Chapter3_exam-bank_AnswerKey.docx - Texas Promulgated Forms Second Edition Update Texas Promulgated Forms Second Edition Update Chapter 3 Exam Bank

Chapter3_exam-bank_AnswerKey.docx - Texas Promulgated Forms...

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Texas Promulgated Forms, Second Edition Update Texas Promulgated Forms, Second Edition Update Chapter 3 Exam Bank Answer Key 1. b. The answer is Thomas Bud Smith and spouse Mary Ann Smith. Learning Objective 3.1. 2. b. The answer is buyer. Under the TREC Seller Financing Addendum, the buyer is responsible for payment for the credit report. Learning Objective 3.4. 3. a. The answer is how long the buyer has to provide the option fee. The buyer must provide the option fee within three days after the effective date of the contract. The time period is not negotiable. Learning Objective 3.1. 4. c. The answer is buyer. Under the TREC Loan Assumption Addendum, the buyer is responsible for payment for the credit report. Learning Objective 3.4. 5. a. The answer is seller’s contribution to buyer’s expenses. Earnest money is addressed in paragraph five. The addresses of the buyer and the seller for purposes of providing notices are addressed in paragraph 21. Specific repairs required by the buyer are addressed in paragraph seven. Learning Objective 3.1. 6. d. The answer is whether the option fee is refundable. The option fee is not refundable. Paragraph 23 addresses information related to the termination option. Learning Objective 3.1. 7. a. The answer is the contract will terminate and the buyer will get the earnest money. The buyer must give notice that the buyer has not received approval within a certain number of days negotiated by the parties. If the buyer fails to provide notice, there is no longer any financing contingency on this contract. Learning Objective 3.4. 8. b. The answer is paragraph 7. Paragraph 7 addresses property disclosure and repair information including sellers contribution towards a residential service contract. Learning Objective 3.1. 9. d. The answer is all of these. Learning Objective 3.2. 10. a. The answer is The Statute of Frauds. Obtaining the correct legal description is essential to having a valid contract. The Statute of Frauds requires that any agreement affecting the title to real estate have a valid legal description. Learning Objective 3.2. 11. d. The answer is in the blank for “city” put “unincorporated” or “none.” All of the other answers are wrong. Never leave a blank line blank. At a minimum, it should be filled out as “none” or N/A. Learning Objective 3.2. 12. d. The answer is 3A and 3C will be the same amount. If it is an all cash offer, then the cash payable at closing (3A) and the Sales Price (3C) will be the same. The other answers are wrong. Learning Objective 3.2. 13. d. The answer is do nothing; it is already in the contract. Learning Objective 3.3. 14. b. The answer is 3A is $168,000, 3B is $0, and 3C is $168,000. In an all cash offer, 3A and 3C will be the same amount. 3B will be $0. Learning Objective 3.2. 15. a. The answer is the buyer. Since the buyer is not at fault if the note holder does not consent, the buyer gets the earnest money. He should not be penalized for that fact.

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