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Texas Promulgated Contracts-Champions Study
Guide |80 Questions with 100% Correct Answers |
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The elements of a valid contract are, competent parties, consideration, legal subject matter, in writing, and. (a) Default (b) Mutual consent (c) Property condition (d) Recording - โโB A(n) contract is defined as a contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed. (a) Executory (b) Executed (c) Bilateral (d) Void - โโA In the business of real estate, is defined as something given in exchange for a promise. (a) Consideration
(b) Mutual assent (c) A bribe (d) Legal subject matter - โโA The TREC-promulgated contract forms: (a) Are for optional use by real estate licensees (b) Are drafted by the Broker-Lawyer Committee (c) Are promulgated by the legislature (d) Are used in both commercial and residential transactions - โโB 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 - โโD TREC has promulgated forms for:
In the Third Party Financing Addendum for Credit Approval: (a) The buyer has no incentive to obtain financial approval (b) The buyer has a definite time to notify seller of the inability to obtain financing approval (c) The buyer's earnest money will not be returned if the buyer does not obtain financing (d) The option period is explained - โโB The Third Party Financing Addendum for Credit Approval cannot be used for: (a) VA guaranteed loans (b) FHA insured loans (c) Seller Financing (d) Texas Veterans Loans - โโC According to the Seller Financing Addendum, the interest rate is: (a) Set at 6% (b) Negotiated between the parties (c) Set by TREC (d) Determined at closing - โโB
occurs when a buyer assumes and agrees to pay the seller's existing mortgage. (a) Loan assumption (b) Seller liability (c) Seller lien (d) Credit approval - โโA Land, improvements and accessories are collectively referred to as: (a) The estate (b) The property (c) The listing (d) The homestead - โโB According to the TREC contract, accessories include: (a) Refrigerators (b) Stoves (c) Washing machines
(d) All of the above - โโD The earnest money is: (a) Always 5% of the purchase price (b) Set by TREC (c) Negotiated between the parties (d) Paid at closing - โโC 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 - โโC 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 - โโA 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 (c) When the property has an out of state owner (d) When the property is sold "as is" - โโA If a buyer is concerned about the presence of endangered species, toxic substances or wetlands on a property, the agent should (a) Add the Environmental Assessment Addendum to the contract (b) Avoid the property at all costs (c) Add in Paragraph 11, Special Provisions, that the contract is subject to an environmental review (d) Explain to the buyer that environmental issues are rarely a problem - โโA How long does a buyer have to object to defects, exceptions and encumbrances to title disclosed in the survey and title commitment?
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 - โโD 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 - โโB 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 - โโD 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 - โโD 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 - โโC The process of dividing ongoing expenses between the buyer and seller at the closing is called: (a) assessing (b) prorating (c) collecting expenses
(c) The Seller's Temporary Residential Lease form should be used (d) The TAR Residential Lease form should be used - โโC When one party defaults under a contract, the other party is known as the: (a) Breaching party (b) Injured party (c) Party to the suit (d) Liable party - โโB The State of Texas encourages the parties to resolve all conflicts and disputes through alternative dispute resolution procedures such as: (a) Arbitration (b) Going to court (c) Mediation (d) Termination of the contract - โโC IRS statutes require a buyer to: (a) Purchase property only from U.S. citizens
(b) Withhold 20% of the price from a foreign seller of U.S. property (c) Withhold 10% of the sale proceeds in excess of $300,000 when a foreign person has no social security card or green card (d) None of the above - โโC All written notices between the parties are effective when: (a) Mailed (b) Hand-delivered (c) Faxed or emailed (d) Any of the above - โโD 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 - โโB Who is responsible for filling in the effective date of the contract?
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 - โโA 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 - โโB 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 - โโD 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 - โโA In a Farm and Ranch sale, the buyer will receive all of the following items except: (a) Windmills (b) Tanks (c) Trucks (d) Pens - โโC In the Farm and Ranch contract, the Seller generally has the right to harvest crops: (a) for one year after closing (b) until delivery of possession (c) until closing (d) for no more than 90 days after funding - โโB Reservations of oil, gas and other minerals will generally be inserted in:
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 - โโC 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 - โโB 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 - โโB
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 - โโB 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 - โโC 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
