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LAW OF CONTRACTS - CHAMPIONS
TEST WITH SOLUTION
Wrongful or criminal deception intended to result in financial or personal gain is called: - ANSWER fraud
The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: - ANSWER 90 days
__________ extend above the surface without limitation. - ANSWER air rights
An example(s) of an appurtenance would be: - ANSWER easements
There is no upper limit on the value of a Texas homestead. - ANSWER true
A(n) __________ is one that combines some of the elements of a sale with a lease. - ANSWER lease purchase agreement
Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable? - ANSWER statute of frauds
If a broker receives more than one offer on a property: - ANSWER All must be presented to the seller unless the seller has instructed the broker otherwise
The most common form of financing used by buyers is: - ANSWER third party financing
A(n) __________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. - ANSWER contingency
The Lead-Based Paint Disclosure is: - ANSWER A federal requirement for
residential property built prior to 1978
In Texas, real estate contracts are subject to satisfactory inspections. - ANSWER false
The term __________ is synonymous with contingent. - ANSWER subject to
Real estate agents play a role that includes arranging for the pre-qualification / pre-approval of buyers. - ANSWER true
Rule P-53 of the Texas Department of Insurance states that Title Companies:
- ANSWER Cannot provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single firm, Cannot provide continuing education classes unless they charge the market rate for those classes
Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to keep the property. Bill is determined to complete the purchase and acquire the property. The only default remedy in the contract that could result in Bill acquiring the property is___________________________. - ANSWER specific performance
Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has: - ANSWER Engaged in the unlawful practice of law
tax statements for the current year are available, The tax proration may be calculated taking into consideration any change in the exemptions that will affect the current year's taxes
________ is the right of the government to regulate and control the way land is used. - ANSWER police power
A seller of coastal property abutting tidally influenced water must provide the ________. - ANSWER Notice Regarding Coastal Area Property
RESPA prohibits ________, which is considered an abusive practice. - ANSWER kickbacks
A claim, lien, charge, or liability attached to and binding real property is a(n) ________. - ANSWER encumbrance
A(n) ________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. - ANSWER waiver
At closing, the contract is: - ANSWER fully executed
FHA loans include two mortgage insurance premiums that must be paid by the borrower. They are the: - ANSWER UFMIP and Annual Premium
________ are changes that are made to the original contract, such as changes to the closing date or changes to the sales price, down payment and/or the amount financed. - ANSWER amendments
According to the Deceptive Trade Practices Act (DTPA), brokerage falls under the category of ________. - ANSWER services
________ law is a body of law based on "common sense" and local custom. - ANSWER common
Which kind of rights extend above the surface of property without limitation? - ANSWER air rights
________ is the legal procedure whereby secured property may be sold to satisfy a borrower's unpaid promissory note. - ANSWER foreclosure
The five essential elements of a valid and enforceable contract are, competent parties, offer and acceptance, legal purpose, in writing and ________. - ANSWER consideration
The formal judicial proceeding to prove the validity of a will and to distribute the assets of a decedent's estate is called: - ANSWER probate
A ________ is a deed with no guarantees or warranties. - ANSWER quitclaim deed
A ________ is the borrower's unconditional promise to repay the lender. - ANSWER Promissory note
A "Section 502 Loan" is insured by the ________. - ANSWER USDA
________ is evidence an individual has of his or her right to possess land. - ANSWER Probate
A(n) ________ mortgage covers more than one piece of property. - ANSWER blanket
Real property conveyed by will is called a ________. - ANSWER devise
An offer may be withdrawn at any time prior to its acceptance by the offeree
The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and ________. - ANSWER Periodic tenancy
Buyers' and sellers' marital status is not required in the contract. - ANSWER true
Which of the following is a physical characteristic of land? - ANSWER indestructability
Which disclosure is provided to comply with federal requirements for properties built before 1978? - ANSWER Lead-Based Paint Disclosure
If the loan factor is $4.49 and the loan amount is $357,500, taxes are $7300/year and the insurance is $3103 per year, what is the monthly PITI payment? - ANSWER $2,472.
A loan assumption might be desirable because: - ANSWER The loan assumption is generally less costly than a new loan
Earnest money is deposited in an escrow account when: - ANSWER The
A(n) __________ is a type of seller financing wherein the owner retains title to the property while the purchaser takes possession of the premises and pays on the principal. - ANSWER contract for deed
A(n) __________ is an agreement between two or more parties to do something or to refrain from doing something. - ANSWER contract
When an individual owns real property, he or she is said to have a (n) __________ in that property. - ANSWER freehold estate
