Texas Promulgated Forms Unit 1-9
If the escrow agent receives a demand for the earnest money from one party, the escrow agent will send a copy of the demand to the other party. If the escrow agent does not receive a written objection within ___ days, the escrow agent may release the earnest money to the party making the demand. A. 7 B. 15 C. 30 D. 45
B. 15
Which of the following addenda contains the words "time is of the essence?" A. Addendum for Reservation of Oil, Gas, and Other Minerals B. Addendum for Sale of Other Property by Buyer C. Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement D. Addendum for Coastal Area Property
B. Addendum for Sale of Other Property by Buyer
The buyer will receive a copy of the restrictive covenants at the ____________ expense, according to the contract. A. seller's B. buyer's C. title company's D. lender's
B. buyer's
How many members make up the Broker-Lawyer Committee? A. 9 B. 10 C. 13 D. 17
C. 13
The law that requires the contract to be in writing and signed by the parties is A. the Texas Deceptive Trade Practices Act. B. the Law of Contracts. C. the statute of frauds. D. the Fair Housing Act.
C. the statute of frauds.
If the tenant damages the property while occupying, the cost of repair is the responsibility of the A. the landlord. B. the broker. C. the tenant. D. the agent.
C. the tenant.
Provided the seller will not incur any expense, how many days after their receipt does the seller have to cure the timely objections of the buyer or any third-party lender? A. 3 B. 5 C. 7 D. 15
D. 15
Buyer must object not later than the closing date or within how many days after receiving the commitment, exception documents, and the survey? A. Three B. Five C. Seven D. An agreed-upon number
D. An agreed-upon number
Which TREC-promulgated contract form(s) give(s) disclosure about the type of insulation in the property? A. The One to Four Family Residential Contract B. The Unimproved Property Contract C. The Farm and Ranch Contract D. Both New Home Contracts
D. Both New Home Contracts
TRUE/FALSE: The Seller's Disclosure Notice should be attached to the contract and listed in paragraph 22.
FALSE
TRUE/FALSE: Paragraph 7B(2) of the Residential Sales Contract is checked, and three days are entered in the blank. The Seller's Disclosure Notice is delivered on time. Two days later, the buyer sees another home he likes better. The buyer is free to terminate this contract even though he did NOT pat for an option to terminate.
TRUE
Real estate fraud is harmful to A. lenders. B. consumers. C. buyers. D. everyone.
D. everyone.
Notice from one party to the other are effective when they are sent to A. the parties' agents. B. the email address listed in paragraph 21. C. the address listed in paragraph 21. D. the email address and address listed in paragraph 21.
D. the email address and address listed in paragraph 21.
The TREC contract forms say that if the property is damaged by fire or other casualty prior to closing A. the buyer may terminate the contract as is. B. the buyer is obligated to restore the property after closing. C. the buyer must accept an assignment of the insurance funds. D. the seller will be obligated to restore the property prior to closing.
D. the seller will be obligated to restore the property prior to closing.
An oral agreement of sale is A. valid. B. voidable. C. enforceable by the court. D. void and unenforceable.
D. void and unenforceable.
TRUE/FALSE: According to the TREC One to Four Family Residential Contract (Resale), if a PMI premium is due, it is a negotiable item between the buyer and the seller.
FALSE
TRUE/FALSE: The title company furnishes copies of the restrictive covenants to the buyer at the seller's expense.
FALSE
TRUE/FALSE: Paragraph 7G of the TREC One to Four Family Residential Contract (Resale) cautions the buyer to use an addendum regarding environmental issues if he is concerned about those matters.
TRUE
Contracts can be discharged or terminated for all of the following reasons EXCEPT A, when the buyer sends an amendment to the seller asking for a change in the closing date. B. if the contract is voided by a minor. C. when the parties agree to cancel or terminate. D. if the transaction is fraudulent.
A, when the buyer sends an amendment to the seller asking for a change in the closing date.
If one of the parties wrongfully refuses to sign a release acceptable to the escrow agent within _____ days of receipt of the request for the release, that party will be liable to the other party for damages plus the earnest money, reasonable attorney's fees, and all costs of the suit. A. 7 B. 10 C. 12 D. 15
A. 7
According to the Property Code, which of the following are NOT required to furnish a Seller's Disclosure Notice? A. Single-family new residences B. Property owned by Relocation Companies C. Property owned by investors D. all of these
A. Single-family new residences
The seller's disclosure in the TREC Unimproved Property Contract does not address the seller's knowledge of A. building conditions. B. flooding of the property. C. pending or threatening litigation. D. environmental hazards.
A. building conditions.
When buyers purchase a condominium, they are buying the A. the unit ad an undivided interest in the common areas. B. the unit and the lot. C. the stock in the company that owns the condominium building. D. the unit, the lot, and an undivided interest in the common areas.
A. the unit ad an undivided interest in the common areas.
The agreement between the brokers regarding the amount to be paid by the listing broker to the selling broker is a contractual agreement contained in A. the listing agreement. B. the agreement between brokers (frequently in MLS). C. the sales contract. D. the buyer/tenant representation.
B. the agreement between brokers (frequently in MLS).
According to the Loan Assumption Addendum, if the buyer does not deliver the credit information within the required time, the seller has how many days to terminate after expiration for the time of delivery? A. 3 B. 5 C. 7 D. 10
C. 7
According to the Seller Finance Addendum, if the buyer delivers his credit information to the seller timely, and the seller determines it is unacceptable, how many days after the date for the expiration of the time for delivery does the seller have to terminate? A. 3 B. 5 C. 7 D. 12
C. 7
The Addendum for Coastal Area Property and the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway contains the notices required by A. the Texas Real Estate Commission. B. the Texas Real Estate License Act. C. the Texas Natural Resources Code. D. the One to Four Family Residential Contract.
C. the Texas Natural Resources Code.
Rollback taxes can be assessed when A. property values are increasing quickly. B. property values have been reappraised. C. zoning is changing and the property no longer qualifies for a previous exemption. D. tax rates have been upgraded.
C. zoning is changing and the property no longer qualifies for a previous exemption.
Who fills out the Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners Association? A. The seller B. The buyer C. The listing agent D. A representative of the property owners association
D. A representative of the property owners association
A sales contract in which a promise is exchanged for a promise is A. unilateral. B. executed. C. executory. D. bilateral.
D. bilateral.
If you believe a transaction is involved in illegal activity, you should A. notify your broker. B. withdraw from the transaction. C. tell the seller to seek legal advice if they plan to continue with the transaction. D. do all of these.
D. do all of these.
Which of the following is NOT an appropriate use for paragraph 11, Special Provisions, of the One to Four Family Residential Contract? A. It states a business detail for which no TREC addendum exists. B. The contract is in a second or back-up position. C. It states the buyer's availability for contract closing. D. It states additional information regarding the parties that does not fit in paragraph 1.
B. The contract is in a second or back-up position.
When property owned by a married couple is being sold, what is the BEST way to identify the sellers? A. Mr. and Mrs. Thomas Bud Smith B. Thomas Bud Smith and spouse Mary Ann Smith C. Thomas Bud Smith and his wife D Thomas Bud Smith et vir Mary Ann Smith
B. Thomas Bud Smith and spouse Mary Ann Smith
When the existing survey is not acceptable to either the lender or the title company, the buyer shall obtain a new survey no later than how many days prior to the closing date? A. Two B. Three C. Four D. Five
B. Three
A document that transfers contract obligations to another party but does NOT release the first party's obligation is A. a novation. B. an assignment. C. an amendment. D. an addendum.
B. an assignment.
The TREC contract forms that discuss rollback taxes say that if the rollback taxes are assessed because the seller changed the usage prior to closing A. the developer will be obligated to pay the rollback taxes. B. the seller will be obligated to pay the rollback taxes. C. the buyer will be obligated to pay the rollback taxes. D. there will be no rollback taxes.
B. the seller will be obligated to pay the rollback taxes.
Which of the following is NOT an exception to the rules requiring that promulgated forms be used and completed by the license holder? A. When the contract form has been prepared by the seller's attorney and is required by the seller B. When an agency of the U.S government requires a different form C. When the contractor form has been prepared by the buyer's agent D. When the license holder is functioning solely as a principal
C. When the contractor form has been prepared by the buyer's agent
Restrictive covenants may include rules regarding A. minimum size requirements. B. pets. C. all of these. D. fees for road maintenance.
C. all of these.
In paragraph 3 of the One to Four Family Residential Contract, the sales price is the sum of the cash portion of the sales price A. plus all the closing costs. B. plus loan funding. C. and the sum of all financing. D. plus the mortgage insurance premium.
C. and the sum of all financing.
If one of the parties defaults, and the non-defaulting party accepts the earnest money as damages, the party A. may also sue for specific damages. B. may also sue for other damages, C. can do nothing more; the contract is terminated. D. may also sue for specific damages and other damages
C. can do nothing more; the contract is terminated.
Once the duties in a contract are completed by both parties, the contract is A. unilateral. B. bilateral. C. executed. D. executory.
C. executed.
If anyone is helping the buyer with the down payment or closing cost, it A. must be disclosed to the title company. B. is not necessary to disclose. C. must be disclosed to the lender on the contract and on the closing documents. D. must be disclosed to the seller.
C. must be disclosed to the lender on the contract and on the closing documents.
The seller is A. obligated to accept any offer that is at or above the list price. B. obligated to accept any offer that will net the seller the amount she agreed upon. C. never obligated to accept any offer. D. obligated to accept any offer that has a reasonable possession date.
C. never obligated to accept any offer.
The Broker-Lawyer Committee A. drafts and edits forms. B. approves forms. C. promulgates forms. D. approves and promulgates forms.
C. promulgates forms.
The purpose of the TRELA is to A. protect real estate license holders. B. protect real estate brokers from unscrupulous salespeople. C. protect the public. D. keep the cost of real estate services under control.
C. protect the public.
When the parties agree to change a contract that has already been agreed upon the proper form to use is A. the Addendum. B. the Notice to Buyer. C. the Amendment. D. the Termination Agreement.
C. the Amendment.
Who fills in the final date of acceptance on page 8 of the One to Four Family Residential Contract? A. The agent who communicates the first offer to the other party or the other party's agent B. The agent who communicates the counteroffer to the other party or the other party's agent C. The parties fill it in D. The agent who communicates that the contract has been accepted in the other party or the other party's agent
D. The agent who communicates that the contract has been accepted in the other party or the other party's agent
Property approval, according to paragraph 2B in the Third Party Financing Addendum, includes A. the appraisal. B. lender-required repairs. C. insurability. D. all of these.
D. all of these.
If the buyer wants to be sure the fireplace screen stays with the property, the buyer's agent should A. write it in paragraph 11. B. add it the Non-Realty Items Addendum. C. add it at the end of paragraph 2. D. do nothing; it is already in the contract.
D. do nothing; it is already in the contract.
Familial status in the Fair Housing Act protects A. families with children under the age of 18. B. all families. C. pregnant women. D. families with children under the age of 18 and pregnant women.
D. families with children under the age of 18 and pregnant women.
If the seller has already sent a counteroffer to a prospective buyer and then receives another offer that is even better, the seller A. must wait to hear from the first buyer. B. is free to counter this offer too. C. must tell the first buyer about the second offer and give them an opportunity to come up to the new amount. D. should withdraw the first counter before answering the new offer.
D. should withdraw the first counter before answering the new offer.
According to paragraph 23, the option money is to be delivered to A. the buyer's agent. B. the title company. C. the mailbox. D. the seller.
D. the seller.
Contractual agreements between brokers may be defined in A. written agreements signed by both brokers. B. the MLS. C. the sales contract. D. written agreements signed by both brokers and the sales contract.
D. written agreements signed by both brokers and the sales contract.
TRUE/FALSE: A buyer receives the survey and discovers a utility easement created by the dedication deed and plat of the subdivision. The buyer discovers that the easement is in an area that will prevent the addition of a swimming pool. If nothing has been added to the TREC One to Four Family Residential Contract (Resale), the buyer has the right to terminate the contract if she objects within the proper time frame.
FALSE
TRUE/FALSE: A contract is subject to financing. The loan is turned down by the lender because the property did NOT appraise for enough money. The buyer will be in default if the option period has already expired.
FALSE
TRUE/FALSE: A seller who is a lender that has foreclosed on the property is exempt from obligation to give the Seller's Disclosure Notice. No boxes will be checked under paragraph 7B.
FALSE
TRUE/FALSE: According to paragraph 18 of the TREC One to Four Family Residential Contract (Resale), if the buyer and the seller agrees to release the earnest money to the buyer, the title company must refund all of the earnest money to the buyer.
FALSE
TRUE/FALSE: If a property has mandatory membership in an owners association, it is necessary to use the TREC Addendum for Property Subject to Mandatory Membership in an Owners Association and to list that addendum in paragraph 11.
FALSE
TRUE/FALSE: If a seller wants to continue to show her property for backup offers, it is necessary to add that information to paragraph 11 of the TREC One to Four Family Residential Contract (Resale).
FALSE
TRUE/FALSE: If no changes are made to the TREC One to Four Family Residential Contract (Resale), the seller will furnish the buyer a special warranty deed at the time of closing.
FALSE
TRUE/FALSE: The TREC One to Four Family Residential Contract (Resale) has a provision that makes any party that fails or refuses to sign a release of escrow liable to the other party for liquidated damages in the amount of three times the amount of the earnest money.
FALSE
TRUE/FALSE: The sales price is $100,000. The buyer is making a first lien mortgage for $80,000, and the seller is carrying a second lien for $10,000. The amount in paragraph 3B should be $80,000.
FALSE
TRUE/FALSE: When using the TREC One to Four Family Residential Contract (Resale), if you are acting as an intermediary, it is necessary for you to add the buyer's representation agreement and add it in paragraph 22.
FALSE
Who completed the promulgated resale certificate? A. Seller B. Homeowners association C. Buyer D. Listing agent
B. Homeowners association
What information does the TREC Consumer Protection Notice contain? A. A list of infractions about which a complaint may be submitted B. Information regarding TREC recovery funds C. Information on how to file a lawsuit D. Information on how a broker should respond to a complaint
B. Information regarding TREC recovery funds
Who is required to execute the notice of termination of contract? A. Only the seller. B. Only the buyer C Both the buyer and the seller D. The buyer, the seller, and both agents
B. Only the buyer
Which paragraph is different in all six TREC contracts? A. Paragraph 1 B. Paragraph 2 C. Paragraph 23 D. All paragraphs are different
B. Paragraph 2
Which form should be used when a seller wants to sell his property for less than what is owed on the property? A. Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement B. Short Sale Addendum C. Notice of Buyer's Termination of Contract D. Addendum for Sale of Other Property By Buyer
B. Short Sale Addendum
The date in the upper right corner of the promulgated contract form is the date A. the Broker-Lawyer Committee drafted form. B. TREC approved and promulgated the form. C. license holders must begin using the form. D. the form will be reviewed in the future.
B. TREC approved and promulgated the form.
TRUE/FALSE: If the buyer agrees to deliver a credit report to the seller, according to paragraph A of the TREC Seller Financing Addendum, the cost of the report will be the buyer's expense.
TRUE
A contract can be terminated at the option of the buyer when A. A seller fails to provide and the buyer, of a previously occupied single-family residence, fails to receive the written seller's disclosure of property condition. B. homeowners association information and the Condominium Resale Certificate have not been provided to the buyer before creating a contract to purchase. C. the property is situated in a utility district or other statutorily created district providing water, sewer, drainage, or flood control (Chapter 49 of the Texas Water Code), and the seller has not forwarded the appropriate notice prior to creating a contract to purchase. D. all of these.
D. all of these.
According to paragraph 18B, if no closing occurs, the title company may require A. unpaid expenses on behalf of the buyer. B. unpaid expenses on behalf of the seller. C. a written release of liability of escrow agent. D. all of these.
D. all of these.
Rollback taxes are discussed in A. both New Home Contracts. B. Unimproved Property Contract. C. Farm and Ranch Contract. D. all of these.
D. all of these.
TRUE/FALSE: If a buyer does NOT deposit the earnest money as agreed in the TREC One to Four Family Residential Contract (Resale), the buyer will be in default.
TRUE
TRUE/FALSE: If a property is damaged by fire, after it has been put under contract, and the seller is unable to repair the damage by the closing date, one of the buyer's options, according to the TREC One to Four Family Residential Contract (Resale), is to accept the property in it's damaged condition and accept an assignment of the insurance proceeds.
TRUE
TRUE/FALSE: If any sales expense exceeds the amount agreed to by a party in the TREC One to Four Family Residential Contract (Resale), that party may terminate the contract unless the other party agrees to pay the excess.
TRUE
Which of the following is NOT a protected class under the federal Fair Housing Act? A. Race B. Age C. Familial status D. Religion
B. Age
According to the Third Party Financing Addendum, which one of the following is NOT necessary for buyer approval? A. The terms of the loan described must be available. B. An appraisal for at least the sales amount must be received. C. The buyer's assets and income meet the lenders underwriting requirements. D. The buyer's credit history meets the lender's underwriting requirements.
B. An appraisal for at least the sales amount must be received.
Which of the following is NOT an essential element of a valid contract? A. Consideration B. Earnest money C. Mutual agreement D. In writing and signed by the parties
B. Earnest money
Which group administers the TRELA? A. Texas Real Estate Commission B. National Association of REALTORS C. Texas Association of REALTORS D. Broker-Lawyer Committee
A. Texas Real Estate Commission
What happens to the option fee if the buyer terminates within the option period under paragraph 23 of the TREC One to Four Residential Contract? A. The option fee is not refunded to the buyer. B. The option fee is refunded to the buyer. C. The option fee is split between the buyer and the seller. D. The agents split the option fee for the time spent for their client
A. The option fee is not refunded to the buyer.
An owner might be exempt from the provisions of the Fair Housing Act if the owner is attempting to rent out A. one of the units in the duplex in which she lives. B. an apartment in a five-unit complex that is across the street from her home. C. an apartment in a three-unit complex is using the assistance of a license holder. D. an apartment in a five-unit complex in which her brother lives.
A. one of the units in the duplex in which she lives.
According to the One to Four Family Residential Contract (Resale), the title policy cost is the responsibility of A. the party that agreed to pay the cost in the contract. B. the seller. C. the buyer. D. the lender.
A. the party that agreed to pay the cost in the contract.
A contract that is unenforceable A. was once valid but is no longer so. B. was never valid. C. is voidable. D. is missing one of the elements of a valid contract.
A. was once valid but is no longer so.
A back-up contract was executed on August 9. The parties agreed to a 12-day option period. On August 15, the seller notified the buyer that the first contract had terminated. When does the buyer's option period end? A. At noon on August 21 B. At 5:00 pm on August 27 C. At noon on August 27 D. At 5:00 pm on August 21
B. At 5:00 pm on August 27
How long does seller have to notify buyer that the seller has obtained the lienholder's consent and agreement using the TREC Short Sale Addendum? A. Promptly B. Timely C. The time period is negotiated D. Three days
C. The time period is negotiated
The National Association of REALTORS recently added which of the following as a protected class under the NAR Code of Ethics? A. National origin B. Color C. Smokers D. Sexual orientation
D. Sexual orientation
Which of the following is TRUE regarding the presentation of offers to a seller? A. A license holder can use his discretion in determining which offers to present to the seller. B. License holders are not required to present offers to sellers that are 30% below the asking price. C. A license holder doesn't have to present offers $20,000 below the asking price if the seller has given the license holder that direction in writing. D. License holders need to present all offers to sellers within one month of receiving the offer.
C. A license holder doesn't have to present offers $20,000 below the asking price if the seller has given the license holder that direction in writing.
Which action might leave a license holder open to a charge of practicing law without a license? A. License holder advises the seller that the property probably won't sell because it is overpriced. B. License holder advises the buyer, in writing, that a title policy should be obtained, as well as a survey. C. License holder advises both the seller and the buyer that, in his opinion, title to the subject property is encumbered. D. License holder adds factual statements an business details to a promulgated form as requested by the client.
C. License holder advises both the seller and the buyer that, in his opinion, title to the subject property is encumbered.
If the seller furnishes the existing survey to the buyer, but it is not acceptable to the buyer's lender, who will cover the cost of a new survey? A. Buyer B. Lender C. Party negotiated in the contract D. Seller
C. Party negotiated in the contract
Which TREC promulgated contract form has a spot for information about exception documents and surface leases? A. The One to Four Family Residential Contract B. the Unimproved Property Contract C. The Farm and Ranch Contract D. The New Home Contract (Complete Construction)
C. The Farm and Ranch Contract
Which TREC-promulgated contract form allows for the sales price to be adjusted because of the survey? A. The One to Four Family Residential Contract B. The Unimproved Property Contract C. The Farm and Ranch Contract D. The New Home Contract (Completed Construction)
C. The Farm and Ranch Contract
If the seller is doing all of the financing and is furnishing the buyer with an owner's policy of title insurance, who will pay for a mortgagee policy of title insurance and who does it protect? A. The buyer will pay, and it protects the third party lender. B. The seller will pay and it protects the third-party lender. C. The byer will pay, and it protects the seller. D. The seller will pay, and it protects the buyer.
C. The byer will pay, and it protects the seller.
What should be done if the closing date needs to be charged under the TREC One to Four Family Residential Contract? A. The buyer should submit an extension of closing addendum to the seller. B. The parties should use the same contract with the old date crossed out. C. The parties must both sign the amendment form. D. The parties should execute a new contract with the new closing date added.
C. The parties must both sign the amendment form.
Under the TREC Third Party Financing Addendum, what happens when the terms of the loan described in the addendum are available, and the lender determines that the buyer has satisfied all of lender's requirements related to the buyer's assets, income, and credit history? A. There is no approval contingency in the contract. B. The buyer may give 7 days notice to extend the time period. C. The seller may terminate under the addendum D. They buyer may terminate under the addendum.
C. The seller may terminate under the addendum
What should a license holder do when there are unusual matters involved in a transaction? A. Explain it to the best of his ability before letting the prospect sign the contract B. Ignore it and hope that the client understands it C. Have the client sign the form and the advise the client to talk to an attorney D. Advise the client to seek legal advice before signing anything
D. Advise the client to seek legal advice before signing anything
Which of the following best describes the Information About Brokerage Services form? A. The form must be linked to from the broker's website. B. The form must be provided to real estate consumer at first substantive discussion. C. The form describes the various agency relationships that might occur in a transaction. D. All of these describe the form.
D. All of these describe the form.
Red flags that a party may be making an offer that will be involve in real estate fraud include A. an offer calling for future improvements. B. An inflated sales price. C. A request to remove the property from MLS. D. All of these.
D. All of these.
Who has the responsibility for turning on the utilities and keeping them on for the duration of the contract, according to the contract? A. Broker. B. Buyer. C. Agent. D. Seller.
D. Seller.
TRUE/FALSE: If the buyer and the seller agree that the seller will have the foundation repaired and the buyer wants the warranty for that work transferred to him, the transfer will be at the buyer's expense according to the TREC One to Four Family Residential Contract (Resale).
TRUE