Texas Promulgated Contracts Exam Questions and Answers for 2024, Exams of Contract Law

Download Texas Promulgated Contracts Exam Questions and Answers for 2024 and more Exams Contract Law in PDF only on Docsity! Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers The TREC-promulgated contract forms: The elements of a valid contract are, competent parties, consideration, legal subject matter, in writing, and . (a)Default (b)Mutual consent (c)Property condition (d)Recordin g B A(n) contract is defined as a contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed. (a)Executory (b)Executed (c)Bilateral (d)Voi d A In the business of real estate, is defined as something given in exchange for a promise. (a)Consideration (b)Mutual assent (c)A bribe (d)Legal subject matter A (a)Are for optional use by real estate licensees Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)Are drafted by the Broker-Lawyer Committee Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c)The buyer is obtaining VA financing (d)The buyer is obtaining any kind of financing B Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers In the Third Party Financing Addendum for Credit Approval: (a)The buyer has no incentive to obtain financial approval (b)The buyer has a definite time to notify seller of the inability to obtain financing approval (c)The buyer's earnest money will not be returned if the buyer does not obtain financing (d)The option period is explained C The Third Party Financing Addendum for Credit Approval cannot be used for: (a)VA guaranteed loans (b)FHA insured loans (c)Seller Financing (d)Texas Veterans Loans B According to the Seller Financing Addendum, the interest rate is: (a)Set at 6% (b)Negotiated between the parties (c)Set by TREC (d)Determined at closing A occurs when a buyer assumes and agrees to pay the seller's existing mortgage. (a)Loan assumption Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)Seller liability (c)Seller lien (d)Credit approval Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers The sales price in 3.C. is always: (a) The loan amount plus the cash portion (b) 3.A. + 3.B. (c)The amount borrowed plus the down payment (d)All of the above D The earnest money is: (a)Always 5% of the purchase price (b)Set by TREC (c)Negotiated between the parties (d)Paid at closing D The T-47 Residential Real Property Affidavit is not completed until , in most cases. (a)Funding (b)Inspection (c)Closing (d)The listing is taken B The ensures compliance with TRELA, which requires that license holders advise buyers to have an abstract of title examined or to obtain title insurance. (a)Title commitment (b)Notice to Prospective Buyer Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c)Seller's Disclosure (d) Inspection report A Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers A Seller's Disclosure Notice is not required (a)When the property being sold is a previously unoccupied new home (b)When the property is sold to an investor (c)When the property has an out of state owner (d)When the property is sold "as i" A If a buyer is concerned about the presence of endangered species, toxic substances or wetlands on a property, the agent should (a)Add the Environmental Assessment Addendum to the contract (b)Avoid the property at all costs (c)Add in Paragraph 11, Special Provisions, that the contract is subject to an environmental review (d)Explain to the buyer that environmental issues are rarely a problem A How long does a buyer have to object to defects, exceptions and encumbrances to title disclosed in the survey and title commitment? (a)Within 3 days of the effective date of the contract (b)Up to 5 days prior to closing (c)Within 7 days of becoming concerned (d)The negotiated number of days stated in the contract D Being within the extraterritorial jurisdiction of a municipality is an Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers For a valid option to exist (a)The option fee must be paid directly to the seller or listing broker Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)All of the blanks in paragraph 23 must be filled in (c)The fee must be paid within three days of the effective date of the contract (d)All of the above D The special provisions paragraph of the contract allows licensees to insert: (a)Factual business details (b)Statements not addressed in the contract (c) Information for which there is no TREC promulgated addendum, lease or mandatory form (d)All of the above D Usual expenses of the seller as stated in the contract include: (a)Appraisal fees (b)VA loan funding fee (c)Release of existing lien (d)Copies of easements and restrictions C The process of dividing ongoing expenses between the buyer and seller at the closing is called: (a)assessing (b)prorating (c)collecting expenses (d)accounting Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers B If not using a temporary lease, the buyer is entitled to possession of the property: Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers B The State of Texas encourages the parties to resolve all conflicts and disputes through alternative dispute resolution procedures such as: (a)Arbitration (b)Going to court (c)Mediation (d)Termination of the contract C IRS statutes require a buyer to: (a)Purchase property only from U.S. citizens (b)Withhold 20% of the price from a foreign seller of U.S. property (c)Withhold 10% of the sale proceeds in excess of $300,000 when a foreign person has no social security card or green card (d)None of the above C All written notices between the parties are effective when: (a)Mailed (b)Hand-delivered (c)Faxed or emailed (d)Any of the above D When should a licensee advise a party to a contract to consult an attorney? Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (a)At first contact with the client (b)Before signing the contract if the client does not understand the effect of signing the sales contract or the terms or conditions in the agreement Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c)After the contract has been signed by all parties if the party does not understand the contract (d)A licensee should never advise a client to consult an attorney B Who is responsible for filling in the effective date of the contract? (a)The listing salesperson (b)The title company (c)The broker (d)The selling salesperson C The sales contract identifies the agency relationships between the broker(s) and parties: (a) In paragraph 23 (b)In paragraph 17 (c) In the Broker Information section (d) In paragraph 9 C The condominium resale certificate must have been prepared within the previous: (a)3 months (b)6 months (c)30 days (d)60 days A Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers In a Farm and Ranch sale, the buyer will receive all of the following items except: (a)Windmills Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)Tanks (c)Trucks (d)Pen s C In the Farm and Ranch contract, the Seller generally has the right to harvest crops: (a) for one year after closing (b)until delivery of possession (c)until closing (d)for no more than 90 days after funding B Reservations of oil, gas and other minerals will generally be inserted in: (a)Paragraph 2 (b)Paragraph 11 (c)TREC Addenda form (d)Paragraph 7 C The sales price may be adjusted based upon a survey. If the sales price is adjusted, . (a)The cash portion can be adjusted (b)The amount financed can be adjusted (c)The cash portion and amount financed can be adjusted proportionately (d)Any of the above are possible Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers D If the sales priced is adjusted based upon a survey, either party may terminate the contract if the sales price varies by more than: Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)Beach erosion and movement of the vegetation line could cause an owner to lose the property (c)Serious rip tides are a constant danger (d)Wave action and strong winds are a danger in these areas B If a home is to be sold, with lender's consent, at a price less than the outstanding balance on a mortgage, the sale is known as a (a)Deed in lieu of foreclosure (b)Foreclosure (c)Short sale (d)Distress sale C Which of the following activities is specifically prohibited under the Civil Rights Act of 1968? (a)Denying availability of property when it is available (b)Refusing to sell, or rent to, deal or negotiate with any person (c)Steering or blockbusting (d)All of the above activities are specifically prohibited under the Civil Rights Act of 1968 B A building or community must not discriminate based on familial status, unless it qualifies as housing for older persons. (a)True (b)Fals e A The commission agreement between the broker and the seller is Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers usually found in the: (a)Sales contract (b)Listing agreement Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c)Buyer representation agreement (d) IABS B occurs when a property is refinanced or resold immediately after purchase for an artificially inflated value. (a)Chunking (b)Churning (c)Property flipping (d)Equity theft C A state government entity created to encourage agricultural development in Texas is the: (a)Texas Department of Parks and Wildlife (b)Texas Agricultural Development District (c)Texas Farm Bureau (d)Texas Farm Aid B If a seller wants to continue to occupy the property for two days after the closing and the buyer agrees: (a) this can be written into the special provisions paragraph of the contract (b)because it is for only two days, the parties should just enter into an oral agreement (c) the buyer and seller should negotiate a periodic tenancy agreement (d)the Seller's Temporary Residential Lease form should be used Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c) the number of days entered in paragraph 6. (d)any time prior to closing C Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers TREC promulgated contracts allow the Buyer to have the property inspected: (a)by anybody selected by the buyer (b)by inspectors licensed by TREC or otherwise permitted by law (c)no more than three times (d)at any time by any person selected by their agent B Buyer Sarah is purchasing a residential property. She plans to live in the home and operate a daycare business in the home as well. Having mentioned this to her agent, the agent should: (a)write a paragraph describing the business in Paragraph 11, Special Provisions (b)disclose the daycare using a TREC Special Use addendum (c)specify the use as a daycare in Paragraph 6: Objections (d)not mention the daycare because the future use of a property is not an issue C If a property is under contract to a buyer, another buyer may use the to enter into a contract for the property if the first contract fails to close. (a)Addendum for Sale of Other Property by Buyer (b)Addendum for Back-up Contract (c)1-4 Family Residential Contract (d)Notice of Buyer's Termination of Contract B The title company is: Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (a)A party to the transaction (b)Not a party to the transaction Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c)when the property has an out of state owner (d)when the property is sold "as is" A The closing date: (a) is negotiated by the buyer and the seller (b)is an "on or before" date (c)may be extended in some cases (d)all of the above D When a seller wishes to retain certain fixtures or accessories, these items are called: (a)personal property (b)problems (c)exceptions (d)exclusio ns D Exclusions to the sale must be removed: (a)prior to delivery of possession (b)at the convenience of Seller (c)when the offer becomes a binding contract (d)two days prior to closing A In the Farm and Ranch contract, the Sales Price may be adjusted based upon a survey. If the sales price is adjusted, Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers . (a)the cash portion can be adjusted (b)the amount financed can be adjusted Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c) the cash portion and amount financed can be adjusted proportionately (d)any of the above are possible D Any material changes to subdivision information require the to give notice of said changes promptly. (a)Buyer (b)Listing Agent (c)Seller (d)Broke r C Rollback taxes would most likely be imposed when: (a)a property that has been used for agricultural purposes is no longer productive (b)a borrower rolls loan fees into a refinance (c)a property that has been under an agricultural exemption is developed into a subdivision (d)when the use of a property changes from residential to commercial C In Texas, the statute of limitations is for an oral agreement. (a)Four years (b)Two years (c)Eight years (d)Six Years Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers If the Seller agrees to contribute to the Buyer's closing costs, the amount should be: (a)entered in Paragraph 11, Special Provisions Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)paid in cash to the Buyer after closing (c)entered in Paragraph 12.A(1)(b) (d)added to the sales price in Paragraph 3 C A Buyer wishes to make an offer on a property, but is concerned that the rare and endangered fluted tree scorpion occupies the land. In preparing the offer, the agent should: (a) include in special provision authorization for the Buyer to conduct assessments of endangered species on the land (b) include that the Seller provide an affidavit stating that the land is free of all endangered species (c) insist that the Seller take immediate action to remove all fluted tree scorpions from the land (d) include the TREC Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum D The process of dividing ongoing expenses such as taxes and POA fees between the buyer and seller at closing is called: (a)assessing (b)prorating (c)collecting expenses (d)accounti ng B An exception to a license holder using a TREC- promulgated contract form would be: (a) if the broker does not want to use the forms Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)if the license holder prepared his or her own form Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (a)Consideration (b)Legal subject matter Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (c)Mutual assent (d)Competent parties A Usual expenses of the buyer as stated in the contract include: (a)deed preparation fee (b)release of existing liens (c) loan application fees (d)tax statements C If a buyer makes an offer without having received the Seller's Disclosure Notice, how many days does the seller have to provide the notice? (a)not less than 3 days prior to closing (b)not more than 5 days after the effective date of the contract (c)within 7 days of loan approval (d)the number of days negotiated in the contract D When should a licensee advise a client to consult an attorney: (a)at first contact with the client (b)before signing the contract if the client does not understand the effect of signing the sales contract or the terms or conditions in the agreement (c)after the contract has been signed by all parties (d)a licensee should never advise a client to consult an attorney B Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers One possible issue with using the Seller's existing survey is that the Buyer may have no cause of action against the original surveyor in the event that an error is discovered. (a)True Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (d)the lender has decided to proceed with action to foreclose the property due to the borrower's inability or unwillingness to pay C A purchaser of property seaward of the Gulf Intracoastal Waterway must be given a disclosure notice that: (a)dangerous marine life pose a significant risk to swimmers (b)beach erosion and movement of the vegetation line could cause an owner to lose the property (c)serious rip tides are a constant danger (d)wave action and strong winds are a danger in these areas B Federal law provides that, when selling a home built before 1978: (a)all lead-based paint must be removed (b)Buyer must be provided with the pamphlet "Protect Your Family From Lead in Your Home" (c)Buyer must have lead testing performed prior to closing (d)a Seller must complete a Lead-Based Paint Disclosure only if there is a concern that the property might be contaminated B No advertisement may contain explicit reference to a preferred gender of the renter or tenant, with the exception of those advertisements for . (a)Townhomes (b)Single family homes (c)Shared living spaces (d)Condominiu ms C Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers The TREC promulgated contract forms: (a)Are for optional use by real estate licensees Texas Promulgated Contracts-CHAMPIONS Exam 2024 100% Correct Answers (b)Are drafted by the Broker-Lawyer Committee (c)Are promulgated by the legislature (d)Are used in both commercial and residential transactions B According to the , a broker who is acting as intermediary must obtain written consent from each party of the transaction. (a)Consumer Information Form (b)Listing Agreement (c)Buyer's Representation Agreement (d) Information about Brokerage Services Form D If a licensee is receiving compensation from a residential service company, the compensation must be: (a)reported to TREC (b)disclosed to the parties using the appropriate TREC form (c)never disclosed to anybody (d)reported to the attorney general for action B