Promulgated Contracts
What is one thing that differentiates TREC from the Broker-Lawyer Committee?
TREC members are appointed by the governor only.
Laura is in contract for a home. Her contract contains a Sale of Other Property by Buyer Addendum. The seller has just accepted a back-up contract for the property that doesn't have this contingency. What happens to Laura and her contract?
The seller can accept the back-up offer and notify Laura that she may waive the contingency by an agreed upon date or Laura's contract terminates.
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?
The seller must deliver a copy of the lease and any move-in condition form within seven days after the effective date of the contract.
What does Paragraph A of the Addendum for Back-Up Contract specify a back-up contract holder do when they execute the contract?
deposit the earnest and option money agreed to in the contract
Additions to the standard coverage in a title policy can be purchased via:
endorsements
According to Paragraph 10B, Possessions, what is a seller prohibited from doing after the effective date?
execute a lease without the buyer's permission
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
What does the date in the Third Party Financing Addendum provide a deadline to buyers for?
informing a seller they didnt 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
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
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
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
What part of the Third Party Financing Addendum for Credit Approval specifically pertains to people getting VA loans?
paragraph D
A stand-alone refrigerator would be considered ______ .
personal property that will not transfer
What is the purpose of TREC form OP-C Notice to Prospective Buyer?
provides a notice to buyers using their own contract to obtain an Abstract of Title
To be valid and enforceable, a contract must be in writing, represent a complete agreement, have acceptance communicated, and:
signed by all parties
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
Which of these does NOT create housing occupancy standards?
the Federal Housing Administration
Agents are required to give all buyers a written copy of the title notice. Aside from Paragraph 6E(1) of the One to Four Family Residential contract, where else can this notice be found?
the Notice to Prospective Buyer
The Seller's Disclosure Notice is a requirement of
the Texas Property Code
Who pays for an investigation of an environmental, endangered species, or wetlands issue, according to the Environmental Assessment, Threatened or Endangered Species, & Wetlands Addendum?
the buyer
Agent Kara's buyer's representation agreement with her client says she will be paid a 3% commission. In the MLS listing of the home her client has chosen to buy, the listing broker offered only 2%. Where does the other 1% of her commission come from?
the buyer pays it
What is an express contract?
A contract that has a very specific offer and acceptance
The seller of an unimproved property would provide a disclosure about the property in what location?
In paragraph 7E of TREC Unimproved Property Contract
What is the purpose of the Short Sale Addendum?
to protect a seller who is selling their home for less than they owe their lender
In TREC promulgated contracts, what does Paragraph 21: Notices provide information about?
where to send official notices about the contract
In TREC promulgated contracts, what does paragraph 6E(8) say about private transfer fees?
Paragraph 6E(8) of all the promulgated contracts informs the consumer that if the property is subject to a private transfer fee, the seller must notify the buyer.
Rollback taxes are addressed in all of the following EXCEPT:
Residential Service Contract
According to the promulgated contracts, rollback taxes assessed because the buyer changed the usage after closing will be settled how?
The buyer will be obligated to pay the rollback taxes.
Which of the following would constitute unauthorized practice of law and/or be a violation of TRELA?
adding or striking things from pre-printed contract forms Adding or striking things from pre-printed contract forms without instruction from the principals to the transaction is considered unauthorized practice of law and is a violation of the Texas Real Estate License Act.
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
When do brokers determine how the commission from a sale will be split?
before closing
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 the following is TRUE regarding a contract to transfer real estate which contains no earnest money?
the contract is valid
A buyer and seller have been in negotiations. They have everything in writing, have agreed to all terms, the contract is signed and changes initialed. Today, the written acceptance of the final agreement has been communicated to the other party. What is today called?
the effective date
The amount of the earnest money the buyer is contractually obligated to pay the seller is set by:
the parties
Which of these is a possible result of when zoning is changed and a property no longer qualifies for a previous exemption?
the property owner owes charged rollback taxes
Which of these is NOT a place where commission split agreements between cooperating brokers can be determined?
the sales contract
Which of these is NOT true about the residential service contract?
the seller can prevent the buyer from purchasing it
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?
third party financing addendum
There are three different types of financing choices in Paragraph Three of TREC's One to Four Family Residential Contract. They are:
third party, assumption, seller financing
Which of these is NOT a TREC promulgated form?
Condo Addendum is not a TREC promulgated form.
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
Which type of TREC promulgated contract form(s) gives disclosure about the type of insulation in the property?
Both new homes contracts
In which of these situations is the seller required to provide a seller's disclosure?
Brian is selling an investment property he has never lived in.
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
What is the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway for?
The Addendum for Property Located Seaward of the Gulf Intracoastal Waterway warns buyers that, if their property comes to be located on the beach area because of storms or erosion of the soil, the state can require them to remove the structure at their own expense.
Which TREC promulgated form allows for the sales price to be adjusted because of the survey?
The Farm and Ranch Contract
Jill's client bought a new home but never lived there. Eight months later she decided to sell it. When they found a buyer, Jill used the One to Four Family Residential Contract. Why didn't she use the New Home Contract (Completed Construction)?
The New Home Contract (Completed Construction) is only appropriate for the first time a new home is sold
Within how many days after the title company receiving a copy of the contract will the buyer receive the title policy documents?
20 days
By what time is the seller required to furnish any existing survey?
3 days before closing
What is the statute of limitations to claim fraud or misrepresentation against a license holder?
4 years from discovery
Seller Vera agrees to allow another veteran to assume their mortgage loan. To make sure Vera can get their VA entitlement restored, what must be attached to the contract?
Addendum for Release of Liability on an Assumed Loan and/or Restoration of Seller's VA Addendum
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
How can an agent help protect the earnest money of a buyer who is financing their purchase?
By submitting a Third Party Financing Addendum
Agent Sarah knows her client wants to make the sales contract contingent on appraisal, so she adds a notation to that effect in the Special Provisions section of the contract. Why is that wrong?
It's a violation to include anything in the Special Provisions section that alters the parties' legal rights, because that could be considered the unauthorized practice of law.
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
If an agent makes a change to Paragraph 6A8 in a TREC promulgated contract, which of these is most likely to be the result?
The title policy will be amended to read "shortage in area" rather than the standard exception.
What part of the One to Four Family Residential Contract advises the buyer to get an abstract of title reviewed by a lawyer?
Title Notice under Paragraph 6E1 of the One to Four Family Residential Contract advises the buyer to get an abstract of title reviewed by a lawyer.
Which is TRUE regarding buyer rebates?
Undisclosed buyer rebates are not legal.
Which one of these is a bilateral contract?
Zelda agrees to pay Gus $250,000 for ownership of his house
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
Paragraph C2 on the Lead Based Paint Disclosure states that:
buyer has 10 days to have the property inspected for lead-based paint