CEShop Law of Contracts flashcards: 8/31

The fee a lender charges for processing a loan is called ______.

A loan origination fee

Corinne's deed has no covenants of warranty, but if it did, it would be a specialty warranty deed. What type of deed does Corinne have?

Bargain and sale deed

Misunderstandings between a buyer and seller regarding personal and real property are most often discovered ___________________.

During the final walk-through

When a real estate transaction involving a governmental agency takes place, the forms used in the transaction will need to be provided by that agency. This is what is known as an ______ to TREC's rule.

Exception

Bart's listing agreement with his seller client prohibits the seller from listing the property with another brokerage prior to the expiration of the listing contract. What type of listing agreement do Bart and his client have?

Exclusive right to sell

Sam is taking out a home loan, which states the offered price and includes other important information, like the payments, the loan term, and Sam's signature. What type of contract is this?

Express

Sander and Ginny bought an old industrial site and plan to get grant money to put an environmental education center on the site. There are a few structures on the property, but they are in disrepair, and it will likely be less expensive to tear them down and build new than to rehabilitate them. However, the new owners are sure that they've made a great investment because the land is in great shape. This reflects which physical characteristic of real property?

Indestructibility

Kirk and his cousin Dewey decided to buy a vacation home. They entered into a contract with the seller, Crystal. Before finalizing the sale, Dewey wanted out, but he didn't want to let his cousin down. So instead of pulling out altogether, Dewey convinced his son to replace him in the purchase contract. Kirk and Crystal agreed to the substitution, and Dewey was released from all his obligations under the contract. Dewey's son is now the contracting party. What's this an example of?

Novation

You have a net listing with your seller client. With what other type of listing (or listings) may the net listing be used?

Open, exclusive agency, or exclusive right to sell

If an individual acquires rights or liabilities automatically due to law, and not through an agreement or act of their own, this is known as ______.

Operation of law

Commercial lenders operate in the _____mortgage market, making loans directly to consumers.

Primary

Jason purchased his dream home six months ago. After Jason received an inheritance from his uncle, he decided to pay off his mortgage. What should he consider before doing this?

Whether he will incur a prepayment penalty

How many lawyers does the governor appoint to the Broker-Lawyer Committee?

Zero

Prior to closing, who should review the Loan Estimate?

The buyer

Who should review the settlement statement before closing?

The buyer and the seller

What is equitable right of redemption?

The curing of the default prior to the foreclosure sale

Per TREC's residential One to Four Family (resale) contract, who's authorized to pay the buyer's broker fee at closing?

The escrow agent

If a minor enters into a contract with an adult, which of the following is true?

The minor may legally hold the adult to the contract, but the adult cannot legally hold the minor to the contract.

Per the Casualty Loss section of the TREC One to Four Family Residential Contract (Resale), who's responsible for restoring the property to its previous condition in the event the property is damaged or destroyed?

The seller

The _____ should provide the title insurance company with an affidavit of title when necessary.

The seller

Which of the following is a guideline used by Fannie Mae and Freddie Mac when determining if a loan is conforming?

Down payment

Which type of easement provides a right-of-way for a railroad?

An easement in gross

Mario lives in a state that requires an abstract of title for property conveyance. The chain of title is broken approximately 50 years prior to the current date. Which of these properly identifies the status of Mario's title?

Depending on his state's laws, Mario may have marketable title.

Which of the following statements is true about septic systems?

They differ in the way they are installed.

Texas licensee Jackson is leaving Brokerage A and joining Brokerage B. What will happen to Jackson's active listings?

They will remain with Brokerage A unless that brokerage allows otherwise.

Which section of the TREC One to Four Family Residential Contract (Resale) identifies the party who will pay for title insurance and the extent of the policy coverage?

Title Policy and Survey section

What is the purpose of the Broker-Lawyer Committee?

To draft contract forms

Harry is meeting with a prospective buyer client, June. Harry has presented June with the Information About Brokerage Services form and explained June's agency relationship options. Harry is now ready to present June with a buyer agency agreement. What will he say is the purpose of the contract?

To identify the terms of the buyer agent/buyer agency relationship