Contract progumlate (5)

Earnest money _______ to make a valid offer in Texas.

is not required

Which of these is an exemption to the "legal capacity" requirement to form a contract?

A contract for a life necessity.

Unless otherwise agreed, the Option Fee must be delivered to the seller by:

Third day after the sales contract was executed.

For items for which a promulgated addendum is provided the proper way to include the item is:

Through use of the addendum.

§7 Property Conditions (D)(2) of the TREC 1-4 contract should be used:

To identify specific repairs evident to buyer that buyer requires as a condition to purchase.

One difference between the TREC unimproved Property Contract and the others is which of the following?

The seller's responsibility to disclose knowledge of six potential issues

An oral contract for the lease of a property for one year or less has a statute of limitation of:

Two years

According to TREC 1-4 §10.(A), any possession by Buyer prior to closing or by Seller after closing which is not authorized by a written lease will establish:

A tenancy at sufferance relationship between the parties.

VA will not restore Seller's VA entitlement except under which of these conditions?

ALl of these - Buyer has sufficient unused VA entitlement remaining. - Buyer is a veteran. - Buyer is otherwise qualified.

Which of these IS NOT included in the Seller's Disclosure?

Any defects or malfunctions in critical systems known to the seller Deferred maintenance or other repairs that may be necessary Psychological stigmas, e.g., a violent death on the property ( Correct Answer ) Violations of deed restrictions on the property

The TREC 1-4 states that Broker's fees are which of the following?

Are handled in a separate agreement

The use of paragraph 11 ( Special Provisions ) of the One to Four Family Residential Contract is restricted to:

Factual statements and business details applicable to the sale

§11 Special Provisions of the TREC 1-4 can be used only for:

Factual statements and business details applicable to the sale.

In Texas, the status of limitation on filing a lawsuit on a written contract is which of the following?

Four year

Identification of the buyer and seller must include:

Full name and marital status of all parties.

Residential service companies offer home warranty contracts for maintenance, repair, or replacement of all or any part of these, except for:

Funiture

The unauthorized practice of law would include all of these actions by a licensee, except:

Inserting minor handwritten notes on the contract initialed by all parties.

When a temporary lease is used between seller and buyer, one item that is particularly important to be communicated is which of these?

Insurance on the property

Which of these contracts does not include rollback taxes in §13?

One to Four Family Residential Contract (Resale)

What are the two major forms of modifying a contract discussed above?

Both of these - Amendments - Addenda

§2 Property of the New Construction Contracts does not include which of these?

None of these are included - Exclusions - Improvements - Accessories

Which form of financing does the "Third Party Financing Addendum NOT cover?

Seller financing

Which of these IS NOT a promulgated sales contract?

Seller's Temporary Residential Lease

Which of these IS NOT a termination of contract form?

Short Sale Addendum

How many promulgated sales contracts are there?

Six

Which of these IS NOT an item properly suited to inclusion in a Non-Realty Items Addendum?

Smart car

If one or the other of the parties to a transaction defaults, the other party may:

Sue for specific performance

Option fees and earnest money are covered by which section of the one to four family residential contract ( resale)

5

The Sellers and Buyers Temporary Leases can be used for leasing up to:

90 days

TRELA specifically prohibits real estate licensees from the dangerous mistake of which of the following?

Engaging in the unauthorized practice of law

A contract for deed is a classic example of a(n):

Executory contract

Which of these is not a subject of the Paragraph 6E Title Notices?

Names and boundaries of local school districts

A buyer who indicates that they will "accept the property in it's present condition (as is)" is agreeing:

That they are not asking for any repairs at this point, leaving future repair requests open

For how many days is a Paragraph 23 option valid?

The length of the option period is set by the contracting parties.

Which of the following statements regarding the escrow officer in a One to Four Family Residential sale is accurate?

They have all of these protections - They are not liable for interest on earnest money - They are not a party to the contract - They are not liable for any losses of escrow money attributable to the failure of a financial institution unless the financial institution is acting as escrow agent

An assignment of rights is:

A transfer of rights or duties under a contract from a current party to a contract to another party.

Which of the New Home Contracts includes the page 8 construction defect language?

Both of them - New home ( Complete ) - New Home ( Incomplete )

Using the Addendum for Reservation of Oil, Gas, and Other Minerals, a seller can reserve:

Both of these - All of their mineral estate rights. - Any portion of their mineral estate rights.

Which of these forms is for general consumer or client information, and not directly related to a sale?

Both of these - Consumer Information Form - Information About Brokerage Services

The offer becomes a sales contract when:

It is accepted, signed by the seller, and acceptance communicated to the buyer or buyer's agent.

Paragraph 10 on the TREC 1-4 covers what subject?

possession

Executed and Executory contracts are differentiated by:

their stages of fulfillment.

An option is a form of which kind of contract?

unilateral

The " Seller Financing Addendum " covers all of these EXCEPT?

use of propety

Which paragraph is different from the TREC 1-4 in all five of the other property sales contracts?

§13

Which of these Farm and Ranch Contract sections IS NOT distinguished from the TREC 1-4?

§15 Default

Which Paragraph of the TREC 1-4 contract lists the different addenda that are available?

§22

TRELA, the primary real estate law in Texas today, was established in which of the following years?

1955

The current One to Four Family Residential Contract (Resale) is form number:

20-16

Texas' promulgated One to Four Family Residential Contract (Resale) §__ allows the buyer a grace period in which they can cancel the deal without risking their escrow deposit.

23

Licensee Louise L ' Amour is dealing with a challenging client, buyer Mannie Douts, who questions pretty much every step along the way. Mannie's questions are mostly about the entire purchasing process and has not yet even reached the stage of making an offer, but is asking about much of the process that Louise's client have generally taken for granted. Louise's initial and most daunting task is answering questions about the process that Mannie wants to know before signing anything. Help louise answer these questions.

1. How do I benefit from the escrow process: Both of these - Use of the escrow process avoids a number of problems, such as multiple parties writing checks for fees, title policies, and property taxes. - The escrow company provided the parties with accounting for where the money goes, e.g. title fees, prorated taxes, rents, or other divisible obligations, as well as proceeds to the seller. 2. Why should I risk putting down an earnest deposit? Earnest money is a show of faith and sincerity to let a seller know you are genuinely interest 3. How much does the termination potion cost under the TREC 1-4 Earnest money and termination. That's negotiated between buyer and seller 4. What kind of information will I get on a title commitment? All of these - Rules for charging or removing covenants; Rules about pets and other animals; Regulations on in-home business and renting - Setbacks ( how far homes must be from streets, alleys, and lot lines); Easements - Fees for road maintenance or amenities; Rules on landscaping such as that limit tree height or cutting 5. What is a " survey"? A property survey is a sketch or map of a property showing its boundaries and other physical features like easement and property setbacks

You are licensee in Bigville, Tx working for Bigville Realty, LLC, located at 1234 Big Street, Bigville, Tx 77777. Your new client, Buyer brooks cousin, your single male cousin, want to make an offer on 666 back street, Bigville, Tx 77777. The property is in the developer's dream subdivision in Bigville, Markebelieve county and was built in 1975. Asking price is $250, but Brooks want to offer $240,000. Big bucks bank has pre-approved Brooks for a conventional loan of up to $240,000 so long as he puts 20% down. $240,000 minus his down payment. This is all dependent on Brooks Selling his own home. He want to put $2,400 down for escrow. He wants everything that is negotiable to be charged to the seller for his initial offer. Seller Serena Deneuve, a single women, lives at and owns the property at 666 back street free of any loans, liens, or encumbrances as describe in &6 of the TREC 1-4 form. The property is subject to an HOA. She has a condo in Hawaii where she will be moving, but is conducting all business from her current address until the home is sold. She want to rent back the property until the end of the year. Her listing agent is Lester Luster, The Other Realty, INC.. 2345 Middle Street, Bigville, Tx 77777. Serena has directed lester to use Tiffany Taylor of Titanic Title Co. This is notated in the MLS listing. Brooks wants serena to pay for the title. Brooks also wants serena to supply her existing survey and T-47 affidavit within 3 days of acceptance of the offer or pay for a new one. Brooks chooses not to register any objection to the title defect, so long as the title is determined to be clear by the title company. Because he wants to operate a business out of his home, he does have some concerns about the HOAs and want to be certain that he approves those before committing to the sale. Brooks also want to be certain he receives the seller's disclosure notice within 3 days of the offering being accepted. During his initial viewing ( well before any inspections are performed). Brooks notices that the gutter is missing from the south side of the roof and the window beneath is broken. He wants both fixed as a condition precedent to the sale. He also wants a $500 allotment for a Residential Service Contract. Brooks is seeking a closing date of November 1st of the current year, but agrees to rent back the property to Serena until the end of the year. He also wants to pay $100 for an option fee to be able to terminate within 15 days of offer acceptance without penalty other than losing the option fee. He wants the fee credited toward the sale price if the deal goes through. Brooks want to insert in the 11 special provisions section that the sale is subject to inspections, the seller meeting all other deadlines, and approval of the Lead-based paint disclosure. He also wants seller to help with up to $6000 in buyer's expense allowed by the lender. Brooks' phone number is 555.555.555. His email is [email protected]. He does not have a fax. Serena phone number is 555.555.5556. Her email is [email protected] and her fax is 555 .555.5557. Other Info Serena has a 3D sculpture which is bolted to her living room wall because of its weight, and a portable gazebo in her yard that was handmade by her father. She want both excluded from the sale. She also has a freestanding hot tub that Brooks wants left on the property. Brooks will have up to $50,000 available for a down payment once his other property is sold. He has $2,400 toward that already which he will use for escrow. That is all he will put down until the balance of the down payment at closing. He wants Serena to cover $6000 in closing cost. Both parties agree to submit attorney information at a later date. With the information above ( and gleaned from answers to other questions) go through the One to Four Family Residential COntract ( Resale) as if you were filling it out for your client. If you cannot print out the form ( pages 1-9 only, we are not concerned with page 10 or 11 at this juncture). simply keep the contract displayed on your screen. If personal information or address is provided , then assume it is inserted properly where called for. Signature and identifying addresses at the top of pages are presumed to be properly filled in. For information that is Not Applicable to your offer, answer N/A For information that is necessary but missing and not readily discernible from the information provided, answer I/M ( information missing ) Pick the best answer below to help fill out this form

1. How should the names appear in $1? Buyer: Brooks Cousins, a single male; Seller: Serena Deneuve, a single women 2. What information is needed to complete $2 property (A) Lot block and number 3. What information is needed to best complete $2 property (D) 3D sculpture bolted to living room wall and back yard portable gazebo 4. Brooks is approved for a conventional loan of up to $240,000 with 20% down, i.e $240,000 minus 20%. What is his minimum down? $48,000 5. In the example above, how much is the bank Financing? $192,000 6. What figure is inserted in $3 sales price ( C) $240,000 7. What information is best inserted in $8 brokers and sales agent disclosure? N/A 8. Which of these should be used for the third bank in $5 Earnest Money and Termination Option shall deposit $ __________? $2,400.00 9. What goes in the frist bank of $5 Earnest Money and Termination Option (A): Within 3 days after the Effective Date, Buyer must deliver to __________? Titanic Title Company 10. What goes in the first blank of $5 Earnest Money and Termination option (A)(1). Buyer shall deposit additional earnest money of $ ________? N/A 11. What goes in the second blank of $ Earnest Money and Termination Option (A)(1): with escrow agent within __________ days after the effective date of this contract? N/A 12. Which box should be checked for paying for the title policy? Seller 13. What is inserted in the $6 first bank asking for an owner policy of title insurance ( Title Policy) issued by ( Title Company ) from which of the following? Titanic Title Company 14. Which boxes are to be checked in $6 (A)(8) regarding printed exceptions? I/M 15. What is inserted in the first blank of $6 (C)(1) for the number of days to supply the survey and which box for who to pay for it? 3 and Seller 16. What is inserted in the first blank of $6(D) Objections ( Both Blanks ) for: " Which prohibit the following use or activity: _______. Buyer must object the earlier of (i) the closing date or (ii) ____ days." N/A, N/A Which box should checked ( if any ) for $6(E)(2) regarding homewoner's association membership? Is 18. Which box should be checked and what number ( if any) inserted in the blank for $7 (B) seller's Disclosure/ Box 2,3 (days)

New Licensee Elle Nino just filed out her first One to Four Family Residential Contract ( Resale ) TREC 1-4 for a client buying a home built in 1979 in a planned community with a homeowner's association. She is working with a very cooperative listing agent and seller who made it clear that there is flexibility in timing unless otherwise specified by them or the contract, and that the bottom line is to make the sale happen. The sale price is $240,000 for which Elle's buyer is putting down $ 40,000 and using a private investor for the balance. Your buyer also is selling another home that went into escrow two weeks prior to this deal, but must close in order to complete this purchase. The buyer did select and pay for a Earnest Money and Termination Option, putting 14 days in as the option period, checking the box to have the fee applied toward the purchase, but has question about issues there as well.

1. What is the different method to note that the sale is contingent on the successful sale of the buyer's current home? Use the Addendum for sale of other property by Buyer form 2. Which Addenda should she select for this purchase? All of these - Addendum for sale of other property by Buyer - Third party financing Addendum - Addendum for property subject to Mandatory Membership in a property Owners Association 3. With the buyer's comments on timing, are there any timing issues to be concerned about? Yes, the Earnest Money and termination option selected by the buyer has a " time of the essence " clause built in 4. What happens to the client's fee and escrow deposit if her contigency sale is complete, but she terminates this purchase within the option period for other reasons? The client loses the option fee, but refunded her earnest deposit 5. How long after the execution of the contract does the client have to pay to be able to take advantage of the Earnest Money and Termination option? 3 days 4. When is the contract considered " executed" for purposes of starting the clock on the Earnest Money and Termination Option deadlines? Once it has been communicated to the first signing party that the second party has accepted and signed

The TREC 1-4 states that if the property involved in a transaction is damaged, at no fault of either party, one remedy is to allow time for repairs by extending the closing date by up to which of these?

15 days

The TAR 1904 form is properly used to:

Acknowledge termination of a contract and release earnest money according to the terms of the agreement.

An attachment added to the end of a contract and incorporated in the contract terms is called an:

Addenda

Which of these IS NOT an addendum listed in TREC 1-4 §22 Agreement of Parties?

Addendum for Inclusion and Exclusion of Personal Property

Which of these forms generally should be attached to the buyer's original contract offer?

Addendum for Sale of Other Property

The notice to Prospective Buyers protected licensees through which of the following?

Advising buyers to have title document reviewed by an attorney

Which of these is a potential remedy for a Casualty Loss under §14 of the TREC 1-4?

All of these - Acceptance of the property "as is," with an agreement to receive proceeds of any insurance coverage allowable, with other compensation from seller, e.g., reduced price, or, with no compensation and buyer absorbs any costs - Termination of the contract with earnest money returned to the buyer - Extension of the closing date of up to 15 for seller to fix the damage

The Environmental Assessment & Threatened or Endangered Species & Wetlands Addendum provides assessment opportunities for:

All of these - Environmental hazards - Wetlands - Endangered species

If a buyer needing to sell another property chooses not to use the addendum then fails to come up with the funds, they risk:

All of these - Losing their earnest money. - A lawsuit from the seller who could file a legal action for specific performance or other remedies. - Being found in default.

The TREC farm and Ranch promulgated contract includes considerations that do not apply to the other types of contracts, including which of the following?

All of these - Surface leases - Equipment - Crops

What is/are the seller's options when receiving an offer?

All of these Counter. Reject. Accept.

Which of these IS NOT listed as a reason for termination?

All of these are reasons for termination. - The Property does not satisfy Property Approval in accordance with the Third Party Financing Addendum to the contract. - Buyer elects to terminate under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice. - The unrestricted right of Buyer to terminate the contract under Paragraph 23 of the Contract.

Which of these IS NOT a warning issued on the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway?

All of these are warnings on the Addendum. - Beware of legal risks inherent with purchase of this property. - Be prepared to move or demolish any structure determined to be too close to the shoreline even if it was legal when built or purchased. - Take caution because beach erosion can change the shoreline and, along with it, change the legal status of a structure's location.

An amendment to a contract must always include which of the following?

All of these things -The date of ratification - Reference to the original contract - The parties involved

The Promissory Note section of the Seller's Financing Addendum includes:

All of these. - 5% penalty on installment payments paid more than 10 days past their due date. - Prepayment without penalty. - 1.5% per month or highest lawful rate, whichever is lower, for mature unpaid amounts.

The Real Estate License Act was created to:

All of these. - Protect licensed brokers and salespersons from unfair or improper competition. - Protect the public interests from dishonest or incompetent brokers or salespersons. - Maintain high standards in the real estate profession.

TREC 1-4 Paragraph 6C lists what options for providing the survey to buyer within a number of days after the effective date of this contract set by the parties' agreement?

All of these. - Seller, at Seller's expense, shall furnish a new survey to Buyer. - Seller furnishes to Buyer and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit). - Buyer shall obtain a new survey at Buyer's expense.

Texas' promulgated One to Four Family Residential Contract (Resale) §23:

Allows the buyer a grace period in which they can cancel the deal without risking their escrow deposit.

When a buyer makes a " backup offer " on a pending property, they must submit which of these?

An Addendum for " Back-Up " Contract

A title endorsement is best described by which of these?

An addition or limitation of coverage that is attached to a title insurance policy

Which of these IS NOT listed as a potential damages item for wrongfully failing or refusing to sign a release acceptable to the escrow agent within 7 days of receipt of the request?

Broker's fee

According to TREC a "reasonable time" within which to deposit the escrow check is:

By the end of the second business day following formation of the contract.

The Broker-Lawyer Committee:

Develops forms for TREC to adopt and promulgate at their discretion.

Section 12B of the TREC 1-4, referred to in the text as an " escape clause " allows for which of the following?

If any expense exceeds an amount clearly states in the contract for such expense the responsible party may terminate the contract unless the other party agrees to pay such excess

TREC allows the use of forms that are not promulgated under which of these circumstances?

If they are prepared by the owner, or by an attorney and required by the property owner

Modifications to promulgated forms must be which of the following?

Initialed by the appropriate parties

Which of these IS NOT a difference between the Condominium Sales contract and the TREC 1-4?

Paragraph 7 disclosures

When a licensee receives an offer on a property, they should do which of the following?

Present it to the owner as quickly as possible

Contract sections that are not the same across all TREC promulgated forms include which of these?

Property Conditions

Which of these is generally considered to be a "seller's cost"?

Releases of existing liens, including prepayment penalties and recording fees

Which of the following property types does not have a specific TREC promulgated sales form?

Rental and Investment Properties

New Home Construction contacts, for complete and incomplete construction ( TREC $2 property ), include which one of these of as a specific subsection that is also used in the One-to-Four Residential Contract $2 property? ( Hint: the other does not apply to a new home )

Reservations

Which of these IS NOT a potential reason for terminating a contract?

Specific performance ( correct Answer ) Substantial Performance Impossibility Rescission

If the timing of an agreement being executed is crucial to the agreement, the contract should state:

That time is of the essence

TRELA, as the law is entitled, stands specifically for which of these?

The Real Estate License Act

he Broker-Lawyer Committee was established by:

The Real Estate License Act

The TREC Residential condominium contract includes sections not present in TREC 1-4, including which of the following?

The Resale Certificate

IF a contracted buyer and seller cannot agree to a resolution on repair costs which of the following occurs?

The contract will terminate

The settlement section of the TREC 1 to 4 determines which of the following?

The costs that need to be handled at closing and designates who is to take how much of responsibility for these costs

The Short Sale Addendum protects both the buyer and seller because:

The parties have contractually agreed performance requirements and seller's ability to perform these obligations is subject to lender approval.

Which of these IS NOT part of the subdivision information referenced by the Addendum for Property Subject to Mandatory Membership in a Property Owners Association?

The title commitment

When filling out the One to Four Family Residential Contract, the names of the parties should be accompanied by which of the following?

Their marital status, if applicable

Which of these generally will not include a structure of any sort in the sale?

Unimproved Property Contract

A contract for non-life necessities with a person lacking legal capacity is:

Voidable

if Buyer and Seller execute a back-up contract effective on a Monday (in a week with no holidays) with a 10-day option to terminate, unless otherwise agreed, what is the deadline for depositing the buyer's earnest money?

Wednesday by 5pm

Which of these IS NOT in the information requested above?

Who is the buyer's employer?

According to the One to Four Family Residential Contract, who pays for the title policy?

Whoever is specified