Contracts

Which of the following requires that a legal description of the property be included in a real estate contract in Texas?

Statute of Frauds

If the seller fails to provide the required Seller's Disclosure Notice, the buyer may terminate the contract and have the earnest money refunded up to________.

Closing (Unless the seller is exempt, failure to provide the Seller's Disclosure Notice gives the buyer the right to terminate up to closing, and receive a refund of earnest money deposited.)

Lillian is acting as a single agent for the seller. Which of the following representation options will she check as part of the Broker Information section in TREC's residential One to Four Family (resale) contract?

Seller only as seller's agent

Physical stigmas must be disclosed in Texas. Which of the following is an example of a physical stigma?

The property was used to manufacture methamphetamine.

Tom sold new construction property that was formerly zoned agricultural to Brenda and Lee. Who's responsible for paying rollback taxes on this property?

Tom

If you're involved in a transaction and there isn't a promulgated form available for use, what should you do

Use a form that's been approved by a Texas attorney.

Which of the following elements does the Statute of Frauds require as part of a valid real estate contract in Texas?

Legal description (To prevent fraud in a real estate transaction, the Statute of Frauds requires that real estate contracts not only be in writing, but that they contain a legal description. The legal description helps to correctly and accurately identify the property being transferred.)

If the sellers don't reserve all of their interest in the mineral estate, the sellers have ______ days after the effective date of the contract to provide the buyer with the contact information of any existing mineral lessee known to the seller.

Seven

Per the Texas statute of frauds, a contract for the sale of real estate is only enforceable if it is in writing and

Signed by the person to be charged with the promise/agreement

Per the Texas statute of frauds, a contract for the sale of real estate is only enforceable if it is in writing and ______.

Signed by the person to be charged with the promise/agreement

Kathy and Glen are considering two properties. If they purchase the townhome, which of the following is a true statement?

They will have fee simple ownership of the land beneath their unit.

Which of the following types of death, if it occurred on the property, is a required disclosure in Texas?

A death due to a carbon monoxide leak on the property

In Texas, which of the following real estate contracts does not have to be in writing to be enforceable?

A lease that is for one year or less

Your client Samantha is selling coastal area property. Which of the following forms must she complete as part of the TREC One To Four Family Residential Contract (Resale)?

Addendum for Coastal Area Property

Your client Robbie is buying property that's located seaward of the Gulf Intracoastal Waterway. Which of the following forms should he receive as part of the sales contract?

Addendum for Property Located Seaward of the Gulf Intracoastal Waterway

Which of the following statements correctly identifies what the seller must include in the disclosure notice per Texas law?

Any actual knowledge of latent defects

All third-party financing is subject to property approval and may or may not be subject to ______.

Buyer approval (All third-party financing is subject to property approval and may or may not be subject to buyer approval. The FHA- and VA-insured loans have additional provisions, as well.)

Which of the following is a true statement about the Texas seller's disclosure of property condition law?

It requires sellers of single-family residential properties to disclose material facts to buyers.

Janet and Hank are buying a condominium from Shirley. Who's responsible for the transfer fees charged by the association, up to the amount specified in the contract?

Janet and Hank (Janet and Hank are responsible for the transfer fees up to a specified amount and Shirley is on the hook for the excess.)

An example of a party in default of the TREC One To Four Family Residential Contract (Resale) would be:

Johann, who agreed to apply for an FHA loan by April 3, but he hasn't done so by April 10.

If your clients purchased a home built in 1968, what disclosure or disclosures would be needed for this home, but would not be needed for a home built in 1988?

Lead-based paint and Lead-Based Paint Hazards Addendum

In order for a lease for real estate to be enforceable, it must be in writing and signed by the person to be charged with the promise/agreement, or by someone who is legally authorized to sign for that person. This requirement applies to a lease with a term of ______.

More than one year

Who is required to complete a property disclosure notice in Texas?

Most sellers of single-family residential properties

Kylie and Cory make an offer on a house that is accepted by the sellers, Joe and Jenn. The contract is written, signed by the buyers and sellers, understood by all parties, and all changes to the contract are initialed by the buyers and sellers. Finally, the contract is accepted by both parties. Is the contract considered "executed"?

No. The contract's acceptance must be communicated to all parties before it is considered executed. (Once all other requirements have been met and the final party has signed the contract, that party or agent must call the other party or agent to let them know the contract has been accepted. This call must be followed up with a copy of the written contract being sent to that agent/other party.)

When a contract is executed, the timing for certain contract requirements begins ______ day(s) later.

One

Peter is selling his ranch and has decided to exclude his cotton crop from the sale. Which of the following is true?

Peter must remove the crops before closing. (If crops are excluded from the sale, they must be removed before closing.)

Texas law ______ the statute of frauds' requirement that contracts involving the transfer of real property must be in writing.

Reinforces

Who's responsible for providing the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway in the sale of a property to which this addendum applies?

Seller

Which Texas law requires contracts for real property to be in writing?

Statute of frauds

Marshall is a buyer who made an offer on a home prior to receiving a copy of the Seller's Disclosure Notice. If the seller, who is not exempt from the disclosure requirement, doesn't provide this notice before closing, what may Marshall do?

Terminate the contract for any reason prior to closing.

Jasmine and Roberto just bought their first new home, which was finished just a week before they moved in. Which of the following is a true statement?

The Seller's Disclosure Notice is not required.

Which of the following must be included as part of the property section in TAR's Residential Real Estate Listing Agreement Exclusive Right to Sell contract?

The legal description of the property

The Texas listing agreement is an agreement between which parties?

The seller and a broker

Janice and Tim have decided to sell their home, located right outside of Dallas. It's been one year since their son committed suicide, and while they're apprehensive, they're ready to move to another home that doesn't represent so much pain. As they complete the seller disclosure form, you inform them that ______.

They do not need to disclose their son's suicide, unless they want to, because it's not required under Texas law. (Death due to a suicide on a property is a permitted disclosure, but it's not required under Texas law.)

Which of the following addenda is required as part of the TREC residential One to Four Family (resale) contract when the buyer needs to obtain a mortgage loan from a lender to purchase the property?

Third Party Financing Addendum

There are a few exceptions to the Texas rule that requires a seller to complete a property condition disclosure. Which of the following is an example of such an exception?

When the property is new construction.

If a property being sold is located within a municipal utility district (MUD), the seller must provide this statutory disclosure to the buyer before the sales contract is executed.

Statutory Tax District Notice (The Statutory Tax District Notice includes the district's tax rate, standby fee, or indebtedness.)

This written notice must be provided by the seller of a single-family residence to the buyer, and must disclose material facts that are not reasonably discoverable about the property.

Seller's Disclosure Notice

Government-insured loans have an additional provision, which is described in paragraph D of the Third Party Financing Addendum to the TREC residential One to Four Family (resale) contract. Specifically, the buyer is not obligated to purchase the property unless the buyer is given a written statement containing what information?

The appraised value of the property or the reasonable value of the property (All third-party financing is subject to property approval and may or may not be subject to buyer approval. The FHA- and VA-insured loans have additional provisions, which include a written statement with the appraised value of the property or the reasonable value of the property established by the VA.)

Who is required to sign and date the TAR Seller's Disclosure Notice?

The buyer and seller only (The seller is verifying that the form is complete and accurate as of the date it is signed. The buyer is acknowledging that they've received the disclosure.)

Steve is positive that his late cat, Chester, still roams the six-bedroom Texas home where he's lived for 40 years. Steve has made the decision to move from this large property and into a retirement community where he can golf and do other exciting activities with fellow retirees. Steve feels that disclosing the fact the Chester is still "in the home" may scare buyers away. What do you do?

You tell Steve that you, as a licensee, are required to disclose this information to potential buyers because "hauntings" and other paranormal occurrences are considered material facts. (In Texas, hauntings and other paranormal experiences are considered "psychological stigmas," and as such, are material facts that much be disclosed to potential buyers.)

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.

Your client is interested in keeping the seller's free-standing workbench that's in the garage, and is willing to pay the seller to leave it behind. Which form will you help your client complete to submit to the seller for consideration?

Non-Realty Items Addendum (If the buyer is interested in personal property that's not already included in the sale, the buyer should complete the Non-Realty Items Addendum, and ask the seller to consider leaving the property behind.)

Which form is used when a seller wants to reserve mineral rights in Texas?

Addendum for Reservation of Oil, Gas and Other Minerals

You represent Sue, who is making an offer on a new home, and she tells you that she must sell her current home before she'll have enough funds to purchase the new home. Besides the TREC One To Four Family Residential Contract (Resale), which form should she complete?

Addendum for Sale of Other Property by Buyer

The parties are moving the closing date back by four days, so instead of occurring on March 24, the closing will occur on March 28. What form must be completed and signed?

Amendment to Contract (The closing date can only be changed to a date after the date specified in the contract if the parties complete and sign the TREC-promulgated Amendment to Contract form, which is required for any changes to an executed sales contract.)

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

Exclusive right to sell

Norman buys Connie's Texas home, and in the sales contract, he specifies that the outdoor grill must stay with the home. Connie ends up taking the grill when she moves out. If Norman wants to sue Connie for taking the grill, he must do so within ______.

Four years

Which of the following statements about the contract for deed default process in Texas is true?

If the buyer is in default, the seller must provide the buyer with a notice before taking further action.

The New Home Contract (Completed Construction) doesn't contain ______ in the property section, which is a key difference between this contract and the One to Four Family Residential Contract.

Improvements, accessories, or exclusions

Per the TREC residential One To Four Family (resale) contract, where are the parties' obligations with regard to brokers' fees to be found?

In the parties' respective agency agreements (The Brokers' Fee section tells the parties to check their respective agency agreements.)

In Texas, a real estate licensee who represents a party to a transaction must ensure that all contractual documents and agreements are ______.

In writing

Quentin is the seller in a Texas contract for deed agreement. What type of rights to the property does he have during the contract for deed process?

Legal title rights (During the contract for deed process, the seller still holds legal title rights to the property while the buyer has equitable title rights.)

The parties were scheduled to close January 15, but now wish to close January 10. What Texas form must be completed and signed?

No form is needed, as long as the parties agree and have met all of their contractual obligations (Closing can occur before the date noted in the contract if both parties have met their obligations under the contract and have agreed to the earlier date.)

What paragraph of the TREC residential One to Four Family (resale) contract contains the promise to sell and the promise to purchase, known as the consideration, of the contract?

Parties (The promises in the first paragraph, Parties, are known as the consideration of the contract. This paragraph also—as its name states—includes the names of the parties to the contract.)

When a buyer purchases property "as is," which of the following is true?

The buyer can inspect it and still negotiate repairs and treatments.

Jane is interested in making an offer on a condominium. She's heard that the condominium owners association for the condominium development has several pending lawsuits for violations of the bylaws. Where can she verify this information?

The resale certificate (The resale certificate provides condominium owners association financials, frequency and amount of assessments, pending lawsuits, information about the right of first refusal, and more.)

A Texas seller should complete the seller disclosure form at which phase in the transaction?

Time of Listing

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

Title Policy and Survey section