PROMULGATED CONTRACTS UPDATED EXAM GUIDE
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔If a seller wants to restore their entitlement, the VA is not obligated to approve
restoration, the seller must pay for fees associated with release and/or restoration, and:
the buyer must be active military personnel
the buyer must be an eligible veteran/qualified buyer
the seller is ineligible if they have missed more than two consecutive loan payments
the buyer must agree to a higher sales price to offset the entitlement - ✔✔the buyer
must be an eligible veteran/qualified buyer
✔✔Under the Addendum for Release of Liability on an Assumed Loan and/or
Restoration of Seller's VA Entitlement, what happens if the parties cannot obtain the
release by the closing date?
The parties agree they will close anyway.
The parties either agree to close anyway OR agree to terminate the contract, refunding
earnest money to the buyer.
The contract terminates and the earnest money is refunded to the buyer.
The parties split the earnest money. - ✔✔The parties either agree to close anyway OR
agree to terminate the contract, refunding earnest money to the buyer.
✔✔Which of the following is TRUE of VA loans?
The veteran is held liable if the person who assumed the loan after purchase defaults
on it.
A veteran will receive an automatic release of liability after the property is sold.
A veteran can use the VA program again only when the original loan is paid off.
VA loans are available to everyone. - ✔✔The veteran is held liable if the person who
assumed the loan after purchase defaults on it.
✔✔The amount of earnest money to be paid in a transaction is agreed upon by:
the lending institute
the two brokers
the appraiser
the seller and the buyer - ✔✔the seller and the buyer
✔✔A real estate transaction fail to close, and the parties can't agree on who keeps the
earnest money. As the buyer's agent, what should you do?
Send an email to the lender.
Call the seller.
Send a written demand to the title company.
Call the escrow agent. - ✔✔Send a written demand to the title company.
✔✔Compare option money and earnest money.
Both earnest money and option money are often refundable.
Earnest money is often refundable, whereas option money is never refundable.
, Option money is often refundable, whereas earnest money is never refundable.
Neither earnest money nor option money are refundable. - ✔✔Earnest money is often
refundable, whereas option money is never refundable.
✔✔If an item is listed as an exception to the title policy, it means:
That item is protected somewhere else.
That item is protected under the title policy.
That item is NOT protected under the title policy.
There are no exclusions to the title policy. - ✔✔That item is NOT protected under the
title policy.
✔✔According to the TREC contract, the buyer will receive a copy of the restrictive
covenants at whose expense?
lender's
title company's
seller's
buyer's - ✔✔buyer's
✔✔The buyer should review the restrictive covenants because they determine:
if the taxes are current
how many bedrooms the home must have
how the property can or cannot be used
if there are liens on the property - ✔✔how the property can or cannot be used
✔✔A buyer and seller agreed in negotiations that the seller would furnish the existing
survey. When an existing survey is being used, the TREC contract also requires a seller
to furnish a:
mortgagee title policy
title policy endorsement
Residential Real Property Affidavit
title insurance amendment - ✔✔Residential Real Property Affidavit
✔✔If the seller furnishes the existing survey to the buyer, but it is not acceptable to the
buyer's lender, the cost of a new survey will be at whose expense?
the lender
the buyer
the seller
the party chosen through negotiation - ✔✔the party chosen through negotiation
✔✔A buyer is making an offer on a property, which she plans to use as a single-family
residence. But when the title commitment comes back, she and her agent learn that the
property is zoned for commercial use only. Fortunately, though, the buyer is able to get
out of the contract and get her earnest money back. Why?
The buyer's agent had listed "single-family residence" in Paragraph 6D as a valid
objection.
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔If a seller wants to restore their entitlement, the VA is not obligated to approve
restoration, the seller must pay for fees associated with release and/or restoration, and:
the buyer must be active military personnel
the buyer must be an eligible veteran/qualified buyer
the seller is ineligible if they have missed more than two consecutive loan payments
the buyer must agree to a higher sales price to offset the entitlement - ✔✔the buyer
must be an eligible veteran/qualified buyer
✔✔Under the Addendum for Release of Liability on an Assumed Loan and/or
Restoration of Seller's VA Entitlement, what happens if the parties cannot obtain the
release by the closing date?
The parties agree they will close anyway.
The parties either agree to close anyway OR agree to terminate the contract, refunding
earnest money to the buyer.
The contract terminates and the earnest money is refunded to the buyer.
The parties split the earnest money. - ✔✔The parties either agree to close anyway OR
agree to terminate the contract, refunding earnest money to the buyer.
✔✔Which of the following is TRUE of VA loans?
The veteran is held liable if the person who assumed the loan after purchase defaults
on it.
A veteran will receive an automatic release of liability after the property is sold.
A veteran can use the VA program again only when the original loan is paid off.
VA loans are available to everyone. - ✔✔The veteran is held liable if the person who
assumed the loan after purchase defaults on it.
✔✔The amount of earnest money to be paid in a transaction is agreed upon by:
the lending institute
the two brokers
the appraiser
the seller and the buyer - ✔✔the seller and the buyer
✔✔A real estate transaction fail to close, and the parties can't agree on who keeps the
earnest money. As the buyer's agent, what should you do?
Send an email to the lender.
Call the seller.
Send a written demand to the title company.
Call the escrow agent. - ✔✔Send a written demand to the title company.
✔✔Compare option money and earnest money.
Both earnest money and option money are often refundable.
Earnest money is often refundable, whereas option money is never refundable.
, Option money is often refundable, whereas earnest money is never refundable.
Neither earnest money nor option money are refundable. - ✔✔Earnest money is often
refundable, whereas option money is never refundable.
✔✔If an item is listed as an exception to the title policy, it means:
That item is protected somewhere else.
That item is protected under the title policy.
That item is NOT protected under the title policy.
There are no exclusions to the title policy. - ✔✔That item is NOT protected under the
title policy.
✔✔According to the TREC contract, the buyer will receive a copy of the restrictive
covenants at whose expense?
lender's
title company's
seller's
buyer's - ✔✔buyer's
✔✔The buyer should review the restrictive covenants because they determine:
if the taxes are current
how many bedrooms the home must have
how the property can or cannot be used
if there are liens on the property - ✔✔how the property can or cannot be used
✔✔A buyer and seller agreed in negotiations that the seller would furnish the existing
survey. When an existing survey is being used, the TREC contract also requires a seller
to furnish a:
mortgagee title policy
title policy endorsement
Residential Real Property Affidavit
title insurance amendment - ✔✔Residential Real Property Affidavit
✔✔If the seller furnishes the existing survey to the buyer, but it is not acceptable to the
buyer's lender, the cost of a new survey will be at whose expense?
the lender
the buyer
the seller
the party chosen through negotiation - ✔✔the party chosen through negotiation
✔✔A buyer is making an offer on a property, which she plans to use as a single-family
residence. But when the title commitment comes back, she and her agent learn that the
property is zoned for commercial use only. Fortunately, though, the buyer is able to get
out of the contract and get her earnest money back. Why?
The buyer's agent had listed "single-family residence" in Paragraph 6D as a valid
objection.
