#351: Promulgated Forms (2017) (351PromulgatedForms2017) - FINAL EXAM
How many resale certificates are currently promulgated by TREC? A)One B)Two C)Three D)Six
B) Two REMEMBER: 1. Condominium Resale Certificate2. Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in an Owner's Association.
According to the provisions of the sales contract, who will purchase a residential service contract, if so desired? A)Lender B)Buyer C)Seller D)Listing agent
B)Buyer TIP: If the buyer does so, paragraph 7H provides for the seller to reimburse the buyer at closing for the cost up to an agreed-upon amount.
The TREC Buyer's Temporary Residential Lease would be used when the A)seller wants to stay in the home after closing for no more than 90 days. B)buyer wants to move in before closing for no more than 90 days. C)buyer wants to move in before closing for at least 90 days. D)seller wants to stay in the home after closing for at least 90 days.
B)Buyer wants to move in before closing for no more than 90 days.
Which paragraph allows the buyer to terminate if the seller's disclosure is never received? A)Paragraph 6 B)Paragraph 7 C)Paragraph 11 D)Paragraph 15
B)Paragraph 7 REMEMBER: The buyer has a right to terminate the contract within seven days of receiving the notice or up to the closing date, whichever is earlier, should the seller not deliver the seller's disclosure of property condition after the parties are in a contractual agreement.
Which form must be displayed in the residential broker's office? A)Franchise Disclosure B)TREC Consumer Information Notice C)FHA Mortgage Information Form D)Soldiers and Sailors Act Notice
B)TREC Consumer Information Notice
Which law requires a contract for real property to be in writing and signed to be enforceable? A)Texas Real Estate License Act B)Texas Statute of Frauds C)Texas Contract Law Act D)Texas Statute of Contracts
B)Texas Statute of Frauds
In the TREC new home contracts the R-Value addresses what issue? A)hot water heater. B)insulation. C)appraisal. D)air conditioner.
B)insulation.
The notice about obtaining an abstract or title policy is a required notice from: A)seller to buyer. B)licensee to buyer. C)buyer to seller. D)licensee to seller.
B)licensee to buyer. REMEMBER: TREC requires licensees to advise buyers to have an abstract of title covering the property examined by an attorney of the buyer's selection, or the buyer should be furnished with or obtain a title policy.
A seller's instruction not to present back-up offers:. A)is contrary to licensing laws. B)must be given to the licensee in writing. C)must be given when the listing is signed. D)may only be given after an offer has been accepted
B)must be given to the licensee in writing.
If one of the parties defaults and the non-defaulting party accepts the earnest money as damages, that party can: A)also sue for specific damages. B)also sue for other damages. C)do nothing more; the contract is terminated. D)both sue for specific damages and sue for other damages
C) Do nothing more; the contract is terminated.
In the rental of housing, the Fair Housing Act prohibits discrimination on the basis of A)age. B)sexual orientation. C)familial status. D)marital status.
C) Familial Status REMEMBER: Protected classes under the Fair Housing Act include race, color, national origin, religion, sex, familial status, and disability.
Agents must make clear where notices are to be delivered. This is done in One to Four Family Residential Contract (Resale) paragraph: A)1 B)11 C)23 D)21
D)21 REMEMBER: An agent's failure to define in paragraph 21 where notices are to be delivered can cause confusion on the part of the buyer and the seller.
A seller furnishes the existing survey to the buyer, but it is not acceptable to the buyer's lender. The cost of a new survey will be at whose expense? A)The buyer's B)The lender's C)The seller's D)A party negotiated in the contract
D)A party negotiated in the contract
Which of the following is TRUE about TREC addenda? A)Every TREC contract must have at least one TREC addendum. B)All TREC addenda are promulgated. C)Any addenda used as part of an agreement need to be listed in paragraph 23 of the contract. D)Any addenda used as part of an agreement must be listed in paragraph 22 of the contract.
D)Any addenda used as part of an agreement must be listed in paragraph 22 of the contract. TIP: Addenda are only used if necessary to the agreement, and not all TREC addenda are promulgated; some are approved by TREC for voluntary use.
According to the preprinted language, what type of deed is to be used at closing to convey the title to the real property that is being sold using a TREC-promulgated contract form? A)Quitclaim B)Bargain and sale C)Special warranty D)General warranty
D)General warranty REMEMBER: Paragraph 9B(1) provides for the seller to provide a general warranty deed
All of the following promulgated forms provide that "time is of the essence" EXCEPT: A)Addendum for Sale of Other Property by Buyer. B)Addendum for Back-Up Contract. C)Third Party Financing Addendum. D)Loan Assumption Addendum.
D)Loan Assumption Addendum.
Which financing addendum will the purchaser use when purchasing a property for cash? A)Financing addendum exception B)Assumption addendum C)Special provisions addendum D)None of these
D)None of these If a buyer will pay cash in the purchase of a property and no loan is involved, the purchases will not need to use any of the financing addenda. The purchaser should complete paragraphs 3 and 12 of the purchase agreement.
According to paragraph 18 of the One to Four Family Residential Contract, at closing, earnest money is first applied to: A)cash down payment. B)buyer's expenses. C)seller's expenses. D)commission to agents.
A)cash down payment.
If the seller allows the buyer to move in prior to the closing of the sale, the seller is: A)a landlord. B)a tenant. C)a wise seller. D)an owner in waiting.
A)A Landlord.
Which of the following is an example of a bilateral contract? A)A purchase contract B)An option to lease C)A nonexclusive listing contract D)A non exclusive buyer contract
A)A purchase contract REMEMBER: A purchase contract is bilateral, in which a promise is exchanged for a promise.
The primary intention of HUD regarding occupancy standards is to make sure the occupancy standards do not eliminate the protection of: A)older persons. B)families with children. C)single parent families. D)multi-family households.
B) Families with children.
Which of the following is NOT addressed by a TREC-promulgated form? A)Assumption of an FHA-insured loan B)A purchase using a contract for deed C)A purchase using seller financing D)The purchase of a fee-simple town house
B)A purchase using a contract for deed
According to the contract, the seller will provide a copy of the restrictive covenants at whose expense? A)The seller's B)The buyer's C)The title company's D)The lender's
B)The buyer's TIP: The agreement calls for the seller to furnish the buyer a commitment for title insurance, and at the buyer's expense, legible copies of deed restrictions (restrictive covenants) and documentation of any exceptions in the commitment within 20 days after the title company receives a copy of the contract.
All of the following is a specifically listed right, privileges and appurtenances in the TREC Unimproved Property Contract EXCEPT: A)water rights. B)harvest rights. C)claims. D)strips and gores.
B)harvest rights.
Financing approval occurs when: A)both the borrower and the property meet the lender's underwriting guidelines. B)the property is acceptable to and approved by the lender. C)the lender determines that the buyer's assets, income, and credit are satisfactory. D)the property meets the lender's underwriting guidelines
C the lender determines that the buyer's assets, income, and credit are satisfactory.
Where would the seller reserve the mineral rights? A)Paragraph 11 of the One to Four Family Residential Contract (Resale) B)On the Amendment to Contract form C)Addendum for Reservation of Oil, Gas and Other Minerals D)Seller's Disclosure of Property Condition
C)Addendum for Reservation of Oil, Gas and Other Minerals
Which financing option listed in paragraph 3 requires the use of a promulgated addendum? A)Third-party conventional B)Assumption C)All of these D)Seller finance
C)All of these
When is the seller required to deliver a title commitment to the buyer? A)20 days after the title company receives the contract B)20 days after the executed date of the contract C)20 days prior to closing D)15 days after the executed date of the contract
D)15 days after the executed date of the contract
How many contract forms are currently promulgated by TREC? A)6 B)7 C)9 D)10
A) 6 -Unimproved Property Contract -One to Four Family -residential Contractors -New Home Contract (Incomplete Construction) -New Home Contract (Complete Construction) -Farm and Ranch Contract -Residential Condominium Contract
Which of the following is FALSE about paragraph 11, Special Provisions? A)A buyer and her attorney can include a legal right in paragraph 11. B)Licensees must not enter legal rights in paragraph 11 C)Anything that is addressed in one of the TREC addenda can adequately and legally be set down in this paragraph, if so desired by a licensee. D)Licensees must not enter "time is of the essence" in paragraph 11.
C)Anything that is addressed in one of the TREC addenda can adequately and legally be set down in this paragraph, if so desired by a licensee. REMEMBEER: Licensees must use forms available from TREC, as opposed to writing something into special provision for which there is a TREC form available.
In the Third Party Financing Addendum, what should be the cap on interest rates? A)6.5% B)11% C)12% D)A rate the buyer will pay that is available in the market
D) A rate the buyer will pay that is available in the market
Which of the following is the BEST way to extend the closing date on a contract? A)Change the date on the original contract and have the buyer, the seller, and both agents initial it. B)Change the date on the original contract and have the buyer and the seller initial and date the change. C)Cross out the old date, enter the new date, and send a written notification of the change to the title company. D)Use the TREC Amendment to Contract and have the buyers and the sellers sign it.
D) Use the TREC Amendment to Contract and have the buyers and the sellers sign it. REMEMBER: This is one of the uses of paragraph 3 of the amendment.
When may a potential purchaser's offer to buy real estate be withdrawn? A)Anytime prior to seller acceptance and buyer notification of acceptance B)Only after the seller has turned it down C)At any time, if no earnest money was tendered D)Anytime prior to opening title
A)Anytime prior to seller acceptance and buyer notification of acceptance
Which of the following can the licensee never disclose? A)Death due to AIDS B)Representation C)Death due to suicide D)Haunted property
A)Death due to AIDS REMEMBER: Illness or death due to AIDS or HIV is a protected class. It is mandatory for licensees to disclose representation of one or both of the parties. There is no duty to disclose a death due to suicide. However, such a disclosure is not prohibited. A material fact can be real or imagined, so if the seller believes their home is haunted, the licensee should disclose this belief.
A buyer and seller enter into a written contract for the sale of a four-bedroom home. If either party defaults under the contract, the other party has how much time to file a lawsuit for specific performance? A)Four years B)Three years C)One year D)Unlimited
A)Four years
A buyer enters into a contract that has an option period of seven days after the effective date of the contract. The effective date of the contract is July 2. The seller accepts a second contract with the Addendum for Back-Up attached with an effective date of July 6. The first buyer terminates on the last day of the option period and the seller immediately notifies the second buyer. What is the "amended effective date" of the contract with the Addendum for Back-Up attached to it? A)July 9 B)July 6 C)July 13 D)July 20
A)July 9
Can a party accept earnest money as liquidated damages and also sue the other party for specific performance? A)No B)Yes C)Usually D)Only if the parties agreed to it in paragraph 15
A)No REMEMBER: The contract allows only for the earnest money to serve as the liquidated damages.
According to the standard wording in the Property Condition paragraph (paragraph 7E) of the TREC One to Four Family Residential Contract (Resale), who is required to pay for the lender-required repairs? A)No one B)Seller C)Buyer D)Lender
A)No one REMEMBER: The paragraph states that neither the buyer nor the seller is obligated to pay for lender repairs unless otherwise agreed in writing.
The TREC Mineral Rights Addendum provides that which of the following is considered as being a part of the mineral estate? A)Oil B)Gravel C)Water D)Sand
A)Oil
Which form does NOT address rollback taxes? A)One To Four Family Residential Contract (Resale) B)Farm and Ranch Contract C)New Home Contract (Completed Construction) D)Unimproved Property Contract
A)One To Four Family Residential Contract (Resale) TIP: It is rare to have to deal with rollback taxes in the sale of a one- to four-family residential home. The remaining forms address rollback taxes in paragraph 13.
The TREC Addendum for Property Subject to Mandatory Membership in a Property Owners Association provides for which of the following to act on behalf of the parties to obtain the subdivision information? A)Title company B)Buyer's agent C)Seller's agent D)Lender
A)Title company
Which of the following is NOT an exception to the rules requiring that promulgated forms be used by the licensee? A)When the contract form has been prepared by the buyer and the buyer wants the agent to fill in the blanks B)When the contract form has been prepared by the seller's attorney and is required by the seller C)When an agency of the United States government requires a different form D)When the licensee is functioning solely as a principal
A)When the contract form has been prepared by the buyer and the buyer wants the agent to fill in the blanks REMEMBER!!: Licensees should only fill in the blanks of TREC-promulgated forms.
When using a power of attorney to transfer title to real property: A)the document must include the legal description of the subject of the authority. B)an attorney-at-law must be present at the closing. C)a court of competent jurisdiction must affirm the document. D)neither the buyer nor the seller may be present at closing.
A)the document must include the legal description of the subject of the authority. TIP: A power of attorney granting authority to transfer title to real property must recite the legal description of the subject of the authority.
1Who may give opinions concerning the status or validity of title to real estate? A)The licensee B)The broker C)An attorney D)TREC
C)An attorney REMEMBER: The licensee may not give opinions concerning the status or validity of title to real estate; and the licensee may not attempt to prevent more, in any manner whatsoever, discourage any principal to a real estate transaction from employing a lawyer. However, nothing limits the licensee's fiduciary obligation to disclose to principals all pertinent facts that are within the knowledge of the licensee, including facts that might affect the status of title to real estate.
A real estate licensee has a business relationship with a home warranty company where the licensee receives a referral fee. Which form is required? A)Loan Assumption Addendum B)Non-Realty Items Addendum C)Disclosure of Relationship with Residential Service Company D)Information About Brokerage Services
C)Disclosure of Relationship with Residential Service Company REMEMBER: The compensation is the fee for the services that the listing broker or other broker, either directly or through an agent, provides to the company. As required by the Real Estate Settlement Procedures Act and HUD Regulation X, any fees paid to a settlement services provider are limited to the reasonable value of services actually rendered.
Which of the following is addressed as part of the real estate in paragraph 2 of the One to Four Family Residential Contract (Resale)? A)Countertop microwave oven B)Portable dishwasher C)Draperies D)All area rugs
C)Draperies TIP: Accessories, lists various items, including drapes.
Which of the following is NOT an essential element of a contract for the purchase of a one- to four family residential resale property? A)Competent parties B)Consideration C)Earnest money D)Offer and acceptance
C)Earnest money
Issues addressed in the Farm and Ranch Contract do NOT include which of the following? A)Crops B)Equipment C)Mineral rights D)Surface leases
C)Mineral rights REMEMBER: The Farm and Ranch Contract used to address the reservation of mineral rights by the seller, though TREC now has an addendum that must be attached to the sale contract for the seller to reserve some or all of the mineral rights.
Which of the following offers must be communicated to the seller by the listing agent? A)All offers, regardless of the seller's instructions to the contrary B)Only offers within 10% of the asking price C)Offers made to the principal before the principal has accepted an offer D)Offers made after a binding contract has been executed between a seller and a buyer
C)Offers made to the principal before the principal has accepted an offer REMEMBER: Although the general rule is that all offers must be communicated to the seller by the listing agent, there are a few exceptions. These include instances in which the seller has specifically instructed the listing broker in writing not to bring the seller any offers below a certain price, or situations in which a binding contract has been executed between a seller and a buyer. TREC rules provide that "the license holder shall have no duty to submit offers to the principal after the principal has accepted an offer."
How many back-up contracts can be created using the TREC-promulgated addendum for that purpose? A)Equipment B)As many as the seller wants C)One D)No more than two
C)One
Paragraph 7H of the contract indicates that who should review and decide on the company to use as the residential service company? A)The seller B)The buyer's agent C)The buyer D)The seller's agent
C)The buyer
Which addendum is commonly used in a transaction involving an 80% fixed-rate loan? A)Addendum for Property Subject to Mandatory Membership in an Owners' Association B)Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum C)Third Party Financing Addendum D)Addendum for Coastal Area Property
C)Third Party Financing Addendum
When a legally enforceable promise is exchanged for a legally enforceable promise: A)an offer is made. B)an executed note is made. C)a contract is created. D)an acceptance and counteroffer is made.
C)a contract is created.
The paragraph that is different in each of the six TREC contracts is A)paragraph 1 .B)paragraph 23. C)paragraph 2. D)paragraph 8.
C)paragraph 2.
Paragraphs found in every purchase agreement include all of the following EXCEPT: A)property. B)price. C)parcel. D)parties.
C)parcel. REMEMBER: Usually the following are found in every real estate purchase agreement:- Identification of the parties- Identification of the property- Establishment of the price
In Texas, the statute of limitations for a non-defaulting party to an oral contract to enforce their rights in the event of default is: A)four years. B)three years. C)two years. D)six years
C)two years.
The promulgated form for the purchase of One to Four Family Residential Contract (Resale) was authored by the: A)Texas Real Estate Commission. B)Texas TREC-Lawyer Committee. C)Texas Broker-TREC Committee. D)Texas Broker-Lawyer Committee.
D)Texas Broker-Lawyer Committee. The answer is Texas Broker-Lawyer Committee. The One to Four Family Residential Contract (Resale) was authored by the Texas Broker-Lawyer Committee and promulgated by TREC. Learning Objective 2.3. REMEMBER: The One to Four Family Residential Contract (Resale) was authored by the Texas Broker-Lawyer Committee and promulgated by TREC.
All of the following are listed as a farm and ranch improvement in Paragraph 2 of the TREC Farm and Ranch Contract EXCEPT: A)barns. B)pens. C)fences. D)irrigation equipment.
D)irrigation equipment.
The premium for title insurance policies: A)varies widely in different counties. B)is always paid by the buyer. C)can vary by as much as 2% within the same county. D)is the same throughout the stat
D)is the same throughout the state
A short sale must be approved by: A)escrow officer. B)HUD. C)title company. D)seller's lender.
D)seller's lender.
