+601 Texas Promulgated Forms 3E
Where should the Texas Consumer Protection Notice be displayed, if anywhere? At a broker's main office At all of a broker's place(s) of business No need for a physical display of the form On the front door and in every room at a brokerage firm
At all of a broker's place(s) of business
The TREC Addendum for Property Subject to Mandatory Membership in a Property Owners Associations provides for which of the following to act on behalf of the parties to obtain the subdivision information? 1. Title company 2. Buyer's agent 3. Seller's agent 4. Lender
1. Title company
When Jan sells her house, she'll leave behind the draperies, shades, window air conditioner, and garage door opener, which are considered ______________. Accessories Exclusions Improvements Sundries
Accessories
When a buyer gains possession prior to closing,
A landlord-tenant relationship exists
If a buyer wants to be sure that they will be able to park their RV in the driveway they should
Add a statement to that effect in paragraph 6D
What is one major difference between condominiums and townhomes? Condo owners pay association fees, while townhome owners do not. The square footage is different. They each have different forms of ownership. Townhome owners do not own the land beneath their units.
They each have different forms of ownership.
In a DTPA lawsuit, the consumer must prove the deceptive act
Was the producing cause of damages
Connie is helping the Morrisons fill out the Sales Price paragraph of the TREC One to Four Family Residential Contract (Resale). What amount will they put in these spaces? Cash Price, Sum of all financing and Sales price The difference between the down payment and loan amounts The seller's listing price The seller's listing price, minus the down payment and loan amounts
Cash Price, Sum of all financing and Sales price
To have a valid real property contract, something of value must be exchanged. This is called
Consideration
For any property to close, all _________________ must be removed prior to closing. Contingencies Earnest money Lead-based paint Window treatments
Contingencies
What is required of licensees who are selling or buying a property for themselves?
Disclose in writing to the other party in the transaction that they have a license
If one of the parties defaults and the non-defaulting party accepts the earnest money as damages, that party can
Do nothing more; the contract is terminated
If there is no dollar amount inserted in paragraph 23 of the TREC One to Four Family Residential Contract but the time period shows as being 10 days, the contract
Does not have a valid option period
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. Addition Amendment Exception Omission
Exception
Buck and his wife, Betsy, made an offer on a home and specified in the sales contract the items on the property they want the seller to remove prior to them taking possession. These items are referred to in the Property section of the TREC One to Four Family Residential Contract (Resale) as _____________________. Accessories Exclusions Improvements Sundries
Exclusions
Harvey and his wife, Dana, have made an offer on a home but specified in the sales contract the items on the property that they wanted the seller to remove prior to them taking possession. These items are referred to in the Property section of the TREC residential One to Four Family (resale) contract as ______. Accessories Exclusions Improvements Sundries
Exclusions
You're helping your client with a transaction and are careful to include the disposition of crops. That's because the promulgated form you're using for this transaction is ______. Farm and Ranch New Home Contract (Incomplete Construction) Oil, Mineral, Gas, and Timber Land One to Four Family
Farm and Ranch
When HUD receives a discrimination complaint from Texas, what step does it take? Asks assistance in investigation the complaint from the Texas Fair Housing Board Forwards the complaint to the Texas Workforce Commission Civil Rights Division Opens an investigation into the complaint Sends the complaint to the federal district court where the complaint occurred
Forwards the complaint to the Texas Workforce Commission Civil Rights Division
The difference between paragraph 2 in the TREC New Home Contracts and the One to Four Residential Contract is that
Improvements and accessories are not addressed in the new home contracts
When must a real estate licensee advise a buyer, in writing, to get an abstract examined by an attorney of the buyer's choice or obtain an owners' title insurance policy?
When an offer to purchase real estate is signed
According to the Seller Financing Addendum, if a buyer timely delivers the buyer's credit documentation and the seller does not terminate the contract within 7 days, the seller...
Will be deemed to have approved the buyer's credit
The Addendum for Sale of Other Property by Buyer is the form to use if the buyers
Will be unable to buy the new property unless their existing property is sold and closed
Paragraph 7H of the contract indicated that who should review and decide on the company to use as the residential service company?
The buyer
Under paragraph 12 of the One to Four Family Residential Contract all of the following are seller expenses EXCEPT 1. Releases of existing liens 2. Release of seller's loan liability 3. Appraisal fees 4. Tax statements or certificates
3. Appraisal fees
How many contract forms are currently promulgated by TREC
6
Earnest money is to be deposited
By the close of the escrow agent's 2nd business day following the signing of the agreement
What group promulgates forms for mandatory use by licensees?
TREC
Margo received a copy of the seller's disclosure notice, but she wasn't happy with what she read. She decided to terminate the agreement three days after she received the notice. Which of the following reasons should Margo check on the Notice of Buyer's Termination Contract for terminating the contract? "Buyer cannot obtain Buyer Approval in accordance with the Third Party Financing Addendum to the contract." "Buyer elects to terminate under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice." "Buyer elects to terminate under Paragraph A of the Addendum for Property Subject to Mandatory Membership in a Property Owners' Association." The unrestricted buyer's right to terminate the contract under Paragraph 5 of the contract.
"Buyer elects to terminate under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice."
Which of the following is an example of a bilateral contract? 1. A purchase contract 2. An option to lease 3. A Nonexclusive listing contract 4. A nonexclusive buyer contract
1. A purchase contract
Which of the following methods of purchasing does NOT require the use of a TREC-promulgated addendum to define the transaction's financial details? 1. Cash 2. Third-party financing 3. Seller financing 4. Assumption of existing lien
1. Cash
Which of the following can the licensee never disclose? 1. Death due to AIDS 2. Representation 3. Death due to suicide 4. Haunted property
1. Death due to AIDS
Which form does NOT address rollback taxes? 1. One to Four Family Residential Contract (Resale) 2. Farm and Ranch Contract 3. New Home Contract (Completed Construction) 4. Unimproved Property Contract
1. One to Four Family Residential Contract (Resale)
Which of the following is NOT and exception to the rules requiring that promulgated forms be used by the licensee? 1. When the contract from has been prepared by the buyer and the buyer wants the agent to fill in the blanks 2. When the contract form has been prepared by the seller's attorney and is required by the seller 3. When an agency of the United States government requires a different form 4. When the licensee is functioning solely as a principal
1. When the contract form has been prepared by the buyer and the buyer wants the agent to fill in the blanks
In Texas, the statute of limitations for a non-defaulting party to an oral contract to enforce the rights in the event of default is
2 years
Which of the following is NOT a TREC-promulgated form? 1. Notice of Buyer's Termination of Contract 2. Exclusive Right-to-Sell Listing Agreement 3. Addendum for Coastal Area Property 4. Amendment to Contract
2. Exclusive Right-to-Sell Listing Agreement
Items that are preprinted in paragraphs 1 and 2 of the contract include all of the following EXCEPT 1. Lot number 2. Marital status 3. Subdivision name 4. County
2. Marital status
How many days does the Texas seller have to deliver a "commitment for title insurance" to the buyer under the terms of the TREC One To Four Family Residential Contract (Resale)? 10 15 20 35
20
Agents must make clear where notices are to be delivered. This is done in One to Four Family Residential Contract (Resale) paragraph
21
Which of the following parties may NOT be held to the terms of an agreement? 1. Buyer whose credit score is less than 600 2. Emancipated individuals younger than 18 3. Incompetent parties 4. Competent parties
3. Incompetent parties
Issues addressed in the Farm and Ranch Contract do NOT include which of the following? 1. Crops 2. Equipment 3. Mineral Rights 4. Surface leases
3. Mineral Rights
The TREC Residential Condominium Contract defines all of the following as "documents" EXCEPT 1. Declaration 2. Bylaws 3. Resale certificate 4. Rules of the associate
3. Resale certificate
A buyer and seller have entered into a valid and binding executory contract. Prior to closing the property is damaged by a fire. The damage is too severe to repair prior to closing. According to paragraph 14 of the One to Four Family Residential Contract, they may do all the following EXCEPT 1. Terminate the contract and receive the earnest money 2. Extend the time for performance up to 15 day and extend the closing date 3. Accept the property in its damaged condition with an assignment of insurance proceeds and credit from seller for insurance deductible 4. Enforce specific performance to restore the property to its previous condition
4. Enforce specific performance to restore the property to its previous condition
All of the following promulgated forms provide that "time is of the essence" EXCEPT 1. Addendum for Sale of Other Property by Buyer 2. Addendum for Back-Up Contract 3. Third Party Financing Addendum 4. Loan Assumption Addendum
4. Loan Assumption Addendum
Which financing addendum will the purchaser use when purchasing a property for cash? 1. Financing addendum exception 2. Assumption addendum 3. Special provisions addendum 4. None of these
4. None of these
When a Texas buyer's purchase of the property is contingent upon obtaining financing, what type of document is attached to the sales contract? Addendum Ad hoc Stipulation Supplement
Addendum
Where would the seller reserve the mineral rights?
Addendum for Reservation of Oil, Gas, and Other Minerals
Your buyer clients Nina and Peter are interested in purchasing a ranch. As their agent, what should you tell them about this type of transaction? Additional considerations may apply, including equipment, surface leases, and royalties. Crops are always excluded from the sale of farm and ranch property. Improvements and accessories can't be excluded. Residential property and accessories must be included on a separate contract.
Additional considerations may apply, including equipment, surface leases, and royalties.
What form is used if the parties want to negotiate different terms after a contract has been executed?
Amendment to contract
If a buyer decides to terminate a contract within the option period, where and how must the promulgated Notice of Buyer's Termination of Contract be delivered?
As specified in the Notices paragraph
Wendell's buyer client has made an offer on a property that's already under contract. Wendell needs to add the TREC Addendum for Back-Up Contract to the sales contract. Who's required to sign this addendum? Both parties Nobody The attorneys for both parties The buyer of the first contract
Both parties
According to the provisions of the sales contract, who will purchase a residential service contract, if so desired?
Buyer
When Marcy toured her new client's house, she noticed paint peeling off of the shutters. When she asked the seller if the house was painted with lead-based paint, he replied, "I'm not sure ... I inherited the house from my dad, who built it in the '50s." What is Marcy required to do? Based on the build date, she should assume the property has lead-based paint and advise the seller that it must be remediated before listing the property. Have the seller test for lead-based paint. Inform the seller that he needs to complete the lead-based paint disclosure form and provide potential buyers with the EPA pamphlet regarding lead hazards. Take a sample of the peeling paint with her, have it tested, and have the seller reimburse her for the testing cost at settlement.
Inform the seller that he needs to complete the lead-based paint disclosure form and provide potential buyers with the EPA pamphlet regarding lead hazards.
Which form informs the customer or client how agents represent consumers of real estate services?
Information About Brokerage Services
What information is needed in paragraph 2 of the One to Four Family Residential Contract (Resale)?
Items the seller wants to retain after closing
Jamie, a seller, deliberately hid the evidence of a termite infestation from potential buyers. Annette, his listing broker, agreed to not disclose the presence of termites in the home, even though she had seen them for herself. Jamie also paid Fred, a friend and home inspector to leave it out of his report. According to the Fraud in Real Estate and Stock Transactions Act, who is liable? Annette only Jamie and Annette Jamie, Annette, and Fred Jamie only
Jamie, Annette, and Fred
Joy is a licensee preparing the contract for her buyer client, who's purchasing a condominium. Which of the following is a true statement? Joy should not use the New Home Contract (Completed Construction). Joy should use the New Home Contract (Completed Construction). Joy should use the New Home Contract (Completed Construction) if the condominium is new. Joy should use the One to Four Family Residential Contract (Resale).
Joy should not use the New Home Contract (Completed Construction).
The notice about obtaining an abstract or title policy is a required notice from
Licensee to buyer
The seller does not want to include the hot tub with the purchase of his home. How should this be addressed?
List the hot tub in paragraph 2 of the contract as an exclusion
Regarding escrow agents and title policy issuers, the company selected to issue the owner's title policy
May be different than the company chosen to serve as escrow agent
Gavin, an investor, secures an owner-occupied loan at a much lower rate than the general public is allowed, yet never plans to live in the property. Gavin is committing ______. Buyer rebate fraud Fraud as a straw buyer Fraud by illegal flipping Mortgage fraud
Mortgage fraud
Is the Seller Disclosure of Property Condition noted under the Agreement of Parties? No, only addenda are noted in the Agreement of Parties paragraph. The Seller's Disclosure Notice is not considered an addendum. No, this is listed under Special Provisions. Yes, but this does not need to be written into the "other" box. Yes, the "other" box should be checked and the name of the disclosure should be written out.
No, only addenda are noted in the Agreement of Parties paragraph. The Seller's Disclosure Notice is not considered an addendum.
When using a power of attorney to transfer title to real property,
The document must include the legal description of the subject of the authority
Financing approval occurs when
The lender determines that the buyer's assets, income, and credit are satisfactory
JoEllen is buying Magdalena's property in Oak Brook. They are set to close on the property today. Last night, Magdalena's home was robbed and vandalized. The 75-inch flat screen television was ripped from the wall, as were the crystal chandeliers in the dining room and kitchen. In addition, considerable damage was done to the walls and ceilings. Is JoEllen responsible for replacing these items and making the needed repairs before the closing today? No. Because closing has not yet occurred, Magdalena is responsible. No. The parties will have to amend the contract to negotiate who will restore the property and replace the stolen TV and other fixtures. Yes. She must make an insurance claim as soon as they close. Yes. The property will become hers today, so it is her responsibility.
No. Because closing has not yet occurred, Magdalena is responsible.
Which form is used if the buyer wants the seller to leave personal property with the home after closing?
Non-realty Items Addendum
Your Texas buyer client, Amanda, finally received a copy of the seller's disclosure. After reviewing the disclosure and the subdivision information about the homeowners association, she wants out of the deal. Which form must Amanda complete to stop the transaction from going forward? Addendum for Property Subject to Mandatory Membership in an Owners Association Consumer Protection Notice Notice of Buyer's Termination of Contract Seller's Disclosure of Property Condition
Notice of Buyer's Termination of Contract
Per the Short Sale Addendum, when does the time for giving notice of termination begin if the buyer has the unrestricted right to terminate the contract? On the date the contract was signed On the effective date of the contract The day the buyer receives a copy of the seller's disclosure notice Two days after the effective date of the contract
On the effective date of the contract
Kyle and his brother, Bob, have been raising their four young nephews since the children's mother was killed in a car accident. What is the fewest number of bedrooms Kyle and Bob may have in an apartment they rent in Texas? Five bedrooms One bedroom Three bedrooms Two bedrooms
One bedroom
Daryl, the buyer, and Sydney, the seller, have mutually agreed to terminate their sales contract. They have also agreed to a 50/50 split of the earnest money. Which promulgated form can they use to release all parties from their contractual liabilities, while at the same time providing directions to the escrow agent as to how the earnest money should be disbursed? Mutual Termination of Contract Notice of Buyer's Termination of Contract Release of Earnest Money Short Sale Addendum
Release of Earnest Money
A contract that at first appears to be valid but may be rescinded or disaffirmed by one or both parties is
Voidable
The Hatfields and the McCoys can't agree on anything, including the sale of the Hatfield's property. Surprisingly, the parties agree to terminate their contract. More surprising is that they're in complete agreement as to how the earnest money should be disbursed. What form will the parties complete to release all parties from their contractual obligations and disburse the earnest money? Consumer Protection Notice Non-Realty Items Addendum Notice of Buyer's Termination of Contract Release of Earnest Money
Release of Earnest Money
The Fair Housing Act's protection of people with disabilities...
Requires a building with a "no pets" policy to allow a visually impaired tenant to keep a guide dog
The cancellation or termination of a contract as though it had never been made is
Rescission
Sarah hasn't been able to get a loan to finance the unimproved property she wants to buy. However, the seller has agreed to loan her the money to purchase the property. Which addendum should be attached to the contract? Down Payment Addendum Loan Assumption Addendum Seller Financing Addendum Third Party Financing Addendum
Seller Financing Addendum
The TREC Seller's Temporary Residential Lease would be used when the
Seller wants to stay in the home after closing for no more than 90 days
A short sale must be approved by
Seller's lender
Bobby is buying Tandra's property. They have a closing date of October 3. Bobby will move in early on September 15, and pay rent to Tandra, who is moving out September 12. What date should be listed as "buyer possession" in the sales contract? October 1, the beginning of the first mortgage period October 3, the closing date September 12, when Tandra vacates September 15, when Bobby moves in
September 15, when Bobby moves in
If the seller has already sent a counteroffer to a prospective buyer and then receives another offer that is even better, the seller
Should withdraw the 1st counter before answering the new offer
To modify who pays for what in paragraph 12, the parties may define their agreement in the
Special Provisions paragraph
Which of the following requires that a legal description of the property be included in a real estate contract in Texas? Property Code Real Estate Code of Ethics Statute of Frauds Statute of Limitations
Statute of Frauds
Ingo has a "Back-Up" contract with Sally, the seller. Ingo really wants the house and has put down $10,000 in earnest money. What happens if the first contract isn't terminated by the date specified in the Addendum for "Back-Up" Contract? Ingo can approach the first buyer and offer to buy them out. Ingo can increase his offer and extend the term of the "Back-Up" contract. The "Back-Up" contract is terminated and Ingo's earnest money is refunded. The term of the "Back-Up" contract is automatically extended by one month.
The "Back-Up" contract is terminated and Ingo's earnest money is refunded.
Agreements regarding brokers' fees are NOT addressed in
The One to Four Family Residential Contract
In a condominium transaction, which of the following is true? The buyer pays for a portion of the transfer fees up to a specific amount, and the seller pays the remainder. The buyer pays for the transfer fees assessed by the HOA. There are no transfer fees. The seller pays for the transfer fees assessed by the HOA.
The buyer pays for a portion of the transfer fees up to a specific amount, and the seller pays the remainder.
According to the contract, the seller will provide a copy of the restrictive covenants at whose expense?
The buyers
What happens if the seller is unable to furnish the buyer with the commitment and exception documents within 20 days after the title company has received a signed copy of the TREC One to Four Family Residential Contract (Resale)? The buyer's earnest money is refunded. The contract is automatically terminated. The deadline for delivery is automatically extended. The seller must pay a late fee
The deadline for delivery is automatically extended.
How would a delay in closing be handled within a sales transaction in Texas? Buyers can send a letter to the sellers stating their intention to extend the closing date. It can't be handled, because it's a breach of contract. The parties must terminate. The broker of the party requesting the change would have to notify the escrow and title company of the scheduling change. The parties can complete and sign an Amendment to the Contract form.
The parties can complete and sign an Amendment to the Contract form.
What about the owner's policy of title insurance can be negotiated in the TREC One To Four Family Residential Contract (Resale) in Texas? The amount of the title policy coverage and when the title policy will be issued The selection of the title company and the amount of the title policy coverage The selection of the title company and who will pay for the title policy Who will pay for the title policy and when the title policy will be issued
The selection of the title company and who will pay for the title policy
Per the Addendum for Sale of Other Property by Buyer, what happens if the seller accepts a written offer to sell the property? The buyer can sue the seller for breach of contract. The buyer is given the opportunity to counter the offer and continue with the transaction. The contract is terminated automatically, and the earnest money is refunded to the buyer. The seller is required to notify the buyer and give the buyer the opportunity to waive the contingency.
The seller is required to notify the buyer and give the buyer the opportunity to waive the contingency.
What happens when a Texas buyer who has paid the seller an option fee under the TREC One to Four Family Residential Contract (Resale) terminates the contract after the option period expires? The buyer gets both the option fee and the earnest money back. The seller keeps the earnest money and the buyer gets the option fee back. The seller keeps the option fee and may get to keep the buyer's earnest money. The seller keeps the option fee, and the buyer gets the earnest money back.
The seller keeps the option fee and may get to keep the buyer's earnest money.
ally and Jake have signed an offer to purchase a home that is still being constructed. If rollback taxes are assessed, who must pay them? It's negotiable. The seller and the buyer each pay half. The seller pays 75% and the buyer pays 25%. The seller pays for the whole thing.
The seller pays for the whole thing.
If a casualty loss occurs on a property subject to a real estate transaction, who or what entity is responsible for bringing the property back to its original condition? The buyer's insurance company, through casualty insurance The buyer, within 60 days after closing The escrow company, through title insurance The seller, through the seller's insurance
The seller, through the seller's insurance
Which addendum is commonly used in a transaction involving an 80% conventional ARM?
Third Party Financing Addendum
According to paragraph 13 of the One to Four Family Residential Contract, taxes are prorate
Through the closing date
When selecting a title company, price is not a consideration because
Title companies charge the same for the same coverage
What is the purpose of the Broker-Lawyer Committee? To draft contract forms To promulgate forms To review clients' legal complaints To sue citizens
To draft contract forms
What is the purpose of the Uniform Electronic Transactions Act? To ensure that all contracts are in writing and signed by both parties To ensure that both parties are legally competent To ensure that the seller has title insurance To identify that electronic signatures are just as binding as written signatures
To identify that electronic signatures are just as binding as written signatures
Which contract is used for a one-acre lot in an upscale subdivision?
Unimproved Property Contract
A real estate licensee is selling a new home and is using the builder-required contract form. How can the licensee ensure that the buyer receives the required notice that the buyer should have abstract examined by an attorney or obtain a policy of title insurance?
Use TREC's Notice to Prospective Buyer
If the broker information is blank on the final page of the contract, the contract is
Valid
Texas real estate licensees may determine whether they are using the correct version of a TREC form by
Verifying current forms on the TREC website