promulgated contracts final exam qs
At what point does an offer become a contract? After the licensee fills in all the blanks After the buyer signs it After the seller accepts the buyer's offer After the seller's acceptance is communicated back to the buyer
After the seller's acceptance is communicated back to the buyer
Seller Brittany has agreed to a contract term that allows the buyer to purchase her property within two months at an agreed upon price. Which contract feature has Brittany agreed to? Habendum clause The right of first refusal An option These types of agreements are unenforceable in the state of Texas
An option
Brittany is set to close on her new home in three days, but today she received a phone call from her agent stating that the lender needs to push closing back 7 days. What, if any, action needs to be done? Brittany's agent should submit an "Amendment to Contract" (TREC 39-7) with the new closing date to the seller's agent. Brittany's agent should call the seller's agent and notify them of the change. Brittany's agent should submit a counteroffer to the seller's agent with the new date. The lender is not a party to this contract and have no say in the terms of the contract, so no further action is necessary.
Brittany's agent should submit an "Amendment to Contract" (TREC 39-7) with the new closing date to the seller's agent.
What group has the task to draft and revise contracts and forms for use by licensees? Texas Association of REALTORS Broker-Lawyer Committee Texas Real Estate Commission Texas Association of Brokers-Lawyers
Broker-Lawyer Committee
What agreement is typically made when a buyer moves in before the actual close? Short-term lease agreement Buyer's Temporary Lease Seller's Temporary Lease The TREC promulgated purchase agreement addresses this and no further documentation is needed.
Buyer's Temporary Lease
Form 9-10 Unimproved Property Contract differs from Form 20-11 Residential Contract in that Form 9-10 covers condominiums. Form 9-10 calls for possession on the date of closing. Form 9-10 has no section to specify repairs to the property. brokers fees are listed on Form 9-10.
Form 9-10 calls for possession on the date of closing.
What is it called when all terms in a contract are agreed to by all the parties of the contract? A firm deal A concurrence An accord Mutual Assent
Mutual Assent
If a party feels he has been wronged, what law sets the deadline for initiating legal proceedings? Statute of Limitations Statute of Frauds The Deceptive Trade Practices Act The Real Estate Settlement Procedures Act
Statute of Limitations
What should a buyer do if he wants to submit an offer on a home that already has a contract on it? Submit an offer with the TREC 12-4, Submission of Secondary Offer. Submit an offer with TREC 11-7 Addendum for Back-up Contract attached. Submit a counteroffer without contingencies. Once a contract has been accepted, no other offers can be accepted.
Submit an offer with TREC 11-7 Addendum for Back-up Contract attached.
What addendum should a licensee use if a buyer needs to sell his home before closing on a second home? TREC 10-6 Addendum for Sale of Other Property by Buyer TREC 14-4 Addendum for Buyer's Contingency of Sale of Current Residence There is no promulgated addendum, the licensee should put limited details in paragraph 11 (Special Provisions) of the TREC promulgated Residential Contract. There is no promulgated addendum, the buyer should contact an attorney for proper communication.
TREC 10-6 Addendum for Sale of Other Property by Buyer
A buyer leases a property for a period of time and then exercises an option to buy. Which of the following best describes TREC's position regarding the licensee's role in the option contract? TREC discourages licensees from getting involved in the negotiations. TREC prohibits licensees from getting involved. TREC encourages licensees to negotiate these contracts. TREC takes no position on whether licensees should be involved in these contracts.
TREC discourages licensees from getting involved in the negotiations.
Which of the following TREC promulgated forms addresses a "contract for deed"? TREC 20-11 Residential Contract TREC 22-1 Land Contract and Contract for Deed TREC 26-6 - Seller Financing Addendum TREC has no promulgated form for this type of transaction.
TREC has no promulgated form for this type of transaction.
All of the following actions would be considered practicing law without a license except which one? Modify a 1997 TREC promulgated contract to fit the buyer's current scenario to purchase a property. Tell the client known facts about the property that might affect the title. Give advice about the legal consequences of the purchase. Offer a client an opinion regarding the validity of the title.
Tell the client known facts about the property that might affect the title.
What is the best solution if a situation arises and both the seller and buyer agree to alter a binding, signed Residential Contract? A new Residential Contract must be filled out, the action is called novation. The "Amendment to Contract" (TREC 39-7) must be completed and signed by both parties. A counter-contract must be agreed to by both parties and signed. No significant changes can be made on a contract that is signed.
The "Amendment to Contract" (TREC 39-7) must be completed and signed by both parties.
Who normally pays for environmental assessments? The buyer The seller The cost is divided between the buyer and seller Only the EPA requires assessments
The buyer
On Form 24-12 (New Home Contract Completed Construction), what two amounts equal the sales price? The difference between the current loan amount and the offer price The first lien and the second lien The cash the buyer is putting up plus the sum of all of the financing It depends upon the ratios set by the lender
The cash the buyer is putting up plus the sum of all of the financing
If a loan is assumed by a buyer, what happens to any escrow accounts associated with the property? The escrow accounts will be returned to the seller. With an assumption, there are no prorations of escrow accounts. The escrow accounts will be prorated between the buyer and seller depending upon the date of sale. The escrow accounts will be transferred to the buyer assuming the loan.
The escrow accounts will be transferred to the buyer assuming the loan.
For a short sale to go through, who must give approval? The buyer's lender The lender holding the current mortgage. The title officer The underwriter
The lender holding the current mortgage
How can a licensee determine the terms of the buyer's loan when completing Form 40-5 Third Party Financing Addendum for Credit Approval? The licensee can use the buyer's income and expenses to determine what the buyer can afford. The lender will provide this information after negotiations with the buyer. The buyer tells the licensee what loan terms are acceptable and this information is given to the lender. There is a standard chart the licensee can use.
The lender will provide this information after negotiations with the buyer.
According to TREC Residential Contract, who is to advise the buyer to have an attorney examine the abstract or obtain a title policy? The licensee The seller The title officer No one is required
The licensee
Who is responsible for making sure all applicable addenda have been included with a sales contract? The licensee The buyer The closing agent The TREC
The licensee
What is the effective date of the contract? The date the buyer's option terminates if no additional contingencies exist. The date the offer was originally written. Upon the seller's acceptance and communication of that acceptance to the buyer. The date the contract closes and funds.
Upon the seller's acceptance and communication of that acceptance to the buyer.
Under TRELA, a licensee will not be in violation of practicing law without a license if she writes a real estate contract. fills in the blanks on a standardized contract. offers professional advice on Texas real estate law. revises promulgated contracts.
fills in the blanks on a standardized contract.
To write a legal description for a large ranch, the licensee would want to use the triangular survey method. want to use the metes and bounds survey method. want to use the lot, block subdivision survey method. probably have to attach an addendum to completely describe the property.
probably have to attach an addendum to completely describe the property.
A seller can have another party assume her loan if the title has an assumption clause. the property currently appraises at or above the current loan amount. the current owner remains liable for the loan. the lender allows it.
the lender allows it.
TREC 12-3 Addendum for Release of Liability on Assumption is used when a buyer wishes to assume a loan and if the assumption is qualifying. if the assumption is non-qualifying. the seller wants to be released from any further liability. the lender demands release of their liability on the current and/or future mortgages.
the seller wants to be released from any further liability.
A broker could receive a fee from a Residential Service Company (RSC) for providing information such as the size and brand of the hot water heater. the buyer's work history and credit worthiness. demographics of the subject household and surrounding neighborhood. active and sold comparable properties in the area.
the size and brand of the hot water heater.
One reason that a survey may not be required in a conventional transaction is because they are very expensive. they require final approval by the Texas Commission of Land Grants. they are based on dated land grant maps and abstracts that use varas and leagues. they are extremely inaccurate.
they are very expensive.
Loan origination charges are not allowed on government backed loans. are prohibited to exceed 1% of the loan amount on all FHA or VA loans. are rarely charged. vary from lender to lender.
vary from lender to lender.
According to the TREC OP-L - Addendum for Seller's Disclosure of Information on Lead-Based Paint, how many days from the effective date of the contract does the buyer have to get the property inspected? 10 days 14 days 21 days 30 days
10 days
If a home is built prior to what year does it trigger the mandatory disclosure on lead based paint? 1972 1978 1982 1986
1978
On the TREC promulgated New Home Contract - Incomplete Construction (23-12), how is the commission paid to the broker to be handled? By a separate written agreement. Fill in paragraph eight (8) in its entirety. Mark the "Commission's are negotiable" box in paragraph eight (8) and then write in paragraph eleven (11) the terms of the commission agreement. It is not addressed in this contract because commissions are regulated by the TREC
By a separate written agreement.
What is added to Form 25-9 (Farm and Ranch Contract) in paragraph 3 that does not appear on Form 20-11 (Residential Contract)? Cash portion of Sales Price Sales price adjustment Sales price Sum of all financing
Cash portion of Sales Price
What paragraph of Form 24-12 (New Home Contract Completed Construction) deals with property damage? 6. Title Policy and Survey D. Objections 16. Escrow D. Damages 7. Property Condition F. Completion of Repairs, Treatments and Improvements 14. Casualty loss
Casualty loss
What term describes the status of a sales contract from the time of the contract's signing to the day of closing? Executory Executed Valid Breached
Executory
What action by an owner may be a violation of federal wetland laws? Landscaping with flora native to the area Filing an affidavit of protest with the state of Texas Filling in areas with topsoil Occupying a pre-existing home in a designated wetland
Filling in areas with topsoil
What should the licensee do with the TREC OP-C - Notice to Prospective Buyer form? Give a copy to the seller and the original to the buyer. Give a copy to the buyer and the original to the seller. Give a copy to the buyer and retain the original in file. Give a copy to the seller and retain the original in file.
Give a copy to the buyer and retain the original in file.
What is the name of the 1,300 mile canal that runs from Brownsville, Texas to St. Mark's, Florida? Texas/Florida Trans State Water Channel Brownsville Inland Waterway Gulf Intracoastal Waterway Strait of St. Marks
Gulf Intracoastal Waterway
What is the purpose of the TREC OP-K - Information About Brokerage Services form? It allows the seller or the buyer and the broker to agree upon the services that are to be provided. Informing the buyer and seller as to the function of the licensee in terms of agency. It provides information to the buyer and seller about the brokerage services available. It describes the relationship between the brokerage company and the salesperson.
Informing the buyer and seller as to the function of the licensee in terms of agency.
Which of the following is the best definition of an executory contract? It is a contract that is pre-foreclosure, that must have the judge sign off on the sale. It is a contract in which the buyer has a certain number of days to unilaterally terminate the contract. It is a contract in which the possession date and ownership transfer date are significantly different. It is a contract that requires the execution of actions by one or both parties.
It is a contract in which the possession date and ownership transfer date are significantly different.
What are the four basic elements of a bilateral contract? Mutual assent, Competent parties, Consideration and Legal objective Offer, Counter offer, Agreement and Close Agreement, Earnest money, Must be at least 18 years of age and the purpose of the contract must be legal Must be in writing, Cannot violate a law, Legal consideration and a Meeting of the minds must occur
Mutual assent, Competent parties, Consideration and Legal objective
Who should sign the TREC OP-I - Texas Real Estate Consumer Notice Concerning Hazards or Deficiencies form? The seller The buyer Both the seller and buyer Neither the buyer nor seller
Neither the buyer nor seller
If a home is being leased back to the seller under TREC 16-5 - Buyer's Temporary Residential Lease, when does the lease commence? No more than 90 days prior to closing, depending upon the agreement At closing and funding After the buyer alienates the property When the buyer takes possession
No more than 90 days prior to closing, depending upon the agreement
What is not an option on the TREC OP-K - Information About Brokerage Services form? Representing the buyer Representing the owner Intermediary Non-agency
Non-agency
Who signs TREC 38-4 Notice of Buyer's Termination of Contract? The buyer and seller Buyer, seller, lender and title officer Only the buyer Only the seller
Only the buyer
Which of the following contract terms is designed to create an action? Open Straight Working Performance
Performance
In what paragraph of Form 30-10 - Residential Condominium Contract would you find items dealing with improvements? Property Condition Property and Condominium Documents Title Policy Special Provisions
Property and Condominium Documents
What is the probably best action a seller can take if he or she wants to take a fixture prior to closing? Mark the item with a tag that states that the item does not convey. List the item in the remarks section of the MLS as not conveying. Place a notice on the inside of the front door telling any potential buyers that the item does not convey. Remove the item prior to any showings.
Remove the item prior to any showings.
What paragraph of Form 30-10 - Residential Condominium Contract deals with requiring the buyer to pay for any deposits mandated by the Association? Closing Prorations Escrow Settlement and Other Expenses
Settlement and Other Expenses
When a transfer fee is enforced, who receives the payment? The owner of the property The state of Texas The homeowners association The original creator of the covenant
The original creator of the covenant
Which of the following transactions would use Form 9-10, Unimproved Property Contract? The sale of a condominium The sale of a spec home The sale of land with no utilities The sale of an office building
The sale of a spec home
What does the use of the TREC OP-H Seller's Disclosure of Property Condition form facilitate? The transition of possession between the buyer and seller The disclosure of any structural defects that are in need of repair that exceed 5% of the sales price. The seller meeting regulations concerning the disclosure of the condition of the property The prioritized repair agreement between the buyer and the seller.
The seller meeting regulations concerning the disclosure of the condition of the property
What can be done if a seller needs extra time and wants to remain in the home past the closing date? The seller should ask the buyer for permission and correct the closing date on the contract. The seller should ask the buyer for permission and both should sign a temporary lease. The buyer's agent should protect their client's interest and not agree to any extension of possession. Once the contract reaches the final stages of closing, this type of request would not be allowed by the underwriter.
The seller should ask the buyer for permission and both should sign a temporary lease.
What happens to the penalty funds collected from transfer fee violators? They are placed in the general revenue fund of the State. They are placed in the HUD general revenue fund. They are placed in the Real Estate Recovery Fund. They are placed in a holding account to distribute to the victims.
They are placed in the general revenue fund of the State.
On the TREC promulgated Unimproved Property Contract, in what paragraph would you find information regarding potential annexation? Casualty Loss Title Policy and Survey Property Condition Default
Title Policy and Survey
Which of the following statements best defines "promulgate"? To disperse To define a code of conduct To officially publish rules To disseminate
To officially publish rules
In which of the following situations would a temporary lease be inappropriate? When the seller stays in the property for three days after closing. When the buyer moves in the week prior to the closing date. When the seller needs the weekend after closing to finish moving. When the buyer moves in six months prior to the closing.
When the seller needs the weekend after closing to finish moving.
When should the TREC OP-M - Non-Realty Items Addendum be used? When the seller agrees to leave certain personal items. When the seller wants to retain certain items that are attached to the real property. When the seller wants to disclose to the buyer certain property conditions. When the seller must replace certain items on the property listed on the OP-M form.
When the seller wants to retain certain items that are attached to the real property.
Which of the following transactions require a TREC OP-H - Seller's Disclosure of Property Condition, to be provided? When the transfer is the result of a divorce. When the transfer is from a professional investor in real estate. When the property is taken by a trustee in a bankruptcy. When the transfer is handled by an executor.
When the transfer is from a professional investor in real estate.
Which of the following is the worst action for a licensee in regards to mineral rights? Using TREC 44-1 Addendum for Reservation of Oil, Gas and Other Minerals to deal with mineral rights. Writing the terms of the agreement into the special provisions section of the TREC Residential Contract. Asking his or her broker for direction on the best course of action. Advising the client to seek legal counsel.
Writing the terms of the agreement into the special provisions section of the TREC Residential Contract.
Novation occurs when a current contract is substituted with a new contract. something in a contract still needs to be executed. a buyer transfers his or her rights to a contract to another. two contracts are valid simultaneously.
a current contract is substituted with a new contract.
According to the Texas Real Estate Commission (TREC) a listing contract must contain a notice that it was prepared by an attorney licensed in the state of Texas. disclosure about representation of clients. a disclaimer saying that the form was not promulgated by Texas. a provision informing the parties to the contract that real estate commissions are negotiable.
a notice that it was prepared by an attorney licensed in the state of Texas.
Due to _________________ property purchased along the coastline can change. the Realignment Act of 2011 land disputes the lasting effects of Hurricane Katrina erosion
erosion
In a short sale, if the buyer is notified of the bank's approval before the date written paragraph (D) on TREC 45-1 - Short Sale Addendum, the effective date of the contract remains unchanged. is amended to the date of the original agreement or to the date of the lender's approval, whichever is sooner. is amended to the date of notification. the original contract would not have had an effective date due to the fact it is contingent upon the lender's approval.
is amended to the date of notification.
All oil, gas, and other minerals in or under a property, including any royalties, production and drilling rights, lease payments and all related benefits are known as a seller's mineral estate. subsurface rights. real property. real estate.
mineral estate.
TREC 37-4 Subdivision Information is used to notify the HOA of the new buyer's contact and financial information. request information from the HOA to give to the buyer. notify the title company that a HOA is present in this transaction and Declaration documents must be signed at closing. provide the lender with information on HOA regulations that may affect the position of the lender's mortgage.
request information from the HOA to give to the buyer.
A Residential Service Company provides maintenance and staging for vacant homes during their marketing time. sells warranties to owners, covering any repairs on listed items in the home for a pre-determined length of time. provides brokerage services to owners of residential properties. is a select group of lawyers that work on behalf of buyers if the property they purchased does not meet acceptable standards.
sells warranties to owners, covering any repairs on listed items in the home for a pre-determined length of time.
Consideration is also known as earnest money. something in exchange for something else. option money. lis pendens.
something in exchange for something else.
TREC No. 10-6 Addendum for Sale of Other Buyer Property by Buyer is used when the mortgage lender requires a larger downpayment. the buyer needs a co-signer. the buyer must sell his current home before closing on his contract. the seller needs to lease back the home after closing.
the buyer must sell his current home before closing on his contract.
In completing a sales contract, the sale price should equal the market price. the down payment added to any loans. .the appraised value. the loan amount and closing costs.
the down payment added to any loans.