For a sum of money negotiated between the parties, the buyer has a time period, stated in this paragraph, for the "unrestricted right" to terminate. Which paragraph does this reference? :
A. Sales price paragraph
B. Earnest money paragraph
C. Option money paragraph
D. Repairs escrow paragraph -...
For a sum of money negotiated between the parties, the buyer has a time period, stated in this
paragraph, for the "unrestricted right" to terminate. Which paragraph does this reference? :
A. Sales price paragraph
B. Earnest money paragraph
C. Option money paragraph
D. Repairs escrow paragraph - ANSWERSC. Option money paragraph
With regard to common mistakes on contracts, it is recommended that the seller's name be used on the
contract as it is named in the ____________.
A. Deed
B. Previous contract when they bought the house.
C. Survey
D. Mortgagee's title policy
Rationale: The correct answer is A. The deed is the document of ownership, so the deed is the best
source for the owner's name that intends to transfer ownership to the buyer. - ANSWERS
In an S Corporation, the earnings of the shareholders are __________.
A. Deferred
B. Taxed
C. Automatically put into a tax free IRA
D. Shifted to an C Corporation if there are profits in the S Corporation
Rationale: The correct answer is B. In an S Corporation, the earnings of the shareholders are taxed, each
at their own individual rate depending on their individual incomes. - ANSWERS
TREC exists to protect:
A. Real estate agents
,B. The citizens of Texas
C. Real estate brokers
D. Lenders, appraisers, and all licensees - ANSWERSB. The citizens of Texas
What is the law that established the Texas Real Estate Commission?
A. TREC
B. TRELA
C. TAR
D. TCEQ
Rationale: The correct answer is B. TRELA (or The Texas Real Estate License Act) required someone to
administer it which created the need for the Texas Real Estate Commission. - ANSWERS
All of the following are reasons that contracts may terminate EXCEPT:
A. Fraud
B. Misrepresentation
C. When there is a suit for specific performance
D. Previous agreement
Rationale: The correct answer is C. A contract may not terminate if the non-defaulting party is suing for
performance of the contact, thereby continuing the contract until the suit concludes. - ANSWERS
Nonhomogeneity, immobility, and indestructibility are examples of:
A. Physical characteristics of property
B. Economic characteristics of property
C. Bundle of legal rights of property
D. Mineral rights of property
Rationale: The correct answer is A. The three characteristics of property are non-homogeneity (every
parcel is in a different place on the globe), immobility, and indestructibility (although property can be
altered or damaged). - ANSWERS
A promise for a promise is considered a _________________contract.
, A. Unilateral
B. Bilateral
C. Valid
D. Void
Rationale: The correct answer is B. A bilateral contract, or a promise for a promise, is where both parties
are agreeing to both take an agreed action. - ANSWERS
In addition to the existing survey, what else needs to be included for the title company to consider
accepting the existing survey?
A. The S67 testimony of the seller
B. A letter from the original surveyor
C. The T47 affidavit
D. A lender from the lender
Rationale: The correct answer is C. For a title office to accept a survey from a seller, the seller must
include a T-47 which is an affidavit of any changes the seller has made that might affect the survey. -
ANSWERS
The only provision in the TREC contract for which time is of the essence is the:
A. Loan approval clause of the contract
B. Mandatory Homeowner's Association documents
C. Termination Option section of the contract
D. U.S. Constitution
Rationale: The correct answer is C. The option money paragraph is strictly enforced and must not be
handled loosely, so the language, "Time is of the Essence" is included to let all parties know this. -
ANSWERS
Land and all items attached to the property are considered:
A. Attachments
B. Real property
C. Personal property
D. Personal items
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