TEXAS PROMULGATED CONTRACTS CHAMPIONS
EXAM 2026/2027 UPDATED | Official Practice Test |
Verified Q&A | Pass Guaranteed - A+ Graded
Part One: Resale & New Home Contracts (One-to-Four Family)
(20 Questions)
Q1: A buyer submits an offer on a resale home using the TREC One to Four Family
Residential Contract (Resale). The seller counters with a higher price, which the buyer
accepts. When does the contract become effective?
A. When the buyer first submits the original offer
B. When the seller signs the counteroffer
C. When the last party signs or initials the final agreement and communicates
acceptance to the other party [CORRECT]
D. At midnight on the day the seller receives the buyer's acceptance
Correct Answer: C
Rationale: The effective date is the date when the last party required to sign or initial
does so and communicates that acceptance to the other party. This is a fundamental
contract law principle in Texas. Option A is the offer date, not acceptance. Option B is
incomplete—the buyer must also accept the counter. Option D invents a rule that
doesn't exist.
Q2: In the TREC One to Four Family Residential Contract (Resale), the buyer wants to
include a termination option. The option fee is paid to:
A. The listing broker as compensation for holding the property off the market
B. The title company to be held in escrow until closing
,C. The seller (or as otherwise agreed) and is typically non-refundable if the buyer
exercises the option to terminate [CORRECT]
D. The buyer's agent as a transaction coordination fee
Correct Answer: C
Rationale: The option fee is paid directly to the seller (unless otherwise agreed) and
compensates the seller for taking the property off the market during the option
period. It is generally non-refundable. Option A misidentifies the recipient. Option B
confuses option fee with earnest money. Option D is not a recognized use of option
fees.
Q3: A buyer and seller execute a contract with an effective date of May 1. The option
period is 10 days. The buyer delivers a termination notice to the seller on May 9.
What is the buyer entitled to receive back?
A. Both the option fee and the earnest money
B. Neither the option fee nor the earnest money
C. The earnest money, but not the option fee [CORRECT]
D. The option fee, but not the earnest money
Correct Answer: C
Rationale: If the buyer terminates within the option period, the earnest money is
returned, but the option fee is typically non-refundable unless otherwise agreed.
Option A is wrong because the option fee is generally retained. Option B is wrong
because earnest money is returned. Option D reverses the correct rule.
Q4: The TREC New Home Contract (Incomplete Construction) differs from the Resale
contract primarily because:
A. It is only used for homes priced above $500,000
,B. It addresses construction timelines, builder warranties, and completion deadlines
that don't apply to existing homes [CORRECT]
C. It eliminates the need for a title policy
D. It requires the buyer to pay the entire purchase price upfront
Correct Answer: B
Rationale: The New Home Contract (Incomplete Construction) includes provisions
specific to construction, such as substantial completion dates, builder warranties, and
punch list items. Option A is false—price doesn't determine form use. Option C is
false—title policy is still required. Option D is false—financing terms are negotiable.
Q5: Under the TREC One to Four Family Residential Contract (Resale), who is typically
responsible for paying for the owner's title policy?
A. The buyer, as the party who needs title protection
B. The seller, as a standard contractual obligation in Texas [CORRECT]
C. The title company, as part of their service
D. The buyer's lender, as a loan requirement
Correct Answer: B
Rationale: In Texas, the seller typically pays for the owner's title policy as a standard
provision in the One to Four Family Residential Contract (Resale). The buyer typically
pays for the lender's title policy if financing is involved. Option A is incorrect for
owner's policy. Option C is false—title companies don't pay for policies. Option D
describes lender's policy, not owner's.
Q6: A buyer submits an offer with $500 earnest money and a $200 option fee. The
seller accepts. Three days into the option period, the buyer has the home inspected
and discovers foundation issues. The buyer decides to terminate. What happens to
the money?
, A. The buyer gets back both $500 earnest money and $200 option fee
B. The buyer gets back $500 earnest money; the seller keeps $200 option fee
[CORRECT]
C. The seller keeps both $500 earnest money and $200 option fee
D. The buyer gets back $200 option fee; the seller keeps $500 earnest money
Correct Answer: B
Rationale: During the option period, the buyer can terminate for any reason and
receive earnest money back. The option fee is generally non-refundable and
compensates the seller for the option period. Option A incorrectly includes the
option fee. Option C incorrectly includes earnest money. Option D reverses the rule.
Q7: In the TREC One to Four Family Residential Contract (Resale), the "Special
Provisions" paragraph:
A. Can be used to add any terms the parties agree to, including illegal provisions
B. Should be left blank because TREC prohibits any additions to promulgated forms
C. Is intended for factual statements and business details, not for altering the
contract's legal rights and obligations [CORRECT]
D. Automatically overrides all other paragraphs in the contract
Correct Answer: C
Rationale: Special Provisions is for factual statements and business details (e.g.,
"refrigerator conveys"). It should not be used to alter legal rights or create new
obligations that conflict with other paragraphs. Option A is wrong—illegal provisions
are void. Option B is wrong—Special Provisions has a legitimate purpose. Option D is
wrong—it doesn't automatically override other terms.
EXAM 2026/2027 UPDATED | Official Practice Test |
Verified Q&A | Pass Guaranteed - A+ Graded
Part One: Resale & New Home Contracts (One-to-Four Family)
(20 Questions)
Q1: A buyer submits an offer on a resale home using the TREC One to Four Family
Residential Contract (Resale). The seller counters with a higher price, which the buyer
accepts. When does the contract become effective?
A. When the buyer first submits the original offer
B. When the seller signs the counteroffer
C. When the last party signs or initials the final agreement and communicates
acceptance to the other party [CORRECT]
D. At midnight on the day the seller receives the buyer's acceptance
Correct Answer: C
Rationale: The effective date is the date when the last party required to sign or initial
does so and communicates that acceptance to the other party. This is a fundamental
contract law principle in Texas. Option A is the offer date, not acceptance. Option B is
incomplete—the buyer must also accept the counter. Option D invents a rule that
doesn't exist.
Q2: In the TREC One to Four Family Residential Contract (Resale), the buyer wants to
include a termination option. The option fee is paid to:
A. The listing broker as compensation for holding the property off the market
B. The title company to be held in escrow until closing
,C. The seller (or as otherwise agreed) and is typically non-refundable if the buyer
exercises the option to terminate [CORRECT]
D. The buyer's agent as a transaction coordination fee
Correct Answer: C
Rationale: The option fee is paid directly to the seller (unless otherwise agreed) and
compensates the seller for taking the property off the market during the option
period. It is generally non-refundable. Option A misidentifies the recipient. Option B
confuses option fee with earnest money. Option D is not a recognized use of option
fees.
Q3: A buyer and seller execute a contract with an effective date of May 1. The option
period is 10 days. The buyer delivers a termination notice to the seller on May 9.
What is the buyer entitled to receive back?
A. Both the option fee and the earnest money
B. Neither the option fee nor the earnest money
C. The earnest money, but not the option fee [CORRECT]
D. The option fee, but not the earnest money
Correct Answer: C
Rationale: If the buyer terminates within the option period, the earnest money is
returned, but the option fee is typically non-refundable unless otherwise agreed.
Option A is wrong because the option fee is generally retained. Option B is wrong
because earnest money is returned. Option D reverses the correct rule.
Q4: The TREC New Home Contract (Incomplete Construction) differs from the Resale
contract primarily because:
A. It is only used for homes priced above $500,000
,B. It addresses construction timelines, builder warranties, and completion deadlines
that don't apply to existing homes [CORRECT]
C. It eliminates the need for a title policy
D. It requires the buyer to pay the entire purchase price upfront
Correct Answer: B
Rationale: The New Home Contract (Incomplete Construction) includes provisions
specific to construction, such as substantial completion dates, builder warranties, and
punch list items. Option A is false—price doesn't determine form use. Option C is
false—title policy is still required. Option D is false—financing terms are negotiable.
Q5: Under the TREC One to Four Family Residential Contract (Resale), who is typically
responsible for paying for the owner's title policy?
A. The buyer, as the party who needs title protection
B. The seller, as a standard contractual obligation in Texas [CORRECT]
C. The title company, as part of their service
D. The buyer's lender, as a loan requirement
Correct Answer: B
Rationale: In Texas, the seller typically pays for the owner's title policy as a standard
provision in the One to Four Family Residential Contract (Resale). The buyer typically
pays for the lender's title policy if financing is involved. Option A is incorrect for
owner's policy. Option C is false—title companies don't pay for policies. Option D
describes lender's policy, not owner's.
Q6: A buyer submits an offer with $500 earnest money and a $200 option fee. The
seller accepts. Three days into the option period, the buyer has the home inspected
and discovers foundation issues. The buyer decides to terminate. What happens to
the money?
, A. The buyer gets back both $500 earnest money and $200 option fee
B. The buyer gets back $500 earnest money; the seller keeps $200 option fee
[CORRECT]
C. The seller keeps both $500 earnest money and $200 option fee
D. The buyer gets back $200 option fee; the seller keeps $500 earnest money
Correct Answer: B
Rationale: During the option period, the buyer can terminate for any reason and
receive earnest money back. The option fee is generally non-refundable and
compensates the seller for the option period. Option A incorrectly includes the
option fee. Option C incorrectly includes earnest money. Option D reverses the rule.
Q7: In the TREC One to Four Family Residential Contract (Resale), the "Special
Provisions" paragraph:
A. Can be used to add any terms the parties agree to, including illegal provisions
B. Should be left blank because TREC prohibits any additions to promulgated forms
C. Is intended for factual statements and business details, not for altering the
contract's legal rights and obligations [CORRECT]
D. Automatically overrides all other paragraphs in the contract
Correct Answer: C
Rationale: Special Provisions is for factual statements and business details (e.g.,
"refrigerator conveys"). It should not be used to alter legal rights or create new
obligations that conflict with other paragraphs. Option A is wrong—illegal provisions
are void. Option B is wrong—Special Provisions has a legitimate purpose. Option D is
wrong—it doesn't automatically override other terms.
