Promulgated Contracts
A murder/suicide took place in a property. The crime was widely publicized. What is the disclosure requirement for this crime?
It must be disclosed forever.
Agent Ralph has a buyer client that wants the seller to leave them the refrigerator, built-in microwave, and vent hood. Ralph notes this expectation in the Special Provisions section. What is wrong with this scenario?
It should be written in a Non-Realty Items Addendum, not in the Special Provisions section.
Which of these must the broker maintain a copy of for three years following a sale?
Lead Based Paint Addendum
Mary has a rental property with a two year lease on it. She collected a $500 security deposit at the beginning of the lease. Now she is selling the property. What will happen to the security deposit?
Mary will transfer the security deposit to the buyer at closing.
Buyer Javier sends a formal offer to Seller Joy: $250,000 and the appliances stay. Joy counters: $250,000, no appliances. She then reconsiders and accepts the first offer. Is Javier obligated to buy the home? Why or why not?
No, because the first offer was dead when Joy countered.
A seller is planning to convey a refrigerator through the Non-Realty Items Addendum. They financed the applianced purchase, and still have a few payments left. Is this allowed? Why or why not?
No, items conveyed though the Non-Realty Items Addendum must be owned fully by the seller.
Where in the One to Four Family Residential Contract does it spell out what remedy the buyer has if the property is damaged after going into contract but before closing?
Paragraph 14
In TREC promulgated contracts, what does Paragraph 21: Notices provide information about?
Paragraph 21: Notices informs parties where to send official notices.
The words "time is of the essence" are in:
Paragraph 23 of the One to Four Family Contract
What part of the One to Four Family Residential Contract advises the buyer to get an abstract of title reviewed by a lawyer?
Paragraph 6E1
If a seller wants to reserve part of their mineral rights after selling, where on the Reservation of Oil, Gas and Other Minerals Addendum would they note what percentage they're keeping?
Paragraph B2
Which MUST be disclosed to potential buyers?
Prior flood damage that was repaired by the owner
As outlined in the TREC promulgated sales contracts, what obligations does the seller have regarding the property condition at the time of sale?
Seller's obligations are a matter of negotiation with the buyer.
A buyer who discovers a defect which they believe was misrepresented has a certain time after discovery to make a claim for damages. This is known as the:
Statute of Limitations
What are two real estate governing bodies that were formed as a result of TRELA?
TREC and the Broker-Lawyer Committee
What is one thing that differentiates TREC from the Broker-Lawyer Committee?
TREC members are only appointed by the governor, Broker-Lawyer Committee members can be appointed by different people.
If clients want to make an offer to the seller offering a "lease with option to buy," the buyer's agent should:
Tell the client they will need an attorney to draw up the documents
Agent Alicia is helping her client buy a newly built home. She does not use the New Home Contract (Completed Construction). What is the most likely reason why?
The builder required that she use their contract.
Paragraph D of the Short Sale Addendum contains a date by which the seller must get approval from their lender for the sale. What happens if the lender does not give approval by the date?
The contract will terminate and the earnest money will be refunded to the buyer.
By what time is the seller required to furnish a new survey?
The seller must furnish the buyer a new survey no later than 3 days prior to closing
If a buyer is using VA financing, what will be part of the contract?
Third Party Financing Addendum for Credit Approval
Which is TRUE regarding buyer rebates?
Undisclosed buyer rebates are not legal.
Alex is a licensed sales agent. Her client is selling her single-family home. In order not to violate TRELA contract law and run afoul of TREC, how should she create the contract?
Using TREC's promulgated One to Four Family Residential Contract
A Residential Real Property Affidavit Promulgated by the Texas Department of Insurance (T-47 Affidavit) must be furnished to the buyer _______________________.
When the seller provides the existing survey
Agent Aaron was drawing up a contract, and opted to use his brokerage's (lawyer-created) Seller's Disclosure Notice instead of TREC's. Is this allowed? Why or why not?
Yes, because the Seller's Disclosure Notice is not promulgated by TREC.
Which one of these is a bilateral contract?
Zelda agrees to pay Gus $250,000 for ownership of his house.
An agent's buyer client wants to keep the curtains in the home they are buying, and the seller has agreed. What does the agent need to include with the contract to ensure this happens?
a Non-Realty Items Addendum
Buyer Raz goes into contract on a house in Texas. At the last minute, he is unable to obtain financing. What would he need to have in his contract to terminate it without penalty?
a Third Party Financing Addendum
TRELA empowers TREC to require license holders to use certain contract forms. Which of these would NOT meet TREC's requirements?
a contract created by a license holder's sponsoring broker
What is an express contract?
a contract that has a very specific offer and acceptance
Your buyer client has received their inspection report. In it, there are several identified items that they want the seller to fix. Seller has agreed to fix these items before close. What will you need to include in the contract to ensure this agreement is enforced?
amendment
Which of these is an example of an illegal buyer rebate?
an agent gives their buyer client half of their commission without disclosing it on the settlement statement
According to Paragraph 6B: Commitments in the promulgated One to Four Family Residential Contract, what must be provided to the buyer along with the title policy documents?
any restrictive covenants
To be valid and enforceable, a contract must be in writing, represent a complete agreement, have acceptance communicated, and:
be signed by all parties
Why does the Option to Terminate require an extra consideration in the form of option money?
because it is another contract within the overall contract
When do brokers determine how the commission from a sale will be split?
before closing
A buyer was unable to obtain financing. How would they notify the seller that they are terminating the contract?
by sending a promulgated Notice of Buyer's Termination
How can an agent help protect the earnest money of a buyer who is financing their purchase?
by submitting a Third Party Financing Addendum
In Paragraph 9 of the One to Four Family (Resale) contract, what must happen "on or before" the specified date?
closing
Which of these is a technique license holders can employ to avoid mortgage fraud?
disclose everything to the lender
A contract that is fully performed is referred to as:
executed
In a TREC promulgated contract, what is the Third Party Financing Addendum concerned with?
financing contingencies
Emily and Josh signed a real estate contract with each other. The contract is now fully executed. What does that mean that Josh and Emily have done?
fulfilled the material terms of the contract
Seller Xavier's home is in a special statutory tax district. According to the Texas Water Code, what does Xavier have to do before going into contract with a buyer?
have them sign a notice informing them of the extra taxes
What is the only time it is acceptable for a license holder not to present all offers to a seller client?
if the listing agreement specifies that it is not necessary
If nothing is added in Paragraph 7D, the agreement says that the buyer is accepting the property:
in its present condition
What is one exception to HUD's occupancy guidelines of two people per bedroom?
infants in a room with parents
What does the date in the Third Party Financing Addendum provide a deadline to buyers for?
informing a seller they didn't get their financing approved
When all parties have agreed to all terms of an offer, have signed the offer, and have initialed any changes that took place during negotiations, what happens to the offer?
it becomes a contract.
What is the purpose of the Consumer Notice Concerning Hazards or Deficiencies in TREC promulgated contracts?
it educates buyers on the purpose of property inspections
When a contract has been fully executed, what has happened to it?
it has been terminated
According to the Short Sale Addendum the effective date of the contract is amended to the date the Seller notifies the Buyer that the
lender has approved the short sale
Which of these is NOT something TREC has the power to do?
licensing developers and builders
Which of these materials would be considered part of a property's mineral estate?
oil
A landlord may have to make adjustments for a tenant with a disability to be able to live in a dwelling. Those adjustments do not include:
permitting a tenant to use illegal drugs
A stand-alone refrigerator would be considered ______ .
personal property that will not transfer
What are brokers required to do regarding Consumer Protection Notice TREC No. CN 1-2?
post it in each office
Paragraph 7D(2) of the contract indicates:
repairs that must be completed by the seller before closing
In a Texas real estate contract, what does an Addendum for Property Subject to Mandatory Membership allow a buyer to do?
terminate a contract if not given information about the property's HOA
According to the Addendum for Back-Up Contract, if a first contract is terminated and the seller notifies the back-up buyer of the termination, what happens?
that date becomes the effective date of the back-up contract
What information does the Disclosure of Relationship with Residential Service Company form convey?
that it is a violation of RESPA for a license holder to receive a referral fee for passing on a name to a service provider
If the seller is providing an existing survey during a real estate transaction, what must the license holder give to the buyer?
the T-47 Residential Real Property Affidavit
The Seller's Disclosure Notice is a requirement of
the Texas Property Code
According to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum, what happens if the buyer can provide the seller with a report proving that the use of the property is negatively affected by one of the noted factors (before the agreed-upon deadline)?
the buyer can terminate the contract and get their earnest money back
According to Paragraph 9B, what happens when someone buys a property that currently under a lease?
the buyer must honor the lease, and the seller transfers them the security deposit
Why does the Notice of Buyer's Termination of Contract only have to be signed by the buyer?
the buyer's termination rights are outlined in the contract
Which of these is NOT true about a Seller's Temporary Residential Lease?
the buyer/landlord has no recourse if the seller/tenant overstays
Which of these is NOT necessary for a contract to be binding and effective?
the contract must be hand delivered to the title company
Which of the following bodies appoints the public member on the Broker-Lawyer Committee?
the governor
Which of these is appropriate to put in the Special Provisions section of the One to Four Family Residential Contract?
the names of sellers that wouldn't fit in Paragraph 1
The amount of the earnest money the buyer is contractually obligated to pay the seller is set by:
the parties
If legal action is required regarding a TREC sales contract, what will the non-prevailing party be responsible for?
the prevailing party's reasonable attorney fees and court costs
Which of these is an example of something that could go in Paragraph 12 of the One to Four Family Residential Contract?
the seller plans to pay some of the buyer's closing costs
A seller is renting back a property from a buyer using the Seller's Temporary Residential Lease. The seller damages the property while they are staying there. Who is responsible for the cost of the repairs?
the seller/tenant
When both parties mutually agree to terminate a contract, who provides the appropriate form?
the title company
What is special about the earnest money section (paragraph five) and the option money section (paragraph 23) in the TREC promulgated sales contract?
they contain "time is of the essence" language
What happens when a homebuyer takes out a residential service contract on their newly-purchased home?
they get a warranty for the property, usually for a year
A contract which courts cannot compel the parties to perform is:
unenforceable
In loan fraud, the lender is usually the ________.
victim
What is the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway for?
warns buyers that if their property become located on the beach area by erosion, they can be required to remove the structure at their own expense
When is it acceptable for a seller not to give a buyer a seller's disclosure notice?
when the buyer has indicated in the contract it isn't necessary
What determines which New Home Contract a license holder should use?
whether or not the building has been completed
A seller is selling a property that is under a lease. When does the seller have to deliver a copy of the lease and any move-in condition form to the buyer?
within seven days after the effective date
What form must be provided to any unrepresented buyer or seller a license holder talks with?
Information About Brokerage Services form
How long after receiving an Addendum for Property Subject to Mandatory Membership in an Owner's Association does a buyer have to terminate the contract?
3 days
How many lawyers are on the Broker-Lawyer Committee?
6
In which of these scenarios would it be correct to use the Residential Condominium Contract (Resale)?
A client is buying a property where the land is not owned individually and the common areas are shared equally among the community's owners.
What is TRUE of a unilateral contract?
A unilateral contract is a promise exchanged for performance.
Which of these is an example of a unilateral contract?
A unilateral contract is an agreement made between two or more parties in which only one of those parties makes a promise or otherwise accepts an obligation.
A potential buyer's current home is under contract. He has found a home he would like to make an offer on, but does not want to take a chance on being obligated to buy if his current home does not close. What form can help this buyer?
Addendum for Sale of Other Property by Buyer
Anthony changed the use of his land from farm land to residential before he sold it. According to TREC rules, who is responsible for any rollback taxes he might owe?
Anthony
Which type of TREC promulgated contract form(s) gives disclosure about the type of insulation in the property?
Both New Home Contracts
Who is tasked with drafting and editing Texas's promulgated contracts?
Broker-Lawyer Committee
Which of the following laws protect people based on race only?
Civil Rights Act of 1866
Which of these is NOT a TREC promulgated form?
Condo Addendum
Which of these forms is least likely to be involved in the sale of unimproved property?
Condominium Resale Certificate
Because many things in the contract depend on these two items, it is important that the agent finalizing the acceptance of the contract fill in which of the following dates for their broker:
Effective and executed date
Which of these is the name of a TREC promulgated contract?
Farm and Ranch Contract
When a property is purchased and then quickly resells at a higher value it is called:
Flipping is quickly reselling a home for a higher value.
A married couple is buying a property. Which is the BEST way to write their names in the contract?
Georgianna Serif and spouse Bryan Serif