TEXAS PROMULGATED CONTRACTS 2026 SET EXAM
QUESTIONS AND ANSWERS SURE A+
✔✔Suppose a buyer was willing to offer a seller $285,000 on a property with a first lien
of $200,000 and a second lien of $60,000, with $25,000 as a down payment. What
would the licensee put in paragraph 3.B of the TREC One to Four Family Residential
Contract (Resale)? - ✔✔$260,000
✔✔Who is a "third party" to a contract? - ✔✔Anyone listed on the contract that is not the
buyer or seller
✔✔How should a licensee fill out a TREC One to Four Family Residential Contract
(Resale) if the seller is willing to finance the transaction for the buyer? - ✔✔Use
paragraph 3.B and check the appropriate box for Seller Financing Addendum.
✔✔Which addendum spells out the details of the loan and will be included on almost all
contracts? - ✔✔Third Party Financing Addendum
✔✔Using a TREC promulgated purchase agreement, who is required to pay for the title
insurance? - ✔✔It's negotiable
✔✔Which of the following is true? - ✔✔A seller that has agreed to pay for both the
owner's and buyer's title policy can require a buyer to use a specific title company.
✔✔What is the difference between a title policy and a title commitment? - ✔✔A title
commitment is issued prior to closing to describe the items on the title policy which will
be issued after closing.
✔✔What is a disclosure statement by the seller that states no changes have been made
on the property that could affect the survey? - ✔✔T-47 Affidavit
, ✔✔What is the fee that is charged every time a property changes hands? - ✔✔Transfer
fee
✔✔The seller must allow the buyer the right to have the property inspected during which
times? - ✔✔Reasonable times
✔✔According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL
CONTRACT (RESALE), who is responsible for having the utilities turned on? -
✔✔Seller
✔✔A lead-based paint notification is required on all properties built prior to what year? -
✔✔1978
✔✔According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL
CONTRACT (RESALE), who is required to pay for lender-required repairs? - ✔✔Neither
party
✔✔When should the Third Party Financing Addendum be used? - ✔✔If the buyer is
applying for a loan with conventional, FHA, VA or other forms of financing?
✔✔Should addendums be attached to the main contract? - ✔✔Yes, under after being
noted in Paragraph 22 of the One to Four Family Residential Contract (Resale).
✔✔How is the interest rate in the Third Party Financing addendum determined? - ✔✔By
negotiation between the buyer and lender
✔✔Which FHA loan is typically the lowest down payment loan for a buyer? - ✔✔203 (b)
✔✔With the Loan Assumption addendum, what happens if the seller does not respond
to the buyer's creditworthiness after seven days? - ✔✔The contract is valid.
✔✔Why might a buyer want to assume a note and not originate a new loan? - ✔✔Both
1 and 2
✔✔What does "ad valorem" mean? - ✔✔According to value
✔✔When should the Seller Financing Addendum be used? - ✔✔It is used when the
seller carries a note for a buyer for all or any portion of the sales price.
✔✔How many days is the buyer allowed to get financial information to the seller in the
Seller Financing Addendum? - ✔✔It is dependent upon paragraph A of the Seller
Financing Addendum
QUESTIONS AND ANSWERS SURE A+
✔✔Suppose a buyer was willing to offer a seller $285,000 on a property with a first lien
of $200,000 and a second lien of $60,000, with $25,000 as a down payment. What
would the licensee put in paragraph 3.B of the TREC One to Four Family Residential
Contract (Resale)? - ✔✔$260,000
✔✔Who is a "third party" to a contract? - ✔✔Anyone listed on the contract that is not the
buyer or seller
✔✔How should a licensee fill out a TREC One to Four Family Residential Contract
(Resale) if the seller is willing to finance the transaction for the buyer? - ✔✔Use
paragraph 3.B and check the appropriate box for Seller Financing Addendum.
✔✔Which addendum spells out the details of the loan and will be included on almost all
contracts? - ✔✔Third Party Financing Addendum
✔✔Using a TREC promulgated purchase agreement, who is required to pay for the title
insurance? - ✔✔It's negotiable
✔✔Which of the following is true? - ✔✔A seller that has agreed to pay for both the
owner's and buyer's title policy can require a buyer to use a specific title company.
✔✔What is the difference between a title policy and a title commitment? - ✔✔A title
commitment is issued prior to closing to describe the items on the title policy which will
be issued after closing.
✔✔What is a disclosure statement by the seller that states no changes have been made
on the property that could affect the survey? - ✔✔T-47 Affidavit
, ✔✔What is the fee that is charged every time a property changes hands? - ✔✔Transfer
fee
✔✔The seller must allow the buyer the right to have the property inspected during which
times? - ✔✔Reasonable times
✔✔According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL
CONTRACT (RESALE), who is responsible for having the utilities turned on? -
✔✔Seller
✔✔A lead-based paint notification is required on all properties built prior to what year? -
✔✔1978
✔✔According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL
CONTRACT (RESALE), who is required to pay for lender-required repairs? - ✔✔Neither
party
✔✔When should the Third Party Financing Addendum be used? - ✔✔If the buyer is
applying for a loan with conventional, FHA, VA or other forms of financing?
✔✔Should addendums be attached to the main contract? - ✔✔Yes, under after being
noted in Paragraph 22 of the One to Four Family Residential Contract (Resale).
✔✔How is the interest rate in the Third Party Financing addendum determined? - ✔✔By
negotiation between the buyer and lender
✔✔Which FHA loan is typically the lowest down payment loan for a buyer? - ✔✔203 (b)
✔✔With the Loan Assumption addendum, what happens if the seller does not respond
to the buyer's creditworthiness after seven days? - ✔✔The contract is valid.
✔✔Why might a buyer want to assume a note and not originate a new loan? - ✔✔Both
1 and 2
✔✔What does "ad valorem" mean? - ✔✔According to value
✔✔When should the Seller Financing Addendum be used? - ✔✔It is used when the
seller carries a note for a buyer for all or any portion of the sales price.
✔✔How many days is the buyer allowed to get financial information to the seller in the
Seller Financing Addendum? - ✔✔It is dependent upon paragraph A of the Seller
Financing Addendum
