Download Texas Real Estate Contract Law: Multiple Choice Questions and Answers and more Quizzes Commercial Law in PDF only on Docsity!
TEXAS PROMULGATED CONTRACTS-
CHAMPIONS STUDY 100% ACCURATE RATED
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" A short sale is a transaction wherein: (a) the property is priced well below market so that it can be sold very quickly (b) the property, with the consent of the lender, is flipped (c) the lender has agreed to accept less than the outstanding loan balance at closing (d) the lender has decided to proceed with action to foreclose the property due to the borrower's
inability or unwillingness to pay - CORRECT ANSWER=> C"
"A purchaser of property seaward of the Gulf Intracoastal Waterway must be given a disclosure notice that: (a) dangerous marine life pose a significant risk to swimmers (b) beach erosion and movement of the vegetation line could cause an owner to lose the property (c) serious rip tides are a constant danger
(d) wave action and strong winds are a danger in these areas - CORRECT ANSWER=> B"
"Federal law provides that, when selling a home built before 1978: (a) all lead-based paint must be removed (b) Buyer must be provided with the pamphlet "Protect Your Family From Lead in Your Home" (c) Buyer must have lead testing performed prior to closing (d) a Seller must complete a Lead-Based Paint Disclosure only if there is a concern that the property
might be contaminated - CORRECT ANSWER=> D"
"No advertisement may contain explicit reference to a preferred gender of the renter or tenant, with the exception of those advertisements for _________________.
(a) Townhomes (b) Single family homes (c) Shared living spaces
(d) Condominiums - CORRECT ANSWER=> C"
"In a lease with a "right of first refusal" provision: (a) The price is set when the lease agreement is negotiated (b) The tenant has promised to buy the property (c) The TREC promulgated form must be used (d) The tenant has the right to match or better any offer the landlord receives to prevent the property
from being sold to someone else - CORRECT ANSWER=> D"
"TREC has promulgated forms for: (a) lease purchase transactions (b) cooperatives (c) right of first refusal
(d) residential transactions - CORRECT ANSWER=> D"
"An offer can be communicated by ___________________. (a) Phone (b) Hand delivery (c) E-mail
(d) All of the above - CORRECT ANSWER=> D"
"The Third Party Financing Addendum For Credit Approval is used when: (a) The buyer is obtaining FHA financing
(d) Credit approval - CORRECT ANSWER=> A"
"Land, improvements and accessories are collectively referred to as: (a) The estate (b) The property (c) The listing
(d) The homestead - CORRECT ANSWER=> B"
"According to the TREC contract, accessories include: (a) Refrigerators (b) Stoves (c) Washing machines
(d) Gas dryers - CORRECT ANSWER=> B"
"Exclusions to the sale must be removed (a) Prior to delivery of possession (b) At the convenience of the seller (c) When the offer becomes a binding contract
(d) Two days prior to closing - CORRECT ANSWER=> A"
"The loan amount in Paragraph 3.B. of the sales contract includes: (a) The amount of the mortgage insurance (b) The loan plus origination fees (c) Only the amount borrowed by the buyer
(d) The loan amount minus the earnest money - CORRECT ANSWER=> C"
"The sales price in 3.C. is always:
(a) The loan amount plus the cash portion (b) 3.A. + 3.B. (c) The amount borrowed plus the down payment
(d) All of the above - CORRECT ANSWER=> D"
"The earnest money is: (a) Always 5% of the purchase price (b) Set by TREC (c) Negotiated between the parties
(d) Paid at closing - CORRECT ANSWER=> C"
"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 - CORRECT ANSWER=> C"
"The __________________ ensures compliance with TRELA, which requires that license holders advise buyers to have an abstract of title examined or to obtain title insurance. (a) Title commitment (b) Notice to Prospective Buyer (c) Seller's Disclosure
(d) Inspection report - CORRECT ANSWER=> A"
"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
(d) The responsibility of the buyer's agent - CORRECT ANSWER=> B"
"If a buyer makes an offer without having received the Seller's Disclosure Notice, how many days does the seller have to provide the notice? (a) Not less than 3 days prior to closing (b) Not more than 5 days after the effective date of the contract (c) Within 7 days of loan approval
(d) The number of days negotiated in the contract - CORRECT ANSWER=> D"
"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 - CORRECT ANSWER=> B"
"For a valid option to exist (a) The option fee must be paid directly to the seller or listing broker (b) All of the blanks in paragraph 23 must be filled in (c) The fee must be paid within three days of the effective date of the contract
(d) All of the above - CORRECT ANSWER=> D"
"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 - CORRECT ANSWER=> D"
"Usual expenses of the seller as stated in the contract include: (a) Appraisal fees (b) VA loan funding fee (c) Release of existing lien
(d) Copies of easements and restrictions - CORRECT ANSWER=> C"
"The process of dividing ongoing expenses between the buyer and seller at the closing is called: (a) assessing (b) prorating (c) collecting expenses
(d) accounting - CORRECT ANSWER=> B"
"If not using a temporary lease, the buyer is entitled to possession of the property: (a) 24 hours before closing (b) When the seller has moved out (c) On closing day
(d) Upon closing and funding - CORRECT ANSWER=> D"
"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 - CORRECT ANSWER=> D"
"If a seller wants to continue to occupy the property for two days after the closing and the buyer agrees: (a) This can be written into the special provisions paragraph of the contract
(c) Faxed or emailed
(d) Any of the above - CORRECT ANSWER=> D"
"When should a licensee advise a party to a contract to consult an attorney? (a) At first contact with the client (b) Before signing the contract if the client does not understand the effect of signing the sales contract or the terms or conditions in the agreement (c) After the contract has been signed by all parties if the party does not understand the contract
(d) A licensee should never advise a client to consult an attorney - CORRECT ANSWER=> B"
"Who is responsible for filling in the effective date of the contract? (a) The listing salesperson (b) The title company (c) The broker
(d) The selling salesperson - CORRECT ANSWER=> C"
"The sales contract identifies the agency relationships between the broker(s) and parties: (a) In paragraph 23 (b) In paragraph 17 (c) In the Broker Information section
(d) In paragraph 9 - CORRECT ANSWER=> C"
"The condominium resale certificate must have been prepared within the previous: (a) 3 months (b) 6 months (c) 30 days
(d) 60 days - CORRECT ANSWER=> A"
"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 - CORRECT ANSWER=> A"
"If an overage is incurred due to a change order, the excess is paid by: (a) The seller (b) The buyer (c) Splitting the overage equally between seller and buyer
(d) The agent - CORRECT ANSWER=> B"
"At the closing the buyer should bring: (a) A personal check for the amount of closing costs and down payment (b) A promissory note for the amount of closing costs and down payment (c) Cash for the amount of closing costs and down payment
(d) A cashier's check or wire transfer for the amount of closing costs and down payment - CORRECT
ANSWER=> D"
"Damage or destruction of a property under contract prior to closing: (a) Can result in termination of the contract (b) Will result in a lawsuit against the seller (c) Will result in a lawsuit against the broker
(d) Is never a legal cause for delay of closing - CORRECT ANSWER=> A"
"In a Farm and Ranch sale, the buyer will receive all of the following items except: (a) Windmills (b) Tanks
(d) The amount entered in 3.A of the contract - CORRECT ANSWER=> B"
"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) d. Change of use fee - CORRECT ANSWER=> C"
"The buyer may terminate the contract and receive a refund of earnest money if lender required repairs: (a) Seem really high (b) Exceed 5% of the Sales Price (c) Exceed 3% of the Sales Price
(d) Exceed $10,000 - CORRECT ANSWER=> B"
"If in Paragraph B(2) is checked, and 50% entered in the Addendum for Reservation of Oil, Gas, and Other Minerals, (a) Seller reserves 50% of all of the mineral estate
(b) Seller reserves 50% of whatever mineral estate the seller owns as of the closing date - CORRECT
ANSWER=> B"
"A purchaser of property seaward of the Gulf Intracoastal Waterway must be given a disclosure notice that (a) Dangerous marine life pose a significant risk to swimmers (b) Beach erosion and movement of the vegetation line could cause an owner to lose the property (c) Serious rip tides are a constant danger
(d) Wave action and strong winds are a danger in these areas - CORRECT ANSWER=> B"
"If a home is to be sold, with lender's consent, at a price less than the outstanding balance on a mortgage, the sale is known as a
(a) Deed in lieu of foreclosure (b) Foreclosure (c) Short sale
(d) Distress sale - CORRECT ANSWER=> C"
"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 - CORRECT
ANSWER=> D"
"A building or community must not discriminate based on familial status, unless it qualifies as housing for older persons. (a) True
(b) False - CORRECT ANSWER=> A"
"The commission agreement between the broker and the seller is usually found in the: (a) Sales contract (b) Listing agreement (c) Buyer representation agreement
(d) IABS - CORRECT ANSWER=> B"
"_______________ occurs when a property is refinanced or resold immediately after purchase for an artificially inflated value. (a) Chunking (b) Churning
"The deed of trust securing seller financing is always assumable by a future buyer without approval: (a) True
(b) False - CORRECT ANSWER=> B"
"A new survey is always required for all transactions: (a) True
(b) False - CORRECT ANSWER=> B"
"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 - CORRECT ANSWER=> C"
"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 - CORRECT ANSWER=> B"
"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 - CORRECT ANSWER=>
C"
"If a property is under contract to a buyer, another buyer may use the __________________ to enter into a contract for the property if the first contract fails to close. (a) Addendum for Sale of Other Property by Buyer (b) Addendum for Back-up Contract (c) 1-4 Family Residential Contract
(d) Notice of Buyer's Termination of Contract - CORRECT ANSWER=> B"
"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 - CORRECT ANSWER=> B"
"A(n) property is one where a particular event has affected the desirability of said property. (a) Stigmatized (b) Undesirable (c) Unsellable
(d) Foreclosed - CORRECT ANSWER=> A"
"If an overage is incurred on new home construction due to a change order, the excess is paid by: (a) the seller (b) the buyer (c) splitting the overage equally between seller and buyer
(d) the agent - CORRECT ANSWER=> B"
"A licensee might be guilty of the unlawful practice of law if he or she: (a) wrote a will for a client
(d) two days prior to closing - CORRECT ANSWER=> A"
"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 - CORRECT ANSWER=> D"
"Any material changes to subdivision information require the ________________ to give notice of said changes promptly. (a) Buyer (b) Listing Agent (c) Seller
(d) Broker - CORRECT ANSWER=> C"
"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 - CORRECT ANSWER=> C"
"In Texas, the statute of limitations is _________________ for an oral agreement. (a) Four years (b) Two years (c) Eight years
(d) Six Years - CORRECT ANSWER=> B"
"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 - CORRECT ANSWER=> D"
"On a VA assumption, the veteran Seller automatically obtains a release of liability and restoration of entitlement. (a) True
(b) False - CORRECT ANSWER=> B"
"___________________ occurs when a property is refinanced or resold immediately after purchase for an artificially inflated value. (a) Chunking (b) Churning (c) Equity theft
(d) Property flipping - CORRECT ANSWER=> D"
"In the Farm and Ranch contract, if the Sales Price is adjusted based upon a survey, either party may terminate the contract if the Sales Price varies by more than: (a) the amount entered in 3.C of the contract (b) 5% (c) 10%
(d) the amount entered in 3.A of the contract - CORRECT ANSWER=> C"
"If the Seller agrees to contribute to the Buyer's closing costs, the amount should be: (a) entered in Paragraph 11, Special Provisions
