PROMULGATED CONTRACTS UPDATED COMPREHENSIVE
EXAM QUESTIONS AND ANSWERS GUARANTEE A+
✔✔house flipping - ✔✔a mortgage fraud scheme that involves an inflated appraisal and
a straw buyer
✔✔legally competent - ✔✔when a party can legally sign a binding contract; they have
the age of majority and have not been declared mentally incompetent by a judge
✔✔loan-to-value ratio - ✔✔the amount of money being loaned compared to the value of
the property
✔✔mortgagee title policy - ✔✔a title insurance policy that protects the lender's interests
in the property should a problem with the title arise
✔✔novation - ✔✔a mutual agreement of the parties to replace an existing contract with
a new one
✔✔occupancy standards - ✔✔rules about the maximum number of people that are
allowed to live together in a single dwelling
✔✔offer - ✔✔a proposition made by an offeror to an offeree to agree to the terms of a
binding contract; becomes a contract upon acceptance
✔✔option money - ✔✔a payment that the prospective buyer makes to the seller in
exchange for the exclusive option to terminate the sales contract within a specified
period of time (known as the "option period") without penalty; also known as the option
fee
✔✔option period - ✔✔the window of time during which a buyer can opt out of a contract
without penalty; a right that is purchased by the buyer
✔✔performance - ✔✔the fulfillment of an obligation, duty, or contract
✔✔predatory lending - ✔✔imposing unfair and abusive loan terms on borrowers
✔✔promulgated contracts - ✔✔contracts prepared and authorized by the Texas Real
Estate Commission that must be used by real estate license holders; there are a few
exceptions to this rule
✔✔quitclaim deed - ✔✔a type of deed that conveys any interest, title, or right to a parcel
of land the grantor has at the time the deed is executed
EXAM QUESTIONS AND ANSWERS GUARANTEE A+
✔✔house flipping - ✔✔a mortgage fraud scheme that involves an inflated appraisal and
a straw buyer
✔✔legally competent - ✔✔when a party can legally sign a binding contract; they have
the age of majority and have not been declared mentally incompetent by a judge
✔✔loan-to-value ratio - ✔✔the amount of money being loaned compared to the value of
the property
✔✔mortgagee title policy - ✔✔a title insurance policy that protects the lender's interests
in the property should a problem with the title arise
✔✔novation - ✔✔a mutual agreement of the parties to replace an existing contract with
a new one
✔✔occupancy standards - ✔✔rules about the maximum number of people that are
allowed to live together in a single dwelling
✔✔offer - ✔✔a proposition made by an offeror to an offeree to agree to the terms of a
binding contract; becomes a contract upon acceptance
✔✔option money - ✔✔a payment that the prospective buyer makes to the seller in
exchange for the exclusive option to terminate the sales contract within a specified
period of time (known as the "option period") without penalty; also known as the option
fee
✔✔option period - ✔✔the window of time during which a buyer can opt out of a contract
without penalty; a right that is purchased by the buyer
✔✔performance - ✔✔the fulfillment of an obligation, duty, or contract
✔✔predatory lending - ✔✔imposing unfair and abusive loan terms on borrowers
✔✔promulgated contracts - ✔✔contracts prepared and authorized by the Texas Real
Estate Commission that must be used by real estate license holders; there are a few
exceptions to this rule
✔✔quitclaim deed - ✔✔a type of deed that conveys any interest, title, or right to a parcel
of land the grantor has at the time the deed is executed
