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AYPO Real Estate Law of Contracts Exam 2025
(Actual Exam) | All Questions and Correct
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Which of these items would NOT be likely to fall into a grey area between personal and real property? ---------CORRECT ANSWER-----------------Forced-Air HVAC System An advantage to buyers in a lease-purchase option is which of the following? ------ ---CORRECT ANSWER-----------------It can be easier for a difficult to qualify buyer to purchase a home with a lower down payments. Eminent domain in Texas MAY NOT be used for which of these purposes? --------- CORRECT ANSWER-----------------Private party uses. Graduated and index leases are what types of leases? ---------CORRECT ANSWER--- --------------Variable. A "mirror" will is a : ---------CORRECT ANSWER-----------------Reciprocal will.
Under a land sales contract which of the following statements is accurate? (Best answer.) ---------CORRECT ANSWER-----------------All of these are accurate. Which type of listing agreement is the only one to guarantee the broker a commission in the event of a successful sale? ---------CORRECT ANSWER-------------- ---Exclusive-right-to-sell A Deed of Trust allows for what type of foreclosure? ---------CORRECT ANSWER----- ------------Non- judicial Once the offer to purchase and all details and contingencies are agreed upon, and all parties are signed, which of these should happen next? ---------CORRECT ANSWER-----------------All of these. A title search includes a searching of public records to determine these issues, except for: ---------CORRECT ANSWER-----------------Credit history of the potential buyer. Which of these might a certificate of title include? ---------CORRECT ANSWER-------- ---------Any of these
A contract for deed is also known as: ---------CORRECT ANSWER-----------------1. Installment sales contract
- Real estate contract An advantage to buyers in a lease-purchase option is that: ---------CORRECT ANSWER-----------------It can be easier to get a difficult to qualify buyer into a home with a lower down payment. The real estate sales contract becomes an offer as soon as: ---------CORRECT ANSWER-----------------It has been prepared and signed by the purchaser. At what point has an acceptance of an offer been completed? ---------CORRECT ANSWER-----------------Once the offeror has been notified of the offeree's acceptance. A __________ clause states that a contract remains valid even if one provision of the contract is rendered invalid. ---------CORRECT ANSWER----------------- Severability
Which of these IS NOT one of the major types of REITs? ---------CORRECT ANSWER- ----------------Commercial Buyer's agents aware of a "stigma." i.e., psychologically impactful event, on a property are required to disclose the stigma. ---------CORRECT ANSWER--------------- --FALSE Buyer A purchases home from Seller B, but the home burns down the week before closing - the cause a cigarette dropped by A during a walk-through. As a result: ---------CORRECT ANSWER-----------------A likely is obligated to complete the purchase because the damage was A's fault. Which of these IS NOT listed as a potential damages item for wrongfully failing or refusing to sign a release acceptable to the escrow agent within 7 days of receipt of the request? ---------CORRECT ANSWER-----------------Broker's fees In what instances may parol (oral) evidence be used to dispute a contractual obligation? ---------CORRECT ANSWER-----------------When a party made promises that they never intended to fulfill but used to induced the other party to sign the contract Which of these is not a common defense to breach of contract? ---------CORRECT ANSWER-----------------Novation
Hypothecation is: ---------CORRECT ANSWER-----------------The process of a buyer signing a promissory note to repay a debt and the lender taking an underlying equitable right in the property. A promissory note is: ---------CORRECT ANSWER-----------------A promise to pay a debt. The Deed of Trust is easier to foreclose on because: ---------CORRECT ANSWER------ -----------The Deed of Trust is held by a third party. Owner/seller financing is most common with: ---------CORRECT ANSWER-------------- ---Raw acreage and farmland sales. The federal CFPB has required that the mortgage servicer wait until the owner is more than 120 days delinquent on payments before the first official notice of filing for a foreclosure, unless: ---------CORRECT ANSWER-----------------The lender's sole purpose of notice is to inform the borrower that their payments are delinquent and/or to explain what loss mitigation options are available. A major difference between a lien for federal or state income taxes versus a lien for property taxes is: ---------CORRECT ANSWER-----------------Federal and state income tax liens can be placed against any individual property, while property taxes generally attach to the property on which the tax is owed.
To qualify for a Jumbo Loan, lenders generally require a credit score of ___ or above, and at least ___ of reserves in the borrower's bank accounts. --------- CORRECT ANSWER-----------------700, 6 The number of hours of continuing education required to renew a license has increased to: ---------CORRECT ANSWER-----------------18 hours Computerized loan origination (CLO) systems have been approved by the U.S. Dept. of Housing and Urban Development so long as: ---------CORRECT ANSWER---- -------------1. There is full disclosure of the fee.
- The fee charged is a dollar amount rather than a percentage of the loan.
- Multiple lenders are displayed on the screen in a neutral format to give borrowers freedom of choice. A "good and indefeasible" title is the same as: ---------CORRECT ANSWER------------- ----1. Clear title.
- Free and clear title.
- Clean title.
Which of the following is one of the steps on the checklist? ---------CORRECT ANSWER-----------------1. Definite closing date, time, and place set with notice to buyer and seller.
- Copy of contract sent to all parties including closing agent/title company.
- Closing agent obtains payoff figures for any existing mortgages. Lenders will look at which of these factors when considering whether to approve a loan: ---------CORRECT ANSWER-----------------1. Capacity
- Capital "Consummation" as used here refers to: ---------CORRECT ANSWER----------------- The specific point in time where the borrower becomes contractually obligated to the lender. Which of the following is NOT listed among the special inspections? --------- CORRECT ANSWER-----------------Home appliances A new survey is not essential if: ---------CORRECT ANSWER-----------------An existing survey is agreed to by all parties in the transaction, including the lender and title company.
The Buyer takes possession of a home with 60 days left to go in the property tax year. Based on a 360-day year, Seller has already paid $2400 for the year. How much does Buyer owe Seller at closing? ---------CORRECT ANSWER----------------- $ Which of these is/are not considered to be "closing costs"? ---------CORRECT ANSWER-----------------Broker's commissions Which of these promulgated sales contracts includes a special section regarding the "Resale Certificate?" ---------CORRECT ANSWER-----------------Residential Condominium Forms published and promoted by the TREC for use in the Texas real estate profession are referred to as: ---------CORRECT ANSWER-----------------Promulgated forms The Texas Real Estate Commission (TREC) is a ___-member commission appointed by the governor with the advice and consent of the senate for overlapping ___- year terms. ---------CORRECT ANSWER-----------------9, 6 Contract law presents a particularly high risk of the unauthorized practice of law when a licensee chooses to do which of the following? ---------CORRECT ANSWER-- ---------------Create their own contract forms.
Which of these IS NOT one of the basic five tests to determine if an object or item is a fixture? ---------CORRECT ANSWER-----------------Size of the object Which of these is not a physical characteristic of real property? ---------CORRECT ANSWER-----------------Scarcity Which of these forms of ownership allows for unequal interests between the owners? ---------CORRECT ANSWER-----------------Tenancy in Common Which of these forms of business provide protection from personal liability? ------- --CORRECT ANSWER-----------------1. Corporations
- LLCs A housing cooperative is a co-op that: ---------CORRECT ANSWER-----------------Owns real property, usually residential Which of these professions is NOT regulated by the TREC? ---------CORRECT ANSWER-----------------Home mortgage lenders
Which of these is an element necessary to form a contract? ---------CORRECT ANSWER-----------------1. Legal Purpose
- Offer
- Consideration A contract often created by a court based on the actions of the parties and not on a written agreement is called a(n): ---------CORRECT ANSWER-----------------Implied contract Once a party has purchased an option to buy: ---------CORRECT ANSWER-------------- ---They have the choice to complete the purchase within the option period or to pass without further obligation. Which of these contracts is voidable, and not void? ---------CORRECT ANSWER------ -----------A contract with a minor (under 18 years of age) for something not considered a life necessity. Contracts for deed, lease-purchases, and lease-options for longer than ____ days are legally defined as executory contracts. ---------CORRECT ANSWER----------------- 180
Which of these is not considered an "environmental" issue in home-buying? ------- --CORRECT ANSWER-----------------Termites Which of these primary residences would not be fully protected under the Texas Homestead Act? ---------CORRECT ANSWER-----------------A city residence on 12 acres. Which of these IS NOT in the information requested above? ---------CORRECT ANSWER-----------------Who is the buyer's employer? Which of these was NOT one of the key court rulings? ---------CORRECT ANSWER--- --------------Earlier agreements supersede later agreements Which process requires the breaching party to complete their contractual obligations? ---------CORRECT ANSWER-----------------Specific performance The form that generally precedes the rest in most sales transactions is the: --------- CORRECT ANSWER-----------------Information About Brokerage Services
Which type of listing agreement is the only one to guarantee the broker a commission in the event of a successful sale? ---------CORRECT ANSWER-------------- ---Exclusive-right-to-sell Buyer-broker agency is a relatively new concept in the Texas real estate profession? ---------CORRECT ANSWER-----------------TRUE Lease agreements lasting more than ________ must be in writing to be unenforceable under the Texas Statute of Frauds. ---------CORRECT ANSWER-------- ---------One year The leasehold estate owner is said to hold a ____________ interest. --------- CORRECT ANSWER-----------------Reversionary Which of these would NOT be a requirement to create a valid lease agreement? -- -------CORRECT ANSWER-----------------Financing disclosure Which form of these lease types is focused primarily on commercial lessees? ------- --CORRECT ANSWER-----------------Percentage lease
An encumbrance is a(n) ________ real property. ---------CORRECT ANSWER---------- -------All of these Once signed by borrowers, the note is which of the following? ---------CORRECT ANSWER-----------------A fully enforceable and negotiable instrument of debt. Providing basic information regarding various standard aspects of real estate law is: ---------CORRECT ANSWER-----------------An important piece of the fiduciary duty to protect the client's best interests. In real estate, a 72- hour clause allowing a party a grace period to change their minds is called which of the following? ---------CORRECT ANSWER----------------- Escape clause. Computerized loan origination (CLO) systems have been approved by the U.S Dept. of Housing and Urban Development so long as: ---------CORRECT ANSWER---- -------------All of these.
Contracts for deed, lease-purchases, and lease-options for longer than (minimum mandatory) ___days are legally defines as executory contracts. ---------CORRECT ANSWER----------------- 180 All of the following are required for an amendment to make changes to an existing real estate contract in Texas, EXCEPT for which of these? ---------CORRECT ANSWER-----------------The amendment must be included in the actual language of contract and so requires a new contract to be signed. Who pays for the inspections and subsequent repairs? ---------CORRECT ANSWER-- ---------------Who pays is open to negotiation and, once decided, should be entered into the sales agreement. In terms of the closing process, Texas is an ______ state. ---------CORRECT ANSWER-----------------Escrow When a property is mortgaged, the buyer executes (signs) which two separate instruments? ---------CORRECT ANSWER-----------------A promissory note and a security document (either a mortgage or deed of trust). Which of these is not considered an "environmental" issue in home-buying? ------- --CORRECT ANSWER-----------------Termites
