TAB - Tennessee Affiliate Broker Exam

Question 21: A buyer's purchase agreement is conditioned on obtaining a loan commitment by a stated date, yet the buyer never submits any loan application at all. May the buyer claim the financing contingency failed?

No, because financing contingencies cannot be waived

Yes, because no commitment was obtained

No, because good faith required a real application

Yes, because contingencies let buyers cancel freely

Question 22: A purchase contract contains an inspection contingency that genuinely fails after the buyer acts diligently and delivers proper written notice within the period. What happens to the contract and the deposit?

The buyer forfeits the earnest money

The seller may sue for specific performance

The contract continues despite the failure

The contract terminates without breach

Question 23: A broker promises to use diligent efforts to market a Franklin home, and the owner promises to pay compensation and grant exclusivity if it sells. How is this exclusive listing classified as a contract?

A bilateral contract

A void contract

An option contract

A unilateral contract

Question 24: The moment a purchase contract becomes binding, the buyer gains a real ownership interest in the property while the seller keeps legal title as security until closing. What interest does the buyer hold?

A lien on the property

Equitable title

Legal title

A leasehold estate

Question 25: An instructor reviews items found in a typical purchase agreement and asks which one is NOT required for the contract to be valid. Which of the following is correct?

An adequate description of the property

The signatures of the parties to be bound

The broker's signature on the contract

Agreement on the purchase price

Question 26: A buyer and seller form a fully binding purchase agreement, but the buyer deposited no earnest money with the offer. What is the legal effect of the missing deposit on the contract?

The contract is voidable by the seller

The contract is unenforceable until a deposit is made

The contract is void for lack of consideration

The contract is still fully binding

Question 27: A purchase form provides that if the buyer defaults, the seller may keep the earnest money as the seller's sole and exclusive remedy. What role does the earnest money play under this clause?

Liquidated damages for the buyer's default

A retainer credited to the broker's fee

Consideration that formed the contract

A penalty designed to punish the buyer

Question 28: An investor transfers her rights under a purchase contract to a third party but obtains no release from the seller. If the third party fails to perform, what is the investor's position?

She is fully released from all liability

She remains secondarily liable to the seller

She has no further connection to the contract

She becomes the primary party once again

Question 29: A buyer assumes a seller's existing mortgage, and the lender then signs a release substituting the buyer as the only party liable and discharging the seller entirely. Which legal device accomplishes this?

Subrogation

Forbearance

Novation

Assignment

Question 30: An investor buys a freestanding pharmacy building where the tenant pays the property taxes, the insurance, and the maintenance in addition to base rent. Which type of lease is this?

A ground lease

A gross lease

A percentage lease

A triple net lease

Question 31: A shopping-center retailer signs a lease that requires a base rent plus a stated percentage of the store's gross sales above a set breakpoint. Which type of lease has the retailer signed?

A percentage lease

A gross lease

A ground lease

A net lease

Question 32: A developer leases bare land for ninety-nine years, builds an office tower on it, and owns that building during the term, with the improvements reverting to the landowner when the lease ends. Which lease is this?

A percentage lease

A ground lease

A gross lease

A sale-leaseback

Question 33: A buyer experiences ordinary buyer's remorse two days after signing a binding home purchase contract and assumes a three-day right to cancel exists. Is the buyer correct about that right?

No, but only a licensed attorney may cancel it

Yes, every buyer gets three days to cancel

No, there is no general right to cancel a purchase

Yes, because the closing has not occurred yet

Question 34: A clause in a deed of trust lets the lender declare the entire unpaid balance immediately due once the borrower defaults on the loan. Which clause does this describe?

A defeasance clause

A subordination clause

An alienation clause

An acceleration clause

Question 35: A homeowner in Knoxville makes the final payment on a loan and becomes entitled to a release of the lien. Which clause in the security instrument secures that right?

The defeasance clause

The escrow clause

The granting clause

The acceleration clause

Question 36: A landowner who carries financing for a buyer agrees that the carryback loan will take a lower priority position behind a construction loan the buyer obtains later. Which clause produces this result?

A prepayment clause

A subordination clause

An alienation clause

A defeasance clause

Question 37: A lender wants the power to call its full balance due whenever an owner conveys the property to a new buyer without the lender's approval. Which clause gives the lender that power?

An acceleration clause

A defeasance clause

An alienation clause

A power of sale clause

Question 38: A buyer wants to know which document she signs at closing that makes her personally promise to repay the debt and that can be used to pursue her for any shortfall. Which document is it?

The warranty deed

The closing disclosure

The deed of trust

The promissory note

Question 39: An instructor lists items found in every real estate promissory note. Which of the following belongs in the note rather than only in the recorded security instrument?

The principal amount of the debt

The trustee's appointment

The legal description of the land

The power of sale authority

Question 40: A loan officer in Memphis describes a mortgage that carries no federal insurance and no federal guarantee, leaving the lender to manage the credit risk itself. Which type of loan is this?

An FHA insured loan

A conventional loan

A VA guaranteed loan

A USDA Rural Development loan

TAB Tennessee Affiliate Broker Exam - Set 2 - Part 2

Question 21: A buyer's purchase agreement is conditioned on obtaining a loan commitment by a stated date, yet the buyer never submits any loan application at all. May the buyer claim the financing contingency failed?

Question 22: A purchase contract contains an inspection contingency that genuinely fails after the buyer acts diligently and delivers proper written notice within the period. What happens to the contract and the deposit?

Question 23: A broker promises to use diligent efforts to market a Franklin home, and the owner promises to pay compensation and grant exclusivity if it sells. How is this exclusive listing classified as a contract?

Question 24: The moment a purchase contract becomes binding, the buyer gains a real ownership interest in the property while the seller keeps legal title as security until closing. What interest does the buyer hold?

Question 25: An instructor reviews items found in a typical purchase agreement and asks which one is NOT required for the contract to be valid. Which of the following is correct?

Question 26: A buyer and seller form a fully binding purchase agreement, but the buyer deposited no earnest money with the offer. What is the legal effect of the missing deposit on the contract?

Question 27: A purchase form provides that if the buyer defaults, the seller may keep the earnest money as the seller's sole and exclusive remedy. What role does the earnest money play under this clause?

Question 28: An investor transfers her rights under a purchase contract to a third party but obtains no release from the seller. If the third party fails to perform, what is the investor's position?

Question 29: A buyer assumes a seller's existing mortgage, and the lender then signs a release substituting the buyer as the only party liable and discharging the seller entirely. Which legal device accomplishes this?

Question 30: An investor buys a freestanding pharmacy building where the tenant pays the property taxes, the insurance, and the maintenance in addition to base rent. Which type of lease is this?

Question 31: A shopping-center retailer signs a lease that requires a base rent plus a stated percentage of the store's gross sales above a set breakpoint. Which type of lease has the retailer signed?

Question 32: A developer leases bare land for ninety-nine years, builds an office tower on it, and owns that building during the term, with the improvements reverting to the landowner when the lease ends. Which lease is this?

Question 33: A buyer experiences ordinary buyer's remorse two days after signing a binding home purchase contract and assumes a three-day right to cancel exists. Is the buyer correct about that right?

Question 34: A clause in a deed of trust lets the lender declare the entire unpaid balance immediately due once the borrower defaults on the loan. Which clause does this describe?

Question 35: A homeowner in Knoxville makes the final payment on a loan and becomes entitled to a release of the lien. Which clause in the security instrument secures that right?

Question 36: A landowner who carries financing for a buyer agrees that the carryback loan will take a lower priority position behind a construction loan the buyer obtains later. Which clause produces this result?

Question 37: A lender wants the power to call its full balance due whenever an owner conveys the property to a new buyer without the lender's approval. Which clause gives the lender that power?

Question 38: A buyer wants to know which document she signs at closing that makes her personally promise to repay the debt and that can be used to pursue her for any shortfall. Which document is it?

Question 39: An instructor lists items found in every real estate promissory note. Which of the following belongs in the note rather than only in the recorded security instrument?

Question 40: A loan officer in Memphis describes a mortgage that carries no federal insurance and no federal guarantee, leaving the lender to manage the credit risk itself. Which type of loan is this?

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