Promulgated Contract Forms
What type of contract do you have once the seller has accepted the buyer's offer in writing and the buyer has been notified of the acceptance?
Enforceable
The Addendum for Property Subject to Mandatory Membership in a Property Owners Association is meant to do which of the following?
Make buyers aware of the CC&Rs that govern the neighborhood of the house they're purchasing
Russel Maverick likes to get things done quickly, so when he decided to buy Kent Regent's property, he asked Kent if he'd be willing to take a promissory note for the difference between the down payment and the purchase price that he would pay off in installments. Kent agreed. What type of financing is this?
Seller financing
Which Texas law requires contracts for real property to be in writing?
Statute of frauds
What is one reason that Texas licensees must be able to distinguish between townhomes and condominiums?
They require different promulgated forms.
Kathy and Glen are considering two properties. If they purchase the townhome, which of the following is a true statement?
They will have fee simple ownership of the land beneath their unit.
Veteran Shirley Beckles is seeking VA-guaranteed financing to purchase a three-bedroom, two-bath home in Dallas. Which addendum will she need to include in the TREC One to Four Family Residential Contract (Resale)?
Third Party Financing Addendum
When a Texas buyer needs to obtain a mortgage loan from a lender to purchase the property, the ______ must be attached to the contract.
Third Party Financing Addendum
What's the purpose of the Residential Real Property Affidavit T-47 in Texas?
To help the lender and title company decide whether to accept the seller's existing survey or to request a new survey
What is the purpose of the Texas Real Estate License Act?
To protect the public
What's the purpose of the earnest money deposit?
To show the seller that the buyer is serious and intends to go through with the purchase
What options does the TREC-promulgated Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement give the Texas seller if the restoration of VA entitlement is not approved by closing?
To terminate the contract or not delay the closing
Claude and Gloria are buying a house together. Why is it important for them to read and understand the default section of the contract?
To understand what happens in the event of either party defaulting
What type of form has been prepared by the Broker-Lawyer Committee, approved by TREC, and made available on a voluntary basis?
Trial use
Which of the following is a requirement of a seller of new construction on what was formerly agricultural property?
To pay any rollback taxes due
You're helping your buyer client complete a Buyer's Temporary Residential Lease form for a Texas real estate transaction. Closing is set for January 5. Which of the following lease terms falls outside the maximum term allowed under the provisions of the Buyer's Temporary Residential Lease?
A lease beginning October 2
Damian enters into a contract to sell his home to Lori, who puts down a $5,500 earnest money deposit. At the last minute, Lori backs out of the deal. Damian keeps the earnest money deposit. Of what is this an example?
Accepting liquidated damages
If buyers _________________, they are defaulting on the contract and could lose their earnest money deposit to the seller.
Fail to remove a contingency before closing
Which of these scenarios is an example of a seller defaulting on a contract?
Failing to provide documentation proving that a leaky faucet was fixed in accordance with the contract terms
A common form of mortgage fraud—illegal property flipping—involves a recently purchased property being ______.
Falsely appraised at an inflated value and then sold for that higher price
An offer to purchase is executed on February 10. There's a 10-day deadline by which the sellers must remove their hunting blind and camper from the property. In order to avoid a breach of contract, what is the last day the sellers can do this?
February 20
Norman buys Connie's Texas home, and in the sales contract, he specifies that the outdoor grill must stay with the home. Connie ends up taking the grill when she moves out. If Norman wants to sue Connie for taking the grill, he must do so within ______.
Four years
Gavin, an investor, secures an owner-occupied loan at a much lower rate than the general public is allowed, yet never plans to live in the property. Gavin is committing ______.
Mortgage fraud
Kendra enters a contract to sell her home to Madge. After the inspection, Madge insists that Kendra replace the roof, which is damaged. Kendra refuses, and the parties agree to cancel the deal. Of what is this an example?
Mutually rescinding the contract
Kylie and Cory make an offer on a house that is accepted by the sellers, Joe and Jenn. The contract is written, signed by the buyers and sellers, any changes are initialed by both parties, and understood by all parties. The contract is accepted by both parties. Is the contract considered "executed"?
No. The contract's acceptance must be communicated to all parties before it is considered executed.
Gloria absolutely loved the sellers' old roll top desk and knew the sellers were downsizing, so she asked her agent to help her complete the Texas form ______, in which she agreed to pay the sellers $1,500 to leave the desk behind.
Non-Realty Items Addendum
A residential service contract is an agreement to repair or replace major appliances and electrical, plumbing, heating, or air conditioning systems that fail under what kind of circumstances?
Normal wear and tear
If a buyer has concerns about the condition of any part of the property that the homeowners association is required to repair, what should the buyer do?
Not sign the contract unless the buyer is satisfied that the homeowners association will make the desired repairs
Where can licensees find all of the required forms promulgated by TREC?
On the TREC website
Kyle and his brother, Bob, have been raising their four young nephews since the children's mother was killed in a car accident. What is the fewest number of bedrooms Kyle and Bob may have in an apartment they rent in Texas?
One bedroom
When does partial performance of a contract occur?
One or both parties have completed only a portion of the terms agreed to in the contract.
Sarah hasn't been able to get a loan to finance the unimproved property she wants to buy. However, the seller has agreed to loan her the money to purchase the property. Which addendum should be attached to the contract?
Seller Financing Addendum
The property that the Lincolns are interested in purchasing is subject to mandatory membership in the subdivision's homeowners association. If the Lincolns request more information about the subdivision, what form will they receive from the property owners association?
Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners Association
Your buyer needs to lease the Texas property he's purchasing for six months before he can close. You notice that the Buyer's Temporary Residential Lease allows a term of up to 90 days. What should you do?
Suggest that your client have an attorney prepare the temporary lease.
Koby is a Texas seller who has a recent property survey that he would like to provide to the buyer's lender and title company. Koby swears and notarizes a statement about any changes to the property since the existing survey. What document does Koby use to provide his statement?
T-47 Residential Real Property Affidavit
The Environmental Assessment, Threatened or Endangered Species, and Wetlands addendum in Texas specifies which type of assessment the buyer wants performed and what else?
The amount of time the buyer has to terminate the contract if the report(s) find conditions that will adversely affect how the property can be used.
Your clients have fallen in love with a property and want to buy it. The only problem is that the property is already under contract. What Texas addendum can you help your clients complete so that if the first contract falls through, your clients will be next in line to purchase the home?
Addendum for "Back-Up" Contract
According to the Objections paragraph of the TREC One to Four Family Residential Contract (Resale) , how much time does the Texas buyer have to object to title defects after receiving the commitment, exception documents, and survey?
By closing or the number of days specified, whichever is earlier
Bryce is tired of waiting for his subcontractor to get his part of the deal done. The agreed-upon deadlines have come and gone, and Bryce is losing money waiting for the subcontractor to meet his obligations. If the subcontractor isn't going to honor his commitments, neither is Bryce. He decides to consult with his attorney and then terminate the contract. Of what is this an example?
Rescinding the contract unilaterally
In the eyes of the law, why do people under age 18 lack contractual ability?
They're minors.
Your client asks you, "What does 'buyer possession' mean in the sales contract?" What do you say?
"The date the buyer takes possession"
Nancy is explaining the termination option to her buyer client. How would she explain that "time is of the essence" for the termination option?
"This means that the deadline for depositing the option fee and the time frame for the option period will be strictly enforced. You don't want to miss these deadlines."
Chip is your developer client who's about to sell several lots in his new subdivision. He asks you what his disclosure requirements are. How do you answer him?
"You must disclose all known defects and issues that would impact a buyer's decision to buy."
In Texas, the Loan Assumption Addendum to the TREC One to Four Family Residential Contract (Resale) allows for a variance of ______ in the amount of the total principal balance at time of closing.
$500
When Jan sells her house, she'll leave behind the draperies, shades, window air conditioner, and garage door opener, which are considered ______________.
Accessories
Sheila is looking for a document that describes additions to the scope or terms of her offer to purchase. Where might she find this information?
Addendum
You represent Sue, who is making an offer on a new home, and she tells you that she must sell her current home before she'll have enough funds to purchase the new home. Besides the TREC One To Four Family Residential Contract (Resale), which form should she complete?
Addendum for Sale of Other Property by Buyer
Marcus, a Texas buyer, learns that he can't close by the contracted date, but can close a week later. As his agent, you prepare a(n) ______.
Amendment to Contract
Chris is a broker to a transaction. He is required to complete the ______ of the TREC One to Four Family Residential Contract (Resale).
Broker Information section
If any expense exceeds the amount the buyer agreed to pay in the contract, the _________ must go through with the transaction if the seller agrees to pay the difference in cost.
Buyer
Per the Addendum for Property Subject to Mandatory Membership in a Property Owners Association form, who pays any deposits for reserves that might be required by the property owners association?
Buyer
Any addenda to the contract must be included with the TREC One To Four Family Residential Contract (Resale) documents and ______.
Checked off in the Agreement of Parties section of that contract
Plans, specifications, change orders, and allowances are part of the ______ and should be referenced in the New Home Contract (Incomplete Construction).
Construction documents
Before signing the Addendum for Reservation of Oil, Gas, and Other Minerals, what should you advise your client to do?
Consult an attorney.
Which type of document is provided to the consumer to notify them that a recovery fund is available, should they be unable to collect a judgment against a licensee?
Consumer disclosure
Judy and Dave Foster, a married couple, are buying their first home. What is the correct way to name these parties on the contract?
Dave P. Foster, and wife, Judy A. Foster.
In addition to the names of the parties, what other information must be provided in the naming of the parties section of the sales contract?
Marital status
Allison is helping her buyer complete a Seller Financing Addendum to a Texas sales contract. Where should she put that the buyer needs a $40,000 loan at a 6% fixed rate from the seller to be paid back in 120 monthly payments?
In the Promissory Note paragraph
When Marcy toured her new client's house, she noticed paint peeling off of the shutters. When she asked the seller if the house was painted with lead-based paint, he replied, "I'm not sure ... I inherited the house from my dad, who built it in the '50s." What is Marcy required to do?
Inform the seller that he needs to complete the lead-based paint disclosure form and provide potential buyers with the EPA pamphlet regarding lead hazards.
Megan, a seller, tells the party buying her home that the property will soon be part of the public water system. She makes this claim based on erroneous information supplied to her by the city. The buyer relies upon this information and moves forward with the purchase of the home. This is an example of ______.
Innocent misrepresentation
Jesse received two offers for a listing. One is a lowball offer and one is for the listing price. Which one of the following statements is true?
Jesse must submit both offers to his seller client.
Karen, the seller, has sent a counter-offer to Fred, a potential buyer. Before Fred accepts the counter-offer on the Texas property, Karen receives another offer from James that is even better. She wants to accept James's offer. What should Karen do?
Karen must withdraw the counter-offer to Fred before responding to James's offer
If buyers are identified as "Kathleen Leary and Trent Carpenter, as tenants in common," which of the following is true?
Kathleen Leary and Trent Carpenter are unmarried persons buying a property together.
Juan and Natalie are preparing to send written notice that they are not accepting an offer from a potential buyer, but that they'd like the offeror to consider submitting a new offer (the couple even gives the offeror some ideas of how to make the new offer more acceptable). What is the type of the letter they will send?
Letter of non-acceptance
Licensees are required to relate all information that's material to the transaction to their clients. How does this relate to presenting offers to the seller?
Licensees must present and explain all offers.
Melanie is helping her clients, Steve and Monica, who are purchasing a brand new home. Steve and Monica love their home and its half-acre of property, but wish they'd had a chance to pick out the flooring. Who uses orange shag carpeting anymore? What form should Melanie use to write up Steve and Monica's offer?
New Home Contract (Completed Construction)
Jerimiah and his wife Camille are expecting their third child. They're shopping around the Austin area for a two-bedroom, two-bathroom apartment. Are there any occupancy regulations in Texas that would prohibit this from happening?
No, Jerimiah and Camille are within the occupancy standards established under Texas law.
Sasha loves the play structure in the backyard of a property she is considering purchasing. It's a free-standing item. Can she expect this item to remain with the property?
No, a free-standing play structure would be considered the seller's personal property.
Rick is representing a business in a sales transaction. Rick owns 3% of the business. Is Rick required to provide a written broker or sales agent disclosure notice to the other party in the transaction?
No, because Rick does not own more than 10% of the business.
Rescission, suit for specific performance, liquidated damages, and acceptance of partial performance are all examples of what?
Options a wronged party has to remedy a breach of contract
Chapter 27 of the Texas Property Code requires that buyers follow certain procedures in order to ______.
Recover damages for construction defects
The closing date on a Texas real estate transaction is set for August 10, but the seller can't move out until August 31. What can the parties do?
Require the seller to pay rent to the buyer under a seller's temporary residential lease
Which TREC promulgated form should be used for condominium transactions?
Residential Condominium Contract (Resale)
Offer to purchase, sales agreement, contract of purchase and sale, and purchase agreement are other names for which of the following?
Sales contract
If the Texas buyer does not need any financing, then in the TREC residential resale contract, the Cash Portion of the Sales Price will be the same as the ______.
Sales price
If the sellers don't reserve all of their interest in the mineral estate, the sellers have ______ days after the effective date of the contract to provide the buyer with the contact information of any existing mineral lessee known to the seller.
Seven
Archie is behind in his mortgage payments. He wants to sell his house and get out from under the loan. You agree to help Archie list his property. Which TREC addendum will you and Archie need to complete and attach to the sales contract?
Short Sale Addendum
The Texas Workforce Commission consists of three members who serve ______-year terms.
Six
Which entity was formed for the purpose of enforcing the Real Estate Dealers Act in Texas?
TREC
You represent a Texas seller, Sully, and when he fills out the seller's property disclosure, you notice he says the roof is "new." You can tell the roof is at least 15 years old, if not older, and will need to be replaced soon. What's your responsibility here?
Tell Sully he must complete the disclosure as truthfully as possible, and that if he lies about the roof, you will tell potential buyers the truth (and then do it, if necessary).
If a buyer is in default of a TREC One To Four Family Residential Contract (Resale), the seller may ______.
Terminate the contract and receive the earnest money
Teri is concerned that nearby wetlands will affect how she's able to use the property on which she's making an offer. Which Texas addendum should be attached to the contract?
The Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum
Texas sellers Tim and Carol are in a hurry to move closer to their new grandbaby, who lives across the country. They've even offered seller financing to qualified buyers. However, an interested buyer, Lyle, would rather assume Tim and Carol's mortgage. To do this, Lyle would have to complete which of the following addenda to the TREC One to Four Family Residential Sales Contract (Resale)?
The Loan Assumption Addendum
Jasmine and Roberto just bought their first new home, which was finished just a week before they moved in. Which of the following is a true statement?
The Seller's Disclosure Notice is not required.
When a buyer purchases property "as is," which of the following is true?
The buyer can inspect it and still negotiate repairs and treatments.
If a seller is in breach of contract, which of the following is the possible remedy for the buyer?
The buyer could sue the seller for specific performance.
Paige is a seller considering several offers for her property. One of the offers states that the buyer is offering two thousand over the asking price and earnest money in the amount of 1% of the offer. What does this mean?
The buyer is serious about wanting to purchase the property.
What determines the effective date of a contract?
The date on which it's executed
Who or what entity prepares the resale certificate that's provided to a prospective buyer of a subdivision property or condominium?
The owners association
Jenny is buying a condo. She wants to find out the amount and frequency of regular assessments from the condominium association. Where could she find this information?
The resale certificate
When a casualty loss occurs in a condominium unit after an offer to purchase has been made and accepted, which of the following is true?
The seller must return the unit to its previous condition as soon as possible, and before the closing.
If a casualty loss occurs on a property subject to a real estate transaction, who or what entity is responsible for bringing the property back to its original condition?
The seller, through the seller's insurance
Joaquin, a broker in Houston, needs to act as an intermediary in one of his transactions. He has received written consent from the parties of the transaction. Now he just needs to fulfill the other requirement, which is providing ______.
The source of the broker's expected compensation
What's providing legal advice to a client considered?
The unauthorized practice of law
What's an option period as it's used in a TREC residential resale contract?
When the buyer who has paid an option fee can terminate the contract for any reason
What is the correct way to use an addendum to a Texas contract?
When you want to make an addition to an existing contract
Besides the name of the title company, which of the following information is needed in the Title Policy paragraph of the TREC One To Four Family Residential Contract (Resale) in Texas?
Whether the buyer or the seller will pay for the title policy
The Butlers have countered an offer from Conner, but then they receive an even better offer from Audrey. What should the Butlers do before accepting Audrey's offer?
Withdraw their counter-offer to Conner.
Your seller client, William, had multiple offers to consider. He decided to move forward with Ryan's offer, and reject the offer from Kevin. What should your client do with the offer from Kevin?
Write "rejected" on Kevin's offer
Which of the following actions is a violation of TREC rules regarding addenda?
Writing something in the Special Provisions of a TREC contract if there is a TREC addendum form that can be used