Promulgated Contracts - Capture
Who pays for an investigation of an environmental, endangered species, or wetlands issue, according to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum?
Buyer
True or False - TREC can license builders and developers
FALSE
What information does the Disclosure of Relationship with Residential Service Company form convey?
It is a violation for a licence holder to receive a referral fee for simply passing a name along to customers.
Laura is in contract for a home. Her contract contains a Sale of Other Property by Buyer Addendum. The seller has just accepted a back-up contract for the property that doesn't have this contingency. What happens to Laura and her contract?
Laura can waive the addendum by a date she and the seller agree on. Otherwise her contract terminates
Which of these must the broker maintain a copy of for three years following a sale?
Lead based paint addendum
In Paragraph 10 of the sales contract, the parties will check a box saying that possession of the property will be transferred either upon closing and funding OR according to a temporary residential lease agreement.
Lease will terminate and the earnest money will be returned to the buyer
According to the Short Sale Addendum, the effective date of the contract is amended to the date the Seller notifies the Buyer that the:
Lender has approved a short sale
Housing occupancy standards are created by:
Local Laws
Mary has a rental property with a two-year lease on it. She collected a $500 security deposit at the beginning of the lease. Now she is selling the property. What will happen to the security deposit?
Mary will transfer the security deposit to the buyer at closing
A married couple is buying a property. Which is the BEST way to write their names in the contract?
Mike Smith and spouse Mara Smith
A seller is planning to convey a refrigerator through the Non-Realty Items Addendum. They financed the applianced purchase and still have a few payments left. Is this allowed? Why or why not?
No items conveyed through the Non-Realty Items Addendum must be fully owned by the seller
Brokers' fees are NOT included in the:
Sales Contract
A buyer who discovers a defect that they believe was misrepresented has a certain time after discovery to make a claim for damages. This is known as the:
Statute of limitations
What are two real estate governing bodies that were formed as a result of TRELA?
TREC and the Broker Lawyer Committee
If clients want to make an offer to the seller offering a "lease with option to buy," the buyer's agent should:
Tell the client that they will need an attorney to draw up the documents
According to the Addendum for "Back-Up" Contract, if a first contract is terminated and the seller notifies the back-up buyer of the termination, what happens?
That date becomes the effective date of the backup contract
Which of these is NOT something that is appropriate to put in Paragraph 11 (the Special Provisions section) of a TREC-promulgated contract?
That the contract is contingent on an inspection The Special Provisions section can be used for relevant business information (such as the names of the parties or the property description) that did not fit in the fields provided.
Who pays for an investigation of an environmental, endangered species, or wetlands issue, according to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum?
The Buyer
According to the NAR Code of Ethics, unless the agent has written instructions stating otherwise, they must present all offers until:
The Closing
When seller financing is being used, the seller becomes:
The Lender
The Seller's Disclosure Notice is a requirement of:
The Texas Property Code
What is the purpose of the Texas Real Estate Consumer Notice Concerning Hazards or Deficiencies?
The Texas Real Estate Consumer Notice Concerning Hazards or Deficiencies educates buyers on the purpose of property inspections. Specifically, it gives examples of certain hazards in the home (malfunctioning electrical circuits, lack of fire safety features like smoke alarms, improperly installed appliances, etc.) that can be avoided.
Before the Lead-Based Paint Addendum can be considered complete, which of these must happen?
The led based paint addendum must be signed by buyer, seller, and both brokers.
Agents are required to give all buyers a written copy of the title notice. Aside from Paragraph 6E(1) of the One to Four Family Residential contract, where else can this notice be found?
The notice to prospective buyer
After agreement by both parties, one of their agents filled in the blanks in Paragraph 9 of the One to Four Family (Resale) contract so that it read: "The closing of the sale will be on or before May 7, 2023." What does this mean?
The parties can close on or before May 7, 2023 (but not after)
Which of these is NOT a place where commission split agreements between cooperating brokers can be determined?
The sales contract
Paragraph 12 of the One to Four Family Residential Contract is also known as the "Settlement and Expenses" paragraph. What's an example of something that could be noted in this paragraph?
The seller pays for some of the buyers closing costs
The T-47 Residential Real Property Affidavit is only required when:
The seller provides an existing survey
As outlined in the TREC-promulgated sales contracts, what obligations does the seller have regarding the property condition at the time of sale?
The seller's obligations are a matter of negotiations with the buyer
True or False - A stand-alone refrigerator is considered personal property that will not transfer in a sale.
True - It will not stay with the property
Accessories are NOT permanently attached to the property, but are expected to stay with the property upon sale. Improvements and fixtures ARE permanently attached or built in to the property, and are also assumed to stay with the property upon sale.
True - he One-to-Four Family Residential Contract makes the below distinction.
Which broker fills in the effective date of a contract?
Typically, the first broker to touch the contract once all parties have signed will fill in the effective date.
A contract which courts cannot compel the parties to perform is:
Unenforceable
In Paragraph 10 of the sales contract, the parties check a box saying that possession of the property will be transferred:
Upon closing or according to the temporary residential lease agreement
The seller of a vacant lot needs to provide a seller's disclosure. The seller should:
Use a form from a local board that addresses the seller's disclosure of vacant lots or Para. 7E the Unimprovement Property Contract No areas in TREC for vacant lots
Alex is a licensed sales agent. Her client is selling her single-family home. In order not to violate TRELA contract law and run afoul of TREC, how should she create the contract?
Using TRECs One to Four Family Residential Contract
What determines which New Home Contract a license holder should use?
Wether or not the building has been completed or not
Which of these is an example of a time when it is acceptable NOT to use a TREC-promulgated form?
When the U.S Government requires a different form to be used
When should a license holder use form T-47, Residential Real Property Affidavit?
When the seller wants to use an existing survey Used to assure they haven't changed the boundaries since the survey was done
What is true of title insurance?
Which party pays for the title insurance policy is negotiable
Reggie made Betty an offer on her house. She countered, but Reggie has not yet accepted. Then along comes Archie with a better offer. Before accepting Archie's offer, what must Betty do?
Withdraw her counter from Reggie
residential service contract
policy that insures household items such as the air conditioner, heater, and large kitchen appliances; aka home warranty
How many TREC-promulgated contracts are there?
six 1 to 4 Family Residential Contract Farm and Ranch Contract New Home Contract (Completed Construction) New Home Contract (Incomplete Construction) Unimproved Property Contract Residential Condominium Contract
rollback taxes
taxes that can be assessed if the zoning of the property changes when it is sold
rollback taxes
taxes that can be assessed if the zoning of the property changes when it is sold (say, from farmland to residential) is responsible for paying those taxes.
In Paragraph 10 of the sales contract, the parties check a box saying that possession of the property will be transferred:
upon closing and funding OR according to a temporary residential lease agreement.
How much time does a seller have to cure a valid objection listed by the buyer in Paragraph 6D of the One to Four Family Residential Contract?
15
According to the One to Four contract, the buyer should receive their title policy documents within how many days after the title company receives the contract?
20
In Paragraph 6C of the One to Four contract, the parties negotiate the number of days the seller has to give the buyer an existing survey and the T-47 form. However, if the seller fails to furnish the existing survey or T-47 within that agreed-upon number of days, the buyer will obtain a new survey at the seller's expense. This occurs no later than how many days prior to closing?
3
In Paragraph 6C of the One to Four contract, the parties negotiate the number of days the seller has to give the buyer an existing survey and the T-47 form. However, if the seller fails to furnish the existing survey or T-47 within that agreed-upon number of days, the buyer will obtain a new survey at the seller's expense. This occurs no later than how many days prior to closing?
3 Days
Agent Kara put in MLS that she would compensate a buyer's broker 3% if they sold her listing. When Will, the buyer's agent, prepared the sales contract, he listed 3.5% as the agreement between brokers. How much is Will entitled to? Is he within his rights?
3% and Will is in violation of the MLS
If the seller is providing an existing survey during a real estate transaction, what must the license holder give to the buyer?
A T-47 Residential Contract Affidavit
What is one way that a homebuyer can locate any physical faults that may affect the safety or value of a home before purchasing it?
A home inspection
Which of these is an example of a unilateral contract?
A listing agreement (as well as a buyer's representation agreement) is a unilateral contract. Remember, a unilateral contract is an agreement made between two or more parties in which only ONE of those parties makes a promise or otherwise accepts an obligation.
Which of the following would constitute the unauthorized practice of law and/or be a violation of TRELA?
Adding or striking things from pre printed contract forms
What is one thing that differentiates TREC from the Broker-Lawyer Committee?
All of TREC's members are appointed by the governor. The Broker-Lawyer Committee, on the other hand, has members appointed by the State Bar of Texas, TREC, and the governor.
Angela's buyer has decided to terminate their contract during the option period. The buyer has sent a written demand to the escrow agent to release the earnest money, but Angela wants to keep it. What penalty might she eventually face, according to the TREC contract?
Angela will be entitled to pay back the earnest money, attorney fees, and cost of the lawsuit. The buyer has a right to in during this option period cancelation
According to Paragraph 6B (Commitments) in the promulgated One to Four Family Residential Contract, what must be provided to the buyer along with the title policy documents?
Any restrictive covenants
George Jr. inherited the family compound after George Sr. died. The will was contested, and some family is still disgruntled. George is now selling the property. How can a buyer best protect themself from any claims on the title?
Ask the family to sign a quitclaim deed One common scenario in which a quitclaim deed is needed is when a property is inherited by the current owner, but other members of the family might have a claim to the property. The title company would have each one of those relatives sign a quitclaim deed to "quit any claim" they might have to the property.
According to the Lead-Based Paint Addendum, how many days does the buyer have to get the property inspected for lead-based paint?
10
A sales contract states that $40,000 is to be paid to Robot Contractors for home repairs. Robot Contractors is owned by a friend of the buyer and after closing, the friend and the buyer split the $40,000. No repairs are made. What type of real estate fraud is this an example of?
Buyer rebate Causes money to return to the buyer
How can a buyer ensure they pay the least possible amount of pre-paid interest to the mortgage company?
Close near the end of the month
Commission is determined in:
Commission is determined/established in the listing agreement, buyer representation agreement, or agreements between brokers (usually in MLS).
Which of these is appropriate to put in the Special Provisions section of the One to Four Family Residential Contract?
Details on ARM
In a TREC-promulgated contract, what is the Third Party Financing Addendum concerned with?
Financing Contingencies
Emily and Josh signed a real estate contract with each other. The contract is now fully executed. What does that mean that Josh and Emily have done?
Fulfilled the material terms of the contract
Even the most experienced home inspectors have limitations. Which of these are frequently difficult to vet by visual inspection?
HVAC, Leak, Environmental Toxins
What form must be provided to any unrepresented buyer or seller that a license holder talks to?
IABS
According to Paragraph 5 of the One to Four Family Residential Contract, if the buyer fails to deposit the earnest money as agreed, the buyer will be:
In default
When all parties have agreed to all terms of an offer, have signed the offer, and have initialed any changes that took place during negotiations, what happens to the offer?
It becomes a contract
Agent Sarah knows her client wants to make the sales contract contingent on appraisal, so she adds a notation to that effect in the Special Provisions section of the contract. Why is that wrong?
It can be an unauthorized practice of law It's a violation to include anything in the Special Provisions section that alters the parties' legal rights
Agent Sarah knows her client wants to make the sales contract contingent on appraisal, so she adds a notation to that effect in the Special Provisions section of the contract. Why is that wrong?
It can be considered an unauthorized practice of law alters the parties' legal rights
What is special about the earnest option money section in the TREC promulgated sales contract? "Tik Tok"
It contains "time is of the essence" language
What is special about the earnest option money section in the TREC promulgated sales contract?
It contains time is of the essence language
A back-up buyer's contract is executed on September 28 with a four-day option period. On October 4, the seller informed the back-up buyer that the first contract was terminated. When does the back-up buyer's option period end?
October 8th at 5 P.M Never midnight! Too late
Which of these materials would be considered part of a property's mineral estate?
Oil The mineral estate does NOT include water, sand, caliche, gravel, limestone, or iron.
A buyer needs more option period time. They have asked the seller, who agreed, and signed TREC's Amendment to Contract. What else must they do to make the extension official?
Pay an additional option fee
According to the Addendum for "Back-Up" Contract, what happens if the first contract does not terminate by its deadline date?
The back up contract will terminate and earnest money will be returned to the terminated buyer. Read closely
Agent Alicia is helping her client buy a newly built home. The home is ready for move-in, and the client can't wait! For the transaction, Alicia does not use the New Home Contract (Completed Construction). What is the most likely reason why?
The builder requires that they use their contract
Who is required to sign the Buyer's Notice of Termination of Contract?
The buyer only
Does a contract NEED to be delivered in person to the title company?
The contract does not need to be dilivered in person to the title company
According to the Addendum for "Back-Up" Contract, if a first contract is terminated and the seller notifies the back-up buyer of the termination, what happens?
The date becomes the effective date of the backup contract No time lost
A buyer and seller have been in negotiations. They have everything in writing, have agreed to all terms, the contract is signed and changes initialed. Today, the written acceptance of the final agreement has been communicated to the other party. What is today called?
The effective date
If a buyer is sent an Addendum for Property Subject to Mandatory Membership in an Owner's Association and they don't like the terms, what remedy do they have?
They can terminate the contract within the first 3 days.
What happens when a homebuyer takes out a residential service contract on their newly purchased home?
They get a home warranty. Usually lasting 1 year
What happens when a homebuyer takes out a residential service contract on their newly purchased home?
They get a warranty for the property, usually a year
Buyer Raz goes into contract on a house in Texas. At the last minute, he is unable to obtain financing. What would he need to have in his contract to terminate it without penalty?
Third Party Financing Addendum
If a buyer is using VA financing, what will be part of the contract?
Third Party Financing Addendum Contract
What contract language phrase is used to convey that a time period is inflexible?
Time of the essence
When both parties mutually agree to terminate a contract, who provides the appropriate form?
Title Company
Which is the purpose of the Information About Brokerage Services form?
To inform clients on how brokers represent a party in a real estate contract
Buyer Jeremy gave the escrow agent $800 in earnest money and paid an additional $200 in option money. During the option period, Jeremy decided to terminate the contract. Jeremy was refunded $800. Is this correct? Why or why not?
Yes, because option money is never refundable
The buyer wants to make sure they will get the table and chairs that are currently in the home. Does anything need to be added to the contract?
Yes. It'll be in the non-realty items addendum
casualty loss
a loss arising from a sudden, unexpected, or unusual event such as a "fire, storm, or any natural disaster" or loss from theft. seller must restore the property to its previous condition by the closing date.
Residential Real Property Affidavit (form T-47) BOUNDS
a way for the seller to assure the buyer that they haven't changed the boundaries of the property