Real estate Promulgated contract forms

Monthly payments will begin the first month after closing and continue for 120 months

C) Promissory Note

How many members in TREC

9

Used for any type of new financing done by anyone other than the seller or the buyer.

Third Party Financing Addendum:

Alex and Olivia Benson are buying a home using an FHA loan. What type of financing addendum will they need to check in the Sales Price section of the TREC One to Four Family Residential Contract (Resale)?

Third party financing addendum

What is the purpose of the Credit Documentation paragraph of the Seller Financing Addendum in Texas

This paragraph is the buyer's agreement to deliver documents that show creditworthiness within a certain time period.

purpose of the special provisions section of the contract?

To list terms that aren't otherwise covered in the sales contract

In the Loan Assumption Addendum to the TREC One to Four Family Residential Contract (Resale), paragraph (C) states if the ______ of all assumed loans varies in an amount greater than $500, either party can terminate the contract.

Total principal balance

What type of form has been prepared by the Broker-Lawyer Committee, approved by TREC, and made available on a voluntary basis?

Trial use

They're prepared by the Broker-Lawyer Committee and approved by TREC, but they haven't reached the effective date yet.

Trial use form

Remedies to breach of contract

Accept partial performance, rescind unilaterally, sue, accept liquidated damages, mutually rescind,

What is one of the exceptions to the rules requiring the use of TREC-promulgated forms?

Attorney or property owner drafts their own

Where is the version number located on a TREC-promulgated form?

Bottom right every page

TREC purpose

Enforces the real estate law in Texas Interprets and explains TRELA's requirements Establishes procedures to help licensees avoid committing violations of TRELA Handles complaints and violations of TRELA

When a real estate transaction involving a governmental agency takes place, the forms used in the transaction will need to be provided by that agency. This is what is known as an ______ to TREC's rule.

Exception

Texas, contracts for deed, lease-purchase agreements, and lease-option agreements are referred to as ______ contracts.

Executory

FHA

Federal Housing Administration

Which of the following describes how to list a nonprofit as a party on a TREC-promulgated form?

NAME, NAME, and NAME, trustees for and on behalf of nonprofit NAME

If the buyer wishes to purchase a television or some other item of personal property as part of the property transaction, where is this addressed in the TREC residential One to Four Family (resale) contract?

Non realty items addendum

Forms promulgated by TREC

Notices, addenda, contracts

Buyer Anderson Simpson and his cousin, Jethro Smithers, sign a contract to purchase a three-acre farm—complete with a four-bedroom house—from farmer Oleson McDonald. Jethro loses all of his savings during a bad weekend in Vegas, so he can't afford his part of the purchase. Instead, Anderson and Farmer McDonald allow another cousin, Jeraldine, to take Jethro's place in the contract, and Jethro is no longer liable.

Novation

The rights and obligations of an original party to an existing contract are taken by another party, with the agreement of all parties to the contract.

Novation

Unilateral contracts

Open listing, option to purchase, option to terminate

Used for a loan from the seller to the buyer for a portion of the purchase price.

Seller Financing Addendum:

Reginald Barker and Stacey Lee are married and purchasing a property together. Which of the following is the best way to identify them as parties on a sales contract?

Stacy lee and husband Reginald barker

Paragraph 3

Sales price

plat

map that shows the location of a piece of property in context to its adjoining lots, roads, and landmarks. It includes lot, street, and block identifiers

Paragraph 2

Property

document issued by a homeowners association (HOA) that certifies the requirements placed upon the property owner by the restrictive covenants and association rules

Resale certificate

Broker-Lawyer Committee's responsibility

to draft and revise contract forms so they can be standardized for use by licensees.

accessories, if any:

window air conditioning units, stove, fireplace screens, curtains and rods, blinds, window shades, draperies and rods, door keys, mailbox keys, above ground pool, swimming pool equipment and maintenance accessories, artificial fireplace logs, security systems that are not fixtures, and controls for: (i) garage doors, (ii) entry gates, and (iii) other improvements and accessories. "Controls"

buyers have - days after the effective date of the contract to provide documentation of creditworthiness.

10 days

Broker lawyer committee members

6 attorneys(appointed by texas bar association), 6 brokers( appointed by TREC) , 1 member of public (appointed by governor)

Broker lawyer committee terms

6 years

TREC members' terms

6 years

Improvements permanently installed and built-in items, if any:

all equipment and appliances, valances, screens, shutters, awnings, wall-to-wall carpeting, mirrors, ceiling fans, attic fans, mail boxes, television antennas, mounts and brackets for televisions and speakers, heating and air-conditioning units, security and fire detection equipment, wiring, plumbing and lighting fixtures, chandeliers, water softener system, kitchen equipment, garage door openers, cleaning equipment, shrubbery, landscaping, outdoor cooking equipment, and all other property

executory contract refers only to a

contract for deed, lease-purchase agreement, or lease-option agreement.

What was the name of the first licensing act?

real estate dealers license act 1939

Novation

substitutes the original party with a new party. This fully releases the original party from all liability for performance of the contract.

How many members in broker lawyer committee

13

With these types of real estate transactions, closing normally occurs more than — days after the contract has been signed by the parties.

180

When Dashiell received the purchase offer for his bungalow, he was surprised to see a page added to the contract requesting that an attorney review the contract. What is Dashiell looking at?

Addendum

Toby is a Texas seller who is willing to allow the buyer to assume his mortgage. In addition to the Loan Assumption Addendum, what other TREC-promulgated addendum might Toby consider using if he'd like to limit his responsibility if the buyer defaults on the loan?

Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement

What's an option fee as it's used in the TREC residential resale contract?

An amount of money paid for the buyer's right to terminate the contract during a defined period of time

All third-party financing in Texas is subject to property approval and may or may not be subject to ______.

Buyer approval

Paragraphs D and E protect the —, and —protected by paragraph G.

Buyer, both parties are

You'd like to add your own touches to the TREC forms that are being used in your office. How can you modify the forms?

By adding your broker's business logo

Amount of the loan is $37,500 at 5% interest

C) Promissory Note

termination of a contract on court orders (via an order of discharge) or mutual agreement, or caused by breach of contract, impossibility of performance, or performance of contract

Discharge of contract

What type of contract do you have once the seller has accepted the buyer's offer in writing and the buyer has been notified of the acceptance?

Enforceable

If I'm a transaction and no promulgated form is available

Check with your broker to see if the form exists Use a trial use form that has been approved by TREC Use a form that's been drafted and approved by a Texas attorney

six elements to be considered valid:

Competent parties Legal description Consideration (a promise to sell and promise to purchase) In writing and signed by both parties Lawful objective Mutual agreement

Which type of document is provided to the consumer to notify them that a recovery fund is available, should they be unable to collect a judgment against a licensee?

Consumer disclosure

A primary mortgage loan that is not guaranteed or insured by any government agency

Conventional financing

types of financing are:

Conventional financing: Government-insured financing: Reverse mortgage financing:

Hilda is a Texas buyer who has gathered her financial statements, proof of employment, and credit report to show the seller that she can be relied upon to pay back a loan from the seller. Where in the Seller Financing Addendum is this information required?

Credit documentation

Consent to property transfer is required

Deed of trust

Tax and insurance escrow is not required

Deed of trust

Chandra is a Texas seller who is considering financing a loan for a buyer. According to the TREC-promulgated Seller Financing Addendum, the buyer agreed to deliver credit documentation within five days of the effective date of the contract. That time has passed, and Chandra has not received the credit documentation, so she decides to terminate the contract. What must Chandra do next?

Give notice to the buyer that the contract is terminated within seven days of the expiration of the delivery date.

Mortgage loans guaranteed by FHA, USDA, or VA

Government insured financing

Assignment

It occurs when one of the original parties transfers his or her rights under the contract to a new party.

essential elements to a valid real estate contract in Texas:

Legally competent parties Mutual agreement (also referred to as "offer and acceptance" or "consent") Lawful objective (also referred to as "legal purpose") Consideration In writing and signed by the parties (as mentioned above) Legal description of the property

Bi lateral real estate contracts

Listing agreement(exclusive right to sell, exclusive agency) , buyer respresentation agreement, lease agreement, purchase agreement

Used for the possibility of the buyer taking over the seller's mortgage loan.

Loan Assumption Addendum

When the buyer is allowed to take over the seller's mortgage and make mortgage payments.

Loan assumption:

option fee and the ______ are part of the terms of the termination option in the TREC One To Four Family Residential Contract (Resale).

Option period

reasons a contract can be discharged:

Partial performance Specific performance Substantial performance Impossibility of performance Operation of law

Paragraph 1 one to four residential contract

Parties

information needed from the parties to the transaction to complete the TREC residential resale contract:

Parties, property, sales price,

When it comes to contracts, what can TREC do under the Texas Real Estate License Act?

Promulgate forms

Which type of document is issued by an HOA and is provided by the seller in a transaction?

Resale certificate

The lender makes payments to the homeowner for a specified period of time and gains corresponding ownership.

Reverse mortgage financing

Jessica is selling her own home. What promulgated form must she use per TREC rules?

She is not required to use a TREC form per the exception that she is selling the home on her own

Members of TREC

Six brokers 5 years experience, 3 members of public

What is a voluntary use form?

TREC does not require that they be used, but they have been reviewed by attorneys.

Robin, a Texas buyer, has offered to pay an option fee to the seller within three days of the effective date of the TREC One to Four Family Residential Contract (Resale). Robin put her check for the option fee in the mail and, unfortunately, the seller received it six days after the effective date of the contract. What happens next?

Termination option will not be part of sales contract

What does it mean when a buyer assumes the seller's mortgage loan?

The buyer is allowed to take over the seller's mortgage and make mortgage payments.

4 things for have to occur before the offer to become a contract

The contract must be in writing. The two parties (buyer and seller) must sign the final contract and initial all changes within that contract. Acceptance is complete. The last party to accept the agreement lets the other party (or the other party's agent) know that the written acceptance of the contract has occurred. (The "last party" can communicate this verbally to the other party or to their agent.)

most commonly used types of legal descriptions are:

The metes-and-bounds description Reference to a recorded plat (AKA the lot-and-block system)

What's in the contract between the parties?" The answer would be:

The sales contract, as signed by the parties Any associated amendments signed by the parties Any associated addenda signed by the parties

who is liable to pay the notes the buyer has assumed?

The seller will remain liable to pay the notes assumed by the buyer unless the seller obtains a release of liability from the note holde

The Texas Loan Assumption Addendum requires some information about the seller's mortgage, including the name of the lender, interest rate, and any loan assumption fee, monthly payment, and ______.

Unpaid principal balance of the loan

Warren signed a contract with the Samsons for the sale of property he didn't own. What type of contract is this?

Void

has no legal basis or force

Void

Missing one or more elements

Voidable

What's an option period as it's used in a TREC residential resale contract?

When the buyer who has paid an option fee can terminate the contract for any reason

Sam is offering $200,000 for the property with a 20% cash down payment. Next, you'll describe the financing. Do you need an addendum? And if so, which one will you use?

Yes, you'll need the Third Party Financing Addendum