Texas Promulgated Forms, Second Edition Update Chapter 3 Exam BankTexas Promulgated Forms, Second Edition Update Texas Promulgated Forms, Second Edition
... [Show More] Update Chapter 3 Exam Bank QUESTION# 1 When property owned by a married couple is being sold, what is the BEST way to identify the sellers? a. Mr. and Mrs. Thomas Bud Smith b. Thomas Bud Smith and spouse Mary Ann Smith c. Thomas Bud Smith and his wife d. Thomas Bud Smith et vir Mary Ann Smith QUESTION# 2 Under the TREC Seller Financing Addendum, who pays to provide the buyer’s credit report to the seller? a. Seller b. Buyer c. Buyer and seller d. Title company QUESTION# 3 Which of the following is not negotiable in paragraph 23? a. How long the buyer has to provide the option fee b. The option fee amount c. The option period d. Whether the option fee will be credited to the sales price at closing QUESTION# 4 Under the TREC Loan Assumption Addendum, who pays to provide buyer’s credit report to seller? a. Seller b. Buyer and seller c. Buyer d. Title company QUESTION# 5 What information is required in paragraph 12 of the TREC One to Four Family Residential Contract? a. Seller’s contribution to buyer’s expenses b. Amount of earnest money to be provided by the buyer c. Addresses for notices to be provided for buyer and seller d. Specific repairs required by the buyer QUESTION# 6 What information is NOT needed to complete paragraph 23 of the TREC One to Four Family Residential Contract? a. The option fee amount b. How many days in the option period ©2016 Kaplan, Inc. May be reproduced for educational uses only. Contact: [email protected] Texas Promulgated Forms, Second Edition Update c. Whether the option fee will be credited to the sales price at closing d. Whether the option fee is refundable QUESTION# 7 What happens if buyer’s credit is not approved under the TREC Third Party Financing Addendum, and the buyer gives timely notice to the seller? a. The contract will terminate and the buyer will get the earnest money. b. Seller may terminate and get the earnest money. c. Either party may terminate and the earnest money is split. d. Buyer may terminate but seller gets the earnest money. QUESTION# 8 Sellers contribution to a residential service contract is addressed is which paragraph of the TREC One to Four Family Residential Contract? a. Paragraph 6 b. Paragraph 7 c. Paragraph 5 d. Paragraph 8 QUESTION# 9 Property approval, according to paragraph B2 in the Third Party Financing Addendum, includes a. the appraisal. b. lender-required repairs. c. insurability. d. all of these. QUESTION# 10 Which law requires that a contract have a proper legal description? a. The Statute of Frauds b. The Statute of Limitations c. The Deceptive Trade Practices Act d. The Real Estate License Act QUESTION# 11 How should the TREC One to Four Family Residential Contract be filled out if the property is not located within a city? a. In the blank for “city” put the nearest city. b. In the blank for “city” put the largest city in the county. c. Leave the “city” blank line blank. d. In the blank for “city” put “unincorporated” or “none.” QUESTION# 12 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update If the buyer wishes to make an all cash offer, how should paragraph 3 of the TREC One to Four Family Residential Contract be completed? a. 3A and 3B will be the same amount. b. 3B and 3C will be the same amount. c. 3A, 3B, and 3C will be the same amount. d. 3A and 3C will be the same amount. QUESTION# 13 If the buyer wants to be sure the fireplace screen stays with the property, the buyer’s agent should a. write it in paragraph 11. b. add it the Non-Realty Items Addendum. c. add it at the end of paragraph 2. d. do nothing; it is already in the contract. QUESTION# 14 A buyer makes an all-cash offer of $168,000. How will paragraphs 3A, 3B, and 3C be filled out? a. 3A is $168,000, 3B is $168,000, and 3C is $0. b. 3A is $168,000, 3B is $0, and 3C is $168,000. c. 3A is $0, 3B is $0, and 3C is $168,000. d. 3A is $33,600, 3B is $134,400, and 3C is $168,000. QUESTION# 15 Under the TREC Loan Assumption Addendum, who gets the earnest money if the note holder fails to consent to the loan assumption? a. The buyer b. The seller c. Both the buyer and the seller d. The title company QUESTION# 16 The down payment in a transaction is indicated a. in paragraph 3A of the contract. b. in paragraph 3B of the contract. c. in paragraph 3C of the contract. d. in the financing addenda. QUESTION# 17 Which of the following is not included in the legal description in paragraph 2 of the One to Four Family Residential Contract? a. Lot and block number b. Subdivision name c. County ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update d. Name and marital status of the parties QUESTION# 18 The seller wishes to sell to the buyers all of the flower pots on the patio. What should the agent do? a. Use the Amendment to Contract. b. Use the Non-Realty Items Addendum. c. Add “flower pots” to the list in paragraph 2. d. Identify the flower pots in paragraph 11. QUESTION# 19 The seller wants to keep the built-in, high-end stovetop. How should the seller’s agent note that? a. Use the Non-Realty Items Addendum. b. Use the Amendment to Contract. c. List the stovetop in paragraph 2, Exclusions. d. Note it in paragraph 11. QUESTION# 20 According to the Loan Assumption Addendum, if the buyer does not deliver the credit information within the required time, the seller has how many days to terminate after expiration for the time of delivery? a. 10 b. 3 c. 5 d. 7 QUESTION# 21 A buyer wishes to take as much time to apply for financing as possible to get the best interest rate. Under the TREC Third Party Financing Addendum, how soon after the effective date must the buyer apply for financing? a. Promptly b. 3 days c. 15 days d. Negotiable QUESTION# 22 Both the Seller Financing Addendum and Loan Assumption Addendum give the seller the option to terminate the contract under which specific condition? a. If the seller timely notifies the buyer that the seller has not approved the buyer’s creditworthiness. b. If the seller receives a better offer while the buyer’s approval is pending. c. If the seller pays the buyer an additional termination contingency fee. d. If the seller’s loan is foreclosed on by the lender while the contract is pending. QUESTION# 23 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update Under the TREC Third Party Financing Addendum, what happens if the buyer fails to give notice that the buyer cannot obtain approval within the number of days negotiated by the parties? a. There is no approval contingency in the contract. b. The buyer may give 7 days notice to extend the time period. c. The seller may terminate under the addendum. d. The buyer may terminate under the addendum. QUESTION# 24 The buyer wishes to obtain an adjustable rate mortgage. How should paragraph 1 of the TREC Third Party Financing Addendum be filled out? a. Per annum for the first 15 years of the loan. b. The blank should not be filled in since it makes sense blank c. Per annum for the first year of the loan. d. The blank should be filled in as NA since it envisions a term longer than one year. QUESTION# 25 Under the TREC Third Party Financing Addendum, which of the following is a FALSE statement? a. The contract terminates if the buyer timely notifies the seller that the buyer was unable to get buyer approval. b. The earnest money will be refunded to the buyer if the buyer timely notifies the seller that the buyer was unable to get buyer approval. c. If the buyer doesn't receive buyer approval, the buyer can terminate anytime before closing. d. Time is of the essence for purposes of obtaining buyer approval. QUESTION# 26 Paragraph 2 of the TREC One to Four Family Residential Contract includes all of the following EXCEPT a. the sales price. b. the street name. c. the county. d. excluded fixtures and accessories. QUESTION# 27 A buyer wishes to cap the interest rate on a loan to finance the purchase of a home at 3%. Where is the interest rate inserted in the TREC One to Four Family Residential Contract? a. The interest rate is included in paragraph 4. b. The interest rate is included in paragraph 3. c. The interest rate should be added in paragraph 11, Special Provisions. d. There is no blank line for interest rate in the TREC One to Four Family Residential Contract. QUESTION# 28 Buyer wants to submit an offer and has already been approved for financing. How should the TREC Third Party Financing Addendum be filled out? a. The addendum is not required since the buyer has already been approved for financing. ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update b. The contingency paragraph should be left blank. c. The conventional financing box should be checked. d. The buyer should indicate that 0 days are required to obtain financing. QUESTION# 29 Which of the following is not included in paragraph 6 of the TREC One to Four Family Residential Contract? a. Seller’s contribution to a residential service contract b. Who will pay for the title policy c. Who will pay for the survey d. HOA information QUESTION# 30 Under the TREC Loan Assumption Addendum, which of the following is NOT listed in the preprinted form to establish the buyer’s creditworthiness? a. Credit report b. Verification of employment, including salary c. Stocks and bonds d. Verification of funds on deposit in financial institutions QUESTION# 31 A married buyer wishes to purchase a home as separate property. This will be indicated in a. paragraph 2 of the contract. b. paragraph 3 of the contract. c. paragraph 1 of the contract. d. TREC's Buyer Information Form. QUESTION# 32 The seller wants to have the buyer assume his existing VA loan and restore his VA entitlement. Which form should the agent use to achieve this goal? a. Loan Assumption Addendum b. Seller Financing Addendum c. Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement d. Third Party Financing Addendum QUESTION# 33 The legal description of the property, improvements, accessories, and any exclusions to improvements or accessories are a. in paragraph 3. b. in paragraph 1. c. in paragraph 2. d. not covered in the promulgated contract forms. ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update QUESTION# 34 Under the Seller Financing Addendum a. the seller may terminate the contract and receive the earnest money if the buyer fails to have the house inspected within the negotiated time period. b. the seller may terminate the contract and receive the earnest money if the seller decides that the buyer’s credit is not satisfactory. c. the seller may never terminate the contract and receive the earnest money. d. the seller may terminate the contract and receive the earnest money if the buyer fails to provide credit documentation within the negotiated time period. QUESTION# 35 The seller wishes to convey the washer and dryer, but the buyers wish to pay a nominal price for them and the sellers agree. What should the agent do? a. Use the Non-Realty Items Addendum b. Note the appliances in paragraph 11 c. Have the buyers lay the sellers outside of closing d. Use the amendment form QUESTION# 36 A married buyer wishes to purchase a home as separate property. Which of the following is an appropriate way to identify him on the contract? a. John Doe, as separate property b. John Doe, a married person with consent of Jane Doe c. John Doe d. John Doe, as individual legal owner QUESTION# 37 What information is required to fill out paragraph 23 of the TREC One to Four Family Residential Contract? a. The various addenda attached to the contract form b. The names of the parties’ attorneys c. Whether the parties will engage in mediation d. The option fee to be paid and the option period QUESTION# 38 If the seller is doing all of the financing and is furnishing the buyer with an owner’s policy of title insurance, who will pay for a mortgagee policy of title insurance and who does it protect? a. The buyer will pay, and it protects the third-party lender. b. The seller will pay, and it protects the third-party lender. c. The buyer will pay, and it protects the seller. d. The seller will pay, and it protects the buyer. ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update QUESTION# 39 Which paragraph of the TREC One to Four Family Residential Contract addresses title policy information? a. Paragraph 7 b. Paragraph 6 c. Paragraph 5 d. Paragraph 8 QUESTION# 40 Which paragraph of the TREC One to Four Family Residential Contract provides a breakdown of sellers’ and buyers’ expenses? a. Paragraph 12 b. Paragraph 11 c. Paragraph 9 d. Paragraph 8 QUESTION# 41 The TREC Third Party Financing Addendum includes which of the following types of financing? a. All of these b. Conventional financing c. FHA-insured financing d. USDA-guaranteed financing QUESTION# 42 Which paragraph in the TREC One to Four Family Residential Contract deals with title issues? a. Paragraph 7 b. Paragraph 5 c. Paragraph 6 d. Paragraph 4 QUESTION# 43 In paragraph 3 of the One to Four Family Residential Contract, the sales price is the sum of the cash portion of the sales price a. plus all the closing costs. b. plus loan funding. c. and the sum of all financing. d. plus the mortgage insurance premium. QUESTION# 44 Which of the paragraphs in the TREC One to Four Family Residential Contract addresses the sales price? a. Paragraph 4 b. Paragraph 2 c. Paragraph 3 d. Paragraph 1 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update QUESTION# 45 Under the TREC Seller Financing Addendum, what happens if the seller fails to notify the buyer within seven days that the seller has decided that the buyer's credit is not acceptable? a. The buyer may terminate and receive the earnest money. b. The buyer may terminate but the seller receives the earnest money. c. The seller is deemed to have approved the buyer’s creditworthiness. d. The seller may terminate, but the buyer receives the earnest money. QUESTION# 46 A married seller wishes to sell her separate property. Which of the following is an appropriate way to identify her in the TREC One to Four Family Residential Contract? a. Jane Doe, as individual legal owner b. Jane Doe, a married person with consent of John Doe c. Jane Doe, as separate property d. Jane Doe QUESTION# 47 If the sales price is $375,000, earnest money is $5,000 and the amount financed is $300,000, how much is filled in as the cash payable at closing? a. $70,000 b. $375,000 c. $75,000 d. $300,000 QUESTION# 48 The earnest money paragraph addresses all of the following EXCEPT a. Additional earnest money b. Escrow officer c. Title policy company d. Date to provide additional earnest money While the title company and the escrow officer may be the same entity, the title policy company is named in paragraph 6 and the escrow officer in paragraph 5. QUESTION# 49 Which of the following is included in paragraph 2 of the TREC One to Four Family Residential Contract? a. The amount of the down payment b. Sum of all financing c. The marital status of the parties d. Excluded fixtures and accessories ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update QUESTION# 50 Which of the following is not included in paragraph 2 of the TREC One to Four Family Residential Contract? a. The street name b. The county c. The marital status of the parties d. Excluded fixtures and accessories QUESTION# 51 The buyer has offered to assume seller’s loan under the TREC Loan Assumption Addendum, so long as the lender does not charge more than a $1,000 loan assumption fee. The lender wants to charge $3,000 and the seller refuses to pay the difference. What can the buyer do? a. Terminate the contract and forfeit the earnest money b. Terminate the contract and receive the earnest money c. Terminate the contract and split the earnest money with the seller d. Terminate the contract, but the title company retains the earnest money QUESTION# 52 Under paragraph 2 of the One to Four Family Residential Contract, items such as window air conditioning units, curtains and rods, and door keys are considered a. improvements and are included in the sale unless specifically excluded. b. accessories and are included in the sale unless specifically excluded. c. accessories and are only included in the sale if listed in 2D. d. improvements and are only included in the sale if listed in 2D. Accessories include window air conditioning units, stove, fireplace screens, curtains and rods, blinds, window shades, draperies and rods, door keys, mailbox keys, above ground pool, swimming pool equipment and maintenance accessories, artificial fireplace logs, and controls for: (i) garage doors, (ii) entry gates, and (iii) other improvements and accessories. QUESTION# 53 Under the TREC Third Party Financing Addendum, what happens when the terms of the loan described in the addendum are available, and the lender determines that the buyer has satisfied all of lender's requirements related to the buyer's assets, income, and credit history? a. Buyer approval will be pending. b. Property approval will be deemed to have been obtained. c. Buyer approval will be deemed to have been obtained. d. Buyer approval will be under review. QUESTION# 54 A seller wishes to keep an item listed as an accessory. How should the TREC One to Four Family Residential Contract be filled out? a. List the item under Exclusions b. Cross out the item where it is listed in Accessories c. Use the Non-Realty Items Addendum ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update d. Identify the item in paragraph 11 QUESTION# 55 Under the TREC Loan Assumption Addendum, the seller has the right to terminate under all of the following conditions EXCEPT a. if the note holder requires payment of an assumption fee in excess of the negotiated amount. b. if the buyer fails to provide credit documentation within the negotiated time period. c. if the seller determines that the buyer’s credit is unacceptable. d. if the note holder fails to consent to the loan assumption. QUESTION# 56 The buyer wants the free standing bookshelves in the study to be included in the sales price. How should the agent handle it? a. Ask the seller to give the bookshelves to the buyer at no cost b. Use the Amendment to Contract c. Use the Non-Realty Items Addendum d. Note the bookshelves in paragraph 11 QUESTION# 57 According to the Seller Financing Addendum, if the buyer delivers his credit information to the seller timely, and the seller determines it is unacceptable, how many days after the date for the expiration of the time for delivery does the seller have to terminate? a. 7 b. 3 c. 5 d. 12 QUESTION# 58 Which of the following types of financing is not addressed in the TREC Third Party Financing Addendum? a. Texas veterans loan b. FHA insured financing c. VA guaranteed financing d. Seller financing QUESTION# 59 Which financing addendum is NOT included in paragraph 3B of the TREC One to Four Family Residential Contract? a. Third Party Financing Addendum b. Seller Financing Addendum c. Reverse Mortgage Addendum d. Loan Assumption Addendum ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update QUESTION# 60 Under the TREC Third Party Financing Addendum, which of the following is NOT considered by the lender? a. Property condition b. Buyer’s assets c. Buyer’s income d. Buyer’s credit history QUESTION# 61 The buyer wishes to make an offer to buy a house for $185,000, with 70% financed through a first loan, 10% financed through a second loan, and a 20% cash down payment. How much is the down payment? a. $3,700 b. $18,500 c. $37,000 d. $1,850 QUESTION# 62 The buyer wishes to make an offer to buy a house for $220,000, with 80% financed through 30-year fixed-rate mortgage and a 20% cash down payment. How much is the down payment? a. 4,400 b. 176,000 c. 22,000 d. 44,000 QUESTION# 63 Under the assumption paragraph of the TREC Loan Assumption Addendum, how many notes are assumable using the preprinted form? a. Two b. One c. Three d. An unlimited number The answer is two. The TREC Loan Assumption Addendum provides for assumption of a first and second lien promissory note. Learning Objective 3.4 QUESTION# 64 If a buyer is obtaining a new conventional mortgage, which of the following will be checked in paragraph 3? a. Third Party Financing Addendum b. Loan Assumption Addendum c. Seller Financing Addendum d. None of these QUESTION# 65 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update Six days after executing a contract to buy a house, the buyer has been unable to get approved for a loan. Under the TREC Third Party Financing Addendum, he has seven days to get buyer approval. What is his best course of action if he is uncertain about getting timely approval and wants to get the earnest money back? a. Notify the seller on the seventh day that he wishes to extend the time period. b. Notification is not necessary because the contract terminates automatically. c. Notify the seller before the close of business on the seventh day that he was unable to get approval. d. Notification is not necessary because there is an automatic three-day extension. The answer is notify the seller before the close of business on the seventh day that he was unable to get approval. The buyer must notify the seller within the seven days negotiated by the parties, or the buyer loses any buyer approval contingency on the contract. Because time is of the essence, strict compliance with time for performance is required. Learning Objective 3.4. QUESTION# 66 What information is NOT required to fill out paragraph 3 of the TREC One to Four Family Residential Contract? a. Sum of all financing b. Interest rate c. Down payment d. Sales price ===================================================== QUESTION# 67 Which two TREC addenda both give the seller the ability to terminate the contract? a. Seller Financing Addendum and Loan Assumption Addendum b. Third Party Financing Addendum and Seller Financing Addendum c. Third Party Financing Addendum and Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement d. No TREC addendum gives the seller the right to terminate the contract QUESTION# 68 In which case may the seller terminate the contract and receive the earnest money under the TREC Seller Financing Addendum? a. If the buyer fails to have the house inspected within the negotiated time period. b. If the seller decides that the buyer’s credit is not satisfactory. c. The seller may never terminate the contract and receive the earnest money under the TREC Seller Financing Addendum. d. If the buyer fails to provide credit documentation within the negotiated time period. QUESTION# 69 Which of the following is included in paragraph 2 of the TREC One to Four Family Residential Contract? a. The marital status of the parties b. The name of the parties c. The property price ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update d. The legal description of the property QUESTION# 70 Which paragraph of TREC One to Four Family Residential Contract addresses whether the property is subject to an HOA? a. Paragraph 5 b. Paragraph 7 c. Paragraph 4 d. Paragraph 6 QUESTION# 71 Which of the following is TRUE under the TREC Third Party Financing Addendum? a. The buyer may terminate the contract if the buyer fails to get buyer approval. b. The contract terminates if the buyer timely notifies the seller that the buyer was unable to get buyer approval. c. The seller may terminate the contract if the buyer timely notifies the seller that the buyer was unable to get buyer approval. d. Seller or buyer may terminate the contract if the buyer fails to timely notify the seller that the buyer was unable to get buyer approval. QUESTION# 72 What information is NOT needed to complete paragraph 23 of the TREC One to Four Family Residential Contract? a. Buyer required repairs b. The option fee amount c. How many days in the option period d. Whether the option fee will be credited to the sales price at closing QUESTION# 73 The date in the upper right corner of the promulgated contract form is the date a. the Broker-Lawyer Committee drafted the form. b. TREC approved and promulgated the form. c. licensees must begin using the form. d. the form will be reviewed in the future. QUESTION# 74 A buyer wishes to get a USDA guaranteed loan. Which form should the agent use to address that type of financing? a. Farm and Ranch Contract b. USDA Financing Addendum c. Farm and Ranch Financing Addendum d. Third Party Financing Addendum ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update QUESTION# 75 Why is the marital status of the parties required to be disclosed in the TREC One to Four Family Residential Contract? a. Because Texas is a community property state b. Because married persons cannot buy separate property in Texas c. Because married persons cannot sell separate property in Texas d. Because married persons must obtain the consent of their spouse before they can buy separate property in Texas QUESTION# 76 When is the best time to clarify which accessories the sellers wish to take with them in the TREC One to Four Family Residential Contract? a. At the listing appointment b. When the first offer comes in c. At closing d. During the option period QUESTION# 77 The option fee paragraph in the TREC One to Four Family Residential Contract requires an amount or period for all of the following EXCEPT a. the option fee amount. b. the option period. c. how long the buyer has to provide the option fee. d. whether the option fee will be credited to the sales price at closing. QUESTION# 78 Under the FHA insured financing paragraph of the TREC Third Party Financing Addendum, what happens if the property appraisal is less than the agreed upon amount? a. The buyer is not obligated to purchase the property. b. The seller may terminate the contract. c. Either party may terminate the contract. d. The lender may terminate the contract. QUESTION# 79 Which TREC form should be used if the buyer wishes to include personal property such as a piece of furniture displayed in a home in the purchase price? a. The amendment form b. Paragraph 11 of the TREC One to Four Family Residential Contract c. The Non-Realty Items Addendum d. A bill of sale QUESTION# 80 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update Which of the following is not included in paragraph 7 of the TREC One to Four Family Residential Contract? a. Who will pay for the title policy b. Seller’s disclosure notice c. Repairs required by the buyer d. Whether the house was built before 1978 QUESTION# 81 If the property has a metes-and-bounds legal description, how should the property description in the TREC One to Four Family Residential Contract be filled out? a. Cross out “lot” and “block” and insert “metes” and “bounds.” b. It is not necessary to include a metes and bounds description. c. Put N/A in the blanks for lot and block and attach the description to the contract. d. None of these. QUESTION# 82 According to the Third Party Financing Addendum, which one of the following is NOT necessary for buyer approval? a. The terms of the loan described must be available. b. An appraisal for at least the sales amount must be received. c. The buyer’s assets and income meet the lenders underwriting requirements. d. The buyer’s credit history meets the lender’s underwriting requirements. QUESTION# 83 Which of the following items of information is not included in paragraph 3 of the TREC One to Four Family Residential Contract? a. The total amount of loans. b. The cash portion of the sales price. c. The interest rate. d. The total sales price. QUESTION# 84 Under the TREC Seller Financing Addendum, the seller has the right to terminate under each of the following conditions EXCEPT a. if the buyer fails to provide credit documentation within the negotiated time period. b. if the seller determines that the buyer’s credit is unacceptable. c. if the property fails a home inspection. d. the seller has no right to terminate. QUESTION# 85 Which of these is the best way to identify a party in paragraph 1 of the contract? a. James A. and Susan B. Johnson b. James A. Johnson and Susan B. Johnson c. Susan B. Johnson and husband James ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update d. James A. Johnson and wife Susan B. Johnson QUESTION# 86 The sellers want to sell the refrigerator to the buyers. How should it be noted in the contract? a. Note the refrigerator as an exclusion b. Use the Non-Realty Items Addendum c. Add the refrigerator to the list in paragraph 2 d. Add the refrigerator to paragraph 11 QUESTION# 87 "James A Johnson and wife Susan B. Johnson" would be found in which paragraph of the contract? a. Paragraph 1 b. Paragraph 2 c. Paragraph 3 d. None of these. QUESTION# 88 How long does the buyer have to give notice that the buyer is unable to obtain buyer approval under the TREC Third Party Financing Addendum? a. The time period is negotiable b. Three days c. 15 days d. 30 days QUESTION# 89 Paragraph 6 in the TREC One to Four Family Residential Contract deals with which of the following issues? a. The repairs required by the seller b. The option fee amount c. Who pays for the title policy d. The amount of earnest money QUESTION# 90 A buyer wishes to borrow $200,000 to purchase a $250,000 home with a conventional loan with two discount points and 1% origination fee. Under the Third Party Financing Addendum, what percentage should be inserted as not to exceed adjusted origination charges in paragraph A1(a)? a. 3% of the loan b. 2% of the loan c. 1% of the loan d. 1.5% of the loan QUESTION# 91 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update What should a licensee do if the seller wishes to retain an item not specifically listed as an improvement or accessory in paragraph 2 of the TREC One to Four Family Residential Contract? a. List the item as an exclusion in paragraph 2D. b. Do not list the item as an exclusion in paragraph 2D. c. Use the Non-Realty Items Addendum to retain the item. d. Tell the buyer's agent that the seller wishes to withhold the item. QUESTION# 92 What information is required to fill out paragraph 3 of the TREC One to Four Family Residential Contract? a. The names of the parties b. Legal description of the property c. Sales price d. Type of loan QUESTION# 93 Which of the following is TRUE under the TREC Third Party Financing Addendum? a. Time is not of the essence. b. Time is of the essence. c. Time periods need not be met. d. Timing is reasonable. QUESTION# 94 Under the TREC Loan Assumption Addendum, the seller has the right to terminate under each of the following conditions EXCEPT a. if the property fails a home inspection. b. if the buyer fails to provide credit documentation within the negotiated time period. c. if the seller determines that the buyer’s credit is unacceptable. d. if the note holder fails to consent to the loan assumption. QUESTION# 95 Under the TREC Loan Assumption Addendum, which party may terminate if the note holder fails to consent to the loan assumption? a. Only the buyer b. Only the seller c. Either the buyer or the seller d. Only the note holder QUESTION# 96 Under the TREC Loan Assumption Addendum, what happens if the seller fails to notify the buyer within seven days that the seller has decided that the buyer's credit is not acceptable? a. The seller is deemed to have approved the buyer’s creditworthiness. b. The buyer may terminate and receive the earnest money. c. The buyer may terminate but the seller receives the earnest money. ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update d. The seller may terminate, but the buyer receives the earnest money. QUESTION# 97 If, as part of the agreement to let the buyer assume existing financing, the seller wants to make the assumption subject to the seller being released from future liability for the loan, which TREC form should be used? a. Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement b. Loan Assumption Addendum c. Seller Financing Addendum d. Third Party Financing Addendum QUESTION# 98 The buyer wishes to make an offer to buy a house for $240,000, with 70% financed through 30-year fixed-rate mortgage and a 30% cash down payment. How much is the down payment? a. $24,000 b. $7,200 c. $72,000 d. $168,000 QUESTION# 99 Under what condition may the seller receive the earnest money if he timely terminates under the Loan Assumption Addendum? a. If the seller determines that the buyer’s credit is unacceptable. b. If the buyer fails to timely provide credit documentation within the negotiated timeperiod. c. If the buyer terminates because the seller failed to provide timely notice. d. If the note holder fails to consent to the assumption of the note. QUESTION# 100 Which paragraph of the One to Four Family Residential Contract indicates if the buyer has received the seller’s disclosure notice? a. Paragraph 4 b. Paragraph 7 c. Paragraph 11 d. Paragraph 12 QUESTION# 101 Marital status must be included in which paragraph of the One to Four Family Residential Contract? a. Property b. Sales Price c. Parties d. Financing QUESTION# 102 ©2016 Kaplan, Inc. May be reproduced for educational uses only. Texas Promulgated Forms, Second Edition Update Which of the following is TRUE regarding the Loan Assumption Addendum? a. The period for the buyer to provide credit documentation to the seller is seven days after the effective date of the contract. b. The period for the seller to terminate under the Loan Assumption Addendum is negotiable. c. The period for the seller to terminate under the Loan Assumption Addendum is seven days. d. If the buyer provides the credit documentation but the seller decides the buyer’s credit is unacceptable and terminates, the earnest money will be paid to the seller. ©2016 Kaplan, Inc. May be reproduced for educational uses only.
Choose a title that best describes your document [Show Less]