Texas Real Estate License Exam Prep

RESPA -- Regulation X Real Estate Settlement Procedures Act

* 1️⃣9️⃣7️⃣5️⃣Federal Law that protects consumers by regulating title companies and lenders regarding true closing costs. * Prohibits Kickbacks, certain kinds of referral fees and limits the use of escrows. * Since 2011 it's enforced by the CFPB -- Consumer Financial Protection Bureau

Buyer has _________ days after the Effective Date of the contract to deliver earnest money and option fee to escrow agent

* 3 days * the check is made out to the escrow agent -- Title Company-- * earnest $ and option fee may be paid separately or in a single payment.

Statutory or Banker's year

* 360 days in a year and 30 days in each month

One Acre equal ______ square feet

* 43,560 square feet 4 Old Ladies👵👵👵👵 driving 🚗 35 mph on a 60 mph road 🛣

One Mile equals ___ feet 🍅🍅🍅🍅🍅

* 5,280 feet One mile has Five tomatoes 1 mile = 🍅🍅🍅🍅🍅 and toes belong to feet 🐾

1 square yard = _______square feet.

* 9 square feet 9 stinky sq feet🐾 fit in the smelly sq yard

What is a Resale Certificate?

* A Resale Certificate has info about assessments/HOA fees and lawsuits in which the HOA is a party. * The HOA has to give the Buyer: the Resale Certificate, CC&Rs and Dedicatory Instruments. (Property Code) * HOA fills out the TREC form, Subdivision Information, Including * The Seller pays for the Resale Certificate Resale Certificate For Property Subject To Mandatory Membership In A Property Owners' Association (Chapter 207, Texas Property Code) ¶6 TITLE POLICY AND SURVEY E. (2) MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S TREC 1-4 FRC

Lenders will require Flood Insurance when...

* A property is in a flood zone according to Federal Emergency🚨 Management Agency -- FEMA maps.

Sections

* A township is divided into 36 sections, numbered 1 thru 36. * One Section = 1 square mile = 6️⃣4️⃣0️⃣ acres. * 36 Sections = 1 Township in the Rectangular (government) Survey System. * Section is numbered starting on the right corner all the way to the bottom right corner of the grid, following an "S" pattern ending with the number 36. [ 6 5 4 3 2 1 ] [ 7 8 9 10 11 12 ] [18 17 16 15 14 13] [..... 36]

Impound or Escrow Account

* Account that mortgage lenders require borrowers to have to pay their monthly loan payments -- which include PITI - Principal, Interest., Property Taxes & Homeowner's insurance; and sometimes HOA fees.

What happens if an HOA member doesn't pay HOA fees? ¶6 TITLE POLICY AND SURVEY E. (1) TREC 1-4 FRC

* An HOA member is obligated to pay assessments(HOA fees) which are subject to change. * Failure to pay will result in a lien being placed by the HOA and foreclosure of the Property. ¶6 TITLE POLICY AND SURVEY E. (2) MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S TREC 1-4 FRC

Formula for Capitalization Rate

* Annual NOI divided by Price of Property = Capitalization rate *net operating income noi ÷ price of prop = Cap Rate

Conventional Financing

* Buyer normally gets a 30-year amortized loan, though 15-year and bi-monthly payment loans are available. A (1) THIRD PARTY FINANCING ADDENDUM

"Subject to" Loan

* Buyer takes over the payments on the Seller's existing loan but is not personally liable, so the seller is not released from the responsibility of repaying the loan.

What happens if the Seller has notified the buyer that he/she must waive the "Sale Of Other Property" Contingency by x date because the seller has accepted a written offer from another buyer and the first buyer waives the Contingency, but fails to close and fund because he/she didn't get the money from the sale of his/her own property?

* Buyer will be in default, so the Seller can exercise the remedies ¶ 15 * Addendum for Sale of Other Property by Buyer

What happens if Seller fails to deliver the Title Commitment and Exception Documents via the Title Company to the Buyer within the 20 days after the Title Company has received the TREC 1-4 FRC?

* Delivery time is automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier. If this deadline is also missed, Buyer can terminate the contract and get the earnest money back ¶6 TITLE POLICY AND SURVEY B. COMMITMENT TREC 1-4 FRC

There's no prepayment penalty in these types of loans

* FHA insured loans and VA guaranteed loans

Freddie Mac

* Federal Home Loan Mortgage Corporation 1970

Loan Origination Fee

* Fee charged by the lender, usually 1% of the loan amount, for initiating the loan process -- the loan application, credit report, verification of deposits and employment; and preparing everything needed for the underwriter.

Ginnie Mae

* Government National Mortgage Association 1968 * A Government Agency that plays an important role in the secondary mortgage market. * It GUARANTEES mortgage-backed securities using FHA and VA loans as collateral. * It Does Not Buy Mortgages ‼️👀

At closing these are paid Upfront by the Buyer:

* HO insurance premiums for 14 months. * Rent if there's a Buyer's Temporary Lease * Prepaid interest -- For example, if you are closing in January then your first mortgage payment will be due on March 1. Because the lender will collect prepaid interest from the date of closing through January 31. That makes your first payment due on March 1 because mortgage interest is paid in arrears. Your March 1 payment will cover the interest that will have accrued in the month of February. (there are more costs that are prepaid...not just these)

What happens if Seller doesn't give the Existing Survey and/or the T-47 Affidavit within the time specified in the contract? ¶6 TITLE POLICY AND SURVEY C. SURVEY TREC 1-4 FRC

* If Seller fails to give the existing survey and/or the T-47 Notarized Affidavit within the time, Buyer can order a new survey at SELLER's EXPENSE no later than 3 days prior to Closing Date.

What are Exception Documents and who pays for them? TREC 1-4 FRC

* They're legible copies of the restrictive covenants and documents evidencing exceptions in the Title Commitment other than the standard printed exceptions. * They are furnished by the Seller. * They're paid by the Buyer. * They're delivered by the Title company to the Buyer ¶6 TITLE POLICY AND SURVEY B. COMMITMENT TREC 1-4 FRC

Hypothecation

* To pledge property as security for an obligation or loan without giving up possession of it.

Controlled Business Arrangement -- CBA --☂

* To streamline the settlement process, a real estate firm, title insurance company, mortgage broker & home inspection company, can have an arrangement to offer a package of services to consumers. * RESPA permits a CBA as long as a consumer is clearly informed of the relationship among the service providers, that participation is not required, and that other providers are available.

Townships

* a square with 6-mile sides and an area of 36 square miles. * Each Township is divided into 36 Sections * Townships are principal units of the Rectangular (government) Survey System.

Release Deed🔗🔐🕊️

* aka Deed of Reconveyance, transfers all rights given to a Trustee under a Deed of Trust back to the mortgagor after the loan has been fully repaid. * Trustee's legal title passes to the Trustor/mortgagor when the debt is paid in full via a Defeasance Clause * However, in Texas, Borrowers have legal title at closing and funding and the Deed is granted in their name, so Trustees only releases the mortgage lien on the property when the loan has been paid. There's no Release Deed.

Codicil

* amends a will; * a will that partially revokes an existing or earlier will

Rectangular Survey System

* established by the federal government in 1️⃣7️⃣8️⃣5️⃣ . * It uses principal meridians↕ and base lines ↔️ , range/longitudinal ↕ and township/latitude lines ↔️, Townships and Sections.

In a lot, front footage is the______ and the 2nd number is the______

* first measurement * depth of the lot

Accretion

* increase of land by the deposit of sand, rock or soil washed up naturally from a river, lake, or sea.

Principal Meridian

* main line running north to south↕️ and intersecting a base line in the Rectangular (government) Survey System.

To calculate Prorated Rent at Closing

* monthly rent amount divided by the number of days in a month times the number of days up to the closing date * Rent ÷ # of days in a month x # of days up to the closing date

Monuments

* natural or manmade fixed objects used as permanent reference points for surveying or to mark land ownership boundaries. * used in metes and bounds legal descriptions * Natural monuments - trees, rocks, streams - take precedent over linear measurements.

In case of dispute, the only person with legal recourse on an existing survey is the person who ________.

* paid for the survey, so this could be a liability for a buyer who accepts the seller's existing survey. * it's a good idea to amend the owner's title policy to include "shortages in area" at the expense of either Buyer or Seller, so that the Buyer will be protected in the future. * The shortages in area amendment on the title policy is called a "Rider" 6.TITLE POLICY AND SURVEY: A. TITLE POLICY:

Farmer Mac The Federal Agricultural Mortgage Corporation

* privately owned and publicly traded company established by Congress * 4th player in the secondary mortgage market * buys agricultural loans -- for farms, ranches or residential props in agricultural areas *loans are guaranteed by the USDA -- The US Dept. of Agriculture * USDA home loan is a zero down payment mortgage

Range Lines

* run north and south ↕, parallel to the principal meridian and * are equally located 6 miles apart, in the Rectangular (government) Survey System. * aka Longitudinal lines

Thrifts

* savings associations that specialize in real estate. * They differ from commercial banks in that they can borrow money from the Federal Home Loan Bank System, which allows them to pay members higher interest.

* 144 square inches 1️⃣4️⃣4️⃣ inch🐛s bite a

One square foot equals ____ square inches

The Texas Veterans Land Board (VLB) was created in _______

* 1946

1 cubic yard

* 27 cubic feet 27 Rubik's cubed feet dance on the cubic yard

Federal Reserve Banks

*called a "banker's bank," *store currency and coin, process checks and electronic payments. *supervise commercial banks in their regions. *12 Federal Reserve Banks and *24 branches that make up the Federal Reserve System *Reserve Banks are the operating arms of the central bank.

To calculate Discount Points on a loan

1 point = 1% of the Loan Amount. Discount Points% x loan amt. = $ amt. of disc. pts.

Name the Interests aka Estates in land that at Freehold aka Non-Leasehold

1. Fee Simple Absolute 2. Fee Simple Defeasible 3. Life Estate

* One Section is equal to 1 square mile which = *the Rectangular Survey System

640 acres

Conforming Loans

A Conventional loan that meets Fannie Mae and Freddie Mac guidelines.

How many days does the Seller have to deliver a Commitment for Title Insurance to the Buyer?

After Title Company receives a copy of the TREC 1-4 FRC, Sellers have 2️⃣0️⃣ days to deliver, via the Title co., the Title Commitment, Restrictive Covenants and Exception Documents to Buyer's address (¶21). ¶6 TITLE POLICY AND SURVEY B. COMMITMENT TREC 1-4 FRC

What happens if Seller provides the Existing Survey and the T-47 Notarized affidavit within the time specified in the contract but either of these aren't acceptable to the Title Company OR Buyer's lender(s)? ¶6 TITLE POLICY AND SURVEY C. SURVEY TREC 1-4 FRC

Buyer can order a New Survey at EITHER Seller's or Buyer's expense no later than 3 days prior to Closing Date.

Buydown

Refers to the payment of discount points by the borrower/ buyer to the lender to buy down or lower the interest rate thus reducing the monthly payments.

Avulsion

The sudden tearing away of land, as by earthquake〽️, flood🌊 , volcanic action🌋, or the sudden change in the course of a stream🏞️. (A Vol-taire)

* Calculate Square Feet and the area of a square or rectangle

Use L x W to ________

TREC 1-4 Family Residential Contract (Resale) ¶ 1

¶ 1: PARTIES full, legal names. Good idea to make relationships known -- single, married -- and ownership interests -- equal or otherwise, joint tenants. * Sellers' names can be obtained from the MLS listing or from the county tax records. * if names of the parties don't fit in ¶ 1, they can be filled in ¶ 11 Special Provisions

TREC 1-4 Family Residential Contract (Resale) ¶ 2(A)

¶ PROPERTY: 2(A) LAND: the correct legal description using Lot & Block is absolutely essential to a binding and legally enforceable contract. * An incorrect legal description makes the contract voidable! * A street address is not sufficient to describe a property in the contract.

¶6 TITLE POLICY AND SURVEY E. TITLE NOTICES: (1) TREC 1-4 FRC

E. TITLE NOTICES: (1) ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering the Property examined by an attorney of Buyer's choice, OR Buyers should be given OR they should get a Title Policy. If a Title Policy is given, the Commitment should be promptly reviewed by an attorney of Buyer's choice due to the time limitations on Buyer's right to object. **(Buyer has to object by the Closing Date or xxx days after receiving the Commitment, Exception Documents, and the survey.....whichever comes earlier ¶6 TITLE POLICY AND SURVEY D. Objections TREC 1-4 FRC)**

What can the Seller do if the Buyer fails to deliver the earnest money within 3 days after the Effective Date? ¶5 TREC 1-4 FRC (Resale)

If Buyer FAILS to deliver it, Seller: 1) may terminate contract OR 2) exercise Seller's remedies in ¶ 15, OR 3) Both(terminate contract + ¶ 15 remedies), by giving notice to Buyer before Buyer delivers the LATE earnest money. ¶5 TREC 1-4 FRC (Resale)

The property being sold doesn't have a Survey. Who pays to have the Survey done? ¶6 TITLE POLICY AND SURVEY C. SURVEY TREC 1-4 FRC

EITHER the Seller or Buyer can pay for the Brand New Survey and deliver it no later than 3 days prior to Closing Date.

VA Guaranteed Financing

¶A (4): This type of financing is available to all qualified veterans. The top 25% of the loan is "guaranteed" by the federal government which makes it a low-risk loan for the lender. That is why, with full entitlement, the veteran can purchase a home with zero down payment. THIRD PARTY FINANCING ADDENDUM -- VA loan entitlement is the dollar amount the Department of Veterans Affairs will guarantee on each VA home loan and helps determine how much a veteran can borrow before needing a down payment. VA loan entitlement is typically either $36,000 or 25% of the loan amount up to the conforming loan limit.

ECOA -- Equal Credit Opportunity Act -- 1974

⚖️💳Makes it unlawful for creditors/lenders to discriminate against applicants based on: *💍Marital Status( in non-community property states) *👵 Age or *💸An applicant's income because it comes from a Public Assistance Program

What happens if the Third Day to deliver the Earnest Money or the Option Fee falls on a Saturday, Sunday or legal holiday? ¶5 TREC 1-4 FRC (Resale)

* If the THIRD DAY to deliver the earnest money and the Option fee falls on a Saturday, Sunday, or legal holiday, the time to deliver it is extended until the END of the next day -- 11:59 pm -- that is not Saturday, Sunday, or Legal Holiday. Day 1 or Day 2 can fall on a Saturday., Sunday, or Legal Holiday so the extension rule ONLY applies to the 3rd DAY! Only 3rd day is Funky *Earnest money and Option Fee Check(s) is delivered the Title co., or attorney (escrow agent) *Real Estate agents have to get a receipt from the Title co., or attorney to prove they have turned in Earnest Money and Option Fee on time. Time is of the Essence for Earnest Money and Option Fee⏰ *If the earnest money isn't turned in on time, the Seller can terminate the contract, or exercise Seller's remedies under Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money ¶5 TREC 1-4 FRC (Resale) * If the Option Fee isn't turned in on time, the Buyer will not have the unrestricted right to terminate the contract

Kick-out Clause

* Is a clause that protects the Seller when the contract is contingent upon Buyers selling their home in order to use the money from that sale to purchase the seller's property * During the contingency period established in the addendum, if Seller receives and Accepts a written offer from another buyer, the Seller must notify the first Buyer and require that he/she waive the contingency by a certain date, otherwise the contract will terminate automatically and the earnest money will be refunded to Buyer. * The Kick-out clause allows the seller to continue showing the house to other buyers as a hedge against the first buyers not being able to sell their house. * The clause is in the Addendum for Sale of Other Property by Buyer * time is of the essence ⏰; strict compliance with the times for performance is required.

Economic life

* Is the expected period of time during which an asset remains useful to the average owner

To calculate volume in cubic feet

* L x W x H

Area of Square or Rectangle

* Length times Width L x W

Township Lines

* Lines running east to west ↔️, parallel to the base line in the Rectangular (government) Survey System. * are 6 miles apart. * aka Latitude Lines

Depreciation

* Loss of value in a property for any reason📉. * Forms of Depreciation: * Functional Obsolescence * Economic Obsolescence -- External * Physical deterioration. *According to the IRS -- Depreciation is the recovery of the cost of the property over a number of years. You deduct a part of the cost every year until you fully recover its cost.

Texas Homestead laws don't protect primary residences from these liens:

* Mortgage (Deed of Trust) & Property Tax liens * Texas homestead protection laws guard your homestead against foreclosure by judgment creditors such as credit card holders, bill collectors, or winning parties in lawsuits. **(not in course. FYI) Despite Texas' homestead exemption, creditors can still place judgment liens against a debtor's primary real estate. Texas laws only exempt primary residences from Seizures, not liens👁‍🗨. If a debtor sells a homestead with a lien, the debtor has six months to invest the proceeds into a new primary residence. Otherwise, the creditor can use the proceeds to fulfill the judgment. A judgment lien might not be able to take a home away from a debtor, but it can still prevent its sale. Therefore, to sell a piece of property that has a judgment lien against it, one must first remove or release the lien.

The amount of money the Escrow Agent receives under ¶ 5 Earnest Money and Termination Option shall be applied first to the _______________ and, then to the _____________.

* Option Fee * Earnest Money

Texas Veterans Loan Program 🎖

* Program from the Texas Veterans Land Board allows Texas Veterans to borrow: ----- $150,000 to purchase land with a minimum down payment of 5% for 1 acre or more ------ for a home purchase a with low-interest rates and little or no down payment. * A(2) of THIRD PARTY FINANCING ADDENDUM

These are paid in Arrears:

* Property Taxes * Interest on the Loan * During closing, the lender collects prepaid interest from the date of closing through the end of the month👀‼️ * After this, mortgage interest is paid in arrears * For example, your March 1st payment covers the interest for the month of February.

If Seller's existing survey will be used for the property, then it should be accompanied with a _______ and both are given to the Buyer AND the Title Co. within X days after the Effective Date of contract. ¶6 TITLE POLICY AND SURVEY C. SURVEY TREC 1-4 FRC

* T-47 Notarized Affidavit aka Residential Real Prop Affidavit from the Tx Dept. of Insurance. *If Seller fails to give survey OR affidavit within the time, Buyer can obtain a new survey (Buyer's agent orders it) at SELLER's EXPENSE no later than 3 days prior to Closing Date. * If Seller provides the existing survey OR affidavit but these aren't acceptable to Title Company or Buyer's lender(s), Buyer can obtain a new survey (Buyer's agent orders it) at EITHER Seller's or Buyer's expense no later than 3 days prior to Closing Date. ¶6 TITLE POLICY AND SURVEY C. SURVEY TREC 1-4 FRC

Fannie Mae

* The Federal National Mortgage Association 1938

Assumption of a Loan

* The buyer takes over the loan and is fully liable and responsible for repayment of the debt. * The seller is released from all obligation if the lender allows.

Equitable Right of Redemption 😇

* The right of a borrower who has defaulted on the mortgage loan to recover the property prior to its sale in a non-judicial foreclosure by paying the loan balance in full and other fees/charges. * This can be done up until the day of the foreclosure sale. * Once the property is sold, the borrower can't redeem it. so the Homestead exemption doesn't apply.

FHA Insured Financing

* There are many types of FHA loans, but the standard is Section 203-B loan. * FHA loans have a loan limit of $356,362 for single-family homes with a 3.5% down payment and 580 credit score * Since these loans are insured by the government, the lender allows a higher qualifying ratio. A (3) THIRD PARTY FINANCING ADDENDUM

How much earnest money must the buyer give?

* There is no set amount for earnest money. * It shows the buyer's serious intention to purchase and it's an enticement to sellers. ***Earnest money Is Not Required, it's just a show of good faith. ¶5 TREC 1-4 FRC (Resale)

Option Contract

* seller gives a potential buyer the right to buy the property at a fixed price within a stated period of time. * The optionee (buyer) has to pay a fee for this option right, but has no obligation to buy. * The optionee (buyer) may decide to either exercise the option right and buy or allow the option right to expire. * An option contract is not a sales contract. * It's a unilateral contract where the only obligated party is the owner who will have to sell the prop to the optionee if the optionee decides to exercise the option. *The option is assignable to another party unless the contract forbids it. * The option fee is non-refundable if the option isn't exercised, but if it is, the contract can stipulate that the seller may refund the option fee to the buyer or apply it to the purchase price at closing. * An option in a lease grants the lessee the privilege of renewing the lease but requires notice on or before a certain date of intent to exercise the option. * Some leases grant the lessee the option of purchasing the leased property.

To calculate property taxes

* tax rate ÷ 100 and multiplied by assessed value

Title Theory States

* the Trustee holds the title to the property in the name of the borrower through a Deed of Trust in which the lender is the beneficiary. *If Borrower defaults on the loan, the Trustee will initiate a Non-Judicial Foreclosure * When the loan is completely paid off, the lender issues and records a Deed of Reconveyance in favor of the borrower who then has clear title to the property. * Texas is a Title Theory state, however in Texas, the borrower receives title at closing and a lien is placed on the property until the amount in the Deed of Trust has been fully paid and in case of default the Trustee initiates a Non-Judicial Foreclosure.

Metes-and-Bounds

* 👴Oldest form of land description in the US. * The description starts with a benchmark --permanent reference mark-- and returns to it * the benchmark is aka the point of beginning (POB) or point of commencement (POC). * uses directions and degrees. * paces and square feet

Area of a Triangle

* 🔺A = 1/2 base times height A=1/2bh

"Red Flags" that signal mortgage fraud

* 🚩an unrecorded deed -- Is the seller really the owner if he cannot produce a recorded valid deed? • 🚩Loan secured by property recently paid off -- borrower wants lender to place a lien on a different property that "has been paid off" instead of putting the lien on the home the loan will be used for. • 🚩Proposing sale within a year of obtaining title

Who pays to have the title policy amended for shortages in area of the property ?

*Either Buyer or Seller depending on what was established in ¶6 TITLE POLICY AND SURVEY A TITLE POLICY TREC 1-4 FRC (Resale) *This is a rider that protects the buyer in the future in case someone else's survey claims the buyer's survey is wrong (court costs & atty's fees are paid for if there's a survey dispute about the area of the prop) *This amendment should always be included if the Seller's existing survey is going to be used, so that the Buyer is protected, because the only person who has legal recourse in case of dispute over surveys is the person who paid for the survey (6.TITLE POLICY AND SURVEY: A. TITLE POLICY: (8) The standard printed exception as to discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements: ... (ii) will be amended to read, "shortages in area" at the expense of Buyer Seller)

Homeowner's insurance premiums owed by the Seller and Buyer at closing

*To calculate what the Seller owes: Annual Insurance Premium amount divided by 365 or 360 days multiplied number of days up to the closing date. *The buyer has to pay in advance 14 months of insurance premiums at closing

Reverse Mortgage aka Home Equity Conversion Mortgage (HECM),

*loan based on the equity in a primary residence *for 62 yrs.+ with 20% + equity *No monthly Principal or Interest payments -- only Property Taxes and Homeowner's Insurance are paid * 60% tax-free cash out of the equity * Loan is paid back with interest when the home is sold or the homeowner dies. * can be an FHA insured loan or not.

Federal Reserve System -- the Fed

*sets monetary policy *sets the Discount Rates for banks. *Sets the amount of money banks have to have in reserve

Promissory Note

*written and signed promise to pay *creates the debt *evidence of the debt *personal and intangible property owned by the lender *gets sold on the secondary market -- transferable to 3rd parties

Greenbelt

*zoning to retain areas of wild or agricultural land surrounding urban areas.

Name the TREC Addenda that can be part of the TREC 1-4 FRC

1. Third Party Financing Addendum 2. Seller Financing Addendum 3. Loan Assumption Addendum 4. Addendum Concerning Right to Terminate Due to Lender's Appraisal 5. Addendum for Seller's Disclosure of Information on Lead-based Paint and Lead-based Paint Hazards as Required by Federal Law 6. Addendum for Sale of Other Property by Buyer 7. Addendum for "Back-Up" Contract 8. Addendum for Property Subject to Mandatory Membership in a Property Owners Association 9. Buyer's Temporary Residential Lease 10. Seller's Temporary Residential Lease 11. Short Sale Addendum 12. Addendum for Reservation of Oil, Gas and Other Minerals 13. Addendum for Authorizing Hydrostatic Testing 14. Addendum for Property in a Propane Gas System Service Area 15. Addendum for Coastal Area Property 16. Addendum for Property Located Seaward of the Gulf Intracoastal Waterway 17. Environmental Assessment, Threatened or Endangered Species and Wetlands Addendum 18. Addendum Regarding Residential Leases 19. Addendum Regarding Fixture Leases Other (list): ie. Non-Realty Items Addendum

¶6B TREC 1-4 FRC (Resale)

B. COMMITMENT: Within 20 days after the Title Company receives a copy of this contract, Seller has to give the Buyer a commitment for title insurance (Commitment) and, at Buyer's expense, legible copies of restrictive covenants and documents evidencing exceptions in the Commitment (Exception Documents) other than the standard printed exceptions. Seller authorizes the Title Company to deliver the Commitment and Exception Documents to Buyer at Buyer's address(¶21). If the Commitment and Exception Documents are not delivered to Buyer within the specified time, the time for delivery will be automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier. If the Commitment and Exception Documents are not delivered within the time required, Buyer may terminate this contract and the earnest money will be refunded to Buyer.

¶6 C. TREC 1-4 FRC

C. SURVEY: must be done by a Registered Professional Land Surveyor acceptable to the Title Company AND Buyer's lender(s). (1) Within X days after the Effective Date of contract, Sellers have to give Buyers and Title Co. their existing survey AND a T-47 Notarized Affidavit (Residential Real Prop Affidavit from the Tx Dept. of Ins). If Seller fails to give survey OR affidavit within the time, Buyer can obtain a new survey at SELLER's EXPENSE no later than 3 days prior to Closing Date. If Seller provides the existing survey OR affidavit but these aren't acceptable to Title Company or Buyer's lender(s), Buyer can obtain a new survey at EITHER Seller's or Buyer's expense no later than 3 days prior to Closing Date. B R A N D N E W S U R V E Y (2) Within X days after the Effective Date of the contract, Buyer can get a NEW survey at Buyer's expense. Buyer is deemed to receive the survey on the date of actual receipt or the date specified in this paragraph, whichever is earlier. q (3) Within X days after the Effective Date of the contract, Seller, at Seller's expense has to give a new survey to Buyer. ¶6 TITLE POLICY AND SURVEY C. SURVEY TREC 1-4 FRC

¶6 TITLE POLICY AND SURVEY D. TREC 1-4 FRC

D. OBJECTIONS: Buyer may object in writing to defects, exceptions, or encumbrances to title: disclosed on the survey other than items 6A(1) through (7) above; disclosed in the Commitment other than items 6A(1) through (9) above; or which prohibit the following use or activity: XXXX Buyer must object the earlier of (i) the Closing Date or (ii) xxx days after Buyer receives the Commitment, Exception Documents, and the survey. Buyer's failure to object within the time allowed will constitute a waiver of Buyer's right to object; except that the requirements in Schedule C of the Commitment are not waived by Buyer. Provided Seller is not obligated to incur any expense, Seller shall cure any timely objections of Buyer or any third party lender within 15 days after Seller receives the objections (Cure Period) and the Closing Date will be extended as necessary. If objections are not cured within the Cure Period, Buyer may, by delivering notice to Seller within 5 days after the end of the Cure Period: (i) terminate this contract and the earnest money will be refunded to Buyer; or (ii) waive the objections. If Buyer does not terminate within the time required, Buyer shall be deemed to have waived the objections. If the Commitment or Survey is revised or any new Exception Document(s) is delivered, Buyer may object to any new matter revealed in the revised Commitment or Survey or new Exception Document(s) within the same time stated in this paragraph to make objections beginning when the revised Commitment, Survey, or Exception Document(s) is delivered to Buyer.

¶6 TITLE POLICY AND SURVEY E. TITLE NOTICES: (2) TREC 1-4 FRC

E. TITLE NOTICES: (2) MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S): The Property IS/ISN'T in a mandatory-membership HOA, Seller notifies Buyers under §5.012, Texas Property Code, that they are obligated to be an HOA member. Restrictive covenants governing the use and occupancy of the Property and all dedicatory instruments governing the establishment, maintenance, or operation of this residential community have been or will be recorded in the Real Property Records of the county in which the Property is located. Copies of the restrictive covenants and dedicatory instruments may be obtained from the county clerk. You are obligated to pay assessments to the property owners association(s). The amount of the assessments is subject to change. Your failure to pay the assessments could result in enforcement of the association's lien on and the foreclosure of the Property. Section 207.003, Property Code, entitles an owner to receive copies of any document that governs the establishment, maintenance, or operation of a subdivision, including, but not limited to, restrictions, bylaws, rules and regulations, and a resale certificate from a property owners' association. A resale certificate contains information including, but not limited to, statements specifying the amount and frequency of regular assessments and the style and cause number of lawsuits to which the property owners' association is a party, other than lawsuits relating to unpaid ad valorem taxes of an individual member of the association. These documents must be made available to you by the property owners' association or the association's agent on your request. If Buyer is concerned about these matters, the TREC promulgated Addendum for Property Subject to Mandatory Membership in a Property Owners Association(s) should be used.

TREC 1-4 Family Residential Contract (Resale) ¶ 2(B)

¶2(B) IMPROVEMENTS: The house, garage and all other fixtures and improvements attached to the above-described real property, including without limitation, the following permanently installed and built-in items, if any: all equipment and appliances, valances, screens, shutters, awnings, wall-to-wall carpeting, mirrors, ceiling fans, attic fans, mail boxes, television antennas, mounts and brackets for televisions and speakers, heating and air-conditioning units, security and fire detection equipment, wiring, plumbing and lighting fixtures, chandeliers, water softener system, kitchen equipment, garage door openers, cleaning equipment, shrubbery, landscaping, outdoor cooking equipment, and all other property attached to the above described real property. * If sellers don't want to leave a fixture with the property, they can change it out before the property goes on the market.

TREC 1-4 Family Residential Contract (Resale) ¶ 2(C)

¶2(C) ACCESSORIES-window air conditioning units, stove, fireplace screens, curtains and rods, blinds, window shades, draperies and rods, door keys, mailbox keys, above ground pool, swimming pool equipment and maintenance accessories, artificial fireplace logs, security systems that are not fixtures, and controls for: (i) garage doors, (ii) entry gates, and (iii) other improvements and accessories."Controls" includes Seller's transferable rights to the (i) software and applications used to access and control improvements or accessories, and (ii) hardware used solely to control improvements or accessories.

¶ 2(D) TREC 1-4 Family Residential Contract (Resale)

¶2(D) EXCLUSIONS: Exclusion of items in 2B improvements or 2C accessories must be on the contract for it to be legally binding. * exclusions noted on a Seller's Disclosure or signs placed in the house aren't valid or binding.*

TREC 1-4 Family Residential Contract (Resale) ¶ 2(E)

¶2E. RESERVATIONS: reservation of mineral rights must be done in the Addendum for Reservation of Oil, Gas, and other Minerals

TREC 1-4 Family Residential Contract (Resale) ¶ 3

¶3. SALES PRICE: A. Cash portion payable by Buyer at closing: either full Sales Price or down payment B. Sum of all financing described in the attached: Third Party Financing Addendum, Loan Assumption Addendum, or Seller Financing Addendum. C. Sales price = A. down payment + B. the loan amt.

TREC 1-4 Family Residential Contract (Resale) ¶ 4

¶4 LEASES: Except as disclosed in this contract, Seller is not aware of any leases affecting the Property. After the Effective Date, Seller may not, without Buyer's written consent, create a new lease, amend any existing lease, or convey any interest in the Property. (Check all applicable boxes) A. RESIDENTIAL LEASES: The Property is subject to one or more residential leases and the Addendum Regarding Residential Leases is attached to this contract. B. FIXTURE LEASES: Fixtures on the Property are subject to one or more fixture leases (for example, solar panels, propane tanks, water softener, security system) and the Addendum Regarding Fixture Leases is attached to this contract. C. NATURAL RESOURCE LEASES: "Natural Resource Lease" means an existing oil and gas, mineral, water, wind, or other natural resource lease affecting the Property to which Seller is a party. (1) Seller has delivered to Buyer a copy of all the Natural Resource Leases. (2) Seller has not delivered to Buyer a copy of all the Natural Resource Leases. Seller shall provide to Buyer a copy of all the Natural Resource Leases within 3 days after the Effective Date. Buyer may terminate the contract within _____ days after the date the Buyer receives all the Natural Resource Leases and the earnest money shall be refunded to Buyer.

¶5 Earnest Money and Termination Option TREC 1-4 FRC (Resale)

¶5 A. DELIVERY OF EARNEST MONEY AND OPTION FEE: Within 3 days after the Effective Date, Buyer must deliver to , as escrow agent, at (address): $__________ as earnest money and $___________ as the Option Fee. The earnest money and Option Fee shall be made payable to escrow agent and may be paid separately or combined in a single payment. (1) Buyer shall deliver additional earnest money of $ ______ to escrow agent within ___ days after the Effective Date of this contract. (2) If the last day to deliver the earnest money, Option Fee, or the additional earnest money falls on a Saturday, Sunday, or legal holiday, the time to deliver the earnest money, Option Fee, or the additional earnest money, as applicable, is extended until the end of the next day that is not a Saturday, Sunday, or legal holiday. (3) The amount(s) escrow agent receives under this paragraph shall be applied first to the Option Fee, then to the earnest money, and then to the additional earnest money. (4) Buyer authorizes escrow agent to release and deliver the Option Fee to Seller at any time without further notice to or consent from Buyer, and releases escrow agent from liability for delivery of the Option Fee to Seller. The Option Fee will be credited to the Sales Price at closing. B. TERMINATION OPTION: For nominal consideration, the receipt of which Seller acknowledges, and Buyer's agreement to pay the Option Fee within the time required, Seller grants Buyer the unrestricted right to terminate this contract by giving notice of termination to Seller within ______ days after the Effective Date of this contract (Option Period). Notices under this paragraph must be given by 5:00 p.m. (local time where the Property is located) by the date specified. If Buyer gives notice of termination within the time prescribed: (i) the Option Fee will not be refunded and escrow agent shall release any Option Fee remaining with escrow agent to Seller; and (ii) any earnest money will be refunded to Buyer. C. FAILURE TO TIMELY DELIVER EARNEST MONEY: If Buyer fails to deliver the earnest money within the time required, Seller may terminate this contract or exercise Seller's remedies under Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money. D. FAILURE TO TIMELY DELIVER OPTION FEE: If no dollar amount is stated as the Option Fee or if Buyer fails to deliver the Option Fee within the time required, Buyer shall not have the unrestricted right to terminate this contract under this paragraph 5. E. TIME: Time is of the essence for this paragraph and strict compliance with the time for performance is required.

¶6A TREC 1-4 FRC (Resale)

¶6 TITLE POLICY AND SURVEY A. TITLE POLICY: Seller shall furnish to Buyer at Seller's Buyer's expense an owner policy of title insurance (Title Policy) issued by (Title Company) in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under the provisions of the Title Policy, subject to the promulgated exclusions (including existing building and zoning ordinances) and the following exceptions: (1) Restrictive covenants common to the platted subdivision in which the Property is located. (2) The standard printed exception for standby fees, taxes and assessments. (3) Liens created as part of the financing described in Paragraph 3. (4) Utility easements created by the dedication deed or plat of the subdivision in which the Property is located. (5) Reservations or exceptions otherwise permitted by this contract or as may be approved by Buyer in writing. (6) The standard printed exception as to marital rights. (7) The standard printed exception as to waters, tidelands, beaches, streams, and related matters. (8) The standard printed exception as to discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements: (i) will not be amended or deleted from the title policy; or (ii) will be amended to read, "shortages in area" at the expense of Buyer Seller. (9) The exception or exclusion regarding minerals approved by the Texas Department of Insurance.