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PROMULGATED CONTRACT FORMS
The Federal Fair Housing Act exempts all the following EXCEPT:
A. Owner-occupied buildings with no more than four units
B. Apartment building in rural areas
C. Landlords who own only a few single-family homes that were sold or leased without a broker
D. Housing operated by organizations and private clubs that limit occupancy to members - Correct Answer ✔ ️ ✔️ Apartment building in rural areas
Fraud is defined as a deliberate act of deception made for personal gain or to damage another individual.(T/F) - Correct Answer ✔ ️ ✔️ True
All the following can be awarded in statutory fraud case EXCEPT:
A. Exemplary damages
B. Court costs
C. Attorney's fee
D. Fees for pain and suffering - Correct Answer ✔️ ✔️ Fees for pain and suffering
Federal Fair Housing Laws forbid discrimination based only on race.(T/F) - Correct Answer ✔️ ✔️ False
The Seller has an existing survey. Which party does NOT need to approve the existing survey for use in this transaction? - Correct
Answer ✔️ ✔️ The seller's agent
The buyers have asked for a Residential Service Contract and asked the seller to pay $400. If the cost exceeds the $400 as stated in the contract who, according to the contract, pays the difference? - Correct Answer ✔️ ✔️ the Buyer
The buyers are applying for third party financing. The Third- Party Financing Addendum covers all of these EXCEPT:
seller's home and is willing to substitute his eligibility for the seller. (T/F) - Correct Answer ✔ ️ ✔️ True
If an agent is a principal in a transaction or has at least a 50% interest in the property, he must disclose this in paragraph # 4 of the contract. (T/F) - Correct Answer ✔ ️ ✔️ True
The sales price in the contracts includes the down payment, the loan, and the private mortgage insurance if the loan is greater than 80%. (T/F) - Correct Answer ✔ ️ ✔️ False
In the One-to-Four Residential Contract, "property" includes the land, improvements, and accessories. (T/F) - Correct Answer ✔️ ✔ ️ True
Built-in appliances, wall-to-wall carpeting, and heating and air conditioning units are all considered "improvements." (T/F) - Correct Answer ✔️ ✔️ False
The TREC promulgated Seller Financing Addendum states that if a seller determines at seller's sole discretion that the buyer's credit is unacceptable, the seller may terminate the contract and return the earnest money to the buyer. (T/F) - Correct Answer ✔️ ✔
️ True
In paragraph 2 of the standard residential contract form, which of the following items would NOT be included in the sale unless otherwise provided for:
A. Mini-blinds
B. Stove
C. Ceiling fans
D. Oriental living room rug - Correct Answer ✔️ ✔️ Oriental living room rug
If the buyer takes possession prior to closing, what needs to happen? - Correct Answer ✔️ ✔️ The buyer needs to sign a temporary lease.
In a contract to purchase real property, what is the name of the clause that states that the buyer will NOT be held responsible to complete the purchase if the buyer cannot obtain sufficient financing? - Correct Answer ✔️ ✔️ Contingency clause
If the buyer cannot obtain financing for the purchase: - Correct
Answer ✔️ ✔️ The buyer must terminate the contract within a certain number of days or lose the right to terminate
If the earnest money is not deposited within two days, it is considered a(n) ___________________. - Correct Answer ✔️ ✔️ Defect
The typical survey which most purchasers obtain when they go to closing is called _____________________. - Correct Answer ✔
️ ✔️ A real property survey
Seller disclosure of ______________________ is required by Federal law for a residential dwelling constructed prior to 1978. - Correct
Answer ✔️ ✔️ Lead-based paint
Wetlands are the link between ____________ and ________________. - Correct Answer ✔️ ✔️ land / water
Earnest money is a _____________________ only to make the offer more enticing to the seller. - Correct Answer ✔️ ✔️ Good faith gesture
The option money must be in the hands of the seller within _________ days from the effective date of the contract. If it is not, the buyer does not have a valid option and accepts the property as is. - Correct Answer ✔️ ✔️ Three
It is the agent's responsibility to notify the buyer that they should have a(n) ____________ or a(n) ___________________ examined by
C. Seller of residential property consisting of more than one dwelling unit
D. All of the above - Correct Answer ✔ ️ ✔ ️ All of the above
If a buyer checks item 7D (2) under Property Condition, the buyer can only ask for specific repairs and cannot use general terms such as "subject to inspection." (T/F) - Correct Answer ✔️ ✔️ True
The reason a buyer would want "shortages in area" covered under the title policy is that only the original person who paid for the survey has recourse. (T/F) - Correct Answer ✔️ ✔️ True
In the One-to-Four Family Residential Contract, the title company - Correct Answer ✔️ ✔️ Can make the decision whether they will consider using the seller's existing survey. The seller will need to sign an affidavit called a T-47 and provide the original survey
Why do lender-required repairs take priority? - Correct Answer ✔️ ✔️ The buyer cannot get the loan without these being done
A(n) _____________________ is often used when a bank takes a property back from the owner in a foreclosure. - Correct Answer
✔️ ✔️ Special warranty deed
The _________________________________ is used when the sellers close on their property but want to stay in the home after closing. - Correct Answer ✔️ ✔️ Seller's Temporary Residential Lease
The __________________ requires that all contracts for the sale of real property be in writing to be enforceable, so any changes should be in writing and signed by all parties. - Correct Answer ✔️ ✔
️ Statute of frauds
The ___________________ buyer is not allowed to pay certain closing costs. - Correct Answer ✔ ️ ✔ ️ VA or FHA
The _____________________ paragraph of the contract should only deal with factual statements and business details. - Correct
Answer ✔️ ✔️ Special provisions
A real estate broker or salesperson, while acting as an agent for another, is a(n) _____________. - Correct Answer ✔️ ✔
️ fiduciary
The Joint Broker-Lawyer Committee consists of _______________ members. - Correct Answer ✔ ️ ✔️ 13
The Texas Real Estate Commission is a nine-member commission appointed by _____________. - Correct Answer ✔️ ✔️ the governer
The three Canons of Professional Ethics are ____________, ___________, and ______________. - Correct Answer ✔ ️ ✔
️ fidelity / integrity / competency
The One-to-Four Family Residential Contract spells out the ______________________________________ of each party to successfully complete a transaction. - Correct Answer ✔️ ✔
️ financial obligations, duties
Texas real estate license holders are _______________ to use forms promulgated by TREC when negotiating contacts for the sale of real property. - Correct Answer ✔️ ✔️ required
There are two places to find the seller's name to fill in the contract. The name can be found in the ____________________ or in the ______________________. - Correct Answer ✔️ ✔️ MLS printout / tax records
If the agent is a _________________________, he/she must disclose that fact. - Correct Answer ✔️ ✔️ party to the contract
For proper naming of the parties in the contract, you should ask the buyer (if you are representing them) their ___________________________. - Correct Answer ✔️ ✔
️ full and legal name
Under conventional financing, the buyer will normally get a 30-year amortized loan although 15-year and bi-monthly payment loans are available. (T/F) - Correct Answer ✔️ ✔️ True
As long as any exclusion is on the Seller's Disclosure, it is not necessary to put in the contract itself. (T/F) - Correct Answer ✔️ ✔️ False
The Seller Financing Addendum is much more common than the Loan Assumption Addendum. (T/F) - Correct Answer ✔️ ✔️ True
On the Loan Assumption Addendum, if the tax and insurance escrow is deficient, the buyer must pay the deficiency. (T/F) - Correct
Answer ✔️ ✔️ False
The VA release of liability is for the benefit of the seller. (T/F) - Correct Answer ✔️ ✔️ True
The lender requires _________________________ if the loan is above 80% loan-to-value on a conventional loan. - Correct Answer ✔
️ ✔️ Private mortgage insurance
A(n) _______________________ is the legal term used when either the buyer or seller force the other party to perform on the terms of the contract. - Correct Answer ✔️ ✔️ Specific performance
In the contract, it states that the prevailing party in a lawsuit will also recoup ______________ fees. - Correct Answer ✔️ ✔ ️ Attorneys
If a buyer terminates a contract, the ___________ usually retains the earnest money deposit. - Correct Answer ✔️ ✔️ Seller
How does the seller inform the buyer and ensure that the hot tub does not remain with the property? - Correct Answer ✔️ ✔
️ List it in the contract in paragraph 2D
Who pays for the appraisal and credit report? - Correct Answer
✔️ ✔️
Who is the escrow officer? - Correct Answer ✔️ ✔️
If a Buyer wants some repairs done should they list those in the contract, or wait until inspections are done and ask for the repairs in an amendment? - Correct Answer ✔️ ✔ ️ List in Contract
Paragraph #23 in the One-to-Four Family Residential Contract gives the buyer the right to the unrestricted (for any reason) right to terminate the contract within the time frame stipulated in the paragraph.
What is earnest money? - Correct Answer ✔️ ✔️ A deposit made by the buyer into a trust or escrow account.
Money used to show the seller that the buyer has entered into the transaction in good faith.
Money that will be returned to the buyer if the seller terminates the transaction.
If a buyer decides to terminate a contract, the seller must agree to the termination. (T/F) - Correct Answer ✔️ ✔️ False
Per paragraph 9 (Closing), what type of deed is called for in a standard residential sale? - Correct Answer ✔ ️ ✔ ️ General warranty deed
In the event of the seller's default, the buyer may do any of the following EXCEPT:
A. Terminate the contract
B. Enforce specific performance
C. Seek such relief as provided by law
D. Move into the property - Correct Answer ✔️ ✔️ Move into the property
