M5 Course Questions

sale of another property contingency

Martha is selling her home in order to downsize and live closer to her grandchildren. She has been looking at a property to buy, and while the sellers are eager to close the sale, Martha has made it clear she won't buy until her current property is sold. What is this an example of?

prepare an amendment and add the Seller's Temporary Lease Agreement

Mary has one of her listings under contract. The contract calls for possession at closing. Now the seller asks if she can stay for three days after closing. The buyer orally agrees. What does Mary need to do now?

b) prepare an amendment and add the Seller's Temporary Lease Agreement

Mary has one of her listings under contract. The contract calls for possession at closing. Now the seller asks if she can stay for three days after closing. The buyer orally agrees. What does Mary need to do now? a) nothing, as long as the parties have agreed b) prepare an amendment and add the Seller's Temporary Lease Agreement c) just let the seller know it is okay with the buyer d) change the terms in the original document under special provisions

c) No. The contract does not satisfy the requirement of unequivocal acceptance.

Maya and Ashley, a couple in Texas, are buying a house. The seller's proposal is in writing, has a provision about consideration, and contains no illegal provisions or requirements. As the couple meets with their agent, he talks them through the counteroffer process. Is the proposal an enforceable real estate contract? a) It depends on if Maya and Ashley counteroffer in writing or orally. b) No. The contract does not satisfy the requirement of lawful purpose. c) No. The contract does not satisfy the requirement of unequivocal acceptance. d) Yes. The seller's proposal satisfies all of the requirements in Texas to be an enforceable real estate contract.

d) Yes, because it involves the sale or transfer of real estate.

Maybeth is buying a house. Does the contract need to be in writing? a) No, because of the statue of frauds. b) It is up to Maybeth whether or not the contract is oral or in writing. c) No, because it concerns debts or specific duties. d) Yes, because it involves the sale or transfer of real estate.

a) equitable interest

Michael has entered into a sales contract with the seller of 444 Ocean Avenue. What type of interest does Michael have? a) equitable interest b) ownership interest c) concurrent interest d) security interest

c) fee simple absolute

Michael owns his house, and he has the right to sell it both today or in the future, including by will upon his death. What type of conveyance is this? a) life estate b) marketable title c) fee simple absolute d) fee simple defeasible

b) Oil Company B has the right to use the surface estate as much is "reasonably necessary" to access the mineral estate without Michael's permission.

Michael owns the surface rights to 3333 ABC Drive. Oil Company B owns the mineral rights to 3333 ABC Drive. Which of the following statements is TRUE? a) Oil Company B needs to ask Michael for permission to exercise their mineral right. b) Oil Company B has the right to use the surface estate as much is "reasonably necessary" to access the mineral estate without Michael's permission. c) As the surface estate owner, Michael's rights come first. d) Oil Company B cannot do anything on 3333 ABC Drive, as they do not have surface rights.

b) non-traditional

A borrower is making mortgage payments directly to the seller. What kind of loan is this? a) secured b) non-traditional c) traditional d) interest-free

tenancy at sufferance

A breach of the lease occurs when a tenant refuses to vacate the property upon expiration of the lease. When a tenant will not vacate, the lease becomes a ____.

a) unilateral contract

A broker tells her license holders that if anyone brings in over a certain amount of business in six months, they will be entitled to a bonus. This is a(n): a) unilateral contract b) This is not an example of a contract. c) bilateral contract d) lateral contract

FALSE

A business loan is covered by TILA. TRUE FALSE

c) equitable lien

A buyer does not pay for a property in full. This is an example of a(n): a) tax lien b) assessment lien c) equitable lien d) priority lien

a) The buyer's credit will be applied at the closing of the sale.

A buyer gives the seller earnest money. What will happen? a) The buyer's credit will be applied at the closing of the sale. b) The earnest money check automatically becomes the agent's commission. c) The buyer will receive a refund of their earnest money after closing. d) The seller is not legally entitled to the earnest money.

a) No, a buyer who cancels during the option period is not in breach of contract.

A buyer has paid for an option period in Paragraph 23 of the One to Four Family Residential Contract. He cancels the contract during the option period. Is this a breach of contract? a) No, a buyer who cancels during the option period is not in breach of contract. b) Yes, a buyer who cancels during the option period is in breach of contract. c) It depends on the buyer's reason for cancelling the contract. d) It depends on how much the buyer paid for the option period.

d) executory

A buyer is arranging for financing and getting inspections while a seller is ordering the title policy, doing required repairs, etc. Based on its stage of existence, what kind of contract is this? a) unilateral b) bilateral c) executed d) executory

b) mortgage interest

A common tax-deductible expense associated with a real estate purchase is: a) loan finalization fees b) mortgage interest c) capital loss tax d) homeowner association dues

d) the interior of their unit

A condo owner owns: a) the land on which the unit was built b) the exterior of their unit c) the common areas around the unit d) the interior of their unit

b) voluntary transfer of an interest and rights in real property

A conveyance is the: a) illegal seizure of property b) voluntary transfer of an interest and rights in real property c) deed of trust d) substitution of parties to a contract

a) the right of possession

A couple renting a home have a leasehold estate, which means they have: a) the right of possession b) a deed for the property c) the right of disposition d) ownership of the property

FALSE

A digital signature is an image of your signature placed on a document. TRUE FALSE

b) promulgated contract

A form that TREC requires agents to use is called a(n): a) committee contract b) promulgated contract c) approved contract d) unilateral contract

both the husband and the wife

A husband owned his Texas property before marrying his spouse. They have both been living in the property for the past year. You are listing the property. Who will need to sign the listing agreement?

b) reflects a court decision concerning the rights and claims of parties in a suit

A judgement lien: a) is purchased with money borrowed from a lender b) reflects a court decision concerning the rights and claims of parties in a suit c) allows a lender to foreclose on the property if the borrower does not make appropriate mortgage payments d) establishes a claim against a property to secure payment for labor or materials used to improve that property

b) Statute of Frauds

A law that requires real estate contracts to be in writing is the: a) Statute of Written Contracts b) Statute of Frauds c) Statute of Limitations d) The Texas Real Estate License Act

c) Nothing. The lender has met all of RESPA's requirements.

A lender provides a loan applicant with a booklet entitled "Settlement Costs and You" published by HUD, a truth in lending statement indicating the total credit costs and the APR of the loan, and a good-faith estimate of settlement costs. What else does the lender need to provide? a) a disclosure of redlining, if the area has historically been redlined b) an abstract of title and an original copy of their deed c) Nothing. The lender has met all of RESPA's requirements. d) a fair housing statement as provided by RESPA

a) "From a legal standpoint, I think it's best if you add a contingency here. I'll write one for you."

A license holder is discussing a contract with a client. What should she NOT say? a) "From a legal standpoint, I think it's best if you add a contingency here. I'll write one for you." b) "You sign right here." c) "Oh, you don't understand that sentence? Let me explain it to you." d) "This clause here means that you have to get the seller the earnest money by that date and time."

d) what consequences will result if the borrower fails to make the payments to the lender

A promissory note includes a promise to pay; the time and place of payments; and the amount of the payments, interest rate, and loan. What other element does it typically include? a) the written agreement of the buyer's obligation to pay the seller b) the loan terms between the seller and lender c) the license holder's commission rate d) what consequences will result if the borrower fails to make the payments to the lender

a) bedroom and level of a building that has multiple levels

A residence should have smoke alarms in every: a) bedroom and level of a building that has multiple levels b) single room with a doorway and corridor that serves at least 50 units c) bathroom and corridor that serves at least 50 units d) third level of a building that has at least 12 levels and every bedroom

a) 30 days

A residential landlord must postmark the return of a security deposit within: a) 30 days b) 2 days c) 7 days d) 2 months

d) The parties will need to resolve any issues on their own as per the One to Four Family Residential Contract.

A sale closes. The current year's taxes are unknown, so the previous year's numbers are used for proration. What should be done about any variance in tax amount (once the current tax amount is known)? a) By signing the One to Four Family Residential Contract, the parties agreed not to contest the good-faith proration of taxes. b) The parties will need to resolve any issues on their own as per the FHA Contract. c) By signing the FHA Contract, the parties agreed not to contest the good-faith proration of taxes. d) The parties will need to resolve any issues on their own as per the One to Four Family Residential Contract.

a) Yes, the SDN needs to list any repairs in place.

A seller had a roof repaired years ago. The roof shows no current problems. Does the seller still need to disclose the repairs? a) Yes, the SDN needs to list any repairs in place. b) No, if the roof is currently fine, the SDN does not need to list past repairs. c) It depends on how long ago the roof repairs were done. d) It depends on how bad the initial roof problems were.

d) Release of Liability

A seller is concerned about continuing to have liability for their mortgage after they sell the property and a buyer assumes the loan. The seller should attempt to get this document from their lender: a) non-liability affidavit b) copy of the buyer's approval c) Assumption Certification d) Release of Liability

c) vendor's lien

A seller sells their property to a buyer. However, the buyer does not pay them the full price. The seller can place a lien on the home and maintain the right to repossess the home until the buyer pays the full price to the seller. What is this kind of lien? a) tax lien b) judgement lien c) vendor's lien d) mechanic's lien

a) Yes, moving in qualifies as notice of ownership.

A sneaky seller sells a house to two different buyers. Buyer 1, who actually moved into the house, claims that this is enough notice of their ownership. Is Buyer 1 right? a) Yes, moving in qualifies as notice of ownership. b) A buyer needs to give both actual AND constructive notice, so this is not enough notice of ownership. c) No, moving in does not qualify as notice of ownership. d) A buyer needs to record a deed AND move in, so this is not enough notice of ownership.

d) the seller furnish a Lead-Based Paint Disclosure

A structure build before 1978 requires that: a) the buyer get a foundation-specific inspection b) the buyer get an advanced inspection c) the seller furnish a Home Inspection Disclosure d) the seller furnish a Lead-Based Paint Disclosure

c) "Yes I'll inspect it, let's schedule something."

A tenant calls and their landlord and asks them to inspect the smoke alarm. The landlord should say: a) "I inspected the alarm before you moved in, so I will not inspect it again." b) "It is your responsibility to inspect the alarm." c) "Yes I'll inspect it, let's schedule something." d) "If the alarm is not malfunctioning then there is no need for me to inspect it."

b) should act quickly to repair the window because they are responsible for the safety of the tenant

A tenant calls the landlord to report a window broken during a hurricane.The landlord: a) should eventually act to repair the window but can do so at any time before lease termination b) should act quickly to repair the window because they are responsible for the safety of the tenant c) can repair the window if they choose to but they are not required to d) does not need to repair the window because it is the tenant's responsibility to do so

d) themself (the tenant), a lawful occupant of the property, or a tenant's guest

A tenant is required to repair conditions caused by: a) a tenant's guest, a landlord's negligence, or a lawful occupant of the property b) a member of the tenant's family, themself (the tenant), or a natural disaster c) a lawful occupant of the property, a natural disaster, or a landlord's negligence, d) themself (the tenant), a lawful occupant of the property, or a tenant's guest

c) quiet enjoyment

A tenant's right to enjoy their property without disturbance from the landlord is known as the covenant of: a) material safety b) landlord obligation c) quiet enjoyment d) tenant possession

a) must return that amount to the borrower within 30 days

According to RESPA guidelines, if an escrow account contains an amount more than $50 in excess of the allowable limit, the lender: a) must return that amount to the borrower within 30 days b) must return that amount to the borrower within 10 days c) must notify the borrower and give them the option of a refund or credit d) can return that amount to the borrower or apply it to future required payments

b) monetary compensation given to an injured party for losses that were a result of the actions or omissions of another party

Actual damages are: a) intended to compensate a party for "inconvenience" and cannot be speculative b) monetary compensation given to an injured party for losses that were a result of the actions or omissions of another party c) items on the property that are actually broken and need repair d) monetary compensation for damages on the property that will not be repaired or replaced

d) Short Sale

All of the following are main types of foreclosure EXCEPT: a) Judicial Foreclosure b) Deficiency Judgement c) Auction d) Short Sale

prorations

All of the following are specific components of what is known as "title work" EXCEPT:

Repairs or replacement of major home systems and appliances are covered for the life of the mortgage.

All of the following are true about home warranties EXCEPT:

b) It must be filled out in every instance for a contract to be valid.

All of the following are true with respect to the Special Provisions section of the sales contract EXCEPT: a) It should not be used to address any provisions for which a TREC promulgated form already exists. b) It must be filled out in every instance for a contract to be valid. c) Improper use can be interpreted as the unauthorized practice of law. d) It is designated for adding factual statements and business details.

a) Any offer can be rejected without consequence to the buyer.

All of the following regarding offers are correct EXCEPT: a) Any offer can be rejected without consequence to the buyer. b) A seller may be obligated to pay a commission if they reject a full-price offer. c) The order in which offers are received has no legal bearing on which offer is countered or accepted by the seller. d) Full-price offers can be rejected by the seller.

b) sex offenders in the neighborhood

All of these issues would need to be disclosed EXCEPT: a) termites b) sex offenders in the neighborhood c) foundation problems d) a leaky roof

a) be named in the listing agreement and sign the document

All persons with an ownership interest in the property must: a) be named in the listing agreement and sign the document b) designate one person to sign the agreement on their behalf c) be related or married to each other d) be present at all stages of the listing process

d) use contracts promulgated by TREC

All real estate agents MUST: a) All choices are correct. b) offer legal advice to the best of their abilities to their clients c) create contracts and addenda specific to their clients' needs d) use contracts promulgated by TREC

c) Their clients expect them to have expertise in this area.

Although license holders won't be the ones to "crunch the numbers," they need to understand proration because: a) The license holder does not need to understand prorations since those calculations fall to the loan officer. b) The other agent will manipulate the calculations in favor of their client if at all possible. c) Their clients expect them to have expertise in this area. d) Math errors are commonplace in closing documents.

FALSE

An agent should record any notes they have on the transaction in Paragraph 11. TRUE FALSE

a) ask questions to determine if the actions were really discriminatory

An agent thinks that their client is accepting an offer for reasons that discriminate against a protected class. The agent should: a) ask questions to determine if the actions were really discriminatory b) help find the client new representation c) immediately end the relationship with the client d) report the client to HUD

c) decide the tenancy should end at any time

An estate at will allows the tenant and landlord to: a) bring issues to TREC at no cost to either party b) bring issues to small claims court at no cost to either party c) decide the tenancy should end at any time d) decide the tenancy should end with at least six months' notice

d) leasehold estate

An estate in land that does not include ownership and limits the term for the right of possession is a: a) private estate b) freehold estate c) fee simple estate d) leasehold estate

a) the Farm and Ranch Contract

An example of a TREC promulgated contract is: a) the Farm and Ranch Contract b) the Improved Property Contract c) the One to Five Residential Contract (Resale) d) the Condominium and Co-op Contract Correct

the terms are not fully carried out or are in the process of being carried out by one or more parties in the agreement

An executory contract is a contract where:

c) the original tenant

An original tenant sublets without the permission of the landlord. Who is liable for unpaid rent and/or any damages done by the person subletting? a) the landlord b) the original tenant and the person subletting equally c) the original tenant d) the person subletting

FALSE

Because Luke owns the title, Felix's only option is to recast the loan terms. FALSE TRUE

b) home warranty

Becky moved into her home in May. In December, her heating unit stopped working. What could cover the repair of the heating unit? a) home insurance b) home warranty c) title warranty d) title insurance

c) give the prospect the IABS form and have them sign a Buyer/Tenant Representation Agreement

Before a license holder shows a property to a prospect, they should: a) give the prospect the IABS form and have them fill out a financial profile disclosure b) give the prospect the Buyer/Tenant Representation Agreement and have them sign a blank sales contract c) give the prospect the IABS form and have them sign a Buyer/Tenant Representation Agreement d) give the prospect the IABS form and have them sign a blank sales contract

a) from TAR

Besides their brokerage, where is one place that an agent can get a buyer's representation agreement and listing agreement that is legal to use? a) from TAR b) from TREC c) from TRELA d) from TABC

c) Sale of Other Property Addendum

Bob is making an offer on a property, but he wants the offer to be contingent upon his current home closing. What should be added to his contract? a) Assumption Addendum b) Third Party Financing Addendum c) Sale of Other Property Addendum d) Back-Up Addendum

b) Bob will be less likely to buy a new home.

Bob, who has been thinking of buying a new home, learns that his company is planning to lay off several people in his department. How will this affect Bob's plans to buy? a) Bob will be less likely to buy a new home, but he will be more likely to start leasing an apartment. b) Bob will be less likely to buy a new home. c) Bob will be more likely to buy a new home. d) Bob will be more likely to buy a new home, but he will likely purchase a cheaper house than he was originally considering.

TRUE

By adding information that changed the rights of the parties, the agent is guilty of the unauthorized practice of law. FALSE TRUE

b) acknowledging receipt of the form

By signing the Loan Estimate Form, the buyer is: a) requesting the loan b) acknowledging receipt of the form c) committing the lender to the loan d) accepting the loan

d) total acceptance

Cameron, a seller, receives an offer. He signs and dates it, and his agent communicates acceptance to the other agent. What is this called? a) ignoring it b) rejection c) counteroffer d) total acceptance

b) No, unless they pay for all costs for themselves and the buyer.

Can a seller ever require a buyer to purchase title insurance from a specific title company? a) Yes, in order to purchase the property offered for sale. b) No, unless they pay for all costs for themselves and the buyer. c) No, never. d) No, unless they have family ties at the title company.

b) Earnest money is often refundable, whereas option money is never refundable.

Compare option money and earnest money. a) Neither earnest money nor option money are refundable. b) Earnest money is often refundable, whereas option money is never refundable. c) Option money is often refundable, whereas earnest money is never refundable. d) Both earnest money and option money are often refundable.

b) They are not legal in every state.

Describe holographic wills. a) They are often incorrect. b) They are not legal in every state. c) They exist solely online. d) They are the latest in document technology, and thus are not completely foolproof yet.

FALSE

Desktop Underwriter is designed to increase the subjective element involved in underwriting loans. TRUE FALSE

TRUE

During the option period, if negotiation is a minute late (according to TREC's option period deadline of 5 p.m.), the property is sold under the original terms. FALSE TRUE

b) a defaulting debtor to pay the defaulted portion of the debt and prevent foreclosure

Equitable redemption occurs before the auction of property and allows: a) a debtor to resume normal monthly payments b) a defaulting debtor to pay the defaulted portion of the debt and prevent foreclosure c) a lender to recast a loan for the defaulting debtor in lieu of foreclosure d) a debtor to take a lender to court over default payments

a) homeowners insurance

Examples of ongoing expenses that need to be split fairly between the buyer and seller of the property through prorations include all of the following EXCEPT: a) homeowners insurance b) interest c) taxes d) HOA dues

a) The buyer needs to create a temporary lease agreement for the seller.

For Jim, the buyer, funding is not happening on the same day as closing. What needs to happen? a) The buyer needs to create a temporary lease agreement for the seller. b) The seller needs to create a temporary lease agreement for the buyer. c) The closing date needs to be moved to the funding day. d) Nothing needs to happen.

Yes, he could be sued under DTPA

Frank has a listing that he is aware has had the foundation repaired. Frank believes that information could harm his seller so Frank does not give that information to potential buyers. Frank advised the seller not to mention it on his seller's disclosure. Is Frank in danger of ending up in court?

c) a real estate attorney

From whom can a lease purchase agreement be obtained? a) the broker b) the seller c) a real estate attorney d) TREC

a) high interest rates

High inflation is usually accompanied by: a) high interest rates b) high and then low interest rates c) low interest rates d) no change in interest rates

d) by getting a title policy or an abstract of title

How does a purchaser verify clear title to a property? a) by asking their agent b) by researching online c) by creating a contract that claims a clear title d) by getting a title policy or an abstract of title

c) It is included in the Third Party Financing Addendum.

How does an agent obtain written consent from a buyer so that the agent can review loan documents or the closing statement? a) Written consent is not needed. b) It is added to the Special Provisions. c) It is included in the Third Party Financing Addendum. d) A lawyer must draw up a consent form.

c) Homeowner association fees MAY or MAY NOT be paid through escrow accounts.

How does payment through escrow accounts work? a) Homeowner's insurance, but NOT property taxes, MUST be paid through escrow accounts. b) Property taxes, but NOT homeowner's insurance, MUST be paid through escrow accounts. c) Homeowner association fees MAY or MAY NOT be paid through escrow accounts. d) Both homeowner association fees and property taxes MUST be paid through escrow accounts.

b) by agreement between the seller and the listing broker

How is a listing broker's commission on the sale of a property established? a) by the local MLS guidelines b) by agreement between the seller and the listing broker c) by TREC d) by agreement between the seller and the procuring cause of the sale

3 calendar days

How many days do buyers have to deliver their termination-option fee, according to TREC?

d) His lender must approve the short sale.

If Michael finds a buyer who will pay less than the amount owed on his home, which of the following statements BEST describes what must happen before he can proceed with the sale? a) His lender must deny the short sale. b) A court judge must approve the short sale. c) His attorney must approve the short sale. d) His lender must approve the short sale.

FALSE

If a buyer is in the process of countering an offer, the seller cannot sell the property to anyone else. TRUE FALSE

a) sue for specific performance

If a contract has been breached, and the non-breaching party wants to force the breaching party to do what it says in the contract, what can the non-breaching party do? a) sue for specific performance b) rescind the contract c) forfeit the contract d) sue for damages

b) Third Party Financing Addendum

If a purchaser plans to obtain a loan from the USDA to buy a property, what will be attached to the contract? a) Seller Financing Addendum b) Third Party Financing Addendum c) Wraparound Mortgage Addendum d) Loan Assumption Addendum

b) The seller must return all payments the buyer has made.

If a seller rescinds a contract: a) The buyer must continue paying payments until the debt is paid. b) The seller must return all payments the buyer has made. c) The seller can keep what payments have been paid by the buyer. d) The buyer must pay liquidated damages.

b) Seller Financing Addendum

If a seller wants to be the lender in a transaction, what form should they fill out? a) Financing Addendum b) Seller Financing Addendum c) Self-Loan Addendum d) Borrower Financing Addendum

d) in Paragraph 2D, Exclusions

If the seller does NOT intend to leave the chandelier in the dining room, where should they list that information? a) in the Non-Realty Items Addendum b) if it is listed in the MLS, it does not need to be in the contract c) in Paragraph 11, Special Provisions d) in Paragraph 2D, Exclusions

b) terminate the contract within seven days of receiving the notice

If the seller does not provide the buyer with a completed Seller's Disclosure Notice before signing the contract, the buyer has a legal right to: a) have their closing costs paid by the seller b) terminate the contract within seven days of receiving the notice c) receive a price reduction on the home d) sue the seller for damages

c) 10 acres

In Texas, an urban homestead cannot exceed: a) 100 acres b) 5 acres c) 10 acres d) 15 acres

c) Buyers typically pay an option fee up front and then monthly rent payments to the seller.

In a lease purchase agreement: a) Buyers must pay the down payment on the property in a lump sum. b) When the lease expires, the buyer chooses whether to keep the property or sell it back to the landlord. c) Buyers typically pay an option fee up front and then monthly rent payments to the seller. d) Buyers need to apply for a mortgage to enter a lease purchase agreement.

a) The tenant has actual possession of the property for a specified period of time, but they do not own the property.

In a leasehold estate: a) The tenant has actual possession of the property for a specified period of time, but they do not own the property. b) The property owner has actual possession and ownership of the property. c) The property owner can occupy and own the property for an unspecified period of time. d) The tenant has actual possession of the property for a specified period of time, and they own the property.

FALSE

In a suit for condemnation, land or land access is revoked due to improper use of the property. TRUE FALSE

a) can be both fixed and variable

In a triple-net lease, the expenses that a tenant must pay: a) can be both fixed and variable b) are neither fixed nor variable c) are always variable d) are always fixed

c) Acceptance of the contract must be communicated to the other party.

In order for a contract to become binding and effective: a) The contract must be delivered to the title company. b) The accepted contract must be hand delivered to the other party. c) Acceptance of the contract must be communicated to the other party. d) The accepted contract must be faxed to the other party.

property

In order for a loan to be approved, both buyer approval and ___ approval must be met.

FALSE

In order to protect their client, agents should note all issues in the special provisions paragraph as well as attach the proper promulgated addenda. TRUE FALSE

b) the extent of your share in that property

In real estate, interest is defined as a right or legal share in a property. The type of interest you have depends on: a) how long you've owned the property b) the extent of your share in that property c) if the property is newly constructed d) who you purchased the property from

FALSE

In the case of a Seller Financing Addendum, the seller makes payments to the buyer. TRUE FALSE

a) The seller will be the tenant and the buyer will be the landlord.

In the case of a Seller's Temporary Residential Lease: a) The seller will be the tenant and the buyer will be the landlord. b) The seller will be the lender and the buyer will be the tenant-in-wait. c) The seller will be the landlord and the buyer will be the lender. d) The seller will be the landlord and the buyer will be the roommate.

FALSE

In the case of either party defaulting or breaching a contract, the defaulting party has remedies and the non-defaulting party has burdens or obligations. FALSE TRUE

d) a promissory note

In which document does a borrower promise to repay their loan? a) a security instrument b) a deed of trust c) a mortgage note d) a promissory note

b) TRELA and TREC's One to Four Family Residential Contract

In which two places is it stated that a broker has a fiduciary responsibility to advise the buyer to obtain an abstract or a title policy? a) TRELA and the TAC b) TRELA and TREC's One to Four Family Residential Contract c) TREC's One to Four Family Residential Contract and the TAC d) The NAR and TAR sales contracts

No, it's not legal for Felix to try and accelerate the contract.

Is Felix's demand of Luke to pay the entire purchase price within 30 days legal?

b) presenting all offers to her client

Jane, a listing agent, just received three offers. Which of the following is a fiduciary duty owed by Jane to her client? a) only presenting offers that meet the house's appraised value to her client b) presenting all offers to her client c) presenting the offers one at a time, waiting a day between presenting d) presenting all offers made by a buyer with a license holder representing them

b) not have a problem as easements run with the land

John has an easement appurtenant that allows him to cross Sally's land. Sally is selling her property. When Sally's property sells, John will: a) lose his right to use Sally's property b) not have a problem as easements run with the land c) hopefully be able to reason with the new owner d) have to go to court to keep his easement

a) A lender has a right to 1234 Racimo Drive if they are not repaid their loan.

Juan is interested in purchasing 1234 Racimo Drive, but there's a lien on the property. What does this mean? a) A lender has a right to 1234 Racimo Drive if they are not repaid their loan. b) The seller has accepted an offer from another buyer. c) The property is not level. d) Another buyer has already made an offer on the property.

b) Yes, partial performance is a valid reason for a party to discharge the contract.

Kelly is in the process of buying a house. The seller has performed some of the required duties by the required date, but not all of them. Can Kelly discharge the contract? a) No, only non-performance or illegality would be a valid reason for a party to discharge the contract. b) Yes, partial performance is a valid reason for a party to discharge the contract. c) Maybe. Kelly can only discharge the contract if the other party (the seller) agrees. d) No, only non-performance, illegality, or operation of law would be a valid reason for a party to discharge the contract.

c) three business days

Landlords must give tenants a written copy of their lease within: a) seven business days b) thirty days c) three business days d) three months

b) 1/3 ownership of the property

Larry, Moe, and Curly have a tenancy in common for a 200 acre plot of land. The ownership is divided evenly. What do they each own? a) Larry owns half, Moe and Curly each own 1/4 b) 1/3 ownership of the property c) 200 acres d) 50 acres

FALSE

Laura rents a house. She pays her rent on time and moves out at the end of six months. After she moves out, Laura's lease is an executory contract. TRUE FALSE

a) less than one year

Leases are not required to be in writing if they are: a) less than one year b) indefinite c) month-to-month d) over one year

the buyer's assets, income, and credit history

Lender approval of the buyer requires the verification and approval of _______.

a) in public records

Liana is looking for documentation of a mortgage lien. Where can she find this? a) in public records b) in the bank's private records, which usually remain under seal and are thus not accessible c) in the addenda to the original sales contract d) in the lender's records, which she will need permission to access

FALSE

License holders MUST enforce implied contracts. FALSE TRUE

FALSE

License holders can always create their own forms to use in real estate transactions. TRUE FALSE

FALSE

License holders should only advise homebuyers to get a lead-based paint inspection if they are expecting children. FALSE TRUE

b) TREC

Licensed Texas home inspectors abide by the guidelines as set forth by: a) ASHI b) TREC c) RESPA d) TAR

Easement

Lisa shares a driveway with her neighbor. The driveway is on Lisa's property but Lisa allows her neighbor to use the driveway. What is this an example of?

TRUE

Most executory contracts are created with the ultimate goal of being fully executed. FALSE TRUE

FALSE

Mutual consent must be written down in an agreement to be valid. TRUE FALSE

b) commercial properties

Net leases are most commonly used for: a) undeveloped properties b) commercial properties c) residential properties d) leasehold properties

a) a buyer who is unable to obtain traditional financing

Of the below, who is most likely to purchase a contract for deed? a) a buyer who is unable to obtain traditional financing b) a buyer who could obtain traditional financing but chooses not to c) a buyer who has a high income d) a buyer who has a great credit history

d) a death caused by a defect of the property

Of the following examples, which requires disclosure? a) a death by HIV-related illness b) a death by suicide of the previous owner c) a death by natural causes on the property d) a death caused by a defect of the property

d) unenforceable

Once created, a contract can be valid, void, voidable, or: a) performable b) acceptable c) executive d) unenforceable

b) operation of law or special statutory rights

One of the four categories of ways a lease can be discharged is: a) breach of one of the parties, if the lease has been breached at least three times b) operation of law or special statutory rights c) agreement on the part of the landlord and their spouse d) expiration of the landlord's patience if proper notice of an annoyance has been provided

b) possible future damages during the lease term

One reason why security deposits are often required is because they cover: a) both routine maintenance and tenant damage b) possible future damages during the lease term c) the repair costs for any existing damages d) routine maintenance during the duration of the lease

TRUE

Option periods are optional. TRUE FALSE

c) processing

Origination charges include application fees, origination fees, underwriting fees, verification fees, rate-lock fees, and what kind of fees? a) mortgage b) interest c) processing d) lending

title

Ownership of a property is also called _______.

a) Escheat

PETE stands for Police Power, Eminent Domain, Taxation, and: a) Escheat b) Elimination c) Estate d) Escrow

b) gives the buyer the right to terminate for any reason within the option period

Paragraph 23 of the One to Four Family Residential Contract: a) gives the buyer the right to terminate only if there is something unfavorable in the inspection b) gives the buyer the right to terminate for any reason within the option period c) allows the seller to terminate the contract if the buyer has poor credit d) allows the seller to terminate for any reason

d) The buyer has a right to have inspections done.

Paragraph 7A of the One to Four Family Residential Contract states that: a) The costs of any inspection done will be credited to the buyer at closing. b) The seller is not obligated to turn the utilities on and keep them on until closing. c) Only certain inspectors, approved by the seller, can perform inspections. d) The buyer has a right to have inspections done.

c) It is an odorless, colorless, life-threatening gas.

Radon is one of the most important factors to consider during inspection because: a) It affects most houses in Texas. b) It drastically increases a home's value. c) It is an odorless, colorless, life-threatening gas. d) It can be a source of oil, the rights to which the buyer can sell.

b) $60,000

Randy is buying a home for $300,000. He obtained two loans (one for $200,000 and another for $40,000). How much will Randy need to have in the cash portion of the sales contract? a) $40,000 b) $60,000 c) $120,000 d) $240,000

TRUE

Rescission of a contract has the legal effect of making it as though the contract had never been enter into. FALSE TRUE

FALSE

Restrictive covenants dictate everything EXCEPT how the buyer can and cannot use the property. FALSE TRUE

a) Yes. In Texas, this is standard.

Richard is reading over his title policy. It states that it will not cover any overlapping of improvements. Is this standard in Texas? a) Yes. In Texas, this is standard. b) Yes. In Texas, this is standard. This is the only exception to title policy coverage. c) No. In Texas, this is not standard. d) It depends on the number of improvements which overlap.

b) Representing the seller of an agricultural property

Select the transaction below where the license holder is required to use a TREC-promulgated form. The agent is: a) Representing the seller of a sports stadium b) Representing the seller of an agricultural property c) Representing a buyer who wants to purchase a new home for which the property owner has created their own form d) Purchasing a commercial property for themselves

TRUE

Seller financing is not typically used in residential transaction. TRUE FALSE

d) personal property

Shane bought a ceiling fan from Home Depot. It's still in the box and not attached to the ceiling. What is it considered? a) a cool gadget b) real property c) annexation d) personal property

d) marital status

Since Texas is a community property state, the title company might want to know a couple's or person's: a) anniversary date b) number of children c) birth date(s) d) marital status

d) the building and the lot on which it stands

Single-family home owners own: a) the lot b) neither the building nor the lot c) the building d) the building and the lot on which it stands

d) legislatures

Statutory laws are formally created by: a) homeowner's associations b) history c) customs d) legislatures

FALSE

TREC forms now give buyers three business days to deliver their termination-option fee. TRUE FALSE

d) TILA and RESPA

TRID combined disclosures from which two previous laws? a) the CFPB and the Volcker Rule b) CERCLA and SARA c) the ECOA and the Fair Housing Act d) TILA and RESPA

c) $25,000

Texas law requires school districts to offer a tax exemption on residence homesteads in what amount? a) $35,000 b) $15,000 c) $25,000 d) $10,000

b) groundwater (if they can pump it up to the surface)

Thanks to the rule of capture, surface right owners have the right to: a) rivers (if the body of water touches their property) b) groundwater (if they can pump it up to the surface) c) planes (if the planes cross over their property) d) oil (if they bring it up to the surface)

c) 1978

The Lead-Based Paint Addendum is required for properties built before: a) 2002 b) 2006 c) 1978 d) 1983

a) borrower credit report

The Loan Estimate Form will typically contain all of the following EXCEPT _____. a) borrower credit report b) loan terms c) projected payments d) closing costs

d) an estimate of the buyer's closing costs to the buyer after application

The Real Estate Settlement Procedures Act (RESPA) requires lenders to deliver: a) buyers' applications straight to the seller b) an estimate of the buyer's closing costs to the seller after application c) an estimate of the seller's closing costs to the buyer after application d) an estimate of the buyer's closing costs to the buyer after application

d) mortgage loan originators

The SAFE Act regulates the licensure of which type of real estate professionals? a) title agents b) home inspectors c) real estate attorneys d) mortgage loan originators

TRUE

The Statue of Frauds requires that specific contracts be in writing. FALSE TRUE

TRUE

The Texas Real Estate Commission does not write or change TRELA. TRUE FALSE

b) default of the loan terms by the borrower

The acceleration clause causes the entire balance to become due upon: a) a lack of maintenance on the property by the seller b) default of the loan terms by the borrower c) a vacating of the property by the owner d) the inability of either party to pay for repairs

a) 18 years old

The age at which a person can enter into a lease agreement is: a) 18 years old b) 16 years old c) 20 years old d) 21 years old

principal

The agent is a fiduciary for the ______.

b) Equitable Estate

The four main types of estate in land are Freehold Estate, Leasehold Estate, Concurrent Estate, and: a) Non-Freehold Estate b) Equitable Estate c) Equity Estate d) Fee Simple Estate

TRUE

The most common reason people lose their property is their failure to make payments on their mortgage. FALSE TRUE

b) The Americans with Disabilities Act

The new restaurant down the street has a ramp to provide access to patrons using wheelchairs. Which federal act requires establishments to do this? a) The Equal Credit Opportunity Act b) The Americans with Disabilities Act c) The Fair Housing Act d) The Texas Real Estate License Act

a) buyer

The objections section of the sales contract is where Alicia lists her dealbreakers. Who is Alicia? a) buyer b) agent c) broker d) seller

a) the seller

The option money should be delivered to: a) the seller b) the title company c) the lender d) the buyer's agent

c) amendment

The parties to a contract have decided that they want to change the closing date. The agent will need to prepare a(n): a) affidavit b) addendum c) amendment d) codicil

a) move a transaction from signed contract to closing

The primary purpose of a transaction checklist is to: a) move a transaction from signed contract to closing b) create a written transactional history for your records c) give your sponsoring broker the ability to track your progress d) keep from getting sued

d) competent parties to the lease, consideration, legal description of the property

The requirements of a valid lease include: a) competent or incompetent parties to the lease, offer and acceptance, lawful objective b) offer and acceptance, lawful objective, loose or general description of the property c) competent parties to the lease, offer without acceptance, legal description of the property d) competent parties to the lease, consideration, legal description of the property

for adding factual statements and business details regarding a transaction

The special provisions paragraph should be used:

be in writing

The statute of frauds requires all real estate contracts:

FALSE

There are no exemptions from the Fair Housing Act. TRUE FALSE

c) sign the deed

To complete the process of voluntary alienation, a seller must: a) get a copy of the title b) move out early c) sign the deed d) get authentication from a notary

c) addenda

To personalize a standard contract to fit many different situations, TREC has promulgated additions that can be added to the contract when the offer is created. These additions are called: a) codicils b) affidavits c) addenda d) amendments

a) A license holder is not directly involved.

To what extent is a license holder involved in the loan approvel process of their buyer client? a) A license holder is not directly involved. b) The license holder and lender work together to approve a loan for the buyer client. c) A license holder is directly involved. d) A license holder helps with the loan approval process of their buyer client.

a) to the seller or seller's agent/broker

To whom must the option money be delivered? a) to the seller or seller's agent/broker b) to the title company c) to the buyer's broker's escrow account d) It shouldn't be delivered to anyone; it should be held by the buyer in the form of a cashier's check.

They will order a copy of the recorded deed from the county records.

Tom is selling his home. He has looked everywhere and cannot find his original deed. How will the title company solve this problem?

a) original landowner

Upon the expiration of a ground lease, ownership of any construction on the land reverts to the: a) original landowner b) lessee c) renting commercial tenant d) builder

FALSE

Voidable contracts can never be valid contracts. FALSE TRUE

b) the type of market environment

What can influence the willingness of a buyer or seller to participate in splitting closing costs? a) negotiation tactics b) the type of market environment c) an agent d) the amount of earnest money the buyer paid

c) tenant damages that do NOT qualify as "normal wear and tear"

What charges may a landlord deduct from the security deposit? a) any and all damages that occurred during the lease term b) damages related to "normal wear and tear" c) tenant damages that do NOT qualify as "normal wear and tear" d) no charges, as all security deposits must be returned in full

b) It allowed planned living communities to discriminate based on age.

What did the Housing for Older Persons Act of 1995 do? a) It provided incentives for city government officials to create more zoning for the elderly. b) It allowed planned living communities to discriminate based on age. c) It made it illegal to build a retirement community within a flood zone. d) It required residential home builders to construct more assisted living facilities.

a) They are funded by lenders.

What do FHA and VA loans have in common? a) They are funded by lenders. b) They feature high down payments. c) They are not assumable. d) They charge MIPs.

d) allows tenants to use and occupy a property they do NOT own

What does a leasehold estate accomplish? a) allows tenants to use and occupy a property for an unspecified period of time b) establishes tenants' legal right to use and occupy a property they own c) provides tenants with the option of buying the property they are leasing before the end of the lease d) allows tenants to use and occupy a property they do NOT own

a) A certain act needs to take place in order for the contract to be executed.

What does it mean if there is a contingency in a transaction? a) A certain act needs to take place in order for the contract to be executed. b) A certain act must be done during the showing of the listed property. c) A certain act must be done at the time of inspection of the listed property. d) A certain act must occur after the contract is finalized.

a) It limits the number of lenders that can operate within a specific community or city.

What does redlining do? a) It limits the number of lenders that can operate within a specific community or city. b) It is part of a good, legal, fair housing practice. c) It raises the number of loans or the loan-to-value ratio in certain areas of a community or city. d) It is encouraged by the Community Reinvestment Act.

d) TREC's Notice of Buyer's Termination of Contract form

What form should be used when opting out of a Texas real estate sales contract? a) TRELA's Notice of Buyer Rescission form b) TAR's Notice of Buyer Opt-Out form c) TAC's Notice of Buyer Backout form d) TREC's Notice of Buyer's Termination of Contract form

d) The file goes to a live underwriter for review.

What happens if a borrower's loan application is rejected by a CLO? a) The borrower is offered a high-risk high-rate loan. b) The loan application is diverted to a secondary CLO to verify borrower criteria concerns. c) The loan is rejected without further review. d) The file goes to a live underwriter for review.

b) It is a federal law which ensures the legal validity of electronic contracts.

What is a characteristic of ESIGN? a) It shuts down any business that does not allow electronic signatures. b) It is a federal law which ensures the legal validity of electronic contracts. c) It is a state law. d) It was created before UETA.

a) None of these are true.

What is a characteristic of forbearance agreements? a) None of these are true. b) One party promises to perform all of their duties as specified in a contract. c) One party promises to take action against the other party if they default. d) Both parties promise not to default on their contract.

d) They are usually based on the dollar amount of the loan.

What is a characteristic of mortgagee title policies? a) The policy amount increases each year. b) They protect the buyer and lender. c) They are rarely required by lenders when they issue a mortgage loan. d) They are usually based on the dollar amount of the loan.

a) seven days

What is a reasonable time for making repairs in a residential tenancy? a) seven days b) thirty days c) two days d) two months

b) a claim against a particular parcel of real estate

What is a specific lien? a) a claim against all property an individual owns b) a claim against a particular parcel of real estate c) an individual's ability to use a portion of a neighboring landowner's land d) a part of a property that is over a neighbor's property line

d) Strict and timely performance is required.

What is a trait of option periods? a) The seller must do their due diligence promptly. b) Performance is expected, but deadlines aren't firm. c) They are NOT optional. d) Strict and timely performance is required.

d) an easement that allows a utility provider the right to use and access a specific area of another's property for gas, electric, water, and/or sewer line

What is a utility easement? a) an easement that is part of the public record and attached to the deed, and which title companies insure against b) an easement that is not shown on the survey since it refers to underground elements c) an easement that does not pass with the property but instead must be decided in court (regarding the "best use" of the property) d) an easement that allows a utility provider the right to use and access a specific area of another's property for gas, electric, water, and/or sewer line

addenda

What is added to a completed contract that specifies supplementary information to the contract that was not previously included in the contract?

c) the legal process whereby a lender takes control of a property held by a borrower in default and sells it to recover the lender's losses

What is foreclosure? a) the legal process whereby a borrower takes control of a property held by a lender in default and sells it to recover the borrower's losses b) the legal process where a lender can accelerate a borrower's payments and require them to pay the full remaining amount c) the legal process whereby a lender takes control of a property held by a borrower in default and sells it to recover the lender's losses d) the legal process where a seller can stay in the house past the closing date

b) breach of contract

What is it called when one or more of the contracting parties either partially or completely fails to fulfill the contractual obligations? a) broken contract b) breach of contract c) interruption of contract d) voidable contract

d) It combined the efforts of the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA).

What is the BEST description of the TILA-RESPA Integrated Disclosure (TRID)? a) It applies to home equity lines of credit. b) It covers most open-end consumer mortgages. c) It created two integrated forms to help the consumer control costs and understand the closing process, called the Closing Estimate and Loan Disclosure forms. d) It combined the efforts of the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act of 1974 (RESPA).

c) The seller promises to make good any problems with the title.

What is the Covenant of Further Assurance? a) If the title ever fails, the seller will compensate the buyer. b) The seller warrants that they are the owner. c) The seller promises to make good any problems with the title. d) The title is good against third parties who might bring suit.

d) The effective date is the day the contract becomes binding between the parties.

What is the effective date? a) The effective date is the day the option period starts. b) The effective date is the day the first counteroffer was made. c) The effective date is the date of closing. d) The effective date is the day the contract becomes binding between the parties.

b) Assignment is the transfer of parties in a contract. Novation is the exchange of one contract for another.

What is the major difference between assignment and novation? a) Assignment is an amendment to a contract after it has been signed. Novation is a completely different or new contract. b) Assignment is the transfer of parties in a contract. Novation is the exchange of one contract for another. c) Assignment is used for those who are not available to fulfill the contract. Novation is used when new contract forms are required to be used. d) Assignment transfers the contract into a trust until executed. Novation is the transfer of parties in a contract.

d) That would be the unauthorized practice of law.

What is the most valid reason why real estate agents should NOT create their own contracts? a) They would have to get them printed because handwritten contracts aren't allowed. b) They don't understand the concepts well enough to craft a contract. c) They might not want to assume the increased liability. d) That would be the unauthorized practice of law.

b) to make changes or modifications to an already agreed upon contract

What is the purpose of the Amendment to Contract form? a) to make changes or modifications to a contract prior to acceptance of the contract b) to make changes or modifications to an already agreed upon contract c) to make changes to a contract that tailor it to the specific circumstances of the property d) to serve as a notice that the contract is no longer enforceable

b) to make a change to a term that was originally agreed

What is the purpose of the TREC promulgated form Amendment to Contract? a) to accept an offer from the buyer b) to make a change to a term that was originally agreed c) to in the signed contract d) to add additional information to the original offer to counter an offer to purchase from the buyer

b) make sure the title company gets a copy of the amendment

What should the license holder do if there are any last-minute changes to the sales contract? a) make sure both parties (and their brokers) get a copy of the amendment b) make sure the title company gets a copy of the amendment c) make sure their client gets a copy of the amendment d) make sure all parties initial the changes on the original contract

d) sale of other property contingency

What type of contingency is meant to protect buyers from owning two homes at once? a) inspection contingency b) financing contingency c) title contingency d) sale of other property contingency

c) open

What type of listing provides a commission to the broker ONLY if their activities bring about a sale? a) exclusive right-to-sell b) net c) open d) exclusive agency

d) An addendum is attached to a contract to create additional terms, and an amendment changes the terms within an existing contract.

What's the difference between an addendum and an amendment? a) TREC promulgates amendments but does not promulgate addenda. b) An addendum needs to be signed by all affected parties, but an amendment does not. c) All contracts require amendments, but not all contracts require addenda. d) An addendum is attached to a contract to create additional terms, and an amendment changes the terms within an existing contract.

b) A special warranty deed only provides one covenant.

What's the main difference between a special warranty deed and a general warranty deed? a) There is so significant difference. b) A special warranty deed only provides one covenant. c) A special warranty deed provides three covenants instead of five. d) Special warranty deeds are illegal in most states.

FALSE

When a homebuyer goes to a lender to make a loan, the consumer is doing business with a secondary lender. FALSE TRUE

a) the landlord

When a lease ends, the property reverts to: a) the landlord b) the tenant c) the grantor named in the lease d) a third party named in the lease

short sale

When a lender agrees to allow the borrower to sell the property and accept less than a full pay off amount, it is referred to as a ________.

a conveyance

When a seller (grantor) signs a deed transferring property to a buyer (grantee), it is called ______.

c) no one is technically required to repair the problem

When an inspector reports a problem, _______. a) the lender must repair the problem b) the buyer must repair the problem c) no one is technically required to repair the problem d) the seller must repair the problem

b) It aligns with the agency policies of your sponsoring broker.

When building a transaction checklist, which of the following should be the most important consideration? a) It is easy for your client to understand. b) It aligns with the agency policies of your sponsoring broker. c) It is comprehensive enough to cover every contingency. d) It is mobile-friendly.

FALSE

When completing the Seller's Disclosure Notice, the seller only needs to disclose malfunctions, not defects. FALSE TRUE

d) when the borrower owes more than the current market value of the property

When is a borrower most likely to seek a short sale? a) when the borrower owes less than the current market value of the property b) when the lender increases the borrower's loan amount c) when the borrower is finished paying off their loan d) when the borrower owes more than the current market value of the property

d) if an owner doesn't explicitly limit the transfer of ownership to "surface only"

When is the mineral estate included in the sale? a) always b) never c) if there is documented potential for oil/gas development d) if an owner doesn't explicitly limit the transfer of ownership to "surface only"

b) get it in writing

When it comes to contracts, a best practice is to: a) keep it simple b) get it in writing c) use industry templates d) establish deadlines for performance

c) within seven days after tenant turnover

When must the landlord rekey residences? a) only by tenant request b) at least twice during each lease period c) within seven days after tenant turnover d) only when a tenant fails to turn in their keys after a lease ends

A failure to get everything in writing.

When the buyers took possession of their new home, they found that the seller had not followed through with a verbal agreement made two days earlier at closing to clean out the gutters. When confronted, the seller told them it was too expensive, so he decided not to do it. The buyers asked their agent for help and were told that there was legally nothing they could do. What common contractual mistake is this an example of?

TRUE

When the seller signs a document of conveyance, ownership interest has been conveyed from the grantor to the grantee. TRUE FALSE

d) The Fair Housing Act

Which federal act prohibits unfair and discriminatory practices? a) The New Deal b) The Federal Highway Act c) The Taft-Hartley Act d) The Fair Housing Act

c) The Consumer Financial Protection Bureau

Which government agency is responsible for enforcing the Truth in Lending Act (TILA) and Real Estate Settlement Procedures Act (RESPA)? a) The Texas Real Estate Commission b) The Housing and Urban Development c) The Consumer Financial Protection Bureau d) The Department of Housing and Urban Development

"Buyer's representative is related to buyer, and working for no commission."

Which is an example of an acceptable use of Paragraph 11 - Special Provisions?

b) Nancy Everett, a single person

Which of the examples below is the BEST example of identifying a single purchaser? a) Nancy Everett b) Nancy Everett, a single person c) Nancy Everett, MD d) Everett

d) A seller and a buyer sign a One to Four Family Residential Contract.

Which of the following agreements is enforceable in a Texas court? a) A buyer's agent agrees to a seller's counteroffer over lunch. b) A seller nods when the buyer asks if he likes her offer. c) A listing agent, on behalf of his seller, accepts an offer over the phone. d) A seller and a buyer sign a One to Four Family Residential Contract.

a) After the business goal is finished, the investors part ways instead of continuing business together.

Which of the following best describes a joint venture? a) After the business goal is finished, the investors part ways instead of continuing business together. b) When taking this partnership, the investor assumes unlimited personal liability. c) It is a type of venture only done by one proprietor. d) Texas only allows married couples to establish this proprietorship.

Computerized Loan Origination System

Which of the following can help a borrower get loan approval quickly and automatically?

c) Ownership interest in the property is transferred directly to the state without the deceased's consent.

Which of the following happens in escheat? a) Ownership interest in the property is transferred directly to one of the deceased's family members. b) Ownership interest in the property is transferred to an ex-spouse. c) Ownership interest in the property is transferred directly to the state without the deceased's consent. d) Ownership interest in property is transferred if the deceased gave previous consent.

a) insurance contingency

Which of the following is NOT a common type of contingency? a) insurance contingency b) financing contingency c) inspection contingency d) sale of other property contingency

d) The cooperating brokers do not always cooperate like they should.

Which of the following is NOT a good reason for closings to be separately attended by the seller and buyer? a) The order of buyer and seller closing doesn't matter, so individual schedules can be accommodated. b) Individual closings might make for a more pleasant conclusion if earlier negotiations were contentious or strained. c) The seller doesn't need to sit through the buyer's side of closing, which is usually a much more drawn-out experience than the seller's side. d) The cooperating brokers do not always cooperate like they should.

earnest money

Which of the following is NOT an essential element of a valid contract?

Agreements that are not written may not be enforceable.

Which of the following is TRUE about the statute of frauds?

b) wire transfers

Which of the following is an acceptable form of good funding? a) promissory note b) wire transfers c) a personal check d) credit card

d) Jimmy's HOA won't allow him to keep his trash can out by the curb past 8 p.m.

Which of the following is an example of a private land-use control? a) The City of Abilene won't allow Jimmy to build a coffee shop on his property. b) The City of Abilene claims Jimmy's property after he passes away. c) Jimmy owes $3,500 in taxes this year. d) Jimmy's HOA won't allow him to keep his trash can out by the curb past 8 p.m.

b) City Federal Credit Union seizes Shane's property as collateral because he defaults on his payments.

Which of the following is an example of a security interest? a) State law requires deeds of trust to be printed out and kept under lock and key. b) City Federal Credit Union seizes Shane's property as collateral because he defaults on his payments. c) Shane's bank requires him to sign a note before obtaining a loan. d) City Federal Credit Union earns interest on a secure bond.

c) a rent-to-buy lease where the tenant exercises an option to buy the property

Which of the following is an example of an executory contract with a set end date? a) an automatically renewing apartment lease contract where the tenant pays rent in exchange for living quarters b) an equipment lease where the user pays rent on the equipment being borrowed c) a rent-to-buy lease where the tenant exercises an option to buy the property d) a cable TV package subscription where the customer pays a monthly fee for access to programming

c) A seller signs a sales contract.

Which of the following is an example of express acceptance? a) A buyer sends an inspector to inspect a property. b) A seller makes a counteroffer. c) A seller signs a sales contract. d) A buyer says they'll buy a home if the title comes back clean.

d) whether or not an item is functioning properly

Which of the following is the concern of the general home inspector at the time of the inspection? a) what the life expectancy of an item is b) the fair market value of an item c) the age and quality of the item d) whether or not an item is functioning properly

d) The buyer should review the title commitment.

Which of the following is the most definitive way for a buyer to know what encumbrances exist on the property being purchased? a) The buyer should talk to the neighbors. b) The buyer should do a visual inspection of the property. c) The buyer should review the seller's disclosure form. d) The buyer should review the title commitment.

Promissory Note

Which of the following is the promise to pay on a mortgage loan?

d) unpaid income tax

Which of the following negatively affects homestead? a) a taxpayer's age b) the amount of rooms in a property c) credit card debt d) unpaid income tax

c) condo for sale: 3 bed, 2 bath, $1,200/month mortgage

Which of these advertisements violates the Truth in Lending Act? a) for rent: 2 bed, 1 bath, $1,000/month b) for sale: 2 bed, 1 bath in a family neighborhood c) condo for sale: 3 bed, 2 bath, $1,200/month mortgage d) for sale: 2 bed, 1 bath, listed at $256,000

b) All choices are correct.

Which of these forms satisfies the written property disclosure requirement? a) TAR's Seller's Disclosure Notice b) All choices are correct. c) TREC's Seller's Disclosure Notice d) seller's disclosure forms provided by brokerages and associations that contain all of the disclosures required by law

d) records of marriages and divorces

Which of these is an example of something the title company will search for in the public records? a) life insurance policies b) credit card statements c) criminal history d) records of marriages and divorces

d) Digital signatures do the same thing as electronic signatures, but are more secure.

Which statement BEST compares digital signatures and electronic signatures? a) Digital signatures do the same thing as electronic signatures, but are less secure. b) Digital signatures and electronic signatures do the same thing, and are equally secure. c) Digital signatures can be easily forged and are not encrypted, while electronic signatures are encrypted and cannot be copied in any way. d) Digital signatures do the same thing as electronic signatures, but are more secure.

d) owner policy

Which title policy protects up to the purchase price of the property? a) property policy b) seller policy c) lender policy d) owner policy

d) borrower, lender, trustee

Who are the three parties on a deed of trust? a) borrower, lender, broker b) borrower, lender, trustor c) borrower, lender, seller d) borrower, lender, trustee

a) the seller

Who must fill out the Seller's Disclosure Notice? a) the seller b) the buyer c) the buyer's agent d) the listing agent

c) RESPA prohibits anyone from giving or accepting anything of value in exchange for referrals of settlement service business.

Why can't license holders accept payment of any sort for referring clients to a bank? a) This may lead to a smaller commission for the license holder. b) Fees and kickbacks are only rarely allowed under RESPA, so most license holders choose not to engage in these practices at all. c) RESPA prohibits anyone from giving or accepting anything of value in exchange for referrals of settlement service business. d) This may lead to the client choosing to work with a different license holder.

b) 20 days

Within how many days of the title company receiving the sales contract does the seller have to deliver (via the title company) a copy of the title commitment to the buyer? a) 15 business days b) 20 days c) 45 calendar days d) 30 days

d) an encroachment

Without permission, Betsy's neighbor built a fence that extends onto Betsy's property. What is the fence? a) an easement b) an exchange c) an estate d) an encroachment

FALSE

You can enter into a Buyer/Tenant Representation Agreement even if the client is currently represented by another agent. FALSE TRUE

b) All choices are correct.

You should NOT modify existing TREC forms or any other standard forms to create: a) contracts for deed b) All choices are correct. c) lease-purchase contracts d) lease-option contracts

c) Yes, a government agency can require their own form to be used.

A broker is helping a government agency locate a building they can buy for an office. The agency has their own form they want the agent to use when they make their offer. Can the agent do that legally? a) No, it would be a violation of TRELA. b) No, they must use the promulgated form. c) Yes, a government agency can require their own form to be used. d) No, it is a violation of the Rules of the Commission.

c) where multiple parties co-own it

A concurrent estate is any type of estate: a) where a party has an encumbrance on a property b) where one party has full ownership rights to a property c) where multiple parties co-own it d) where a tenant enjoys the right to possession during their lease

a) specific, voluntary lien

A mortgage is an example of a: a) specific, voluntary lien b) general, voluntary lien c) general, involuntary lien d) specific, involuntary lien

b) No, it was the seller who made the false claim, and the agent had no reason to doubt him.

A seller tells his agent that his house had never flooded. The agent checks the flood zone map and finds the property is not within the limits. After the house is sold, it is discovered that the property has flooded many times before and the buyer is furious. Could the agent be in violation of the DTPA? a) Yes, the agent could be found guilty of fraud. b) No, it was the seller who made the false claim, and the agent had no reason to doubt him. c) No, the DTPA does not deal with these types of issues. d) Yes, the agent should have checked everything themselves in order to be sure.

implied contract

An agent shows a buyer homes without a written agreement to do so. During the showings the agent talks about how she is going to help them find a home. If the agent's actions cause the buyer to assume the agent is representing them, the agent may have created a(n) __________________.

b) frauds

An oral contract to buy a piece of real estate is unenforceable because it does not comply with the statute of: a) civil affairs b) frauds c) duress d) limitations

a) when Betsy dies

Doug granted Betsy a life estate for a property he owned and named his son as the remainderman. When will his son become the owner of the property? a) when Betsy dies b) never c) when Doug dies d) Life estates are not legal in Texas.

joint tenancy

Four friends bought a piece of property. They all closed at the same time, they each own 25% and they all have the right of possession and if any of them die their share passes to the other three owners. The friends have a _________________ with right of survivorship.

a) 6

How many brokers are on the Broker-Lawyer Committee? a) 6 b) 4 c) 9 d) 3

a) the stream

If Jenna has the water rights to a property, she has the rights to: a) the stream b) the rainwater c) the well d) the groundwater

d) The landowner has the right to do that.

If an owner can capture so much water from below their land that it affects the wells of her neighbors, the courts say _____. a) The landowner cannot legally capture any groundwater. b) The landowner must reimburse the neighbors. c) The landowner must gain the permission of their neighbors first. d) The landowner has the right to do that.

a) grantor

If no third party is named as remainderman, when a life estate owner dies, the property reverts to the: a) grantor b) heir of the life estate owner c) relative of the life estate owner d) third party

c) riparian

If someone has a river on their property, what type of rights would be associated with it? a) aquatic b) coastal c) riparian d) littoral

a) in trust, in severalty, or in co-ownership

In Texas, an estate can be held: a) in trust, in severalty, or in co-ownership b) in co-ownership only c) in severalty or in co-ownership only d) in trust or in severalty only

FALSE

Inserting a provision in the contract form is sufficient in protecting mineral rights. TRUE FALSE

d) real estate

Jami has a beautiful 10-year-old oak tree planted in her backyard. What is the oak tree considered to be? a) annexation b) personal property c) fixture d) real estate

d) bill of sale

Jane is selling her house and wants to sell the washer to the buyer as well. The washer is not annexed to the real estate and is considered personal property. What kind of document should Jane's license holder use to transfer ownership of the washer? a) notepad b) deed c) contract d) bill of sale

Equitable interest

Jane's entered into a sales contract with the seller of 444 Dream Avenue. Jane's interest in the property is now known as:

c) Yes. She'll need to use the Condominium Contract.

Marissa, a license holder, is assisting a seller in the sale of their condo. Does she need to use a promulgated contract? a) Yes. She'll need to use the Residential Contract. b) No. There are no promulgated contracts in Texas. c) Yes. She'll need to use the Condominium Contract. d) No. Marissa can write up the contract herself.

d) Samantha's license is suspended and she is fined.

Samantha has committed the unauthorized practice of law. What is the BEST example of possible TREC penalties? a) Samantha's license is revoked and she must perform 100 hours of community service. b) Samantha receives a mild reprimand. c) Samantha receives a short prison sentence. d) Samantha's license is suspended and she is fined.

a) a Lead-Based Paint Disclosure Form.

The Environmental Protection Agency requires sellers of houses built before 1978 to furnish buyers with: a) a Lead-Based Paint Disclosure Form. b) a Mold Disclosure Form. c) a Radon Discovery Form. d) a Mineral Disclosure Form.

c) the lender to recoup their losses on the loan the borrower defaulted on

The goal of foreclosure is for: a) the lender to sell the house as quick as possible b) the borrower to be able to leave the house as quick as possible c) the lender to recoup their losses on the loan the borrower defaulted on d) the borrower to recoup their losses on the loan they defaulted on

c) the right of survivorship

The major difference between tenancy in common and joint tenancy is: a) who has possession of the property b) the number of contracts signed c) the right of survivorship d) the number of owners

d) identify its stage of existence

To describe a contract as "executory" is to: a) define it as performance-based b) describe its nature or purpose c) indicate it can be terminated d) identify its stage of existence

d) It establishes a tenant's legal right to use and occupy a property they do not own.

What rights does a leasehold estate establish? a) It designates a tenant as the remainderman of a property in the event the landlord dies. b) It provides a tenant with the option of buying the property they are leasing before the end of the lease. c) It establishes a tenant's legal right to use and occupy a property they own. d) It establishes a tenant's legal right to use and occupy a property they do not own.

d) implied agency

What type of agency occurs when a party assumes consent to a relationship based solely upon inferences formed by the actions, conduct, and words of either or both parties? a) express agency b) dual agency c) written agency d) implied agency

a) both partners

When a married couple purchases a home in Texas, who is required to sign the deed? a) both partners b) one partner c) whoever has the nicest signature d) whoever makes the most money

c) the TREC promulgated contract addendum

When dealing with a property sale that includes mineral rights, an agent is required to use: a) the TAR Mineral and Oils contract b) the form provided by their broker c) the TREC promulgated contract addendum d) the NAR sub-surface lease addendum Submit answer

b) Deceptive Trade Practices Act

Which law protects consumers from fraudulent schemes? a) Doctrine of Laches b) Deceptive Trade Practices Act c) Statute of Limitations d) Statute of Frauds

a) The City of Abilene claims a 12 x 30 feet section of Lisa's property in order to add another lane to the highway.

Which of the following is an example of eminent domain? a) The City of Abilene claims a 12 x 30 feet section of Lisa's property in order to add another lane to the highway. b) The City of Abilene demands Lisa pay $3,300 in property taxes. c) The City of Abilene does not permit Lisa to build a car dealership on her land. d) The City of Abilene lays claim to Lisa's property after she passes away, as she had no will or descendants.

b) The buyer and seller of 6602 Krollton are both of sound mind and over the age of 18.

Which of the following is the BEST example of a legally valid contract? a) Jenny had an agent prepare her contract. b) The buyer and seller of 6602 Krollton are both of sound mind and over the age of 18. c) Michael got his sales contract notarized by a licensed notary. d) Melissa gave her home away for free.

b) All claims must be filed prior to the statutory deadline or the legal right to press a claim is barred.

Which of the following is true regarding the statute of limitations? a) A legitimate complaint for a performance failure related to a valid contract will be considered even if the statute of limitations has expired. b) All claims must be filed prior to the statutory deadline or the legal right to press a claim is barred. c) Statute of limitations are federal-level laws only. d) Statute of limitations are state-level laws only.

c) No. A lender can still foreclose on a homestead property if the owner defaults on their mortgage, which Alex did.

Alex is evicted from his home. He claims that his homestead rights should prevent the eviction. Is Alex correct? a) Yes. Because Alex lives in a condo that is part of a mixed-use development, homestead rights protect against eviction. b) Yes. Homestead rights always protect against eviction by all creditors. c) No. A lender can still foreclose on a homestead property if the owner defaults on their mortgage, which Alex did. d) No. Because Alex is a convicted criminal, homestead rights do not apply to him.

b) until either the tenant or the landlord decides tenancy should end

An estate at will allows the tenant to occupy the property: a) until their lease ends b) until either the tenant or the landlord decides tenancy should end c) until the landlord renews the lease d) beyond the term stipulated in the lease agreement

b) a special form of joint tenancy that exists between a married couple

Community property is: a) only applicable to divorced couples b) a special form of joint tenancy that exists between a married couple c) not a legal term in the state of Texas d) owned by an individual

a) Unilateral contracts offer to pay for accomplished performance. Bilateral contracts offer to pay for the promise of performance.

Describe an important distinction between unilateral and bilateral contracts. a) Unilateral contracts offer to pay for accomplished performance. Bilateral contracts offer to pay for the promise of performance. b) Unilateral contracts involve only one party. Bilateral contracts require two parties. c) Unilateral contracts only require one signature. Bilateral contracts require two. d) In unilateral contracts, only one party performs. In bilateral contracts, both parties perform.

FALSE

In Texas, if a buyer purchases the surface rights, they automatically acquire the subsurface rights. FALSE TRUE

FALSE

In Texas, the owner of the property can give or revoke access at their will to the owner of the subsurface rights. TRUE FALSE

d) reciprocal obligations

In a bilateral contract, what kind of obligations are created? a) unenforceable obligations b) solitary obligations c) double obligations d) reciprocal obligations

c) when their lease has expired

In a leasehold estate, when does the tenant's right of possession end? a) as soon as the current landowner accepts a buyer's offer b) on closing day c) when their lease has expired d) the day their landlord lists their rental on the MLS

d) Deeds were not always recorded.

In the early days of real estate, why was it easy for a seller to cheat a buyer by selling a property multiple times? a) Most sellers sold with bad intentions. b) People were not as smart at this time. c) Buyers were used to buying houses on good faith alone. d) Deeds were not always recorded.

d) easement

The right of one party to access or use the land of another is a(n): a) lien b) assessment c) encroachment d) easement

d) real property

The seller has a flat screen TV. To mount the TV, the seller puts brackets on the wall. What are the brackets considered? a) a nuisance b) personalty c) personal property d) real property

d) zoning

Timmy owns the rights to a lot in Abilene, Texas. He wants to build a laundromat, but the City of Abilene will not give him permission because of his location. What is this an example of? a) eminent domain b) taxation c) escheat d) zoning

c) scarcity, situs (location), modification, fixity

What are land's economic characteristics? a) moveable, modification, investment, permanent b) abundant, moveable, permanent, everywhere c) scarcity, situs (location), modification, fixity d) indestructibility, immobility, non-homogeneity, abundant

c) shares of the corporation that owns the building(s)

What do cooperative members own? a) the land b) only the common areas c) shares of the corporation that owns the building(s) d) their part of the building

c) unlimited personal liability

What do general partners assume in a partnership? a) unlimited corporate liability b) risk shared with other limited partners c) unlimited personal liability d) limited personal liability

b) the right of a surface estate owner to use all groundwater that they can bring to their surface

What does the "rule of capture" refer to? a) the right of a surface estate owner to access all nearby lakefront property b) the right of a surface estate owner to use all groundwater that they can bring to their surface c) the right of a surface estate owner to use all water that flows by their house d) the right of a surface estate owner to access all rainfall that lands on their property

a) inherent value

What is NOT a unique characteristic of land? a) inherent value b) indestructibility c) non-homogeneity d) immobility

b) personal property that's transformed into real property

What is a fixture? a) real property that's transformed into an abstract b) personal property that's transformed into real property c) real property that's transformed into personal property d) personal property that's transformed into an abstract

b) a notice used to inform the public when a lawsuit is filed that affects a specific piece of real estate

What is a lis pendens? a) a contract used to formalize a lien b) a notice used to inform the public when a lawsuit is filed that affects a specific piece of real estate c) a list that prioritizes liens on a property d) a term used for federal judgement liens

a) land and improvements

What is real estate? a) land and improvements b) land, water, and improvements c) land and water d) improvements and water

land and everything that is permanently attached to the land, plus all the things growing above and below the surface of the land

What is real property?

a) to create, edit, and recommend contract forms to TREC

What is the primary purpose of the Broker-Lawyer Committee? a) to create, edit, and recommend contract forms to TREC b) to promulgate transaction forms, making them voluntary or required c) to arbitrate real estate contract disputes d) to create and codify real estate rules for TREC

a) building and zoning laws

What laws dictate what types of real estate buildings can be built in a geographical area? a) building and zoning laws b) area laws c) location laws d) geographical laws

d) Marcela passed away without a will and no known heirs, so the City of Abilene now has the title to her estate.

Which of the following is an example of escheat? a) Marcela is not allowed by the City of Abilene to build a guest house in her backyard. b) Marcela's subdivision requires her to park her vehicles inside her parking garage. c) The City of Abilene is taking 132 feet of Marcela's property in order to add a roundabout. d) Marcela passed away without a will and no known heirs, so the City of Abilene now has the title to her estate.

a) Katie is conveying the title of her land to Tim on the condition that no illegal drugs are consumed on the property or she can reclaim the title.

Which of the scenarios below BEST describes fee simple subject to condition subsequent? a) Katie is conveying the title of her land to Tim on the condition that no illegal drugs are consumed on the property or she can reclaim the title. b) Katie is conveying the title of her land to Tim until Katie's children reach the age of 18. c) Katie is conveying the title of her land to Tim for life, no conditions attached. d) The State of Texas is granting Tim the right to the title to his property for his lifetime, in spite of any third party lien on the property.

c) a timeshare developer

Which person would TREC regulate? a) a mortgage banker b) a landscape architect c) a timeshare developer d) a maintenance worker

Texas Real Estate Commission

Who enforces TRELA and oversees the licensing of agents?

c) the mortgage company

Who initiates the foreclosure on an 80-10-10 loan? a) the seller b) the buyer c) the mortgage company d) the HOA

FALSE

License holders can always create their own forms to use in real estate transactions. FALSE TRUE

c) fee simple estate

Monica owns her house. For the duration of her lifetime, she has the right to her property (unless she sells it) and can will her property title to her children after her death. Monica has a: a) freehold estate b) leasehold estate c) fee simple estate d) life estate