Texas Promulgated Contract Forms & Addenda Final Exams

Which contract does not address rollback taxes?

1 to 4 family residential contract resell Condo Resale

Which addendum warns buyers that Texas may have the right to take their property?

1. Addendum for Property located Seaward of the Gulf Inter coastal Waterway, 2. Addendum for Coastal Area Property.

In how many addendum's and in what place in the contract that states -- "time is of the essence"?

1. In One to Four Family - Paragraph 23 under option section, 2. Short sale addendum, 3. Sale of other property addendum, 4. Back up addendum, 5. Third party financing addendum.

Four statutory agency position;

1. Seller's agent, 2. Subagent, 3. Buyers agent, 4. Intermediary.

Earnest money is to be deposited?

By the close of the escrow agent's second business day following the signing of the agreement. By the end of the 2nd business day after the effective date. days of the effective date of the contract.

Regarding closing and the buyer's possession of the property?

Seller shall deliver possession of property in it's present or require condition, or wear and tear excepted; 1. Upon closing or funding; Or date agreed upon 2. according to a temporary lease form promulgated by TREC or other written lease required by the parties.

Which form is used for the owner to tell the buyer about known problems with the property?

Sellers disclosure of property condition.

Buyer's Agent is known as the?

Selling Agent

Which law requires the contract for real property to be in writing and signed to be enforceable?

Statute of Frauds

If the broker's information is blank on the final page of the contract the contract is?

Still Valid - He will not get paid a commission.

The TREC contract forms that discuss rollback taxes say that if the rollback taxes are assessed because If seller change the use of the property prior to closing.

The seller will be obligated to pay the Rollback Taxes. If the seller changes the use of the property prior to closing or denial of the special use valuation on the property claim by seller results in assessments appeared prior to closing, the assessment will be the obligation of the seller. FARM & RANCH

Property approval, according to paragraph 4 of the one - four family contract includes;

Third Party Financing Seller's Financing Loan Assumption Financing If the property does not satisfy the lenders underwriting requirements for the loan including, but not limited to appraisal, insurability, and the lender required repairs, buyer may terminate this contract by giving notice to the seller prior to closing and the earnest money will be refunded to the buyer.

Which addendum is commonly used in a transaction involving a 90 percent fixed rate loan with PMI?

Third party financing addendum.

If the option money is not delivered to the proper party within the proper Time frame what is the status of the contract?

Valid but no option period. If buyer fails to pay the option fee to seller within the time prescribed this paragraph will not be part of this contract and the buyer shall not have the unrestricted right to terminate this contract.

if the buyer never receives a seller's disclosure of property condition, what does it make the contract?

Voidable - in a court of law.

If a seller fails to provide the buyer with the seller's disclosure of property condition as required by Section 5.008 of the Texas Property Code, what is the status of the purchase contract?

Voidable at the option of the buyer. Voidable by buyer any time prior to closing and the earnest money will be refunded to the buyer.

In the TREC option Par. 23, which statement is true? a) The option fee is refunded if the option is not exercised b) The property must be purchased within the option period c) Third party financing cannot be obtained until the option period has expired d) The optionee may withdraw from the contract during that period

d

When is a financing addendum not required?

When the buyer pays in cash. When third financing addendum is waived

If the seller has already sent a counteroffer to a prospective buyer and then receives another offer that is even better, the seller:

Withdraw the counteroffer first then consider new offer

The notice about obtaining an abstract or title policy is a required notice from?

Buyer's broker

Rollback taxes are discussed in:

New home contract completed, New home contract incomplete Farm and ranch contracts

In New home, What is the name of the Insulation measurement?

R -factor or R-value.

Which form must be displayed in the residential brokers office?

TREC - Notice to Consumer Equal Housing Opportunity Poster --should be posted at the broker's office In accordance to the Fair Housing Amendment Act of 1988 requires it to be posted.

Notices:

Warning to buyer.

In Farm and ranch, Can the sales rights be automatically changed?

No. Example; parties can agree beforehand that they are automatically going to be change, so it doesn't have to be renegotiated, but it's not automatically.

What form is used if the buyer wants the seller to leave the refrigerator with the home after closing?

Non-- Reality items addendum

When may a potential purchase's offer to buy real estate be withdrawn?

at any time before it's accepted

Which of the following characteristics of insulation installed in a new home must be builders reveal?

The R Value or rating

What two things is a buyer actually purchasing when they buy a Condo?

The Unit and common areas. net and common area.

An amendment to a contract is?

A Change to the Contract or a new contract.

The buyer's representation agreement is an addendum to a contract?

False - it is a separate contract between a buyer and a broker.

Who is required to execute the notice of termination of a contract?

The buyer.

Which of the following is true about TREC addenda?

It adds to the contract but does not change the contract.

Who must fill in the executed date?

The broker or the agent who represents the broker.

When a buyer purchases a condominium they are buying the?

ownership of the airspace within the unit itself, plus share ownership of common facility such as halls, elevators, and the land as undivided interest.

Can a party accept earnest money as liquidated damages and also sue the third party for specific performance?

No - one or the other.

In Sellers financing addendum, Seller has how many days to check the buyer's credit?

7 -days.

When a legally enforceable promise is exchanged for a legally enforceable promise?

It is a Bilateral Contract.

To have a valid real property contract, something of value must be exchanged. This is called:

Consideration

When will the third party financing addendum credit approval not be used?

1. all cash 2. When Third Part Financing contingency is waived

How many resale certificates are currently promulgated by TREC?

2 1. Condominium Resale Certificate, 2. Subdivision Information including Resale Certificate for Property Subject to Membership in a Property Owners Association.

In Loan assumption, If the buyer doesn't deliver the credit information to the seller, how long does the seller have to terminate?

7 calendar days.

Which of the following is an example of a Bilateral contract?

A Promise in exchange for a promise - Purchase Contract. Unilateral Contracts - Listing Agreement, Buyer's Rep, Option Contract

In Leases when is the total rent due?

After closing or funding of the contract - a house and closes and not be funded in temporary leases which is called Lease backup.

If the property is subject to mandatory membership in an HOA, subdivision information means?

(i). A current copy of restrictions applies into the subdivision and bylaws and rules of Association, (ii). A resale certificate, all of which are described by section 207.003 of the Texas property code. (iii) Restrictions

In Farm and ranch the rollback taxes are paid by the party that?

Changes the usage of the property.

In HOA - Name two 2 resell certificates?

Condominium resale certificate Subdivision information including resale certificate for property subject to membership in a property owners Association.

Items that are preprinted in paragraphs 1 and 2 of the contract include all the following except?

Exclusions

Which contract would be used for a 50-acre track with a small cottage outside the city?

Farm and ranch contract

If the buyer fails to give the notice required by the third-party financing statement for credit approval?

If buyer does not give the notice with in the time required, this contract will no longer be subject to credit approval. Time is of the essence for this paragraph and strict compliance with time for performance is required.

Sell of other property - What is a kick out and when is it due?

If the seller gets another contract then he kicks that buyer out because the contract is better and not contingent upon sale of home. The backup contract Has to remove the contingency and come out of the money or he gets kicked out as a backup usually within three days seller will give him three days to remove

Which form informs the customer or client how agents represent consumers of real estate services?

Information About Brokerage Services.

Which of the following made the address by agent in paragraph 11 (special provisions)?

Insert only factual statements and business detail applicable to the sale. TREC rules prohibit licensees for adding factual statements or business details for which a contract addendum, lease or other form has been promulgated by TREC for mandatory use.

In Short sale, how long of a timeframe should you put in the form for a buyer to wait for bank approval?

It is negotiable.-- Example; agents can recommend 60 days. Ask the buyer, how long do you want to wait for this? Agent cannot tell the buyer what to do or decide.

In Leases what is a holdover fee?

It is the fee charged by the tenant, if the party does not leave - Fee is usually a hefty payment per day to get them out between 200 and $300. On the second page of the seller and buyer temporary lease, there is a space to put a date.

Addendum for Coastal Area Property and the Addendum for Property located Seaward of the Gulf Intracoastal Waterway contains the notices required by the?

Texas Natural Resource Code Sections -33.135 and 61.025 respectfully.

In General information notice, Where can I buyer find information about waterways?

Texas Natural Resource Code.

If clients want an agent to write a statement that defines a legal remedy?

The agent should decline and referring the client to a lawyer.

Who are the two people who signed the amendment?

The buyer and seller.

In Third-party financing, what does the buyer do if the lender says, I cannot loan you the money at this time?

The buyer must send a notice to the seller stating they don't qualify.

Which of the following is NOT addressed by a TREC-promulgated contract?

Lease with an option to purchase. Lease purchase - new Condo contract

Which is acceptable language for special provisions of 22-TREC contract form?

Only factual or business details.

What forms are approved or promulgated by the Texas real estate commission?

1. Unimproved Property Contract - Promulgated by TREC, 2. Addendum for Sale of the Property by Buyer - promulgated, 3. Addendum for Back up Contract - promulgated. 4. Addendum for Release of Liability on Assumed Loan and\or Restoration of Seller's VA Entitlement. - Promulgated 5. Seller's Temporary Residential Lease--Promulgated-No more than 90 days after the closing use form. 6. Buyer's Temporary Residential Lease-- promulgated. No more than 90 days. 7. New Home Contract Incomplete construction-. Promulgated. 8. New Home Contract - complete construction - Promulgated 9. Farm and Ranch Contract -. Promulgated 10. Seller Financing Addendum -. Promulgated. 11. Environmental Assessment, Threatened or Endangered Species, and Wet Lands Addendum-- Promulgated, 12. Residential Condominium Contract Resale -. Promulgated. 13. Condominium resale certificate -.Promulgated 14. Addendum for coastal area property -.Promulgated, 15. Addendum for property located Seaward of the gulf intercostal waterway -. Promulgated 16. Addendum for property subject to mandatory membership in a property owners Association -. Promulgated 17. Subdivision information, including resale certificate for property subject to mandatory membership in a property owners Association -. Promulgated 18. Notice of buyer's termination of contract Promulgated, 19. Amendment to contract -. Promulgated, 20. Third party financing addendum for credit approval -. Promulgated, 21. Loan assumption addendum -. Promulgated, 22. Addendum for reservation of oil - Gas other minerals -. Promulgated, 23. Short sale addendum -. Promulgated 24. Notice to prospective buyer -. Approved. 25. Sellers disclosure of property condition -. Approved. 26. Texas real estate consumer notice concerning hazards or deficiencies -. Approved, 27. Information about brokerage service -. Approved, 28. Lead base Addendum for seller's disclosure of information on lead-based paint and leg days a hazard as required by federal law -. Approved. 29. Non-reality items addendum -. Approved 30. Disclosure of relationship with residential service company -. Promulgated

Which of the following should not be listed as an addendum to a promulgated TREC contract form?

Amendment-none listed below.... 1. Addendum for Sell Other Property by Buyer, 2. Addendum for Back - up Contract, 3. Addendum for Release of Liability on Assumed Loan and/or Restoration of Sellers VA Entitlement, 4. Addendum for Coastal Area Property, 5. ADDENDUM for Property located Seaboard of the Intercoastal Waterway, 6. Addendum for Property Subject to Mandatory Membership in an Owners Association, 7. Addendum for Reservation of Oil, Gas, and Other . Minerals, 8. Lead-based Addendum, 9. Non-Reality Items Addendum, 10. Short Sale Addendum, 11. Loan Assumption Addendum, 12. Third Party Financing Addendum for Credit Approval. ----- Anything other than above listed should NOT be included.

When using a Power of Attorney to transfer title to real property?

Attorney-in-fact - Legal description and the subject of the authority

A Back up contract with a 12-day option period was executed on August 9. On August 15, the seller notified the buyer that the first contract was terminated when does the buyers option end?

August 27.

What is a legal proceeding brought by a party to a contract against another party to compel action called for in the agreement?

Breach of a contract, one-party defaults, sues for specific performance, seek other relief - arbitration, mediation, injunction to sue for compensatory Damages.

The broker fees that are split in MLS Is between who?

Broker and broker - if Ebby agrees to pay Century 21 and an LS agreement.

Who is responsible for filling in the effective date, who, when & what?

Broker. Between the buyer and the seller, The date on which the communication was made. The date of initialing and signing of the parties. The last party to initial/Sign fills in the day. Broker. Last party to accept must communicate back to other party & fill in the date

The earnest money is to be deposited with the title company in how many days?

By the close of business on the 2nd calendar day.

The disclosure of relationship with a residential service company requires disclosure of all?

Kick-backs or Compensations by Broker The purchase of a residential service contract is optional - neither a broker or salesperson nor a seller may condition the sale of the property on the buyers purchase at a residential service contract.

Who must convey to the principal all known information that would affect the principal's decision to accept or reject offers?

Licensee - the listing agent/selling agent

Brokerage Fee splits are agreement between the?

Listing Broker & Selling Broker

In Third party financing addendum for credit approval, what should the Cap On interest rates?

MARKET RATE----- Should be on what the buyer and lender have agreed on and it should not exceed that amount.

In Sellers financing addendum, the seller is protected by what kind of title policy?

Mortgagees title policy. Example - there are two Title policies. Sellers policy - they pay - and the buyers policy pays to protect the mortgage lender from buyers default. Buyer pays a small portion of both policies.

In Home Warranty what must an agent disclose and to whom?

Most people disclose that they are receiving a kick back, must disclose and agents client - example; if these buyer and sellers listing agreement see disclosure affiliated business relationship, -See - disclosure affiliated business relation - paragraph number eight on buyers and paragraph number 12 on sellers agreement.

The seller of unimproved property provides the property condition disclosure;

NONE- Paragraph 7-E - Property Condition; access, inspection, and utilities; seller shall permit buyer to buyer's agent access to the property at reasonable times. The buyer may have the property inspected by inspectors selected by the buyer and licensed by TREC or other permitted by law to make inspections. Seller at seller's expense shall immediately cause existing utilities to be turned on and shall keep utilities on during time this contract is in effect.

Which addenda will the Purchaser use when purchasing a property for cash?

None- no addendum will be used.

Which term identifies the substitution of a new contract for an existing contract?

Novation

When I licensees using a builder's contract or a form prepared by an attorney that is not promulgated by TREC, what is the wisest way to notify the buyer about title insurance or abstract.?

OP-C Notice to prospective buyer - Suggest that he get an abstract or a title insurance prior to closing - TAR - Buyer's Rep

Which of the following is not true about paragraph 11 special provisions?

Paragraph 11 special provisions calls for: Insert only factual statements and business details to the sale. TREC prohibits licensee from adding factual statements for business detail where to contract addendum lease or other form has been promulgated by TREC for mandatory use.

Federal law dictates that an addendum addressing the possible presence of lead-based paint and lead based paint hazard be attached to the purchase agreement when the house is being so that was built before?

Prior to 1978.

If the seller furnishes the existing survey to the buyer, but it is not acceptable to the buyers lender, the cost of the new survey may be at whose expense?

The Buyer

The option fee is paid to?

The Seller - for the unrestricted rights to terminate the contract within the specified date.

If the seller is doing all the financing in a sale, the mortgagees Title policy will protect

The seller That he has a first lien position or second lien position on the property.