Promulgated Contract Forms Practice Test

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• In a seller's market, what changes are typically seen in purchase agreements?
• What role does a real estate agent typically play in a transaction?
• What typically triggers the "due diligence" phase in a real estate transaction?
• What does Paragraph 23 "termination option" of the TREC 1-4 Family Residential Contract require?
• Which of the following best describes a tenant?
• Which element is crucial in defining the terms of a real estate transaction?
• According to Texas law, what must be included in written contracts regarding financing?
• Is a street address sufficient to describe the property being conveyed in a real estate transaction?
• Why is a loan contingency clause included in a purchase contract?
• What action is typically taken if an agent discovers a zoning violation on a property?
• What is the purpose of a "disclosure form" in real estate?
• What actions can a buyer take if the seller defaults on a real estate agreement?
• In Texas, what does an "option fee" provide for a potential buyer?
• What does "TREC" stand for?
• Name a common contingency included in a home purchase contract.
• If a Buyer wants the Seller to pay some or all of their closing costs, where should this be added in the contract?
• What does the property appraisal process determine?
• What is the reason behind including a sale price in real estate contracts?
• In the context of real estate contracts, what does the term "real property" refer to?
• What must a Buyer's Representation Agreement include?
• How does a survey help in negotiations during a real estate transaction?
• Why is understanding closing costs important for both real estate parties?
• What describes a "listing agreement" in the context of real estate?
• If a buyer and/or seller agree to mediate, what right are they giving up?
• In the sales contract, what does "sum of all financing" NOT include?
• What role does the state real estate commission play regarding promulgated forms?
• What does an "exclusivity clause" entail in a listing agreement?
• In the context of real estate contracts, what is "consideration"?
• What is the purpose of the One to Four Family Residential Contract?
• What does "as-is" mean in a real estate contract?
• Under what condition can the buyer do nothing and still proceed to closing?
• How might an escrow account be used in a real estate transaction?
• How does the foreclosure process begin?
• What is typically included in closing costs?
• What is a common characteristic of a buyer’s market?
• In real estate contracts, what is a "due diligence" period?
• What role does an earnest money deposit play in a purchase contract?
• Which document typically lists the final costs associated with a real estate transaction?
• What are the legal implications of contract modification?
• If a transaction falls through due to buyer default, what typically happens to the earnest money?
• In what situation might earnest money not be refundable?
• According to the Texas Real Estate License Act, when is required agency disclosure initiated?
• How is a "real estate option" defined?
• What action should parties take upon reaching a verbal agreement in real estate?
• What should a buyer verify before signing a real estate contract?
• What happens if the Buyer does not give notice to the Seller that they cannot obtain credit approval within the specified days?
• What type of agreement is referred to by the term lease-option?
• Which parties are forbidden from engaging in discriminatory practices according to Federal Fair Housing Laws?
• Why is it important to clearly define the closing date in a contract?
• Name one of the most common types of promulgated contract forms in real estate.
• What is the role of a Homeowners Association (HOA)?
• What happens to earnest money if the sale does not close?
• In real estate contracts, what role does an "agent" typically play?
• Is the agent legally required to advise a buyer about title policy options?
• Who is primarily responsible for conducting due diligence in a real estate transaction?
• What is the focus of the TREC promulgated contracts?
• What does "marketable title" mean in real estate transactions?
• What is the main difference between a tenant and a subtenant?
• What is one of the key roles of the listing agent?
• Within how many days must the Seller furnish the Buyer a Commitment for title insurance after receiving a copy of the contract?
• In the context of real estate, what does "earnest money" signify?
• What characterizes a buyer's market?
• What is an easement?
• What is the implication of a Buyer opting for Seller participation in their costs?
• What is the purpose of the earnest money deposit in a purchase agreement?
• What does "amortization" refer to in financing?
• What does the term termination mean in the context of real estate?
• In a foreclosed property sale, who typically participates in the auction?
• What may result from a broker's failure to advise a purchaser to have an abstract of title examined?
• What does the expiration clause in a listing agreement signify?
• What does title insurance protect against in real estate?
• If a property was built before 1978, what specific addendum is required?
• What is the primary function of a buyer's agent in a real estate transaction?
• What is the function of an amendment in a real estate contract?
• What does the term "as-is" refer to in a real estate contract?
• What action must be taken if a buyer wants to terminate a contract?
• When earnest money is deposited with an escrow agent, what is one responsibility of the escrow agent?
• What is typically a consequence of failing to meet contingencies specified in a contract?
• Which of the following indicates that an escrow agent has no liability for the performance of any signatory?
• What does a real estate listing's description typically include?
• If a Buyer does not tender the option fee within the time limit set in the contract, what happens to their right to terminate under the option?
• What is the effect of failing to disclose required information in a contract?
• What is the consequence for a buyer if the lender-required repairs exceed a specified percentage of the sales price?
• What does steering refer to in real estate?
• What does it mean to "assign" a contract?
• What is a contract described as?
• What should a Buyer expect if the existing survey is not approved by the lender?
• Why is it essential to include property details in a purchase agreement?
• According to the TREC promulgated 1-4 Family Residential Contract, what is the maximum percentage of the sales price for lender-required repairs that allows a buyer to terminate the contract?
• If an agent receives confidential information from a client during an agency agreement, what can they do?
• What is a primary benefit of using a listing agreement?
• What can occur if earnest money is not provided in a real estate contract?
• What does "dual agency" refer to in real estate transactions?
• What does the Information About Brokerage Services (IBS) allow a broker to do?
• What is a force majeure clause used for in real estate agreements?
• What is the purpose of "disclosure notices" in real estate transactions?
• Who issues the promulgated contract forms in Texas?
• What does "time is of the essence" signify in a contract?
• What is the purpose of promulgated contract forms in real estate?
• If an agent discovers unauthorized alterations to a property, what should they do?
• What is the importance of an inspection clause in a contract?
• Is the use of TREC promulgated contracts allowed for the sale of residential condominiums?
• Can both the seller and the buyer terminate the contract under the option period?
• What is the purpose of a performance bond in a real estate contract?
• What is typically included in a purchase agreement?
• Which action is a fair act for an Intermediary according to the Real Estate License Act of Texas?
• What is the function of a real estate disclosure?
• When reviewing a contract, what is essential for both parties to initial?
• What is the primary purpose of promulgated contract forms?
• What arises from the non-payment of earnest money by the buyer?
• What is a lease option?
• What must be included in a residential lease agreement as per TREC?
• What does an addendum usually add to a contract?
• What should happen to the earnest money on the Seller's default?
• What happens if a buyer defaults on a real estate contract?
• How is the sales price determined in the contract?
• What does enforcement of a contract primarily depend on?
• How should a "fixture" that does not remain with the property be communicated to the Buyer?
• Can a buyer legally back out of a contract during the option period?
• Under what circumstances can a seller rescind a contract?
• What is the significance of the effective date in a contract?
• What does "FOR SALE AS-IS" imply in a real estate listing?
• What can be the result of inaccuracies in a real estate contract?
• Which type of relationship is NOT typically established in agency contracts in real estate?
• If the contract includes an option period and the Buyer fails to pay the option fee, what is the result?
• The Buyer's Agency Agreement allows an agent to show the same properties to which of the following?
• What is required for a real estate contract to be enforceable?
• A suit for specific performance is intended to enforce which of the following?
• In the context of real estate, what typically occurs during a foreclosure auction?
• If a Buyer is not represented by an agent, what information may be communicated to the Seller?
• Which of the following is true about the involvement of brokers in real estate contracts?
• According to TREC, what may happen if the buyer does not furnish required qualifying documentation in a seller financing situation?
• Which of the following best describes the purpose of a property appraisal?
• When using the option paragraph of the contract, the buyer may do anything EXCEPT:
• What ensures all parties are aware of their rights and responsibilities in a real estate transaction?
• If a property has a "Sale of Other Property" contingency, what can the seller do?
• Who is responsible for paying the owner policy of title insurance fee according to the TREC 1-4 Residential Contract (Resale)?
• What is the purpose of a "seller's disclosure statement"?
• Are brokers fees included in the 1-4 Family Residential Contract (resale) between the Buyer and the Seller?
• The Third Party Financing Condition Addendum is not used with which type of financing?
• What role does the Title Company play in a real estate transaction?
• What does the "listing agreement" specify?
• In real estate contracts, what is a "contingency"?
• What is the primary purpose of title insurance?
• Which document serves as a foundational agreement in residential real estate transactions?
• Are there TREC promulgated contracts for new construction?
• What feature of title insurance provides peace of mind for buyers?
• Which type of lease allows for an eventual purchase of the leased property?
• What does the "last will and testament" clause in a real estate document specify?
• What happens during the "title search" process?
• What is a key provision in the Mediation clause in the Residential Contract?
• What is the role of the buyer's agent in a real estate transaction?
• What must a real estate contract include to be valid?
• Is a Buyer/Tenant Representation Agreement exclusively available through TREC?
• What does the term "closing costs" refer to?
• What is it called when a buyer's purchase contract is dependent on the sale of their existing home?
• How recent must the Condominium Resale Certificate be when delivered to the buyer?
• What is specific performance in the context of real estate contracts?
• What is the effect of not disclosing known property defects?
• What is the primary difference between "fixed-rate" and "adjustable-rate" mortgages?
• What is a lien waiver?
• Which information is commonly found in a Purchase Agreement?
• What is the primary responsibility of the title company in a real estate transaction?
• What can a break in the chain of title cause during a real estate transaction?
• What should a buyer do if they receive conflicting information about a property’s condition?
• What is the importance of including a "default" clause in a contract?
• In which scenario would a buyer typically be responsible for repairs?
• Why might a seller choose to include an appraisal contingency in a sale?
• Why is it important for a buyer to provide earnest money with their offer?
• What must be included with the existing survey when presented to the title company and lender?
• What is the main purpose of the closing disclosure in a real estate transaction?
• Which of the following is NOT a right of a homeowner during the option period?
• What type of law does fraud fall under?
• What document details the property being sold and its legal description?
• In real estate, what does the term "duress" refer to?
• What is the function of an addendum in a contract?
• What is typically meant by the term "30-day option period"?
• Who is responsible for sending a copy of the contract to any attorneys named in the contract?
• What does "escrow" mean in real estate?
• In the event of a buyer's default, which action can the seller take?
• How does market analysis affect a real estate contract?
• The financing paragraph in a contract is used to indicate:
• What is a contingency in a real estate contract?
• What is a requirement of an intermediary in a real estate transaction?
• What defines an executable contract?
• Which entity typically enforces zoning laws?
• What does the term due diligence refer to in real estate?
• Which document outlines the Seller's obligations regarding providing a survey?
• Is there an addendum provided by TREC for voluntary transfer of personal property?
• What are the main types of promulgated contract forms?
• What is one of the responsibilities of the seller if a sale is finalized and they remain in the property?
• Who is responsible for paying for a new survey if the existing one is rejected by the lender?
• How does "specific performance" relate to real estate contracts?
• Why is it important to have real estate licensure before facilitating transactions?
• Why is a real estate contract often required to be in writing?
• What do zoning laws in real estate primarily dictate?
• What is a "time is of the essence" clause?
• What is a common reason sellers agree to repairs in a real estate transaction?
• What role does an intermediary broker play in a transaction?
• What typically happens during the closing of a real estate transaction?
• Once a contract is finalized, how can it be amended?
• Does the Residential Condominium Contract allow a limit to the amount a Buyer will pay for Association transfer fees?
• Is a real estate contract valid if it is oral?
• Which of the following statements is true regarding the confidentiality of client information?
• Earnest money is primarily used for what purpose in a real estate transaction?
• According to Paragraph #16 of the Residential Contract, if a buyer agrees to mediate, what right are they giving up?
• Why might a contract include an "executory" period?
• What must a seller do if a buyer provides qualifying documentation in a seller financing arrangement?
• Which party usually bears the responsibility of ensuring that financing arrangements are met for the transaction to proceed?
• How does the "right of first refusal" work?
• What does “mechanic's lien” refer to?
• Who needs to sign the Short Sale Addendum promulgated by the Texas Real Estate Commission (TREC)?
• What role does a title company play in a real estate transaction?
• What is an "addendum" in the context of a real estate contract?
• In Texas, dual agency has been replaced with which concept?
• What must a seller do with an offer that has a "Sale of Other Property" contingency?
• What does the term "eminent domain" refer to in real estate?
• What does an "option period" allow a buyer to do?
• What is the purpose of a closing statement?
• What is the primary benefit of title insurance for property owners?
• What must a real estate agent ensure before using a promulgated contract form?
• Why is an "Indemnification" clause critical in a contract?
• What is the purpose of the Disclosure of Lead-Based Paint Addendum?
• What is the purpose of a property survey in real estate transactions?
• What is a "blank" on a promulgated contract form?
• What must be included in the contingencies section of a contract?
• Which document regulates the use and transfer of personal property in real estate transactions?
• When is a real estate contract considered legally enforceable?
• If there is an existing survey on the property, what must the seller present to the title company and the lender?
• What can a TREC promulgated Farm and Ranch contract include?
• What is the significance of using standardized contract forms?
• What are the buyer's options if a seller cannot complete repairs within the time limit, according to Paragraph #14 of the Residential Contract?
• What is the significance of the closing date in a real estate contract?
• Why is conducting a survey of the property important?
• In the context of real estate, what does "voluntary" dispute resolution imply?
• Why is it essential to include a "mediation" clause in a real estate contract?
• What is the primary purpose of a representation agreement in real estate?
• What legal document is necessary for a seller to remain in the property after a transaction?
• How can property ownership be legally transferred?
• When should the Seller’s Disclosure Notice be provided?
• What must be disclosed to the buyer in a real estate transaction?
• Which of the following is a benefit of using promulgated contract forms?
• Which organization typically creates and maintains promulgated contract forms?
• When can a different form be used instead of standard forms of TREC?
• What is the role of a broker in a real estate transaction?
• Is litigation a form of voluntary dispute resolution?