Promulgated forms

Which of the following elements is always required for a real estate contract to be valid?

Consideration

In which section of the TREC One to Four Family Residential Contract (Resale) do buyers indicate the price they're offering for the property?

Sales Price section

What is a short sale in Texas?

A transaction in which the sales proceeds will not be sufficient to pay off the seller's loan obligations, plus closing costs

You're working with buyers who won't be able to buy the new property unless they can sell and close on their current property. What addendum do you need to help your client complete and attach to the sales contract?

Addendum for Sale of Other Property by Buyer

Which of these scenarios is an example of the buyer potentially defaulting on a contract?

Failing to return the signed copy of the received seller's disclosure of property condition within the agreed-upon time frame The buyer must make sure to return the fully signed copy of the seller's disclosure of property condition within the agreed-upon time frame.

What does "time is of the essence" mean in the Addendum for Sale of Other Property by Buyer?

Failure to act within the time required constitutes a breach of contract

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

Herbert is selling his 1980 single-family home in Texas, which he purchased from the original owner in 1995. Which of the following must he provide to any potential buyers?

Seller's Disclosure Notice

Janet has signed an offer to purchase a parcel of unimproved property. In the property condition section of the offer, she stipulated that she accepts the property "as is." Which of the following is true?

She can inspect it and still negotiate repairs and treatments. Buyers can still inspect the property and negotiate for any required repairs or treatments, regardless of which box they check in the property condition section.

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)

Which of the following entities promulgates forms for Texas licensees?

TREC

Which entity was formed for the purpose of enforcing the Real Estate Dealers Act in Texas?

TREC TREC was formed 10 years after the real estate license law known at the time as the Real Estate Dealers Act was established. Today TREC enforces the laws of the Texas Real Estate License Act (TRELA).

Texas licensee Alexandra is helping her clients, the Kents, fill out the Sales Price section of the TREC One to Four Family Residential Contract (Resale). What amount will they put in this space?

The Kents' purchase offer

Finn Tutul is applying for FHA financing. Based on this, you know that he will need to use which addendum to the TREC One to Four Family Residential Contract (Resale)?

Third Party Financing Addendum

Approval for financing as described in the TREC Third Party Financing Addendum will be deemed to have been obtained when ______ are obtained.

Buyer approval and property approval

Which type of document is provided to the consumer to notify them that a recovery fund is available, should they be unable to collect a judgment against a licensee?

Consumer disclosure

The purpose of promulgated forms in Texas is ______.

To make contractual terms crystal clear to the parties involved and to protect the parties involved

Why is it important for the parties to read and understand the default section of the Texas sales contract?

To understand what happens in the event of a contract failing

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

When negotiating a contract for the sale of interest in real property In most cases, you'll use a TREC promulgated contract when you're negotiating a contract for the sale, exchange, option, lease, or rental of any interest in real property.

The Addendum for Property Subject to Mandatory Membership in a Property Owners Association is meant to do which of the following?

Make buyers aware of the CC&Rs that govern the neighborhood of the house they're purchasing

In a condominium transaction, which of the following is true?

The buyer pays for a portion of the transfer fees up to a specific amount, and the seller pays the remainder.

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.

In which section of the Unimproved Property contract do buyers indicate the amount of earnest money they're putting down?

Earnest Money section

Which of the following is the committee that is responsible for drafting and revising contract forms for TREC?

The Broker-Lawyer Committee

When his contract to buy a hip downtown penthouse condo fell through, buyer Kevin submitted a request to the escrow agent to release the earnest money to him. If seller Anita doesn't feel Kevin's request is warranted, she has ______ days to formally object.

15

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

Your seller client must include a lead-based paint disclosure if her home was built prior to ______.

1978

The maximum term that a Texas buyer may lease from a seller under the buyer's temporary residential lease is ______.

90 days

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 An addendum is an addition to an existing sales contract. It may be added without changing other terms already agreed upon in the contract. In this situation, Kimmy will have her clients complete the Non-Realty Items Addendum.

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

A larger down payment is usually required.

Abegayle is meeting with her banker to discuss financing 50 acres of unimproved land. Which of the following can she expect?

A larger down payment will be required.

Texas buyer Lydia has opted to have the seller reimburse her for insurance that protects her if something goes wrong with any of the home's major systems or appliances. ______ provides this type of insurance.

A residential service contract A residential service contract (also known as a homeowners warranty) provides this type of protection. Before opting to purchase the insurance, the buyer should review the contract for the scope of coverage, exclusions, and limitations.

Martina is buying five acres of unimproved land on which to build a home. The property was part of a large family farm for the last 150 years. Which of the following is true?

A substantially larger down payment will be required than if there were structures on the land.

Items that aren't attached permanently to the real property but are assumed to belong to the house, such as draperies, fireplace inserts and screens, and above-ground swimming pools, are referred to in the Property section of the TREC residential One to Four Family (resale) contract as ______.

Accessories These are all examples of accessories, which, unless they are explicitly excluded, must remain with the house

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

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

Which of the following statements about obtaining a property survey for the title company and lender in Texas is true under the terms of the TREC One to Four Family Residential Contract (Resale)?

An existing survey may be used if it's accompanied by a Residential Real Property T-47 affidavit.

Per the Addendum for Property Subject to Mandatory Membership in a Property Owners Association form, who pays any deposits for reserves that might be required by the property owners association?

Buyer

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

Judy and Dave Foster, a married couple, are buying their first home. What is the correct way to name these parties on the contract?

Dave P. Foster, and wife, Judy A. Foster.

You represent Kevin, who is buying a home and must complete the Addendum for Sale of Other Property by Buyer. The form includes the following phrase: "Time is of the essence." You correctly advise Kevin that this phrase means ______.

Failure to act within the time required constitutes a breach of contract. Time is of the essence means that performance by one party at or within the period specified in the contract is necessary to enable that party to require performance by the other party. Failure to act within the required time is a breach of contract.

Glynnis is ready to close on her new house, but her agent told her that they have to wait for the homeowner to fix the electrical box as agreed. What clause in her contract allowed her to request the repair?

Inspection contingency

Susie, a Texas broker, has received written consent from the two parties she is representing. She represents both the buyer and the seller as their broker for a current transaction, which means that she is acting as a(n) ______.

Intermediary

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

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 divorced from one another. Kathleen Leary and Trent Carpenter are married. Kathleen Leary and Trent Carpenter are partners. Kathleen Leary and Trent Carpenter are unmarried persons buying a property together.

Kathleen Leary and Trent Carpenter are unmarried persons buying a property together.

Gavin, an investor, secures an owner-occupied loan at a much lower rate than the general public is allowed, yet never plans to live in the property. Gavin is committing ______.

Mortgage fraud Gavin is committing mortgage fraud by not intending to live at the property, because that's required with an owner-occupied loan.

Kyle and his brother, Bob, have been raising their four young nephews since the children's mother was killed in a car accident. What is the fewest number of bedrooms Kyle and Bob may have in an apartment they rent in Texas?

One bedroom Three adults per bedroom is the occupancy limit in Texas, as established by the Texas Landlord and Tenant Act. Texas doesn't have any limitations on the number of children allowed per bedroom.

When can specific performance be enforced under a sales contract?

One party didn't meet the terms of the contract in the specified timeframe, and is now being required to do exactly what was agreed to in the contract.

When does substantial performance of a contract occur?

One party has met most but not all of the terms specified in the contract, and may be required to pay damages for the terms not met. Substantial performance of a contract occurs when one party has met most, but not all, of the terms specified in the contract and may be required to pay damages for the terms not met.

Which party can provide a legal description of the property?

Seller A legal description of the property can be found in the deed or owner's title policy which the seller can provide to the buyer or the agents.

Because there were no deadlines specified in the contract, Myron didn't think there was a problem if he waited to apply for a loan to help purchase the property. He was therefore a little surprised and not very happy when the seller sued him for breach of contract, stating that the delay was impacting the seller's ability to purchase a new home. What did Myron fail to do?

Perform his contractual obligations within a reasonable time.

Which statement best describes your responsibility when presenting offers to a client?

Present all offers in a timely manner.

Which document that must have been prepared within the last three months must the seller of a condominium unit supply to a buyer?

Resale certificate The seller of a condominium unit must provide buyers with copies of condominium documents and a resale certificate that is no more than three months old. The resale certificate provides information on the first right of refusal, assessments, outstanding association dues for the property, planned capital expenditures, financials, pending lawsuits, and more.

TREC has the authority to ________________________.

Revoke or suspend an agent's or broker's license

Your client's net proceeds at closing will be inadequate to pay the balance of the seller's mortgage loan. Which form will you help your client complete as part of the sales transaction?

Short Sale Addendum Before your client can sell his property as a short sale transaction, he will need the consent, approval, and cooperation of the lender. The Short Sale Addendum is used to give notice to potential buyers that the sale of the property is contingent upon the seller obtaining the lender's consent and approval.

The property that the Lincolns are interested in purchasing is subject to mandatory membership in the subdivision's homeowners association. If the Lincolns request more information about the subdivision, what form will they receive from the property owners association?

Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners Association The property owners association will provide the buyer with the Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owners Association form.

The seller and the buyer have agreed to make a change to the sales price of the Texas property. Which of the following will be used to indicate the change?

TREC Amendment form

In a short sale, what happens if the lienholder refuses or withdraws their consent prior to closing or funding?

The contract is terminated and the buyer's earnest money is refunded. If the lienholder refuses to provide its consent and agreement, the seller must immediately notify the buyer. Without the lienholder's consent and agreement, the contract must be terminated and the earnest money returned to the buyer.

Real estate professionals handle many documents related to real estate transactions. Which one of the items listed below is one of the most important in detecting mortgage fraud?

The original sales agreement and any addenda

Janie is buying MayAnn's home. Janie has just learned that the closing costs are going to be $6,400. Janie agreed to pay $5,800 in the agreement. Janie can terminate the contract, but only if ________________________________.

The seller refuses to pay the excess amount If any expense to be paid by one party exceeds the agreed-upon amount stated in the contract, that party can terminate the agreement unless the other party agrees to pay the excess amount.

What is a representation, according to the TREC sales contract in Texas?

The statements included throughout the sales contract Representations are statements included in the sales contract. Representations, along with any covenants or warranties that are made, continue beyond the closing date.

Nancy wants to buy unimproved land in Texas. When she contacted her lender, she was surprised to find that she would need a 40% down payment. Why is that?

There is more risk financing unimproved land. There is greater risk involved in financing unimproved land. The higher down payment helps to ensure that borrowers have more "skin in the game," and are therefore less likely to walk away from the investment and the loan.

Janice and Tim have decided to sell their home, located right outside of Dallas. It's been one year since their son committed suicide, and while they're apprehensive, they're ready to move to another home that doesn't represent so much pain. As they complete the seller disclosure form, you inform them that ______.

They do not need to disclose their son's suicide, unless they want to, because it's not required under Texas law.

Alex and Olivia Benson are buying a home using an FHA loan. What type of financing addendum will they need to check in the Sales Price section of the TREC One to Four Family Residential Contract (Resale)?

Third Party Financing Addendum

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 This section may be used to clarify facts of the contract. It's not to be used in place of a promulgated form, if one exists to cover the situation.

What is the purpose of the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway

To disclose the legal and economic risks associated with purchasing coastal real property near a beach

What is the purpose of the Addendum for Sale of Other Property by Buyer?

To disclose to the seller that the buyer has a contingency to sell their current property

Which of the following actions is a violation of TREC rules regarding addenda?

Writing something in the Special Provisions of a TREC contract if there is a TREC addendum form that can be used

Donald Lee's best friend, Jake, is helping him look for a house in Dallas. It just so happens that one he listed just yesterday might be the perfect fit for Donald and his girlfriend. Can Jake show a house that he has listed with another client to his new client and friend Donald?

Yes, Jake will need to follow all of the requirements to act as an intermediary. Jake can represent both Donald and the seller in this transaction, provided they follow the requirements of an intermediary brokerage.

Is there a designated area for the broker information in the TREC One to Four Family Residential Contract (Resale)?

Yes, this information is required on page ten of this contract. The broker information is required on page ten of the TREC One To Four Family Residential Contract (Resale).