Texas Promulgated Contracts-CHAMPIONS Exam .

Texas Promulgated Contracts-CHAMPIONS Exam . The elements of a valid contract are, competent parties, consideration, legal subject matter, in writing, and ___________. (a) Default (b) Mutual consent (c) Property condition (d) Recording B A(n) __________________ contract is defined as a contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed. (a) Executory (b) Executed (c) Bilateral (d) Void A In the business of real estate, ___________ is defined as something given in exchange for a promise. (a) Consideration (b) Mutual assent (c) A bribe (d) Legal subject matter A The TREC-promulgated contract forms: (a) Are for optional use by real estate licensees (b) Are drafted by the Broker-Lawyer Committee (c) Are promulgated by the legislature (d) Are used in both commercial and residential transactions B In a lease with a "right of first refusal" provision: (a) The price is set when the lease agreement is negotiated (b) The tenant has promised to buy the property (c) The TREC promulgated form must be used (d) The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else D TREC has promulgated forms for: (a) lease purchase transactions (b) cooperatives (c) right of first refusal (d) residential transactions D An offer can be communicated by ___________________. (a) Phone (b) Hand delivery (c) E-mail (d) All of the above D The Third Party Financing Addendum For Credit Approval is used when: (a) The buyer is obtaining FHA financing (b) Paragraph 4.A(2)(a) is checked in the contract (c) The buyer is obtaining VA financing (d) The buyer is obtaining any kind of financing D In the Third Party Financing Addendum for Credit Approval: (a) The buyer has no incentive to obtain financial approval (b) The buyer has a definite time to notify seller of the inability to obtain financing approval (c) The buyer's earnest money will not be returned if the buyer does not obtain financing (d) The option period is explained B The Third Party Financing Addendum for Credit Approval cannot be used for: (a) VA guaranteed loans (b) FHA insured loans (c) Seller Financing (d) Texas Veterans Loans C According to the Seller Financing Addendum, the interest rate is: (a) Set at 6% (b) Negotiated between the parties (c) Set by TREC (d) Determined at closing B ___________________ occurs when a buyer assumes and agrees to pay the seller's existing mortgage. (a) Loan assumption (b) Seller liability (c) Seller lien (d) Credit approval A Land, improvements and accessories are collectively referred to as: (a) The estate (b) The property (c) The listing (d) The homestead B According to the TREC contract, accessories include: (a) Refrigerators (b) Stoves (c) Washing machines (d) Gas dryers B Exclusions to the sale must be removed (a) Prior to delivery of possession (b) At the convenience of the seller (c) When the offer becomes a binding contract (d) Two days prior to closing A The loan amount in Paragraph 3.B. of the sales contract includes: (a) The amount of the mortgage insurance (b) The loan plus origination fees (c) Only the amount borrowed by the buyer (d) The loan amount minus the earnest money C The sales price in 3.C. is always: (a) The loan amount plus the cash portion (b) 3.A. + 3.B. (c) The amount borrowed plus the down payment (d) All of the above D The earnest money is: (a) Always 5% of the purchase price (b) Set by TREC (c) Negotiated between the parties (d) Paid at closing C The T-47 Residential Real Property Affidavit is not completed until ________________, in most cases. (a) Funding (b) Inspection (c) Closing (d) The listing is taken C The __________________ ensures compliance with TRELA, which requires that license holders advise buyers to have an abstract of title examined or to obtain title insurance. (a) Title commitment (b) Notice to Prospective Buyer (c) Seller's Disclosure (d) Inspection report A A Seller's Disclosure Notice is not required (a) When the property being sold is a previously unoccupied new home (b) When the property is sold to an investor (c) When the property has an out of state owner (d) When the property is sold "as is" A If a buyer is concerned about the presence of endangered species, toxic substances or wetlands on a property, the agent should (a) Add the Environmental Assessment Addendum to the contract (b) Avoid the property at all costs (c) Add in Paragraph 11, Special Provisions, that the contract is subject to an environmental review (d) Explain to the buyer that environmental issues are rarely a problem A How long does a buyer have to object to defects, exceptions and encumbrances to title disclosed in the survey and title commitment? (a) Within 3 days of the effective date of the contract (b) Up to 5 days prior to closing (c) Within 7 days of becoming concerned (d) The negotiated number of days stated in the contract D Being within the extraterritorial jurisdiction of a municipality is an indication the property will: (a) Be condemned in the near future (b) Possibly be annexed in the future (c) Be unmarketable (d) Never be annexed by any municipality B The Lead-Based Paint Disclosure is: (a) Required for all properties (b) A federal requirement for residential property built prior to 1978 (c) A TREC requirement (d) The responsibility of the buyer's agent B If a buyer makes an offer without having received the Seller's Disclosure Notice, how many days does the seller have to provide the notice? (a) Not less than 3 days prior to closing (b) Not more than 5 days after the effective date of the contract