principles of real estate 1 texas unit 9

Is the seller entitled to be present for the home inspection?

Because it is the seller's home, he is entitled to be present at the home inspection

Why might an investor offer an option to purchase a property?

Because once he has the option, all other potential buyers are locked out at least until the contract expires. Because he can risk a comparatively small amount of money to hold a property for a specific period without committing to buy it. Because he believes the value of the property may go up in the near future and the option allows him to lock in a lower price.

Because some property owners prefer to use contracts they draw up themselves, are real estate licensees allowed to help draw up those contracts?

No, licensees are barred from assisting in the creation of forms

While forbidden from practicing general law or business law, agents are allowed to practice real estate law if

Under no circumstances are real estate licensees allowed to practice any form of law unless they also are licensed attorneys.

Charlotte contracts to purchase a home from her sister, Beverley. Which represents consideration given to create a valid, enforceable contract?

a mutual promise of love and affection

An agreement in which the buyer and the seller have met all the obligations of the contract is called

an executed agreement

The transfer of rights and/or duties under a contract is called

assignment

In an installment contract or contract for deed, the buyer obtains possession

before delivery of the deed

A seller breaks a sales contract by NOT delivering title to the buyer under the conditions stated in the agreement. This is called

breach of contract

The Texas Real Estate Commission warns that there is no promulgated contract-for-deed form, therefore

competent legal counsel should be obtained by both seller and buyer

Using force to obtain an agreement is

duress

A contract is void if it involves

illegal purpose

The Texas Real Estate Commission regulates licensed real estate brokers and sales agents in the state. May only licensees use form promulgated by the Commission?

no, anyone can use the forms

What is the difference between a "TREC-approved" form and a "TREC-promulgated" form?

promulgated forms must be used, while approved forms may be used.

May a real estate broker or sales agent receive a referral fee from a cable service provider?

referral fees may be accepted if they are disclosed to the client ahead of time

If one of the parties defaults on a real estate contract, the nondefaulting party may

sue for specific performance

Forms that are promulgated by the Texas Real Estate Commission are drafted by

the Texas Real Estate Broker-Lawyer Committee

Acceptance of a written offer to purchase real estate requires the signature of

the offeree

There are four exceptions to the requirement for a license holder to use a contract that has been promulgated for a particular contract situation. Which is NOT an exception?

transactions in which a relocation company requires a different form to be used. 4 exceptions are 1)Transactions in which the license holder is functioning solely as a principal, not as an agent. 2)Transactions in which an agency of the U.S. government requires a different form to be used. 3)Transactions for which a contract form has been prepared by the property owner or prepared by an attorney and required by the property owner. 4)no standard contract form has been promulgated by the Texas Real Estate Commission (TREC), and the license holder uses a form prepared by an attorney-at-law licensed by this state and approved by the attorney for the particular kind of transactions involved or prepared by Texas Real Estate Broker-Lawyer Committee and made available for trial use by license holders with the consent of the Commission.

An oral listing agreement is which of the following?

unenforceable

An option contract is what kind of contract?

unilateral

Contracts agreed to under undue influence are which of the following at the option of the injured party?

voidable

If a builder substantially completes construction on the deck of a home but fails to provide waterproofing or staining as per the contract, must the homeowner pay the builder?

yes, but the contract may be discharged through an agreement to pay the builder less the cost of waterproofing and staining

Can a seller challenge an inspection report?

yes, if the seller is presented with a list of items from the report, he may discuss and refute them

If a homeseller and a homebuyer draw up a valid real estate contract between them, without the assistance of a real estate broker or real estate attorney, is the transaction legal and enforceable?

yes, it is legal and enforceable provided the principals are of age and sound mind

The statute of frauds requires which element?

A spouse's signature when necessary to release marital rights in community or homestead property The signature of the party to be charged The signatures of each seller when sellers are co-owners of property The statute of frauds requires that instruments affecting interests in real estate be in writing to be enforceable

Who benefits most from the use of TREC-promulgated and/or approved forms?

Consumers

In real estate sales contracts, which term is used to establish the effective date of the contract?

Date of final acceptance

If a home is offered "as is," is it worth the trouble of hiring a home inspector?

Hiring a home inspector helps a buyer identify home flaws and decide whether to pursue the transaction

May a real estate sales agent simply write in an exception to a contract clause, or must an approved or promulgated addendum be used?

If there is an approved or promulgated form that addresses the modification, that form must be used

A broker took a listing for an office building. When it went under contract, the purchaser requested a property condition inspection. The broker hired an inspector who did not find three serious defects in the property. After the purchaser sued the broker, who was an agent of the seller, the courts determined that the broker was also acting as an agent of the purchaser under which kind of contract?

Implied

Through its termination option paragraph, the Texas-promulgated residential sales contract allows the buyer to do what

The buyer may terminate the contract during the option period for any reason

Must a buyer use a licensed home inspector to review the house (can he use a relative or friend)?

The buyer must use a Texas-licensed inspector.

An escrow agreement requires the seller to deposit which of the following with the escrow agent?

The deed

What may happen if the defaulting party in a contract refuses to release the escrow money under a TREC promulgated contract?

The defaulting party will be liable to the other party for liquidated damages