Law of Contracts - CHAMPIONS TEST Latest updated version with expert curated questions and answers (GUARANTEED SUCCESS)

Wrongful or criminal deception intended to result in financial or personal gain is called:

fraud

The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed:

90 days

__________ extend above the surface without limitation.

air rights

An example(s) of an appurtenance would be:

easements

There is no upper limit on the value of a Texas homestead.

true

A(n) __________ is one that combines some of the elements of a sale with a lease.

lease purchase agreement

Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable?

statute of frauds

If a broker receives more than one offer on a property:

All must be presented to the seller unless the seller has instructed the broker otherwise

The most common form of financing used by buyers is:

third party financing

A(n) __________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party.

contingency

The Lead-Based Paint Disclosure is:

A federal requirement for residential property built prior to 1978

In Texas, real estate contracts are subject to satisfactory inspections.

false

The term __________ is synonymous with contingent.

subject to

Real estate agents play a role that includes arranging for the pre-qualification / pre-approval of buyers.

true

Rule P-53 of the Texas Department of Insurance states that Title Companies:

Cannot provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single firm, Cannot provide continuing education classes unless they charge the market rate for those classes

Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to keep the property. Bill is determined to complete the purchase and acquire the property. The only default remedy in the contract that could result in Bill acquiring the property is___________________________.

specific performance

Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has:

Engaged in the unlawful practice of law

The four economic characteristics of land are: scarcity, fixity, situs and ________.

modification

Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for $199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offer?

Joe should present the offer to the seller

An abstract of title is:

a complete written history of title

an option is:

a unilateral contract

A seller is going to continue to occupy a property for two days after closing. In this case, the parties should use the Buyer's Temporary Residential Lease form.

false

A contract in which only one party is obligated to perform is a________ contract.

unilateral

For tax prorations:

If taxes are not paid at or prior to closing the buyer shall pay for the current year, If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available, The tax proration may be calculated taking into consideration any change in the exemptions that will affect the current year's taxes

________ is the right of the government to regulate and control the way land is used.

police power

A seller of coastal property abutting tidally influenced water must provide the ________.

Notice Regarding Coastal Area Property

RESPA prohibits ________, which is considered an abusive practice.

kickbacks

A claim, lien, charge, or liability attached to and binding real property is a(n) ________.

encumbrance

A(n) ________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party.

waiver

At closing, the contract is:

fully executed

FHA loans include two mortgage insurance premiums that must be paid by the borrower. They are the:

UFMIP and Annual Premium

________ are changes that are made to the original contract, such as changes to the closing date or changes to the sales price, down payment and/or the amount financed.

amendments

According to the Deceptive Trade Practices Act (DTPA), brokerage falls under the category of ________.

services

________ law is a body of law based on "common sense" and local custom.

common

Which kind of rights extend above the surface of property without limitation?

air rights

________ is the legal procedure whereby secured property may be sold to satisfy a borrower's unpaid promissory note.

foreclosure

The five essential elements of a valid and enforceable contract are, competent parties, offer and acceptance, legal purpose, in writing and ________.

consideration

The SAFE Act mandated the term ________.

Residential Mortgage Loan Originator

A(n) ________ occurs when a new contract is substituted for an existing one.

novation

A(n) ________ is a business venture that is owned by one individual.

Sole proprietorship

A(n) ________ is a listing in which the real estate broker's commission is the difference between the minimum net established by the seller and the price that the buyer is willing to pay.

net listing

The requirements for a valid lease are, competent parties, let and take agreement, in writing and ________.

description of the property

________ of an offer means that the accepting party does so with no change to the contract whatsoever.

acceptance

The ________ ensures that all consumers are given an equal chance to obtain credit

Equal Credit Opportunity Act

The formal judicial proceeding to prove the validity of a will and to distribute the assets of a decedent's estate is called:

probate

A ________ is a deed with no guarantees or warranties.

quitclaim deed

A ________ is the borrower's unconditional promise to repay the lender.

Promissory note

A "Section 502 Loan" is insured by the ________.

USDA

________ is evidence an individual has of his or her right to possess land.

Probate

A(n) ________ mortgage covers more than one piece of property.

blanket

Real property conveyed by will is called a ________.

devise

An offer may be withdrawn at any time prior to its acceptance by the offeree

true

The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and ________.

Periodic tenancy

Buyers' and sellers' marital status is not required in the contract.

true

Which of the following is a physical characteristic of land?

indestructability

Which disclosure is provided to comply with federal requirements for properties built before 1978?

Lead-Based Paint Disclosure

If the loan factor is $4.49 and the loan amount is $357,500, taxes are $7300/year and the insurance is $3103 per year, what is the monthly PITI payment?

$2,472.09

A loan assumption might be desirable because:

The loan assumption is generally less costly than a new loan

Earnest money is deposited in an escrow account when:

The contract is signed by all parties and acceptance is communicated

Jake (Seller) and Sarah (Buyer) entered into a contract for the sale of Jake's personal residence. In the contract, Jake promised to deliver a seller's disclosure of property condition within 5 days of the effective date of the contract. Jake never delivered the disclosure as promised. Which of the following statements is true?

Sarah has the right to terminate the contract and receive a refund of earnest money prior to closing (Page 24)

Damage or destruction of a property under contract prior to closing:

May result in termination of the contract

When a party is considering consulting an attorney for advice in a transaction an agent should:

Never discourage the use of an attorney

Prior to closing, severe damage to or destruction of a property under contract:

Can result in termination of the contract

The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and __________.

open listing

In a __________ lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business.

percentage lease

A(n) __________ is a type of seller financing wherein the owner retains title to the property while the purchaser takes possession of the premises and pays on the principal.

contract for deed

A(n) __________ is an agreement between two or more parties to do something or to refrain from doing something.

contract

When an individual owns real property, he or she is said to have a (n) __________ in that property.

freehold estate