Real Estate Contract Fundamentals, Exams of Business Accounting

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AYPO REAL ESTATE PROMULGATED CONTRACTS

ACTUAL EXAM QUESTIONS

"Psychological stigmas," which involve violent or catastrophic events on a property, fall under which category of disclosure? a. Required disclosures b. Prohibited disclosures c. Permitted disclosures d. None of these - Answers-c. Permitted disclosures If there is a field in a promulgated form for which you have no information to include, your safest option is which of the following? a. Run a line through it b. Place "N/A" (not applicable) so it is clear that the buyer/buyer's agent is aware that the section exists and was not just overlooked c. Any of these d. Just leave it blank - Answers-b. Place "N/A" (not applicable) so it is clear that the buyer/buyer's agent is aware that the section exists and was not just overlooked Which of these is an exemption to the "legal capacity" requirement to form a contract? a. A contract for a life necessity b. The other party had no knowledge of the party's lack of legal capacity c. Both of these are correct d. Neither of these are correct - Answers-a. A contract for a life necessity An amendment must always include reference to all of these, except: a. The title report b. The original contract c. Parties d. Date of ratification - Answers-a. The title report What category of disclosure do "psychological stigmas" fall into in Texas? a. Prohibited b. Required c. Permitted d. None of these - Answers-c. Permitted Promulgated contracts for TRELA generally are developed by which of the following? a. TREC

b. National Association of Realtors c. Texas Bar Association d. The Broker-Lawyer Committee - Answers-d. The Broker-Lawyer Committee If the seller has misled or misrepresented something, the signature at closing: a. Terminates any obligation to the buyer b. Neither of these c. Either of these d. Does not release them from those promises - Answers-d. Does not release them from those promises Restrictive covenants are regulations which can include which of the following? a. Dictating minimum residence size b. Nuber of homes per lot c. Types of construction allowed and not allowed d. All of these - Answers-d. All of these Before leasing the property back to a seller or leasing it ahead of closing to a buyer, both parties need to pay attention to the effect that leasing will have on which of the following? a. Their insurance coverage b. The Seller's disclosure c. The title commitment d. The title policy - Answers-a. Their insurance coverage HUD's primary concern is to ensure that any occupancy standards are not so strict as: a. To discriminate against single residents b. To undo protections of families with children c. To create a safety hazard d. None of these - Answers-b. To undo protections of families with children Which of these is a part of the Seller Financing Agreement a. Promissory Note b. Deed of Trust c. Buyer's Credit Approval d. All of these - Answers-d. All of these Which of these DOES NOT mean that a contract might not or will not likely stand up in court? a. Valid

b. Voidable c. Unenforceable d. Void - Answers-a. Valid TRELA states unequivocally that it is illegal for a licensee to draw, i.e. create or develop which of the following on their own? a. A deed of trust b. A deed c. All of these d. A will - Answers-c. All of these Which of the New Home Contracts includes the Page 8 construction defect language? a. Neither of them b. Both of them c. New Home Contract (incomplete) d. New Home Contract (completed) - Answers-b. Both of them Which Paragraph of the TREC 1-4 contract already includes a "time is of the essence" clause? a. 23 b. 18 c. 6 d. 5 - Answers-d. 5 How many multiple back-up offers can be in line at one time? a. No more than two b. Texas law only allows for one back-up offer at a time c. There is no limit to the number of backup offers d. No more than three - Answers-b. Texas law only allows for one back-up offer at a time Which of these forms is for general consumer client information, and not directly related to a sale? a. Consumer Information Form b. Both of these c. Information About Brokerage Services d. Neither of these - Answers-b. Both of these A person is not engaged in a real estate brokerage, regardless of whether the person is licensed under this chapter, based solely on engaging in which of the following activities?

a. Any of these. b. Entering into an obligation to pay another person that is secured by an interest in real property c. Sponsoring, promoting, or managing, or otherwise participating as a principal, partner, or financial manager of, an investment in real estate d. Constructing, remodeling, or repairing a home or other building - Answers-a. Any of these. To receive a daily rate of $40 in a buyer's or seller's lease, the monthly rate would have to be set at which of these monthly rates? a. $ b. $1, c. $1, d. $1,000 - Answers-c. $1, According to TREC a "reasonable time" within which to deposit the escrow check is: a. By end of the day following signing b. Within 72 hours c. By the end of the second business following formation of the contract d. By the end of the day of signing - Answers-c. By the end of the second business following formation of the contract A "release clause" in a mortgage agreement would allow which of the following additional lender approval? a. To obligate the lessee/owner to an irrevocable option to buy b. To replace an existing contract with a new contract c. To section off a portion of the property, the equivalent value of which has been paid off, and sell off that portion if desired d. To transfer rights or duties under a contract from a current party to a contract to another party - Answers-c. To section off a portion of the property, the equivalent value of which has been paid off, and sell off that portion if desired The DTPA only applies to real estate transactions in situations involving: a. An express misrepresentation of a material fact that cannot be characterized as advice, judgement, or opinion b. An unconscionable action or course of action that cannot be characterized as advice, judgement, or opinion. c. A failure to disclose information known by the licensee at the time of the transaction if the non-disclosure was intended to induce the consumer into a transaction they would not have entered if they were aware of the undisclosed information d. Any of these - Answers-d. Any of these

Texas' promulgated One to Four Family Residential Contract (Resale) §___ allows the buyer a grace period in which they can cancel the deal without risking their escrow deposit. a. 7 b. 5 c. 11 d. 22 - Answers-b. 5 To promulgate means which of the following? (best answer) a. Officially announce, publish, make known to the public, or to formally announce a statute or a decision by a court. b. Mandatory use c. All of these d. To legislate or regulate - Answers-a. Officially announce, publish, make known to the public, or to formally announce a statute or a decision by a court. The TREC 1-4 §11 can be used only for which of these a. Adding legal provisions b. Adding terms to the loan agreement c. Factual statements and business details applicable to the sale d. Specifying desired inspections - Answers-c. Factual statements and business details applicable to the sale The Information About Brokerage Services handout should be provided to a prospect a. At the signing of a listing (seller) or offer (buyer) b. At the first substantive discussion c. At first contact d. At the signing of the sales contract - Answers-b. At the first substantive discussion In the Back-up Addendum, it states that an ammendment or modification in the first contract: a. Will not terminate the First Contract b. Will change the order of priority of the contracts c. Will serve as a counter offer and restart the clock on the first contract's contingencies d. Will terminate the first contract - Answers-a. Will not terminate the First Contract What is the proper method for calculating the rent in a buyer's or seller's lease agreement? a. The charge should be a daily charge based on an annual (360-day) lease agreement b. The charge should be a daily charge based on a desired 30-day monthly rental rate

c. Parties are not required to state d. Parties negotiate a daily rent based on the Consumer Product Index - Answers-b. The charge should be a daily charge based on a desired 30-day monthly rental rate A title endorsement is a(n): a. Notarized copy of title b. Professionally recommended title company c. Title approved by the local Clerk of the Court or equivalent recording agent d. None of these - Answers-d. None of these If a buyer is required to put 20% down on a $240,000 offering price, how much do they need for a down payment? a. $54, b. $48, c. $60, d. $50,000 - Answers-b. $48, Paragraph 3 is different only in the Farm and Ranch Contract because: a. It deals with agricultural property b. Of the size of the property c. The sales price can be adjusted by the survey d. Of rollback taxes - Answers-c. The sales price can be adjusted by the survey Which of the following contracts does not include rollback taxes in §13? a. None of these b. Unimproved Property Contract c. One to Four Family Residential Contract (Resale) [TREC 1-4] d. Farm and Ranch Contract - Answers-c. One to Four Family Residential Contract (Resale) [TREC 1-4] Which of these is generally considered to be a "seller's cost?" a. Credit reports b. Loan-related inspection fees c. Releases of existing liens, including prepayment penalties and recording fees d. Loan application fees - Answers-c. Releases of existing liens, including prepayment penalties and recording fees To be able to effectively use the option provided under §5 Earnest Money and termination, the option must be signed and paid for by which of these points? a. The signing of the contract

b. At any point in the process c. Within three days of making the original offer d. Within 3 days of the parties signing the contract - Answers-d. Within 3 days of the parties signing the contract New homes present a greater likelihood that the property owner will direct the licensee to use: a. None of these b. A form other than one promulgated by TREC c. One of the promulgated forms d. An attorney to prepare the contract - Answers-b. A form other than one promulgated by TREC Accepting the "property in its present condition" in section 7 of the TREC 1-4: a. None of these b. Waives the right to inspection c. Precludes the use of any professional inspectors d. Does not waive the right to request seller repairs based upon professional inspections performed later - Answers-d. Does not waive the right to request seller repairs based upon professional inspections performed later The Mineral Estate does NOT include which of these? a. Gas b. The right to sign a mineral lease covering any part of the Property c. Iron d. Oil - Answers-c. Iron The Real Estate License Act was created to: a. Maintain high standards in the real estate profession b. Protect the public interest from dishonest or incompetent brokers c. Protect licensed brokers and salespersons from unfair or improper competition d. All of these - Answers-d. All of these The offer becomes a sales contract when: a. Signed by the buyer/ offeror b. All of these c. Presented to the seller who verbally approves d. It is accepted, signed by the seller, and acceptance communicated to the buyer or buyer's agent - Answers-d. It is accepted, signed by the seller, and acceptance communicated to the buyer or buyer's agent

"Subdivision Information" means which of the following? a. A current copy of the restrictions applying to the subdivision and bylaws b. Both of these c. Neither of these d. A resale certificate, all of which are described by section 207.003 of the Texas Property Code - Answers-b. Both of these Failure to present an offer is which of the following? a. Allowable act if the offer is not in writing b. Prerogative of the listing agreement c. Violation of a licensee's fiduciary duties d. Unauthorized practice of law - Answers-c. Violation of a licensee's fiduciary duties Which of these IS NOT an addendum listed in the TREC 1-4 §22 Agreement of Parties a. Environmental Assessment, Threatened or Endangered Species and Wetlands Addendum b. Addendum for Property Subject to Mandatory Membership in a Property Owners Association c. Addendum for Inclusion and Exclusion of Personal Property d.Buyer's Temporary Residential Lease - Answers-c. Addendum for Inclusion and Exclusion of Personal Property A cost that is not prorated by the title company is which of these? a. Loan fees b. Rents c. Association fees d. Property taxes - Answers-a. Loan fees Which of these Farm and Ranch Contract sections IS NOT distinguished from the TREC 1 - 4? a. 6 Title Policy and Survey b. 7 Property Conditions c. 15 Default d. 13 Prorations - Answers-c. 15 Default Who pays for and who is the provider of the title insurance policy is determined by which of the following? a. By the buyer b. Agreement of the parties c. None of these

d. By the listing party - Answers-b. Agreement of the parties What is the statutory minimum price for a termination option under §5 Earnest Money and Termination Option a. $ b. 1% of offer c. $ d. There is no statutory minimum - Answers-d. There is no statutory minimum Using a Seller's Leasing Agreement, once the closing is completed, the buyer becomes the ___ while the seller becomes the ___ a. Owner and renter, landlord b. Buyer and landlord, renter c. Landlord and seller, renter d. Owner and landlord, renter - Answers-d. Owner and landlord, renter Which of these IS NOT included in the Seller's Disclosure? a. Deferred maintenance or other repairs that may be necessary b. Violations of deed restrictions on the property c. Psychological stigmas, e.g., a violent death on the property d. Any defects of malfunctions in critical systems known to the seller - Answers-c. Psychological stigmas, e.g., a violent death on the property An executory contract is one that does which of the following? a. Still has a material duty needing to be performed b. Creates an option c. Has been fufilled d. Cannot be enforced - Answers-a. Still has a material duty needing to be performed A title insurance "commitment" provides a buyer: a. With a guarantee of a clear title b. With the terms and conditions under which the title company will be issuing the title insurance policy c. Time to request a title insurance policy d. With homeowner's insurance - Answers-b. With the terms and conditions under which the title company will be issuing the title insurance policy The Broker-Lawyer Committee was established by: a. Texas Association of REALTORS b. Texas Real Estate Commission

c. Texas Bar Association d. The Real Estate License Act - Answers-d. The Real Estate License Act Which of these IS NOT a warning issued on the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway? a. All of these are warnings on the addendum b. Be prepared to move or demolish any structure determined to be too close to the shoreline even if it was legal when built or purchaced c. Beware of legal risks inherent with purchase of this property d. Take caution because beach erosion can change the shoreline and, along with it, change the legal status of a structure's location - Answers-a. All of these are warnings on the addendum The unauthorized practice of law would include all of these actions by a licensee, except: a. Advising clients to waive their legal rights to pursue damages in court b. Development of a new contract form tailored to each client c. Inserting minor handwritten notes on the contract initialed by all parties d. Advising clients that there are no potential tax - Answers-c. Inserting minor handwritten notes on the contract initialed by all parties ____ is the form that licensees are most likely to work with the most frequently a. New Home Contract (Completed Construction) b. Addendum for Property Subject to Mandatory Membership in an Owners' Association c. Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum d. One to Four Family Residential Contract (Resale) [TREC 1-4] - Answers-d. One to Four Family Residential Contract (Resale) [TREC 1-4] To be a legally competent party to a contract, business entities (such as corporations, limited liability companies, and limited liability partnerships) must: a. File a certificate of solvency with the state department of revenue b. Be pre-approved by the court system c. Be in compliance with state requirements by filing annual documents and complying with assumed business name requirements d. Qualify as a 501(c) corporation - Answers-c. Be in compliance with state requirements by filing annual documents and complying with assumed business name requirements The "Paragraph 8" language in the New Home Contracts pertains to which of the following?

a. Loan qualification b. Association fees c. R-values d. Broker Fees - Answers-d. Broker Fees Contracts that are promulgated by TREC but are used by licensees MUST be which of the following? a. Promulgated contracts can never be used by Texas licensees in any transaction b. Created or approved by an attorney or used at the discretion of the seller c. Promulgated contracts generally can be optional for the licensee d. Generated and notarized by a notary - Answers-b. Created or approved by an attorney or used at the discretion of the seller TREC 1-4 is another name for which contract? a. Residential Condominium Contract (Resale) b. Farm and Ranch Contract c. One to Four Family Residential Contract (Resale) d. Unimproved Property Contract - Answers-c. One to Four Family Residential Contract (Resale) Which of these IS NOT a potential Fair Housing Violation? a. Setting different terms, conditions, or privileges for sale or rental of a dwelling b. Providing different or unequal housing services or facilities c. Denying anyone access to or membership in a facility or service (such as a multiple listing service) related to the sale or rental of housing d. Requiring that at least one resident be at least 55 years of age or older per unit (where 80% of the units are occupied by individuals age 55 or older) - Answers-d. Requiring that at least one resident be at least 55 years of age or older per unit (where 80% of the units are occupied by individuals age 55 or older) In the Short Sale Addendum, who is responsible for contacting the lender's Loss Mitigation Department a. The buyer and the buyer's agent b. The loan officer c. The listing agent and the sellers d. The title company - Answers-c. The listing agent and the sellers Paragraph 7 regarding disclosures is different from the TREC 1-4 in all of the contracts except for which of the following? a. New Construction Contract (complete) b. Farm and Ranch Contract

c. Unimproved Property Contract d. Residential Condominium Contract - Answers-d. Residential Condominium Contract Failure to timely transmit an offer to a seller may result in which of the following? a. Lawsuits b. Any of these c. License Revocation d. License suspension - Answers-b. Any of these §11 Special Provisions of the TREC 1-4 can be used only for which of the following? a. Neither of these b. Factual statements and business details applicable to the sale c. Alterations of text or addition of provisions that are generally legal in nature d. Both of these - Answers-b. Factual statements and business details applicable to the sale Before signing a purchase contract, the licensee must give a buyer written advice to: a. Have the abstract covering the property examined by an attorney of the buyer's selection b. Both of these c. Neither of these d. Obtain an owner's title insurance policy prior to closing - Answers-b. Both of these The Environmental Assessment & Threatened or Endangered Species & Wetlands Addendum provides assessment opportunities for a. Endangered species b. All of these c. Environmental hazards d. Wetlands - Answers-b. All of these An option is a form of which kind of contract? a. Executed b. Bilateral c. Executory d. Unilateral - Answers-d. Unilateral Which of these IS NOT listed as a reason for termination? a. The unrestricted right of Buyer to terminate the contract under Paragraph 5 of the contract

b. The Property does not satisfy Property Approval in accordance with the Third Party Financing Addendum to the contract c. All of these are reasons for termination d. Buyer elects to terminate under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice - Answers-c. All of these are reasons for termination Which of these properties built before 1978 is exempt from the lead based paint hazard disclosure? a. Condominiums b. None of these c. Senior/disabled housing (where no child under six will reside) d. Single family dwellings - Answers-c. Senior/disabled housing (where no child under six will reside) TREC 1-4 Paragraph 6C lists what options for providing the survey to buyer within a number of days after the effective date of this contract set by the parties' agreement? a. Seller, at Seller's expense, shall furnish a new survey to Buyer b. All of these c. Buyer shall obtain a new survey at Buyer's expense d. Seller furnishes to Buyer and Title Company Seller's existing survey of the property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit) - Answers-b. All of these In most circumstances, the licensee will obtain two checks from the prospective buyer when writing the offer: a. One for earnest money payable to the escrow or title company, and one for the option money payable to the seller b. One for broker's fees, and one for the option money payable to the seller c. One for earnest money payable to the escrow or title company, and one for the title policy d. One for earnest money payable to the escrow or title company, and one for broker's fees - Answers-a. One for earnest money payable to the escrow or title company, and one for the option money payable to the seller Which of these IS NOT required to have a valid executed date? a. Notarized third-party witness b. A written agreement signed by all parties c. Initials by both parties on any and all changes d. Clear and unambiguous language forming the agreement - Answers-a. Notarized third-party witness

The Short Sale Addendum protects both the buyer and seller because of which of these? a. Both of these reasons b. The addendum dictates that the contract is binding on the lender regardless of their approval c. Neither of these reasons d. The parties have contractually agreed performance requirements and seller's ability to perform these obligations is subject to lender approval - Answers-d. The parties have contractually agreed performance requirements and seller's ability to perform these obligations is subject to lender approval How much will a bank be financing on a $240,000 home where the buyer puts 20% down? a. $180, b. $192, c. $190, d. $196,000 - Answers-b. $192, An "assignment of rights" is best described by which of the following a. All of these are correct b. A transfer of rights or duties under a contract from a current party to a contract to another party c. Designation of a party's obligation under a contract d. The conveyance of the bundle of rights by the seller to the buyer at the conclusion of the contract - Answers-b. A transfer of rights or duties under a contract from a current party to a contract to another party Most warranties or RSC's have a ___ life span, but often may be renewed. a. Two-year b. One-year c. 90-day d. 30-day - Answers-b. One-year What is the total rent die for a 20-day lease-back based on a $1200.00 per month rental a. $800. b. $900. c. $600. d. $1,000.00 - Answers-a. $800. Which form of financing does the "Third Party Financing Addendum" NOT cover?

a. Conventional loan financing b. Texas Veterans Loans c. VA Guaranteed Loans d. Seller financing - Answers-d. Seller financing Which of these is not a subject of the Paragraph 6E Title Notices? a. If the property is located within a Public Improvement District b. Names and boundaries of local school districts c. Notice that the property is or is not subject to HOA or other mandatory ownership fees d. If the property is subject to transfer fees - Answers-b. Names and boundaries of local school districts Which of these IS NOT an item properly suited to inclusion in a Non-Realty Items Addendum? a. Refrigerator b. Washer/dryer c. Smart car d. Couch - Answers-c. Smart car Which paragraph of the TREC 1-4 contract lists the different addenda that are available? a. 22 b. 23 c. 9 d. 10 - Answers-a. 22 The Texas Real Estate Commission (TREC) was created by which of these? a. The Real Estate License Act b. None of these c. The Governor's Office d. The broker-Lawyer Committee - Answers-a. The Real Estate License Act Which of these was not true of occupancy standards? a. HUD is not particularly concerned with occupancy standards and generally defers to the local jurisdiction b. Texas has no specific regulations pertaining to occupancy standards c. The Texas Property Code limits residences to no more than three adults per bedroom d. Local jurisdictions can have their own occupancy standards so long as they do not unfairly limit the rights of families - Answers-b. Texas has no specific regulations pertaining to occupancy standards

Paragraph 2 is different in each in each of the promulgated sales contracts because: a. The Broker-Lawyer Committee wanted to distinguish the contracts b. The sales price is inserted here c. Of differences in disclosures d. This paragraph is used to describe the type of property involved - Answers-d. This paragraph is used to describe the type of property involved Using the Addendum for Reservation of Oil, Gas, and Other Minerals, a seller can reserve: a. Both of these b. Any portion of their mineral estate rights c. Neither of these d. All of their mineral estate rights - Answers-a. Both of these "Short sale" generally would not include which of the following? a. The borrower seeing no funds from a short sale b. A guarantee that the lender will not seek additional compensation from the borrower c. Less than full net proceeds at closing to pay the balance of the Seller's mortgage loan d. Lender permission to proceed with the sale - Answers-b. A guarantee that the lender will not seek additional compensation from the borrower The buyer is obligated to pay for the buyer;s broker's fees generally only under which of the following situations? a. The commission is agreed to in a buyer's representation agreement b. Both of these c. The commissions are not listed in the MLS d. Neither of these - Answers-a. The commission is agreed to in a buyer's representation agreement If the Property is damaged or destroyed after the contract's effective date, and Seller fails due to factors beyond their control, Buyer may: a. Any of these b. Terminate the contract and earnest money will be refunded to Buyer c. Accept the Property as is with an assignment of insurance proceeds, if permitted by Seller's carrier, and receive credit equal to the deductible from Seller at closing d. Extend the time for performance up to 15 days and the Closing Date will be extended as necessary - Answers-a. Any of these Which of these IS NOT a potential reason for terminating a contract? a. Impossibility

b. Specific performance c. Recission d. Substantial Performance - Answers-b. Specific performance To waive a contingency on the Addendum for Sale of Other Property by Buyer, one must do all of these except which of these? a. Notify the seller in writing within the timeframe for fulling the contingency b. Provide evidence to support a decision to waive the contingency c. Deposit the additional earnest money with the escrow agent in a timely manner d. all of these - Answers-b. Provide evidence to support a decision to waive the contingency If the title company is unable to deliver the title commitment within 20 days: a. The time for delivery is automatically extended up to 15 days or 3 days before the closing date, whichever is sooner b. The buyer can terminate without consequence c. The time for delivery is automatically extended up to 3 days or 15 days before the closing date, whichever is sooner d. The deal is automatically terminated - Answers-a. The time for delivery is automatically extended up to 15 days or 3 days before the closing date, whichever is sooner Which of these contract situations is voidable and not inherently void? a. One party was coerced into signing against their will b. One party's obligation is to commit a crime c. A property manager is directed to exclude a specific category of people d. A contract with a person not of legal competence at the forming of the contract - Answers-d. A contract with a person not of legal competence at the forming of the contract Which of these contracts addresses the issue of Lead-based Paint Hazard disclosure? a. Unimproved Property Contrace b. New Home Contract (Incomplete) c. The One to Four Family Residential Contract (Resale) d. New Home Contract (Completed) - Answers-c. The One to Four Family Residential Contract (Resale) If Buyer and Seller execute a back-up contract, complete with the earnest money deposit, and the back-up contract becomes the primary effective on a Monday (in a week with no holidays), unless otherwise agreed, what is the deadline for the broker to deposit the buyer's earnest money?

a. Wednesday by 5pm b. Tuesday by 5pm c. Not until primary offer falls through d. Wednesday, midnight - Answers-a. Wednesday by 5pm In §6B of the TREC 1-4, the agreement calls for the seller to furnish the buyer a title commitment within ___ days. a. 20 b. 15 c. 14 d. 30 - Answers-a. 20 Which of these IS NOT a promulgated sales contract? a. Seller's Temporary Residential Lease b. New Construction (Completed) c. New Construction (Incomplete) d. Farm and Ranch Contract - Answers-a. Seller's Temporary Residential Lease How much earnest money does Texas state law require to validate a real estate sale contract? a. A minimum of 3% of the sales price b. No earnest money is required c. A minimum of 1% of the offer price d. A minimum of $1000 - Answers-b. No earnest money is required Which of these is a potential remedy for a Casualty Loss under §14 on the TREC 1-4? a. Extension of the closing date of up to 15 for seller to fix the damage b. All of these c. Acceptance of the property "as is" with an agreement to recieve proceeds of any insurance coverage allowable, with other compensation from seller, e.g., reduced price, or with no compensation and buyer absorbs any costs d. Termination of the contract with earnest money returned to the buyer - Answers-b. All of these Must multi-page promulgated contracts have a blank space at the top of each page after one for which of the following? a. The address of the property central to the transaction b. Use by the MLS only c. All of these d. Use by the County only - Answers-a. The address of the property central to the transaction

Which of these settlement expanses generally will not be attributed to the seller? a. Inspection and appraisal fees b. Preparation of deed c. Releases of existing liens, including prepayment penalties and recording fees d. Release of Seller's loan liability - Answers-a. Inspection and appraisal fees Which of these sections is included in the Residential Condominium contract and not in the TREC 1-4? a. §2(B) - Deals with the Declaration, Bylaws, and Association rules, and whether a prospective buyer has received all of this documentation b. 2(C) - Addresses the form and the delivery of the Resale Certificate (known as "the Certificate") c. All of these d. 2(D) - Covers the rights of first refusal that may exist in the Association or other members of the Association - Answers-c. All of these In the Addendum for Release of Liability on Assumed Loan and/or Restoration of a Seller's VA Entitlement if restoration has not been approved by the Closing Date, the parties option(s) is/are: a. The contract will terminate and the earnest money will be refunded to Buyer b. Neither of these c. Either of these d. Failure to obtain release approval will not delay closing - Answers-c. Either of these The escrow agent is not which of these: a. Any of these b. A party to the contract c. Liable for the loss of any earnest money caused by the failure of any financial institution in which the earnest money has been deposited (unless the financial institution is acting as escrow agent) d. Liable for interest on the earnest money - Answers-a. Any of these Which of these IS NOT a difference between the Condominium Sales Contract and the TREC 1-4? a. Expenses include Association fees and deposits b. Paragraph 7 disclosures c. Mentions of the survey are deleted d. Certain deferred maintenance and related costs are exempted from proration. - Answers-b. Paragraph 7 disclosures

Which of these IS NOT an exemption from the Fair Housing Laws? a. Housing operating by organizations and private clubs that limit occupancy to members b. Owner-occupied buildings with no more than four units c. Single-family housing sold or rented without the use of a broker d. Where there is racial discrimination under the Civil Rights Act of 1866 - Answers-d. Where there is racial discrimination under the Civil Rights Act of 1866 The offer to purchase does not become a "contract" until which of the following acts? a. It is signed by the buyer b. It is accepted by the seller c. It is signed by the seller d. Acceptance on exact terms of an offer/counteroffer is communicated to the other party of their representative and has been signed by both parties - Answers-d. Acceptance on exact terms of an offer/counteroffer is communicated to the other party of their representative and has been signed by both parties Which of these IS NOT a red flag for potential real estate fraud? a. False statements concerning the reasons for a price reduction b. Occasional price reductions c. Inflated price and/or appraisal d. Frequent requests to remove the property from the MLS (a violation of MLS rules) or to increase the price in the MLS - Answers-b. Occasional price reductions Which of these applies specifically to New Home Contracts a. Flooding impact disclosure b. Lead-based paint and hazards disclosure c. None of these d. R-value insulation factor disclosure - Answers-d. R-value insulation factor disclosure What are two major forms of making modifications to a contract? a. Addenda b. Both of these c. Ammendment d. Neither of these - Answers-b. Both of these Which of the following IS NOT a warning on the Addendum for Property Located Seaward of the Gulf Intracostal Waterway? a. To beware of legal risks inherent with purchase of this property b. To read and not sign the contract until fully understanding the notice

c. To be forewarned that the property may be subject to tsunami warnings d. To take caution because beach erosion can change the shoreline and the legal status of a structure's location - Answers-c. To be forewarned that the property may be subject to tsunami warnings The best method(s) for adding special provisions is which of the following? a. Add a special provisions addendum, and insert the wording "See Special Provisions Addendum attached hereto and incorporated herein" is §11 b. neither of these c. Both of these d. Insert the desired language in the §11 Special Provisions section - Answers-c. Both of these The Loan Assumption Addendum warning(s) include(s) which of the following? a. Both of these b. Neither of these c. Advising the seller to use the TREC Release of Liability Addendum if the seller is concerned with being at risk of retaining liability on the assumed notes d. Advising the buyer not to sign the contract without examining the notes and deed of trust if the buyer has any concerns about future adjustments or other factors impacting the terms - Answers-a. Both of these The Addendum for Property Subject to Mandatory Membership in a Property Owners Association gives the buyer the choice to which of the following? a. Both of these b. Receive or not to receive the Seller's disclosure c. Receive or not to receive the Subdivision Information d. Neither of these - Answers-c. Receive or not to receive the Subdivision Information The Texas Association of Realtors (TAR) 1904 Release of Earnest Money Form is for which of the following? a. Terminates the contract b. Acknowledging that there is an agreement between the parties that the contract is terminated c. Does not require the buyer's signature d. Does not require the seller's signature - Answers-b. Acknowledging that there is an agreement between the parties that the contract is terminated An oral contract for the lease of a property for one year or less has a statute of limitation of: a. Four years

b. One year c. Two years d. Three years - Answers-c. Two years Which of these generally will not include a structure of any sort in the sale? a. New Home Contract (Completed Construction) b. Farm and Ranch Contract c. Unimproved Property Contract d. Residential Condominium Contract (Resale) - Answers-c. Unimproved Property Contract The condominium Resale Certificate is filled out by which of these parties? a. Seller b. Licensee c. Buyer d. A representative of the home or property owners association - Answers-d. A representative of the home or property owners association