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 -...
TREBS Exam 4 Questions & Answers
100% Correct!!
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
What kind of law is handed down by the legislature?
A. Agency Law
B. Common Law
C. TREC
D. Statutory Law
Rationale: The correct answer is D. Statutory laws are the laws passed by the State Legislature. -
ANSWERS
Land and all items attached to the property are considered:
A. Attachments
, B. Real property
C. Personal property
D. Personal items
Rationale: The correct answer is B. When land is improved with attached items, they become part of the
property and therefore become part of the real estate. - ANSWERS
General Partnership is a flow-through business entity where profits and losses flow to the individual
partners just as they do in a(n):
A. C Corporation
B. S Corporation
C. Sole proprietor
D. There are no other entities that are follow-through.
Rationale: The correct answer is B. Losses from a general partnership "flow through" giving the hint to
the correct answer, S corporations, where the individual partners are taxed based on their personal
incomes. - ANSWERS
If a party to the contract defaults, what option(s) does the non-defaulting have?
A. To terminate the contract and receive the earnest money
B. To enforce specific performance
C. Both A and B
D. Either A or B
Rationale: The correct answer is D. If a party defaults to the contract, in paragraph #15, the most
important word in the paragraph is the OR as the non-defaulting party has the contracted right to sue for
specific performance OR receive the earnest money as damages and release all parties from the
contract. The OR in the paragraph is why the Either A or B is the correct answer. - ANSWERS
If a party to the contract defaults, what option(s) does the non-defaulting have?
A. To terminate the contract and receive the earnest money
B. To enforce specific performance
C. Both A and B
D. Either A or B
Rationale: The correct answer is D. If a party defaults to the contract, in paragraph #15, the most
important word in the paragraph is the OR as the non-defaulting party has the contracted right to sue for
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