A competent party is one that is: - correct answer At least 18 years of age
Mentally competent
Cannot be temporary incompetent
The Texas Real Estate
... [Show More] Commission regulates a licensee in which of the following situations? - correct answer When the licensee is selling a house for a client
What is a legal agreement between parties to do (performance) or not to do (forbearance) a certain act for consideration? - correct answer A contract
All of the following are necessary to create a valid contract except which one? - correct answer Earnest money
What law requires all contracts for real property to be in writing to be enforceable? - correct answer Statute of Frauds
Which of the following would be an example of "good consideration"? - correct answer Love of a friend
What is duress? - correct answer Use of force
What is it called when a person listens to both sides of the situation and makes a decision. His or her decision is binding and court action cannot be pursued. - correct answer Arbitration
What is defined as agreement to all the terms by all the parties of the contract? - correct answer Mutual assent
When all promises in a contract have been met, that contract is called what? - correct answer Executed
What is a contract called which defers material action by either party into the future? - correct answer Executory
When a written agreement is legal and every item is completely agreed to, it is said to be which of the following? - correct answer Valid
When an essential element is missing in an agreement and the courts would not hold it as a contract, then the agreement would be: - correct answer Void
When one party could change their mind and exit a contract, it is said to be: - correct answer Voidable
When one party may be in default but because of the nature of the agreement, the damaged party would not have the ability to sue the other party in court, this is what type of contract? - correct answer Unenforceable
When a change needs to be made to the TREC ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE) TREC 20-14, what is the best way to handle it? - correct answer Changes should be made using the "Amendment to Contract" addendum.
For which of the following reasons could a contract need to be changed? - correct answer For repairs
For financing
For termination of the option
What law requires any amendment or addenda used must be in writing and signed by both parties to be enforceable? - correct answer Statute of Frauds
Which of the following is the correct definition of the "Four Corners Doctrine"? - correct answer The interpretation of any disputed clause in a contract will be influenced by the document as a whole.
What rule in contract cases prevents a party to a written contract from presenting oral evidence that contradicts or adds to the written terms of the contract that appears to be whole? - correct answer Parol Evidence Rule
How long is the Statute of Limitations for a written contract in Texas? - correct answer Four years
How long is the Statute of Limitations for an oral contract in Texas? - correct answer Four years
Which of the following items would need to be disclosed by a seller prior to selling his or her property? - correct answer Asbestos
Lead-based paint
Mold
What type of contract dispute results in going to court and usually involves attorneys and research? - correct answer Litigation
How difficult was the real estate license to acquire prior to the 1930's? - correct answer There was no test.
The Texas Real Estate License Act was formerly known as - correct answer the Real Estate Dealer's License Act.
What damages could a seller possibly claim if the buyer is in breach of contract? - correct answer Loss of marketing time
Any fees actually paid
Mental duress
What might be a reason for the necessity to change the closing date of a contract? - correct answer The repairs will take longer than anticipated.
The seller needs more time to find another home.
The buyer cannot get out of his or her lease.
What repairs might be noted on the Texas Real Estate Commission Amendment to Contract? - correct answer Swimming pool has missing tiles that are to be replaced.
The sink in the main bathroom is cracked and is to be replaced.
Fix leaky pipe in the laundry room.
How many amendments are allowed on a valid contract? - correct answer Multiple
What is the legal age in Texas to enter into a valid, binding contract? - correct answer 18
Which of these forms is a Texas Real Estate Commission (TREC) promulgated form? - correct answer New Home Contract (Completed Construction)
If both the buyer and seller agree to have the real estate professional write a contract for their specific situation and will put this request in writing, can the agent then write the contract for the customers? - correct answer Not under any circumstances
Which of the following is true? - correct answer A real estate licensee may give advice to their clients
What is an error in the meaning of words, laws, or facts which causes one or both parties to enter into the contract without fully understanding the outcomes or responsibilities implied by the contract? - correct answer Mistake
Which of the following is a real estate agent not allowed to do? - correct answer An agent acting properly should always include all names including nick names and fictitious names as well as full names for the parties of a contract.
What law prohibits price fixing? - correct answer The Sherman Anti-Trust Act?
What entity promulgates real estate contracts for use by licensees? - correct answer The Texas Real Estate Commission
Which of the following situations is NOT an exception to the use of promulgated forms? - correct answer A standard purchase agreement bought from a business supply store
Which of the following groups does the Texas Real Estate Commission govern? - correct answer Real estate licensees
What is it called when two or more real estate brokers work together to conspire to charge the same commission? - correct answer Price Fixing
What is it called when a buyer puts together the paperwork necessary to buy a house from a seller and that paperwork is presented to the seller? - correct answer An offer
When an offer is presented to a seller to purchase, the seller has all which of the following potential responses? - correct answer Accept it
Fail to act on it
Alter it
When should a licensee communicate the agreement of a buyer to buy and a seller to sell? - correct answer As soon as possible
What is the least appropriate way to communicate the agreement of a buyer and seller? - correct answer By postal mail
Which of the following is an exemption to a real estate agent using Texas Real Estate Commission promulgated forms? - correct answer A form directed to be used by a new home builder.
A form directed to be used by a land developer.
Commercial real estate forms.
Can a real estate agent use a contract drafted by a builder/owner of new homes? - correct answer Yes, it is an exception.
Which of the following statements is true regarding offers? - correct answer The buyer may withdraw his offer any time prior to acceptance by the seller.
The Broker-Lawyer Committee is made up of - correct answer 6 lawyers, 6 brokers, and one member of the public.
What is the maximum amount of commission allowed by law? - correct answer No limit
When does a purchase agreement become binding if both parties have signed and both parties have been notified? - correct answer At that time
Which of the following statements is FALSE regarding reformation? - correct answer One of the parties assigned his duties under the contract to a third party.
What is another term for "rewritten"? - correct answer Reformation
Which of the following is a real estate agent allowed to do? - correct answer Give advice as to the pricing of an owner's property
What is another term for "cancellation"? - correct answer Rescission
The TREC One to Four Family Residential Contract (Resale) should be used in which of the following transactions? - correct answer A duplex
Suppose a buyer was willing to offer a seller $285,000 on a property with a first lien of $200,000 and a second lien of $60,000, with $25,000 as a down payment. What would the licensee put in paragraph 3.B of the TREC One to Four Family Residential Contract (Resale)? - correct answer $260,000
Who is a "third party" to a contract? - correct answer Anyone listed on the contract that is not the buyer or seller
How should a licensee fill out a TREC One to Four Family Residential Contract (Resale) if the seller is willing to finance the transaction for the buyer? - correct answer Use paragraph 3.B and check the appropriate box for Seller Financing Addendum.
Which addendum spells out the details of the loan and will be included on almost all contracts? - correct answer Third Party Financing Addendum
Using a TREC promulgated purchase agreement, who is required to pay for the title insurance? - correct answer It's negotiable
Which of the following is true? - correct answer A seller that has agreed to pay for both the owner's and buyer's title policy can require a buyer to use a specific title company.
What is the difference between a title policy and a title commitment? - correct answer A title commitment is issued prior to closing to describe the items on the title policy which will be issued after closing.
What is a disclosure statement by the seller that states no changes have been made on the property that could affect the survey? - correct answer T-47 Affidavit
What is the fee that is charged every time a property changes hands? - correct answer Transfer fee
The seller must allow the buyer the right to have the property inspected during which times? - correct answer Reasonable times
According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE), who is responsible for having the utilities turned on? - correct answer Seller
A lead-based paint notification is required on all properties built prior to what year? - correct answer 1978
According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE), who is required to pay for lender-required repairs? - correct answer Neither party
When should the Third Party Financing Addendum be used? - correct answer If the buyer is applying for a loan with conventional, FHA, VA or other forms of financing?
Should addendums be attached to the main contract? - correct answer Yes, under after being noted in Paragraph 22 of the One to Four Family Residential Contract (Resale).
How is the interest rate in the Third Party Financing addendum determined? - correct answer By negotiation between the buyer and lender
Which FHA loan is typically the lowest down payment loan for a buyer? - correct answer 203 (b)
With the Loan Assumption addendum, what happens if the seller does not respond to the buyer's creditworthiness after seven days? - correct answer The contract is valid.
Why might a buyer want to assume a note and not originate a new loan? - correct answer Both 1 and 2
What does "ad valorem" mean? - correct answer According to value
When should the Seller Financing Addendum be used? - correct answer It is used when the seller carries a note for a buyer for all or any portion of the sales price.
How many days is the buyer allowed to get financial information to the seller in the Seller Financing Addendum? - correct answer It is dependent upon paragraph A of the Seller Financing Addendum
Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement is used for what type of situation? - correct answer When a seller wants to be released from further liability on the VA assumed loan and wants their VA entitlement restored.
In the Texas Real Estate Commission One to Four Family Residential Contract (Resale), where would you find down payment for the property identified? - correct answer paragraph 3.A
For sellers who are carrying notes for buyers, Texas Real Estate Commission promulgated Seller Financing addendum requires a late payment fee of _________ for any payment made more than 10 days late. - correct answer 5% [Show Less]