? A. This paragraph describes the terms for the repayment of the loan. B. This paragraph is the buyer's agreement to deliver documents that show creditworthiness within a certain time period. C. This paragraph provides for taxes and insurance escrow. D. This paragraph secures the note with the deed of trust.

C (To protect the public by requiring license holders to disclose to the other party that they have a real estate license when they, close relatives, or certain entities are parties to a transaction)

What is the purpose of the license holder disclosure requirement of the TREC residential resale contract? A. To inform all parties in a transaction that the license holder's real estate license is active B. To inform all parties in a transaction that the license holder's real estate license is valid C. To protect the public by requiring license holders to disclose to the other party that they have a real estate license when they, close relatives, or certain entities are parties to a transaction D. To protect the public by requiring the license holders to disclose to all parties if their real estate license has been placed on inactive status

C (To terminate the contract or not delay the closing)

What options does the Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement give the seller if the restoration of VA entitlement is not approved by closing? A. To not delay the closing or to expedite the closing date B. To postpone closing or surrender the right to request a restoration of VA entitlement C. To terminate the contract or not delay the closing D. To terminate the contract or postpone the closing until approval is granted

Terminate the contract

What recourse do Texas buyers have if a seller is unable to cure the title issues within 15 days after receiving the buyer's list of objections? Demand that the sales price be lowered. Sue the seller for damages. Take early possession. Terminate the contract.

A (It's applied to the down payment and closing costs owed by the buyer)

What typically happens to any earnest money when a sales transaction successfully closes? A. It's applied to the down payment and closing costs owed by the buyer. B. It's placed in an escrow account. C. It's refunded to the buyer. D. It's used to pay the broker's fees.

C (An amount of money paid for the buyer's right to terminate the contract during a defined period of time)

What's an option fee as it's used in the TREC residential resale contract? A. An amount of money deposited to show a sincere intention to purchase a property B. An amount of money paid for an inspection of the property C. An amount of money paid for the buyer's right to terminate the contract during a defined period of time D. An amount of money paid for title insurance

B (When the buyer who has paid an option fee can terminate the contract for any reason)

What's an option period as it's used in a TREC residential resale contract? A. When the buyer can select a sales agent to represent the buyer B. When the buyer who has paid an option fee can terminate the contract for any reason C. When the contract has been signed but the transaction has not yet closed D. When the option fee must be paid

C (To help the lender and title company decide whether to accept the seller's existing survey or to request a new survey)

What's the purpose of the Residential Real Property Affidavit T-47? A. To allow the buyer the unrestricted right to terminate the sales contract B. To allow the seller to show a sincere intention to complete the transaction C. To help the lender and title company decide whether to accept the seller's existing survey or to request a new survey D. To specify which items are included in the sale of the real property

A (Performance must take place within a "reasonable time")

When a contract doesn't provide specific dates for when the terms need to be met, what should the parties assume regarding performance of the contract? A. Performance must take place within a "reasonable time." B. The contract will be done when all of the parties have met their obligations and not before. C. The courts will decide if the parties have met their respective contractual obligations. D. This contract provides an opportunity to sue for breach of contract.

D (One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met)

When does substantial performance of a contract occur? A. Both parties fully meet the contract's terms. B. One or both parties have completed only a portion of the terms agreed to in the contract. C. One party did not meet the terms of the contract in the specified timeframe and is being required to do exactly what was agreed to in the contract. D. One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met.

B (The lot, block, and subdivision information is part of a recorded plat)

When preparing a sales contract, where can a licensee look for the legal description of a property that's located in a city? A. The description provided on the MLS is enough. B. The lot, block, and subdivision information is part of a recorded plat. C. The metes-and-bounds legal description is needed. D. The street address is sufficient.

C (On the deed or owner's title policy)

Where would the buyer's agent find the seller's legal name, which is needed to complete the Parties paragraph of the TREC residential One to Four Family (resale) contract? A. In the Buyer Representation Agreement B. In the listing agreement C. On the deed or owner's title policy D. On the seller's passport

B (Barbara Harrison, administrator of the estate of Geoffrey Harrison, deceased)

Which as an acceptable way to identify Barbara Harrison as the administrator of her late husband, Geoffrey Harrison's, estate? A. Barbara and Geoffrey Harrison B. Barbara Harrison, administrator of the estate of Geoffrey Harrison, deceased C. Barbara Harrison and husband Geoffrey Harrison, deceased D. Geoffrey Harrison, deceased, and his wife Barbara Harrison

Texas Real Estate Commission

Which authority is responsible for providing promulgated contract forms and enforcing license law in Texas? Texas Real Estate Commission Texas Real Estate License Law The Broker-Lawyer Committee The Secretary of State

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

Which of the following describes the Annexation section of the title notices paragraph provided in the TREC One to Four Family Residential Contract (Resale)? A. Required by Texas Natural Resources Code if property abuts tidally influenced waters of the state B. Required by Texas Property Code if property may now or later be included in the extra-territorial jurisdiction of a municipality C. Required by Texas Water Code if the property adjoins an impoundment of water D. Required by Texas Water Code if the property is located in a district providing water, sewer, drainage, or flood control services

A (Required by the Texas Natural Resources Code if the property abuts tidally influenced waters of the state)

Which of the following describes the Tide Waters notice of the Title Notices provided in the TREC One to Four Family Residential Contract (Resale)? A. Required by the Texas Natural Resources Code if the property abuts tidally influenced waters of the state B. Required by the Texas Property Code if the property may be included in the extraterritorial jurisdiction of a municipality now or later C. Required by the Texas Water Code if the property adjoins an impoundment of water D. Required by the Texas Water Code if the property is located in a district providing water, sewer, drainage, or flood control services

D (The title insurance owner's policy)

Which of the following documents insures the buyer against loss because of title issues and must be furnished by the seller to the buyer? A. A copy of the deed B. The survey C. The title commitment D. The title insurance owner's policy

Statute of Frauds

Which of the following requires that a legal description of the property be included in a real estate contract in Texas? Property Code Real Estate Code of Ethics Statute of Frauds Statute of Limitations

B (An existing survey may be used if it's accompanied by a Residential Real Property T-47 affidavit)

Which of the following statements about obtaining a property survey for the title company and lender is true? A. A new survey is always required. B. An existing survey may be used if it's accompanied by a Residential Real Property T-47 affidavit. C. A survey is not required for homes built before 1978. D. If a new survey is required, the seller must always pay for it.

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

Which of the following statements about the owner's title insurance policy is true? A. It insures the buyer against loss due to title defects under the provisions of the title policy, which are subject to existing exclusions and a list of exceptions. B. It must be provided at the seller's expense. C. It's issued in the amount of the financing needed for the transaction. D. It's issued to the seller.

C (The title commitment is the title insurance company's promise to issue a title insurance policy)

Which of the following statements about the title commitment is true? A. The title commitment is a request by the buyer to conduct a title search. B. The title commitment is the same as the title insurance policy. C. The title commitment is the title insurance company's promise to issue a title insurance policy. D. The title commitment is used as proof of ownership.

Title Policy and Survey section

Which section of the TREC One to Four Family Residential Contract (Resale) identifies the party who will pay for title insurance and the extent of the policy coverage? Earnest Money section Financing section Property section Title Policy and Survey section

Resale certificate

Which type of document is issued by an HOA and is provided by the seller in a transaction? Addendum Amendment Notice Resale certificate