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Aceable Agent TEXAS- Promulgated Contracts Exam With 100% Correct Answers 2024 Seller Vera agrees to allow another veteran to assume her mortgage loan. Vera then wants to make sure that she can regain the amount the VA initially guaranteed her on a loan. What must be attached to the contract? - Correct Answer-Addendum for Release of Liability on an Assumed Loan and/or Restoration of Seller's VA Entitlement A back-up buyer's contract is executed on September 28 with a four-day option period. On October 4, the seller informed the back-up buyer that the first contract was terminated. When does the back-up buyer's option period end? - Correct Answer-October 8, 5 p.m. *The four-day option period begins when the back-up contract becomes the primary contract, on October 4. Four days after October 4 is October 8. Deadlines are set at 5 p.m., not midnight. So, the option period ends on October 8 at 5 p.m.
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Seller Vera agrees to allow another veteran to assume her mortgage loan. Vera then wants to make sure that she can regain the amount the VA initially guaranteed her on a loan. What must be attached to the contract? - Correct Answer- Addendum for Release of Liability on an Assumed Loan and/or Restoration of Seller's VA Entitlement A back-up buyer's contract is executed on September 28 with a four-day option period. On October 4, the seller informed the back-up buyer that the first contract was terminated. When does the back-up buyer's option period end? - Correct Answer-October 8, 5 p.m. *The four-day option period begins when the back-up contract becomes the primary contract, on October 4. Four days after October 4 is October 8. Deadlines are set at 5 p.m., not midnight. So, the option period ends on October 8 at 5 p.m.
What contract language phrase is used to convey that a time period is inflexible? - Correct Answer-"time is of the essence" Agent Alicia is helping her client buy a newly built home. The home is ready for move-in, and the client can't wait! For the transaction, Alicia does not use the New Home Contract (Completed Construction). What is the most likely reason why? - Correct Answer-The builder required that she use their contract. A TREC-promulgated contract has a section on insulation. This section leaves space to specify where the insulation is located (ceilings, walls, floors, etc.). Which contract is this? - Correct Answer-the New Home Contract (Incomplete Construction) AND the New Home Contract (Completed Construction) Which of these is the name of a TREC-promulgated contract? Farm and Ranch Contract Commercial Lease Three to Five Family Residential Contract Mixed-Use Building Contract - Correct Answer-Farm and Ranch Contract
The option to terminate requires extra consideration in the form of option money because: - Correct Answer-The option to terminate is a unilateral contract (for the buyer) within the contract, and valid contracts require consideration (thus, the separate fee). María, the buyer, and Jennie, the seller, are in the process of negotiating a sales contract. María wants a crack in the home's siding fixed and some new plumbing installed. What will happen next? - Correct Answer-María and Jennie will negotiate which repairs, if any, Jennie will be responsible for. If Jennie decides not to do any repairs, María may be able to terminate the contract. Who pays for an investigation of an environmental, endangered species, or wetlands issue, according to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum? - Correct Answer-the buyer In Paragraph 6C of the One to Four contract, the parties negotiate the number of days the seller has to give the buyer an existing survey and the T-47 form.
However, if the seller fails to furnish the existing survey or T- 47 within that agreed-upon number of days, the buyer will obtain a new survey at the seller's expense. This occurs no later than how many days prior to closing? - Correct Answer- three Justine and Marilyn are legally competent parties. They want to create a valid real estate contract. What else do they need?
The buyer is now covered for discrepancies, conflicts in boundary lines, and any encroachments, protrusions, or overlapping of improvements. In a TREC-promulgated contract, what is the Third Party Financing Addendum concerned with? - Correct Answer- financing contingencies In Paragraph 10 of the sales contract, the parties check a box saying that possession of the property will be transferred: - Correct Answer-upon closing and funding OR according to a temporary residential lease agreement What does the Residential Condominium Contract require in the legal description of the property? - Correct Answer-a unit number According to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum, what happens if the buyer can provide the seller with a report proving that the use of the property is negatively affected by one of the noted factors (before the agreed-upon deadline)? - Correct Answer- The buyer can terminate the contract and get their earnest money back.
According to the Addendum for "Back-Up" Contract, what happens if the first contract does not terminate by its deadline date? - Correct Answer-The back-up contract will terminate, and the earnest money will be refunded to the buyer. In which of these scenarios would it be correct to use the Residential Condominium Contract (Resale)? - Correct Answer- A client is buying a property where the land is not owned individually and the common areas are shared equally among the community's owners. What are brokers required to do regarding Consumer Protection Notice TREC No. CN 1-2? - Correct Answer-post it in each office Which one of these is a bilateral contract? Zelda agrees to pay Gus $250,000 for ownership of his house. Levi advertises a $100 reward for finding his lost cat.
Broker Anna offers a $1,000 bonus for closing three houses this month. Joshua will give Erin a $50 gift card if she sends him a referral.
The promulgated form required changes to be useable for the client. - Correct Answer-The U.S. government requires a different form to be used. Agent Kara put in MLS that she would compensate a buyer's broker 3% if they sold her listing. When Will, the buyer's agent, prepared the sales contract, he listed 3.5% as the agreement between brokers. How much is Will entitled to? Is he within his rights? - Correct Answer-3% and Will is guilty of a violation of MLS rules According to the Short Sale Addendum, the effective date of the contract is amended to the date the Seller notifies the Buyer that the: - Correct Answer-lender has approved the short sale When all parties have agreed to all terms of an offer, have signed the offer, and have initialed any changes that took place during negotiations, what happens to the offer? - Correct Answer-It becomes a contract. Which of these is NOT true about a Seller's Temporary Residential Lease? - Correct Answer-The buyer/landlord has no recourse if the seller/tenant overstays.
The date in the Third Party Financing Addendum provides a deadline to buyers for: - Correct Answer-informing a seller they didn't get their financing approved When both parties mutually agree to terminate a contract, who provides the appropriate form? - Correct Answer-the title company Which of these is NOT something TREC has the power to do? - Correct Answer-license developers and builders Mary has a rental property with a two-year lease on it. She collected a $500 security deposit at the beginning of the lease. Now she is selling the property. What will happen to the security deposit? - Correct Answer-Mary will transfer the security deposit to the buyer at closing. Which of the following is TRUE regarding a contract to transfer real estate that contains no requirement of earnest money? It is valid. It is voidable.
It is unenforceable. It is void. - Correct Answer-It is valid What is the only time it is acceptable for a license holder NOT to present all offers to a seller client? - Correct Answer-if the listing agreement specifies that it is not necessary A buyer was unable to obtain financing. How would they notify the seller that they are terminating the contract? - Correct Answer-by sending a promulgated Notice of Buyer's Termination When should a license holder use form T-47, Residential Real Property Affidavit? - Correct Answer-when a seller wants to use an existing survey If nothing is added in Paragraph 7D, the agreement says that the buyer is accepting the property: - Correct Answer-in its present condition Buyer Raz goes into contract on a house in Texas. At the last minute, he is unable to obtain financing. What would he need
to have in his contract to terminate it without penalty? - Correct Answer-a Third Party Financing Addendum Which of these is NOT a TREC-promulgated form? - Correct Answer-Mutual Termination of Contract How many lawyers are on the Broker-Lawyer Committee? - Correct Answer-six Which of the following would constitute the unauthorized practice of law and/or be a violation of TRELA? - Correct Answer-adding or striking things from preprinted contract forms If a seller is still accepting counteroffers, what is true about their property? It is not yet officially in contract. It is no longer for sale. It is in the commitment period.
It is ready to be inspected. - Correct Answer-It is not yet officially in contract. Which of these must the broker maintain a copy of for three years following a sale? Lead-Based Paint Addendum Seller's Disclosure listing agreement copy of the earnest money check - Correct Answer-Lead-Based Paint Addendum Even the most experienced home inspectors have limitations. Which of these are frequently difficult to vet by visual inspection? HVAC, leaks, and environmental toxins foundation, walls, and fixture appliances, flooring, and grading brick damage, code violations, and foundation shifting - Correct Answer-HVAC, leaks, and environmental toxins
Commission is determined in: - Correct Answer-the listing agreement, buyer representation agreement, or agreements between brokers (usually in MLS) What is unique to Paragraph 5 in the TREC promulgated sales contract? - Correct Answer-It contains "time is of the essence" language. Which of these is NOT a place where commission split agreements between cooperating brokers can be determined?
Which TREC-promulgated contract are all the other contracts based on? - Correct Answer-One to Four Family Residential Contract A stand-alone refrigerator would be considered: - Correct Answer-personal property that will not transfer The Seller's Disclosure Notice is a requirement of: - Correct Answer-the Texas Property Code What is one thing that differentiates TREC from the Broker- Lawyer Committee? - Correct Answer-TREC members are appointed only by the governor, while Broker-Lawyer Committee members can be appointed by different people. A buyer who discovers a defect that they believe was misrepresented has a certain time after discovery to make a claim for damages. This is known as the: - Correct Answer- statute of limitations With the One to Four Family contract, when is it acceptable for a seller NOT to give a buyer a seller's disclosure notice? -
Correct Answer-when the buyer has indicated in the contract it isn't necessary Angela's buyer has decided to terminate their contract during the option period. The buyer has sent a written demand to the escrow agent to release the earnest money, but Angela wants to keep it. What penalty might she eventually face, according to the TREC contract? - Correct Answer-Angela will have to pay back the earnest money, attorney fees, and the cost of a lawsuit. The Seller's Temporary Residential Lease will only be used: - Correct Answer-when the seller will remain on the property for no more than 90 days after closing Jill's client bought a new home but never lived there. Eight months later, she decided to sell it. When they found a buyer, Jill used the One to Four Family Residential Contract. Why didn't she use the New Home Contract (Completed Construction)? - Correct Answer-The New Home Contract (Completed Construction) is only appropriate for the first time a new home is sold.
Which of the following bodies appoints the public member on the Broker-Lawyer Committee? - Correct Answer-the governor Zak is selling his plot of land. He sold 50% of the mineral interest in the land three years ago to Maisha and is now transferring part of the remaining mineral interest to Ed. Zak wants to keep 50% of his mineral interest and transfer 50% to Ed. What would Zak need to do in order for this to happen? - Correct Answer-Fill out and attach the Addendum for Reservation of Oil, Gas and Other Minerals. Which of these is a technique license holders can employ to avoid mortgage fraud? - Correct Answer-Disclose everything to the lender. Which of these is an example of a unilateral contract? - Correct Answer-Mike signs a listing agreement with Broker Amy, agreeing to pay a 6% commission if she sells his house. How can an agent help protect the earnest money of a buyer who is financing their purchase through a lending institution?
Which MUST be disclosed to potential buyers? - Correct Answer-Prior flood damage that was repaired by the owner A murder took place on a property. The crime was featured on a podcast, which made the property notorious. Should the seller disclose this crime? - Correct Answer-The seller is required to disclose this crime. Reggie made Betty an offer on her house. She countered, but Reggie has not yet accepted. Then along comes Archie with a better offer. Before accepting Archie's offer, what must Betty do? - Correct Answer-withdraw her counter to Reggie What are two real estate governing bodies that were formed as a result of TRELA? - Correct Answer-TREC and the Broker- Lawyer Committee Emily and Josh signed a real estate contract with each other. The contract is now fully executed. What does that mean that Josh and Emily have done? - Correct Answer-fulfilled the material terms of the contract
Laura is in contract for a home. Her contract contains a Sale of Other Property by Buyer Addendum. The seller has just accepted a back-up contract for the property that doesn't have this contingency. What happens to Laura and her contract? - Correct Answer-Laura can waive the addendum by a date she and the seller agree on. Otherwise, her contract terminates. Which of these is appropriate to put in the Special Provisions section of the One to Four Family Residential Contract? - Correct Answer-details of an adjustable rate mortgage Agent Ted, who represents Buyer Bob, advises Bob that the title to the property Bob is buying is clear — no need to do a further title search. Why is this inappropriate? - Correct Answer-It may constitute unauthorized practice of law under TRELA. Buyer Ashley is shopping for empty lots on which to build a home. She found a lot for sale that looks promising, but she's concerned its located on a wetland. What should her agent do? - Correct Answer-Use the Unimproved Property contract and attach the Environmental Assessment, Threatened or Endangered Species and Wetlands Addendum
Paragraph 12 of the One to Four Family Residential Contract is also known as the "Settlement and Expenses" paragraph. What's an example of something that could be noted in this paragraph? - Correct Answer-The seller plans to pay some of the buyer's closing costs. According to Paragraph 6B (Commitments) in the promulgated One to Four Family Residential Contract, what must be provided to the buyer along with the title policy documents? - Correct Answer-any restrictive covenants A seller is planning to convey a refrigerator through the Non- Realty Items Addendum. They financed the applianced purchase and still have a few payments left. Is this allowed? Why or why not? - Correct Answer-No, items conveyed through the Non-Realty Items Addendum must be owned fully by the seller. In Texas, what is the statute of limitations concerning fraud? - Correct Answer-four years What is the purpose of the Notice to Prospective Buyer? - Correct Answer-It is an alternative method of giving the required notice to the buyer that they need a title policy.
When is the Addendum for Sale of Other Property by Buyer used? - Correct Answer-when the buyer needs the money from the first sale to complete the second sale Seller Ben wants to make sure that their agent offers a cooperating broker a commission. Ben believes this will drive better traffic to the listing. How can Ben BEST make sure this is a part of the transaction? - Correct Answer-make sure it appears in the listing agreement that Ben signs with the broker Buyer Jeremy gave the escrow agent $800 in earnest money and paid an additional $200 in option money. During the option period, Jeremy decided to terminate the contract. Jeremy was refunded $800. Is this correct? Why or why not? - Correct Answer-Yes, because option money is never refundable. Per Paragraph 7D of the One to Four, what is it called when a buyer accepts the property, "with any and all defects and without warranty"? - Correct Answer-accepting it in "as is" condition
What is TRUE of a unilateral contract? - Correct Answer-A unilateral contract is a promise exchanged for performance. What is the purpose of the Texas Real Estate Consumer Notice Concerning Hazards or Deficiencies? - Correct Answer-It gives examples of certain problems in the home (for example, malfunctioning smoke alarms) that licensed inspectors must report. Agent Yugo pads the income numbers on their client's loan application. What is TRUE regarding this situation? - Correct Answer-Yugo has committed loan fraud. What happens when a homebuyer takes out a residential service contract on their newly purchased home? - Correct Answer-They get a warranty for the property, usually for a year. What information does the Disclosure of Relationship with Residential Service Company form convey? - Correct Answer-It is a violation of RESPA for a license holder to receive a referral fee for simply passing on a name to a service provider.
Agent Aaron was drawing up a contract, and opted to use his brokerage's (lawyer-created) Seller's Disclosure Notice instead of TREC's. Is this allowed? Why or why not? - Correct Answer- Yes, because the Seller's Disclosure Notice is not promulgated by TREC. A contract which courts cannot compel the parties to perform is: - Correct Answer-unenforceable Agents are required to give all buyers a written copy of the title notice. Aside from Paragraph 6E(1) of the One to Four Family Residential contract, where else can this notice be found? - Correct Answer-the Notice to Prospective Buyer Agent Sarah knows her client wants to make the sales contract contingent on appraisal, so she adds a notation to that effect in the Special Provisions section of the contract. Why is that wrong? - Correct Answer-It could be considered the unauthorized practice of law. Agent Sarah knows her client wants to make the sales contract contingent on appraisal, so she adds a notation to that effect in the Special Provisions section of the contract.
Why is that wrong? - Correct Answer-It could be considered the unauthorized practice of law. Which TREC-promulgated form allows for the sales price to be adjusted because of the survey? - Correct Answer-the Farm and Ranch Contract Which of these is NOT something that is appropriate to put in Paragraph 11 (the Special Provisions section) of a TREC- promulgated contract? - Correct Answer-that the contract is contingent on the inspection If a buyer is sent an Addendum for Property Subject to Mandatory Membership in an Owner's Association and they don't like the terms, what remedy do they have? - Correct Answer-They can terminate the contract within the first three days. It would be appropriate to use the New Home Contract (Incomplete Construction) for a client buying: - Correct Answer-a new home that is being built
When a property is purchased and then quickly resells at a higher value it is called: - Correct Answer-flipping Rollback taxes are: - Correct Answer-assessed if the zoning of the property changes when it is sold How can a license holder ensure that any relevant addenda are officially included in the One to Four contract? - Correct Answer-by checking the appropriate boxes of the attached addenda in Paragraph 22 (Agreement of the Parties) What form must be provided to any unrepresented buyer or seller that a license holder talks to? - Correct Answer- Information About Brokerage Services form Which of these is NOT a TREC-promulgated form? - Correct Answer-Mutual Termination of Contract Which of these is appropriate to put in the Special Provisions section of the One to Four Family Residential Contract? - Correct Answer-details of an adjustable rate mortgage
In which of these situations is the seller required to provide a seller's disclosure? - Correct Answer-Brian is selling an investment property he has never lived in. Additions to the standard coverage in a title policy can be purchased via: - Correct Answer-endorsements The seller of a residential condominium is required to provide financial and restrictive information to the buyer in the form of a certain document. This document should be completed by the HOA. What is this document? - Correct Answer-the Condominium Resale Certificate A buyer and seller have been in negotiations. They have everything in writing, have agreed to all terms, the contract is signed and changes initialed. Today, the written acceptance of the final agreement has been communicated to the other party. What is today called? - Correct Answer-the effective date Agent Ralph has a buyer client that wants the seller to leave them the refrigerator, built-in microwave, and vent hood. Ralph notes this expectation in the Special Provisions section. What is wrong with this scenario? - Correct Answer-It should