Promulgated Contract Forms: Final
UPDATED ACTUAL Exam Questions and
CORRECT Answers
When earnest money is deposited with an escrow agent, the escrow agent: - CORRECT
ANSWER - A) Is not responsible for the performance of any signatory B) Has the right to
secure written release of all signatories C) Is not liable for interest on the money
How does the Texas Real Estate License Act define the first face-to-face meeting with required
agency disclosure? - CORRECT ANSWER - When a substantive dialogue about a specific
real property occurs
If a property was built before 1978, what specific addendum is required? - CORRECT
ANSWER - Disclosure of Lead-Base Paint Addendum
The Buyer's Agency Agreement allows an agent to show the same properties to competing
clients - CORRECT ANSWER - true
The Third Party Financing Condition Addendum is not used with - CORRECT ANSWER -
Seller financing
The Texas Real Estate Commission (TREC) promulgates an addendum to be used in a short sale.
This Short Sale Addendum is to be signed by: - CORRECT ANSWER - Buyer and seller
In Paragraph #14 of the Residential Contract (casualty loss), If a seller cannot complete the
repairs within the time limit, the buyer has the option of: - CORRECT ANSWER -
Terminating the contract
In Paragraph 3B of the sales contract, the "sum of all financing" - CORRECT ANSWER -
Excludes any loan funding fee or mortgage insurance premium
, The TREC promulgated 1-4 Family Residential Contract (resale) states that if the cost of lender
required repairs and treatment exceed _______% of the sales price, buyer may terminate the
contract and the earnest money will be refunded to the buyer. - CORRECT ANSWER - 5%
The financing paragraph will be used to indicate: - CORRECT ANSWER - A) Third party
financing B) Assumption C) Seller financing
If a Seller is to remain in the property after closing: - CORRECT ANSWER - D) A Seller's
Temporary Lease Form promulgated by TREC should be completed and signed by buyer and
seller and attached to the contract. -
Your buyers have signed a contract to buy a new home. The contract is subject to the sale of their
present home. This is called a: - CORRECT ANSWER - Contingency
In the event of buyer's default, the seller may: - CORRECT ANSWER - A) Terminate the
contract B) Receive the earnest money as liquidated damages C) Enforce specific performance
If there is an existing survey on the property, what does the seller take to the title company and
the lender? - CORRECT ANSWER - The existing survey and a notarized affidavit stating
if there have been any changes in the survey since the time the existing survey was completed -
Failure on the part of the broker/sales associate to advise the purchaser in writing to have an
abstract of title examined by an attorney or obtain a title insurance policy: - CORRECT
ANSWER - May be cause to have the agent's license suspended or revoked, and precludes
receiving any commissions or agreed fees associated with the sale.
Who is designated as responsible for promptly sending a copy of the contract to any attorneys
that are named in the contract? - CORRECT ANSWER - The broker
Intermediary requires: - CORRECT ANSWER - A) Disclosure of who represents whom in
a transaction B) Written agreement by both seller and buyer C) involvement of only one
company
UPDATED ACTUAL Exam Questions and
CORRECT Answers
When earnest money is deposited with an escrow agent, the escrow agent: - CORRECT
ANSWER - A) Is not responsible for the performance of any signatory B) Has the right to
secure written release of all signatories C) Is not liable for interest on the money
How does the Texas Real Estate License Act define the first face-to-face meeting with required
agency disclosure? - CORRECT ANSWER - When a substantive dialogue about a specific
real property occurs
If a property was built before 1978, what specific addendum is required? - CORRECT
ANSWER - Disclosure of Lead-Base Paint Addendum
The Buyer's Agency Agreement allows an agent to show the same properties to competing
clients - CORRECT ANSWER - true
The Third Party Financing Condition Addendum is not used with - CORRECT ANSWER -
Seller financing
The Texas Real Estate Commission (TREC) promulgates an addendum to be used in a short sale.
This Short Sale Addendum is to be signed by: - CORRECT ANSWER - Buyer and seller
In Paragraph #14 of the Residential Contract (casualty loss), If a seller cannot complete the
repairs within the time limit, the buyer has the option of: - CORRECT ANSWER -
Terminating the contract
In Paragraph 3B of the sales contract, the "sum of all financing" - CORRECT ANSWER -
Excludes any loan funding fee or mortgage insurance premium
, The TREC promulgated 1-4 Family Residential Contract (resale) states that if the cost of lender
required repairs and treatment exceed _______% of the sales price, buyer may terminate the
contract and the earnest money will be refunded to the buyer. - CORRECT ANSWER - 5%
The financing paragraph will be used to indicate: - CORRECT ANSWER - A) Third party
financing B) Assumption C) Seller financing
If a Seller is to remain in the property after closing: - CORRECT ANSWER - D) A Seller's
Temporary Lease Form promulgated by TREC should be completed and signed by buyer and
seller and attached to the contract. -
Your buyers have signed a contract to buy a new home. The contract is subject to the sale of their
present home. This is called a: - CORRECT ANSWER - Contingency
In the event of buyer's default, the seller may: - CORRECT ANSWER - A) Terminate the
contract B) Receive the earnest money as liquidated damages C) Enforce specific performance
If there is an existing survey on the property, what does the seller take to the title company and
the lender? - CORRECT ANSWER - The existing survey and a notarized affidavit stating
if there have been any changes in the survey since the time the existing survey was completed -
Failure on the part of the broker/sales associate to advise the purchaser in writing to have an
abstract of title examined by an attorney or obtain a title insurance policy: - CORRECT
ANSWER - May be cause to have the agent's license suspended or revoked, and precludes
receiving any commissions or agreed fees associated with the sale.
Who is designated as responsible for promptly sending a copy of the contract to any attorneys
that are named in the contract? - CORRECT ANSWER - The broker
Intermediary requires: - CORRECT ANSWER - A) Disclosure of who represents whom in
a transaction B) Written agreement by both seller and buyer C) involvement of only one
company
