The CE shop - promulgated contract forms
In buyer Brenda's TREC One To Four Family Residential Contract (Resale), her offer states that her closing fees may not exceed $3,800. If her closing fees turn out to be $5,000, Brenda can _______.
Terminate and get her earnest money back
Which entity was formed for the purpose of enforcing the Real Estate Dealers Act in Texas?
TREC
Buyer Dee Dee Warren has found the perfect home. She's offering $304,000, with $74,000 in cash paid at closing, and wants to assume the sellers' mortgage loan of $230,000. To do this, she'll need to complete which of the following addenda to the TREC One to Four Family Residential Sales Contract (Resale)?
Loan Assumption Addendum
When can specific performance be enforced under a sales contract?
One party didn't meet the terms of the contract in the specified time frame, and is now being required to do exactly what was agreed to in the contract.
Which of the following is an example of discrimination?
Restricting families with children to a certain area of a building or complex
When a Texas buyer's purchase of the property is contingent upon obtaining financing, what type of document is attached to the sales contract?
Addendum
Your client is selling property that's subject to mandatory membership in the homeowners association. What form should the buyers complete to request more information about the association rules and fees?
Addendum for Property Subject to Mandatory Membership in an Owners Association
In paragraph 3 of the TREC One to Four Family Residential Sales Contract (Resale), the______ plus the sum of all financing will equal the sales price offered.
Cash down payment
Gertrude and Hank are buying a piece of property. What can they provide to the seller to indicate they are serious and intend to go through with the purchase?
Earnest money
Items that are attached to the real property, such as the house and garage, or that are permanently installed or built in are referred to in the Property section of the TREC sales contract as ______.
Improvements
All notices from one party to the other in a TREC One To Four Family Residential Contract (Resale) must be ______.
In writing
Sarah's offer on a condominium unit was accepted, pending the condo association's decision on whether to exercise its right of first refusal. The association decides to purchase the unit. What happens to Sarah's offer?
It's terminated.
Which of the following is a true statement about a residential service contract in Texas?
It's typically for one year of coverage.
Jill and Jackie want to rent an apartment with their three children. Under the occupancy standards established in the Texas Landlord and Tenant Act, which of the following is the smallest unit they can rent?
One bedroom
Joaquin, a broker in Houston, needs to act as an intermediary in one of his transactions. He has received written consent from the parties of the transaction. Now he just needs to fulfill the other requirement, which is providing ______.
The source of the broker's expected compensation
The Texas Workforce Commission consists of three members who serve ______-year terms.
Six
What information is required to complete the Promissory Note paragraph in the Seller Financing Addendum to the sales contract?
The terms for repayment of the loan
What's providing legal advice to a client considered?
The unauthorized practice of law
According to TREC's Consumer Protection Notice, how many recovery funds does TREC administer?
Two
Sameen and Mohammed apply to rent an apartment in a six-plex in the middle of Houston. Bob, the landlord, thinks they're probably Muslim, and doesn't want to upset the other tenants, so he lies and tells the applicants that he's just filled the vacancy. Has Bob just violated the fair housing laws?
Yes, and Bob could be penalized by the Texas Workforce Commission Civil Rights Division.
Janet and Hank are buying a condominium from Shirley. Who's responsible for the transfer fees charged by the association, up to the amount specified in the contract?
Janet and Hank
Which of the following is protected under the federal Fair Housing Act?
Race
Seth and Kellie want to make an offer on a Craftsman house with its wide front porch and gabled roof. The market is hot, so they want to make an offer quickly. Their agent uses the ______ contract.
TREC One to Four Family Residential Contract (Resale)
Who is responsible for filling in the effective date on the sales contract?
The licensee
Mindy must sell her home immediately, but it's worth far less than she owes. What form must she complete?
Short Sale 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?
Stacey Lee and husband Reginald Barker
Zelda is a Texas licensee working with a buyer and she's explaining the Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement. Which of the following explanations accurately describes what restoration of seller's VA entitlement means?
"A VA entitlement is a financial guaranty from the government to repay a portion of a VA loan in the event of default. Because the VA entitlement is a specific amount, the parties may apply to have the VA entitlement restored once the loan is assumed."
Nancy is meeting with her agent to make an offer on unimproved land, which was previously part of a family farm. She is sinking every penny she has saved into the down payment on the property. Which of the following is a true statement?
She will be responsible for rollback taxes if she changes the use of the land.
What's the purpose of the Addendum for Back-Up Contract?
To allow a buyer to place a back-up offer on a property that's already under contract
According to fair housing laws, the protected class of familial status refers, in part, to those with children, who are defined as anyone under the age of ______.
18
When does buyer possession usually occur?
After closing and funding
What is the Non-Realty Items Addendum used for?
Personal property that will be conveyed from the seller to the buyer
Jasmine and Roberto just bought their first new home, which was finished just a week before they moved in. Which of the following is a true statement?
The Seller's Disclosure Notice is not required.
Which paragraph of the TREC One To Four Family Residential Contract (Resale) is used when a buyer wants the exclusive right to purchase the property with the unrestrictive right to terminate the contract?
The Termination Option paragraph
In Texas, a potential consequence for the unauthorized practice of law is ______.
The revocation or suspension of one's real estate license
Under the New Home Contract (Incomplete Construction), assessments for rollback taxes are the responsibility of ______.
The seller
The Texas listing agreement is an agreement between which parties?
The seller and a broker
What happens when a Texas buyer who has paid the seller an option fee under the TREC residential One to Four Family (resale) contract terminates the contract after the option period expires?
The seller keeps the option fee and may get to keep the buyer's earnest money.
What is a representation, according to the sales contract?
The statements included throughout the sales contract
What's the correct way to use an amendment to a contract?
To change the original contract's terms
What's the purpose of the Special Provisions paragraph of the One To Four Family Residential Contract (Resale)?
To clarify facts found in the contract
What is the purpose of the Broker-Lawyer Committee?
To draft contract forms
Which of the following is a requirement of a seller of new construction on what was formerly agricultural property?
To pay any rollback taxes due
Tom sold new construction property that was formerly zoned agricultural to Brenda and Lee. Who's responsible for paying rollback taxes on this property?
Tom
Kimmy's buyer clients want the seller to leave behind the workbench that is in the basement—something that was not originally identified as an inclusion in the original Texas sales contract. Which of the following will Kimmy use to indicate the change?
A TREC-promulgated addendum form
When does timing for certain contract requirements begin?
On the first full day after the executed date (effective)
Donald and Darlene have just made an offer on a new home. However, they can't purchase the new home until they sell their existing home. Which addendum should be attached to the sales contract?
Addendum for Sale of Other Property by Buyer
Jonathan is acting as an intermediary in Texas. He has received written consent from the parties involved in the transaction. What additional requirement does Jonathan need to meet?
Information detailing the broker's compensation and the source of that compensation
In Texas, the Information About Brokerage Services form ______.
Is required by law
Lou and Lannie, two unmarried siblings, decide to buy a vacation home. They enter into a contract with the seller, Amanda. A week after signing the contract, Lou and Lannie have a falling out. Now their brother Larry wants to buy the home with Lou, and Lannie wants no part of the purchase anymore. Amanda agrees, and they substitute Larry for Lannie in the contract, leaving Lannie with no further liability. This is an example of ______.
Novation
Where can licensees find all of the required forms promulgated by TREC?
On the TREC website
The Termination Option (paragraph 23) of the TREC One To Four Family Residential Contract (Resale) applies to the option period, which give the exclusive right to hold and terminate the contract to which party?
The buyer
Maura is representing three buyer clients and there is only room enough in the Parties section of the TREC One To Four Family Residential Contract (Resale) to list two of the three names. Where should she note the name of the third buyer?
In the Special Provisions section
Consuela is selling the family farm, but she has a significant investment in the cotton crop she has already planted. Which of the following is a true statement?
She needs the buyer's permission to harvest the crop after closing. -The seller can also reserve the right to come back and harvest for as long as the buyer agrees to this in writing.
Stan was unable to obtain financing from his lender for the property he was hoping to buy. Which of the following reasons should Stan check on the Notice of Buyer's Termination Contract for having to terminate the contract?
"Buyer cannot obtain Buyer Approval in accordance with the Third Party Financing Addendum to the contract."
Damon's home gradually became located on a public beach due to erosion. What happens now?
The state can sue Damon and make him remove the home at his expense.
A common form of mortgage fraud—illegal property flipping—involves a recently purchased property being ______.
Falsely appraised at an inflated value and then sold for that higher price
Is the Seller Disclosure of Property Condition noted under the Agreement of Parties?
No, only addenda are noted in the Agreement of Parties paragraph. The Seller's Disclosure Notice is not considered an addendum. -The Agreement of Parties paragraph 22 is only used for showing the addenda that are part of the contract.
Built-to-Last Construction entered into a contract to build a home for the Andrew sisters. The sisters had gotten the deal for a song. The contract specified that the home must be completed by June 9. The construction company finished the homes on June 6. This is an example of ________ of the contract.
Performance
You're helping your buyer client complete a Buyer's Temporary Residential Lease form for a transaction. Closing is set for January 5. Which of the following lease terms falls outside the maximum term allowed under the provisions of the Buyer's Temporary Residential Lease?
A lease beginning October 2
The appraisal on Jean's property came in at $22,000 less than the agreed-upon sales price, so the buyer, Thomas, wants to renegotiate the terms. If they can come up with a new price that is satisfactory to both parties, what will they use to document this?
Amendment
Which of the following statements about obtaining a property survey for the title company and lender is true?
An existing survey may be used if it's accompanied by a Residential Real Property T-47 affidavit.
It is Texas state policy to encourage resolution of disputes first through ______.
Mediation
Rick, a seller, wants to reserve the right to harvest crops he planted on a farm and ranch property. By when must he do this?
At any time agreed to in writing
In Texas, when is a licensee required to provide an agency disclosure?
At the time that the licensee is having the first substantive dialogue about a specific property with the party whom they are not representing in the transaction
The seller, Bob Smith, received an offer on his home that was contingent on the buyers selling their home first. While waiting for the buyers, Bob received a back-up offer without a contingency. What can Bob do?
Bob can ask the buyer on the first TREC One To Four Family Residential Contract (Resale) to waive the contingency within an agreed-upon timeframe or terminate the contract.
Through which promulgated form are consumers notified that they can submit a complaint to TREC against a license holder?
Consumer Protection Notice
Which of the following is an appropriate use of the Special Provisions section of the TREC One To Four Family Residential Contract (Resale)?
Expanding on statements presented elsewhere in the contract
Which of the following is a financing option listed on the Third Party Financing addendum?
FHA-insured
Georgie Banker is the widow of the late Gordon Banker. How should Georgie be listed as a party in a TREC sales contract regarding a property that Georgie owns?
Georgie Banker, an unmarried person
Vinnie is a seller who is considering financing a loan to a potential buyer. In the Seller Financing Addendum, Vinnie agreed to a delivery date five days after the effective date of the sales contract. The buyer delivered the documentation on time, but Vinnie doesn't approve the buyer's credit. What must Vinnie do to terminate the contract?
Give notice to the buyer that the contract is terminated within seven days of the date of delivery of the credit documentation.
Which of the following statements about the owner's title insurance policy is true?
It insures the buyer against loss due to title defects under the provisions of the title policy, which are subject to existing exclusions and a list of exceptions.
If buyers are identified as "Kathleen Leary and Trent Carpenter, as tenants in common," which of the following is true?
Kathleen Leary and Trent Carpenter are unmarried persons buying a property together.
One main difference between condominiums and townhomes is that townhome owners have fee simple title to the ______.
Land beneath their units
If licensee Diane represents the seller of a home built in 1972, what does she need to provide to potential buyers?
Lead safety pamphlet
The buyer is responsible for which of the following expenses?
Loan application fees
When an option contract is being used, the buyer agrees to pay the seller a fee. This fee is known as the ______________.
Option fee
The option fee and the ______ are part of the terms of the termination option in the TREC residential One To Four Family (resale) contract.
Option period
TREC does NOT have the right to do which of the following?
Prohibit a license holder from using a contract that has been drafted by the property owner's attorney.
TREC has the authority to ________________________.
Revoke or suspend an agent's or broker's license
Which of the following is a protected class under federal fair housing laws?
Sex
Jerry is buying an income property, which is a four-family apartment building. When his agent writes up the offer, what Texas contract should he use?
TREC One to Four Family Residential Contract (Resale)
What are voluntary use forms in Texas?
TREC doesn't require you to use them, but they have been reviewed by attorneys.
You represent a Texas seller, Sully, and when he fills out the seller's property disclosure, you notice he says the roof is "new." You can tell the roof is at least 15 years old, if not older, and will need to be replaced soon. What's your responsibility here?
Tell Sully he must complete the disclosure as truthfully as possible, and that if he lies about the roof, you will tell potential buyers the truth (and then do it, if necessary).
If any expenses for either party exceed the amount already agreed-upon in the contract, that party can ______ unless the other party agrees to pay the excess amount unless prohibited by the type of loan the buyer is obtaining.
Terminate
The Addendum for Coastal Area Property and the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway include notices required by the ______.
Texas Natural Resources Code
What was the name of the first law regulating real estate brokerage in Texas, which was originally passed in 1939?
Texas Real Estate Dealers Act
Unlike Texas, there are states that follow what organization's policy allowing two people per bedroom as a "reasonable standard."
The Department of Housing and Urban Development
Texas licensee Alexandra is helping her clients, the Kents, fill out the Sales Price section of the TREC residential One to Four Family (resale) contract. What amount will they put in this space?
The Kents' purchase offer
According to the TREC One to Four Family Residential Contract (Resale), what recourse does a buyer have if a seller is unable to complete agreed-upon repairs and treatments prior to closing?
The buyer can extend the closing date up to five days to allow the seller to complete the repairs.
In Texas, before a contract for the sale of real estate is considered binding and executory, three things must occur. First, the buyer must make a written offer on the property. Second, the seller must accept the offer in writing. What is the third action that must occur?
The buyer must be notified of the seller's written acceptance of the offer.
How does the right of first refusal affect the sale of a condominium unit?
The condominium association is given the first opportunity to buy the unit.
What is meant by "buyer possession" in the sales contract?
The date the buyer may move into the property
In the Loan Assumption Addendum, when does the buyer agree to pay the initial payment toward the loan?
The first payment due after closing
If a casualty loss occurs on a property subject to a real estate transaction, who or what entity is responsible for bringing the property back to its original condition?
The seller, through the seller's insurance
Veteran Shirley Beckles is seeking VA-guaranteed financing to purchase a three-bedroom, two-bath home in Dallas. Which addendum will she need to include in the TREC residential One to Four Family (resale) contract?
Third Party Financing Addendum
How many people per bedroom is/are allowed under The Texas Property Code?
Three
Which section of the TREC One to Four Family Residential Contract (Resale) identifies the party who will pay for title insurance and the extent of the policy coverage?
Title Policy and Survey section
Vanessa just received two offers for a Texas listing. One is $15,000 below the asking price, and one is for the asking price. Vanessa's client, Nevaeh, has asked her in writing to not present offers that are more than $10,000 below the asking price. What should Vanessa do?
Vanessa should submit only the offer that meets Nevaeh's request.
Which of the following transactions requires the use of a promulgated form?
When negotiating a contract for the sale of interest in real property