351 Promulgated Contract Forms
Certification Exam Prep | Complete
Study Guide | 2026/2027
A contract is described as:
A. Mutually binding
B. Legally enforceable
C. An agreement between two or more parties to do or not do something.
D. All of the above - correct answer-D. All of the above
A contract is an agreement between two or more parties to do or not do
something. It is mutually binding and legally enforceable.
In a real estate transaction, the legal description is NOT:
A. Lot and block
B. Metes and bounds
C. A street address
D. A description of the property from a surveyor's field note - correct answer-C. A
street address
,The legal descriptions in Texas are: Lot and block and metes and bounds
(sometimes also called surveyor's field notes). A street address is NOT a legal
description.
Earnest money:
A. Constitutes the consideration
B. Is used to make the offer more enticing to the seller
C. Is required in the contract
D. Always equals 1% of the sales price - correct answer-B. Is used to make the
offer more enticing to the seller
Is used to make the offer more enticing to the seller. Earnest money is a gesture
of good faith and is used to make the offer more enticing to the seller. It can be
any amount that the Buyer wishes to offer, and the Seller is willing to accept.
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-B. A principal in
the transaction requests a different form to be used.
Standard TREC forms must be used in real estate transactions. However, a
principal in the transaction can request a different form be used. A principal is
considered to be either Buyer, Seller, Landlord, or Tenant. Builders (as Sellers)
typically use their own contract forms.
, 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. Using the Amendment
C. On the Third-Party Financing Addendum
D. On a real estate change form - correct answer-B. Using the Amendment
Once a contract has been signed and agreed to by all parties, and receipted by the
escrow agent, any and all changes must be done using an Amendment. The
original contract stays with the escrow agent.
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
Time is of the essence refers to any specific time that is inherent in the contract -
i.e., number of days in an option period or the specific closing date written into
the contract.
Once a contract is finalized and receipted:
A. It cannot be changed.
B. It can be amended only one time.
Certification Exam Prep | Complete
Study Guide | 2026/2027
A contract is described as:
A. Mutually binding
B. Legally enforceable
C. An agreement between two or more parties to do or not do something.
D. All of the above - correct answer-D. All of the above
A contract is an agreement between two or more parties to do or not do
something. It is mutually binding and legally enforceable.
In a real estate transaction, the legal description is NOT:
A. Lot and block
B. Metes and bounds
C. A street address
D. A description of the property from a surveyor's field note - correct answer-C. A
street address
,The legal descriptions in Texas are: Lot and block and metes and bounds
(sometimes also called surveyor's field notes). A street address is NOT a legal
description.
Earnest money:
A. Constitutes the consideration
B. Is used to make the offer more enticing to the seller
C. Is required in the contract
D. Always equals 1% of the sales price - correct answer-B. Is used to make the
offer more enticing to the seller
Is used to make the offer more enticing to the seller. Earnest money is a gesture
of good faith and is used to make the offer more enticing to the seller. It can be
any amount that the Buyer wishes to offer, and the Seller is willing to accept.
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-B. A principal in
the transaction requests a different form to be used.
Standard TREC forms must be used in real estate transactions. However, a
principal in the transaction can request a different form be used. A principal is
considered to be either Buyer, Seller, Landlord, or Tenant. Builders (as Sellers)
typically use their own contract forms.
, 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. Using the Amendment
C. On the Third-Party Financing Addendum
D. On a real estate change form - correct answer-B. Using the Amendment
Once a contract has been signed and agreed to by all parties, and receipted by the
escrow agent, any and all changes must be done using an Amendment. The
original contract stays with the escrow agent.
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
Time is of the essence refers to any specific time that is inherent in the contract -
i.e., number of days in an option period or the specific closing date written into
the contract.
Once a contract is finalized and receipted:
A. It cannot be changed.
B. It can be amended only one time.
