Promulgated Contract Forms

Fact or fiction? Factual statements simply expand on a subject elsewhere in the contract, not a new negotiation?

Fact

Who approves and promulgates Texas real estate contract forms?

Texas Real Estate Commission (TREC)

According to paragraph 18b of the contract, if no closing occurs, the title company may only deduct which expenses from the earnest money?

Unpaid expenses on behalf of the person receiving the earnest money

Paragraph 14

Condominium contract

If the seller wants to continue to show the property for back up offers the...

Contract already permits the seller to do so

What is required for an offer to become a contract?

Contract is in writing, signed and initialed, total agreement and acceptance is communicated to the other party or his or her agent

The appraisal came in too low. How does the buyer terminate the contract?

Deliver the Promulgated Notice of Buyer's Termination of contract to the seller at the methods listed n Paragraph 21 of the contract

Short Sale Addendum

Describes net proceeds and gives the seller an out if the lender won't accept the net proceeds as full payment

Paragraph 2

Different in each contract, describing the type of property that is covered

Which of the following are good risk management techniques?

Document everything, disclose everything to the lender, be sure everything is accurate on the HUD statement, if you believe your transaction is involved in illegal activity withdraw from the transaction

Many things in the contract forms take place within so many days of which date? It is important that the agent finalizing the acceptains of the contract fill that out for his broker.

Effective date

Fact or fiction? The seller conveys title with a general warranty deed, which as a guarantee limited to the time the grantor owned the property?

Fiction

Fact or fiction? The state cannot make owners remove structures that come to be on beaches due to storms and erosion

Fiction

Fact or fiction? The title company will obtain the subdivisions information first and then the required fee

Fiction

Fact or fiction? Verbal notices between parties are effective if they're communicated in person?

Fiction

When an agent receives a copy of the commitment for title insurance, what should the agent double check?

Names, legal descriptions, and reservations (all of this information)

What is the only TREC contract that talks about construction documents and cost adjustments?

New Home Contract-Incomplete

Paragraph 7 and 13

New home contracts, unimproved property contract, and farm and ranch contract

Who is required to sign the Texas Real Estate Consumer Notice (OP-I)

No one

Which paragraph is used to add factual statements or business details and desired by the principals to conform to the negotiations?

Paragraph 11

Which paragraph in the One to Four Family Residential Contract allows you to indicate which addenda will be used in the transaction?

Paragraph 22 Agreement of Parties

Where will you find the words "time is of the essence?"

Paragraph 23 and the One to Four Family Contract

The amount of option money is the decision of the...?

Parties

According to the One to Four Family Promulgated contract, who is responsible for the title policy cost?

Party that agreed to pay the cost

Which group administers the Real Estate License Act?

Texas Real Estate Commission

True of False? If the portion of sale price is financed, the total of all the financing reflected in Paragraph 4 will be entered in Paragraph 3B?

True

What are buyers purchasing when they buy a condominium?

Unit and an undivided interest in the common areas

Paragraph 10, the possession paragraph, cautions the parties that if possession is at a different time than closing and fundings, they should do which of the following things?

Use the TREC Temporary Lease Agreement, Contact their insurance agent to determine coverage has not been limited, realize without a lease agreement there is a tenancy in sufferance relationship between the parties (All of these)

If an agent is selling a new home and the builder has her own contract form, how can the agent ascertain that the buyer receives the required notice that he or she should have the abstract examined by an attorney or obtain a policy of title insurance?

Use the TREC form OP-C, Notice to Prospective Buyer

Addendum for Coastal Area Property

Used with contracts on properties that share a boundary with the submerged lands of the state

The seller does not have a current survey of the property. How many days before the closing date must a new survey at the seller's expense be provided?

3 days

Which paragraph in the Addendum for Reservation of Oil, Gas and Other Minerals defines what the term "mineral estate" does and does not include?

A

Bilateral

A contract involves a promise exchanged for a promise (sales contracts)

Termination

A contract is fully executed (closed)

Void

A contract that doesn't meet the requirements of a valid contract

Voidable

A contract that has the essential features of a valid contract

Valid

A contract that is enforceable by the courts

Unenforceable

A contract that is not legally enforceable

Contract

A legally binding and enforceable agreement to do or not to do anything specific

Which of the following things would be a red flag that a party may be making an offer that will be involved in real estate fraud?

An offer calling for future improvements, an inflated sales price, a request to remove the property from the MLS (all of these)

Sale of Other Property Addendum

Buyer needs money from the first sale to complete the second sale, new lender requires existing loan paid in full

Who is entitled to recover reasonable attorney's fees and court costs if they are the prevailing party in a lawsuit under the TREC sales contracts?

Buyer or seller, listing broker and other broker, escrow agent (all of the above)

The buyer will receive a copy of the restrictive covenants at whose expense, according to the contract?

Buyer's

If a buyer is using VA financing what will be part of the contract?

Third Party Financing Addendum for Credit Approval

How many members are on the Broker Lawyer Committee?

13

TREC has promulgated how many contract forms?

6

Property approval, according to paragraph 4, includes which of the following things?

The appraisal, lender-required repairs, and insurability (All of these)

In a transaction a Third Party Financing Addendum says "financing approval" must be obtained within 10 days after the effective date. On the twelfth day the buyer learns the property is uninsurable and will not meet lender requirements. Which of the following statements is TRUE about this situation?

The buyer may terminate the contract and the earnest money will be refunded to the seller

Executed

The contract duties are completed by both parties (closed)

Executory

The contract was signed, but the duties are not yet complete (pending)

What does the date in the right hand corner of the contract signify?

The date on which TREC approved and promulgated the form

John terminated his contract during the option period. The seller will not release the earnest money. John sent a written demand to the escrow agent for the money and the seller sent one too. Now John is going to court. How much liquidated damages should John get according to the TREC contract?

The earnest money, 3 times the earnest money, attorney fees and all costs of the suit (all of the above)

Which TREC promulgated forms discusses the Texas Agricultural Development Districts?

The farm and ranch contract

After receiving the Commitment Exception Documents, and the survey how long does the buyer have to object?

The number of days agreed to by the parties

Which of the following statements is TRUE if rollback taxes are assessed because the seller changed the usage prior to closing according to the TREC contract forms that discuss rollback taxes?

The seller will be obligated to pay the rollback taxes

What does the legal description in the Residential Condominium Contract describe?

The unit, the building, city, county, and the undivided interest in the common elements

Novation

A new contract or party transfers the obligations of the first party, like an assumption with a release

Unilateral

A seller is obligated to sell, but the buyer has no obligation to buy

Assignment

A transfer of contract obligations to another party, that doesn't release the first party's obligations

Under paragraph 6E of the One to Four Family Residential Contract licensees must advise the buyer to obtain which of the following things?

Abstract of Title

Which of the following transfers contract obligations to another party but does not relieve the original party from liability?

Assignment

When is the total amount of the rent agreed to in the Seller's Temporary Residential Lease Agreement due?

At the time of funding of the sale

The only proper way to determine title to the mineral estate is to have the property records examined by which the following experts?

Attorney

What is required to execute a mutual termination of contract?

Both the buyer and the seller

Who drafts and edits Texas real estate contract forms?

Broker Lawyer Committee

A seller owns all of his minerals. If he sells his home and neither party addresses the minerals, who will own the minerals after the transaction closes?

Buyer

If the new survey is obtained by Paragraph 6C2, who will be paying for it?

Buyer

A buyer decides to exercise her right to terminate under the Third Party Financing Addendum for Credit Approval. What is the proper process?

Execute and deliver a Notice of Buyer's Termination of Contract

Fact or fiction? A survey is the only way to establish a boundary with the submerged lands of the state

Fact

Fact or fiction? All changes that were made to the original offer need to be initialed by all parties?

Fact

Fact or fiction? Title policies don't guarantee mineral rights, so the seller may not know he never acquired the mineral estate.

Fact

Fact or fiction? With the Addendum for "back-up" contract, the seller is free to continue to work with the first buyer.

Fact

Which contract provides information and details live-stock feeders and troughs?

Farm and Ranch Contract

Paragraph 3 and 6

Farm and ranch contract

Fact or fiction? In Texas, tax pro-rations are based not on current year's tax amount?

Fiction

Fact or fiction? In paragraph 9A, the parties can agree to close later than the closing date?

Fiction

Fact or fiction? The effective date of the back-up contract is the listing termination date.

Fiction

What is the difference between explaining contract forms and crossing the line into the unauthorized practice of law?

Give clients options but never tell them what they should do

Statute of Limitations

Governs how long contracting parties have to file a law suit after the contract terminates

What substance is specifically excluded form the mineral estate?

Limestone

Texas is a community property state, so the title company will need to know the parties' what?

Marital status

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 wil transfer the security deposit to the buyer at closing

Addenda

Materials are added to and included in the initial contract

If the parties want to add additional items to remain with the property (that are not already listed in paragraph 2b or 2c) what is the proper form of use?

Non-Realty Items Addendum

What is the proper form to use if the buyer wants to ask the seller to leave the free standing bookcase for a small amount of money?

Non-Realty Items Addendum

What should you do if you believe a transaction is involved in illegal activity?

Notify your broker, withdraw from the transaction, tell the seller to seek legal advice if he/she plans to continue with the transaction (all of these)

Consumer Information Form 1.1

Posted in each real estate office, contains information about TREC recovery funds and how to contract TREC

What is the purpose of the Real Estate License Act?

Protect the public

When must the seller permit the buyer to access the proerpty?

Reasonable times

Which of the following addenda contain the word "time is of the essence"

Sale of Other Property Addendum, Third Party Financing Addendum, Addendum for Back Up Contract. All of these

Once a contract is accepted, agents must deposit any earnest money in their possession with the escrow agent by the close of business on the ___ working day?

Second

Option money must be delivered to the ____ or their agent within three days after the effective date of the contract.

Seller

Back Up Addendum

Seller negotiates with two buyers, terminates if the first contract doesn't terminate, buyer #2 has the next contract now in place

According to the Loan Assumption Addendum, if the buyer does not deliver the credit information within the required time, the seller has how many days to terminate after expiration for the time of delivery?

Seven

According to the Seller's Financing Addendum, if the buyer delivers his credit information to the seller in a timely fashion, and the seller determines it is unacceptable, how many days after the expiration of the time for delivery does the seller have to terminate?

Seven

A buyer's agent is getting ready to write a contract on a property the other agent has disclosed as a short sale. Which addendum will need to be attached to the contract and included in Paragraph 22?

Short Sale Addendum

If seller is going to furnish the existing survey, he or she must provide what other document?

T-47 Affidavit

When property owned by a married couple is being sold, what is the best way to identify the seller?

Thomas Bud Smith and spouse Mary Ann Smith

A mass murder took place in a property, it was on the news and in the newspaper for weeks. Does this need to be disclosed to an out of town buyer?

Yes, the home may be stigmatized and the average person would want to know

Which of the following statements may be the unauthorized practice of law?

You should