PROMULGATED CONTRACT FORM EXAM -

PROMULGATED CONTRACT FORM EXAM -

ACTUAL EXAM 200+ QUESTIONS AND CORRECT

ANSWERS (VERIFIED ANSWERS) |AGRADE

What is TRUE of the paragraph regarding Earnest Money in the 1-4 Family Residential Contract?

a) Earnest money is required to make the contract valid

b) Time is not of the essence for this paragraph

c) Time is of the essence of this paragraph

d) The paragraph states the standard dollar amount of earnest money is required for

a valid contract. - ANSWER- c) Time is of the essence for this paragraph.

According to the TREC Third Party Financing Addendum, buyer approval is obtained when the terms of the loan described are available, and the buyer has satisfied all of the lender's requirements related to the buyer's ___. a) Credit history and employment record

b) Income and credit history

c) Assets and income

d) Assets, income and credit history - ANSWER- d) Assets, income and credit

history

Settlement and other expenses include: a)

Releases of existing liens

b) Appraisal fees

c) Loan application fees

d) All of these are included in settlement and expenses - ANSWER- d) All of these

are included in settlement and expenses

The process of dividing ongoing expenses such as taxes and POA fees between the buyer and seller at closing is called ____. a) Assessment

b) Proration

c) Collections

d) Accounting - ANSWER- b) Proration

An exception to a license holder using a TREC-promulgated contract form would

be if:

a) The broker does not want to use the forms

b) The license holder prepared his or her own form

c) The sale is for vacant lot in a subdivision

d) An attorney-prepared form is used - ANSWER- d) An attorney-prepared form is

used

During the time between execution and closing/funding, a contract is a(n):

a) Tentative contract

b) Voidable contract

c) Executory contract

d) Fully executed contract - ANSWER- c) Executory contract

The Third Party Financing Addendum would NOT be used for ___. a) VA loans

b) FHA loans

c) Conventional loans

d) Seller financing - ANSWER- b) FHA loans

___ is not a requirement of a valid contract. a) Earnest money

b) Legal subject matter

c) Mutual assent

d) Competent parties - ANSWER- a) Earnest money

The Smith's property is on the market, and their agent has received a full price offer from the Johnsons. The agent has presented the offer to Mr. and Mrs. Smith, who have accepted the offer by signing it. When is this contract valid? a) Immediately

b) After all of the parties have a written copy

c) When the Johnsons have received communication of the acceptance

d) At closing - ANSWER- c) When the Johnsons have received communication of

the acceptance

When should a license holder advise a client to consult an attorney? a) At first contact with the client

• 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

• a license holder should never advise a client to consult an attorney - ANSWER-
• 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

According to Paragraph 8.A. in the TREC 1-4 Family Residential Resale Contract, agency coupled with an interest must be disclosed. An agent must also disclose if they are acting on behalf ___. a) Spouse, sibling, or child

b) Spouse, parent, o in-law

c) Paren, child or sibling

d) Spouse, parent or child - ANSWER- d) Spouse, parent or child

Federal law provides that when selling a home built before 1978: a)

All lead-based paint must be removed

b) The buyer must be provided with the pamphlet "Protect Your Family From Lead

in Your Home

c) The buyer must have lead testing performed prior to closing

d) The seller must complete a Lead-Based Paint Disclosure only if there is a

concern that property might be contaminated - ANSWER- b) The buyer must be provided with the pamphlet "Protect Your Family From Lead in Your Home

If a license holder is receiving compensation from a residential service company,

the compensation must be:

a) Reported to TREC

b) Disclosed to the parties using the appropriate TREC form

c) Kept quiet

d) Reported to the attorney general for action - ANSWER- b) Disclosed to the

parties using the appropriate TREC form

Another name for blockbusting is ___. a) Panic peddling

b) Steering

c) Chunking

d) Puffing - ANSWER- a) Panic peddling

In connection with a residential sale in Texas, a T-47 Department of Insurance of

affidavit will be used when the:

a) Lender requires the buyer to purchase a new survey on the property

b) Seller is providing an existing survey

c) Title company is requiring a new survey

d) Seller has agreed to pay for a new survey - ANSWER- b) Seller is providing an

existing survey Madison is writing up a contract on a townhouse unit for which the buyer will have fee simple ownership and pay a monthly HOA for the upkeep on common areas. Which promulgated contract should she use?

a) Residential Condominium Contract

b) Unimproved Property Contract

c) One to Four Family Residential Contract

d) Residential Townhome Contract

c) One to Four Family Residential Contract

TREC has promulgated forms for most ___.

a) Lease purchase transactions

b) Cooperatives

c) Commercial leases

d) Residential transactions

d) Residential transactions

TREC promulgated contracts allow they buyer to have the property inspected:

a) By anyone personally selected by the buyer

b) By inspectors licensed by TREC or otherwise permitted by law

c) No more than three times

d) At any time by any person selected by the buyer's agent

b) By inspectors licensed by TREC or otherwise permitted by law

Buyer Sarah is purchasing a residential property. She plans to live in the home and operate a daycare business out of it. Having mentioned this to her agent, the

agent should:

a) Write a paragraph describing the business in Paragraph 11, Special Provisions

b) Disclose the daycare using a TREC Special Use addendum

c) Specify the use as a daycare in Paragraph: Objections

d) Not mention the daycare because the future use of a property is not an issue

c) Specify the use a daycare in Paragraph 6: Objections

The title company is:

a). A party to the contract

b) Not a party to the contract

c) Liable for the performance of the parties

d) Responsible for arranging financing for the buyer

b) Not a party to the contract

A(n) property is one where a particular event has affected the desirability of said property.