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Exam Question & Answers ( Latest 2025)
According to TREC rules, which of these must be delivered to the seller within three days of a contract's effective date? - CORRECT ANSWER ✅ earnest money What are brokers required to do regarding Consumer Protection Notice TREC No. CN 1-2? - CORRECT ANSWER ✅ post it in each office Rollback taxes are addressed in all of the following EXCEPT: - CORRECT ANSWER ✅ Residential Service Contract Agent Sarah knows her client wants to make the sales contract contingent on appraisal, so she adds a notation to that effect in the Special Provisions section of the contract. Why is that wrong? - CORRECT ANSWER ✅ it could be considered the unauthorized practice of law What are two real estate governing bodies that were formed as a result of TRELA? - CORRECT ANSWER ✅ TREC and the Broker-Lawyer Committee If a seller is still accepting counteroffers, what is true about their property? - CORRECT ANSWER ✅ it is not yet officially in contract
Exam Question & Answers ( Latest 2025)
Which of the following bodies appoints the public member on the Broker-Lawyer Committee? - CORRECT ANSWER ✅ the governor What is the statute of limitations to claim fraud or misrepresentation against a license holder? - CORRECT ANSWER ✅ 4 years from discovery Anthony changed the use of his land from farm land to residential before he sold it. According to TREC rules, who is responsible for any rollback taxes he might owe? - CORRECT ANSWER ✅ Anthony Paragraph D of the Short Sale Addendum contains a date by which the seller must get approval from their lender for the sale. What happens if the lender does not give approval by the date? - CORRECT ANSWER ✅ The contract will terminate and the earnest money will be refunded to the buyer. Which of the following is TRUE regarding a contract to transfer real estate which contains no earnest money? - CORRECT ANSWER ✅ It is valid. What is the purpose of the "Listing Broker's fee" section at the bottom of Page 9 of the One to Four Family Residential contract? - CORRECT ANSWER ✅ to reflect a previously agreed-upon commission
Exam Question & Answers ( Latest 2025)
A buyer was unable to obtain financing. How would they notify the seller that they are terminating the contract? - CORRECT ANSWER ✅ by sending a promulgated Notice of Buyer's Termination What is the name of the document prepared by a condo association (or HOA) to outline the fees and rules of the condo for a prospective buyer?
- CORRECT ANSWER ✅ The Condominium Resale Certificate When seller financing is being used, the seller becomes: - CORRECT ANSWER ✅ the lender If a buyer is sent an Addendum for Property Subject to Mandatory Membership in an Owner's Association and they don't like the terms, what remedy do they have? - CORRECT ANSWER ✅ They can terminate the contract within the first three days. Agent Ralph has a buyer client that wants the seller to leave them the refrigerator, built-in microwave, and vent hood. Ralph notes this expectation in the Special Provisions section. What is wrong with this scenario? - CORRECT ANSWER ✅ It should be written in a Non-Realty Items Addendum, not in the Special Provisions section. Buyer Jeremy gave Seller Anthony $800 in earnest money and an additional $200 in option money. During the option period, Jeremy
Exam Question & Answers ( Latest 2025)
decided to terminate the contract. Anthony gave him back $800. Is this correct? Why or why not? - CORRECT ANSWER ✅ Yes, because option money is never refundable. A buyer who discovers a defect which they believe was misrepresented has a certain time after discovery to make a claim for damages. This is known as the: - CORRECT ANSWER ✅ Statute of Limitations What are rules about the maximum number of people allowed to live together in a single dwelling called? - CORRECT ANSWER ✅ Occupancy standards hen do brokers determine how the commission from a sale will be split?
- CORRECT ANSWER ✅ before closing Which of these is NOT true about a Seller's Temporary Residential Lease? - CORRECT ANSWER ✅ the buyer/landlord has no recourse if the seller/tenant overstays What is one thing that differentiates TREC from the Broker-Lawyer Committee? - CORRECT ANSWER ✅ TREC members are only appointed by the governor, Broker-Lawyer Committee members can be appointed by different people.
Exam Question & Answers ( Latest 2025)
Which of these does NOT create housing occupancy standards? - CORRECT ANSWER ✅ Federal Housing Administration What information does the Disclosure of Relationship with Residential Service Company form convey? - CORRECT ANSWER ✅ that it is a violation of RESPA for a license holder to receive a referral fee for passing on a name to a service provider Agent Kara signed a buyer's representation agreement with her client that set her commission at 3%. The listing broker of the home her client chose offered 3.5% to the buyer's broker. What percentage of the sale price of the home will Kara's commission be? - CORRECT ANSWER ✅ 3.5% What is special about the earnest money section (paragraph five) and the option money section (paragraph 23) in the TREC promulgated sales contract? - CORRECT ANSWER ✅ they contain "time is of the essence" language Which of these materials would be considered part of a property's mineral estate? - CORRECT ANSWER ✅ oil Seller Vera agrees to allow another veteran to assume their mortgage loan. To make sure Vera can get their VA entitlement restored, what
Exam Question & Answers ( Latest 2025)
must be attached to the contract? - CORRECT ANSWER ✅ Addendum for Release of Liability on an Assumed Loan and/or Restoration of Seller's VA Addendum The words "time is of the essence" are in: - CORRECT ANSWER ✅ Paragraph 23 of the One to Four Family Contract Which of these is something TREC is empowered to do by TRELA? - CORRECT ANSWER ✅ require license holders to use contract forms for certain transactions Buyer Raz goes into contract on a house in Texas. At the last minute, he is unable to obtain financing. What would he need to have in his contract to terminate it without penalty? - CORRECT ANSWER ✅ a Third Party Financing Addendum In loan fraud, the lender is usually the ________. - CORRECT ANSWER ✅ victim Which TREC promulgated form allows for the sales price to be adjusted because of the survey? - CORRECT ANSWER ✅ The Farm and Ranch Contract
Exam Question & Answers ( Latest 2025)
As outlined in the TREC promulgated sales contracts, what obligations does the seller have regarding the property condition at the time of sale? - CORRECT ANSWER ✅ Seller's obligations are a matter of negotiation with the buyer. Seller Xavier's home is in a special statutory tax district. According to the Texas Water Code, what does Xavier have to do before going into contract with a buyer? - CORRECT ANSWER ✅ have them sign a notice informing them of the extra taxes When would it be appropriate to use the New Home Contract (Incomplete Construction)? - CORRECT ANSWER ✅ for a client buying a new home that is being built In a Texas real estate contract, what does an Addendum for Property Subject to Mandatory Membership allow a buyer to do? - CORRECT ANSWER ✅ terminate a contract if not given information about the property's HOA According to TRELA, which of these does one NOT need to be a licensed attorney to do? - CORRECT ANSWER ✅ fill out a TREC promulgated contract
Exam Question & Answers ( Latest 2025)
What part of the Third Party Financing Addendum for Credit Approval specifically pertains to people getting VA loans? - CORRECT ANSWER ✅ Paragraph D A married couple is buying a property. Which is the BEST way to write their names in the contract? - CORRECT ANSWER ✅ Georgianna Serif and spouse Bryan Serif Mary has a rental property with a two year lease on it. She collected a $500 security deposit at the beginning of the lease. Now she is selling the property. What will happen to the security deposit? - CORRECT ANSWER ✅ Mary will transfer the security deposit to the buyer at closing. Which of these is NOT something TREC has the power to do? - CORRECT ANSWER ✅ licensing developers and builders Which is the purpose of the Information About Brokerage Services form? - CORRECT ANSWER ✅ to inform clients how a license holder can represent a party in a real estate transaction A Residential Real Property Affidavit Promulgated by the Texas Department of Insurance (T-47 Affidavit) must be furnished to the buyer
Exam Question & Answers ( Latest 2025)
When all parties have agreed to all terms of an offer, have signed the offer, and have initialed any changes that took place during negotiations, what happens to the offer? - CORRECT ANSWER ✅ It becomes a contract. When should a license holder use form T-47, Residential Real Property Affidavit? - CORRECT ANSWER ✅ when a seller wants to use an existing survey A seller is planning to convey a refrigerator through the Non-Realty Items Addendum. They financed the appliance purchase, and still have a few payments left. Is this allowed? Why or why not? - CORRECT ANSWER ✅ No, items conveyed through the Non-Realty Items Addendum must be owned fully by the seller. An agent's buyer client wants to keep the curtains in the home they are buying, and the seller has agreed. What does the agent need to include with the contract to ensure this happens? - CORRECT ANSWER ✅ a Non- Realty Items Addendum Agent Ted advises his client that the title to the property he is buying is clear — no need to do a further title search. Why is this inappropriate? - CORRECT ANSWER ✅ It may constitute unauthorized practice of law under TRELA.
Exam Question & Answers ( Latest 2025)
Buyer Ashley is shopping for empty lots on which to build a home. She found a lot for sale that looks promising, but she's concerned its located on a wetland. What should her agent do? - CORRECT ANSWER ✅ Use the Unimproved Property contract and attach the Environmental Assessment, Threatened or Endangered Species and Wetlands Addendum. Paragraph C2 on the Lead Based Paint Disclosure states that: - CORRECT ANSWER ✅ the buyer has 10 days to have the property inspected for lead-based paint In which of these scenarios could an HOA foreclose on a property that belongs to the HOA? - CORRECT ANSWER ✅ a property owner fails to pay their HOA assessments What does the Residential Condominium Contract require in the legal description of the property? - CORRECT ANSWER ✅ a unit number According to Paragraph 10B, Possessions, what is a seller prohibited from doing after the effective date? - CORRECT ANSWER ✅ execute a lease without the buyer's permission
Exam Question & Answers ( Latest 2025)
A buyer and seller have been in negotiations. They have everything in writing, have agreed to all terms, the contract is signed and changes initialed. Today, the written acceptance of the final agreement has been communicated to the other party. What is today called? - CORRECT ANSWER ✅ the effective date What is the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway for? - CORRECT ANSWER ✅ warns buyers that if their property become located on the beach area by erosion, they can be required to remove the structure at their own expense How can an agent change a contract after it has been signed by both parties? - CORRECT ANSWER ✅ adding an amendment to contract In a TREC promulgated contract, what is the Third Party Financing Addendum concerned with? - CORRECT ANSWER ✅ financing contingencies Which one of these is a bilateral contract? - CORRECT ANSWER ✅ Zelda agrees to pay Gus $250,000 for ownership of his house.
Exam Question & Answers ( Latest 2025)
What is the purpose of the Short Sale Addendum? - CORRECT ANSWER ✅ to protect a seller who is selling their home for less than they owe their lender A contract which courts cannot compel the parties to perform is: - CORRECT ANSWER ✅ unenforceable According to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum, what happens if the buyer can provide the seller with a report proving that the use of the property is negatively affected by one of the noted factors (before the agreed-upon deadline)? - CORRECT ANSWER ✅ The buyer can terminate the contact and get their earnest money back. What part of the One to Four Family Residential Contract advises the buyer to get an abstract of title reviewed by a lawyer? - CORRECT ANSWER ✅ Paragraph 6E Which of these is appropriate to put in the Special Provisions section of the One to Four Family Residential Contract? - CORRECT ANSWER ✅ the names of sellers that wouldn't fit in Paragraph 1
Exam Question & Answers ( Latest 2025)
If an agent makes a change to Paragraph 6A8 in a TREC promulgated contract, which of these is most likely to be the result? - CORRECT ANSWER ✅ The title policy will be amended to read "shortage in area" rather than the standard exception. When both parties mutually agree to terminate a contract, who provides the appropriate form? - CORRECT ANSWER ✅ the title company What is the name of the law that requires certain contracts (for example, sales contracts) to be written down and signed? - CORRECT ANSWER ✅ the statue of frauds In which of these situations is the seller required to provide a seller's disclosure? - CORRECT ANSWER ✅ Brian is selling an investment property he has never lived in. Agent Yugo pads the income numbers on their client's loan application. What is TRUE regarding this situation? - CORRECT ANSWER ✅ Yugo is committing loan fraud. If a seller wants to reserve part of their mineral rights after selling, where on the Reservation of Oil, Gas and Other Minerals Addendum
Exam Question & Answers ( Latest 2025)
would they note what percentage they're keeping? - CORRECT ANSWER ✅ Paragraph B A seller is renting back a property from a buyer using the Seller's Temporary Residential Lease. The seller damages the property while they are staying there. Who is responsible for the cost of the repairs? - CORRECT ANSWER ✅ The seller/tenant Which of these is a technique license holders can employ to avoid mortgage fraud? - CORRECT ANSWER ✅ disclose everything to the lender A landlord may have to make adjustments for a tenant with a disability to be able to live in a dwelling. Those adjustments do not include: - CORRECT ANSWER ✅ permitting a tenant to use illegal drugs Which of these is an example of an illegal buyer rebate? - CORRECT ANSWER ✅ an agent gives their buyer client half of their commission without disclosing it on the settlement statement If the seller is providing an existing survey during a real estate transaction, what must the license holder give to the buyer? - CORRECT ANSWER ✅ the T-47 Residential Real Property Affidavit
