Law Of Contracts Aceable

Before Geri signs a buyer/tenant representation agreement with a buyer, he MUST first ask:

"Are you already represented by an agent?"

What is essential for creating an express agency relationship?

Consent of both parties

What does the Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum do?

It makes the contract contingent on the buyer obtaining certain acceptable environment inspections

What does it mean when a contract has lawful objective?

The subject of the contract adheres to all the necessary laws and regulations

Eduardo made several changes to his contract. WHAT are these changes called, and WHO must receive a copy of them?

These changes are amendments, and the title company must receive a copy of them

Which one of the following is NOT a type of acceptance?

Uniform

Ernesto is a buyer who puts earnest money towards a transaction. When will Ernesto's earnest money be applied?

When the sale closes

Who is responsible for conducting a final walkthrough inspection with the buyer?

buyer's broker

To be enforceable in court, a sales contract must have:

competent parties

A contract in which all material terms have been fulfilled by all parties is said to be:

executed

RESPA requires lenders to:

give a buyer an estimate of closing costs

Which of the following enables the lender to seize the property if the borrower defaults on making payments?

security interest

A home mortgage is an example of a:

specific and voluntary lien

The SAFE Mortgage Licensing Act requires that mortgage loan originators qualify for:

state (Texas) and national mortgage licenses

During a contract for deed:

the seller holds the legal title to the property and the buyer is entitled to possession and equitable title to the property

Assignment is when a party to a contract

wants to withdraw without terminating the contract, so they transfer their rights and duites to a third party

Jackie is a license holder who creates her own real estate contracts because she wishes to save herself (and her brokerage) time and money. Jackie has good intentions. What is true of her (and other license holders like her who create their own contracts)?

Creating and drawing up contracts that transfer real property ownership is prohibited as it is an unauthorized practice of law

Miguel is seeking a conventional mortgage loan to finance the purchase of a new home. During the underwriting process, what needs to be approved?

Miguel (the borrower) and the property he wants to buy

The contract used for resale homes, NOT new construction, is known as the:

One to Four

What does RESPA stand for?

Real Estate Settlement Procedures Act

Which of the following regarding personal and real property is TRUE?

Real property is land plus improvements on the land, so a house is an example of real property

A seller advertises a home's mortgage payments with the best possible terms. This violates:

TILA

Protecting consumers of real estate services, enforcing the laws the legislature passed in the License Act, and ensuring the availability of capable and honest real estate service providers are all responsibilities of the:

Texas Real Estate Commission

The Addendum for Sale of Other Property by Buyer is the form to use if:

The buyer is unable to buy new property unless their existing property is sold and closed

Audrey, a lessor, owns an apartment building. Unfortunately, she passes away unexpectedly. What happens to the leases of the 34 tenants in her building?

The leases remain in force

Which of the following statements is TRUE if a license holder is acting solely as a principal and selling her own home?

The license holder can use the promulgated form, but it is not required

A seller's homeowner's insurance policy is canceled at closing. What will they receive after closing for the part of their premium that was paid in advance?

a refund check

A seller MUST counter, accept, or respond to offers:

as they see fit because they are NOT required to respond

Kirpa and Tim are a married couple. Tim separately owns a property that both he and Kirpa live on for many years. Who will likely need to sign the deed at closing to sever homestead rights?

both Kirpa and Tim

What is an express contract?

contracts in which the parties explicitly state their intentions and their expectations regarding the contract and the exchange of promises

What is a novation?

creating a new contract to replace an old contract and relieve the original party from liability

If a buyer wants to show good faith, they can do it by presenting the seller with:

earnest money

The Texas Deceptive Trade Practices Act (DTPA) protects consumers against:

false and misleading statements or deceptive practices, unconscionable (inexcusable, unforgivable) actions and breaches of warranty

Which instrument of conveyance provides the homeowner with the greatest protection?

general warranty deed

If two people accidentally create a contract by their actions, what kind of contract is this?

implied contract

The statute of frauds is a state law that requires certain types of contracts to be set out:

in writing and signed by all the parties bound by the contract

Four investors agree to co-ownership of an investment property. They have arranged the ownership structure so that if one of them dies, their ownership stake passes to the remaining investors. What form of co-ownership do the investors have?

joint tenancy

A TREC amendment form serves to:

modify a fully accepted and agreed upon contract

A quitclaim deed carries:

no covenants, guarantees, or warranties

License suspension or revocation, fines, and further education requirements are all:

possible penalties TREC may impose for violating the License Act

ONLY a broker can enter into an agency relationship with a(n):

principal

An example of voluntary alienation is:

property passing to a party according to a will

Which of the following contracts is required by the statute of frauds to be in writing to be valid?

purchase contracts

The Non-Realty Items Addendum is used to provide the parties to a contract a place to negotiate and agree to non-real estate items that may be:

purchased separately from the property

Which legal concept places a limit on the amount of time that an individual has to take legal action against another individual in order to recover any losses or damages?

statue of limitations

What is option money or the option fee?

the money a buyer pays a seller for unrestricted rights to terminate the sales contract within a specified amount of days after the effective date

What is eminent domain?

the power of the state to seize a citizen's private property or rights in a property WITH compensation but without the consent of the owner

What might express agency look like?

the principal appointing the broker, and then the broker accepting that appointment either in writing or orally

Jose needs third-party financing, so he knows he will need to fill out the Third Party Financing Addendum. Jose's agent knows this addendum will address:

the six types of third-party financing

Who is responsible for writing commission checks to the brokers?

title company

What is implied agency?

when a party assumes consent to the relationship based solely upon inferences formed by the actions, conduct, and words of either or both parties.

Wes and Neil entered into an oral contract to sell a ranch. Neil agreed to pay $850,000 for the ranch. A week before the sale was to close, Neil changed his mind and rescinded the offer. What legal recourse does Wes have?

He has none because the contract was not written

Helder is a buyer who wants to breach his contract and back out of the deal, but he also doesn't want to lose money. Which of the following is most TRUE of Helder's situation?

Helder will forfeit his earnest money if he backs out

If the buyer wants to make the contract contingent upon their ability to have environmental inspections of the property, the correct way to do that is:

Attach the Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum to the offer

Condominium owners:

DO own the interior of a residential unit

A license holder can have their license suspended or revoked if they:

Failed to use a contract form required by TREC

Which of the following are major players in the secondary mortgage market?

Fannie Mae and Freddie Mac

Real estate sales agents may:

Fill in promulgated forms

What are the three parties to the deed of trust?

Borrower, lender and trustee

Jack and Jill own a property as tenants in common. Jack dies. What happens to Jack's interest in the estate?

Jack's interest will go to Jack's heirs