Real Estate Promulgated Forms Exam

Rollback taxes are discussed in

-Both New Home Contracts -Unimproved Property Contract -Farm and Ranch Contract

A buyer decides to exercise her right to terminate under the option period. What is the proper process?

-Execute a Notice of Termination of Contract -Deliver the Notice of Termination of Contract to the seller according to the instructions paragraph 21 of the contract

A back-up contact was executed on July 1. The buyer is willing to be in back-up position until July 16 and see if the first contract will terminate. What are the back-up buyer's responsibilities while they are in back-up position?

-Pay earnest money agreed to in the back-up contract -Pay any option money agreed to in the back-up contract

The amount entered in paragraph (3B) of the sales contract is the...

Amount of loan(s)

Buyer must object NOT later than the closing date or within _____ days after receiving the Commitment, Exception Documents, and the survey.

An agreed-upon number of days

According to the Third Party Financing Addendum, which one of the following is NOT necessary for credit approval?

An appraisal for at least the sales amount must be received

Licensees may use any form the parties stipulate excluding what..

An outdated TREC form **It is imperative that licensees keep informed of TREC's revised forms.

A back-up contract was executed on August 9. The parties agreed to a 12-day option period. On August 15, the seller notified the buyer that the first contract had terminated. When does the buyer's option period end?

At midnight on August 27

Which form is NOT a TREC-promulgated form? A) Third Party Financing Addendum B) Seller's Disclosure of Property Condition C) Condominium Resale Certificate D) Addendum for Sale of Other Property by Buyer

B) Seller's Disclosure of Property Condition

What is a requirement to have a valid real property sales contract in TX?

Be sober and demonstrate contractual intent

A sales contract in which a promise is exchanged for a promise is

Bilateral

Which TREC promulgated form gives disclosure about the type of insulation in the property?

Both New Home Contracts

If a closing takes place in July, who will be responsible for payment of the annual taxes to the taxing authority when the tax statements arrive?

Buyer

Once the duties in a contract are completed by both parties, the contract is

Executed

T/F- The title policy protects the buyer from loss due to utility easements created by the dedication deed or plat of the subdivision

False

Protected classes under the Fair Housing Act include what?

Gender, Race & Color

Who completes the promulgated resale certificate?

Homeowners Association

How is the cost of a residential service contract addressed in paragraph 7H?

It is a buyer's expense that the seller may reimburse

Which action might leave a licensee open to a charge of practicing law without a license?

Licensee advises both the seller and the buyer that, in his opinion, title to the subject property is encumbered.

An offer may NOT be withdrawn after..

Notification of the acceptance

What paragraph has details regarding the default remedies?

Paragraph 15

If the seller furnishes the existing survey to the buyer, but it is NOT acceptable to the buyer's lender, who will cover the cost of a new survey?

Party negotiated in the contract

A real estate licensee who receives a valid offer must...

Present the offer as quickly as possible

The purpose of the TRELA is to

Protect the public

In addition to the protected classes under the Fair Housing Act, the ECOA is protective of what?

Public Assistance Age Marital Status

Licensees must always suggest that clients...

Seek legal counsel

Who has the responsibility for turning on the utilities and keeping them on for the duration of the contract, according to the contract?

Seller

Which form should be used when a seller wants to sell his property for less than what is owed on the property?

Short Sale Addendum

Which of the following are NOT required, according to the Property Code, to furnish a Seller's Disclosure Notice?

Single-family new residence

The law that requires the contract to be in writing and signed by the parties is the

Statute of Frauds

In the Third Party Financing Addendum for Credit Approval, it is unacceptable to fill in the rates and terms blanks with what?

TBD, market rate, or "as required" *Specific rates and terms must be entered in the blanks; avoid vague or nonspecific words and terms

The addendum for Coastal Area Property and the Addendum for Property Located Seaward of the Gulf Intrcoastal Waterway contain the notices required by the

Texas Natural Resources Code

Which group administers the TRELA?

Texas Real Estate Commission

Which TREC promulgated form allows for the sales price to be adjusted because of the survey?

The Farm & Ranch Contract

Which TREC promulgated form has a spot for information about Exception Documents and Surface Leases?

The Farm and Ranch Contract

Property approval, according to paragraph 4, inclues

The appraisal lender-required repairs insurability

The Texas Real Estate Commission prohibits a license holder from using a sales contract drafted by...

The broker

The buyers applied for an FHA loan. The property appraisal was $5000 less than the sales price in the contract. What are the options of the parties in the contract?

The buyer may proceed with consummation of the contract without regard to the amount of the appraised valuation.

If the 3rd Party Addendum for Credit Approval says credit approval must be obtained within ten days after the effective date, and the appraisal comes in too low for the lender to make the loan on the 12th day, what is the status of the contract?

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

If the seller is doing all of the financing and is furnishing the buyer with an owner's policy of title insurance, who will pay for a mortgagee policy of title insurance and who does it protect?

The buyer will pay, and it protects the seller

If the option money is NOT delivered to the proper party within the proper time frame, what is the status of the contract?

The contract is valid; paragraph 23 is not a part of the contract

An agent is selling a new home and is using the builder-required contract form. How can the agent make sure the buyer receives the required notice that the buyer should have the abstract examined by an attorney or obtain a policy of title insurance?

Use TREC from OP-C Notice to Prospective buyer

If a contract does NOT meet the six elements of a valid real estate contract, it is...

Void

Which of the following is NOT an exception to the rules requiring that promulgated forms be used and completed by the licensee?

When the contract form has been prepared by the buyer's agent

A document that transfers contract obligations to another party but does not release the first party's obligation is

an assignment

If one of the parties default and the non-defaulting party accepts the earnest money as damages, that party

can do nothing more; the contract is terminated

If the buyer wants to be sure the fireplace screen stays with the property, the buyer's agent should

do nothing; it is already in the contract

The Broker-Lawyer Committee

drafts and edits forms

The seller on unimproved property provides a disclosure

in paragraph 7E of TREC 9-10, Unimproved Property Contract

The seller is..

never obligated to accept any offer

According to the One to Four Family Residential Contract (resale), the title policy cost is the responsibility of the

party that agreed to pay the cost in the contract

According to paragraph 23 the option money is to be delivered to the

seller

The TREC contract forms day that if the property is damaged by fire or other casualty prior to closing, the

seller will be obligated to restore the property prior to closing.

According to paragraph 12, the seller's expenses include

tax certificates

If the tenant damages the property while occupying, the cost of repair is the responsibility of the

tenant

The reason the broker fee section is NOT part of the sales contract is that...

the contract is an agreement between only the buyer and the seller

Notices from one party to the other are effective when they are sent to

the email address listed in paragraph 21 & the address listed in paragraph 21

The TREC contract forms that discuss rollback taxes say that if the rollback taxes are assessed because the seller changes the usage prior to closing

the seller will be obligated to pay the rollback taxes

In Paragraph 3 of the One to Four Family Residential Contract, the sales price is the sum of the cash portion of the sales price and

the sum of all financing

When the existing survey is NOT acceptable to either the lender or the title company, the buyer shall obtain a new survey no later than ________ days prior to the closing date.

three

When a buyer purchases a condominium, they are buying the

unit and an undivided interest in the common areas

An oral agreement of sale is

void and unenforceable

A contract that is unenforceable....

was once valid but is no longer so

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 first counter before answering the new offer.

Rollback taxes can be assessed when

zoning is changing and the property no longer qualifies for a previous exemption

A contract can be terminated at the option of the buyer when

-The seller fails to provide and the buyer, of a previously occupied single-family residence, fails to receive the written seller's disclosure of property condition. -Homeowners association information of the Condominium Resale Certificate have not been provided to the buyer prior to creating a contract -The property is situated in a utility district or other statutorily created district providing water, sewage, drainage or flood control, and the seller has not forwarded the appropriate notice prior to creating a contract to purchase

According to paragraph 18B, if no closing costs occurs, the title company may require

-Unpaid expenses on behalf of the buyer & seller -A written release of liability of escrow agent

If a transaction is contingent upon the sale of buyer 1's property ad the seller notifies buyer 1 that the seller has accepted back-up offer, buyer 1 must

-Waive the contingency on or before the date they have agreed upon in the Sale of Other Property Addendum -Pay the additional earnest money agreed to in the Sale of Other Property Addendum

Restrictive covenants may include rules regarding

-minimum size requirements -pets -fees for road maintenance

What are the 6 sales contracts promulgated by TREC?

1. One to Four Family Residential Contract (resale) 2. New Home Contract (Incomplete Construction) New Home Contract (Complete Construction) Farm and Ranch Unimproved Property Contract Residential Condominium Contract (Resale)

How many members make up the Broker-Lawyer Committee?

13

How many people are on the Texas Real Estate Broker-Lawyer Committee?

13 *6 members appointed by TREC *6 members of the State Bar of Texas *1 public member appointed by the governor

If the escrow agent receives a demand for the earnest money from one party, the escrow agent does NOT receive a written objection within ____ days, the escrow agent may release the earnest money to the party making the demand

15 days

Provided the seller will NOT incur any expense, how many days after their receipt does the seller have to cure the timely objections of the buyer or any third-party lender?

15 days

What is the minimum age in TX to enter into a contract for real property?

18

In the sale, sellers must disclose notice of lead-based paint in their homes if it was built before...

1978

How many sales contracts does TREC promulgate?

6

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

7 days

According tot eh 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?

7 days

If one of the parties wrongfully refuses to sign a release acceptable to the escrow agent within ___ days of receipt of the request for the release, they will be liable to the other party for liquidated damages of ____ times the amount of the earnest money.

7;3

How long can a temporary lease last?

90 days

Which of the following is true regarding the presentation of offers to a seller?

A licensee doesn't have to present offers $20,000 below the asking price if the seller has given the licensee that direction in writing

Contracts can be discharged or terminated for all of the following reasons except: A. when the buyer sends an amendment to the seller asking for a change in the closing date B. if the contract is voided by a minor C. when the parties agree to cancel or terminate D. if the transaction is fradulent

A. When the buyer sends an amendment to the seller asking for a change in the closing date

What are the options for the seller after receiving a written offer?

Accept it Reject it Counter it Ignore it

Which of the following addenda contains the words time is of the essence?

Addendum for Sale of Other Property by Buyer

What should a licensee do when there are unusual matters involved in a transaction?

Advise the client to seek legal advice before signing anything

A licensee may do what without engaging in the unauthorized practice of law?

Advise the seller that the property probably won't sell because it is overpriced

When the parties agree to change a contract that has already been agreed upon, the proper form to use is the

Amendment

Who decides the amount of earnest money in the real estate contract?

Buyer and Seller

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

Buyer's

What does the buyer need to provide the seller in paragraph 7D(2) of the One to Four Family Residential Contract?

Buyer's requested repairs

The amendment to Contract form is used when the parties in the purchase contract want to...

Change their agreement

What is the last thing written on the TREC-promulgated contract form the execute the contract?

Date

What does the Broker-Lawyer Committee do?

Drafts and edits forms

What is NOT an essential element of valid contract?

Earnest Money

The date in the upper right corner of the promulgated contract form is what date?

The date that TREC approved and promulgated the form

Paragraph 6E8 of the Farm and Ranch Contract informs the consumer that if the property is subject to a private transfer fee

The seller must notify the buyer

What addendum is used if the buyer wants to acquire a VA loan?

Third Party Financing Addendum

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

Thomas Bud Smith and spouse Mary Ann Smith

The One to Four Family Residential Contract requires the survey to be acceptable to the...

Title Company