Real Estate Contract Fundamentals, Exams of Nursing

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Law of Contracts Exam

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A buyer accepts the acts of an agent without any written agreement. What kind of situation is this? A) expressed agency B) association by act C) implied agency D) agency by ratification -correct answer ✅✅C) implied agency A contract by which the owner agrees with another person that he shall have the right to buy the property at a fixed price, within a certain period of time is called: A) an escrow sales contract B) a sale and leaseback C) a "time is of the essence" provision D) an option -correct answer ✅✅D) an option

A contract that has no legal effect because it does not contain all the essential elements of a contract is: A) voidable B) unenforceable C) void D) canceled -correct answer ✅✅C) void A licensed agent has an oral employment agreement with a seller and provides the seller with a ready, willing, and able buyer. What must happen before he can legally demand a commission? A) he must present his license to the principals B) he must share his commission with the seller C) he must be able to show a written employment contract D) he must get TREC's assistance in collecting the commission - correct answer ✅✅C) he must be able to show a written employment contract A licensee who draws or prepares a contract while not acting as a principal and not licensed as an attorney: A) shall have the license revoked or suspended B) may have the license revoked or suspended C) is acting in the best interest of the seller if no commission is charged D) may do so provided proper disclosure is made to all parties - correct answer ✅✅A) shall have the license revoked or suspended A listing agent must disclose to a buyer that:

A) the family next door have five children under the age of ten B) the property has been rezoned C) the property is overpriced D) the seller is moving out of town next week and needs to sell quickly -correct answer ✅✅B) the property has been rezoned A listing broker has discovered that the person making the offer is acting for someone else. The broker should: A) not present the offer until the buyer reveals the name of the other person B) present the offer to the seller without informing the seller C) present the offer and inform the seller that the buyer is acting for someone else D) not present the offer -correct answer ✅✅C) present the offer and inform the seller that the buyer is acting for someone else A listing contract which obligates the seller to pay the agent a commission UNLESS the seller procures his own prospect is called: A) an option B) a net listing C) an exclusive right-to-sell D) an exclusive agency -correct answer ✅✅D) an exclusive agency A promise in exchange for a promise supported by consideration is the basis for: A) a voidable contract B) a valid binding bilateral agreement

C) an offer to lease D) a unilateral contract with option -correct answer ✅✅B) a valid binding bilateral agreement A real estate sales contract is void if: A) the seller changes his mind about the price B) it is for an illegal purpose C) it is between a minor and an adult D) it is entered into under duress -correct answer ✅✅Not A A salesperson with Ryan Realty sells a house listed by another company. The salesperson may receive a commission from: A) the broker with the other company B) any agent involved in the transaction C) the salesperson's sponsoring broker D) the title company and the lender -correct answer ✅✅C) the salesperson's sponsoring broker A seller made a counteroffer on the buyers offer. the buyer signed the counteroffer and the agent delivered it to the seller. Meanwhile, the buyer made an offer on another property that was accepted. Which of the following is true? A) the first offer is valid B) the second offer is valid C) neither offer is valid D) both offers are valid -correct answer ✅✅A) the first offer is valid

A seller promises a broker a bonus if the broker brings him a full price offer in 30 days. This is an example of: A) bi-lateral agreement B) uni-lateral agreement C) expressed contract D) none of the above -correct answer ✅✅B) uni-lateral agreement A suit for specific performance is: A) to force the buyer not to default on the contract B) to force the seller not to default on the contract C) to force either the buyer or seller to perform on the terms of the contract D) is a lawsuit against the inspection company -correct answer ✅✅C) to force either the buyer or seller to perform on the terms of the contract All of the following acts on the part of a real estate broker would constitute steering and thus be prohibited under the Fair Housing Act EXCEPT: A) directing a prospective buyer of one minority group to work only with a salesperson of the same minority group and to look at areas dominated by that minority group B) directing a member of one minority group away from properties located in areas dominated by other races C) referring a member of one minority group to properties located only in areas dominated by members of the same group

D) directing a minority buyer to an expensive subdivision -correct answer ✅✅D) directing a minority buyer to an expensive subdivision An agent is on his way to make a presentation to his client, the seller on an offer he had received earlier that day. The agent is involved in a car accident while an unlicensed assistant is also in the car with him. The agent is taken to the hospital while the assistant is unharmed. What should the assistant do? A) Make the presentation himself B) Call the agent's broker so she can make the presentation C) Just go back to the office and let the agent deal with it at a later date D) Discuss the offer with the seller over the phone -correct answer ✅✅B) Call the agent's broker so she can make the presentation An instrument conveying title to real property which guarantees title is good and promises to forever defend that title is: A) a policy of title insuarance B) an abstract of title C) a deed of trust D) a general warranty deed -correct answer ✅✅D) a general warranty deed An instrument which guarantees against defects in title and conveys title is: A) a policy of title insurance B) chain of title C) warranty deed

D) deed of trust -correct answer ✅✅not D An oral contract for the sale of real estate is: A) illegal B) unenforceable C) valid for property of loan value D) enforceable if witnessed -correct answer ✅✅B) unenforceable An owner died one month after signing a 6-month exclusive right- to-sell listing. The day after his death, the listing agent procured a buyer for the full list price. The administrator of the owner's estate does not wish to sell. Which of the following is a true statement? A) the buyer can obtain specific performance B) the listing broker has earned a commission C) the listing broker can obtain specific performance D) the administrator need not sell nor is he or she liable for a commission -correct answer ✅✅D) the administrator need not sell nor is he or she liable for a commission By agreement, one party to a contract was discharged and another party took her place, an act known as: A) recission B) reformation C) novation D) accord and satisfaction -correct answer ✅✅C) novation

Consideration to bind a contract may be in the form of: A) cash or cash equivalent only B) anything that the parties agree upon as long as it has monetary value C) money, promises, or services D) thoughtful treatment of the other party's feelings -correct answer ✅✅C) money, promises, or services If a contract is not in writing, it is: A) void B) voidable C) unenforceable D) invalid -correct answer ✅✅C) unenforceable If a listing contract ends with the sale of the property, which of the following true? A) an implied agency relationship exists for a period of time B) both principals must agree that the agency relationship has ended C) the agency relationship of the seller and the listing broker continues until one of the parties formally terminates it D) the agency relationship of the seller and the listing broker ends at this time -correct answer ✅✅... If an agent does not let the buyer know that he should get a title policy or an abstract, what can occur? A) $1000 fine

B) hold back commissions C) buyers cannot move into the house until everything is settled D) it precludes the payment of or recovery of any commission to be paid on the sale -correct answer ✅✅D) it precludes the payment of or recovery of any commission to be paid on the sale In the deed, the clause which sets forth the extent of the title being conveyed is: A) hereditaments B) the demising clause C) the indenture clause D) the habendum clause -correct answer ✅✅D) the habendum clause Is it legal for the listing broker to assign the listing agreement to another broker? A) yes B) only if the agent who took the listing gives written permission C) the listing must be an "exclusive agency" listing D) no -correct answer ✅✅Not B Listing contracts obtained by a real estate salesman are considered to be: A) the salesman's own property B) his personal property C) the property of the employing broker

D) negotiable instrument -correct answer ✅✅C) the property of the employing broker Mary White and Elizabeth Brown, widowed sisters, are buying a home together. To ensure that if one dies her share will go to her children, they should purchase the property as A) tenants by the entirety B) tenants in common C) joint tenants with right of survivorship D) tenants in severalty -correct answer ✅✅B) tenants in common Of the following, the largest estate or ownership in real property is: A) estate at sufferance B) estate at will C) life estate D) fee simple estate -correct answer ✅✅D) fee simple estate Texas Property Code requires disclosure of which of the following in the "Seller's Disclosure"? A) accidental death related to the condition of the property B) self-inflicted gun shot resulting in death C) previous occupant had HIV related illness D) all of the above -correct answer ✅✅A) accidental death related to the condition of the property

The "Seller's Disclosure of Property Condition" must be delivered to the buyer in all of the following transactions EXCEPT: A) for the sale of commercial property B) if the seller has not resided on the property in the last year C) when the seller is not assisted by a licensed real estate agent D) if the buyer has lived on the property as a tenant -correct answer ✅✅not C The agent has a fiduciary relationship that includes duties of: A) accounting, care, loyalty and obedience B) satisfaction, enlightenment and care C) seriousness, loyalty and understanding D) professionalism, integrity and competancy -correct answer ✅✅A) accounting, care, loyalty and obedience The contract in which an owner promises to pay compensation to a broker for providing a buyer but the owner is free to enter into the same arrangement with other brokers is a known as: A) a net listing B) an open listing C) an exclusive right-to-sell D) a contract of sale and bargain -correct answer ✅✅B) an open listing The deed that provides the buyer the greatest protection is the: A) bargain and sale deed B) general warranty deed

C) quitclaim deed D) specialty warranty deed -correct answer ✅✅B) general warranty deed The One-to-Four Family Residential Contracts states: A) only the buyer needs to sign the contract B) licensees cannot give legal advice C) no more than four people may live on the property D) it may be used for condominiums -correct answer ✅✅B) licensees cannot give legal advice The seller and buyer enter into an oral contract and a written contract concerning the same property. Which contracts will prevail in court? A) written contract B) oral contract C) the contract offering the highest price for the property D) the contract offering the lowest price for the property -correct answer ✅✅A) written contract The seller received an offer last evening and is considering how to respond to it. While the seller is still thinking about the first offer, another offer is given to the listing agent. What should the listing agent do? A) present the second offer immediately B) hold the second offer until the seller makes a decision about the first offer

C) call the agent who brought the first offer and tell her about the second offer D) tell the seller that he needs to hurry up and make a decision about the offer he has in his possession -correct answer ✅✅A) present the second offer immediately The term "right of survivorship" is closely associated with: A) joint tenancy B) tenancy in common C) a trust D) a corporation -correct answer ✅✅A) joint tenancy The Texas Property Code states all of the following are exempted from "Seller's Disclosure" EXCEPT: A) from one co-owner to another co-owner B) between spouses in a divorce C) an elderly seller and an elderly buyer D) all are required to provide seller's disclosure -correct answer ✅✅C) an elderly seller and an elderly buyer The Texas Real Estate Commission Broker-Lawyer Committee consists of: A) Six lawyers appointed by the state bar association, six brokers appointed by TREC and a private citizen appointed by the governor. B) Six brokers and one private citizen appointed by the governor and approved by TREC.

C) Six brokers and six lawyers appointed by TREC and a private citizen appointed by the governor. D) Six brokers, six lawyers and a private citizen appointed by the governor and approved by TREC -correct answer ✅✅A) Six lawyers appointed by the state bar association, six brokers appointed by TREC and a private citizen appointed by the governor. The type of listing agreement that is often used to eliminate most procuring cause controversies is: A) an open listing B) an exclusive right to sell C) an exclusive agency listing D) a net listing -correct answer ✅✅B) an exclusive right to sell Title of real property transfers at the time the deed is: A) signed B) delivered C) certified D) revoked -correct answer ✅✅B) delivered To be valid, a listing agreement must: A) have a termination date B) be signed by the buyer C) be for at least six months D) have an automatic rollover at the expiration date -correct answer ✅✅A) have a termination date

What course is available when a broker and a salesperson have a dispute over the commission split on a transaction? A) filing a joint complaint with TREC B) filing individual complaints with TREC C) seeking mediation, arbitration, or civil court action D) complaining to the seller's attorney -correct answer ✅✅C) seeking mediation, arbitration, or civil court action What is it called when a buyer makes an offer on a property and the seller changes a few of the terms before signing and returning it to the buyer? A) conditional acceptance B) rejection C) counteroffer D) there is no term for this situation -correct answer ✅✅C) counteroffer What is the name of the organization that was created to promote and encourage understanding between brokers and lawyers? A) The Texas Association of Realtors B) The Texas Real Estate Commission C) The Texas State Bar D) The Broker-Lawyer Committee -correct answer ✅✅D) The Broker- Lawyer Committee

When a grantor warrants that he/she is the owner of the property and has the right to convey title to it best describes: A) reciprocity B) covenant of seisin C) deed of trust D) tenancy in common -correct answer ✅✅B) covenant of seisin When one of the parties of a contract may legally reject it, the contract is said to be: A) voidable B) void C) unenforceable D) valid -correct answer ✅✅A) voidable When two people have signed a real estate contract, what interest does the purchaser have? A) equitable title B) clear title C) contract conveys no interest D) defeasance title -correct answer ✅✅A) equitable title Whenever fraud, misrepresentation or duress can be proven, the contract becomes: A) implied B) indefeasible C) void

D) voidable -correct answer ✅✅not C Which act constitutes the practice of law by a real estate licensee who is not a member of the State Bar? B) adding a provision to the promulgated contract form making the closing contingent upon the sale of another property C) counseling a prospect on the most favorable terms obtained on a loan D) advising a purchaser to seek assurance of the quality of title conveyed in a transaction -correct answer ✅✅A) examining an abstract of title and providing an opinion of authenticity Which agency consists of two brokers and one client? A) Dual agency B) Sub agency C) Limited agency D) Special agency -correct answer ✅✅B) Sub agency Which form is required for use in Texas for listing a property for sale? A) The TREC promulgated listing agreement B) The Texas Association of Realtors listing agreement C) Any form may be used with the agreement of both parties D) The form required by the broker listing the property -correct answer ✅✅B) The Texas Association of Realtors listing agreement

Which listing is a non-exclusive agreement that lets the owner sell the property by themselves? A) Open listing B) Net listing C) Exclusive Agency listing D) Exclusive Right To Sell listing -correct answer ✅✅A) Open listing Which of the following is NOT an objective or function of the Broker- Lawyer Committee? A) Promote and encourage understanding between lawyers and brokers B) To consider controversies between brokers and lawyers and, if necessary to refer such matters to the Commission of the State Bar C) To educate the public in the correct form to use for their transaction and the proper method for completing the form D) To draft and revise uniform types of standard forms -correct answer ✅✅C) To educate the public in the correct form to use for their transaction and the proper method for completing the form Which of the following is NOT required by RESPA? A) annual percentage rate B) provide the HUD-I settlement statement to the buyer C) disclose to the buyer the settlement cost D) disclose the tax and insurance reserves -correct answer ✅✅D) disclose the tax and insurance reserves

Which one of the following instruments does NOT transfer an interest in real estate? A) option B) lease C) bill of sale D) agreement of sale -correct answer ✅✅C) bill of sale Who does NOT have to use the TREC promulgated forms? A) a person who has a lease for less than one year and in which the rent is over $ B) people who are required to use federal forms, attorneys and property owners C) no one is required to use them, but it is highly reccommended D) a licensed salesman who sells raw land -correct answer ✅✅B) people who are required to use federal forms, attorneys and property owners Whose signature is required on a deed? A) grantor B) grantee C) trustee D) legatee -correct answer ✅✅A) grantor