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Texas Pre-License - Promulgated Contracts
Test Questions With Expert Verified Answers
According to the NAR Code of Ethics, unless the agent has written instructions stating otherwise, they must present all offers until: - Correct Answer ✔️ ✔️ The closing
Which of these is NOT a place where commission split agreements between cooperating brokers can be determined? - Correct
Answer ✔️ ✔️ the sales contract
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
What part of the Third Party Financing Addendum for Credit Approval specifically pertains to people getting VA loans? - Correct Answer
✔️ ✔️ Paragraph D
buyer _______________________. - Correct Answer ✔️ ✔
️ When the seller provides the existing survey
What does Paragraph A of the Addendum for Back-Up Contract specify a back-up contract holder do when they execute the contract?
- Correct Answer ✔️ ✔️ deposit the earnest and option money agreed to in the contract
Which of these agent scenarios involving contracts is NOT inappropriate or in violation of TRELA? - Correct Answer ✔️ ✔️ Avery explains the meaning of factual statements or business details in the contract form.
Emily and Josh signed a real estate contract with each other. The contract is now fully executed. What does that mean that Josh and Emily have done? - Correct Answer ✔ ️ ✔ ️ fulfilled the material terms of the contract
What should an agent do if asked to violate anti-discrimination laws by a client? - Correct Answer ✔️ ✔️ educate the seller about anti-discrimination laws and say they cannot honor the request
Which of these is NOT a TREC promulgated form? - Correct Answer ✔️ ✔️ Condo Addendum
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? -
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
What is the only time it is acceptable for a license holder not to present all offers to a seller client? - Correct Answer ✔️ ✔
️ if the listing agreement specifies that it is not necessary
What does paragraph 7A of the One to Four Family Residential Contract grant every buyer the right to do? - Correct Answer ✔
️ ✔️ have the property inspected
How can an agent help protect the earnest money of a buyer who is financing their purchase? - Correct Answer ✔️ ✔ ️ by submitting a Third Party Financing Addendum
A seller is selling a property that is under a lease. When does the seller have to deliver a copy of the lease and any move-in condition form to the buyer? - Correct Answer ✔️ ✔️ within seven days after the effective date
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.
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
Which of the following would constitute unauthorized practice of law and/or be a violation of TRELA? - Correct Answer ✔️ ✔
️ adding or striking things from pre-printed contract forms
Assessment, Threatened or Endangered Species, & Wetlands Addendum? - Correct Answer ✔️ ✔️ the buyer
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 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
____________________________. - Correct Answer ✔️ ✔
️ lender has approved the short sale
Why are there multiple promulgated contracts for use in Texas? - Correct Answer ✔️ ✔️ because different types of properties have different specific contract needs
If nothing is added in Paragraph 7D, the agreement says that the buyer is accepting the property: - Correct Answer ✔️ ✔ ️ in its present condition
Which of these is NOT a protected class of people, according to Fair Lending Laws? - Correct Answer ✔️ ✔️ sexuality
Which of these is NOT necessary for a contract to be binding and effective? - Correct Answer ✔️ ✔️ the contract must be hand delivered to the title company
When a property is purchased and then quickly resells at a higher value it is called: - Correct Answer ✔️ ✔️ Flipping
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
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
To be valid and enforceable, a contract must be in writing, represent a complete agreement, have acceptance communicated, and: - Correct Answer ✔️ ✔️ be signed by all parties
Which of these is an example of something that could go in Paragraph 12 of the One to Four Family Residential Contract? - Correct
Answer ✔️ ✔️ the seller plans to pay some of the buyer's closing costs
Which of these forms is least likely to be involved in the sale of unimproved property? - Correct Answer ✔️ ✔
️ Condominium Resale Certificate
Which of these is an example of a time when it is acceptable not to use a TREC promulgated form? - Correct Answer ✔️ ✔️ the U.S. government requires a different form to be used
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
