The elements of a valid contract are, competent parties, consideration, legal subject matter, in writing, and ___________.
(a) Default
(b) Mutual
... [Show More] consent
(c) Property condition
(d) Recording - correct answer B
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 - correct answer A
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 - correct answer A
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 - correct answer B
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 - correct answer D
TREC has promulgated forms for:
(a) lease purchase transactions
(b) cooperatives
(c) right of first refusal
(d) residential transactions - correct answer D
An offer can be communicated by ___________________.
(a) Phone
(b) Hand delivery
(c) E-mail
(d) All of the above - correct answer D
The Third Party Financing Addendum For Credit Approval is used when:
(a) The buyer is obtaining FHA financing
(b) Paragraph 4.A(2)(a) is checked in the contract
(c) The buyer is obtaining VA financing
(d) The buyer is obtaining any kind of financing - correct answer D
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 - correct answer B
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 - correct answer C
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 - correct answer B
___________________ 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 - correct answer A
Land, improvements and accessories are collectively referred to as:
(a) The estate
(b) The property
(c) The listing
(d) The homestead - correct answer B
According to the TREC contract, accessories include:
(a) Refrigerators
(b) Stoves
(c) Washing machines
(d) Gas dryers - correct answer B
Exclusions to the sale must be removed
(a) Prior to delivery of possession
(b) At the convenience of the seller
(c) When the offer becomes a binding contract
(d) Two days prior to closing - correct answer A
The loan amount in Paragraph 3.B. of the sales contract includes:
(a) The amount of the mortgage insurance
(b) The loan plus origination fees
(c) Only the amount borrowed by the buyer
(d) The loan amount minus the earnest money - correct answer C
The sales price in 3.C. is always:
(a) The loan amount plus the cash portion
(b) 3.A. + 3.B.
(c) The amount borrowed plus the down payment
(d) All of the above - correct answer D
The earnest money is:
(a) Always 5% of the purchase price
(b) Set by TREC
(c) Negotiated between the parties
(d) Paid at closing - correct answer C
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 - correct answer C
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 - correct answer A
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" - correct answer A
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 - correct answer A
How long does a buyer have to object to defects, exceptions and encumbrances to title disclosed in the survey and title commitment?
(a) Within 3 days of the effective date of the contract
(b) Up to 5 days prior to closing
(c) Within 7 days of becoming concerned
(d) The negotiated number of days stated in the contract - correct answer D
Being within the extraterritorial jurisdiction of a municipality is an indication the property will:
(a) Be condemned in the near future
(b) Possibly be annexed in the future
(c) Be unmarketable
(d) Never be annexed by any municipality - correct answer B
The Lead-Based Paint Disclosure is:
(a) Required for all properties
(b) A federal requirement for residential property built prior to 1978
(c) A TREC requirement
(d) The responsibility of the buyer's agent - correct answer B
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 - correct answer D
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 - correct answer B
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 - correct answer D
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 - correct answer D
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 - correct answer C
The process of dividing ongoing expenses between the buyer and seller at the closing is called:
(a) assessing
(b) prorating
(c) collecting expenses
(d) accounting - correct answer B
If not using a temporary lease, the buyer is entitled to possession of the property:
(a) 24 hours before closing [Show Less]