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A comprehensive set of exam questions and answers related to texas real estate contract forms and addenda. It covers various aspects of real estate transactions, including contract types, addenda, legal requirements, and common scenarios. Designed to help individuals preparing for real estate licensing exams or those seeking to enhance their understanding of texas real estate contracts.
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Which of the following is an example of a Bilateral contract? - ✔✔A Promise in exchange for a promise - Purchase Contract. Unilateral Contracts - Listing Agreement, Buyer's Rep, Option Contract Who is responsible for filling in the effective date, who, when & what? - ✔✔Broker. Between the buyer and the seller, The date on which the communication was made. The date of initialing and signing of the parties. The last party to initial/Sign fills in the day. Broker. Last party to accept must communicate back to other party & fill in the date What is a legal proceeding brought by a party to a contract against another party to compel action called for in the agreement? - ✔✔Breach of a contract, one-party defaults, sues for specific performance, seek other relief - arbitration, mediation, injunction to sue for compensatory Damages. If a seller fails to provide the buyer with the seller's disclosure of property condition as required by Section 5.008 of the Texas Property Code, what is the status of the purchase contract? - ✔✔Voidable at the option of the buyer. Voidable by buyer any time prior to closing and the earnest money will be refunded to the buyer. Which term identifies the substitution of a new contract for an existing contract? - ✔✔Novation When using a Power of Attorney to transfer title to real property? - ✔✔Attorney-in-fact - Legal description and the subject of the authority
Who must convey to the principal all known information that would affect the principal's decision to accept or reject offers? - ✔✔Licensee - the listing agent/selling agent When a legally enforceable promise is exchanged for a legally enforceable promise? - ✔✔It is a Bilateral Contract. If the seller has already sent a counteroffer to a prospective buyer and then receives another offer that is even better, the seller: - ✔✔Withdraw the counteroffer first then consider new offer Which law requires the contract for real property to be in writing and signed to be enforceable? - ✔✔Statute of Frauds To have a valid real property contract, something of value must be exchanged. This is called: - ✔✔Consideration When may a potential purchase's offer to buy real estate be withdrawn? - ✔✔at any time before it's accepted Which of the following is NOT addressed by a TREC-promulgated contract? - ✔✔Lease with an option to purchase. Lease purchase - new Condo contract When is a financing addendum not required? - ✔✔When the buyer pays in cash. When third financing addendum is waived
By the end of the 2nd business day after the effective date. days of the effective date of the contract. If the seller furnishes the existing survey to the buyer, but it is not acceptable to the buyers lender, the cost of the new survey may be at whose expense? - ✔✔The Buyer Which form is used for the owner to tell the buyer about known problems with the property? - ✔✔Sellers disclosure of property condition. The notice about obtaining an abstract or title policy is a required notice from? - ✔✔Buyer's broker When I licensees using a builder's contract or a form prepared by an attorney that is not promulgated by TREC, what is the wisest way to notify the buyer about title insurance or abstract.? - ✔✔OP-C Notice to prospective buyer - Suggest that he get an abstract or a title insurance prior to closing - TAR - Buyer's Rep Buyer's Agent is known as the? - ✔✔Selling Agent Which of the following is not true about paragraph 11 special provisions? - ✔✔Paragraph 11 special provisions calls for: Insert only factual statements and business details to the sale. TREC prohibits licensee from adding factual statements for business detail where to contract addendum lease or other form has been promulgated by TREC for mandatory use. Which of the following is true about TREC addenda? - ✔✔It adds to the contract but does not change the contract.
Which is acceptable language for special provisions of 22 - TREC contract form? - ✔✔Only factual or business details. Can a party accept earnest money as liquidated damages and also sue the third party for specific performance? - ✔✔No - one or the other. Regarding closing and the buyer's possession of the property? - ✔✔Seller shall deliver possession of property in it's present or require condition, or wear and tear excepted;
Minerals,
Which form must be displayed in the residential brokers office? - ✔✔TREC - Notice to Consumer Equal Housing Opportunity Poster --should be posted at the broker's office In accordance to the Fair Housing Amendment Act of 1988 requires it to be posted. Brokerage Fee splits are agreement between the? - ✔✔Listing Broker & Selling Broker Four statutory agency position; - ✔✔1. Seller's agent,
buyer may terminate this contract by giving notice to the seller prior to closing and the earnest money will be refunded to the buyer. If the seller is doing all the financing in a sale, the mortgagees Title policy will protect - ✔✔The seller That he has a first lien position or second lien position on the property. When a buyer purchases a condominium they are buying the? - ✔✔ownership of the airspace within the unit itself, plus share ownership of common facility such as halls, elevators, and the land as undivided interest. The seller of unimproved property provides the property condition disclosure; - ✔✔NONE- Paragraph 7-E - Property Condition; access, inspection, and utilities; seller shall permit buyer to buyer's agent access to the property at reasonable times. The buyer may have the property inspected by inspectors selected by the buyer and licensed by TREC or other permitted by law to make inspections. Seller at seller's expense shall immediately cause existing utilities to be turned on and shall keep utilities on during time this contract is in effect. If the property is subject to mandatory membership in an HOA, subdivision information means? - ✔✔(i). A current copy of restrictions applies into the subdivision and bylaws and rules of Association, (ii). A resale certificate, all of which are described by section 207.003 of the Texas property code. (iii) Restrictions The disclosure of relationship with a residential service company requires disclosure of all? - ✔✔Kick- backs or Compensations by Broker
The purchase of a residential service contract is optional - neither a broker or salesperson nor a seller may condition the sale of the property on the buyers purchase at a residential service contract. If the buyer fails to give the notice required by the third-party financing statement for credit approval? - ✔✔If buyer does not give the notice with in the time required, this contract will no longer be subject to credit approval. Time is of the essence for this paragraph and strict compliance with time for performance is required. The option fee is paid to? - ✔✔The Seller - for the unrestricted rights to terminate the contract within the specified date. An amendment to a contract is? - ✔✔A Change to the Contract or a new contract. Notices: - ✔✔Warning to buyer. What two things is a buyer actually purchasing when they buy a Condo? - ✔✔The Unit and common areas. net and common area. In Loan assumption, If the buyer doesn't deliver the credit information to the seller, how long does the seller have to terminate? - ✔✔7 calendar days. In Third-party financing, what does the buyer do if the lender says, I cannot loan you the money at this time? - ✔✔The buyer must send a notice to the seller stating they don't qualify. Who must fill in the executed date? - ✔✔The broker or the agent who represents the broker.
Sell of other property - What is a kick out and when is it due? - ✔✔If the seller gets another contract then he kicks that buyer out because the contract is better and not contingent upon sale of home. The backup contract Has to remove the contingency and come out of the money or he gets kicked out as a backup usually within three days seller will give him three days to remove In Sellers financing addendum, the seller is protected by what kind of title policy? - ✔✔Mortgagees title policy. Example - there are two Title policies. Sellers policy - they pay - and the buyers policy pays to protect the mortgage lender from buyers default. Buyer pays a small portion of both policies. In how many addendum's and in what place in the contract that states -- "time is of the essence"? - ✔✔1. In One to Four Family - Paragraph 23 under option section,
In HOA - Name two 2 resell certificates? - ✔✔Condominium resale certificate Subdivision information including resale certificate for property subject to membership in a property owners Association. In Sellers financing addendum, Seller has how many days to check the buyer's credit? - ✔✔ 7 - days. In New home, What is the name of the Insulation measurement? - ✔✔R - factor or R-value. In Farm and ranch, Can the sales rights be automatically changed? - ✔✔No. Example; parties can agree beforehand that they are automatically going to be change, so it doesn't have to be renegotiated, but it's not automatically. In Home Warranty what must an agent disclose and to whom? - ✔✔Most people disclose that they are receiving a kick back, must disclose and agents client - example; if these buyer and sellers listing agreement see disclosure affiliated business relationship, - See - disclosure affiliated business relation - paragraph number eight on buyers and paragraph number 12 on sellers agreement. What forms are approved or promulgated by the Texas real estate commission? - ✔✔1. Unimproved Property Contract - Promulgated by TREC,