Promulgated Contracts Practice Exam Questions with 100% Correct Answers | Verified | Updat, Exams of Advanced Education

Download Promulgated Contracts Practice Exam Questions with 100% Correct Answers | Verified | Updat and more Exams Advanced Education in PDF only on Docsity! Promulgated Contracts Practice Exam Questions with 100% Correct Answers | Verified | Updated 2024 Which of these forms is least likely to be involved in the sale of unimproved property? - Correct Answer-The Unimproved Property Contract would not be involved in the sale of a condo. 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 How many lawyers are on the Broker-Lawyer Committee? - Correct Answer-six According to the NAR Code of Ethics, unless the agent has written instructions stating otherwise, they must present all offers until: - Correct Answer-the closing pg. 1 professoraxe l Buyer Javier sends a formal offer to Seller Joy: $250,000 and the appliances stay. Joy counters: $250,000, no appliances. She then reconsiders and accepts the first offer. Is Javier obligated to buy the home? Why or why not? - Correct Answer-No, because the first offer was dead when Joy countered. 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 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 is special about the earnest money section (paragraph five) and the option money section (paragraph 23) in the TREC promulgated sales contract? - Correct Answer-they contain "time is of the essence" language When seller financing is being used, the seller becomes: - Correct Answer-the lender pg. 2 professoraxe l seller about anti-discrimination laws and say they cannot honor the request 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 Paragraph 7D(2) of the contract indicates: - Correct Answer- repairs that must be completed by the seller before closing If legal action is required regarding a TREC sales contract, what will the non-prevailing party be responsible for? - Correct Answer-the prevailing party's reasonable attorney fees and court costs What does paragraph 7A of the One to Four Family Residential Contract grant every buyer the right to do? - Correct Answer- have the property inspected As outlined in the TREC promulgated sales contracts, what obligations does the seller have regarding the property pg. 5 professoraxe l condition at the time of sale? - Correct Answer-Seller's obligations are a matter of negotiation with the buyer. 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 be written in a Non-Realty Items Addendum, not in the Special Provisions section. Which of these is a possible result of when zoning is changed and a property no longer qualifies for a previous exemption? - Correct Answer-Rollback taxes can be assessed when zoning is changing and the property no longer qualifies for a previous exemption. In Paragraph 9 of the One to Four Family (Resale) contract, what must happen "on or before" the specified date? - Correct Answer-closing 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 pg. 6 professoraxe l contract? - Correct Answer-Laura can waive the addendum by a date she and the seller agree on, otherwise her contract terminates. A buyer needs more option period time. They have asked the seller, who agreed, and signed TREC's Amendment to Contract. What else must they do to make the extension official? - Correct Answer-pay an additional option fee Which of these is NOT something TREC has the power to do? - Correct Answer-licensing developers and builders Agent Ted advises his client that the title to the property he 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. Additions to the standard coverage in a title policy can be purchased via: - Correct Answer-endorsements According to TREC rules, which of these must be delivered to the seller within three days of a contract's effective date? - Correct Answer-earnest money pg. 7 professoraxe l 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 Seller Xavier's home is in a special statutory tax district. According to the Texas Water Code, what does Xavier have to do before going into contract with a buyer? - Correct Answer- have them sign a notice informing them of the extra taxes 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 In which of these scenarios could an HOA foreclose on a property that belongs to the HOA? - Correct Answer-a property owner fails to pay their HOA assessments In a TREC promulgated contract, what is the Third Party Financing Addendum concerned with? - Correct Answer- financing contingencies pg. 10 professoraxe l Your buyer client has received their inspection report. In it, there are several identified items that they want the seller to fix. Seller has agreed to fix these items before close. What will you need to include in the contract to ensure this agreement is enforced? - Correct Answer-amendment Which of these is NOT a TREC promulgated form? - Correct Answer-Condo Addendum According to the Addendum for Back-Up Contract, if a first contract is terminated and the seller notifies the back-up buyer of the termination, what happens? - Correct Answer- that date becomes the effective date of the back-up contract 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 do brokers determine how the commission from a sale will be split? - Correct Answer-before closing pg. 11 professoraxe l What is one thing that differentiates TREC from the Broker- Lawyer Committee? - Correct Answer-TREC members are only appointed by the governor, Broker-Lawyer Committee members can be appointed by different people. Which MUST be disclosed to potential buyers? - Correct Answer-Prior flood damage that was repaired by the owner What is the purpose of the Short Sale Addendum? - Correct Answer-The Short Sale Addendum protects the seller by referring to "net proceeds" and giving them a way to break the contract if the lender doesn't approve the sale. A stand-alone refrigerator would be considered . - Correct Answer-personal property that will not transfer What part of the One to Four Family Residential Contract advises the buyer to get an abstract of title reviewed by a lawyer? - Correct Answer-Title Notice under Paragraph 6E1 of the One to Four Family Residential Contract advises the buyer to get an abstract of title reviewed by a lawyer. pg. 12 professoraxe l of the contract fill in which of the following dates for their broker: - Correct Answer-effective and executed date Which of these does NOT create housing occupancy standards? - Correct Answer-the Federal Housing Administration Which of these is NOT a place where commission split agreements between cooperating brokers can be determined? - Correct Answer-Commission split agreements are not determined in the contract. 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 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 pg. 15 professoraxe l appears in the listing agreement that Ben signs with the broker What is TRUE of a unilateral contract? - Correct Answer-A unilateral contract is a promise exchanged for performance. A seller is selling a property that is under a lease. When does the seller have to deliver a copy of the lease and any move-in condition form to the buyer? - Correct Answer-The seller must deliver a copy of the lease and any move-in condition form within seven days after the effective date of the contract. When should a license holder use form T-47, Residential Real Property Affidavit? - Correct Answer-when a seller wants to use an existing survey When a contract has been fully executed, what has happened to it? - Correct Answer-it has been terminated What information does the Disclosure of Relationship with Residential Service Company form convey? - Correct Answer- The Disclosure of Relationship with Residential Service Company form states that it is a violation of RESPA for a pg. 16 professoraxe l license holder to receive a referral fee for simply passing on a name to a service provider. A Residential Real Property Affidavit Promulgated by the Texas Department of Insurance (T-47 Affidavit) must be furnished to the buyer . - Correct Answer-When the seller provides the existing survey 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 Even the most experienced home inspectors have limitations. Which of these are frequently difficult to vet by visual inspection? - Correct Answer-HVAC, leaks, and environmental toxins What does the Residential Condominium Contract require in the legal description of the property? - Correct Answer-a unit number Agent Aaron was drawing up a contract, and opted to use his brokerage's (lawyer-created) Seller's Disclosure Notice instead pg. 17 professoraxe l