TREBS Exam 4 Questions and
Answers21
Where is the law of agency defined?
A. TREC
B. The state constitution
C. National Association of REALTORS®
D. TRELA
Rationale: The correct answer is D. The law of agency is defined in the Texas Real Estate License
Act (TRELA), the governing body for real estate agency that is administered by the Texas Real
Estate Commission. - ANSWERS-
A property whose ownership rights is vested with several owners is called a:
A. Co-operative
B. Townhome
C. Timeshare
D. Condominium
Rationale: The correct answer is C. The use of the singular "property" is a clue to the correct
answer as timeshares are a single unit, often in a vacation property, where the owners have
certain periods that their ownership allows residency, so many owners will own the property to
use during their separate, specified period. - ANSWERS-
When should Information About Brokerage Services be discussed?
A. At first "face-to-face" meeting
B. At the open house
C. At first substantive dialogue about a specific property
,D. At the time an offer is written
Rationale: The correct answer is C. The IABS or Information About Brokerage Services, which
explains the roles Brokers and agents have in real estate transactions, should be presented and
discussed "at the first substantive dialogue" about specific property to protect the buyer in
knowing who the agent represents in a possible future transaction. - ANSWERS-
Duress or undue influence creates what kind of contract?
A. Valid
B. Voidable
C. Unenforceable
D. Void
Rationale: The correct answer is B. A contract is voidable if one of the principles was under
undue influence or duress during the contract process. - ANSWERS-
For a sum of money negotiated between the parties, the buyer has a time period, stated in this
paragraph, for the "unrestricted right" to terminate. Which paragraph does this reference? :
A. Sales price paragraph
B. Earnest money paragraph
C. Option money paragraph
D. Repairs escrow paragraph - ANSWERS-C. Option money paragraph
With regard to common mistakes on contracts, it is recommended that the seller's name be
used on the contract as it is named in the ____________.
A. Deed
B. Previous contract when they bought the house.
C. Survey
D. Mortgagee's title policy
, Rationale: The correct answer is A. The deed is the document of ownership, so the deed is the
best source for the owner's name that intends to transfer ownership to the buyer. - ANSWERS-
In an S Corporation, the earnings of the shareholders are __________.
A. Deferred
B. Taxed
C. Automatically put into a tax free IRA
D. Shifted to an C Corporation if there are profits in the S Corporation
Rationale: The correct answer is B. In an S Corporation, the earnings of the shareholders are
taxed, each at their own individual rate depending on their individual incomes. - ANSWERS-
TREC exists to protect:
A. Real estate agents
B. The citizens of Texas
C. Real estate brokers
D. Lenders, appraisers, and all licensees - ANSWERS-B. The citizens of Texas
What is the law that established the Texas Real Estate Commission?
A. TREC
B. TRELA
C. TAR
D. TCEQ
Rationale: The correct answer is B. TRELA (or The Texas Real Estate License Act) required
someone to administer it which created the need for the Texas Real Estate Commission. -
ANSWERS-
Answers21
Where is the law of agency defined?
A. TREC
B. The state constitution
C. National Association of REALTORS®
D. TRELA
Rationale: The correct answer is D. The law of agency is defined in the Texas Real Estate License
Act (TRELA), the governing body for real estate agency that is administered by the Texas Real
Estate Commission. - ANSWERS-
A property whose ownership rights is vested with several owners is called a:
A. Co-operative
B. Townhome
C. Timeshare
D. Condominium
Rationale: The correct answer is C. The use of the singular "property" is a clue to the correct
answer as timeshares are a single unit, often in a vacation property, where the owners have
certain periods that their ownership allows residency, so many owners will own the property to
use during their separate, specified period. - ANSWERS-
When should Information About Brokerage Services be discussed?
A. At first "face-to-face" meeting
B. At the open house
C. At first substantive dialogue about a specific property
,D. At the time an offer is written
Rationale: The correct answer is C. The IABS or Information About Brokerage Services, which
explains the roles Brokers and agents have in real estate transactions, should be presented and
discussed "at the first substantive dialogue" about specific property to protect the buyer in
knowing who the agent represents in a possible future transaction. - ANSWERS-
Duress or undue influence creates what kind of contract?
A. Valid
B. Voidable
C. Unenforceable
D. Void
Rationale: The correct answer is B. A contract is voidable if one of the principles was under
undue influence or duress during the contract process. - ANSWERS-
For a sum of money negotiated between the parties, the buyer has a time period, stated in this
paragraph, for the "unrestricted right" to terminate. Which paragraph does this reference? :
A. Sales price paragraph
B. Earnest money paragraph
C. Option money paragraph
D. Repairs escrow paragraph - ANSWERS-C. Option money paragraph
With regard to common mistakes on contracts, it is recommended that the seller's name be
used on the contract as it is named in the ____________.
A. Deed
B. Previous contract when they bought the house.
C. Survey
D. Mortgagee's title policy
, Rationale: The correct answer is A. The deed is the document of ownership, so the deed is the
best source for the owner's name that intends to transfer ownership to the buyer. - ANSWERS-
In an S Corporation, the earnings of the shareholders are __________.
A. Deferred
B. Taxed
C. Automatically put into a tax free IRA
D. Shifted to an C Corporation if there are profits in the S Corporation
Rationale: The correct answer is B. In an S Corporation, the earnings of the shareholders are
taxed, each at their own individual rate depending on their individual incomes. - ANSWERS-
TREC exists to protect:
A. Real estate agents
B. The citizens of Texas
C. Real estate brokers
D. Lenders, appraisers, and all licensees - ANSWERS-B. The citizens of Texas
What is the law that established the Texas Real Estate Commission?
A. TREC
B. TRELA
C. TAR
D. TCEQ
Rationale: The correct answer is B. TRELA (or The Texas Real Estate License Act) required
someone to administer it which created the need for the Texas Real Estate Commission. -
ANSWERS-
