LAW OF CONTRACTS CHAMPIONS EXAM, PRACTICE EXAM AND STUDY GUIDE LATEST 2024 ACTUAL EXAM, Exams of Land Law

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LAW OF CONTRACTS CHAMPIONS EXAM, PRACTICE EXAM AND STUDY GUIDE LATEST 2024 ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) ALREADY GRADED A+ Buyers' and sellers' marital status is not required in the contract. - ANSWER--true Which of the following is a physical characteristic of land? - ANSWER-- indestructability Which disclosure is provided to comply with federal requirements for properties built before 1978? - ANSWER--Lead-Based Paint Disclosure If the loan factor is $4.49 and the loan amount is $357,500, taxes are $7300/year and the insurance is $3103 per year, what is the monthly PITI payment? - ANSWER--$2,472.09 A loan assumption might be desirable because: - ANSWER--The loan assumption is generally less costly than a new loan Earnest money is deposited in an escrow account when: - ANSWER-- The contract is signed by all parties and acceptance is communicated Jake (Seller) and Sarah (Buyer) entered into a contract for the sale of Jake's personal residence. In the contract, Jake promised to deliver a seller's disclosure of property condition within 5 days of the effective date of the contract. Jake never delivered the disclosure as promised. Which of the following statements is true? - ANSWER--Sarah has the right to terminate the contract and receive a refund of earnest money prior to closing (Page 24) Damage or destruction of a property under contract prior to closing: - ANSWER--May result in termination of the contract When a party is considering consulting an attorney for advice in a transaction an agent should: - ANSWER--Never discourage the use of an attorney Prior to closing, severe damage to or destruction of a property under contract: - ANSWER--Can result in termination of the contract The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and . - ANSWER--open listing In a lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. - ANSWER--percentage lease A(n) is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. - ANSWER--contingency The Lead-Based Paint Disclosure is: - ANSWER--A federal requirement for residential property built prior to 1978 In Texas, real estate contracts are subject to satisfactory inspections. - ANSWER--false The term is synonymous with contingent. - ANSWER-- subject to Real estate agents play a role that includes arranging for the pre- qualification / pre-approval of buyers. - ANSWER--true Rule P-53 of the Texas Department of Insurance states that Title Companies: - ANSWER--Cannot provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single firm, Cannot provide continuing education classes unless they charge the market rate for those classes Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to keep the property. Bill is determined to complete the purchase and acquire the property. The only default remedy in the contract that could result in Bill acquiring the property is . - ANSWER--specific performance Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has: - ANSWER--Engaged in the unlawful practice of law The four economic characteristics of land are: scarcity, fixity, situs and . - ANSWER--modification Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for $199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offer? - ANSWER--Joe should present the offer to the seller An abstract of title is: - ANSWER--a complete written history of title an option is: - ANSWER--a unilateral contract A seller is going to continue to occupy a property for two days after closing. In this case, the parties should use the Buyer's Temporary Residential Lease form. - ANSWER--false A contract in which only one party is obligated to perform is a_ contract. - ANSWER--unilateral For tax prorations: - ANSWER--If taxes are not paid at or prior to closing the buyer shall pay for the current year, If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available, The tax proration may be calculated taking into consideration any change in the exemptions that will affect the current year's taxes is the right of the government to regulate and control the way land is used. - ANSWER--police power A(n) is a business venture that is owned by one individual. - ANSWER--Sole proprietorship A(n) is a listing in which 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. - ANSWER--net listing The requirements for a valid lease are, competent parties, let and take agreement, in writing and . - ANSWER--description of the property of an offer means that the accepting party does so with no change to the contract whatsoever. - ANSWER--acceptance The ensures that all consumers are given an equal chance to obtain credit - ANSWER--Equal Credit Opportunity Act The formal judicial proceeding to prove the validity of a will and to distribute the assets of a decedent's estate is called: - ANSWER-- probate A is a deed with no guarantees or warranties. - ANSWER-- quitclaim deed A is the borrower's unconditional promise to repay the lender. - ANSWER--Promissory note A "Section 502 Loan" is insured by the . - ANSWER--USDA is evidence an individual has of his or her right to possess land. - ANSWER--LOOKUP A(n) mortgage covers more than one piece of property. - ANSWER--blanket Real property conveyed by will is called a . - ANSWER--devise An offer may be withdrawn at any time prior to its acceptance by the offeree - ANSWER--true The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and . - ANSWER--Periodic tenancy The TREC residential contract forms are: - ANSWER--Drafted by the Broker Lawyer Committee Wrongful or criminal deception intended to result in financial or personal gain is called: - ANSWER--fraud Under the Deceptive Trade Practices Act, are defined as tangible chattels. - ANSWER--goods If a seller will continue to occupy the property for one month after the closing, the buyer and seller should: - ANSWER--Enter into a Seller's Temporary Residential Lease The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: - ANSWER--90 days A seller's disclosure notice is not required - ANSWER--at a foreclosure sale A(n) is an area of land separating one land use from another. - ANSWER--buffer zone The French term means a life estate that is based on the life of another. - ANSWER--pur autre vie In a residential lease with a "right of first refusal" provision: - ANSWER-- The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else A is an employment agreement between the seller and the broker. - ANSWER--listing agreement A(n) is one that combines some of the elements of a sale with a lease. - ANSWER--lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: - ANSWER--Can result in termination of the contract The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and . - ANSWER--open listing In a lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. - ANSWER--percentage lease A(n) is a type of seller financing wherein the owner retains title to the property while the purchaser takes possession of the premises and pays on the principal. - ANSWER--contract for deed Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable? - ANSWER--statute of frauds If a broker receives more than one offer on a property: - ANSWER--All must be presented to the seller unless the seller has instructed the broker otherwise a counteroffer is: - ANSWER--a rejection, a new offer, able to be withdrawn prior to acceptance A seller choosing to receive a buyer's earnest money after the buyer defaults on a contract is an example of: - ANSWER--liquidated damages The most common form of financing used by buyers is: - ANSWER--third party financing The Special Provisions paragraph of the contract allows license holders to insert: - ANSWER--Factual business details, Statements not addressed in the contract, Information for which there is no TREC- promulgated addendum, lease or mandatory form An offer by a prospective purchaser can be terminated prior to acceptance due to: - ANSWER--expiration of a specified time period, bankruptcy of either party, a change in the law that renders the contract illegal A(n) is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. - ANSWER--contingency The Lead-Based Paint Disclosure is: - ANSWER--A federal requirement for residential property built prior to 1978 The closing date specified in a contract is usually a(n )" " date. - ANSWER--on or before occurs when an individual acquires title from the rightful owner through hostile, actual, and continuous occupation of the land for the statutory period. - ANSWER--adverse possession RESPA regulates closings on: - ANSWER--1-4 family residential properties with federally related financing of RESPA prohibits any person who, pursuant to any agreement or understanding, gives or receives a fee or a thing of value for the referral of settlement business. - ANSWER--section 8 implements the Real Estate Settlement Procedures Act. - ANSWER--regulation x Ongoing expenses such as property taxes and property owner association fees that are divided between the buyer and the seller at closing are called . - ANSWER--prorations Rule P-53 of the Texas Department of Insurance states that Title Companies: - ANSWER--Cannot provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single firm, Cannot provide continuing education classes unless they charge the market rate for those classes A yearly tax bill is $2400 and has not been paid. The property has sold and closing is July 30th. How much will be owed at closing for taxes? (Use a 365-day year, round to the nearest dollar and the seller pays for closing day.) - ANSWER--$1,387 Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to keep the property. Bill is determined to complete the purchase and acquire the property. The only default remedy in the contract that could result in Bill acquiring the property is . - ANSWER--specific performance Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has: - ANSWER--Engaged in the unlawful practice of law The four economic characteristics of land are: scarcity, fixity, situs and . - ANSWER--modification Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for $199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offer? - ANSWER--Joe should present the offer to the seller An abstract of title is: - ANSWER--a complete written history of title an option is: - ANSWER--a unilateral contract A seller is going to continue to occupy a property for two days after closing. In this case, the parties should use the Buyer's Temporary Residential Lease form. - ANSWER--false A contract in which only one party is obligated to perform is a_ contract. - ANSWER--unilateral For tax prorations: - ANSWER--If taxes are not paid at or prior to closing the buyer shall pay for the current year, If taxes for the current year The five essential elements of a valid and enforceable contract are, competent parties, offer and acceptance, legal purpose, in writing and . - ANSWER--consideration The SAFE Act mandated the term . - ANSWER--Residential Mortgage Loan Originator A(n) occurs when a new contract is substituted for an existing one. - ANSWER--novation A(n) is a business venture that is owned by one individual. - ANSWER--Sole proprietorship A(n) is a listing in which 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. - ANSWER--net listing The requirements for a valid lease are, competent parties, let and take agreement, in writing and . - ANSWER--description of the property of an offer means that the accepting party does so with no change to the contract whatsoever. - ANSWER--acceptance The ensures that all consumers are given an equal chance to obtain credit - ANSWER--Equal Credit Opportunity Act The formal judicial proceeding to prove the validity of a will and to distribute the assets of a decedent's estate is called: - ANSWER-- probate A is a deed with no guarantees or warranties. - ANSWER-- quitclaim deed A is the borrower's unconditional promise to repay the lender. - ANSWER--Promissory note A "Section 502 Loan" is insured by the . - ANSWER--USDA is evidence an individual has of his or her right to possess land. - ANSWER--Probate A(n) mortgage covers more than one piece of property. - ANSWER--blanket Real property conveyed by will is called a . - ANSWER--devise An offer may be withdrawn at any time prior to its acceptance by the offeree - ANSWER--true The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and . - ANSWER--Periodic tenancy Buyers' and sellers' marital status is not required in the contract. - ANSWER--true Which of the following is a physical characteristic of land? - ANSWER-- indestructability Which disclosure is provided to comply with federal requirements for properties built before 1978? - ANSWER--Lead-Based Paint Disclosure Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable? - ANSWER-- A(n) is one that combines some of the elements of a sale with a lease. - ANSWER--lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: - ANSWER--Can result in termination of the contract The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and . - ANSWER--open listing In a lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. - ANSWER--percentage lease A(n) is one that combines some of the elements of a sale with a lease. - ANSWER--lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: - ANSWER--Can result in termination of the contract A(n) is one that combines some of the elements of a sale with a lease. - ANSWER-- A(n) is an agreement between two or more parties to do something or to refrain from doing something. - ANSWER--contract When an individual owns real property, he or she is said to have a (n) in that property. - ANSWER--freehold estate A(n) is an agreement between two or more parties to do something or to refrain from doing something. - ANSWER-- Real Estate Center - ANSWER--Created by the Legislature in the 1970s to collect and compile data about real estate in Texas. Located at Texas A&M University. Promulgated Forms - ANSWER--Means - "to make known by open declaration; publish." These forms help to expedite the real estate transaction. Broker Lawyer Committee - ANSWER--Established by TREC to write mandatory residential contract forms for license holders. Texas Real Estate Commission (TREC) - ANSWER--Created by the Legislature in 1949 to carry out the provisions of TRELA. Real Estate Recovery Trust Account - ANSWER--Administered by TREC to protect aggrieved individual who suffer a monetary loss due to illegal acts of license holders. Producing cause - ANSWER--requires proof that the act or omission was a significant factor in bringing about injury TREC - ANSWER--The Texas Real Estate Commission- 6 broker members and 3 public members- created to administer the provisions of the license act- they promulgated contract forms for licensees. TRELA - ANSWER--The Texas Real Estate License Act- passed by legislation to protect the public Can a Real Estate agent give "advice?" - ANSWER--A licenced Real Estate holder could have his or her license suspended or revoked if he or she is found to have advised or counseled a person as to the validity or legal sufficiency of an instrument or the validity of title to real estate. Improvements to the land - ANSWER--Any man-made additions to the land that are permanent. What are surface rights? - ANSWER--The ability to use extracted resources such as stone, gravel, and limestone. What is personal property? - ANSWER--Things of a temporary or movable nature. What are emblements? - ANSWER--Annual crops that are considered personal property ever though they are attached to the land. What is common law? - ANSWER--A body of law developed in England and based upon "common sense" and local custom. What is real estate? - ANSWER--All that is encompassed in land, with the addition of all man-made additions to the land (improvements) such as roads, houses, and commercial buildings. What is a bill of sale? - ANSWER--It is generally used to accomplish the transfer, which would normally accompany the deed. What is severance? - ANSWER--The act of removing fixtures (by detaching them) from real property is called severance. What are the 3 physical characteristics of land? - ANSWER--1. Indestructibility or durability (cannot be destroyed) Immobility (can't move) Nonhomogeneity (no 2 parcels are the same) What is modification (1 of the 4 economic characteristics of land) - ANSWER--It refers to the fact that value is affected by man-made changes to the land. These changes cna be on the land itself of off- site. What is ownership in severalty? - ANSWER--One sole owner. When a sole individual or entity acquire real estate the owner is set apart from all others. Joint Tenancy - ANSWER--When a joint tenant dies, his or her share is equally divided among the surviving joint tenants immediately. Sole Proprietorship - ANSWER--The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. What is a cooperative? - ANSWER--Owners within a cooperative do not own a specific unit. A corporation owns the entire cooperative complex. Those who live in the cooperative buy shares in the co-op and receive a proprietary lease to their unit. Advertising in real estate should not have what in it? - ANSWER--1. Use of racial or ethnic terms. Gender preference Familial status (cannot discriminate on marital status or with children). Religion Handicapped Todd planted two live oaks and four magnolia trees on his 3-acre property. These trees are examples of what? - ANSWER--Improvements Patti, David, and Arthur inherited several acres from their parents. They each own a third of the estate. What type of ownership do the siblings have? - ANSWER--Tenancy in Common Mutual Consent - ANSWER--A meeting of the minds between the parties to a transaction. One of the four essential elements of a contract. What does COLIC mean in real estate? - ANSWER--C = Competent O = Offer and acceptance (mutual agreement) L = Legal purpose I = In writing C = Consideration What is consideration? - ANSWER--Anything of value. In order to comply with the Statue of Frauds, contracts must be what? - ANSWER--Contracts must convey an interest in real estate or leases for a term of more than 1 year - must be in writing. Executed contracts - ANSWER--When a sale is closed, the contract has been fully executed. All oral negotiations are voluntary and do not become binding until committed in writing. In order to comply with the , contracts for the conveyance of an interest in real estate or leases for a term of more than one year must be in writing. - ANSWER--Statute of Frauds Broker Bernardo has a signed sales contract that has not yet gone to the closing table. Therefore, Bernardo has a(n) contract. - ANSWER--Executory Bryan's client shows up to his closing after drinking three beers at a baseball game. Due to his consumption of alcohol, the closing cannot take place because Bryan's client is not legally to sign. - ANSWER- -competent Freehold estate - ANSWER--Occurs when an individual owns property. Statutory estate - ANSWER--created by law Equitable estate - ANSWER--Rights or privileges in land that are less than ownership, but exits. prior appropriation - ANSWER--first in time is first in right police power - ANSWER--The government's right to regulate land usage Buffer zone - ANSWER--A buffer zone is an area of land separating one land use from another, such as residential from commercial. Freehold estate - Life estate - ANSWER--A life estate is a ownership for the duration of someone's life. Statutory Estates - ANSWER--Are created by statute of law. - Texas is a community property state. Homestead Law - ANSWER--The law prevents the forced sale of the homestead for payment of all debts, with five exceptions: Non-payment of property taxes Non-payment of mortgage Non-payment of mechanic's and materialman's Non-payment of property owner association fees or dues Non-payment of a home equity loan Dower - ANSWER--Dower is the interest a wife has in the property of her husband. Many states recognizes statutory estates, including: - ANSWER-- Community property, homestead, tenancy by the entirety, (all of the above). Listing Agreement - ANSWER--Employment agreement for listing broker. Buyer- agency agreement - ANSWER--employment contract between the agent (broker) and the buyer Lease - ANSWER--An agreement that transfers the right to possess a property for a period of time. Option agreement - ANSWER--Gives a potential buyer or tenant the right to purchase or lease a property Contract for deed - ANSWER--Also called an installment contract, a land contract or a real estate contract. Discharge of contracts - ANSWER--A contract is considered discharged when all parties have have performed. A contract may be discharged due to . - ANSWER--The destruction of property. Examples include fires, earthquakes, acts of war, or hurricanes. A seller cannot intentionally destroy a property. Only a may earn a commission, and only a may sue to collect a commission. - ANSWER--Broker, broker Regardless of representation, all buyers should be provided with a(n) disclosure of representation af first contract. - ANSWER--Oral, written, email - all of the above. Which of the following is an example of a contract used often in the real estate business? - ANSWER--Property management, listing agreement, lease agreement - all of the above. Metes & Bounds - ANSWER--A legal description of land having a point of beginning, using terminal points and angles, degrees and minutes to outline a property Lot and Block - ANSWER--A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property) Casualty Loss - ANSWER--Damage due to destruction of property. Special Provisions - ANSWER--Terms that are not covered in the standard contract forms or addenda. What does an agent have to do with contracts? - ANSWER--All offers must be presented. Offer - ANSWER--An offer becomes a binding contract when it is signed by all parties, and the acceptance is communicated to the offering party. Communication is also referred to as notification. What constitutes an offer? - ANSWER--You an make an offer by: phone, fax, email, letter, hand delivery. Oral or in written. Which offer should Gary present? - ANSWER--All known offers must be presented. What can Gary do to look out for his client's best interest? - ANSWER-- Gary can make sure that all offers know that this is a multiple offer situation, so they can all make their highest and best offer. What should Barbara do to make sure she is fulfilling her fiduciary responsibilities to Lin? - ANSWER--Barabar should keep Lin informed of her option as well as the approaching deadlines. What additional amendments, contingencies, or addenda may be used if Lin and the seller decide to proceed with the sale at the lower sales price? - ANSWER--Barbara must submit an amendment that reflects the new, lower sales price. Gerald and Finn are selling their classic 1959 mid century modern home. What form must they complete when they list their property? - ANSWER--Addendum for Seller's disclosure of information on lead paint hazards. Sellers can , the oil, gas, and minerals associated with their property. - ANSWER--Sell, reserve, divide, all of the above. Which of the following is NOT considered a common addenda form? - ANSWER--Exclusive right to sell (not common) Servicing - ANSWER--Sending monthly payment statements and collecting monthly payments, maintaining payment records and following up on delinquencies. What is a closing in real estate? - ANSWER--Consummation of a contractual real estate transaction in which all appropriate documents are signed and the proceeds of the loan are disbursed by the lender. Promissory Note - ANSWER--Borrower's unconditional promise to pay Underwriting - ANSWER--The detailed process of evaluating a borrower's loan application to determine the risk involved for the lender. Foreclosure - ANSWER--A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note. What is capacity? - ANSWER--Capacity is measure of the borrower's ability to repay the debt and is demonstrated through current earnings and job stability. PMI (Private Mortgage Insurance) - ANSWER--Insurance that protects the lender in case the borrower defaults and is unable to repay the loan. Generally a borrower must pay PMI if their equity is less than 20% of the home's value. MIP - ANSWER--Mortgage Insurance Premium VHAP - ANSWER--Texas Veterans Loan Assistance Program - a loan program for veterans. RMLOs in Texas are licensed through: Texas Real Estate Commission National Mortgage Bankers Association Texas Department of Savings and Mortgage Lending Texas Savings and Loan Board - ANSWER--is mandated by the SAFE Act. The Dodd-Frank Act - ANSWER--Transferred rule making authority for the SAFE Act to the CFPB, effective July 21, 2011. ECOA - ANSWER--Equal Credit Opportunity Act, federal law prohibiting discrimination in credit/lending Gift Deed - ANSWER--A transfer of ownership made for love and affection. Creditors of the donor could still use the property for The Real Estate Recovery Trust Account is used to... - ANSWER-- Protect aggrieved individuals who suffer a monetary loss due to illegals acts of license holders. The maximum amount per transaction for Real Estate Recovery is... - ANSWER--$50,000 The maximum amount on behalf of any one license holder is... - ANSWER--$100,000 Promulgated forms means... - ANSWER--To make known by open declaration; publish. The Texas Real Estate Broker-Lawyer Committee consists of... - ANSWER--13 members. Of the 13 Lawyer-Broker Committee members, how many are appointed by TREC? - ANSWER--6 Of the 13 Lawyer-Broker Committee members, how many are members from the State Bar of Texas? - ANSWER--6 How many public members are appointed to the Lawyer-Broker Committee? - ANSWER--1 A licensed agent may not give this type of advice... - ANSWER--Legal. How many types of promulgated lease forms does TREC provide? - ANSWER--2 What are the names of the promulgated lease forms? - ANSWER-- Buyer's and Seller's Temporary Residential Lease This gives the tenant the right to purchase the leased property by matching or bettering any offer before the property will be sold to someone else. - ANSWER--Right of First Refusal. A residential lease may contain a Right of... - ANSWER--First Refusal. "Goods" means... - ANSWER--tangible or real property purchased or leased for use. "Services" means... - ANSWER--work, labor, or services purchased or leased. What is the DTPA? - ANSWER--Deceptive Trade Practices Act When a license holder is sued, it tends to be due to an action under the... - ANSWER--DTPA If the judge or jury rule that the licensed agent knowingly or intentionally deceived the consumer, damages have the potential be... - ANSWER--three times the offense. A seller of residential property must provide what type of document to a buyer? - ANSWER--Seller's Disclosure Notice Who completes the Seller's Disclosure Notice? - 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? - ANSWER--Yes. ...is a venture that is owned by a single individual. - ANSWER--Sole Proprietorship An owner within a cooperative own how many specific units? - ANSWER--Zero Units These members buy shares in a corporation and do not own specific units within a building... - ANSWER--Cooperative Owners ...is an agreement between two or more parties to do something or to refrain from doing something. - ANSWER--Contract In bilateral contract, which parties are obligated to perform the stated terms? - ANSWER--Selling and buying parties must perform. In a unilateral contract, which party is obligated to perform the stated terms? - 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... - ANSWER--An option. In order for a contract to be valid and enforceable, both parties must be... - 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... - ANSWER--Offer and acceptance. What type of purpose must a contract have to be valid and enforceable? - 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... - ANSWER--In writing. ...,defined as something given in exchange for a promise, is required in order for a contract to be valid and enforceable. - ANSWER-- Consideration. A contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed. - ANSWER--Executory Contract. When a sale finally closes, the contract is said to be... - ANSWER--Fully executed. ..., which means that both parties remain liable beyond closing for their representations made in the contract. - ANSWER--'Survive closing' ... is the right of the government to regulate and control the way land is used. - ANSWER--Police power In real estate law, a(n) is the interest, or nature of the interest, a person has in real property. - ANSWER--estate The most common example of police power is... - ANSWER--zoning If the intended use of a property would be in violation of current zoning, the owners must request a , or permission to violate the rules. - ANSWER--variance estates are created by statute or law. - ANSWER--Statutory Because of potential ethical and legal issues, are discouraged and subject to great scrutiny. - 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. - 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. - ANSWER--opinion of the market value Only a broker may earn commission and only a may sue to collect a commission. - ANSWER--broker The broker may sue a who has defaulted on a listing agreement. - ANSWER--seller The broker may sue a who has defaulted on a buyer's representation agreement. - ANSWER--buyer gives one possession and use of a property without ownership. - ANSWER--Leasehold estate The person giving use (the owner, or landlord) is the . - ANSWER--lessor A lease with a definite beginning date and definite ending date is a(n) . - ANSWER--estate for years The person acquiring the use (the tenant) is the . - ANSWER-- lessee A lease that renews itself automatically for like periods of time is a(n) . - ANSWER--periodic tenancy Requirements of a valid lease are: competent parties, , adequate consideration, legal purpose, and . - 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. - 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. - ANSWER--specific performance The agent must present offers. - ANSWER--all A counteroffer is a process. - ANSWER--two-step A counteroffer is rejection of the original offer coupled with a . - ANSWER--new offer Any change to an offer is considered a . - ANSWER-- counteroffer An offer may be terminated at any time acceptance by the offeree. Prior to After - ANSWER--Prior to Law may terminate an offer prior to acceptance if either party... - ANSWER--dies or declares for bankruptcy. A mortgage provides consumers with assistance securing hard-to-place or niche sources of mortgage money. - ANSWER-- broker Like a mortgage is someone who processes, underwrites, closes and funds their own files in his or her name. - ANSWER--banker, a correspondent lender A loan quoted at 6% for 15 years on a $200,000... - ANSWER--The answer is D A mortgage covers more than one property. - ANSWER-- blanket A benefit of assuming an existing loan is that it is less expensive, generally costing less than . - ANSWER--$500 PMI is for loans. - ANSWER--high LTV The T-47 Residential Real Property Affidavit is a notarized form that complements a in a real estate transaction. - ANSWER-- survey 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 - 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? - ANSWER--Tenancy in common The rights that extend above the surface of land without limitation are known as - ANSWER--Air rights are man made additions to the land that are permanent and considered to become part of the land - ANSWER--Improvements Another name for personal property is - ANSWER--Personalty or chattel One of the physical characteristics of land is - ANSWER--Indestructibility A is created when an individual or entity acquires real estate - 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 - ANSWER--Statute of Frauds Broker Bernardo has signed a sales contract that has not yet gone to the closing table; therefore, Bernardo has a - ANSWER--Executory contract is defined as something given in exchange for a promise - ANSWER--Fully executed A is also known as an option contract in which only one party is obligated to perform - ANSWER--Unilateral contract is NOT a requirement of a valid contract - ANSWER--Earnest money Transactions considered exempt from RESPA include - ANSWER-- Business Loans What is due to the seller at closing? - ANSWER--The sale price of the property Closings on are regulated by the Real Estate Settlement Procedures Act - ANSWER--one-to-four family residential properties with federally related financing Which regulation implements the Real Estate Settlement Procedures Act? - ANSWER--Regulation X The - ANSWER—Exclusions In the Texas Real Estate Commission was established to administer and enforce the TRELA. a. 1939 b. 1929 c. 1949 d. 1993 - ANSWER--c. 1949 TREC has only promulgated lease forms. 4 - ANSWER--b. 2 In the TAR® Seller's Disclosure the seller should . prepare the disclosure when the listing is taken be the only one completing this form or any part of it none of the above both a and b - ANSWER--d. both a and b Which of the following can result in a license revocation or suspension by TREC? Failure to use TRECs promulgated forms Failure to use a form written by an attorney Failure to use a form required by a party all of the above - ANSWER--(d) all of the above Which of the following does TREC have promulgated sales contract forms for? Lease purchase Right of First Refusal Lease option Homes and condos - ANSWER--(d) Homes and condos If a client is interested in a lease with an option to purchase or a right of first refusal, the assistance of a(n) is required. Attorney Broker TREC Representative Subagent - ANSWER--(a) Attorney TMARR - ANSWER--(c) PRP If you hire a mold remediator he must give you no later than 10 days after work is complete. Dept. of State and Health Services Agreement Texas Property Code receipt EPA Certificate Certificate of Mold Remediation - ANSWER--(d) Certificate of Mold Remediation The rights that extend above the surface of land without limitation are known as rights. improvement subsurface surface air - ANSWER--(d) air are man-made additions to the land that are permanent and considered to become part of the land. Surface rights Improvements Fixtures Personal properties - ANSWER--(b) Improvements Another name for personal property is . Furniture Fixutre Subsurface rights Personalty - ANSWER--(d) Personalty In order to comply with the , contracts for the conveyance of an interest in real estate or leases for a term of more than one year must be in writing. SAFE Act Statute of Frauds Statue of Limitations RESPA - ANSWER--b. Statute of Frauds A unilateral contract is said to lack . Mutuality Fairness Agreement Signatures - ANSWER--a. Mutuality Contracts with a person who lacks mental capacity can be either void or . Implied Unilateral Voidable Express - ANSWER--c. Voidable is often referred to as a meeting of the minds. A contract Allodial - ANSWER--(d) Allodial Pur autre vie is: Based on the lifespan of the life tenant A type of freehold estate Based on the life of another Both b. and c. - ANSWER--(d) Both b. and c. In many states, recognized statutory estates include . community property riparian right reservation encroachment - ANSWER--(a) community property The main reason(s) for homestead laws include(s): Preventing the foreclosure of the homestead under any circumstances Protection of a creditor's interests in a debtor's property Prevention of the forced sale of a home by creditors All of these are correct - ANSWER--(b) Protection of a creditor's interests in a debtor's property Only a may earn a commission and only a may sue to collect a commission. broker, agent agent, broker broker, broker none of the above - ANSWER-- Regardless of representation, all buyers should be provided with a(n) disclosure of representation at first contact. oral written email any of the above - ANSWER-- The is an employment contract. listing agreement buyer-representation both a and b none of the above - ANSWER--(c) both a and b The lease that provides an incentive to the landlord to build foot traffic in the center with promotions, events and superior maintenance is known as which of the following? Percentage Net lease Gross lease Straight lease - ANSWER--(a) Percentage A tenant has the right to match or better any offer the landlord may receive on the property before the property may be sold to someone else in a (n). He/she can hold all offers until one comes in that is over the asking price He/she may present the highest offers only He/she must present all offers to the client - ANSWER--(d) He/she must present all offers to the client An offer can be communicated by . letter phone either a or b must be done orally - ANSWER--(c) either a or b A permanent marker installed on the land by a surveyor is called . a monument metes bounds a lot - ANSWER--(a) a monument What is made when a party changes an offer in some way and communicates the change to the other party? A rejection A counteroffer An evaluation An acceptance of the offer - ANSWER--(b) A counteroffer Which of the following description uses terminal points and angles to describe a parcel of land? Lot and block Government Survey System Metes and Bounds Street address - ANSWER--(c) Metes and Bounds A counteroffer is a two-step process that involves . a rejection a new offer the ability to be withdrawn prior to acceptance all of these are correct - ANSWER--(d) all of these are correct If a seller chooses to receive a buyer's earnest money after the buyer defaults on a contract it is known as . a suit for specific performance money damages liquidated damages mutual rescission - ANSWER--(c) liquidated damages The blank space provided for the special provisions to the contract allows license holders to insert which of the following? Factual business details Statements not addressed in the contract Information for which there is no TREC-promulgated addendum, lease or mandatory form All of these are correct - ANSWER--(d) All of these are correct Title contingency - ANSWER--(d) Title contingency Common time frames in an escape clause are typically . 1 year 2 weeks 72 hours at any time if the seller is unsatisfied - ANSWER--(c) 72 hours In some states, it is common for a contract to be subject to satisfactory inspections, unsatisfactory results leading to of the contract. rewording execution novation termination - ANSWER--(d) termination An " " date is usually the closing date specified in a contract. on or before termination exact amended - ANSWER--(a) on or before An attachment that adds or further describes the rights and duties of the parties is a(n) to a contract. contingency addendum amendment consideration - ANSWER--(b) addendum The federal requirement _ is the Lead-Based Paint Disclosure. for all properties for residential property built prior to 1978 by TREC under RESPA - ANSWER--(b) for residential property built prior to 1978 A may take place when a seller is unable to sell his or her property at or above what the seller owes the lender. foreclosure short sale second market adverse possession - ANSWER--(b) short sale The exists for the purchase and sale of existing mortgages to investors. primary market correspondence market secondary market tertiary market - ANSWER--(c) secondary market In a a mortgage is an actual transfer of ownership from the borrower to the lender. title theory state