Premulgated Contract Forms

Who drafts and edits Texas real estate contract forms? Broker Lawyer Committee Texas Real Estate Commission U.S. Congress Individual Texas real estate brokers

Broker Lawyer Committee

If the closing takes place in July, who will be responsible for payment of the annual taxes to the taxing authority when the tax statements arrive? Seller Buyer Title company Each party will pay their share for the year

Buyer

If the new survey is obtained by Paragraph 6C2, who will be paying for it? Buyer Seller TREC Agent

Buyer

Where in the Farm and Ranch Contract would the seller list the improvements, accessories, and crops he or she will keep and remove prior to delivery of possession? Improvements Accessories Exclusions Title Policy and Survey

Exclusions

What type of contract has all of its obligations completed? Executory Terminated Executed Unenforceable

Executed

A contract that is "pending" is _______. Executed Executory Bilateral Unenforceable

Executory

Property approval, according to paragraph 4, includes which of the following things? The appraisal Lender-required repairs Insurability All of these

Lender-required repairs

According to paragraph 12 of the contract, seller's expenses include _______. Discount fees Tax certificates Loan title policy None of these

Loan title policy

Texas is a community property state, so the title company will need to know the parties' _______. Marital status Nickname Parents' name Parents' marital status

Marital status

A seller furnishes the existing survey to the buyer, but it is not acceptable to the buyer's lender. Who will have to pay for the new survey? Buyer Lender Negotiated party Seller

Negotiated party

What is the only TREC contract that talks about construction documents and cost adjustments? New Home Contract-Complete Unimproved Property Contract Farm and Ranch Contract New Home Contract-Incomplete

New Home Contract-Incomplete

Yes, if it is still during the time frame the contract is contingent on buyer approval No, it must be in writing and delivered as instructed in paragraph 21 No, he should have called the seller directly Yes, if he has an option to terminate

No, it must be in writing and delivered as instructed in paragraph 21

What is the proper form to use if the buyer wants to ask the seller to leave the free standing bookcase for a small amount of money? Non-Realty Items Addendum Seller Financing Addendum Third Party Financing Addendum Loan Assumption Addendum

Non-Realty Items Addendum

What is the purpose of the Real Estate License Act? Protect real estate licensees Protect real estate brokers from unscrupulous salespeople Protect the public Keep the cost of real estate services under control

Protect the public

When must the seller permit the buyer to access the property? Reasonable times Whenever Never Between 10 a.m. and 5 p.m.

Reasonable times

According to the One to Four Family Residential Contract, what expenses does the seller have to pay? Appraisal fees Releases of existing liens Credit reports All prepaid items

Releases of existing liens

What should a seller do if he or she has already sent a counteroffer to a prospective buyer and then receives another offer that is even better? S/he must wait to hear from the first buyer. S/he is free to counter this offer too. S/he must tell the first buyer about the second offer and give them an opportunity to come up to the new amount. S/he should withdraw the first counter before answering the new offer.

S/he must tell the first buyer about the second offer and give them an opportunity to come up to the new amount.

The Rules of the Commission say that the broker must deliver the earnest money by the close of business on the _______ after execution of the contract. First working day Second working day Third working day Fourth working day

Second working day

Option money must be delivered to the _______ or their agent within three days after the effective date of the contract. Seller Buyer TREC NAR

Seller

Which of the following types of financing are not covered by the Third Party Financing Addendum? USDA Seller FHA VA

Seller

Which addendum should be attached if the financing for the offer includes the seller financing a portion of the price? Seller Financing Addendum Non-Realty Items Addendum Third Party Financing Addendum Loan Assumption Addendum

Seller Financing Addendum

The TREC contract forms say that if fire or other casualty damage the property prior to closing, the _______. Buyer may terminate the contract as is. Buyer is obligated to restore the property after closing. Buyer must accept an assignment of the insurance funds. Seller will be obligated to restore the property prior to closing.

Seller will be obligated to restore the property prior to closing.

A seller agrees to furnish the existing survey and then cannot find it. Who pays for the new survey? Buyers Agents Lenders Sellers

Sellers

According to the Loan Assumption Addendum, if the buyer does not deliver the credit information within the required time, the seller has how many days to terminate after expiration for the time of delivery? Ten Three Five Seven

Seven

A buyer's agent is getting ready to write a contract on a property the other agent has disclosed as a short sale. Which addendum will need to be attached to the contract and included in Paragraph 22? Third Party Financing Addendum for Credit Approval Short Sale Addendum Non-Realty Items Addendum Sale of Other Property Addendum

Short Sale Addendum

Which law requires real estate contracts to be in writing? Statute of Limitations Statute of Written Contracts Statute of Frauds The Texas Real Estate License Act

Statute of Frauds

Which law limits the amount of time within which a lawsuit can be filed? Deceptive Trade Practices Act Statute of Limitations Statute of Frauds Law of Supply and Demand

Statute of Limitations

If the tenant damages the property while occupying, who pays for the cost of repairs? Landlord Broker Tenant Agent

Tenant

Which group administers the Real Estate License Act? Texas Real Estate Commission National Association of REALTORS® Texas Association of REALTORS® Broker-Lawyer Committee

Texas Real Estate Commission

Who approves and promulgates Texas real estate contract forms? Texas Real Estate Commission Broker Lawyer Committee U.S. Congress Texas Governor

Texas Real Estate Commission

How many days does the buyer have to object after receiving the Commitment, Exception Documents and a survey? 5 3 The number of days agreed to by the parties 7

The number of days agreed to by the parties

Paragraph Three, the Financing Paragraph is _______. Different in every contract The same in all five contracts Only different in the Unimproved Property Contract Different in both New Home Contracts

The same in all five contracts

Which of the following statements is TRUE if rollback taxes are assessed because the seller changed the usage prior to closing according to the TREC contract forms that discuss rollback taxes? The developer will be obligated to pay the rollback taxes. The seller will be obligated to pay the rollback taxes. The buyer will be obligated to pay the rollback taxes. There will be no rollback taxes.

The seller will be obligated to pay the rollback taxes.

If the portion of sale price is financed, the total of all the financing reflected in Paragraph 4 will be entered in Paragraph 3B. True False

True

What are buyers purchasing when they buy a condominium? Unit and an undivided interest in the common areas Unit and a lot Stock in the company that owns the condominium building Unit, a lot, and an undivided interest in the common areas

Unit and an undivided interest in the common areas

According to the NAR Code of Ethics, unless the agent has written instructions otherwise, for how long must he/she continue to present offers to the seller? Until the seller accepts another offer Until the seller has a fully executed contract and a backup offer Until closing Until the property sale is pending

Until closing

If an agent is selling a new home and the builder has her own contract form, how can the agent ascertain that the buyer receives the required notice that he or she should have the abstract examined by an attorney or obtain a policy of title insurance? It will be in the Builder Contract. Use TREC form OP-C, Notice to Prospective Buyer. New homes are exempt. It will be in the listing agreement.

Use TREC form OP-C, Notice to Prospective Buyer.

A transaction is contingent upon the sale of another property and the seller notifies the buyer that he has accepted another offer. What must this buyer do? Waive the contingency on or before the date agreed to in the Sale of Other Property Addendum Sue the seller Nothing Waive all negotiations of repairs

Waive the contingency on or before the date agreed to in the Sale of Other Property Addendum

Which date is the date in the upper-right corner of the promulgated contract form? When the Broker-Lawyer Committee drafted the form When TREC approved and promulgated the form When the licensees must begin using the form When the form will be reviewed in the future

When TREC approved and promulgated the form

When can rollback taxes be assessed? When property values are increasing quickly When property values have been reappraised When zoning is changing and the property no longer qualifies for a previous exemption When tax rates have been upgraded

When zoning is changing and the property no longer qualifies for a previous exemption

Once a contract is accepted, agents must deposit any earnest money in their possession with the escrow agent by the close of business on the _______ working day. Second Third Forth Fifth

second

How many members are on the Broker-Lawyer Committee? 9 13 10 17

13

If the escrow agent receives a demand for the earnest money from one party, the escrow agent will send a copy of the demand to the other party. The escrow agent may release the earnest money to the party making the demand if he or she has not received a written objection within how many days? 30 15 45 7

15

The seller does not have a current survey of the property. How many days before the closing date must a new survey at the seller's expense be provided? 5 days 10 days 7 days 3 days

3

When the existing survey is not acceptable to either the lender or the title company, the buyer shall obtain a new survey no later than _______ days prior to the closing date. 3 5 2 4

3

The seller has agreed to repair the front porch but he needs more time to finish. What is the maximum number of days the closing date can be delayed for repairs? 4 5 7 10

5

TREC has promulgated how many contract forms? 9 12 24 6

6

According to the Seller's Financing Addendum, if the buyer delivers his credit information to the seller in a timely fashion, and the seller determines it is unacceptable, how many days after the date for the expiration of the time for delivery does the seller have to terminate? 7 3 5 12

7

Which offer is the seller obligated to accept? One that is at or above the list price One that will net the seller the amount on which he/she agreed A seller is never obligated to accept any offer One that has a reasonable possession date

A seller is never obligated to accept any offer

What should the buyer's agent do if the buyer wants to be sure the fireplace screen stays with the property? Write it in Paragraph 11. Add it the Non-Realty Items Addendum. Add it at the end of Paragraph 2. Do nothing; it is already in the contract.

Add it at the end of Paragraph 2.

Which form(s) discusses rollback taxes? Both New Home Contracts Unimproved Property Contract Farm and Ranch Contract All of these contracts

All of these contracts

Which of the following addenda contain the words "time is of the essence"? Sale of Other Property Addendum Third Party Financing Addendum Addendum for Back Up Contract All of these forms

All of these forms

According to paragraph 18B, if no closing occurs, the title company may require which of the following things? Unpaid expenses on behalf of the buyer Unpaid expenses on behalf of the seller A written release of liability of the escrow agent All of these things

All of these things

Paragraph 10, the possession paragraph, cautions the parties that if possession is at a different time than closing and fundings, they should do which of the following things? Use the TREC Temporary Lease Agreement Contact their insurance agent to determine coverage has not been limited Realize without a lease agreement there is a tenancy in sufferance relationship between the parties All of these things

All of these things

What should you do if you believe a transaction is involved in illegal activity? Notify your broker Withdraw from the transaction Tell the seller to seek legal advice if he or she plans to continue with the transaction All of these things

All of these things

Which of the following things would be a red flag that a party may be making an offer that will be involved in real estate fraud? An offer calling for future improvements An inflated sales price A request to remove the property from MLS All of these things

All of these things

Restrictive covenants may include rules regarding which topics? Minimum size requirements Pets Fees for road maintenance All of these topics

All of these topics

When an agent receives a copy of the commitment for title insurance, what should the agent double check? Names Legal descriptions Reservations All of this information

All of this information

According to the Third Party Financing Addendum, which one of the following is NOT necessary for credit approval? The terms of the loan described must be available. An appraisal for at least the sales amount must be received. The buyer's assets and income meet the lenders underwriting requirements. The buyer's credit history meets the lender's underwriting requirements.

An appraisal for at least the sales amount must be received.

Which of the following things transfers contract obligations but does not relieve the original party from obligations? Trade Novation Contract Transfer Assignment

Assignment

A back-up contract was executed on August 9th. The parties agreed to a 12-day option period. On August 15th, the seller notified the buyer that the first contract had terminated. When does the back-up buyer's option period end? At midnight on August 27th At noon on August 21st At noon on August 27th At midnight on August 21st

At midnight on August 27th

When is the total amount of the rent agreed to in the Seller's Temporary Residential Lease Agreement due? When the party moves in When the party moves out At the time of funding of the sale At the time the offer is accepted

At the time of funding of the sale

The buyer will receive a copy of the restrictive covenants at whose expense, according to the contract? Seller's Buyer's Title company Lender's

Buyer's

According to the One to Four Family Residential Contract, what expenses is the buyer prohibited from paying? Certain VA fees Appraisal fees Credit reports Prepaid items

Certain VA fees

If the seller wants to continue to show the property for back up offers the _______. Contact already permits the seller to do so. Agent must add it to the special provisions. Agent must add an addendum. Seller should do so as the buyer will never know.

Contact already permits the seller to do so.

What is the correct term for an agreement to do or not to do something? Assignment Termination Contract Promise

Contract

A buyer decides to exercise his right to terminate under the option period. What is the proper process? Execute a Notice of Termination of Contract Sue the seller Nothing; just let it expire Deliver the Notice of Termination to the Title Company and the seller

Deliver the Notice of Termination to the Title Company and the seller

If one of the parties default and the non-defaulting party accepts the earnest money as damages they may also _______. Sue for specific damages Sue for other damages Do nothing more, the contract is terminated All of these things

Do nothing more, the contract is terminated

What does the Broker-Lawyer Committee do? Drafts and edits forms Approves forms Sanctions licensees Promulgates forms

Drafts and edits forms

What substance is specifically excluded from the mineral estate? Oil Gas None Limestone

Gas

What is the difference between explaining contract forms and crossing the line into the unauthorized practice of law? Give clients options but never tell them what they should do. Tell clients what they should do. Give clients options and tell them which one to choose. Don't give clients any options.

Give clients options but never tell them what they should do.

With which of the following things does a new contract or a new party replaces the original contract and releases the obligations under the original contract? Novation Termination Abandonment Assignment

Novation which is the substitution of a new contract for an existing contract

Which paragraph is used to add factual statements or business details as desired by the principals to conform to the negotiations? Paragraph 11 Paragraph 12 Paragraph 10 Paragraph 9

Paragraph 11

Which paragraph in the One to Four Family Residential Contract allows you to indicate which addenda will be used in the transaction? Paragraph 22 Agreement of Parties Paragraph 22 Notices Paragraph 11 Special Provisions Paragraph 10 Possession

Paragraph 22 Agreement of Parties

According to the One to Four Family Promulgated Contract, who is responsible for the title policy cost? Party that agreed to pay the cost Seller Buyer Lender

Party that agreed to pay the cost

A back-up contact was executed on July 1st. The buyer is willing to be in back-up position until July 16th and see if the first contact will terminate. What are the back-up buyer's responsibilities while in back-up position? Pay any earnest money and option money agreed to in the back-up contract Make loan application with a lender Nothing Conduct appraisals and home inspections

Pay any earnest money and option money agreed to in the back-up contract

An inspector recommends that a buyer get an engineer's report. The buyer will need additional time in the option period to obtain that report. If the seller is willing, how can the buyer accomplish this? Paying an additional option fee and executing an Amendment The option period automatically gives the buyer time for the inspections, so no action is needed Send or e-mail a request to the seller Cancelling the contract and drafting a new one

Paying an additional option fee and executing an Amendment

A contract was executed on May 12th. On May 20th the parties agree verbally to change the closing date. What is the correct way to make that change? Call the lender and the title company and let them know of the change Make a change on the original document and get the change initialed Prepare a promulgated Amendment for the parties' signatures Ask each of the parties to e-mail you with their agreement to the new closing date

Prepare a promulgated Amendment for the parties' signatures

The Third Party Addendum for Credit Approval says credit approval must be obtained within ten days after the effective date. The appraisal comes in too low for the lender to make the loan on the 12th day. What is the status of the contract? The buyer is in default. The contract will terminate, and earnest money and any option money will be refunded to the buyer. The buyer may terminate the contract, and earnest money will be refunded to the seller. The buyer may terminate the contract, and earnest money will be refunded to the buyer.

The buyer may terminate the contract, and earnest money will be refunded to the buyer.

What will happen if the buyer fails to deposit the earnest money as agreed? The buyer will be late. The buyer will be penalized. The buyer will be in default. The buyer will be void.

The buyer will be in default.

What does the date in the right hand corner of the contract signify? The date on which TREC approved and promulgated the form The date by which form needs to submitted Form expiration date It is the date of TREC formation

The date on which TREC approved and promulgated the form

Which addendum should be attached if the financing is an FHA or VA first lien mortgage? Third Party Financing Addendum for Credit Approval Non-Realty Items Addendum Seller Financing Addendum Loan Assumption Addendum

Third Party Financing Addendum for Credit Approval

When property owned by a married couple is being sold, what is the BEST way to identify the sellers? Mr. and Mrs. Thomas Bud Smith Thomas Bud Smith and spouse Mary Ann Smith Thomas Bud Smith and his wife Thomas Bud Smith et vir Mary Ann Smith

Thomas Bud Smith and spouse Mary Ann Smith

What information can be added to Paragraph 11 Special Provisions in the One to Four Family Residential Contract? Disclosure of the presence of lead-based paint Business details applicable to the sale Time is of the essence Details about the financing the buyer has obtained

Time is of the essence

A mass murder took place in a property. It was on the news and in the newspaper for weeks. Does this need to be disclosed to an out of town buyer? Yes, the home may be stigmatized and the average person would want to know No, the house was not involved No, this could harm the seller No, this was in the past and did not affect the property

Yes, the home may be stigmatized and the average person would want to know