Promulgated Contracts 3

Your buyer clients Nina and Peter are interested in purchasing a ranch. As their agent, what should you tell them about this type of transaction?

Additional considerations may apply, including equipment, surface leases, and royalties.

Ryan is a buyer who would like to make his offer attractive to the seller. Which of the following would show his sincere intention to purchase the property?

An earnest money deposit

Casey signed a contract form offering a purchase price of $309,000 on a home, and gave his agent a $5,000 earnest money deposit. The owner is out of town and her agent can't reach her. At this point, what does Casey have?

An offer

Cindy enters into a contract to buy Jarod's home. She then transfers her right to purchase to her twin sister, Maud, for a small fee. But Maud neglects to fulfill the buyer's obligations under the contract, and Jarod is able to pursue Cindy, who's still liable. This is an example of ______.

Assignment

Hannah's buyer clients are proposing a change to the original sales contract. Who is required to sign the amendment in order to make it part of the contract?

Both parties

Chris is a broker to a transaction. He is required to complete the ______ of the TREC One to Four Family Residential Contract (Resale).

Broker Information section

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

Buyer approval

You're assisting a Texas buyer who needs to move in 15 days before closing. If the seller agrees, what form must both parties sign?

Buyer's Temporary Residential Lease

Once there is an accepted sales contract and you've filled in the effective date, what else should you do?

Call the other agent to notify him of the final acceptance

Rhonda and Jade both consider themselves to be African-American, although Rhonda has much darker skin and hair than Jade. When Rhonda went to the Valley Falls apartment manager's office to request a rental application, she was told there were no vacancies. Jade went in a day later and received an application. This may be discrimination based on _______.

Color

Valid real estate contracts must be in writing and signed by parties, contain a legal description, consideration, a lawful objective, mutual agreement, and ______.

Competent parties

Your client is selling a condominium. Which of the following forms is your client required to provide to the buyer?

Condominium Resale Certificate

In addition to providing a disclosure of any lead-based paint hazards in homes built before 1978, what must a seller's agent provide to prospective buyers?

EPA lead safety pamphlet

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

Buck and his wife, Betsy, made an offer on a home and specified in the sales contract the items on the property they want the seller to remove prior to them taking possession. These items are referred to in the Property section of the TREC One to Four Family Residential Contract (Resale) as _____________________.

Exclusions

Jan is selling her home, but she wants to keep the new refrigerator and the above ground pool. In order to do this, where should they be listed on the One to Four Family Residential Contract (Resale)?

Exclusions

The Graysons just closed on their new home. They move in tomorrow. What type of contract do the Graysons have?

Executed

Jerry and Lewis have entered into a sales contract. They're about three weeks into the transaction, with several terms of the agreement yet to be met. What type of contract do Jerry and Lewis have?

Executory

Which of the following qualifies as an example of a buyer default?

Failing to remove one or more contingencies by the agreed-upon date

What does a condominium resale certificate provide?

Financial and legal information about the condominium association

What is the purpose of TREC's Consumer Protection Notice?

Tells consumers how to submit a complaint against a license holder

The TREC Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum gives the buyers time to have an evaluation and the right to ________ if there's an adverse finding.

Terminate the contract

If a casualty loss occurs at a property and the seller refuses to restore the property to its original condition, the buyer can do which of the following?

Terminate the contract and receive their earnest money in return.

The Texas notice that advises the buyer to have the abstract or title policy examined by an attorney is required by which of the following pieces of legislation?

Texas Real Estate License Act (TRELA)

Ingo has a "Back-Up" contract with Sally, the seller. Ingo really wants the house and has put down $10,000 in earnest money. What happens if the first contract isn't terminated by the date specified in the Addendum for "Back-Up" Contract?

The "Back-Up" contract is terminated and Ingo's earnest money is refunded.

When a seller has an accepted offer from a buyer with a contingency that the buyer must sell an existing home first in order to fund the purchase, which of the following is a true statement?

The seller can accept another offer.

Sally and Jake have signed an offer to purchase a home that is still being constructed. If rollback taxes are assessed, who must pay them?

The seller pays for the whole thing.

If a checkbox isn't properly filled out, what can happen to the transaction?

The transaction can be delayed

What's providing legal advice to a client considered?

The unauthorized practice of law

What is a possibility for buyers who include a lot of contingencies in their contract offer for a property?

Their offer is less likely to get accepted.

Which of the following is a true statement about the sales contract form in Texas?

There is no one standard form in Texas for the sales contract.

If you're involved in a transaction and there isn't a promulgated form available for use, what should you do?

Use a form that's been approved by a Texas attorney.

How should a licensee identify unmarried persons buying a property together as parties on a Texas sales contract? The names of the persons are Veronica Charles and Kathy Sharpe.

Veronica Charles and Kathy Sharpe, as tenants in common

Which of the following transactions requires the use of a promulgated form?

When negotiating a contract for the sale of interest in real property

Which information is required in the Deed of Trust paragraph in the Texas Seller Financing Addendum?

Whether or not consent to property transfer is required

In the TREC One To Four Family Residential Contract (Resale), the Title Policy paragraph has checkboxes to indicate which of the following?

Whether the seller or the buyer will pay for the title policy

Jamie, a seller, deliberately hid the evidence of a termite infestation from potential buyers. Annette, his listing broker, agreed to not disclose the presence of termites in the home, even though she had seen them for herself. Jamie also paid Fred, a friend and home inspector to leave it out of his report. According to the Fraud in Real Estate and Stock Transactions Act, who is liable?

Jamie, Annette, and Fred

Joy is a licensee preparing the contract for her buyer client, who's purchasing a condominium. Which of the following is a true statement?

Joy should not use the New Home Contract (Completed Construction).

June is buying Tom's property in Texas. Who will pay for a roof inspection if June hires an inspector (who charges $300), according to the Property Condition paragraph of the TREC One To Four Family Residential Contract (Resale)?

June

Manuel and Clarissa are selling their home. They've agreed to provide the buyer with a new survey within 15 days. If the contract is executed on June 10, what is the last day they can do this?

June 25 (15 days)

Justin Time is a business name for a Texas general partnership between Justin Leung and Anne Claren. How should a licensee identify their general partnership as a party to a sales contract?

Justin Time, a Texas partnership

Kelly is selling his property and has accepted an offer from a buyer, but there's a contingency that the buyer must sell an existing home first in order to fund the purchase. Which of the following is a true statement?

Kelly can accept another offer without a contingency.

A valid contract must include which of the following elements?

Legally competent parties

Under the statute of ______, if legal remedy is sought against a person, the pursuer must bring a court action within a specified period of time.

Limitations

When a buyer takes over the seller's mortgage loan, which of the following addenda must be checked on the TREC One to Four Family Residential Sales Contract (Resale) to indicate this?

Loan Assumption Addendum

Carol and her husband, Mick, have decided that instead of taking out a loan to help finance their property purchase, they are going to take up where the seller left off on the seller's current mortgage. What type of financing is this?

Loan assumption

Per the Addendum for "Back-Up" Contract, which of the following statements about a "Back-Up" contract is true?

Neither party is required to perform under the contract until the first contract is terminated.

Nick, a Texas license holder, is helping his son, Peter, locate a home he can afford to buy and is acting as Peter's agent. Peter has found a property that he wants to make an offer on. Which of the following statements regarding this situation is true?

Nick is required to disclose his relationship to the seller in writing prior to the parties entering into the contract.

Blake, a licensee, has copied down the street address of a property from the MLS. Is this a legal description of the property?

No, a street address is not a legal description. He needs the information from a recorded plat or a metes and bounds description of the property.

As much as Angus and his wife, Stella, hated to part with the old upright piano in their basement, they knew it would be expensive to move. So when the buyers presented them with the ______ offering them $100 to include the piano in the sale of the Texas house, Angus and Stella agreed.

Non-Realty Items Addendum

The time for performing contract contingencies begins __________ the executed date.

One day after

Usually, when you help a buyer client write an offer on a property, you'll get one or two checks from them at that time. The first check is for the earnest money. Assuming that's the only earnest money check paid, then the second check is ______.

Only required in the case of an option

Sue Ellen has a contract to buy Roger's house, which she has always admired, when Roger decides he's ready to move to a senior living community. After Roger finds a suitable senior apartment and moves, Sue Ellen writes a check for the agreed-upon amount, and Roger transfers the deed to her. What is happening in this scenario?

Performance

When a contract doesn't provide specific dates for when the terms need to be met, what should the parties assume regarding performance of the contract?

Performance must take place within a "reasonable time."

Gary, the seller, has a list of repairs from the buyer that he has agreed to make. Per the TREC One To Four Family Residential Contract (Resale), when must Gary have the repairs completed?

Prior to closing

What is a restrictive covenant?

Promises that may appear on a deed, and prohibit or require specific use of the property

In what paragraph of the TREC One To Four Family Residential Contract (Resale) in Texas does the seller agree to permit the buyer and buyer's agent access to the property at reasonable times?

Property Condition

A _______ divides closing costs fairly between the buyer and seller, based on the amount each party actually owes.

Proration

Which of the following is protected under the federal Fair Housing Act?

Race

Which of these is part of the "subdivision information" as defined in the Addendum for Property Subject to Mandatory Membership in a Property Owners Association?

Resale certificate

Bryce is tired of waiting for his subcontractor to get his part of the deal done. The agreed-upon deadlines have come and gone, and Bryce is losing money waiting for the subcontractor to meet his obligations. If the subcontractor isn't going to honor his commitments, neither is Bryce. He decides to consult with his attorney and then terminate the contract. Of what is this an example?

Rescinding the contract unilaterally

Which TREC promulgated form should be used for condominium transactions?

Residential Condominium Contract (Resale)

The Texas seller must provide a survey that's acceptable to the buyer's lender and title company under the provisions of the Title Policy and Survey section of the TREC One to Four Family Residential Contract (Resale). The seller may submit an existing survey and a ______.

Residential Real Property Affidavit T-47

Properties granted agricultural exemptions are taxed at a much lower rate. If the use of the property changes to a non-agricultural use, what happens?

Rollback taxes are assessed.

Offer to purchase, sales agreement, contract of purchase and sale, and purchase agreement are other names for which of the following?

Sales contract

The _____________________ is required for homes built prior to 1978.

Seller's Disclosure of Lead-based Paint and Lead-based Paint Hazards Addendum

If the sellers don't reserve all of their interest in the mineral estate, the sellers have ______ days after the effective date of the contract to provide the buyer with the contact information of any existing mineral lessee known to the seller.

Seven

When completing a contract, which of the following is the correct way to name the seller?

Silas M. Weber, a single person

How many members does TREC appoint to the Broker-Lawyer Committee?

Six

Wynona contracted with a gutter company that advertises a "Lifetime Guarantee of Trouble-Free Gutters." The agreement is that the company will replace her gutters with premium quality seamless aluminum. After she makes payment, she learns that the new gutters are poor quality material and leak at the corners. The company refuses to remedy the situation. What can Wynona do to recoup the money she's lost?

Sue for damages

Lloyd thinks he has purchased an investment property, but the seller refuses to deliver the title to him. Lloyd has met all of his obligations per the written contract that he and the seller signed. He decides to take the seller to court in an effort to force her to hand over the title. Of what is this an example?

Suing for specific performance

Margo received a copy of the seller's disclosure notice, but she wasn't happy with what she read. She decided to terminate the agreement three days after she received the notice. Which of the following reasons should Margo check on the Notice of Buyer's Termination Contract for terminating the contract?

"Buyer elects to terminate under Paragraph 7B(2) of the contract relating to the Seller's Disclosure Notice."

Loans on unimproved land usually have a higher interest rate. What else is true?

A larger down payment is usually required.

In Texas, which of the following real estate contracts does not have to be in writing to be enforceable?

A lease that is for one year or less

Why is it so important that the legal description be captured correctly in the sales contract?

A mistake in the legal description may lead to more or less land being conveyed to the buyer than was intended.

Jose is selling his condominium. He must provide ______ to the buyer which is no more than three months old.

A resale certificate

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

Joe, the buyer, wants his offer for the new property to be contingent upon him selling his home, which is currently under contract and scheduled to close. Which form should he include with his offer?

Addendum for Sale of Other Property

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 Texas addendum should be attached to the sales contract?

Addendum for Sale of Other Property by Buyer

Texas residents Eli and Carol are buying a home built in 1964. What addendum is required by federal law?

Addendum for Seller's Disclosure of Information on Lead-Based Paint and Lead-Based Paint Hazards

Nikola is a Texas seller who agrees to allow the buyer to assume his mortgage loan. What TREC-promulgated addendum will he need if he wants to terminate the contract if his application for release of liability is not approved by closing?

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

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

Allison is helping her buyer complete a Seller Financing Addendum to a Texas sales contract. Where should she put that the buyer needs a $40,000 loan at a 6% fixed rate from the seller to be paid back in 120 monthly payments?

In the Promissory Note paragraph

All notices from one party to the other in a TREC One To Four Family Residential Contract (Resale) must be ______.

In writing

The Federal Trade Commission requires that certain information be provided to consumers who purchase new homes that are incomplete. What is it?

Information on the R-value of installed insulation

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.

Daniel knows that a recent hail storm has caused severe damage the roof of one of his listings. He decides he doesn't want to disclose this to potential buyers. Jack and Jill buy the property and later find out there was a terrible storm, and half the neighborhood had their roofs replaced. They decide to sue Daniel for fraud. Which of the following is true?

Jack and Jill must prove that Daniel intentionally deceived them.

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.

The person who or company that holds the earnest money deposit is known as ______________.

The escrow agent

In situations where a coastline property owner has been forced to remove their home by the state of Texas because the property is now located on public beach property, who or what entity covers the cost of removal?

The property owner is solely responsible for the cost of removal.

Which of the following is true about financing unimproved land?

The risk is higher, so interest rates are usually higher.

Jessica lives in Austin and attends the University of Texas. She's made a lot of friends her first year of college, and is ecstatic to be moving out of the dorms. Nine girls are looking to live in one apartment together to save their parents money. They refuse to live in a house, as they love the amenities of an apartment and "will make it work." What's the minimum number of bedrooms the apartment needs to have in order for these nine women to live together under the occupancy laws in Texas?

Three

The Texas Workforce Commission consists of how many members?

Three

What is the purpose of the Addendum for Property Subject to Mandatory Membership in a Property Owners Association?

To give buyers the opportunity to request subdivision information

What's the purpose of the Non-Realty Items Addendum in Texas?

To identify personal items of the seller's that are to remain with the property

What is the purpose of the Uniform Electronic Transactions Act?

To identify that electronic signatures are just as binding as written signatures

What's the purpose of the Condominium Resale Certificate?

To provide information about the condominium owners association fees, issues, and finances

What's the purpose of the Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners Association form?

To provide information about the property owners association fees, rules of governance, issues, and finances

The Texas Loan Assumption Addendum states, "If the ______ of all assumed loans varies in an amount greater than $500 at closing, either party may terminate this contract and the earnest money will be refunded to buyer unless the other party elects to pay the excess of variance."

Total principal balance