Texas Promulgated Questions MC
For sellers who are carrying notes for buyers, TREC 26-6 requires a late payment fee of _________ for any payment made more than 10 days late. a. $100 b. $50 C) 5% d. 1%
5%
The Buyer and Seller Temporary Residential Lease forms are good for any period up to: a. 14 days b. 30 days c. 60 days D) 90 days
90 days
Using TREC 16-5 Buyer's Temporary Residential Lease, a buyer can lease a property up to ______ prior to closing. a. 30 days b. 45 days C) 90 days d. 180 days
90 days
A federal disclosure requirement for residential properties built prior to 1978 is: a. An energy efficiency audit B) A lead-based paint disclosure c. A seller's disclosure of property condition d. A water district noticeAccording to the Seller
A lead-based paint disclosure
What should a licensee keep on hand to help with environmental issues that may arise before closing? A) A list of environmental specialists b. Contact information for the EPA c. A list of attorneys specializing in environmental issues d. Contact information for the Texas Environmental Issues Agency
A list of environmental specialists
On TREC 28-2 Environmental Assessment, Threatened or Endangered Species, and Wetland Addendum, which box is most often checked? a. Environmental Assessment b. Threatened or Endangered Species c. Wetlands D) All boxes are usually checked.
All boxes are usually checked.
How should a licensee communicate acceptance of a contract? a. Phone call b. Email c. Text message D) All means possible and available
All means possible and available
The special provisions paragraph of the contract allows licensees to insert: a) Factual business details b) Statements not addressed in the contract c) Information for which there is no TREC promulgated addendum, lease or mandatory form D) All of the above
All of the above
What is a possible outcome if erosion causes a structure to be on a public beach? a. The structure is grandfathered in b. The owner can purchase that part of the public beach C) The State of Texas can sue the owner to move it at the owner's expense d. The EPA will help the owner remove the structure
The State of Texas can sue the owner to move it at the owner's expense
Under TREC 16-5 Buyer's Temporary Residential Lease, what would be considered a breech of contract? A) Failure to comply with any laws or rules in the subdivision where the home is located. b. Purchasing a dog. c. Calculating rent on a monthly basis. d. Allowing someone who is not an immediate family member to move in.
Failure to comply with any laws or rules in the subdivision where the home is located.
Earnest money is consideration for the contract. a. True B) False
False
On Form 9-10, what are the first two descriptions that are asked for regarding the location of the property? a. Zip code and Address b. County and City C) Lot and Block d. Zip code and Box Number
Lot and Block
The title company is: a) A party to the transaction B) Not a party to the transaction c) Liable for the performance of the parties d) Responsible for arranging suitable financing for the buyer
Not a party to the transaction
What happens to the status of a back-up contract if the first contract is modified? A) Nothing changes. b. The back-up contract becomes primary. c. The buyer who submitted the back-up contract must be notified in 3 business days. d. The back-up contract becomes a counteroffer.
Nothing changes.
The Third Party Financing Addendum For Credit Approval is used when: a. The buyer is obtaining FHA financing B) Paragraph 4.A(2)(a) is checked in the contract c. The buyer is obtaining VA financing d. The buyer is obtaining any kind of financing
Paragraph 4.A(2)(a) is checked in the contract
What paragraph on Form 23-12 allows space to write buyers names? A) Parties b. Property c. Sales Price d. Buyers and Sellers
Parties
For purposes of performance, what is the effective date of a back-up contract? a. The date the listing expires. b. The termination date of the first contract. C) The date the buyer is notified that the first contract terminated. d. The closing date.
The date the buyer is notified that the first contract terminated.
When should the TREC OP-M form be used? a. When the seller wants to disclose to the buyer the condition of the property b. When the buyer wants certain loan terms locked in the contract C) When the seller agrees to leave certain personal items d. When the property has lead based paint present
When the seller agrees to leave certain personal items
IRS statutes require a buyer to: a. Purchase property only from U.S. citizens b. Withhold 20% of the price from a foreign seller of U.S. property C) Withhold 10% of the sale proceeds in excess of $300,000 when a foreign person has no social security card or green card d. None of the above
Withhold 10% of the sale proceeds in excess of $300,000 when a foreign person has no social security card or green card
A home built prior to what year triggers the disclosure of lead based paint? a. 1989 b. 1964 C) 1978 d. 1982
1978
Properties built before _______ seller must disclose lead based paint
1978
Which of the following items is on Form 20-11 and not on Form 9-10? A) Accessories b. Sales Price c. Financing d. Title Policy and Survey
Accessories
A state government entity created to encourage agricultural development in Texas is the: a. Texas Department of Parks and Wildlife B) Texas Agricultural Development District c. Texas Farm Bureau d. Texas Farm Aid
Texas Agricultural Development District
Why are home owners' associations formed? a. So residents have a voice D) To enforce deed restrictions c. To make sure homes are being painted in the trendiest colors d. To build the community through events such as pot-luck dinners
To enforce deed restrictions
Form 9-10 has paragraph 6.E.8 which you will not find on Form 20-11. This paragraph deals with a. wetlands. B) agricultural development districts. c. litigation. d. endangered species.
agricultural development districts.
The Third Party Financing Addendum For Credit Approval can be used when: a) the buyer is obtaining FHA financing b) the buyer is obtaining seller financing c) the buyer is obtaining VA financing D) the buyer is obtaining any kind of third party financing
the buyer is obtaining any kind of third party financing
Paragraph 2 of TREC 38-4 allows a buyer to terminate an agreement due to a. the seller's failure to disclose material facts. b. Subdivision Information from an HOA. C) the buyer's failure to gain credit approval for a mortgage loan. d. cold feet.
the buyer's failure to gain credit approval for a mortgage loan.
What type of inspector is required according to the TREC OP-L form? a) An inspector with 45 plus hours specializing in lead based paint B) A certified inspector c) A professional inspector d) Any inspector that meets the approval of the buyer
A certified inspector
A new survey is always required for all transactions: a. True B) False
False
The deed of trust securing seller financing is always assumable by a future buyer without approval: a. True B) False
False
What form should an agent use if a buyer needs to sell his or her current home before closing on the new home? A) TREC 10-6 Addendum for Sale of Other Property by Buyer b. TREC OP-K Information about Brokerage Services c. TREC 40-5 Third Party Financing Addendum d. There is no promulgated form and the buyer should contact an attorney.
TREC 10-6 Addendum for Sale of Other Property by Buyer
What can the buyer do if the seller delays delivery of the seller's disclosure?
Terminate the contract
Who is to fill in the effective date of the contract? A) The broker b. The seller c. The licensee d. The buyer
The Broker
Which of the following could be written in paragraph 11?
Listing associate is close friend of sellers.
If the property is currently under an agricultural exemption, and the use of the property changes, the buyer may be charged a: a. Fine b. Penalty C) Rollback tax d. Change of use fee
Rollback tax
The Third Party Financing Addendum for Credit Approval cannot be used for: a. VA guaranteed loans b. FHA insured loans C) Seller Financing d. Texas Veterans Loans
Seller Financing
When a seller is contemplating a loan assumption, the seller must respond to the buyer within how many days or it is assumed that the seller has given his or her approval? a. Five days B) Seven days c. Fourteen days d. 30 days
Seven days
How does a buyer determine if property is located in a flood plain? A) Check a FEMA Flood Map. b. Check with neighbors. c. Contact the county clerk. d. Check a with the National Flood Letter Office
Check a FEMA Flood Map.
How should the rental rate be calculated for a Seller's Temporary Residential Lease? A) Daily rate b. Weekly rate c. Monthly rate d. Annual rate
Daily rate
Which of the following is not mentioned as a possible effect of lead poisoning on the TREC OP-L form? A) Death b. Impaired memory c. Permanent neurological damage d. Reduced intelligence quotient
Death
If a license holder is receiving compensation from a residential service company, the compensation is: a. Reported to TREC B) Disclosed to the parties using the appropriate TREC form c. Never disclosed to anyone d. Reported to the attorney general for action
Disclosed to the parties using the appropriate TREC form
Which of the following would NOT be noted in the 2B(1) farm and ranch improvements paragraph on Form 25-9? A) House b. Barns c. Tanks d. Sheds
House
What should be done with the TREC OP-H in relation to the Multiple Listing Service? A) It should be uploaded to the system if possible. b. MLS rules require written permission to receive the TREC OP-H form for distribution. c. The TREC OP-H form contains confidential information and the licensee is forbidden to place it on the MLS. d. TREC rules require the form to be hand delivered and the MLS is not acceptable.
It should be uploaded to the system if possible.
In which paragraph on Form 20-11 and Form 9-10 would you find information on dispute resolution? a. Loss b. Settlement c. Proration D) Mediation
Mediation
According to a Financing Addendum, the interest rate is: a. Set at 6% B) Negotiated between the parties c. Set by TREC d. Determined at closing
Negotiated between the parties
Who should sign the TREC OP-I form? a. The seller b. The buyer c. Both the seller and buyer D) Neither the buyer nor seller
Neither the buyer nor seller
On Form 9-10, in what paragraph would you find information regarding environmental matters? a. Notices b. Title Policy and Survey C) Property Condition d. Provisions
Property Condition
What should a buyer do if he or she wants to submit an offer on a home that already has a contract on it? a. The buyer should wait and see if the first contract terminates and then submit an offer. b. The buyer should have his or her licensee submit a counteroffer. C) The buyer should have his or her licensee submit an offer with TREC 11-7 Addendum for Back-up Contract attached. d. The buyer should contact the seller directly and convince them to drop the first contract.
The buyer should have his or her licensee submit an offer with TREC 11-7 Addendum for Back-up Contract attached.
In the Third Party Financing Addendum for Credit Approval: a. The buyer has no incentive to obtain financial approval b. The buyer has a definite time to notify seller of the inability to obtain financing approval C) The buyer's earnest money will not be returned if the buyer does not obtain financing d. The option period is explained
The buyer's earnest money will not be returned if the buyer does not obtain financing
Under which of these circumstances could a licensee be exempt from using a TREC promulgated form? A) When the licensee is functioning solely as a principal, not as an agent b. When the broker has solicited an attorney to draft a form c. When a licensee has his or her own form to use d. When the licensee has received permission from the Texas Secretary of State
When the licensee is functioning solely as a principal, not as an agent
A Seller's Disclosure Notice is not required A) When the property being sold is a previously unoccupied new home b. When the property is sold to an investor c. When the property has an out of state owner d. When the property is sold "as is"
When the property being sold is a previously unoccupied new home
If, during the loan assumption process, it becomes known that the lender will be charging an interest rate that is higher than the buyer would like to pay a. the buyer must accept the bank's interest rate because he or she has signed a contract. b. the buyer can terminate the contract but will have to forfeit the earnest money deposit. C) the buyer can terminate the contract and receive a refund of his or her earnest money. d. the seller can try and intervene on the buyer's behalf.
the buyer can terminate the contract and receive a refund of his or her earnest money.
The sale price should equal a. the listed price minus the down payment. B) the down payment and the loan amount. c. the offered price plus compensation. d. the loan amount and closing costs.
the down payment and the loan amount.
The number of days allowed for objections to title or survey is: a) ten days b) a number of days equal to the option period C) the number of days entered in paragraph 6. d) any time prior to closing
the number of days entered in paragraph 6.
If an agent fails to list an addendum on a contract A) the parties' intentions could be in jeopardy and the agent could be held responsible. b. the TREC will mediate an agreement between the two parties. c. the contract is void because it will not make sense. d. both parties have no choice but to adhere to the original contract.
the parties' intentions could be in jeopardy and the agent could be held responsible.
If a contract is terminated using TREC 38-4, _______________ determine(s) if the buyer's earnest money will be refunded. a. the reason for terminating B) the terms of the original contract c. the licensee's negotiating skills d. the local REALTOR® board
the terms of the original contract
One reason that a survey may not be required is because a. they are inaccurate. B) they are time-consuming and tedious. c. they are based on dated land grant maps. d. they require final approval by a board of land granters.
they are time-consuming and tedious.
Which of the following activities is specifically prohibited under the Civil Rights Act of 1968? a. Denying availability of property when it is available B) Refusing to sell, or rent to, deal or negotiate with any person c. Steering or blockbusting d. All of the above activities are specifically prohibited under the Civil Rights Act of 1968
Refusing to sell, or rent to, deal or negotiate with any person
What does the sales price in paragraph 3D deal with on Form 25-9? a. Sale price based on a percentage of the down payment b. Sale price based on the amount financed C) Sale price based on calculated acreage d. Sale price based on the escrow amount
Sale price based on calculated acreage
Any material changes to subdivision information require the ________________ to give notice of said changes promptly. a) Buyer b) Listing Agent C) Seller d) Broker
Seller
Seller Steve sold his home to Buyer Bill and closing is set for November 1. It is October 26 and Steve has been unable to find a new home because his daughter was seriously ill. Buyer Bill has agreed to wait until November 15. What should Steve's agent do? A) Steve's agent should send an Amendment to Contract 39-7 with the new closing date to Bill's agent. b. Steve's agent should send a counteroffer to Bill's agent. c. Steve's agent should strike through the closing date and write in the new one and send the contract to Bill's agent. d. As long as Bill agrees to the new date, no further action is necessary by Steve's agent.
Steve's agent should send an Amendment to Contract 39-7 with the new closing date to Bill's agent.
A(n) property is one where a particular event has affected the desirability of said property. A) Stigmatized b) Undesirable c) Unsellable d) Foreclosed
Stigmatized
According to the TREC contract, accessories include: a. Refrigerators B) Stoves c. Washing machines d. Gas dryers
Stoves
What agreement is typically made when a buyer moves in before the actual close? a. Occupant permit B) Temporary lease c. Pre-close agreement d. Short-term rental
Temporary lease
The Johnsons received an offer on their home contingent on the buyers, the Raleighs, selling their home. While waiting for the Raleighs, the Johnsons receive a back-up offer without a contingency. What can the Johnsons do? a. The Johnsons cannot accept any offers until the deadline to sell has passed on the Raleigh's contract. B) The Johnsons can ask the Raleighs to waive their contingency within an agreed upon timeframe or terminate the contract. c. The Johnsons can accept the new offer but must wait until the deadline to sell has passed on the Raleigh's contract. d. The Johnsons can terminate the Raleigh's contract with no notice or explanation.
The Johnsons can ask the Raleighs to waive their contingency within an agreed upon timeframe or terminate the contract.
Using the TREC OP-I form, who is required to remedy the conditions found on a property? a. The seller b. The buyer c. Both the seller and buyer D) The form does not make this specification.
The form does not make this specification.
The T-47 Residential Real Property Affidavit is not completed until ________________, in most cases. a. Funding b. Inspection c. Closing D) The listing is taken
The listing is taken
Which of the following is not information requested on the Subdivision Information TREC 37-4 form? a. The amount of the current regular assessment b. Any amounts due and unpaid for the property C) The number of current residents in the development d. The association's capital reserves
The number of current residents in the development
When can a tenant keep pets in a home under TREC 15-5 Seller's Temporary Residential Lease? a. The seller is guaranteed to keep any pets the seller owned prior to selling the home. B) The seller can only have pets in the home if the buyer approves. c. The seller has a right to privacy and has full rights to any pets he or she desires whether they were owned prior to selling or purchased after. d. Pets are excluded from TREC 15-5 due to the damage they may cause.
The seller can only have pets in the home if the buyer approves.
On Form 9-10, in what paragraph would you find information regarding property liens? a. Property B) Title Policy and Survey c. Property Condition d. Special Provisions
Title Policy and Survey
If the buyer is allowed to select certain items in the new home that is under construction, the builder (seller) may reject a selection if it adversely affects the market value of the home. A) True b. False
True
A void contract has the same legal status as a. a bilateral contract. b. an extended contract. C) a contract that never existed. d. a dismissed contract.
a contract that never existed.
Rollback taxes would most likely be imposed when: a) a property that has been used for agricultural purposes is no longer productive b) a borrower rolls loan fees into a refinance C) a property that has been under an agricultural exemption is developed into a subdivision d) when the use of a property changes from residential to commercial
a property that has been under an agricultural exemption is developed into a subdivision
TREC 26-6 Seller Financing Addendum is used when A) a seller is carrying the note for all or a portion of the sales price for the buyer. b. the buyer is carrying the note for all or a portion of the sales price for the seller. c. the licensee is carrying the note for all or a portion of the sales price for the seller. d. the licensee is carrying the note for all or a portion of sales price for the buyer.
a seller is carrying the note for all or a portion of the sales price for the buyer.
The only addendum that broker(s), seller(s) & buyer(s) have to sign
addendum for lead based paint
The closing date: a) is negotiated by the buyer and the seller b) is an "on or before" date c) may be extended in some cases D) all of the above
all of the above
A licensee might be guilty of the unlawful practice of law if he or she: a) wrote a will for a client b) advised the buyer regarding title issues c) drafted a lengthy and complex provision in special provisions D) any of the above
any of the above
In the Farm and Ranch contract, the Sales Price may be adjusted based upon a survey. If the sales price is adjusted, _____________. a) the cash portion can be adjusted b) the amount financed can be adjusted c) the cash portion and amount financed can be adjusted proportionately D) any of the above are possible
any of the above are possible
For a short sale to go through, the _____________ must give approval. a, licensees for both parties b. TREC c. title company D) bank holding the mortgage
bank holding the mortgage
TREC promulgated contracts allow the Buyer to have the property inspected: a) by anybody selected by the buyer B) by inspectors licensed by TREC or otherwise permitted by law c) no more than three times d) at any time by any person selected by their agent
by inspectors licensed by TREC or otherwise permitted by law
On TREC 44-1, parties are advised to a. sign the form quickly. B) consult an attorney before signing if there are any concerns. c. ask the seller's licensee for advice before signing. d. ask the Texas Mineral Rights Department for advice before signing.
consult an attorney before signing if there are any concerns.
Due to _________________ property purchased along the coastline can change. a. the census B) erosion c. mineral rights d. land disputes
erosion *the Realignment Act of 2011 land disputes the lasting effects of Hurricane Katrina
When a seller wishes to retain certain fixtures or accessories, these items are called: a) personal property b) problems c) exceptions D) exclusions
exclusions
To increase the amount of land they have, some coastal landowners A) fill in some of the area with top soil. b. squat on adjoining land. c. build a fence over their lot line. d. talk to the local surveyor about making adjustments.
fill in some of the area with top soil.
To verify and clarify the boundaries of a coastal property, a seller should a. ask the EPA. b. look at old maps. C) hire a surveyor. d. hire an attorney.
hire a surveyor.
A sale form completed by a buyer and delivered to a seller A) is an offer. b. constitutes a voidable contract. c. cannot be rescinded. d. is an enforceable contract.
is an offer.
By signing the RSC 1 form, a buyer A) is only acknowledging that the licensee disclosed his or her relationship with the RSC to the buyer. b. agrees to use the RSC that the licensee is affiliated with. c. agrees to receive a quote from the RSC the licensee is affiliated with. d. allows the licensee to share confidential information with the RSC.
is only acknowledging that the licensee disclosed his or her relationship with the RSC to the buyer.
If a buyer terminates a Buyer's Temporary Residential Lease prior to the closing date, the security deposit a. is retained by the seller. B) is refunded, less any itemized deductions c. is given to the licensee for payment of commission. d. is refunded in full.
is refunded, less any itemized deductions
Compliance for the TREC 10-6 Addendum for Sale of Other Property by Buyer a. is flexible. b. is open until the buyer's property sells. C) is strict because time is of the essence. d. is waived if multiple offers are received.
is strict because time is of the essence.
All oil, gas, and other minerals in or under a property, including any royalties, production and drilling rights, lease payments and all related benefits are known as a seller's a. element clause. B) mineral estate. c. organic lease. d. carbon credit.
mineral estate.
Some HOA's for high-end developments may a. perform a background check on new residents. b. perform a credit check on new residents. c. require a year's HOA payments in advance on new residents. D) require a one-time membership fee which could be over $1,000.
require a one-time membership fee which could be over $1,000.
Home warranty or residential service contract is paid by
seller
On TREC 45-1, what is defined as the sales price less seller's expenses? a. seller's gross B) seller's net proceeds c. buyer's mortgage amount d. licensee commission
seller's net proceeds
In many communities across Texas, property owners in subdivisions have been _____________ the right to obtain the minerals, oil, and gas that are under their yards. a. defrauded of b. reserved with C) severed from d. enabled to
severed from
Buyer Sarah is purchasing a residential property. She plans to live in the home and operate a daycare business in the home as well. Having mentioned this to her agent, the agent should: a. write a paragraph describing the business in Paragraph 11, Special Provisions b. disclose the daycare using a TREC Special Use addendum C) specify the use as a daycare in Paragraph 6: Objections d. not mention the daycare because the future use of a property is not an issue
specify the use as a daycare in Paragraph 6: Objections
Per Paragraph E of TREC 45-1, the residential contract will ______________ if the lender does not give approval. A) terminate b. be re-negotiated c. be counteroffered d. be amended to the amount owed
terminate
If a situation arises and both the seller and buyer agree to change a signed Residential Contract a. a new Residential Contract must be filled out. b. a counteroffer must be submitted. C) the Amendment to Contract TREC 39-7 must be completed. d. it is too late and the contract cannot be changed.
the Amendment to Contract TREC 39-7 must be completed.
The Texas Real Estate License Act was formerly known as a. the Texas Agent Licensing Law. b. the Real Estate Broker Act. C) the Real Estate Dealer's License Act. d. the Real Estate Licensing and Regulation Act.
the Real Estate Dealer's License Act.
An example of information a broker would provide to an RSC is a. the number of people living in the house. b. the buyer's annual income. C) the brand and serial number of the air conditioning compressor. d. if the buyer has talked to any other residential service companies.
the brand and serial number of the air conditioning compressor.
The primary focus of TREC 34-4 is a. to inform buyers of their rights under the EPA in regards to erosion. b. to inform buyers that the State of Texas has many programs in place to help combat erosion. C) to inform the buyer of the possibility that erosion can cause a structure to end up on a public beach. d. to inform buyers of requirements when filling in coastal areas.
to inform the buyer of the possibility that erosion can cause a structure to end up on a public beach.
