Texas Promulgated Forms Final Review 2

An offer becomes a binding contract when a. the signed contract has been delivered to the title company. b. the last party has signed and the other party has been notified. c. there is a meeting of the minds and earnest money tendered. d. one party states verbally that the written offer is accepted.

b. the last party has signed and the other party has been notified.

Which of the following is NOT addressed by a TREC-promulgated form? a. Assumption of an FHA-insured loan b. A purchase using seller financing c. A lease with an option to purchase d. The purchase of a fee-simple town house

c. A lease with an option to purchase

Where would the seller reserve the mineral rights? a. Paragraph 11 of the One to Four Family Residential Contract (Resale) b. On the Amendment to Contract form c. Addendum for Reservation of Oil, Gas and Other Minerals d. Seller's Disclosure of Property Condition

c. Addendum for Reservation of Oil, Gas and Other Minerals

Which of the following disclosures is required when selling a home? a. Registered sex offenders in the neighborhood. b. Suicide on the property. c. Death due to an accident related to property condition. d. Previous occupant with AIDS.

c. Death due to an accident related to property condition.

Issues addressed in the Farm and Ranch Contract do NOT include which of the following? a. Crops b. Equipment c. Mineral rights d. Surface leases

c. Mineral rights

A seller agrees to sell the buyer the home theater center. What form or paragraph in the contract should the agent use? a. Paragraph 7, as a repair item b. Paragraph 11, Special Provisions c. Non-Realty Items Addendum. d. Paragraph 2, with the price added

c. Non-Realty Items Addendum.

What is something a real estate license holder should never put in paragraph 11 of the TREC-promulgated contract? a. Clarifying statements for the buyer or the seller b. Statement reminding the seller to make the property accessible for inspections c. Statements making the contract "time is of the essence" d. Statements clarifying business facts

c. Statements making the contract "time is of the essence"

Which of the following is NOT a valid legal description for real property in Texas? a. Recorded plat b. Lot, block, section number, and subdivision c. Street address d. Metes and bounds

c. Street address

Paragraph 7H of the contract indicates that who should review and decide on the company to use as the residential service company? a. The seller b. The buyer's agent c. The buyer d. The seller's agent

c. The buyer

Which addendum is commonly used in a transaction involving a 90% fixed-rate loan with PMI? a. Addendum for Property Subject to Mandatory Membership in an Owners' Association b. Environmental Wetlands Addendum c. Third Party Financing Addendum d. Addendum for Property Located Seaward of the Gulf Intracoastal Waterway

c. Third Party Financing Addendum

When the existing survey is NOT acceptable to either the lender or the title company, the buyer may obtain a new survey no later than how many days prior to the closing date? a. Five b. Two c. Three d. Four

c. Three

The seller agrees to sell the buyer all of the living room furniture. What should the agent do? a. Use an amendment form and fully state each item. b. Add "living room furniture" to the list in paragraph 2. c. Use the Non-Realty Items Addendum. d. Identify the living room furniture in paragraph 11.

c. Use the Non-Realty Items Addendum.

If clients want the broker to write a statement that defines a legal remedy, the a. broker should instruct the clients to write the terms in the contract themselves. b. broker should write the contract. c. broker should advise them to consult an attorney. d. escrow officer should insert the appropriate terms.

c. broker should advise them to consult an attorney.

All of the following are assumed in a short sale using the TREC Short Sale Addendum EXCEPT a. seller's net proceeds at closing will be insufficient to pay the balance of seller's mortgage loan. b. seller requires the consent of the lien-holder to sell the property. c. buyer agrees to a purchase price sufficient to pay the balance of seller's mortgage loan. d. the lien-holder agrees to accept seller's net proceeds in full satisfaction of seller's liability under the mortgage loan.

c. buyer agrees to a purchase price sufficient to pay the balance of seller's mortgage loan.

If one of the parties defaults and the non-defaulting party accepts the earnest money as damages, that party can a. also sue for specific damages. b. also sue for other damages. c. do nothing more; the contract is terminated. d. both sue for specific damages and sue for other damages.

c. do nothing more; the contract is terminated.

According to the One to Four Family Residential Contract (Resale), the title policy cost is the responsibility of the a. seller. b. buyer. c. party that agreed to pay the cost in the contract. d. lender.

c. party that agreed to pay the cost in the contract.

Paragraph 2 of the Residential Condominium Contract different from the One to Four Family Residential Contract in that it addresses a. improvements differently. b. accessories differently. c. the condominium unit. d. exclusions differently

c. the condominium unit.

Financing approval occurs when a. both the borrower and the property meet the lender's underwriting guidelines. b. the property is acceptable to and approved by the lender. c. the lender determines that the buyer's assets, income, and credit are satisfactory. d. the property meets the lender's underwriting guidelines.

c. the lender determines that the buyer's assets, income, and credit are satisfactory.

In Texas, the statute of limitations for a non-defaulting party to an oral contract to enforce their rights in the event of default is a. four years. b. three years. c. two years. d. six years

c. two years.

Agents must make clear where notices are to be delivered. This is done in One to Four Family Residential Contract (Resale) paragraph a. 1. b. 11. c. 23. d. 21

d. 21

According to the Seller Financing Addendum, if a buyer fails to deliver to the seller the buyer's credit documentation the seller may terminate the contract within a. 10 days after expiration of the time for delivery. b. 7 days after the effective date. c. 10 days after the effective date. d. 7 days after expiration of the time for delivery

d. 7 days after expiration of the time for delivery

All of the following promulgated forms provide that "time is of the essence" EXCEPT a. Addendum for Sale of Other Property by Buyer. b. Addendum for Back-Up Contract. c. Third Party Financing Addendum. d. Loan Assumption Addendum.

d. Loan Assumption Addendum.

What information is needed in paragraph 1 of the One to Four Family Residential Contract (Resale)? a. Sales price b. Name of the title company c. Name of the escrow agent d. Names of the parties

d. Names of the parties

Which financing addendum will the purchaser use when purchasing a property for cash? a. Financing addendum exception b. Assumption addendum c. Special provisions addendum d. None of these

d. None of these

A buyer wants to buy a new home but must sell her current property first. What TREC form Should be included as a part of the contract? a. The Addendum for Sale of Other Property by Seller b. The Addendum for Back-Up Contract c. The Amendment to Contract form d. The Addendum for Sale of Other Property by Buyer

d. The Addendum for Sale of Other Property by Buyer

Who must convey to the principal all known information that would affect the principal's decision to accept or reject offers? a. The seller b. The mortgage broker c. The title officer d. The license holder

d. The license holder

All of the following included TREC Notice of Buyers Termination of Contract EXCEPT a. buyer cannot obtain credit approval. b. the property does not satisfy the lenders' underwriting requirements. c. buyer terminates under the option period. d. buyer wants a refund of earnest money.

d. buyer wants a refund of earnest money.

Under the Addendum for Sale of Other Property by Buyer, if the seller accepts a back-up offer the a. seller may waive the contingency before the agreed upon date. b. second buyer may waive the contingency before the effective date. c. first buyer must terminate the back-up contract. d. first buyer may waive the contingency before the agreed upon date.

d. first buyer may waive the contingency before the agreed upon date.

A real estate license holder may do all of the following EXCEPT a. explain the general content. b. explain factual statements. c. explain business details. d. give legal advice.

d. give legal advice.

A short sale must be approved by a. escrow officer. b. HUD. c. title company. d. seller's lender.

d. seller's lender.

All of the following is a required disclosure EXCEPT a. foundation issues. b. underground storage tanks. c. leaking roof. d. suicide on the property

d. suicide on the property

If the buyer pays the $100,000 sales price and puts 15% down and the seller offers a 10% second loan, what is entered in paragraph 3C of the TREC-promulgated contract? a. $100,000 b. $15,000 c. $10,000 d. $85,000

a. $100,000

How many contract forms are currently promulgated by TREC? a. 6 b. 7 c. 9 d. 10

a. 6

Which of the following is an example of a bilateral contract? a. A purchase contract b. An option to lease c. A nonexclusive listing contract d. A nonexclusive buyer contract

a. A purchase contract

Which of the following addenda contains the phrase "time is of the essence"? a. Addendum for Back-Up Contract b. Seller Financing Addendum c. Property Condition Addendum d. Addendum for Coastal Area Property

a. Addendum for Back-Up Contract

Which of the following can the license holders never disclose? a. Death due to AIDS b. Representation c. Death due to suicide d. Haunted property

a. Death due to AIDS

Which of the following is a real estate license holder allowed to do? a. Explain business details b. Create alternate text for the sales contract c. Create a handwritten addendum for the client to attach to the sales contract d. Put the earnest money in the agent's bank account

a. Explain business details

Which of the following is acceptable language for a license holder to enter in paragraph 11, Special Provisions, in TREC contract forms? a. None of these b. Time is of the essence c. Seller will pay for the survey d. Buyer will pay for the owner's title policy

a. None of these

Which form does NOT address rollback taxes? a. One To Four Family Residential Contract (Resale) b. Farm and Ranch Contract c. New Home Contract (Completed Construction) d. Unimproved Property Contract

a. One To Four Family Residential Contract (Resale)

What is a legal proceeding brought by a party to a contract against another party to compel action called for in the agreement? a. Suit for specific performance b. Suit for injunction c. Motion for release d. Writ of forbearance

a. Suit for specific performance

A seller is selling a fully furnished lake house. The personal property should be addressed using what form or paragraph? a. The Non-Realty Items Addendum b. Paragraph 11 of the promulgated contract forms c. The Amendment Form d. None of these

a. The Non-Realty Items Addendum

The TREC Addendum for Property Subject to Mandatory Membership in a Property Owners Association provides for which of the following to act on behalf of the parties to obtain the subdivision information? a. Title company b. Buyer's agent c. Seller's agent d. Lender

a. Title company

If a seller fails to provide the buyer with the seller's disclosure of property condition as required by Section 5.008 of the Texas Property Code, what is the status of the purchase contract? a. Voidable at the option of the buyer b. Unenforceable c. Void d. Valid and enforceable

a. Voidable at the option of the buyer

Which of the following is NOT an exception to the rules requiring that promulgated forms be used by the license holder? a. When the contract form has been prepared by the buyer and the buyer wants the agent to fill in the blanks b. When the contract form has been prepared by the seller's attorney and is required by the seller c. When an agency of the United States government requires a different form d. When the license holder is functioning solely as a principal

a. When the contract form has been prepared by the buyer and the buyer wants the agent to fill in the blanks

Earnest money is a. not necessary to bind the contract. b. required to make a contract binding. c. always used to pay the real estate commission if there is a default. d. used to show serious intent on the part of the seller.

a. not necessary to bind the contract.

The TREC Addendum for Property Subject to Mandatory Membership in a Property Owners Association provides that the seller is to provide information to buyer regarding material changes to the subdivision information a. promptly. b. as soon as possible. c. immediately. d. timely.

a. promptly.

When using a power of attorney to transfer title to real property, a. the document must include the legal description of the subject of the authority. b. an attorney-at-law must be present at the closing. c. a court of competent jurisdiction must affirm the document. d. neither the buyer nor the seller may be present at closing.

a. the document must include the legal description of the subject of the authority.

When parties are held to strict deadlines for performance the contract or addendum includes which of the following phrases? a. "Reasonable time." b. "Time is of the essence." c. "As soon as possible." d. "With good faith."

b. "Time is of the essence."

A property was built prior to 1978. The buyer has it inspected for lead-based paint and finds lead-based paint or lead-based paint hazards are present. The buyer may terminate the contract by giving the seller written notice within how many days after the effective date of the contract? a. 10 days b. 14 days c. 15 days d. 3 days

b. 14 days

Which addendum warns buyers that Texas may have the right to take their property? a. Lead-based paint addendum b. Addendum for Property Located Seaward of the Gulf Intracoastal Waterway c. Amendment to Contract d. Short Sale Addendum

b. Addendum for Property Located Seaward of the Gulf Intracoastal Waterway

A buyer must object no later than the closing date or within how many days after receiving the commitment, exception documents, and survey? a. Five b. An agreed-upon number c. Three d. Seven

b. An agreed-upon number

According to the provisions of the sales contract, who will purchase a residential service contract, if so desired? a. Lender b. Buyer c. Seller d. Listing agent

b. Buyer

Which contract is used for a 50-acre tract with a small cottage outside the city? a. New Home Contract (Incomplete Construction) b. Farm and Ranch Contract c. Residential Condominium Contract d. Unimproved Property Contract

b. Farm and Ranch Contract

An agreement to pay the broker's commission is included as the last page in which of the following TREC contracts? a. The One to Four Family Residential Contract b. The Farm and Ranch Contract c. The Unimproved Contract d. The Condominium Contract

b. The Farm and Ranch Contract

According to the contract, the seller will provide a copy of the restrictive covenants at whose expense? a. The seller's b. The buyer's c. The title company's d. The lender's

b. The buyer's

When a license holder uses a builder's contract or a form prepared by an attorney that is not promulgated by TREC, what is the wisest way to notify the buyer about title insurance or abstracts? a. Emailing the buyer b. Using the TREC Notice to Prospective Buyer form c. Calling the buyer d. Using the TREC Non-Contract Form Notice

b. Using the TREC Notice to Prospective Buyer form

In Texas, the statute of limitations for a non-defaulting party to enforce their rights is the event of default is a. six years for an oral contract for a six-month lease. b. four years for a written contract. c. four years for all contracts for the sale or lease of real property in Texas. d. six years for a written contract.

b. four years for a written contract.

Purchasing a property and then quickly reselling it at a value that is artificially inflated by false appraisals is a. red flagging. b. fraud. c. skimming. d. reclining.

b. fraud.

The notice about obtaining an abstract or title policy is a required notice from a. seller to buyer. b. license holder to buyer. c. buyer to seller. d. license holder to seller

b. license holder to buyer.

According to paragraph 12, seller's expenses include a. discount fees. b. tax certificates. c. mortgagee title policy. d. both tax certificates and mortgagee title policy

b. tax certificates.