Promulgated Contract Forms
Fact or fiction? Factual statements simply expand on a subject elsewhere in the contract, not a new negotiation?
Fact
Who approves and promulgates Texas real estate contract forms?
Texas Real Estate Commission (TREC)
According to paragraph 18b of the contract, if no closing occurs, the title company may only deduct which expenses from the earnest money?
Unpaid expenses on behalf of the person receiving the earnest money
Paragraph 14
Condominium contract
If the seller wants to continue to show the property for back up offers the...
Contract already permits the seller to do so
What is required for an offer to become a contract?
Contract is in writing, signed and initialed, total agreement and acceptance is communicated to the other party or his or her agent
The appraisal came in too low. How does the buyer terminate the contract?
Deliver the Promulgated Notice of Buyer's Termination of contract to the seller at the methods listed n Paragraph 21 of the contract
Short Sale Addendum
Describes net proceeds and gives the seller an out if the lender won't accept the net proceeds as full payment
Paragraph 2
Different in each contract, describing the type of property that is covered
Which of the following are good risk management techniques?
Document everything, disclose everything to the lender, be sure everything is accurate on the HUD statement, if you believe your transaction is involved in illegal activity withdraw from the transaction
Many things in the contract forms take place within so many days of which date? It is important that the agent finalizing the acceptains of the contract fill that out for his broker.
Effective date
Fact or fiction? The seller conveys title with a general warranty deed, which as a guarantee limited to the time the grantor owned the property?
Fiction
Fact or fiction? The state cannot make owners remove structures that come to be on beaches due to storms and erosion
Fiction
Fact or fiction? The title company will obtain the subdivisions information first and then the required fee
Fiction
Fact or fiction? Verbal notices between parties are effective if they're communicated in person?
Fiction
When an agent receives a copy of the commitment for title insurance, what should the agent double check?
Names, legal descriptions, and reservations (all of this information)
What is the only TREC contract that talks about construction documents and cost adjustments?
New Home Contract-Incomplete
Paragraph 7 and 13
New home contracts, unimproved property contract, and farm and ranch contract
Who is required to sign the Texas Real Estate Consumer Notice (OP-I)
No one
Which paragraph is used to add factual statements or business details and desired by the principals to conform to the negotiations?
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
Where will you find the words "time is of the essence?"
Paragraph 23 and the One to Four Family Contract
The amount of option money is the decision of the...?
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
Which group administers the Real Estate License Act?
Texas Real Estate Commission
True of False? 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
What are buyers purchasing when they buy a condominium?
Unit and an undivided interest in the common areas
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)
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?
Use the TREC form OP-C, Notice to Prospective Buyer
Addendum for Coastal Area Property
Used with contracts on properties that share a boundary with the submerged lands of the state
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?
3 days
Which paragraph in the Addendum for Reservation of Oil, Gas and Other Minerals defines what the term "mineral estate" does and does not include?
A
Bilateral
A contract involves a promise exchanged for a promise (sales contracts)
Termination
A contract is fully executed (closed)
Void
A contract that doesn't meet the requirements of a valid contract
Voidable
A contract that has the essential features of a valid contract
Valid
A contract that is enforceable by the courts
Unenforceable
A contract that is not legally enforceable
Contract
A legally binding and enforceable agreement to do or not to do anything specific
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 the MLS (all of these)
Sale of Other Property Addendum
Buyer needs money from the first sale to complete the second sale, new lender requires existing loan paid in full
Who is entitled to recover reasonable attorney's fees and court costs if they are the prevailing party in a lawsuit under the TREC sales contracts?
Buyer or seller, listing broker and other broker, escrow agent (all of the above)
The buyer will receive a copy of the restrictive covenants at whose expense, according to the contract?
Buyer's
If a buyer is using VA financing what will be part of the contract?
Third Party Financing Addendum for Credit Approval
How many members are on the Broker Lawyer Committee?
13
TREC has promulgated how many contract forms?
6
Property approval, according to paragraph 4, includes which of the following things?
The appraisal, lender-required repairs, and insurability (All of these)
In a transaction a Third Party Financing Addendum says "financing approval" must be obtained within 10 days after the effective date. On the twelfth day the buyer learns the property is uninsurable and will not meet lender requirements. Which of the following statements is TRUE about this situation?
The buyer may terminate the contract and the earnest money will be refunded to the seller
Executed
The contract duties are completed by both parties (closed)
Executory
The contract was signed, but the duties are not yet complete (pending)
What does the date in the right hand corner of the contract signify?
The date on which TREC approved and promulgated the form
John terminated his contract during the option period. The seller will not release the earnest money. John sent a written demand to the escrow agent for the money and the seller sent one too. Now John is going to court. How much liquidated damages should John get according to the TREC contract?
The earnest money, 3 times the earnest money, attorney fees and all costs of the suit (all of the above)
Which TREC promulgated forms discusses the Texas Agricultural Development Districts?
The farm and ranch contract
After receiving the Commitment Exception Documents, and the survey how long does the buyer have to object?
The number of days agreed to by the parties
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 seller will be obligated to pay the rollback taxes
What does the legal description in the Residential Condominium Contract describe?
The unit, the building, city, county, and the undivided interest in the common elements
Novation
A new contract or party transfers the obligations of the first party, like an assumption with a release
Unilateral
A seller is obligated to sell, but the buyer has no obligation to buy
Assignment
A transfer of contract obligations to another party, that doesn't release the first party's obligations
Under paragraph 6E of the One to Four Family Residential Contract licensees must advise the buyer to obtain which of the following things?
Abstract of Title
Which of the following transfers contract obligations to another party but does not relieve the original party from liability?
Assignment
When is the total amount of the rent agreed to in the Seller's Temporary Residential Lease Agreement due?
At the time of funding of the sale
The only proper way to determine title to the mineral estate is to have the property records examined by which the following experts?
Attorney
What is required to execute a mutual termination of contract?
Both the buyer and the seller
Who drafts and edits Texas real estate contract forms?
Broker Lawyer Committee
A seller owns all of his minerals. If he sells his home and neither party addresses the minerals, who will own the minerals after the transaction closes?
Buyer
If the new survey is obtained by Paragraph 6C2, who will be paying for it?
Buyer
A buyer decides to exercise her right to terminate under the Third Party Financing Addendum for Credit Approval. What is the proper process?
Execute and deliver a Notice of Buyer's Termination of Contract
Fact or fiction? A survey is the only way to establish a boundary with the submerged lands of the state
Fact
Fact or fiction? All changes that were made to the original offer need to be initialed by all parties?
Fact
Fact or fiction? Title policies don't guarantee mineral rights, so the seller may not know he never acquired the mineral estate.
Fact
Fact or fiction? With the Addendum for "back-up" contract, the seller is free to continue to work with the first buyer.
Fact
Which contract provides information and details live-stock feeders and troughs?
Farm and Ranch Contract
Paragraph 3 and 6
Farm and ranch contract
Fact or fiction? In Texas, tax pro-rations are based not on current year's tax amount?
Fiction
Fact or fiction? In paragraph 9A, the parties can agree to close later than the closing date?
Fiction
Fact or fiction? The effective date of the back-up contract is the listing termination date.
Fiction
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
Statute of Limitations
Governs how long contracting parties have to file a law suit after the contract terminates
What substance is specifically excluded form the mineral estate?
Limestone
Texas is a community property state, so the title company will need to know the parties' what?
Marital status
Mary has a rental property with a two year lease on it. She collected a $500 security deposit at the beginning of the lease. Now she is selling the property. What will happen to the security deposit?
Mary wil transfer the security deposit to the buyer at closing
Addenda
Materials are added to and included in the initial contract
If the parties want to add additional items to remain with the property (that are not already listed in paragraph 2b or 2c) what is the proper form of use?
Non-Realty Items Addendum
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
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/she plans to continue with the transaction (all of these)
Consumer Information Form 1.1
Posted in each real estate office, contains information about TREC recovery funds and how to contract TREC
What is the purpose of the Real Estate License Act?
Protect the public
When must the seller permit the buyer to access the proerpty?
Reasonable times
Which of the following addenda contain the word "time is of the essence"
Sale of Other Property Addendum, Third Party Financing Addendum, Addendum for Back Up Contract. All of these
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
Option money must be delivered to the ____ or their agent within three days after the effective date of the contract.
Seller
Back Up Addendum
Seller negotiates with two buyers, terminates if the first contract doesn't terminate, buyer #2 has the next contract now in place
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?
Seven
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 expiration of the time for delivery does the seller have to terminate?
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?
Short Sale Addendum
If seller is going to furnish the existing survey, he or she must provide what other document?
T-47 Affidavit
When property owned by a married couple is being sold, what is the best way to identify the seller?
Thomas Bud Smith and spouse Mary Ann Smith
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
Which of the following statements may be the unauthorized practice of law?
You should