Texas Promulgated Forms: Chapters 4-8
What should a seller do to verify and clarify the boundaries of a coastal property?
Hire a surveyor
How does the Seller's Temporary Lease handle the tenant making improvements?
If the tenant is allowed to improve the property by the landlord, those improvements become the landlords.
What does it mean, that the title is "free and clear"?
No encumbrances
In a Farm and Ranch Contract, what paragraph do you select information about a home warranty?
Residential Service Contract
What entity regulates the title industry?
Texas Department of Insurance
Why does a Property Owners Association (POA) enforce deed restrictions?
To maintain the value of the homes
What is the purpose of the subdivision information form?
To request information from the association to give to the buyer.
When would the Unimproved Property Contract be used?
When there are no improvements on the property.
Which of the following is something an agent should not due in reference to mineral rights?
Write the terms of the mineral rights agreement into the special provisions section of the TREC One to Four Family Residential Contract (Resale)
The "tenant" is the _________ in the contract.
seller
When using the Seller's Temporary Lease, who is the tenant?
seller
What is a professional analysis of a property and its location relative to other property?
survey
At closing, the earnest money will be applied toward
the buyer's closing costs and their down payment.
Paragraph B addresses....
the condominium declaration, bylaws, and any rules of the association.
The option period begins on
the first full day after the effective date of the contract
The RATIFICATION OF FEE section is at....
the top of the page on the F&R contract
What should the buyer know about condo rules prior to agreeing to a contract?
How restrictive they are
When are rollback taxes required to be paid?
If the property changes from agricultural to residential
What is the purpose of the Information About Brokerage Services form (IABS)?
It gives a summary of the different types of representations an agent can perform
In a short sale, if the buyer is notified of the bank's approval before the date written in Paragraph (D) on the Short Sale Addendum, what will be the effective date of the contract?
It is amended to the date of the notification
In what type of transaction is the Texas Real Estate Consumer Notice Concerning Hazards or Deficiencies required to be used?
It is not required
When does the buyer pay the seller any agreed-upon option money when using the Addendum For "Back-Up" Contract?
It is not required since it is a back-up contract
If a buyer terminates a Buyer's Temporary Residential Lease prior to the closing date, what happens to the security deposit?
It is refunded to the buyer, less any itemized deductions for repairs
What is critical about a metes and bounds survey?
It must start and end at the point of beginning
A buyer leases a property for a period of time and then exercises an option to buy. What is TREC's position regarding the agent's role in the option contract?
TREC prohibits real estate agents from getting involved
In the Addendum for Sale of Other Property by Buyer, what does it say about how important it is for both parties to adhere to strict compliance with the times for performance for performance?
Time is of the essence
What is the purpose of the Seller's Disclosure Notice?
To disclose all information the seller knows about the property condition
What form is used when someone wants to purchase a home but needs to sell their current home first?
Addendum for Sale Of Other Property By Buyer
What does a condo owner own?
Airspace
How long does the owner's title policy stay in force?
As long as the buyers own the property
When purchasing a condominium, a buyer should carefully read over what document, as the information in it could affect the buyer willingness to live at the property?
Association's bylaws and rules
If a home is being leased back to the seller under the Seller's Temporary Residential Lease, when does the lease commence?
At closing and funding
Earnest money funds are usually applied to what at closing?
Buyer's closing costs Down payment
What agreement is required when a buyer moves in before closing?
Buyer's temporary residential lease
When using the Seller's Temporary Residential Lease, what rental rate should you place in paragraph 4?
Daily rate
What clause in an insurance policy details an exemption from or a change in coverage?
Endorsement
What causes the property along the coastline to change?
Erosion
How does a buyer determine if property is located in a flood plain?
FEMA flood map
What contract shows an area called the Ratification of Fee?
Farm and Ranch
What action by an owner may be a violation of federal wetland laws?
Filling in areas with topsoil
What contingencies will be covered by the title insurance policy?
Forgery Confusion due to similar names Error in the records
What should the agent do with the Notice to Prospective Buyer form?
Give a copy yo the buyer and retain the original in file
During a title search, there may be additional claims of ownership by whom?
Government entities Property Owners' Associations (POA)Contractors
What is the name of the 1,300-mile canal that runs from Brownsville, Texas to St. Mark's, Florida?
Gulf Intracoastal Waterway
Which of the following would the title search uncover?
Judgments against previous owners Unpaid taxes Unpaid mortgages
Who is the mortgagee's title policy issued to?
Lender
What are damages that are agreed to in advance?
Liquidated
Who signs the Texas Real Estate Consumer Notice Concerning Hazards or Deficiencies addendum?
Neither the buyer or seller
The following is information requested on the Subdivision Information, including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners' Association:
The amount of special assessments The capital expenditures approved over the next year Unsatisfied judgments
In Paragraph A of the Addendum for "Back-up" Contract....
The buyer must pay the seller any agreed-upon option money at the time of the effective date of the back-up contract.
On the New Home Contract (Completed Construction), what two amounts equal the sales price?
The cash portion plus the sum of all of the financing
What happens to the contract if one party receives the earnest money as liquidated damages?
The contract is terminated
For a short sale to go through, who must give approval?
The lender holding the current mortgage
On the New Home Contract (Completed Construction) which paragraph is the same as on a One to Four Family Residential Contract (Resale)?
The paragraph dealing with the buyer and seller's legal names
How are buyers notified to obtain an abstract or a title policy?
There is a form to notify buyers to obtain an abstract or a title policy
When should the Non-Realty Items Addendum be used?
When the seller wants to retain certain items that are attached to the real property
A contract can have zero dollars as earnest money if...
agreed to by both the buyer and the seller
The "landlord" is the _________ in the contract.
buyer
Who signs the Notice to Prospective Buyer form?
buyer
Paragraph E....
elaborates on any capital expenditures approved by the association over the next year.
Residential service contract is sometimes referred to as a...
home warranty
Paragraph H....
identifies the amount of unsatisfied judgments against the association.
A survey may not be required because...
-there is no lender involved -buyer is willing to pay cash
What is the maximum amount of days that is allowed using the Seller's Temporary Lease?
90
Who issues the Condo Resale Certificate?
Condo Association
What type of property is it that allows ownership of "airspace"?
Condominium
You should not complete the
Condominium Resale Certificate. You should send it to the condominium owners' association's governing board. The board should fill it out and send it back.
Who completes the Condominium Resale Certificate?
Condominium owners' association governing board
Which documents does TREC not make available?
Contract for deedListing representation agreementBuyer/Tenant representation agreement
What happens if the seller does not leave personal property that was agreed to in writing?
Buyer has legal recourse for the seller's breach of contract
What would an agent need to do when writing a legal description for a large ranch?
Attach an addendum to completely describe the property
What type of contract does not require a seller to provide a seller's disclosure notice?
New Home Contract (Completed Construction)
What is not discussed on the Information About Brokerage Services form (IABS)?
Non-agency
What is the minimum amount of earnest money needed to make a contract valid?
None, earnest money is not a requirement of the sale
According to the Buyer's Temporary Lease, who is responsible for all repairs during the lease period?
Tenant
If the broker wishes to practice buyer agency, who should they obtain the form from?
Texas REALTORS©Local Board of REALTORS©Attorney
What is one reason that a survey may not be required in a Farm and Ranch transaction?
They are very expensive
What have property owners discovered In many communities concerning mineral rights?
They were previously reserved
A buyer has a signed document that would allow them to purchase a property within one year at an agreed-upon price. Which contract feature allows this type of agreement?
a contract with an option to buy contract
Paragraph A in the addendum for Reservation of Oil, gas, and other minerasls.....
gives the definition of mineral estate. Because real estate can be severed laterally, it is possible for one person to own the surface of the land and someone else to own the minerals under the land
In paragraph B of the Addendum For Sale of Other Property By Buyer it says that.....
if the buyer fails to comply with this contract then the buyer will be in default. It lets both parties know that time is of the essence and strict compliance with the time for performance stated is required.
Paragraph C explains....
if there is a special assessment due on the unit.
In a transaction that does not involve owner financing or cash, who typically requires a title policy?
lender
What is the form called that should be used by the buyer to terminate the previously agreed One to Four Family contract for any reason?
Notice of Buyer's Termination of Contract
When is the rent due according to the Seller's Temporary Lease?
On the day of closing
Who signs the Notice of Buyer's Termination of Contract?
Only the buyer
If real estate can be severed laterally, who owns the minerals under the land?
Owner Another Party
What is the best way to have a seller's name removed and a buyer's name added to the Property Owners Association's (POA's) records?
Pay a fee as specified in the Addendum for Property Subject to Mandatory Membership in a Property Owners Association
What form is used that says who must pay for any assessments mandated by the association?
Residential Condominium Contract (Resale)
If the effective date of the contract is on a Monday, with the option period ending on the following Monday, the option period is for how many days?
Seven
What addendum is used in a transaction where the seller owes more on a property than it is worth?
Short Sale Addendum
The New Home Contract (Incomplete Construction) is most commonly used to purchase what type of property?
Spec house
What should a buyer do if he wants to submit an offer on a home that already has a contract on it?
Submit an offer using the Addendum for "Back-up" Contract
What type of lease is considered a hunting lease?
Surface Lease
An agent's client is interested in a builder's new home. How can the agent protect their commission in completing the transaction?
The agent must register their client before showing the model home.
At the time, the back-up contract becomes the primary contract, what is the effective date of a back-up contract according to the Addendum for "Back-Up" Contract?
The date the buyer is notified that the first contract terminated
Which of the following is required to be able to sue for a commission?
The listing agreement must be in writing
What is the purpose of a form called the Subdivision Information, Including Resale Certificate For Property Subject to Mandatory Membership In A Property Owners' Association?
To request information from the association to give to the buyer
When should a real estate agent give a customer the Information About Brokerage Services form (IABS)?
Upon the first substantial discussion about real estate
The other reason to have earnest money in a real estate contract, is that earnest money is considered
liquidated damages