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RELE 1300 Contracts & Addenda (F1 F4) Flashcards | StudBud
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RELE 1300 Contracts & Addenda (F1 F4)
RELE 1300 Contracts & Addenda (F1 F4)
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1
Which of the following is NOT an exception to the rules requiring promulgated forms be used by license holders?
When contract is prepared by seller's attorney & required by seller
When the license holder is functioning solely as a principal
When contract is prepared by buyer & buyer wants agent to fill in blanks
When an agency of the US government requires a different form
2
The premium for title insurance policies
is always paid by the buyer
varies widely in different counties
can vary by as much as 2% within the same county
is the same throughout the state
3
In the Third Party Financing Addendum, what should be the cap on interest rates?
a rate the buyer will pay that is available in the market
6.5%
11%
12%
4
Agents must make clear where notices are to be delivered. This is done in 1-4 Family Residential Contract paragraph
1
23
11
21
5
The paragraph that is different in each of the six TREC contracts is
paragraph 2
paragraph 8
paragraph 23
paragraph 1
6
When a buyer gains possession prior to closing
a landlord-tenant relationship exists only if closing <7 days from closing
no landlord-tenant relationship exists
a landlord-tenant relationship exists only if closing >7 days from closing
a landlord-tenant relationship exists
7
In the rental of housing, the Fair Housing Act prohibits discrimination on the basis of
marital status
age
sexual orientation
familial status
8
In Texas, statute of limitations for a nondefaulting party to an oral contract to enforce their rights in the default is
two years
four years
six years
three years
9
A short sale must be approved by
escrow officer
HUD
title company
seller's lender
10
Which form must be displayed in the residential broker's office?
Soldiers and Sailors Act Notice
TREC Consumer Information Notice
Franchise Disclosure
FHA Mortgage Information Form
11
Which addendum is commonly used in a transaction involving an 80% conventional ARM?
Environmental Assessment, Threatened, or Endangered Species
Addendum for Coastal Area Property
Addendum for Seller's Disclosure of Information on Lead-Based Paint
Third Party Financing Addendum
12
The Addendum for Sale of Other Property by Buyer is the form to use if the buyers
are unable to buy new property unless existing property is sold & closed
have multiple properties listed with a license holder
have recently sold properties through the license holder
have tried to sell their property and have yet to do so
13
A counteroffer has be sent to prospective buyer, but a better offer is received, the seller
is free to also counter the second offer
must wait to hear from the first buyer
should withdraw the first counter before answering the new offer
must tell the first buyer and give them an opportunity to raise their offer
14
Which of the following offers must be communicated to the seller by the listing agent?
Offers made after a binding contract has been executed by seller and buyer
Only offers within 10% of asking price
Offers made to the principal before any offer is accepted
All offers, regardless of seller instructions
15
Which of these is included as an accessory (NOT an improvement) in paragraph 2 of the Farm and Ranch contract?
Fences
Barn
Irrigation Equipment
Pens
16
Under paragraph 12 of the 1-4 Family Residential Contract all of the following are seller expenses EXCEPT
releases of existing liens
release of seller's loan liability
appraisal fees
tax statements or certificates
17
Which of the following can the license holders never disclose?
Death due to AIDS
Death due to suicide
Haunted property
Representation
18
If one of the parties defaults and the non-defaulting party accepts the earnest money as damages, that party can
both sue for specific damages and sue for other damages
also sue for specific damages
do nothing more; the contract is terminated
also sue for other damages
19
Which of the following is the BEST way to extend the closing date on a contract?
Change date on original contract & have buyer & seller initial and date it
Use the TREC Amendment to Contract and have buyer and seller sign it
Cross out the old date, enter the new date, send notification to title co
Change date on original contract & have buyer seller & both agents initial
20
When using a power of attorney to transfer the title to real property
a court of competent jurisdiction must affirm the document
neither the buyer nor the seller may be present at closing
the document must include the legal description of the subject of authority
an attorney must be present at closing
21
Who obtains subdivision information in Addendum for Property Subject to Mandatory Membership in Property Owners
Title Company
Lender
Seller's Agent
Buyer's Agent
22
Which of the following is addressed as part of real estate in paragraph 2 of 1-4 Family Residential Contract?
Portable dishwasher
All area rugs
Countertop microwave ovent
Draperies
23
License holder uses builder required forms to sell a new home. The required notice of abstract or title insurance is
included in the builder contract
only included if the builder uses a TREC form
not required because new homes are exempt from the requirement
ensured by TREC's Notice to Prospective Buyer
24
To modify who pays for what in paragraph 12, the parties may define their agreement in the
Modifying Addendum
Special Provisions paragraph
Special Provisions Addendum
Modification language
25
No dollar amt inserted in paragraph 5 of 1-4 Family Residential Contract, but the time period shows 10 days, contract
is terminated on the 11th day
does not have a valid option period
is voidable on the 11th day
is void after 10 days
26
Which of the following is NOT a TREC promulgated form?
Amendment to Contract
Exclusive Right-to-Sell Listing Agreement
Notice of Buyer's Termination of Contract
Addendum for Coastal Area Property
27
Issues addressed in the Farm and Ranch Contract do NOT include which of the following?
Surface Leases
Mineral Rights
Crops
Equipment
28
When a legally enforceable promise is exchanged for a legally enforceable promise,
an executed note is made
an offer is made
a contract is created
an acceptance and counteroffer is made
29
The TREC Residential Condominium Contract defines all of the following as 'documents' EXCEPT
resale certificate
declaration
bylaws
rules of the Association
30
According to the contract, the seller will provide a copy of the restrictive covenants at whose expense?
Title Company's
Sellers
Buyers
Lenders
31
Regarding escrow agents and title policy issuers, the company selected to issue the owner's title policy
is rarely the same chosen to serves as escrow agent
may never be the same chosen to serve as escrow agent
may be different than the company chosen to serve as escrow agent
must be the same chosen to serve as escrow agent
32
The different between paragraph 2 in the TREC New Home contract and 1-4 Family Residential Contract is that
only accessories are addressed in the new home contract
there is no difference
only improvements are addressed in the new home contract
improvements and accessories are not address in the new home contract
33
Which of the following is an example of a bilateral contract?
A purchase contract
a nonexclusive listing contract
an option to lease
a nonexclusive buyer contract
34
Where would the seller reserve the mineral rights?
On the Amendment to Contract form
Paragraph 11 of the 1-4 Family Residential Contract
Addendum for Reservation of Oil Gas and Other Minerals
Seller's Disclosure of Property Condition
35
In a DTPA lawsuit, the consumer must prove the deceptive act
did not cause the damage
was frivolous
was caused knowingly
was the producing cause of damages
36
To have a valid property contract, something of value must be exchanged. This is called
consideration
commission
earnest money
a title transfer fee
37
If the broker information is blank on the final page of the contract, the contract is
void
valid
voidable
unenforceable
38
Which of the following is NOT an essential element of a contract for the purchase of a 1-4 Family Residential property?
Earnest Money
Offer and Acceptance
Competent parties
Consideration
39
The following are specifically listed right privileges and appurtenances in the TREC Unimproved Property Contract EXCEPT
claims
harvest rights
water rights
strips and gores
40
Texas real estate license holders may determine whether they are using the correct version of a TREC form by
verifying current forms on the TREC website
looking at the date in the upper right-hand corner of the form
calling attorney generals office for confirmation of the date promulgated
asking another salesperson in the same office
41
How many resale certificates are currently promulgated by TREC
One
Three
Two
Six
42
The primary intention of HUD regarding occupancy standards is to make sure the standards do not eliminate the protection
of older persons
of multi-family households
of single parent families
of families with children
43
A seller's instruction not to present back-up offers
must be given when the listing is signed
is contrary to licensing laws
may only be given after an offer has been accepted
must be given to the license holder in writing
44
According to TREC promulgated contract form what type of deed is used at closing to convey the real property title?
Special Warranty
General Warranty
Bargain and Sale
Quitclaim
45
Paragraphs found in every purchase agreement include all of the following EXCEPT
parcel
price
property
parties
46
Contract effective July 2, 7-day option. Terminates last day. Backup effective July 6. When is backup effective date?
July 13
July 6
July 20
July 9
47
The TREC Mineral Rights Addendum provides which of the following is considered as being a part of the mineral estate
Sand
Oil
Gravel
Water
48
Which of the following is FALSE about paragraph 11, Special Provisions?
A buyer and her attorney can include a legal right in paragraph 11
License holders must not enter legal rights in paragraph 11
License holders must not enter "time is of the essence" in paragraph 11
Anything addressed in a TREC addenda can be set in this paragraph
49
Which law requires a contract for real property to be in writing and signed to be enforceable?
Texas Statute of Contracts
Texas Statute of Frauds
Texas Contract Law Act
Texas Real Estate License Act
50
What is required of license holders who are selling or buying a property for themselves?
Disclose verbally to other party in the transaction they have a license
Disclose in writing to other party in transaction they have a license
Nothing
License holders cannot act as their own agent
51
Who may give opinions concerning the status or validity of title to real estate?
An Attorney
The license holder
TREC
The broker
52
Which financing option listed in paragraph 3 requires the use of a promulgated addendum?
All of these
Assumption
Third-party conventional
Seller Finance
53
Which of the following parties may NOT be held to the terms of an agreement?
Incompetent parties
Competent parties
Emancipated individuals under the age of 18
Buyer whose credit score is less than 600
54
In Seller Financing Addendum if buyer timely delivers their credit docs & seller does not terminate within 7 days seller
may request additional credit docs
may terminate within three more days
will still be able to terminate within the option period
will be deemed to have approved the buyer's credit
55
According to paragraph 7E of the TREC 1-4 Family Residential Contract who is required to pay for lender-required repairs
Lender
Buyer
Seller
No One
56
According to paragraph 13 of the 1-4 Family Residential Contract, taxes are prorated
for the full year
up to closing date
through the closing date
for the first quarter of the year
57
When selecting a title company, price is not a consideration because
big brokerage firms can negotiate a better price
title companies charge the same for the same coverage
quality is more important than price
the price is automatically determined based on the sales price
58
If the seller allows the buyer to move in prior to the closing of the sale, the seller is
an owner in waiting
a landlord
a wise seller
a tenant
59
Can a party accept earnest money as liquidated damages and also sue the other party for specific performance?
Only if the parties agreed to it in paragraph 15
No
Yes
Usually
60
The notice about obtaining an abstract or title policy is required notice from
buyer to seller
license holder to buyer
license holder to seller
seller to buyer
61
All of the following promulgated forms provide "time is of the essence" EXCEPT
Loan Assumption Addendum
Addendum for Sale of Other Property by Buyer
Third Party Financing Addendum
Addendum for Back-up Contract
62
A property is damaged by fire and cannot be repaired prior to closing. According to paragraph 14, they may do all EXCEPT
terminate the contract and buyer will receive the earnest money
enforce specific performance to restore property to present condition
accept property in damaged condition with assignment of insurance proceeds
extend the time for performance up to 15 days and extend closing date
63
According to paragraph 18 of the 1-4 Family Residential Contract, at closing, earnest money is first applied to
seller's expenses
buyer's expenses
cash down payment
commission to agents
64
Paragraph 7H indicates who should review and decide on the company to use as the residential service contract?
the seller's agent
the buyer's agent
The seller
The buyer
65
How many backup contracts can be created using the TREC-promulgated addendum for that purpose?
Three
One
No more than two
As many as the seller wants
66
Method of purchasing that does NOT require a TREC promulgated addendum to define the transactions financial details
Assumption of existing lien
Seller financing
Third-party financing
Cash
67
When may a potential purchaser's offer to buy real estate be withdrawn?
At any time, if no earnest money was tendered
Anytime prior to opening title
Anytime prior to seller acceptance and buyer notification of acceptance
Only after the seller has turned it down
68
Agreements regarding brokers fees are NOT addressed in
the 1-4 Family Residential Contract
the listing agreement
an agreement between brokers
the buyer's representation agreement
69
Which contract is used for a one-acre lot in an upscale subdivision?
Unimproved Property Contract
Residential Condominium Contract
Farm and Ranch Contract
One to Four Family Residential Contract
70
Which financing addendum will the purchaser use when purchasing a property for cash?
Financing addendum exception
Assumption addendum
Special provisions addendum
None of these
71
If a buyer decides to terminate within the option period, where and how must the notice be delivered?
As specified in the Notices paragraph of the contract
To the listing agent
All of these
To the title company
72
Which form informs the customer or client how agents represent consumers of real estate services?
Information About Brokerage Services
Notice to Prospective Buyer
Non-Realty Items Addendum
Loan Assumption Addendum
73
Which form is used if the buyer wants the seller to leave personal property with the home after closing?
Seller's Disclosure of Property Condition
Notice to Prospective Buyer
Non-Realty Items Addendum
Loan Assumption Addendum
74
If buyer or seller default under a written contract for sale how much time allowed to file specific performance lawsuit?
One year
Unlimited
Four years
Three years
75
Which paragraph allows the buyer to terminate if the seller's disclosure is never received?
Paragraph 6
Paragraph 15
Paragraph 7
Paragraph 11
76
What group promulgates forms for mandatory use by license holders?
TREC
the broker-lawyer committee
the Texas Association of REALTORS
The legislature
77
A seller furnishes existing survey but it's not acceptable to lender. Who pays for new survey?
Buyer
Lender
Negotiated in the contract
Seller
78
When must a real estate license holder advise a buyer, in writing to get an abstract or obtain title insurance?
When an offer to purchase real estate is signed
At first contact
At the first face-to-face meeting
Prior to closing
79
How many contract forms are currently promulgated by TREC?
6
7
9
10
80
The cancellation or termination of a contract as though it had never been made is
revocation
rescission
cancellation
statutory reenactment
81
If a buyer wants to be sure that they will be able to park their RV in the driveway they should
write a statement in paragraph 11, Special Provisions
use TREC's Amendment to Contract
contact the title company closing the transaction
add a statement to that effect in paragraph 6D
82
Which of the following is TRUE about TREC addenda?
Any addenda used as part of an agreement need to be listed in paragraph 23
Any addenda used as part of an agreement must be listed in paragraph 22
All TREC addenda are promulgated
Every TREC contract must have at least one TREC addendum
83
In the TREC new home contracts the R-Value addresses what issue?
air conditioner
hot water heater
appraisal
insulation
84
According to the provisions of the sales contract, who will purchase a residential service contract, if desired?
Lender
Buyer
Seller
Listing agent
85
A contract that at first appears to be valid but may be rescinded or disaffirmed by one or both parties is
void
voidable
valid
enforceable
86
What information is needed in paragraph 2 of the 1-4 Family Residential Contract?
Seller's attorney's name
Names of the parties
Items the seller wants to retain after closing
Loan amount
87
Financing approval occurs when
the property meets the lenders underwriting guidelines
both the borrower and property meet the lenders underwriting guidelines
the lender determines that buyers assets income & credit are satisfactory
the property is acceptable to and approved by the lender
88
Which of the following is NOT addressed by a TREC-promulgated form?
A purchase using seller financing
A purchase using a contract for deed
Assumption of an FHA-insured loan
The purchase of a fee-simple town house
89
The seller does not want to include the hot tub with the purchase of his home. How is this addressed?
Use TREC's Amendment to Contract
List the hot tub in paragraph 2 of the contract as an exclusion
Use the Non-Realty Items Addendum
Note it in paragraph 11 of the contract
90
The promulgated form for the purchase of 1-4 Family Residential Contract was authored by
Texas Broker-Lawyer Committee
Texas TREC-Lawyer Committee
Texas Broker-TREC Committee
Texas Real Estate Commission
91
Which form does NOT address rollback taxes?
One to Four Family Residential Contract (Resale)
New Home Contract (Completed Construction)
Unimproved Property Contract
Farm and Ranch Contract
92
The TREC Seller's Temporary Residential Lease would be used when the
seller wants to stay in the home after the closing for at least 90 days
seller wants to stay in the home after closing for no more than 90 days
buyer wants to move in before closing for at least 90 days
buyer wants to move in before closing for no more than 90 days
93
What form is used if the parties want to negotiate different terms after a contract has been executed?
Information About Brokerage Services
Lead-based Paint Addendum
Disclosure of Relationship with Residential Service Company
Amendment to Contract
94
The TREC Buyer's Temporary Residential Lease would be used when the
buyer wants to move in before closing for no more than 90 days
seller wants to stay in the home after closing for no more than 90 days
seller wants to stay in the home after closing for at least 90 days
buyer wants to move in before closing for at least 90 days
95
The Fair Housing Act's protection of people with disabilities
does not extend to a recovering alcoholic who is a member of AA
requires a landlord to allow a visually impaired tenant to keep a guide dog
does not allow people with disabilities to make reasonable modifications
Includes people who are current users of illegal or controlled substances
96
Items that are pre-printed in paragraph 1 and 2 of the contract include all of the following EXCEPT
marital status
county
subdivision name
lot number
97
Which addendum is commonly used in a transaction involving an 80% fixed-rate loan?
Third Party Financing Addendum
Addendum for Coastal Area Property
Addendum for Property Subject to Mandatory Membership in Owners' Assoc.
Environmental Assessment, Threatened or Endangered Species, and Wetlands
98
The buyer must provide earnest money and option fee to the escrow agent within how many days of effective date?
1 day
5 days
7 days
3 days
99
When is the seller required to deliver a title commitment to the buyer?
20 days after the title company receives the contract
20 days after the executed date of the contract
20 days prior to closing
15 days after the executed date of the contract
100
A license holder has a business relationship with a home warranty company & receives a referral fee. Which form required
Disclosure for Relationship with Residential Service Company
Information About Brokerage Services
Loan Assumption Addendum
Non-Realty Items Addendum
