Texas Promulgated Forms

Broker Lawyer Committee

13 members 6 brokers - appointed by commission 6 lawyers 1 public member Draft and revise contract forms The answer is drafts and edits forms. The Broker-Lawyer Committee drafts and edits forms, whereas TREC approves and promulgates forms.

How many sales contracts does TREC promulgate? A) 6 B) 5 C) 12 D) 9

The answer is 6. There are six sales contracts promulgated by TREC: One to Four Family Residential Contract (Resale) New Home Contract (Incomplete Construction) New Home Contract (Complete Construction) Farm and Ranch Unimproved Property Contract Residential Condominium Contract (Resale)

How long can a temporary lease last? A) 90 days B) 120 days C) 30 days D) 60 days

The answer is 90 days. The two temporary leases are good for up to 90 days. If the parties want a longer time frame, then a different lease agreement must be used. TREC only has the temporary leases.

Of the following forms, which is not a TREC-promulgated form? A) Third Party Financing Addendum B) Seller's Disclosure of Property Condition C) Addendum for Sale of Other Property by Buyer D) Condominium Resale Certificate

The answer is Seller's Disclosure of Property Condition. The Seller's Disclosure of Property Condition. This is a voluntary form with mandatory content. TAR has a different version with added disclosure information, and some brokers have an attorney draw up a disclosure notice for use in their office listings.

What addendum is used if the buyer wants to acquire a VA loan? A) Third Party Financing Addendum B) VA Financing Addendum C) None of these D) Seller Financing Addendum

The answer is Third Party Financing Addendum. The Third Party Financing Addendum addresses conventional, FHA, and VA loans. The addendum is used so that more detailed information in paragraph 4 in the sales contract is disclosed.

A licensee may do which of the following without engaging in the unauthorized practice of law? A) Advise the seller that the property probably won't sell because it is overpriced B) Advise the buyer in writing that a title policy and a survey should be obtained C) Advise both the seller and the buyer that, in the licensee's opinion, title to the subject property is encumbered D) Add factual statements and business details to a promulgated form as requested by the client

The answer is advise the seller that the property probably won't sell because it is overpriced. A real estate licensee should give a seller the licensee's opinion of value to assist the seller in pricing the property. Advising the seller about the dangers of overpricing does not constitute the unauthorized practice of law.

Protected classes under the Fair Housing Act include all of the following EXCEPT A) gender. B) age. C) race. D) color.

The answer is age. Protected classes under the Fair Housing Act include race, color, national origin, religion, sex, familial status, and disability. Age is not a protected class under the Fair Housing Act.

Licensees may use any form EXCEPT A) a builder's contract form. B) an outdated TREC form. C) one selected by the seller. D) a seller's contract form.

The answer is an outdated TREC form. Licensees may use any form the parties stipulate excluding an outdated TREC form. It is imperative that licensees keep informed of TREC's revised forms.

Who decides the amount of earnest money in the real estate contract? A) TREC B) TAR C) Broker D) Buyer and seller

The answer is buyer and seller. It is the decision of the parties in the contractual agreement whether earnest money will be used, the amount, and where it will be deposited.

What does the buyer need to provide the seller in paragraph 7D(2) of the One to Four Family Residential Contract? A) Residential service contract name B) Buyer's requested repairs C) Title insurance address D) Seller's attorney's address

The answer is buyer's requested repairs. In this blank, the buyer asks for the seller, at the seller's sole expense, to perform specific repairs and treatments. If the buyer is not aware of any repairs and/or treatments, N/A should be written in the blank. Remember, the buyer can ask for repairs and/or treatments later, though the seller is not bound to agree to do any repairs or treatments.

What is the last thing written on the TREC-promulgated contract form to execute the contract? A) Buyer's signature B) Date C) Seller's signature D) Listing broker's signature

The answer is date. After all parties have agreed on the terms, the executed date is entered on the form by the real estate licensee.

In addition to the protected classes under the Fair Housing Act, the ECOA is protective of all of the following EXCEPT A) marital status. B) age. C) income. D) public assistance.

The answer is income. The ECOA may not discriminate based on age, though the lender may deny a loan for a potential borrower with limited income.

How is the cost of a residential service contract addressed in paragraph 7H? A) It is the real estate licensee's expense. B) It is the seller's expense. C) It is a buyer's expense that the seller may reimburse. D) It is the buyer's expense.

The answer is it is a buyer's expense that the seller may reimburse. Paragraph 7H provides that the buyer may purchase a residential service contract. If the buyer does so, paragraph 7H provides for the seller to reimburse the buyer at closing for the cost up to an agreed-upon amount.

An offer may NOT be withdrawn after A) presenting the offer. B) accepting the offer. C) notification of acceptance. D) notification of counteroffer.

The answer is notification of acceptance. The offer may not be withdrawn after notification of acceptance is given to the other party. Even with signatures in place, without notifying the other party there is an acceptance, the offer remains an offer, not a contract.

What paragraph has details regarding the default remedies? A) Paragraph 5 B) Paragraph 15 C) Paragraph 20 D) Paragraph 10

The answer is paragraph 15. This paragraph is called the default paragraph. If the seller is in default, the buyer can receive the earnest money and release both parties from liability, or the buyer can sue for specific performance and/or other remedies of law. If the buyer is in default, the seller can receive the earnest money as liquidated damages or sue for specific performance and/or other remedies of law. Once the non-defaulting party chooses the earnest money as the remedy, there can be no other action against the party that defaulted.

A real estate licensee who receives a valid offer must A) present the offer as quickly as possible. B) present offers from highest sales price to lowest price. C) hold offers to make sure all buyers have a fair chance at the property. D) present any offers in the order they were received.

The answer is present the offer as quickly as possible. All offers should be in writing and presented to the property owner as quickly as is reasonably practical. The TREC rules call for immediate presentation. No real estate broker or salesperson has the right to withhold an offer from a property owner.

The Texas Real Estate Commission prohibits a license holder from using a sales contract drafted by A) an attorney. B) the buyer. C) the seller. D) the broker.

The answer is the broker. Either the buyer or the seller can draw up a contractual agreement; however, a licensee who draws up a contractual agreement for one or both parties is in violation of TRELA and TREC and is guilty of the unauthorized practice of law.

The buyers applied for an FHA loan. The property appraisal was $5,000 less than the sales price in the contract. What are the options of the parties in the contract? A) The seller must lower the sales price to meet the appraised value. B) The buyer is obligated to take out a second loan with the lender. C) There are no options, and the contract is void. D) The buyer may proceed with consummation of the contract without regard to the amount of the appraised valuation.

The answer is the buyer may proceed with consummation of the contract without regard to the amount of the appraised valuation. The buyer is not obligated to pay more than the appraised value. However, the buyer has the option of doing so.

Fair Housing Act

The federal law that prohibits discrimination in housing based on race, color, religion, sex, disability, familial status, and national origin.

The One to Four Family Residential Contract requires the survey to be acceptable to the A) buyer. B) seller. C) title company. D) broker.

The statement is title company. Paragraph 6(c) requires the survey to be acceptable to the title company and also to any lender.