TEXAS PROMULGATED CONTRACT FORMS EXAM
An agreement between a buyer and seller giving the buyer the right to purchase a property at a preset price for a given period of time.
a. Mutual consent
b. Unilateral contract
c. Consideration
d. Option
e. Unenforceable contract
D
A “meeting of the minds”
a. Mutual consent
b. Unilateral contract
c. Consideration
d. Option
e. Unenforceable contract
A
A contract that cannot be enforced due to some flaw or other issue in the contract.
a. Mutual consent
b. Unilateral contract
c. Consideration
d. Option
e. Unenforceable contract
E
Something given in exchange for a promise.
a. Mutual consent
b. Unilateral contract
c. Consideration
d. Option
e. Unenforceable contract
C
A contract in which only one party is obligated to perform.
a. Mutual consent
b. Unilateral contract
c. Consideration
d. Option
e. Unenforceable contract
B
The five essential elements that must exist for a real estate sales contract to be considered valid and enforceable are: legal purpose, competent parties, mutual assent, consideration and ___.
a. Signature of witnesses
b. In writing
c. Acknowledgment by a notary
d. Recording in county clerk’s office
B
If a contract has been entered into with a person who has been judged to be incompetent, that contract is considered _____ because that person never had the capacity to enter into it.
a. Executed
b. Valid
c. Voidable
d. Void
D
____ is defined as something given in exchange for a promise.
a. Mutual consent
b. Legal subject matter
c. Consideration
d. Competent parties
C
A buyer who has the right to purchase a property at a preset price and terms for a period of time has a(n) __.
a. Option
b. Novation
c. Bilateral contract
d. Deed
A
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. Fully executed
c. Bilateral
d. Void
A
In Texas, the statute of limitations is __ for an oral agreement.
a. Four years
b. Two years
c. Eight years
d. Six years
B
A rejection of the original offer coupled with a new offer.
a. Promulgated forms
b. Counteroffer
c. Unauthorized practice of law
d. Lease-purchase agreement
e. Offeror
B
License holder adding complex provisions to a contract.
a. Promulgated forms
b. Counteroffer
c. Unauthorized practice of law
d. Lease-purchase agreement
e. Offeror
C
Contract forms published by TREC.
a. Promulgated forms
b. Counteroffer
c. Unauthorized practice of law
d. Lease-purchase agreement
e. Offeror
A
The party making an offer.
a. Promulgated forms
b. Counteroffer
c. Unauthorized practice of law
d. Lease-purchase agreement
e. Offeror
E
An agreement that allows a tenant to purchase a property during the lease term.
a. Promulgated forms
b. Counteroffer
c. Unauthorized practice of law
d. Lease-purchase agreement
e. Offeror
D
TREC-promulgated lease forms are for a term of no more than ____ days.
a. 180
b. 30
c. 90
d. 60
C
A(n) ____ is a rejection of the original offer coupled with a new offer.
a. Counteroffer
b. Acceptance
c. Net sheet
d. Notification
A
The party to whom an offer is submitted is known as the ___.
a. License holder
b. Offeree
c. Buyer
d. Broker
B
TREC publishes promulgated forms for _____.
a. Lease purchase agreements
b. Cooperatives
c. Right of first refusal
d. Residential transactions
D
Brokers receiving multiple offers must submit __ to the seller.
a. Only those offers the broker deems serious
b. Offers in the order in which they were submitted
c. All offers, regardless of the timing of submission
d. Offers which exceed the seller’s asking price
C
An offer may be terminated ___, prior to acceptance by the offeree.
a. Within 7 days
b. At any time
c. Within 24 hours
d. Within 72 hours
B
Under the legal concept of ____, an offer is presumed to have been delivered to the principal when it is delivered to the agent.
a. Presentation
b. Imputed notice
c. Notification
d. Lis pendens
B
When a seller receives an offer, the ______ should prepare a net sheet, which is an estimate of the net proceeds of the offer.
a. Buyer
b. Seller
c. Listing Agent
d. Buyer’s Agent
C
The unauthorized practice of law by license holders led TREC to create the _, which writes residential contract forms.
a. State Bar of Texas
b. Broker-Lawyer Committee
c. Texas Association of REALTORS®
d. Federal Housing Administration
B
Personal property included in a sale.
a. Assumption
b. Parties
c. Government loans
d. Non-realty items
e. Legal description
D
Buyer and seller.
a. Assumption
b. Parties
c. Government loans
d. Non-realty items
e. Legal description
B
The specifics of the location and size of a property.
a. Assumption
b. Parties
c. Government loans
d. Non-realty items
e. Legal description
E
The agreement by the buyer to pay the seller’s existing mortgage as part of a contract for sale.
a. Assumption
b. Parties
c. Government loans
d. Non-realty items
e. Legal description
A
Mortgages insured or guaranteed by the U.S. Government.
a. Assumption
b. Parties
c. Government loans
d. Non-realty items
e. Legal description
C
_____ collectively refers to land, improvements and accessories.
a. The estate
b. The property
c. The listing
d. The homestead
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
C
The sales price is equal to ______ in the 1-4 Family Residential Contract.
a. The loan amount plus the cash portion
b. Paragraph 3.A plus Paragraph 3.B
c. The amount borrowed plus the down payment
d. All of the above
D
Accessories include ___, according to TREC-promulgated contract forms.
a. Refrigerators
b. Stoves
c. Washing machines
d. Gas dryers
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
A
A(n) _____ occurs when a buyers assumes and agrees to pay the seller’s existing mortgage.
a. Loan assumption
b. Seller liability
c. Seller lien
d. Credit approval
A
Paragraph C of the Seller Financing Addendum refers to the _____, and specifies the method of repayment.
a. Taxes and insurance
b. Deed of trust
c. Credit documentation
d. Promissory note
D
The Non-Realty Items Addendum may be used when ______ is/are to be included in a sale.
a. Personal property
b. Accessories
c. Emblements
d. Improvements
A
A measurement of boundaries and land area required in some sale contracts.
a. Earnest money
b. Survey
c. Title policy
d. Endorsement
e. Seller’s Disclosure
B
A change made to a standard insurance policy.
a. Earnest money
b. Survey
c. Title policy
d. Endorsement
e. Seller’s Disclosure
D
Insurance policy against losses resulting form defects in title.
a. Earnest money
b. Survey
c. Title policy
d. Endorsement
e. Seller’s Disclosure
C
A “deposit” paid upfront by the buyer.
a. Earnest money
b. Survey
c. Title policy
d. Endorsement
e. Seller’s Disclosure
A
Form stating known facts and defects concerning a property.
a. Earnest money
b. Survey
c. Title policy
d. Endorsement
e. Seller’s Disclosure
E
When the property ____, a Seller’s Disclosure Notice is not required.
a. Is a previously unoccupied new home
b. Is sold to an investor
c. Has an out-of-state owner
d. Is sold “as-is”
A
The Seller’s Disclosure Notice should be completed by ____.
a. The agent
b. The seller
c. The buyer
d. The title company
B
The Texas Department of Insurance has promulgated _____ exceptions to title insurance policies.
a. Eight
b. Five
c. Nine
d. Three
A
The title company has 20 days from the date that they receive the contract to furnish a(n) ___ to the buyer for title insurance.
a. Survey
b. Objection
c. Inspection
d. Commitment
D
A survey must be acceptable to the _________.
a. Title company and lender
b. Broker
c. Buyer and seller
d. Listing agent
A
The T-47 Residential Real Property Affidavit should be completed _____, in most cases.
a. At funding
b. After inspection
c. At closing
d. When the listing is taken
D
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
B
If an environmental assessment is performed and is shown to affect the intended use of the property, a buyer may _____, providing a copy of the assessment to the seller at that time.
a. Submit a lower offer
b. Terminate the contract
c. Ask for an allowance
d. Request a new inspection
B
While no standard exists for the dollar amount of earnest money, it is often _ of the purchase price of the property.
a. 1%
b. 3%
c. 5%
d. 10%
A
Processes of resolving contractual disagreements between parties.
a. Default
b. Mediation
c. Escrow
d. Option period
e. Prorations
B
The time allowed for buyer-specified inspections.
a. Default
b. Mediation
c. Escrow
d. Option period
e. Prorations
D
Expenses divided between parties at closing.
a. Default
b. Mediation
c. Escrow
d. Option period
e. Prorations
E
Failure to meet a contractural obligation.
a. Default
b. Mediation
c. Escrow
d. Option period
e. Prorations
A
Funds held by a third party until performance of a contract.
a. Default
b. Mediation
c. Escrow
d. Option period
e. Prorations
C
The ____ is responsible for the expense of the release of any existing liens.
a. Buyer
b. Title company
c. Seller
d. Lender
C
A(n) _______ gives the buyer the unrestricted right to terminate the contract within a specified period.
a. Clause
b. Abstract
c. Option
d. Annexation
C
________ is the process of dividing ongoing expenses between the buyer and the seller at closing.
a. Assessing
b. Prorating
c. Collecting expenses
d. Accounting
B
At closing, the seller must _____ a general warranty deed conveying title to the property to the buyer.
a. Sign and mail
b. Execute and deliver
c. Execute and file
d. Deliver and certify
B
Properties subject to a lease must have copies of the lease provided to a buyer within _ days after the effective date of the contract.
a. 14
b. 30
c. 7
d. 60
C
Which of the following expenses is considered payable by the seller as part of the settlement portion of the contract?
a. 1/2 of the escrow fee
b. Appraisal fees
c. Mortgage recording fees
d. Credit report fees
A
In the event of default by the buyer, the seller may _____.
a. Accept the buyer’s earnest money as liquidated damages
b. File criminal charges against the buyer
c. Receive compensation from TREC
d. Renegotiate the terms of the contract
A
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