Chapter 5
Buyer and seller enter into a contract for buyer to purchase seller's property using the One to Four Family Residential Contract. Buyer purchases a seven-day option to terminate the contract and buyer delivers the option fee to the seller's agent on the third day after the effective date. How should the buyer's agent document the delivery?
The answer is have the seller's agent sign and date the option fee receipt.
Seller wishes to contribute $1,000 to buyer's closing costs. Using the TREC One to Four Family Residential Contract, what should the seller's agent advise the seller?
The answer is insert $1,000 into paragraph 12A(1).
Buyer wants seller to help buyer out with closing costs by paying $1,500. What should the buyer's agent advise the buyer regarding the TREC One to Four Family Residential Contract?
The answer is insert $1,500 into paragraph 12A(1).
Under paragraph 23 of the One to Four Family Residential Contract, what happens to the earnest money if buyer timely terminates the contract within the option period?
The answer is it is refunded to buyer.
Who is required to maintain insurance under the TREC Buyer's Temporary Residential Lease?
The answer is landlord and tenant.
What is the status of an option fee that has been physically delivered to the seller's agent?
The answer is legally it has been delivered to the seller.
Which of the following may be included in paragraph 11, Special Provisions, of the One to Four Family Residential Contract?
The answer is multiple sellers if the blanks in paragraph 1 are insufficient.
Buyer and seller enter into a contract for buyer to purchase seller's property using the One to Four Family Residential Contract. The effective date is a Wednesday. Buyer pays for a seven-day option to terminate the contract on the following Sunday. Does the buyer have an option to terminate?
The answer is no, the deadline was Saturday.
Which of the following is a license holder permitted to place in paragraph 11, Special Provisions?
The answer is none of the provisions are appropriate for paragraph 11.
Which of the following is NOT a buyer's expense under paragraph 12 of the One to Four Family Residential Contract?
The answer is release of existing liens. Release of existing liens is a seller's expense.
Which of the following is a seller's expense under paragraph 12 of the One to Four Family Residential Contract?
The answer is release of existing liens. The remaining answers are buyer's expenses.
According to paragraph 23, the option money is to be delivered to the
The answer is seller.
Which of the following is NOT a buyer's expense under paragraph 12 of the One to Four Family Residential Contract?
The answer is tax statements or certificates.
Under paragraph 9 of the TREC One to Four Family Residential Contract, seller wants to stay in the property for one month after closing. What kind of tenancy is formed if there is no written lease allowing the seller to stay?
The answer is tenancy at sufferance.
How are smoke alarms dealt with in the TREC temporary lease forms?
The answer is tenant expressly waives landlord's duties to inspect and repair smoke alarms. All the other answers are wrong.
Under paragraph 14 of the TREC Buyer's Temporary Residential Lease, who bears the cost of maintaining the property?
The answer is tenant.
Buyer and seller enter into a contract for buyer to purchase seller's home using the One to Four Family Residential Contract. Buyer gets buyer's remorse and fails to show up to closing with the money. Which of the following is NOT one of seller's options under paragraph 15?
The answer is terminate the contract and make buyer pay three times earnest money as penalty.
Under the TREC One to Four Family Residential Contract, if the buyer needs to extend the closing date because of financing issues, what form should the buyer's agent have the buyer fill out?
The answer is the amendment form.
The buyer wants to make the contract contingent on a satisfactory home inspection. What should the agent advise the client using the One to Four Family Residential Contract?
The answer is the buyer should purchase an option to terminate under paragraph 23.
Buyer submits an offer for buyer to purchase seller's property using the One to Four Family Residential Contract. Seller counteroffers, buyer accepts seller's counteroffer, and the buyer signs the contract. How should buyer's agent communicate buyer's acceptance to seller?
The answer is the buyer's agent may call the seller's agent to communicate buyer's acceptance.
Which of the following is NOT an appropriate use for paragraph 11, Special Provisions, of the One to Four Family Residential Contract?
The answer is the contract is in a second or back-up position.
Who issues the receipt for the earnest money under the One to Four Family Residential Contract?
The answer is the escrow agent.
If a lawsuit is pursued and the court finds a party's refusal to sign a release of earnest money was wrongful, who is liable for what?
The answer is the losing party is liable for damages plus earnest money, reasonable attorney's fees, and costs.
Whose name should be added into the licensed supervisor's name if the agent is a broker associated with the firm and the sponsoring brokerage firm has not assigned a supervisor?
The answer is the name of the broker of record.
Whose name should be added into the licensed supervisor's name if the agent is a salesperson and the sponsoring brokerage firm has not assigned a supervisor?
The answer is the name of the broker of record.
Whose name should be added into the licensed supervisor's name if the agent is a salesperson and the sponsoring brokerage firm has orally assigned a supervisor?
The answer is the name of the broker of record.
Which of the following is TRUE regarding mediation under paragraph 16 of the One to Four Family Residential Contract?
The answer is the parties agree to mediate disputes related to the contract.
Which of the following is NOT required to be provided to a tenant under paragraph 9 of the TREC One to Four Family Residential Contract if the property is subject to a lease?
The answer is the security deposit.
Which of the following may be included in paragraph 11, Special Provisions, of the One to Four Family Residential Contract?
The answer is the seller is unavailable by phone Tuesdays and Thursdays from 1:00 to 4:00 pm.
Under paragraph 9 of the TREC One to Four Family Residential Contract, what happens if buyer fails to close the sale by the closing date?
The answer is the seller may exercise a remedy under paragraph 15.
Under the TREC Seller's Temporary Residential Lease, what happens if seller wants to stay in the property for one week longer than the term provided in the lease?
The answer is the seller must pay an additional daily holdover fee.
How should the seller acknowledge receipt of the option fee under the One to Four Family Residential Contract?
The answer is the seller should sign the receipt on page 9.
When should the TREC Seller's Temporary Residential Lease be used?
The answer is the seller wants to stay in the home after closing for no more than 90 days.
Whose name should be added into the licensed supervisor's name if the seller's agent is a salesperson and the sponsoring broker has not assigned a supervisor?
The answer is the sponsoring broker's name.
Buyer and seller enter into a contract for buyer to purchase seller's house using the One to Four Family Residential Contract. Buyer wishes to purchase a 10-day option to terminate the contract. How long does the buyer have to pay the option fee?
The answer is three days. The buyer must pay the fee within three days of the execution date.
The buyer needs to sell his existing home before buying a home from the seller. What should the buyer's agent do?
The answer is use the Addendum for Sale of Other Property by Buyer.
How should a change to the One to Four Family Residential Contract be made after the contract is executed?
The answer is using the Amendment to Contract form.
When does the Seller's Temporary Residential Lease terminate?
The answer is when the term in paragraph 3 expires.
Which of the following is NOT a cause for termination under the Buyer's Temporary Residential Lease?
The answer is when the term in paragraph 3 expires.
When must the agent deliver the option fee to the seller or the seller's agent?
The answer is within three days after the effective date.
If the tenant damages the property while occupying, the cost of repair is the responsibility of the
The answer is tenant.
Buyer and seller have entered in a contract for buyer to purchase residential property from seller. Buyer wants to move in early and begin remodeling so that the house will be ready to move in at closing. What are the buyer's rights under the TREC Buyer's Temporary Residential Lease?
The answer is the buyer has no right to remodel without the prior written consent of the seller.
Under the TREC Buyer's Temporary Residential Lease, what happens if buyer fails to close on the closing date in the contract and wants to remain in the property longer than the term provided in the lease?
The answer is the buyer must pay an additional daily holdover fee.
When should the TREC Buyer's Temporary Residential Lease be used?
The answer is the buyer wants to move in before closing for no more than 90 days.
Buyer and seller enter into a contract for buyer to purchase seller's property using the One to Four Family Residential Contract. Buyer purchases a 14-day option to terminate the contract. What happens if buyer fails to pay for the option within three days?
The answer is the option paragraph is not part of the contract.
Under the contract form, if a party sends a demand for release of the earnest money to the escrow agent, with a copy to the other party, if no objection is received by the escrow agent after _____, the agent may release the funds to the party making the demand.
The answer is 15 days.
The local charity run is allowed to use the parking lot of the property under contract on a yearly basis at no charge to stage the event. There is no contractual obligation to provide the space, but merely a tradition that has developed over the years. The seller wants to be sure the buyer is aware of this and will encourage the buyer to continue to practice. This information should go in ___________
The answer is Paragraph 11, Special Provisions.
How are the earnest money and option fee typically paid under the One to Four Family Residential Contract?
The answer is a check to the title company and a check to the seller.
Who is allowed to insert legal rights or remedies in the special provisions paragraph of the One to Four Family Residential Contract?
The answer is a party.
Which of the following is NOT a seller's expense under paragraph 12 of the One to Four Family Residential Contract?
The answer is appraisal fees. Appraisal fees are a buyer's expense.
Which of the following is TRUE regarding the Special Provisions section of the One to Four Family Residential Contract?
The answer is business details and factual statements can be entered by license holders.
Which of these is a license holder allowed to enter under Special Provisions on the One to Four Family Residential Contract?
The answer is business details.
Seller offers to pay $750 towards buyer's expenses using the TREC One to Four Family Residential Contract. Buyer is getting an FHA loan. The parties discover that $750 is not enough to cover all the expenses that buyer is prohibited from paying under the FHA loan, but seller is unwilling to pay any more towards buyer's expenses. What is the buyer's option under paragraph 12B?
The answer is buyer may terminate.
The buyer's agent delivers the option fee to the seller's agent. How should the seller's agent acknowledge that the option fee was delivered to her?
The answer is by signing and dating the option fee receipt.
When must the agent deliver the earnest money to the title company?
The answer is by the close of business on the second day after the effective date.
Where is earnest money first applied at closing under paragraph 18 of the One to Four Family Residential Contract?
The answer is cash down payment.
Buyer and seller enter into a contract for buyer to purchase seller's property using the One to Four Family Residential Contract. The seller fails to show up to closing. Which of the following is one of the buyer's options under paragraph 15?
The answer is enforce specific performance.
Which of the following is a license holder permitted to include in the Special Provisions paragraph 11?
The answer is factual statements.
Under paragraph 16, mandatory mediation provides a lower cost and less formal way to resolve a dispute.
The answer is false, mediation is encouraged but not mandatory.
Under the TREC One to Four Family Residential Contract, what type of warranty deed is conveyed at closing?
The answer is general warranty deed.