Texas Real Estate Promulgated Forms

which law requires that a contract have proper legal description

The Statute of Frauds

A buyer pays an option fee of $25 under paragraph 23 of the TREC One to Four Family Residential Contract to purchase a 10 day option to terminate. What happens if the buyer fails to terminate by the 10th day?

buyer will not have the unrestricted right to terminate

Under the One to Four Family Residential Contract, a buyer wishes to offer to buy the property as is with no repairs. How should the buyer's agent advise the buyers to fill in paragraph 7D?

buyers should check the box under 7D(1)

when should an offer be present?

immediately

a contract that complies with all basic requirements may still be either void or voidable. to be valid the contract must have

mutual agreement

paragraph 8 addresses

the brokers' fees

Time Is Of The Essence

the contracting parties agree that strict adherence to the time frames recited in the contract is an essential part of their agreement

Paragraph 2 includes

the county, excluded fixtures & accessories, the street name.

a seller wants to close using a contract for deed, what is MOST correct

the listing agent could continue helping the seller, but the contract must be drafted by an attorney

what informations required to fill out paragraph 23

the option fee to be paid and the option period

a contract becomes fully executed when

the parties have fulfilled the promises made in the agreement

TRUE regarding properties with the same sales price

the premium cost to insure the title of the property is the same at all title companies in the state

Paragraph 7 addresses

the property condition

a contract with person under duress is

voidable

Which paragraph addresses whether the property is subject to an HOA

Paragraph 6

what information is required in paragraph 12 of the TREC One to Four Family Contract

Seller's Contribution to Buyer's Expenses

law that specifically prohibits licensees from practicing law

Texas Real Estate License Act (TRELA)

What happens if no dollar amount is inserted in paragraph 23 of the TREC One to Four Family Residential Contract but the time period is filled in as 10 days?

The paragraph is not part of the contract

TREC's 6 Promulgated Contracts

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

amendment

a change or modification to the existing content of a contract. MUST BE SIGNED BY ALL PARTIES

Valid Contract

a contract that contains all six elements, and will be upheld by the TX courts

Reasonable Time

a fair length of time, as determined by the court, for the performance of contractual obligations

Paragraph 4 addresses

a licensee disclosure

once presented an offer from a prospective buyer, the seller CANNOT do

accept it after making a counteroffer

Addenda Promulgated by TREC

addendum for Property Located Seaward of the Gulf Intracoastal Waterway Seller Financing Addendum Addendum for Coastal Area Property`

TREC promulgated form

addendum for sale of other property by buyer

paragraph 9

addresses the closing and possession date

contract is said to be bilateral if

all parties to the contract exchange binding promises

Unenforceable Contract

an agreement which had all six elements at the time it became an executory contract but due to change in conditions, it no longer meets the requirements of law and cannot be held up by a court

TRUE regarding amendments and addenda

an amendment is completed AFTER a contract has been executed, but addenda are completed at the SAME TIME as the sales contract

a voiding of a contract by a minor is

an example of terminating by operation of law

in paragraph 3, the sales price is the sum of the cash portion of the sales price

and the sum of all financing

buyers expense

appraisal fees

a seller and buyer have entered into a sales contract, and the seller fails to deliver the title to the buyer, this is an example of

breach of contract

residential contract, what are the buyers options if the seller timely provides the seller's disclosure notice under paragraph 7b(2)?

buyer may terminate the contract within seven days after buyer receives notice

one party cancelling or terminating the contract without return to the original position is

cancellation

essential elements of a valid real estate contract includes

competent parties consideration signatures of the parties

Paragraph 5 addresses

earnest money

Void Contract

if it does not have all the elements was never enforceable

under what condition may the seller receive the earnest money is he timely terminates under the Loan Assumption Addendum

if the buyer fails to timely provide credit documentation within the negotiated time period

both the Seller Financing Addendum and loan Assumption Addendum give the seller the option to terminate the contract under which specific condition

if the seller timely notifies the buyer that the seller has not approved the buyer's creditworthiness

How should the TREC Family Residential Contract be filled out if the property is NOT located within a city

in the blank for city put unincorporated or none

"as is"

indicates the buyer is willing to buy the property for the price they have offered, in the as is condition they can see, subject only to the things listed in paragraph 7D

what happens to the earnest money at funding

it is applied to the sales price.

The buyer wants to use her favorite title company to handle the purchase of an investment property. The seller's agent always uses a different title company. Who selects the title company?

it is negotiated

residential contract, who pays for the title policy

it is negotiated

using the residential contract, who pays for a new survey is the survey is not acceptable to the title company

it is negotiated between the parties

a seller wishes to keep an item listed as an accessory, how should the contract be filled out

list the item under exclusions

the seller wants to keep the built-in, stove top. how should the seller's agent note that?

list the stovetop in paragraph 2, Exclusions

"James A Johnson and wife Susan B. Johnson" would be found in what paragraph

paragraph 1

the names of the sellers and buyers, including martial status are in

paragraph 1

which paragraph provides a breakdown of sellers' and buyer's expenses

paragraph 12

the legal description of the property is in

paragraph 2

the addenda included in the agreement are in

paragraph 22

the amount of the cash down payment is in

paragraph 3

license holder disclosure is addressed in

paragraph 4

earnest money is addressed in

paragraph 5

title policy information is in

paragraph 6

the closing date is in

paragraph 9

who pays for a residential service contract under the TREC one to four family residential contract

parties may negotiate who pays

TREC Residential Contract, buyers wish to make the purchase of the home contingent on the outcome of a home inspection. what should they do

pay an option fee for the unrestricted right to terminate under paragraph 23

a licensee who completes a contract for the sale of real property is NOT engaged in the unauthorized practice of law if the licensee uses a form that is

prepared by the property owner or by an attorney and required by the property owner prepared by an attorney licensed in TX and approved by the attorney for the type of transaction for which it will be used adopted by the commission for the type of transaction for which the form is used

deed restrictions are also known as

restrictive covenants

NOT a TREC promulgated addendum

reverse mortgage financing addendum

TREC approved forms

reverse mortgage financing addendum lead-based paint addendum non-realty items addendum

what information is required to fill out paragraph 3 of the TREC One to Four Family Residential COntract

sales price -3C

things that can be amended with a TREC form

sales price, repairs to be done, seller's agreement to pay a portion of the buyer's closing costs, and extension of the option to terminate

who pays for a new survey if the seller has agreed to provide an existing survey and fails to timely provide the survey

seller

restrictive covenants addresses

setbacks fencing rules easements architectural design fees for road maintenance minimum size requirements pets

Addenda that includes "time is of the essence" clause

short sale addendum addendum for back up contract addendum for sale of other property by buyer

"time is of the essence" in real estate means

that parties are held to exact performance of their duties within the time specified in the agreement

Property approval, according to paragraph B2 in the Third Party Financing Addendum, includes

the appraisal insurability lender-required repairs

an offer to purchase by a potential buyer is considered accepted when

the buyer is notified that the seller has accepted the offer

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 the mortgagee policy of title insurance and who does it protect?

the buyer will pay, it protects the seller

if there are lender required repairs and neither party agrees to them

the contract may be terminated by the buyer and the buyer will receive the earnest money

A buyer purchase property "as is" under the One to Four Family Residential Contract. "As is" means which of the following?

the present condition of the property, with any and all defects, and without warranty except for the warranties of title and warranties in the contract

Novation

the replacement of an existing contract with a new contract -new contract must be reference the contract being replaced -there can also be a novation of parties -releases all of the terms and obligations of original contract

under TREC Loan Assumption Addendum, what happens if the seller fails to notify the buyer within seven days that the seller has decided that the buyer's credit is not acceptable?

the seller is deemed to have approved the buyer's creditworthiness

if the buyer is obtaining a new conventional mortgage, what should be checked in paragraph 3

third party financing addendum

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 days

Paragraph 6 addresses

title policy, survey, HOA information.

What is the intent of the option period under paragraph 23 of the TREC One to Four Family Residential Contract?

to allow the buyers to do their due diligence -buyers can get inspections, insurance and anything else they need to verify within he negotiated option days

Exception to using a TREC promulgated contract form

transaction in which the US government agency requires a different form to be used

Assignment

transfer of rights and/or duties under a contract

Under the assumption paragraph of the TREC Loan Assumption Addendum, how many notes are assumable using the preprinted form

two

Statute of Limitations: Oral Contract

two years

a contract MAY NOT be discharged for

unilateral decision by either party to terminate

Under the TREC One to Four Family Residential Contract, how long does the seller have to complete required repairs?

until closing

TREC promulgated the Loan Assumption Addendum. in a transaction where a buyer is assuming a seller's loan

use TREC's Loan Assumption Addendum is required

the sellers want to sell their refrigerator to the buyers. how should it be noted in the contract

use of the Non-Realty Items Addendum

when a contract contains all the essential elements that make it legally sufficient or enforceable and is binding in a court of law, it is

valid

Under the TREC Loan Assumption Addendum, what is listed in the preprinted form to establish the buyer's creditworthiness

-verification of employment, including salary -verification of funds on deposit in financial institutions -credit report

Paragraph 6 deal with

-who pays for the title policy -what company will issue the title policy -whether a new or existing survey will be provided -who will pay for the survey -who will furnish he survey -number of days to furnish the survey -objections to title -whether the property is subject to an HOA

the TREC Third Party Financing Addendum includes

FHA-insured financing USDA- guaranteed financing Conventional Financing

6 elements of a contract

1. Competent Parties 2. Consideration 3. Mutual Agreement 4. Lawful Objective 5. In Writing & Signed by the Parties 6. Contain a Legal Description

Statute of Limitations; Written Contract

4 years

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?

7 days

How many exceptions to title are listed under paragraph 6A of the One to Four Family Residential Contract?

8

Voidable Contract

A contract that may be legally avoided at the option of one or both of the parties. -when entered into with a minor, the agreement is voidable at the option of the minor party

Addenda

Completed at the same time as the sales contract. Contains additional information hat is part of the original contract/agreement. MUST BE SIGNED BY ALL PARTIES