Texas Promulgated Contract Forms
How much was the net rental loss deduction provided by the Tax Reform Act of 1986? - $5,000 - $10,000 - $25,000 - The total amount of the property
$25,000
If financing cannot be obtained, how long will the buyer have to terminate the contract? - 30 days after the effective date of the contract - 60 days after the effective date of the contract - 120 days after the effective date of the contract - 30 days before the effective date of the contract
- 30 days after the effective date of the contract
Which of the following statements made by a real estate agent, if knowingly incorrect, is the most likely to meet the condition of fraud? - Everyone that buys through me is wise. - It is a great neighborhood. - The fence line is the property line. - The standard commission is 6% but I will only charge you 5%.
- The fence line is the property line.
When a seller carries a loan for a buyer, matured unpaid amounts will bear interest at the rate of ________ or at the highest lawful rate, whichever is lower according to the Texas Real Estate Commission promulgated Seller Financing addendum. - 10% per annum - 12% per annum - 18% per annum - 20% per annum
18% per annum
A resale certificate must have been prepared no more than how long before the date it is delivered according to the Residential Condominium Contract (Resale)? - 1 month - 2 months - 3 months - 6 months
3 months
Which one of the following is a TREC rule on filling in Paragraph 3 of the Texas Real Estate Commission One to Four Family Residential Contract (Resale)? - All three blanks must have a number greater than zero. - The real estate agent should never fill in these blanks. It must be filled in by one of the principles. - 3.A. + 3.B. = 3.C. - 3.A. > 3.B.
3.A. + 3.B. = 3.C.
According to the TREC promulgated Seller's Temporary Residential Lease, how long does the landlord have to itemize and provide to the tenant any deductions to the security deposit? - 3 days - 5 days - 30 days - Whatever is filled in the blank.
30 days
For sellers who are carrying notes for buyers, Texas Real Estate Commission promulgated Seller Financing addendum requires a late payment fee of _________ for any payment made more than 10 days late. - $100 - $50 - 5% - 1%
5%
The Broker-Lawyer Committee is made up of: - 4 lawyers, 4 brokers, and two members of the public. - 6 lawyers and 5 brokers - 3 lawyers, 3 brokers, and 3 public members - 6 lawyers, 6 brokers, and one member of the public
6 lawyers, 6 brokers, and one member of the public
Using the Texas Real Estate Commission promulgated Buyer's Temporary Residential Lease, a buyer can lease a property up to ______ prior to closing. - 30 days - 45 days - 90 days - 180 days
90 days
What is the maximum about of time allowed to lease on the TREC promulgated Buyer's Temporary Residential Lease? - 30 days - 60 days - 90 days - There is no limit
90 days
What must the seller disclose to a buyer about a property? - All material facts - Only the items on the Seller's Disclosure Notice - Only the items listed under section 9 of the Texas Property Code - Nothing, the buyer must be aware
All material facts
A person can be in violation of the Anti-Trust if there was: - Restraint of trade or commerce - Collaboration of businesses to the detriment of consumers - Price Fixing - all of the above.
All of the above
What damages could a seller possibly claim if the buyer is in breach of a contract? - Loss of marketing time - Any fees actually paid - Mental duress - All of the above
All of the above
Which of the following is an exemption to a real estate agent using Texas Real Estate Commission promulgated forms? - A form directed to be used by a new home builder. - A form directed to be used by a land developer. - Commercial real estate forms. - All of the above
All of the above.
According to the Addendum for "Back-Up" Contract, what happens if there is a modification to the first contract? - The seller can terminate the first offer and accept the back-up contract. - Any modification to the first contract does not terminate that contract. - The first contract would terminate if the modification is for loan approval but all other modifications would not terminate that contract. - The back-up buyer could force the first contract to terminate by filing a Lis Pendens.
Any modification to the first contract does not terminate that contract.
On the TREC Seller's Temporary Residential Lease, the ____________ is the landlord and the ____________ is the tenant. - buyer, seller - seller, buyer - real estate agent, buyer - seller, real estate agent
Buyer, seller
What type of contract dispute results in going to court and usually involves attorneys and research? - Litigation - Mediation - Arbitration - Sublimation
Litigation
Which of these forms is a Texas Real Estate Commission (TREC) promulgated form? - Broker-agent employment contract - New Home Contract (Completed Construction) - Listing Agreement - Residential Lease Agreement
New Home Contract (Completed Construction)
What is the maximum amount of commission allowed by law? - 18% - 6% - 1% of sales price - No limit
No limit
According to the TREC promulgated Addendum for Sale of Other Property by Buyer, what must the seller do if they accept a back-up offer? - Terminate the first contract. - Place the second offer in a hold-over position. - Renegotiate the first contract. - Notify the buyer.
Notify the buyer
Which of the following statements is FALSE regarding reformation? - The written agreement is changed to reflect the parties' original understanding. - It is granted only if one party was unaware that the writing did not conform to the actual agreement. - The agreement may be rewritten. - One of the parties assigned his duties under the contract to a third party.
One of the parties assigned his duties under the contract to a third party.
Where on the Texas Real Estate Commission One to Four Family Residential Contract (Resale) does the address get entered? - Upper left hand corner - Paragraph 2 - Lower left hand corner - Paragraph 3
Paragraph 2
According to the Addendum for "Back-Up" Contract, when must the option money be paid? - Upon execution - Upon delivery earnest money - Upon termination of the first contract - Never
Upon execution
If a buyer living in the property under a Buyer's Temporary Residential Lease can make alterations to the property... - as they see fit since they are buying the home. - only if the alteration is written into the lease. - with the owner's permission. - only after the lease is complete and they own the property.
With the owner's permission
Can a residential purchase agreement be valid if it has "zero" earnest money? - Yes, Earnest money is not required. - No, at least one dollar must be stated - Yes, as long as the closing occurs within 10 days of the agreement - No, at least 10 dollars must be stated.
Yes, Earnest money is not required.
Can a real estate agent use a contract drafted by a builder/owner of new homes? - Yes, it is an exception. - No, only Texas Real Estate Commission promulgated forms can be used by real estate agents. - Yes, but only if the builder contract was drawn up by an attorney licensed in the state of Texas. - No, there is a contract that Texas Real Estate Commission has approved for such a transaction.
Yes, it is an exception.
Why might a buyer want to have an option to terminate? - To call for a house inspection. - To have time to make the best decision - To lock up a property while shopping for others. - All are allowable reasons
All are allowable reasons
What repairs might be noted on the Texas Real Estate Commission Amendment to Contract? - Swimming pool has missing tiles that are to be replaced. - The sink in the main bathroom is cracked and is to be replaced. - Fix leaky pipe in the laundry room. - All of the above.
All of the above
Which of the following is a possible penalty for a violation of the Sherman Anti-Trust Act? - $100 million or more for corporations. - $1 million for an individual. - Up to ten years in prison for an individual. - All of the above.
All of the above
Fair housing violations can result in: - Fines of up to $16,000 for the first offense. - Plaintiff attorney fees. - Unlimited punitive damages. - All of the above.
All of the above.
What might be a reason for the necessity to change the closing date of a contract? - The repairs will take longer than expected. - The seller needs more time to find another home. - The buyer cannot get out of his or her lease. - All of the above.
All of the above.
Which of the following could possibly claim an interest into an owner's title? - Government - The purchase money lender - Contractors - All of the above
All of the above.
Buyer Dan wants to use the property to operate a home business. Where would he note this intent on the Texas Real Estate Commission One to Four Family Residential Contract (Resale)? - 8A Broker or Sales Agent Disclosure - 6B Commitment - 6D Objections - 11 Special Provisions
6D Objections
Which of the following questions should be asked at a listing appointment? - Is the property homesteaded? - Are payments on the property current? - Are you keeping the mineral rights? - All are appropriate questions to be asked on a listing appointment.
All are appropriate questions to be asked on a listing appointment.
When does a purchase agreement become binding if both parties have signed and both parties have been notified? - At that time - 3 days - 7 days - 10 days
At that time
In the Residential Condominium Contract (Resale) paragraph 4, what type of leases are discussed? - Residential - Business - Fixture - Both 1 and 3
Both 1 and 3
FEMA can provide the buyer with what? - Flood Plain Maps - Mineral Maps - Subsoil Rights - Wind Maps
Flood Plain Maps
Which of the following is a real estate agent allowed to do? - Practice law, on a limited basis - Give legal advice to represented clients - Give advice as to the pricing of an owner's property - Discourage any principal from employing a lawyer
Give advice as to the pricing of an owner's property
What law was designed to increase incentives to induce home ownership? - The Home Owner Initiative Act of 1994 - Home Mortgage Interest Deduction Act of 1982 - Tax Reform Act of 1986 - Capital Gains Tax Act of 1992
Tax Reform Act of 1986
Who is responsible for costs of any inspection and actions checked on the TREC Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum? - The seller - The local government - The buyer - The state government
The buyer
On the New Home Contract (Completed Construction), what happens if the buyer fails to deposit agreed upon earnest money? - The buyer is given a 5-day grace period. - The buyer is in default. - The buyer must pay a cash penalty. - The buyer is charged a late fee not to exceed $50 per day.
The buyer is in default.
A person in violation of the Anti-Trust could be fined: - $1,000 - $10,000 - $100,000 - $1,000,000
$1,000,000
If a person violates the Anti-Trust Act, what is the maximum fine? - $50,000 - $50,000 first offense, $100,000 second offense and $500,000 each offense after - $100,000 if the act was innocent and $200,000 if the act was intentional - $1,000,000
$1,000,000
A corporation found in violation of the Anti-Trust Act could be fined: - $100,000 - $1,000,000 - $100,000,000 or more - no fines are associated with a violation
$100,000,000
If the sale price is $278,000 and the cash portion is $65,000, what is the financing amount? - $343,000 - $213,000 - $208,000 - $212,000
$213,000
What is the legal age in Texas to enter into a valid, binding contract? - 17 -18 - 21 - Any age
18
The Seller's Temporary Residential Lease calculates rent on a: - daily rate. - weekly rate. - monthly rate. - annual rate.
Daily rate
How should the loan amount on the Texas Real Estate Commission One to Four Family Residential Contract (Resale) be entered into paragraph 3? - Percentage amount - Cost plus commission - Dollar amount - Percent of the listed price
Dollar amount
When negotiating a loan assumption, if the seller does not respond to the buyer's Loan Assumption addendum within 7 days, what happens? - The addendum is void. - It is assumed the seller has approved the addendum. - It is assumed the seller has rejected the addendum. - The bank agrees to the loan assumption.
It is assumed the seller has approved the addendum.
When will the closing of a transaction be held? - 45 days after the agreement of a contract. - The lender determines the closing date. - Texas Real Estate Commission promulgated contracts state that the closing date shall be no more than 20 business days after mutual assent has occurred. - It is negotiable between the buyer and seller.
It is negotiable between the buyer and seller.
According to the TREC Farm & Ranch contract, how long does the buyer have to object if any portion of the property is on the FEMA flood map? - 10 days - 15 days - 20 days - It's negotiable.
It's negotiable
According to the TREC Addendum for Property Subject to Mandatory Membership in a Property Owners Association, who is responsible for paying the title company for the cost of obtaining information from the association? - Seller - Buyer - Both buyer and seller on an equal split - Its negotiable, the real estate agent would mark the correct box
Its negotiable, the real estate agent would mark the correct box
How many amendments are allowed on a valid contract? - No more than two without a rewrite - Only one - Multiple - Amendments are not allowed after 10 days after acceptance
Multiple
If a home is being leased back to the seller under TREC's Seller's Temporary Residential Lease, when should a walk-through of the home be performed? - Prior to closing and prior to the end of the lease term - After closing - After the buyer moves in - Never
Prior to closing and prior to the end of the lease term
In what paragraph of Residential Condominium Contract (Resale) is a note regarding environmental matters? - Possession - Seller Disclosures - Title Policy - Property Condition
Property Condition
What paragraph of Residential Condominium Contract (Resale) deals with residential service contracts? - Property Condition - Seller Disclosures - Title Policy - Title Notices
Property Condition
In what paragraph of the Residential Condominium Contract (Resale) would you find items dealing with exclusions? - Title Policy - Property and Condominium Documents - Notes - Tax District
Property and Condominium Documents
What is another term for "rewritten"? - Rescission - Revocation - Renunciation - Reformation
Reformation
What is another term for "cancellation"? - Rescission - Revocation - Renunciation - Reformation
Rescission
What was the Texas Real Estate License Act called in 1939? - The Real Estate Dealer's License Act - The Broker's Act of 1939 - The Real Estate Settlement Procedures Act - The Real Estate Investment Act
The Real Estate Dealer's License Act
What is an 80-10-10 loan program? - A person of 80 years of age has a fixed rate of 10% for 10 years. - 80% of the value of the property is land, 10% of the value of the property is in the structure and 10% of the value of the property is in minerals. - The buyer must have a score of 80 on credit, and not have a late payment within 10 months of loan approval and no late pays with 10 weeks of closing. - The buyer will borrow 80%, put 10% down and get a second lien for 10%.
The buyer will borrow 80%, put 10% down and get a second lien for 10%.
If the buyer wants to terminate the TREC One to Four Family Residential Contract (Resale) for any reason that is not on the Notice of Buyer's Termination of Contract, what should the real estate agent do? - The real estate agent should advise the buyer that the buyer could be in breach of contract. - The real estate agent should write the reason for the termination in the Special Provisions paragraph of the TREC purchase agreement and send to the other real estate agent. - The real estate agent should use the TREC promulgated addendum, Other Reasons for Termination by Buyer. - The real estate agent should advise the buyer to seek legal counsel.
The real estate agent should advise the buyer to seek legal counsel.
Under TREC's Buyer's Temporary Residential Lease, who is responsible for any injuries that occur during the lease agreement? - The Texas Real Estate Commission - The title company - The seller - The buyer
The buyer
Which of the following statements is true regarding offers? - If the seller's counter-offer is rejected, the seller can then accept the original offer. - Acceptance of most of the contract terms creates an implied contract. - The buyer may withdraw his offer any time prior to acceptance by the seller. - Oral acceptance in the presences of a witness binds the parties until the written signatures can be obtained.
The buyer may withdraw his offer any time prior to acceptance by the seller.
Which of the following is required for fraud? - Must have over $100.00 as damages. - Must involve a HUD protected class. - The incident must have occurred during the last 36 months - The consumer must have relied on the information provided by a licensee
The consumer must have relied on the information provided by a licensee
What is the best definition for "option" when referring to TREC One To Four Family Residential Contract (Resale)? - The days either party has the right to terminate the contract without recourse. - The days the buyer would have to terminate without recourse. - The days the seller would have to terminate without recourse. - There is never an option on TREC contracts, the contract is binding upon agreement.
The days the buyer would have to terminate without recourse
Which items are included in the condo's documents? - Title, deed, abstract - Title, opinion, coverage - The declaration, bylaws, rules - Rule book, fees, taxes
The declaration, bylaws, rules
During a short sale, how much is the maximum the seller can receive? - Unlimited - The seller cannot make more than 3% of the sales price. - The seller cannot make any money on the sale. - The seller must receive enough money to cover closing and moving costs.
The seller cannot make any money on the sale.
How difficult was the real estate license to acquire prior to the 1930's? - There were only 50 questions and all were true/false. - The same test as today, with updates - The test was based on practical experience, not questions. - There was no test
There was no test
On the Unimproved Property Contract, in what paragraph would you find information regarding property liens? - Property - Title Policy and Survey - Property Condition - Special Provisions
Title Policy and Survey
Which of the following is the best reason to use the Addendum for Reservation of Oil, Gas & Other Minerals? - To prevent sellers from having to retain an attorney. - To prevent buyers from having to retain an attorney. - To keep the real estate agents from practicing law. - To prevent the parties of the contract from having to retain an attorney.
To keep the real estate agents from practicing law.
Exemptions to the requirement for providing a Seller's Disclosure Notice include all the following except: - Transfers from the court on a foreclosure sale. - Transfers between spouses. - Transfers from a trustee in a bankruptcy. - Transfer from an investor in real property.
Transfer from an investor in real property.
Is it possible in the state of Texas for one person to own the mineral rights and another person own the surface rights? - No, the two are appurtenant. - Yes, they can be severed laterally. - No, Texas Property Code requires that if a person owns the mineral rights they have the right to access those through the surface. - Yes, Air rights, Surface rights and Subsurface rights by law are all separate and sold separately.
Yes, they can be severed laterally.
Can a Property Owners' Association charge transfer fees legally? - Yes, this transfer fee is perfectly legal. - No, transfer fees became illegal to charge in January 2014. - Yes, if the money is used to pay down the mortgages of the rest of the homeowners. - No, transfer fees have never been legal.
Yes, this transfer fee is perfectly legal.
A title search could uncover all the following EXCEPT: - unpaid mortgages. - judgments against previous owners. - a low appraisal - easements
a low appraisal
If a buyer's agent receives a finder's fee from a lender, the agent: - must keep it confidential so that it doesn't influence the buyer. - must disclose the information to all parties in the transaction. - must offer to split the finder's fee with the buyer. - must discount the commission she receives for the transaction by the amount of the finder's fee.
must disclose the information to all parties in the transaction.
How many days is an option for? - 3 days - 7 days - 10 days - negotiable
negotiable
In the Texas Real Estate Commission One to Four Family Residential Contract (Resale), where would you find down payment for the property identified? - paragraph 3.D - paragraph 3.C - paragraph 3.B - paragraph 3.A
paragraph 3.A