2024 Law of Contracts Champions Exam Study Guide, Exams of Law

Download 2024 Law of Contracts Champions Exam Study Guide and more Exams Law in PDF only on Docsity! 2024 LAW OF CONTRACTS CHAMPIONS EXAM, PRACTICE EXAM AND STUDY GUIDE 500 QUESTIONS AND CORRECT ANSWERS | ALREADY GRADED A+ | PROFESSOR VERIFIED The failure to remove an advertisement within a reasonable amount of time may be considered deceptive or misleading. -----CORRECT ANSWER--------------true Usually, a defamation claim requires evidence of: -----CORRECT ANSWER--------------A false statement made to someone other than the person who is allegedly defamed, A false statement, Damage to the person allegedly defamed by a false statement A broker is representing both sides in an in-house transaction. In this case, the broker is the: -----CORRECT ANSWER--------------intermediary There can be a policies and procedures manual for a real estate agent who is an independent contractor. However, -----CORRECT ANSWER--------------The broker cannot require mandatory compliance A signed employment agreement is necessary to: -----CORRECT ANSWER-------------- sue for commission An agent in ABC Realty has a listing that is being sold by a buyer's agent whose license is also with ABC Realty. The broker will most likely: -----CORRECT ANSWER-------------- Appoint the associates to represent their parties under intermediary rules The listing that allows the seller to list the property with multiple competing brokers at the same time and to sell the property personally without paying any broker a fee is an: -----CORRECT ANSWER--------------open listing An agent creates a (n) ____________________ to give buyers and sellers an indication of the market value of a property. -----CORRECT ANSWER--------------comparative market analysis Agency authority that is the result of the "norm," or what is considered customary, is: ---- -CORRECT ANSWER--------------Implied authority A listing is terminated by any of the following, EXCEPT: -----CORRECT ANSWER-------- ------The passage of exactly one year since the agreement was signed A broker has the power to terminate an agency agreement early, -----CORRECT ANSWER--------------If the principal is not cooperating with the broker's efforts to market the property A real estate agent generally gets paid: -----CORRECT ANSWER--------------commission Agents should always disclose whether or not a previous or current tenant has had AIDS or HIV-related illness. -----CORRECT ANSWER--------------false The IABS should be presented as the buyer is about to write an offer. -----CORRECT ANSWER--------------false all licensees are relators: -----CORRECT ANSWER--------------false A licensee is not liable for a misrepresentation or a concealment of a material fact made by a party to a real estate transaction if the seller did not disclose it to the agent. ----- CORRECT ANSWER--------------true an exemption to using the Information About Brokerage Services form is: ----- CORRECT ANSWER--------------a lease for not more than 1 year listings can be terminated at any time by mutual agreement -----CORRECT ANSWER--- -----------true fiduciaries are: -----CORRECT ANSWER--------------Held to the highest degree of good faith, Required to exclude selfish interest, Require to make disclosures of all relevant facts According to TREC advertising rules, the definition of advertisement includes all of the following, EXCEPT: -----CORRECT ANSWER--------------Communication from a licensee to his or her client real estate agents owe certain non-fiduciary duties to customers such as: ----- CORRECT ANSWER--------------honesty and fairness an unlicensed assistant may: -----CORRECT ANSWER--------------host an open house the best way to create an agency relationship is to do so: -----CORRECT ANSWER------ --------in writing a licensee must present the information about brokerage services form: -----CORRECT ANSWER--------------at the first substantive discussion of a possible transaction when actions lead another person to assume that one is an agent, this is known as: ----- CORRECT ANSWER--------------ostensible agency listings may be terminated by: -----CORRECT ANSWER--------------death, insanity, mutual agreement when one person acts for another on their behalf it is known as: -----CORRECT ANSWER--------------an agency relationship Whether or not to appoint associates in an intermediary real estate transaction is: ----- CORRECT ANSWER--------------At the discretion of the broker In Texas, Worker's Compensation must be paid for real estate agents by brokers: ----- CORRECT ANSWER--------------false unlicensed assistants may: -----CORRECT ANSWER--------------be a transaction coordinator a broker usually establishes buyer representation through a form known as a: ----- CORRECT ANSWER--------------buyer representation agreement for a broker to act as an intermediary there must be: -----CORRECT ANSWER------------- -written consent the real estate agent works for or on behalf of a: -----CORRECT ANSWER-------------- client or principal data used for a CMA should be no older than: -----CORRECT ANSWER--------------6 months The Tax Equity and Fiscal Responsibility Act has which of the following tests for independent contractor status? -----CORRECT ANSWER--------------The salesperson signs a written contract with the broker stating the salesperson is not an employee a termination date on a listing must be: -----CORRECT ANSWER--------------definite The duty of _______ requires that the agent follow all of the lawful instructions of the client. -----CORRECT ANSWER--------------obedience _______ means that, if a single agent in the firm is working with both buyer and seller, another agent in the firm needs to be brought into the transaction so appointment can be made. -----CORRECT ANSWER--------------Intermediary with appointments only listings are the property of the: -----CORRECT ANSWER--------------broker disclosure of representation may be: -----CORRECT ANSWER--------------either oral or written Fiduciary -----CORRECT ANSWER--------------Are held to the highest amount of good faith. Are required to exclude all selfish interest. General Agency -----CORRECT ANSWER--------------Property managers are generally this type of agency. Open Listing -----CORRECT ANSWER--------------An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone. What do you need for a listing agreement? -----CORRECT ANSWER--------------Legal owners names, Legal Description, Commission rate. Does a lease have to have a legal description -----CORRECT ANSWER--------------No, it can be the U.S. Postal address. Open Listing -----CORRECT ANSWER--------------An agreement between an owner and many brokers. If a broker produces a ready willing, and able buyer, a commission is due. However, the owner still has the right to sell his/her property and is not obligated to pay a commission to anyone. MLS (Multiple Listing Service) -----CORRECT ANSWER--------------A multiple listing service that contains descriptions of most of the homes that are for sale. This computer- based service is used to keep up with properties that are listed for sale. CMA -----CORRECT ANSWER--------------Comparative Market Analysis What is needed for a CMA: -----CORRECT ANSWER--------------Listing from past 6 months, minimum of 3 properties. Benefits of Seller Agency -----CORRECT ANSWER--------------1. Marketing 2. Negotiation 3. Qualified Buyers Subagency -----CORRECT ANSWER--------------Legal in the State of Texas NARS - Accredited Buyer Representative (ABR) -----CORRECT ANSWER-------------- This designation takes the fundamental of agency law and looks a little deeper. The duties we know as OLDCAR apply to all states. OLDCAR -----CORRECT ANSWER--------------Obedience Loyalty Disclosure Confidentiality Accounting Reasonable Care Buyer's Broker Disclosure -----CORRECT ANSWER--------------All buyers should be provided with a oral or written disclosure of representation at first contact. Agent's Duties to Customer -----CORRECT ANSWER--------------Disclosure of material facts Material facts -----CORRECT ANSWER--------------Licensees are expected to disclose square footage, lot size, flood zones & wetlands, zoning school attendance, & CC&Rs and property conditions as well as environmental hazards. Suit for Commission -----CORRECT ANSWER--------------Only a broker can earn a commission. Only a broker may sue for a commission. Dual Agency -----CORRECT ANSWER--------------Representing both parties to a transaction with written permission. A dual agency broker may appoint a designated agent to represent the buyer or the seller. Two forms of Intermediary - Intermediary with Appointments -----CORRECT ANSWER-- ------------An in-house sale involves two agents from the same broker. Sue with the seller and Bob with the buyer. They will use the Intermediary Relationship Notice. Disclosure of Representation -----CORRECT ANSWER--------------Mandatory disclosure by licensees representing a party - must be made to all other parties or licensees at first contact. Another party to the transaction and or another license holder who represents another party to the transaction. IABS (Information about Brokerage Services) -----CORRECT ANSWER--------------An IABS form must be provided and signed received by the buyer/seller (whom the agent is representing. A blank form may not be provided. On the agents/broker's website, it must be in 10 pt. font and labeled Texas Real Estate Commission Infomation About Brokerage Services. Intermediary with Appointments Only- -----CORRECT ANSWER---------------If a single agent in the firm is working with both the buyer and seller, another agent in the firm needs to be brought into the transaction so appointments can be made As an Agent for the Buyer/Tenant: -----CORRECT ANSWER--------------The broker becomes the property owner's agent through an agreement with the owner, usually in written listing to sell or property management agreement. Advantages of Buyer Agency Only and Seller Agency Only (No Intermediary) ----- CORRECT ANSWER--------------Firms that Practice Buyer Agency Only or Seller Agency Only do the have to worry about unintentional dual representation. Brokers do not have to act as intermediaries or make appointments Agents are only responsible for giving advice and opinion to the buyer or seller. The IABS should be presented as the buyer is about to write an offer. -----CORRECT ANSWER--------------It is too late. It must be presented at the first substantive time. A relationship between two parties -------CORRECT ANSWER--------------Agency A person who receives limited brokerage services without establishing an agency relationship -------CORRECT ANSWER-------------- Customer Also known as the principal -------CORRECT ANSWER--------------Client makes it illegal to practice any act of real estate brokerage without a license. -------CORRECT ANSWER--------------Texas Real Estate License Act (TRELA) acts for or on behalf of another person, -------CORRECT ANSWER--------------Agent The agent must always remain loyal to the -------CORRECT ANSWER-------------- principal. agency relationships constitute the foundation of the practice of brokerage, it is essential that a license holder -------CORRECT ANSWER--------------have a deep understanding of agency concepts and law There are two key points with respect to agency: -------CORRECT ANSWER-------------- 1. The principal will count on the agent for specific professional advice. The agent is the "expert". 2. The relationship almost always involves money or property. The Texas Real Estate License Act (TRELA) was passed in -------CORRECT ANSWER- -------------1939. Texas Real Estate Commission was created to enforce and administer the act in ------- CORRECT ANSWER--------------1949 The purpose of the License Act is to -------CORRECT ANSWER--------------protect the public against unscrupulous brokers and sales agents. The License Act provides for two types of licenses to be issued -------CORRECT ANSWER--------------1. Broker License 2. Sales Agent License Can a someone hold both Sales Agents License and Brokers License? -------CORRECT ANSWER--------------No, but a broker can act as a sales agent under a brokers license. sales agent is prohibited from splitting fees -------CORRECT ANSWER--------------with anyone, except through the sponsoring broker If a broker has more than one place of business, a branch -------CORRECT ANSWER--- -----------office license is required for each location. It is not necessary to have a licensed broker at each location. How can a broker terminate a sales agent? -------CORRECT ANSWER--------------it must be done in writing, and the license must be returned to the Texas Real Estate Commission immediately How can a sales agent terminate with a broker? -------CORRECT ANSWER--------------it must be done in writing The Texas Real Estate Commissions main focus is to... -------CORRECT ANSWER------ --------protect the public Is price fixing and/or standardize commission a violation of federal anti trust laws? ------- CORRECT ANSWER--------------Yes, can not be done. How are disputes between brokers and sales agents solved? -------CORRECT ANSWER--------------Through mediation, arbitration or the courts. The individual remains a customer until he or she enters into an -------CORRECT ANSWER--------------agency agreement. A seller becomes a client by entering into a listing agreement with the __________ ------ -CORRECT ANSWER--------------broker. A buyer becomes a client by entering into a ___________________________ with the broker. -------CORRECT ANSWER--------------a buyer representation agreement A person licensed by the Texas Real Estate Commission (TREC) to act as a broker or sales agent in a real estate transaction. -------CORRECT ANSWER--------------License holder (1) A broker who represents a seller, landlord, buyer or tenant. (2) Sales agent or broker license holders who represent the broker with whom they are associated. ------- CORRECT ANSWER--------------Agent A license holder not associated with the seller's broker, but who is representing the seller through a cooperative agreement, often through membership in a Multiple Listing Service (MLS), with the seller's broker. -------CORRECT ANSWER--------------Subagent _____________ refers to the fact that the agent should be paid on completion of the agency. -------CORRECT ANSWER--------------Compensation ___________________ refers to the fact that the agent should be reimbursed by the principal for expenses incurred on behalf of the principal, above and beyond the expenses related to the sale itself. -------CORRECT ANSWER-------------- Reimbursement ________________ means that the principal will protect the agent from suffering a loss due to the agent's reliance on information received from the principal. -------CORRECT ANSWER--------------Indemnification ____________________ means the principal is expected to perform as promised in the agency agreement. -------CORRECT ANSWER--------------Performance What are reasons to study agency? -------CORRECT ANSWER--------------• Compliance with state law and Commission rules. • A new license holder is an agent of his or her broker. • Growing public awareness of the duties of a license holder. • License requirements. • Professionalism. • A more "open" marketplace of information and ratings. _______________ is the relationship the agent has with his or her principal, or his or her broker -------CORRECT ANSWER--------------Agency The agent who lists a seller's property for sale is called the __________________ -------CORRECT ANSWER--------------"listing agent" The agent for the buyer is called ______________ -------CORRECT ANSWER------------- -"the buyer's agent." When in a cooperative sale, the buyer's agent is also known as -------CORRECT ANSWER--------------the cooperating agent because the buyer's agent cooperated in the sale with the listing agent. In a real estate office, the agents refer to the buyer's agent as the ___________________ -------CORRECT ANSWER--------------"selling agent" The _______________ makes it illegal to practice any act of real estate brokerage without a license. -------CORRECT ANSWER--------------Texas Real Estate License Act(TRELA) Section 1101.651 of the License Act lists _______________ specific violations that can result in the suspension or revocation of a real estate license. -------CORRECT ANSWER--------------30 The License Act provides for two types of licenses to be issued, a _______________ and a _______________. -------CORRECT ANSWER--------------Brokers License Sales Agent License The Texas Real Estate Commission is not concerned with an agent's earnings and does not involve itself in _______________. -------CORRECT ANSWER--------------Fee Dispute Buyers are increasingly discovering the benefits of being represented in a purchase, and often choose to become _______________ by entering into an _______________ with the broker. -------CORRECT ANSWER--------------Clients Agency Agreement An agency relationship exists when one person, _______________, acts for or on behalf of another person, _______________, who is also known as _______________. This relationship is a _______________ relationship, meaning that it is a relationship based on trust. -------CORRECT ANSWER--------------Agent Principal Client Fiuciary _______________ refers to the fact that the agent should be paid on completion of the agency. -------CORRECT ANSWER--------------Compensation _______________ means the principal is expected to perform as promised in the agency agreement. -------CORRECT ANSWER--------------Performance _______________ means that the principal will protect the agent from suffering a loss due to the agent's reliance on information received from the principal. -------CORRECT ANSWER--------------Indemification The distinction between a _______________ and a _______________ is crucial to the understanding of agency relationships. The broker has a _______________ duty to represent the best interest of a _______________. -------CORRECT ANSWER------------ --Customer Client fiduciary client An agency relationship exists when one person, the _________ acts for, or on the behalf of another person, the _________. a. Client, agent b. Agent, principal c. Principal, agent d. Broker, customer -------CORRECT ANSWER--------------b. Agent, principal has a broad range of authority to act for a principal. an individual has the power to act for the principal in all transactions. is rarely used in real estate brokerage Example: adult child to act for elderly parents -------CORRECT ANSWER-------------- UNIVERSAL AGENCY an individual has the right to represent his or her principal in a particular type of transaction or business example: property manager -------CORRECT ANSWER--------------GENERAL AGENCY The GENERAL AGENT'S duties may include such activities as: -------CORRECT ANSWER--------------• Securing tenants • Collecting rents • Caring for the premises • Budgeting and controlling expenses • Hiring and supervising employees • Keeping proper accounts • Making periodic reports to the owner The broker's agents are authorized to carry out any number of activities typical of this business, including but not limited to: -------CORRECT ANSWER--------------• Securing listings from sellers and landlords • Securing buyer representation agreements from buyers and tenants • Marketing listed properties • Showing properties to prospective buyers • Preparing offers • Negotiating offers The relationship between a SALES AGENT and a BROKER can be describe as what kind of Agency? -------CORRECT ANSWER--------------General Agency the agent may perform only limited duties for the principal. They are not allowed to bind the principal because they are not allowed to -------CORRECT ANSWER-------------- SPECIAL AGENCY Another name for a special agency is ______________ -------CORRECT ANSWER------ --------"limited agency." What are 2 types of agreements that will form a SPECIAL AGENCY? -------CORRECT ANSWER--------------1. Listing Agreement 2. Buyer/Tenant Representation Agreement A LISTING AGREEMENT establishes a special agency relationship between the _____________________________ -------CORRECT ANSWER--------------broker and a seller or landlord. BUYER/TENANT REPRESENTATION AGREEMENT will also create a special agency relationship with the ____________ -------CORRECT ANSWER--------------broker. What is the acronym that describes FIDUCIARY DUTIES and RESPONSIBILITIES? ---- ---CORRECT ANSWER--------------OLDCAR What does the acronym OLDCAR mean? -------CORRECT ANSWER--------------• Obedience • Loyalty • Disclosure • Confidentiality • Accounting • Reasonable care An agent is obligated to follow all of the lawful instructions of a client. -------CORRECT ANSWER--------------OBEDIENCE a license holder may refuse to do business with a prospect at will as long as he or she is not doing so for reasons prohibited by the _______________________ ------- CORRECT ANSWER--------------Fair Housing Act. ______________________means putting the interests of a client first. -------CORRECT ANSWER--------------LOYALTY An agent has a duty of full disclosure of all information relating to the property and the other parties in the transaction. -------CORRECT ANSWER--------------DISCLOSURE Any information learned about a client must be kept __________________ forever, and may not be disclosed without the written consent of the client. -------CORRECT ANSWER--------------CONFIDENTIALITY If any funds are held for a client or a customer, these funds are said to be held in trust and must be placed in a separate account set up for this purpose. -------CORRECT ANSWER--------------ACCOUNTING _____________________ is mixing client's funds with the business, operating, or personal funds of a broker, and is prohibited by the License Act. -------CORRECT ANSWER--------------Commingling When a broker spends his or her client's funds without authorization, that broker is guilty of _________________ -------CORRECT ANSWER--------------conversion. When does earnest money have to be deposited in an Escrow Account? ------- CORRECT ANSWER--------------Once a SALES CONTRACT is SIGNED, they have 2 business days. (a) PETE (b) NEWCAR (c) OLDCAR (d) HOTROD -------CORRECT ANSWER--------------(c) OLDCAR means that an agent must disclose if he or she is representing his or her parents or children. -------CORRECT ANSWER--------------consanguinity What are two other important laws impact the real estate brokerage business? ------- CORRECT ANSWER--------------1. Texas Deceptive Trade Practices Act 2. Fraud in Real Estate and Stock Transactions Fraud in a transaction involving real estate or stock in a corporation or joint stock company consists of a -------CORRECT ANSWER--------------(1) false representation of a past or existing material fact, (2) false promise to do an act, Under Paragraph (b) of Chapter 23 Fraud, an individual who misrepresents a property under this section could be liable for ______________________________ -------CORRECT ANSWER--------------actual damages. Exemplary damages are often referred to as _______________________ ------- CORRECT ANSWER--------------punitive damages. Each advertisement must include the following in a readily noticeable location in the advertisement these 2 thing -------CORRECT ANSWER--------------(1) the name of the license holder or team placing the advertisement; and (2) the broker's name in at least half the size of the largest contact information for any sales agent, TREC still defines an advertisement as misleading if it: -------CORRECT ANSWER------- -------• Implies that a sales agent is responsible for the operation of a brokerage • Fails to include the name of the broker TREC has adopted a ________________________________to be used in deciding if an advertisement is clear and conspicuous. -------CORRECT ANSWER--------------Safe Harbor Policy On signs or any other type of advertising, a broker's name, the brokerage name, or an assumed name has to be at least ___________________________ -------CORRECT ANSWER--------------50% of the largest item of contact information. TREC has opined over the years that the word ______________ or ______________ are words that clearly identify the advertiser as a broker -------CORRECT ANSWER--------------"REALTOR®" "Realty" What are the 2 words that TREC says does not clearly advertise as a real estate broker? -------CORRECT ANSWER--------------Real Estate Properties According to consumers, what is the most confusing type of advertisement? ------- CORRECT ANSWER--------------Team Name What are the terms no longer allowed to be used in a Team Name? -------CORRECT ANSWER--------------Company Realty Associates Brokerage According to TREC, team names must end in? -------CORRECT ANSWER-------------- Team or Group Existing groups have until what date to change all SIGNAGE to comply with new TREC rules? -------CORRECT ANSWER--------------May 15, 2018 What insurance can protect a broker from a seller misrepresenting property condition? - ------CORRECT ANSWER--------------Error & Omissions Insurance Does a Seller or Seller's agent have to disclose that a death by natural causes took place in the house? Example Suicide, accident unrelated to the condition of the home, HIV or AIDS -------CORRECT ANSWER--------------No, this does not have to be disclosed A property is ______________ when some event occurs, or some people believe that a past event or condition is affecting it. -------CORRECT ANSWER--------------stigmatized What is an example of a psychological stigma property? -------CORRECT ANSWER------ --------Haunted house, Events that have happened on the property such as murder, death, infectious disease What is an example of a physical stigma property? -------CORRECT ANSWER------------- -Previous flooding, foundation problems, nearby landfills and nuclear power plants ___________________ occurs as a result of some condition near or on the property. --- ----CORRECT ANSWER--------------Physical stigma (c) If the seller is unsure about the condition or status of an item on the checklist, then he or she should just leave it blank. (d) All of these statements are false. -------CORRECT ANSWER--------------(c) If the seller is unsure about the condition or status of an item on the checklist, then he or she should just leave it blank. According to Paragraph 7.A. in the contract, what are the seller's responsibilities regarding utilities? (a) The seller has no duty to keep utilities on if the house is vacant. (b) The seller must allow buyer to turn on utilities at buyer's expense during the contract term (c) The seller must turn utilities on to allow a buyer's inspection of the property (d) The seller must keep utilities on during the time the contract is in effect ------- CORRECT ANSWER--------------(d) The seller must keep utilities on during the time the contract is in effect Any stigma that relates to a material defect in a property must be ________. (a) Disclosed (b) Hidden (c) Psychological (d) Ignored -------CORRECT ANSWER--------------(a) Disclosed License holders must not disclose whether or not a former tenant had ___________ to potential buyers. (a) Pets (b) Children (c) AIDS or an HIV-related disease (d) All of these are correct -------CORRECT ANSWER--------------(c) AIDS or an HIV- related disease Analysis based on properties that have recently sold that are most similar to the subject property. -------CORRECT ANSWER-------------- Comparative Market Analysis (CMA) The real estate broker's commission is the difference between the minimum net established by the seller, and the price that the buyer is willing to pay. -------CORRECT ANSWER--------------Net listing Contract with a seller that gives the broker the right to find a purchaser for his or her property. -------CORRECT ANSWER-------------- Listing agreement The seller can list his or her property with multiple competing brokers. -------CORRECT ANSWER--------------Open listing The seller lists the property with only one broker, but can sell it him or herself without paying a commission. -------CORRECT ANSWER--------------Exclusive agency • The Information About Brokerage Services (IABS) form, signed and dated • An explanation of duties to clients and customers • A legal description of the property, including a street address • The names of the parties to the contract with appropriate signatures • A beginning date and a termination date • The agreement to pay a stated commission, usually a percentage of the sales price • A description of the fixtures to be included in the sale, such as carpets, the television antenna, draperies, fireplace screens, etc. • Written permission to advertise and place a yard sign and other documents granting permission, e.g. permission to put a lockbox on the door • Fair Housing language and Fair Housing logo • Intermediary consent • Signed and dated listing agreement -------CORRECT ANSWER--------------listing package What are the types of LISTING AGREEMENTS? -------CORRECT ANSWER-------------- 1. Open listing 2. Exclusive agency 3. Exclusive right to sell 4. Net listing What does PROCURING CAUSE mean? -------CORRECT ANSWER--------------This identified as the person who located the buyer for a listing. EXCLUSIVE AGENCY AGREEMENTS are used generally with -------CORRECT ANSWER--------------Builders What type of listing gives the broker the commission regardless if the property is sold by the seller? -------CORRECT ANSWER--------------Exclusive Right to Sell What are the 2 rules regarding NET LISTINGS in Texas? -------CORRECT ANSWER---- ----------1) Brokers should only take this if the seller insists & the principal appears to be familiar with current market values. 2) A license holder is obligated to give their opinion of the market value when negotiating a listing. What are the 2 types of listings the call for the broker to place the list into one or more MLS? -------CORRECT ANSWER--------------1) Exclusive Right to Sell 2) Exclusive Agency Listing How many properties should an Agent find in MLS when preparing a Comparative Market Anaylsis(CMA)? -------CORRECT ANSWER--------------3 of each: 3- Recently Sold 3 - Recently Listed 3 -Recently Expired (c) Maturity (d) Beginning -------CORRECT ANSWER--------------(a) Termination A REALTOR should fill out a(n) ___________ if there is any increase or decrease in the listing price of a property. (a) TAR Exclusive Agency Addendum (b) TAR Amendment to Listing (c) Seller's Disclosure of Property Condition (d) Seller's Authorization to release certain information -------CORRECT ANSWER-------- ------(b) TAR Amendment to Listing A license holder is not required to provide the IABS when the license holder meets with a party who is: (a) Not represented (b) Represented by another license holder (c) A family member (d) Renting for 2 years or more -------CORRECT ANSWER--------------(b) Represented by another license holder The individual who, through a series of uninterrupted activities, brought about the completion of a contract -------CORRECT ANSWER---------- ----Procuring Cause of Sale Federal legislation that specifically deals with illegal fixing of commission rates -------CORRECT ANSWER--------------Sherman Anti-Trust Act Setting commission rates between groups of brokers in an area -------CORRECT ANSWER--------------Price fixing An agent may not deceive or defraud a customer -------CORRECT ANSWER-------------- Honest dealing The agent is held to the standards of knowledge, expertise and ethics defined by TRELA -------CORRECT ANSWER--------------Reasonable care What are some BENEFITS OF BUYER-AGENCY RELATIONSHIPS? -------CORRECT ANSWER--------------1) Access to market data 2) Investment analysis if renting 3) Assistance in "culling out" unsuitable properties. 4) Helping find financing 5) Help with negotiations 6) Help with preparing offers and negtiating 7) Help with surveys, inspections, repairs When working with non-MLS brokers you should do what before showing the property to a potential buyer? -------CORRECT ANSWER--------------Contact the listing broker and enter into a fee sharing agreement. What is the agreement signed by a buyer that allows a broker to represent them is called a ____________________________ -------CORRECT ANSWER-------------- Buyer/Tenant Representation Agreement What should be included in the BUYER REPRESENTATION file? -------CORRECT ANSWER--------------• The Information About Brokerage Services (IABS) form, signed and dated • General characteristics of the property search (market area) • Buyer's and broker's obligations • Term of the agreement • Broker's duties to clients and customers • Compensation agreement • Intermediary consent • Consent for broker to represent other buyers • Fair-Housing language • Signatures of the parties The listing agreement or buyer representation agreement is an _______________________ -------CORRECT ANSWER--------------employment contract Are oral agreements binding when attempting to collect commission? -------CORRECT ANSWER--------------NO, you must prove you were employed. This must be in WRITING. What must happen in order for a BROKER to sue for a commission? -------CORRECT ANSWER--------------• The broker must have an employment agreement • hold a valid real estate license. • must be the procuring cause of the sale. • The broker must provide a qualified buyer who agrees to the sale terms • The license holder must have informed the purchaser, in writing, to have the abstract examined by an attorney The _____________________ of sale is the individual who, through a series of uninterrupted activities or actions, brought about the completion of a contract ------- CORRECT ANSWER--------------procuring cause What are the AGENT'S DUTIES TO CUSTOMERS? -------CORRECT ANSWER---------- ----1) Honest Dealing 2) Reasonable Care and Skill in Performance 3) Disclosure of all Material Facts _______________________and any other means by which brokers are compensated by sellers and buyers are always negotiable between the parties. -------CORRECT ANSWER--------------Commission rates What are the 2 federal laws that impact COMMISSION RATES & PRICE FIXING? ------- CORRECT ANSWER--------------Sherman Anit-trust Act and Clayton Act Which of the following statements should a license holder only say AFTER a Buyer's Representation Agreement has been signed? (a) "My professional opinion is that the market value of this property is $350,000." (b) "I will write up the offer of $347,000 for you at my office." (c) "It is my professional opinion that this house is overpriced for the neighborhood." (d) All of these statements should be made after a Buyer's Representation Agreement has been signed. -------CORRECT ANSWER--------------(d) All of these statements should be made after a Buyer's Representation Agreement has been signed. A property is sold by the listing firm -------CORRECT ANSWER--------------In-house sale A property is sold by a firm other than the listing firm -------CORRECT ANSWER--------------Cooperative sale The agent working with the buyer -------CORRECT ANSWER--------------Selling agent The seller retains the services of a broker -------CORRECT ANSWER--------------Listing side The buyer retains the services of a broker -------CORRECT ANSWER--------------Selling side In Texas, there are 4 statutory agency relationships allowed by TRELA: ------- CORRECT ANSWER--------------• Seller Agency • Buyer Agency • Subagency • Intermediary What are the negatives to an ORAL AGENCY AGREEMENT? -------CORRECT ANSWER--------------1) Not enforceable against the client 2) It is enforceable against the agent 3) Is subject to confusion and misinterpretation 4) It can not be placed on the MLS since it is not in writing All transactions are said to have two "sides": -------CORRECT ANSWER--------------1. A listing side 2. A selling side __________________ where the seller retains the services of a broker. ------- CORRECT ANSWER--------------listing side ________________ where the buyer retains the services of a broker. -------CORRECT ANSWER--------------selling side The agent working with the buyer is referred to as the ____________ -------CORRECT ANSWER--------------selling agent. When a property is sold by a brokerage firm, two possibilities exist: -------CORRECT ANSWER--------------1. cooperative sale. 2. in-house sale. The property is sold by a firm other than the listing firm, which is referred to as a ------- CORRECT ANSWER--------------cooperative sale. The property is sold by the listing firm, which is referred to as an -------CORRECT ANSWER--------------in-house sale. If a party to a transaction is not being represented by an agent, that party is known as a ________________ -------CORRECT ANSWER--------------customer when one firm sells a property listed by another firm to a buyer that they are not representing, the selling firm represents the seller in a ___________________ -------CORRECT ANSWER--------------subagency to have a subagency relationship two conditions must both be met: -------CORRECT ANSWER--------------1. The sale must be a cooperative sale, and 2. The buyer must be an unrepresented customer. How is an AGENCY TERMINATED? -------CORRECT ANSWER--------------1) The Property is sold 2) Expiration of the time period in listing contract 3) Mutual agreement 4) Death 5) Destruction of property 6) Bankruptcy 7) Operation of law 8) Brokers license revoked 9) Abandonment by agent 10) Revocation of agreement by the principal 11) Termination When the broker is given notice of termination, the broker must: -------CORRECT ANSWER--------------1. Cease all marketing activities. 2. Remove signs and lockboxes. 3. Remove the listing from websites and other advertising media. 4. Terminate the listing in the MLS. Does a WITHDRAWAL terminate a listing? -------CORRECT ANSWER--------------No Why is timing critical when taking a listing? What is the easiest duty of the dual agent? -------CORRECT ANSWER-------------- Accounting In Texas, what do we use instead of a Dual Agency? -------CORRECT ANSWER---------- ----Intermediary ___________________ is a process that makes it possible to bring client buyers and sellers together while at the same time representing their best interests. ------- CORRECT ANSWER--------------Intermediary What are the 2 forms of INTERMEDIARY? -------CORRECT ANSWER--------------1) Intermediary with Appointments 2) Intermediary without Appointments What are 2 simple guidelines used to determine if a transaction is the be done under Intermediary rules? -------CORRECT ANSWER--------------1. The transaction must be an in-house sale. 2. Both sides (buyer/seller or landlord/tenant) must be clients. The ___________ notifies the parties that both the seller and buyer are clients of the broker. a. Intermediary Relationship Notice b. IABS c. Dual Agency Notice d. Buyer's Representation Agreement -------CORRECT ANSWER--------------a. Intermediary Relationship Notice Which of the following is true regarding Intermediary rules for a transaction? a. The transaction must be an in-house sale b. Both sides of the transaction must be clients of the broker c. The broker must have written consent from both parties d. All of these are correct -------CORRECT ANSWER--------------d. All of these are correct Broker Steve, having no agents, is a solo practitioner in the state of Texas. He has a buyer-client who wants to purchase one of his listings. The process that Broker Steve must use is: a. Intermediary Without Appointments b. Transaction brokerage c. Intermediary With Appointments d. Dual agency -------CORRECT ANSWER--------------a. Intermediary Without Appointments What are the duties and obligations of an Intermediary? (a) To treat all parties fairly (b) To decide whether or not to appoint associates (c) To obtain written consent from both parties to act as Intermediary (d) All of these are duties and obligations of an Intermediary -------CORRECT ANSWER--------------(d) All of these are duties and obligations of an Intermediary When a broker in Texas represents both the buyer and the seller, the broker is a(n) _____________. (a) Intermediary (b) Dual agent (c) Appointed broker (d) Ostensible agent -------CORRECT ANSWER--------------(a) Intermediary Which specialization has a tendency to use oral agreements over written on both sides of the transaction? (a) Farm and ranch transactions (b) Commercial sales (c) Commercial leasing (d) All of these -------CORRECT ANSWER--------------(d) All of these Intermediary with appointments requires that the broker sponsor at least ______ agents. (a) Two (b) Five (c) Ten (d) Twelve -------CORRECT ANSWER--------------(a) Two Which statement is incorrect? (a) There can be two intermediaries in the same transaction. (b) More than one associated license holder can be appointed by the Intermediary to work with the same party (c) Disclosure of agency may be oral or in writing (d) All of these statements are incorrect -------CORRECT ANSWER--------------(a) There can be two intermediaries in the same transaction. When does the Intermediary process begin? (a) When the buyer is ready to make an offer on a broker's listing (b) When a buyer contacts a broker (c) When a seller lists his property with a broker (d) When a buyer views a broker's listing -------CORRECT ANSWER--------------(a) When the buyer is ready to make an offer on a broker's listing a license holder who represents a party in a proposed real estate transaction shall disclose, orally or in writing, that representation at the time of the license holder's first contact with: -------CORRECT ANSWER--------------• Another party to the transaction; or • Another license holder who represents another party to the transaction. ________________ as a meeting or written communication that involves a substantive discussion that relates to a specific property. -------CORRECT ANSWER-------------- "substantive dialogue" (c) Yearly (d) Quarterly -------CORRECT ANSWER--------------(d) Quarterly Which of the following statements is correct? (a) Property mangers do not need to have a real estate license. (b) Unlicensed assistants can show property for an agent. (c) In order to perform all common duties, a property managers must be licensed by the state. (d) Unlicensed assistants cannot show a property, but can open a door for prospective buyers and tenants. -------CORRECT ANSWER--------------(c) In order to perform all common duties, a property managers must be licensed by the state. Which statement is correct? (a) Only the broker can terminate the Independent Contractor Agreement for Sales Associate (b) Only the agent can terminate the Independent Contractor Agreement for Sales Associate (c) Either party may terminate with or without cause, at any time (d) Either party may terminate only with proof of cause -------CORRECT ANSWER-------- ------(c) Either party may terminate with or without cause, at any time If a sales agent signs the Independent Contractor Agreement for Sales Associate, he or she (a) Is obligated to attend all brokerage meetings (b) Is not required to be present in the broker's office (c) Is not responsible for his or her association dues and licensing fees (d) Becomes an employee of the broker -------CORRECT ANSWER--------------(b) Is not required to be present in the broker's office Steven, a sales agent, signed an Independent Contractor Agreement with broker Jean- Yves. Jean-Yves is now Steven's ____________. (a) Client (b) Principal (c) Employer (d) Consultant -------CORRECT ANSWER--------------(b) Principal Where would you find the Canons of Professional Ethics and Conduct for Real Estate License Holders? a. Texas State Constitution b. Rules of the Commission c. NAR Code of Ethics d. TAR Code of Ethics -------CORRECT ANSWER--------------b. Rules of the Commission What does the Consumer Protection Notice (CN1-2) notify of? a. How to file a complaint against a license holder b. The Recovery Trust Account c. TREC regulates brokers, sales agents, and inspectors among others d. All of these -------CORRECT ANSWER--------------d. All of these ___________ requires that TREC investigate complaints against license holders according to a risk-based approach. a. The Secretary of the State b. The Secretary of the Commission c. The Governor d. TRELA -------CORRECT ANSWER--------------(d) TRELA Which of the following is NOT one of the 5 sources of ethical standards discussed in the text? (a) Hammurabi's Code (b) The Common Good Approach (c) The Virtue Approach (d) The Rights Approach -------CORRECT ANSWER--------------(a) Hammurabi's Code TREC has included ______________________ for real estate license holders in the Rules of the Commission. (a) The Canons of Professional Ethics and Conduct (b) Pachelbel's Canon (c) The NAR Code of Ethics (d) Texas Ethical Competency and Practices -------CORRECT ANSWER--------------(a) The Canons of Professional Ethics and Conduct What does Article 1 of the Canons of Professional Ethics and Conduct of Real Estate License Holders say? (a) License holders must be competent (b) License holders must not discriminate in the sale or lease of housing (c) License holders must be scrupulous and meticulous while performing their duties (d) All of these are included under Article 1 -------CORRECT ANSWER--------------(c) License holders must be scrupulous and meticulous while performing their duties Who can suspend or revoke a sales agent's license under a DTPA violation? a. TREC b. A court of law c. Congress d. The agent's sponsoring broker -------CORRECT ANSWER--------------a. TREC The Deceptive Trade Practices Act is found in the ___________. a. Texas Business and Commerce Code b. Rules of the Commission c. Texas Real Estate License Act d. Texas Insurance Code -------CORRECT ANSWER--------------(a) Texas Business and Commerce Code According to DTPA, trade and commerce includes the ___________ of any good or service affecting the people of Texas. a. Advertising b. Distribution c. Offering for sale or lease (a) 4 (b) 6 (c) 10 (d) 25 -------CORRECT ANSWER--------------(a) 4 Illegal private conspiracies and combinations formed to eliminate or minimize competition in an industry is known as: (a) Privateering (b) Unfair business practices (c) Poaching (d) Corporate takeovers -------CORRECT ANSWER--------------(b) Unfair business practices ___________ prohibits undisclosed referral fees and kickbacks. (a) Sherman Anti-Trust Act (b) Errors and Omissions Insurance (c) Fair Housing Law (d) RESPA -------CORRECT ANSWER--------------(d) RESPA A(n) _________ is a contract between an insurance company and a broker/license holder. (a) Errors and Omissions policy (b) HOA (c) Policy and procedure manual (d) Demographic farm -------CORRECT ANSWER--------------(a) Errors and Omissions policy The seller, as a customer, is in a(n)___________ relationship with the broker until he or she becomes a client. (a) Agency (b) Third-party (c) Secret (d) Personal -------CORRECT ANSWER--------------(b) Third-party Which of the following statements is true? (a) The first two or three transactions new real estate professionals usually close are with a buyer (b) Buyers have a timeline to buy a home (c) Agents should limit the amount of buyers that they work with to 3 at a time in order to effectively manage their time (d) All of these statements are true -------CORRECT ANSWER--------------(d) All of these statements are true Receives a gross check and a 1099-MISC -------CORRECT ANSWER-------------- Independent contractor Shows the sum of payments received from a sales agent's broker during the tax year. -------CORRECT ANSWER--------------1099- MISC Receives a paycheck that is net of deductions for income taxes and other charges -------CORRECT ANSWER--------------Employee May be hired to assist a sales agent, but is not required to hold a real estate license -------CORRECT ANSWER--------------Personal assistant The broker in the broker-sales agent relationship in real estate -------CORRECT ANSWER--------------Principal Under the Tax Equity and Fiscal Responsibility Act there are three tests for specifying that a sales agent is an independent contractor: -------CORRECT ANSWER--------------1. The sales agent must hold a real estate license. 2. The sales agent must be paid on a commission basis. 3. The sales agent must have a written contract with the broker specifying the sales agent is not an employee Independent contractors are paid a ___________________________________ ------- CORRECT ANSWER--------------gross check without deductions for taxes. When do Agents pay their IRS tax bill? -------CORRECT ANSWER--------------Quarterly The main purpose of the Department of Labor is "to ______________________________________________ -------CORRECT ANSWER--- -----------1) promote and develop the welfare of working people 2) to improve their working conditions, 3) to advance their opportunities for profitable employment." According to the Fair Labor Standards Act (FLSA), the term "employ" includes ------- CORRECT ANSWER--------------"to suffer or permit to work." The "workday" is defined as -------CORRECT ANSWER--------------the period of time on any given day (employee's scheduled work days) that an employee begins and ends his or her principal activity. Who establishes the minimum wage, overtime pay, record keeping, and child labor standards? -------CORRECT ANSWER--------------Fair Labor Standards Act (FLSA) What is the minimum number of employees for Anti-Discriminating Laws to kick in? ------ -CORRECT ANSWER--------------15 or more employees it is unlawful for employers to discriminate against or to fail or refuse to terminate any individual in their employ who discriminates against another due e) The Virtue Approach -------CORRECT ANSWER--------------The Utilitarian Approach - Individuals have the right to have their moral rights protected and respected, and the right to be told the truth, and not to be injured. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach -------CORRECT ANSWER--------------The Rights Approach - Ethical action is equal for all, or if not, then fair for some, based on some defensible standard. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach -------CORRECT ANSWER--------------The Fairness or Justice Approach - Ethical standards and actions embrace common conditions that are important to the welfare (common good) of all. a) The Utilitarian Approach b) The Rights Approach c) The Fairness or Justice Approach d) The Common Good Approach e) The Virtue Approach -------CORRECT ANSWER--------------The Common Good Approach - Ethics are habits that enable us to act accordingly as persons who are truthful, honest, courageous, compassionate, generous, tolerant, and possess integrity, fairness, self- control and prudence. -------CORRECT ANSWER--------------The Virtue Approach - _______________ is defined as acting in strict regard for what is considered right or proper; punctiliously exact; painstaking. -------CORRECT ANSWER-------------- Scrupulously ___________________ is defined as marked by extreme or excessive care in the consideration or treatment of details; careful. -------CORRECT ANSWER------ --------Meticulously Informing the customer of material facts relating to a property -------CORRECT ANSWER--------------Disclosure Arise out of law -------CORRECT ANSWER--------------Statutory Defenses An assertion or statement by words or conduct that is not in accordance with the facts. - ------CORRECT ANSWER--------------Misrepresentation A Texas law that was passed in 1973 that allows an aggrieved consumer to sue a seller of goods for damages. -------CORRECT ANSWER--------------Deceptive Trade Practices Act (DTPA) How many inspectors should a license holder recommend to a buyer? -------CORRECT ANSWER--------------Atleast 3 Trade and commerce include: -------CORRECT ANSWER--------------• advertising • selling • leasing • distributing The act of harming another person by making a false statement -------CORRECT ANSWER--------------Defamation Marketing to a specific area or location -------CORRECT ANSWER-------------- Geographic Farming Marketing to a specific set of people sharing many commonalities -------CORRECT ANSWER--------------Demographic Farming A document that addresses broker and client safety, listing and contract files and license holder obligations. -------CORRECT ANSWER--------------Policy and procedure A contract between an insurance company and a broker/license holder -------CORRECT ANSWER--------------Errors and omissions policy '1101' laws are associated with... ------CORRECT ANSWER----------------TRELA '535' laws are associated with... ------CORRECT ANSWER----------------TREC TRELA was established in... ------CORRECT ANSWER----------------1939 TREC was established in... ------CORRECT ANSWER----------------1949 The Real Estate Recovery Trust Account is used to... ------CORRECT ANSWER---------- ------Protect aggrieved individuals who suffer a monetary loss due to illegals acts of license holders. Who completes the Seller's Disclosure Notice? ------CORRECT ANSWER---------------- The seller should be the ONLY one completing the seller's disclosure notice. If the seller has never occupied the property, do they still have to fill out the disclosure? Yes, or no? ------CORRECT ANSWER----------------Yes. What is the body of law developed in England and based upon "common sense"? ------ CORRECT ANSWER----------------Common Law These court judgments are referred to as __________ and used as guidance in common law. ------CORRECT ANSWER----------------Precedents What is the body of laws and regulations enacted by federal and state legislatures? ----- -CORRECT ANSWER----------------Statutory Law These rights extend above the surface without limitation... ------CORRECT ANSWER---- ------------Air Rights These rights allow an owner to develop the surface, and to use resources extracted from or near the surface including stone, gravel, water, and limestone. ------CORRECT ANSWER----------------Surface Rights These rights include oil, gas and other minerals, and are commonly conveyed through a lease, mineral deed or by reservation. ------CORRECT ANSWER---------------- Subsurface Rights This characteristic of land refers to the fact that land cannot be destroyed. ------ CORRECT ANSWER----------------Indestructibility This characteristic of land refers to the fact that land cannot be moved. ------CORRECT ANSWER----------------Immobility This characteristic of land refers to the fact no two parcels of land are the same. ------ CORRECT ANSWER----------------Nonhomogeneity Economic characteristics include... ------CORRECT ANSWER----------------Scarcity, Modifications, Fixity, Situs ...comes from the theory of supply and demand ------CORRECT ANSWER---------------- Scarcity ...refers to the fact that value is affected by man-made changes to the land. ------ CORRECT ANSWER----------------Modifications ...refers to the fact that land, and additions to the land, take long periods of time to pay for themselves. ------CORRECT ANSWER----------------Fixity ...refers to the location of the property or land from an economic, not geographic, view point. ------CORRECT ANSWER----------------Situs ...is a venture that is owned by a single individual. ------CORRECT ANSWER--------------- -Sole Proprietorship An owner within a cooperative own how many specific units? ------CORRECT ANSWER----------------Zero Units These members buy shares in a corporation and do not own specific units within a building... ------CORRECT ANSWER----------------Cooperative Owners ...is an agreement between two or more parties to do something or to refrain from doing something. ------CORRECT ANSWER----------------Contract In bilateral contract, which parties are obligated to perform the stated terms? ------ CORRECT ANSWER----------------Selling and buying parties must perform. In a unilateral contract, which party is obligated to perform the stated terms? ------ CORRECT ANSWER----------------Selling party. A seller, in exchange for some form of consideration (fee), gives the buyer the right to purchase the property at a preset price for a period of time. This is known as... ------ CORRECT ANSWER----------------An option. In order for a contract to be valid and enforceable, both parties must be... ------ CORRECT ANSWER----------------Competent This term, often referred to as 'mutual consent' or 'meeting of the minds' is required for a contract to be valid and enforceable... ------CORRECT ANSWER----------------Offer and acceptance. What type of purpose must a contract have to be valid and enforceable? ------ CORRECT ANSWER----------------Legal purpose. A contract for the conveyance of an interest in real estate or lease for a term of more than one year must be... ------CORRECT ANSWER----------------In writing. If a buyer is deceased, it is likely that the contract _______ discharged. ------CORRECT ANSWER----------------will be A ________ is an employment agreement between the seller and the broker. ------ CORRECT ANSWER----------------listing agreement Exclusive agency, __________, open listing, and net listing are four major types of listing agreements. ------CORRECT ANSWER----------------exclusive right to sell This type of listing agreement is preferred by most brokers as it affords the greatest degree of protection in earning a commission during the listing term. ------CORRECT ANSWER----------------Exclusive Right to Sell In this type of listing, the seller agrees to list the property with only one broker during the listing term, with the provision that the seller can sell the property himself, without payment of commission. ------CORRECT ANSWER----------------Exclusive Agency Because of potential ethical and legal issues, ________ are discouraged and subject to great scrutiny. ------CORRECT ANSWER----------------net listings A broker should only take net listings when the principal _______, and when the principal appears to be familiar with current market values of real property. ------ CORRECT ANSWER----------------insists In a net listing, the licensed holder is obligated to advise the property owner as to the license holder's ________ of a property when negotiating a listing. ------CORRECT ANSWER----------------opinion of the market value Only a broker may earn commission and only a _______ may sue to collect a commission. ------CORRECT ANSWER----------------broker The broker may sue a ______ who has defaulted on a listing agreement. ------ CORRECT ANSWER----------------seller The broker may sue a ______ who has defaulted on a buyer's representation agreement. ------CORRECT ANSWER----------------buyer _________ gives one possession and use of a property without ownership. ------ CORRECT ANSWER----------------Leasehold estate The person giving use (the owner, or landlord) is the _______. ------CORRECT ANSWER----------------lessor A lease with a definite beginning date and definite ending date is a(n) ______. ------ CORRECT ANSWER----------------estate for years The person acquiring the use (the tenant) is the ______. ------CORRECT ANSWER------ ----------lessee A lease that renews itself automatically for like periods of time is a(n) _________. ------ CORRECT ANSWER----------------periodic tenancy Requirements of a valid lease are: competent parties, _______, adequate consideration, legal purpose, and ________. ------CORRECT ANSWER----------------let and take agreement, description of the property In the event of default by the BUYER, the SELLER can choose to accept the buyer's _______ as liquidated damages. ------CORRECT ANSWER----------------earnest money In the event of default by the BUYER, the SELLER can choose to file suit against buyer for _______. This is the only remedy that would possibly result in the full execution of the transaction. ------CORRECT ANSWER----------------specific performance The agent must present ______ offers. ------CORRECT ANSWER----------------all A counteroffer is a _______ process. ------CORRECT ANSWER----------------two-step A counteroffer is rejection of the original offer coupled with a _______. ------CORRECT ANSWER----------------new offer Any change to an offer is considered a _______. ------CORRECT ANSWER---------------- counteroffer An offer may be terminated at any time _______ acceptance by the offeree. a. Prior to b. After ------CORRECT ANSWER----------------Prior to Law may terminate an offer prior to acceptance if either party... ------CORRECT ANSWER----------------dies or declares for bankruptcy. An offer may be terminated if new laws... ------CORRECT ANSWER----------------render the proposed contract illegal. An agent should never discourage a client from consulting ______ for advice in a transaction. ------CORRECT ANSWER----------------an attorney A cup of water costs $1.50. The water costs is a dollar more than the cup. How much does the cup cost? $0.50 $0.25 ------CORRECT ANSWER----------------$0.25 Patti, David and Arthur inherited several acres from their parents. They received unequal shares of the estate. What type of ownership do the siblings have? ------ CORRECT ANSWER----------------Tenancy in common The rights that extend above the surface of land without limitation are known as ------ CORRECT ANSWER----------------Air rights ______ are man made additions to the land that are permanent and considered to become part of the land ------CORRECT ANSWER----------------Improvements Another name for personal property is ------CORRECT ANSWER----------------Personalty or chattel One of the physical characteristics of land is ------CORRECT ANSWER---------------- Indestructibility A ______________ is created when an individual or entity acquires real estate ------ CORRECT ANSWER----------------Estate in Severalty In order to comply with the ____________ contracts for the conveyance of an interest in real estate in real estate for leases for a term of more than one year must be in writing -- ----CORRECT ANSWER----------------Statute of Frauds Broker Bernardo has signed a sales contract that has not yet gone to the closing table; therefore, Bernardo has a ------CORRECT ANSWER----------------Executory contract ______ is defined as something given in exchange for a promise ------CORRECT ANSWER----------------Fully executed A _________ is also known as an option contract in which only one party is obligated to perform ------CORRECT ANSWER----------------Unilateral contract is NOT a requirement of a valid contract ------CORRECT ANSWER----------------Earnest money Lynne purchased a lakefront lot in order to build her dream home. Under _________, Lynne has the right to take her fishing boat out on the water to catch fish on the weekends ------CORRECT ANSWER----------------Littoral rights Property taxes are known as _________ taxes. That is, they are according to the value. ------CORRECT ANSWER----------------Ad Valorem An ________ to a contract is an attachment that adds or further describes the rights and duties of the parties ------CORRECT ANSWER----------------Addendum The contract should include a _________ in case there are any title problems with the property that could become future problems for the new buyer ------CORRECT ANSWER----------------Title Contingency If a contract is terminated they can ------CORRECT ANSWER----------------receive their earnest money back When changes are made to the sales contract, an ______ must be completed ------ CORRECT ANSWER----------------Amendment A ________ may take place when the seller is unable to sell his or her property at or above that the seller owes the lender ------CORRECT ANSWER----------------Short sale Gene made a will naming his oldest daughter as executor. His other children are noted as heirs. In this circumstance, Gene is referred to as the ------CORRECT ANSWER------ ----------Testator The key to determining whether a conveyance is voluntary is the ------CORRECT ANSWER----------------Absence of force The process by which a leader exercises its power of sale under a mortgage that is in default is known as ------CORRECT ANSWER----------------Foreclosure When an individual acquires title from the rightful owner through hostile, actual, and continuous occupation of the land for the statutory period _______ occurs ------ CORRECT ANSWER----------------Adverse possession What closings would be covered by RESPA? ------CORRECT ANSWER----------------A condominium The T-47 Affidavit must be signed in the presence if a ------CORRECT ANSWER---------- ------Notary Transactions considered exempt from RESPA include ------CORRECT ANSWER--------- -------Business Loans