Promulgated Contract Forms Final Exam

If a Buyer wants the Seller to pay some or all of their closing costs, it should be added to the contract in: A) Paragraph #11 (Special Provisions) B) Paragraph #12 - Seller participation in the Buyer's costs C) Third Part financing Addendum D) All of the above - correct answer B) Paragraph #12- Seller participation in the Buyer's costs If a Buyer chooses not to be represented by an agent, the Buyer must be made aware that any information they share can be communicated to the Seller. A) True B) False - correct answer A) True The sales price is determined in paragraph 3 by adding the down payment (3A) and the loan amount (3B). A) True B) False - correct answer A) True The Seller contracts to furnish the buyer an existing survey, but neglects to furnish an "affidavit' with the time specified. The lender requests a new survey be furnished. Who pays for the new survey? A) Whoever is stated in the contract if the existing survey is rejected B) The title company can approve the existing survey and override the lender C) The buyer D) The seller - correct answer D) The seller The Third Party Financing Condition Addendum is not used with: A) Conventional financing B) Seller financing C) FHA Financing D) VA Financing - correct answer B) Seller financing On the Seller's default, what should happen to the earnest money? A) It belongs to the Broker B) It should be returned to the Buyer C) It should be retained by the Seller D) The title company should keep it - correct answer B) It should be returned to the Buyer If the contract includes an option period for the buyer and the buyer does not tender the option fee to the Seller within the time limit (currently with 3 days from effective date of the contract) the Buyer no longer has an unrestricted right to terminate under the option. A) True B) False - correct answer A) True Fraud is: A) A crime B) A civil law violation C) Both a & b D) Only b - correct answer C) Both a & b When a "fixture" in a property does not remain for the buyer, how do we inform the buyer of that fact and make sure the item does not convey with the property? A) List the item as not included in the listing Agreement B) List the item on the "Seller's Disclosure Notice" C) List the item on the "Residential Contract" D) List the item on the "Amendment" form - correct answer C) List the item on the "Residential Contract" Paragraph 23 "termination option" of the TREC 1-4 Family Residential Contract: A) Binds the seller to complete the repairs needed B) Requires option money that is refundable if the buyer does not buy C) Requires a fee for a specified period of time D) Allows the buyer to get his option fee back if he is disqualified for the loan - correct answer C) Requires a fee for a specified period of time 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 the 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 the seller to perform on the terms of the contract How does the Texas Real Estate License Act define the first face-to-face meeting with required agency disclosure? A) When a licensee first meets a prospect B) When a prospect is ready to sign an agreement C) Only when a specific property is being shown D) When a substantive dialogue about a specific real property occurs - correct answer D) When a substantive dialogue about a specific real property occurs Brokers fees are included in the 1-4 Family Residential Contract (resale) between the Buyer and the Seller. A) True B) False - correct answer B) False Standard forms of TREC must be used unless: A) A broker or salesperson wishes to use a different form B) A principal in the transaction requests a different form to be used C) The listing broker disagrees with certain language in the contract D) A lender requires a different form to be used - correct answer Wrong A) A broker or salesperson wishes to use a different form wrong D) A lender requires a different form to be used According to the TREC 1-4 Residential Contract (Resale), who is responsible for paying the owner policy of title insurance fee? A) The buyer B) The seller C) The title company named in the contract D) The party stipulated in the contract - correct answer D) The party stipulated in the contract The Information About Brokerage Services (IBS) states the broker may represent the: A) Owner B) Buyer C) Both owner and buyer as intermediary D) All of the above - correct answer Wrong C) Both owner and buyer as intermediary What is the status of a contract if the seller does not make the buyer aware of a property being located with a municipal utility district? A) Voidable by the buyer B) Void C) Voidable by the seller D) Voidable by the buyer or the seller - correct answer A) Voidable by the buyer A contract is described as an agreement between two or more parties to do or not do something. A) True B) False - correct answer A) True Any changes to the original contract once it is finalized and receipted must be done: A) At the title company on the original contract B) On an amendment C) On the 3rd Party Financing Addendum D) On a real estate change form - correct answer B) On an amendment A TREC promulgated (declaration)Farm and Ranch contract can include: A) Buildings B) Crops C) Equipment D) All of the above - correct answer D) All of the above What must a Buyer's Representation Agreement have? A) Fair Housing disclosure B) An attachment from a mortgage company regarding buyer's qualifications for a loan C) A termination date D) none of the above - correct answer C) A termination date Who is designated as responsible for promptly sending a copy of the contract to any attorneys that are named in the contract? A) The title company B) The lender C) The broker D) The buyer - correct answer C) The broker According to the Real Estate License Act of Texas, which one of the following actions is a fair and impartial act for an Intermediary? A) Appointing associated licensees to work with the parties B) Appointing subagents to work with the parties C) Agreeing to represent only the owner D) Agreeing to represent only the buyer - correct answer A) Appointing associated licensees to work with the parties When electing to use the option paragraph of the contract, the buyer may, within the time specified in the paragraph, do any of the following EXCEPT: A) Complete the repairs himself before the end of the option period B) Terminate the contract C) Do nothing and proceed to closing D) Amend the contract waiving the right to terminate - correct answer A) Complete the repairs himself before the end of the option period A Buyer/Tenant Representation Agreement is only available through the Texas Real Estate Commission (TREC) A) True B) False - correct answer B) False The financing paragraph will be used to indicate: A) Third party financing B) Assumption C) Seller financing D) Any of the above - correct answer D) Any of the above Time is of the essence means that certain items in the contract must be performed: A) As specified in the contract B) As verbally agreed between buyer and seller C) As verbally agreed between the sales agents representing buyers and sellers D) None of the above - correct answer A) As specified in the contract The Seller as well as the Buyer has the unrestricted right to terminate the contract under the option period. A) True B) False - correct answer B) False A voluntary dispute resolution is called litigation A) True