Texas Promulgated Contract Forms
2 What is it called when two or more real estate companies refuse, as a group, to show and sell another real estate companies' listings?
Boycotting
1 Consideration is also known as what?
Something in exchange for something else
2 An initial counteroffer would be best described as what?
The seller's offer to buyer
3 When are keys to the property given to the new buyer?
Upon closing and funding
3 In which of the following situations would a temporary lease be inappropriate?
When the buyer moves in six months prior to the closing date
3 When can a seller have another party assume their loan?
When the lender allows it
1 Who is responsible for making sure all applicable addenda have been included with the contract?
You are, the clients agent
2 Once a contract is signed, how many days are there for automatic recission?
Zero
2 SCENARIO BASED LEARNING #1 ASSESSMENT By modifying the previous contract, the broker now would be in violation for _________________________. a practicing law b not disclosing that he modified the form c copyright infringement d the broker would not be in violation
a practicing law
2 Which of the following is a real estate agent allowed to do? a Practice law, on a limited basis b Give legal advice to represented clients c Give advice as to the pricing of an owner's property d Discourage any principal from employing a lawyer
c Give advice as to the pricing of an owner's property
1 How many amendments are allowed on a valid contract? a No more than two without a rewrite b Only one c Multiple d Amendments are not allowed after 10 days after acceptance
c Multiple
1 What repairs might be noted on the Texas Real Estate Commission Amendment to Contract? a Swimming pool has missing tiles that are to be replaced b The sink in the main bathroom is cracked and is to be replaced. c Fix leaky pipe in the laundry room d All of the above
d All of the above
2 Which of the following is an exemption to a real estate agent using Texas Real Estate Commission promulgated forms? a A form directed to be used by a new home builder b A form directed to be used by a land developer c Commercial real estate forms d All of the above
d All of the above
2 What is the maximum amount of commission allowed by law? a 18% b 6 % c 1% of sales price d No limit
d No limit
2 Which of the following statements is FALSE regarding reformation? a The written agreement is changed to reflect the parties' original understanding b It is granted only if one party was unaware that the writing did not conform to the actual agreement. c The agreement may be rewritten d One of the parties assigned his duties under the contract to a third party
d One of the parties assigned his duties under contract to a third party
2 When can an agent use their own forms in a transaction?
when they are buying properties for themselves
1 What is the legal age in Texas to enter into a valid, binding contract? a 17 b 18 c 21 d Any age
b 18
1 Fraud in a contract makes it what?
Voidable
2 At what point does an offer become a contract?
When all parties have signed/initialed the contracts and both parties have been notified
2 Which of the following statements is true regarding offers? a if the seller's counter-offer is rejected, the seller can then accept the original offer. b Acceptance of most of the contract terms creates an implied contract c The buyer may withdraw his offer any time prior to acceptance by the seller d Oral acceptance in the presence of a witness binds the parties until the written signatures can be obtained
c The buyer may withdraw his offer any time prior to acceptance by the seller
1 The Texas Real Estate License Act was formerly known as a the Texas Agent Licensing Law b the Real Estate Broker Act c the Real Estate Dealer's License Act. d the Real Estate Licensing and Regulation Act.
c the Real Estate Dealer's License Act
2 The Broker - Lawyer Committee is made up of a 4 lawyers, 4 brokers, and two members of the public b 6 lawyers and 5 brokers c 3 lawyers, 3 brokers, and 3 public members d 6 lawyers, 6 brokers, and one member of the public
d 6 lawyers , 6 brokers, and one member of the public
1 What damages could a seller possibly claim if the buyer is in breach of contract? a Loss of Marketing time b Any fees actually paid c Mental Duress d All of the above
d All of the above
1 What might be a reason for the necessity to change the closing date of a contract? a The repairs will take longer than anticpated b The seller needs more time to find another home c The buyer cannot get out of his or her lease d All of the above
d All of the above
2 What is another term for "rewritten"? a Rescission b Revocation c Renunciation d Reformation
d Reformation
1 How difficult was the real estate license to acquire prior to the 1930's? a There were only 50 questions and all were true/false b The same test as today, with updates c The test was based on practical experience, not questions. d There was no test
d there was no test
1 What is the minimum age a person must have attained to be of legal age in Texas?
18
2 In what year was TRELA written?
1939
3 Which FHA loan is typically the lowest down payment loan for a buyer?
203 (b)
2 Maria, a licensed real estate professional is working with Juan and Augustina, who are buyers. Juan wants Maria's opinion on whether or not she thinks the title is valid. What should Maria do?
Advise Juan to call the title company or his favorite attorney for this type of advise
2 How is the effective date of the contract determined?
After both parties have signed / initialed the contract and all parties have been notified of such
1 What are the four basic elements of a contract?
Agreement Competency Consideration Legal Objective
1 Alicia 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 seven days. What, if any, action needs to be done?
Alicia's agent should submit an "Amendment to Contract" with the new closing date to the seller's agent.
1 What is misrepresentation?
An error
1 What is it called when someone listens to both sides of the situation and makes a decision?
Arbitration
1 What determines whether someone is a competent party?
At least 18 years of age Mentally competent Cannot be temporary incompetent
1 In completing a sales contract, the sale price should equal what?
Both the down payment and the loan amount are added together
2 Which group has the task to draft and revise contracts and forms for use by agents?
Broker - Lawyer - Committee
1 Which item cannot be changed or modified by completing the Amendment form?
Brokerage fee (commission)
1 What form is used when the buyer wants to cancel the contract?
Buyer's termination of contract
1 To make a valid contract, there must be four elements including Agreement, Competent Parties and Legal objective. Which one is missing?
Consideration
1 What are some examples of discharging a contract?
Contract could not be accomplished legally, fraud or some action of the law.
1 What is the definition of an executory contract?
Contract for deed lease option purchase option longer than 180 days
2 What is contract recission?
Contract is completely canceled
1 What does the Four Corners Doctrine direct a judge to look at?
Document as a whole
1 What type of contract is it when two parties agree to and then sign it?
Executed
2 Under the Texas Real Estate License Act (TRELA), a real estate agent will not be in violation of practicing law without a license if they do what?
Fills in the blanks on a standardized contract
1 How long is the Statute of Limitations for a written contract in Texas?
Four years
1 How long is the Statute of Limitations for an oral contract in Texas?
Four years
3 There may be some private transfer fees that will continue, assuming they were created on, or before, what date?
January 31st, 2012
2 What are some things you can do to avoid common contract mistakes?
Keep the contract neat Fill in all blanks correctly Use full names for the buyer and seller
2 What are some actions that would be considered practicing law without a license?
Modifying a 2012 TREC promulgated contract to fit the buyer's current situation Giving advice about the legal consequences of the purchase Offering a client an option regarding the validity of a title
3 What do the letters MUD stand for?
Municipal Utility District
1 What is it called when all terms in a contract are agreed to by all parties of the contract?
Mutual Agreement
2 What is it called when two or more real estate companies work together to conspire to charge the same commission?
Price fixing
2 Who authorizes a licensee to strike information from a contract?
Principal to the transaction
2 What is the primary purpose of TREC?
Protect the public
2 What is the main law that governs the real estate industry?
Real Estate License Act
3 If your client is not married, what do you write after their name on the contract?
Single Person
2 Which paragraph in the One to Four Family Residential Contract (Resale), typically creates the potential for legal problems for an agent?
Special Provisions
3 Which paragraph in the One to Four Family Residential Contract (Resale) is used to put in items that have no other paragraph or addendum that can address them?
Special Provisions
1 If a party feels they have been wronged, what law sets the length of time they are allowed to bring a civil lawsuit?
Statute of Limitations
2 What can TREC do if a real estate agent fails to use a required contract form?
Suspend the agent's license
3 Who promulgates contracts for real estate agents to use?
TREC
2 All of the following actions would be considered practicing law without a license except which one?
Tell the client known facts about the property that might affect the title
1 What group administers the Texas Real Estate License Act?
Texas Real Estate Commission TREC
3 What is probably the best action a seller can take if they want to take a ceiling fan with them prior to closing?
Remove any item prior to any showings
2 Which of the following forms are NOT promulgated by TREC?
Residential Listing Agreement
3 According to the One to Four Family Residential Contract (Resale), who is to advise the buyer to have an attorney examine the abstract or obtain a title policy?
The agent
1 What is the best solution to solve a situation when the seller and buyer agree to alter a binding One to Four Family Residential Contract (Resale)?
The amendment must be completed and signed by both parties
2 Which of the following is an exception to an agent using a TREC promulgated form?
The form is prepared and required by the property owner
2 Which of the following is an exception to an agent using a TREC promulgated form?
The form is prepared and required by the property owner.
1 How can an agent determine the terms of the buyer's loan when completing the Third Party Financing Addendum?
The lender will provide this information after negotiations with the buyer
1 Who fills out the Seller's Disclosure Notice?
The seller
3 What happens to the penalty funds collected from transfer fee violators?
They are placed in the general revenue fund of the state
2 How many total members are on the Broker-Lawyer Committee?
Thirteen
1 What is a court's primary objective when interpreting a contract?
To ascertain and give effect to the intent of the parties
1 What is durress?
Use of force
2 If a seller changes one item on an offer, what does that offer become?
Rejection of the entire offer
3 Using the One to Four Family Residential Contract - (Resale), who is required to pay for the title insurance Policy?
It is negotiable
3 Suppose a buyer was willing to offer a seller $300,000 on a property with a first lien of $215,000 and a second lien of $70,000, with $15,000 as a down payment. What would the license put in the sum of the financing paragraph of the One to Four Family Residential Contract (Resale)?
$285,000
1 What legal status does a void contract have
A contract that never existed
3 The TREC One to Four Family Residential Contract (Resale) should be used in which of the following transactions?
A duplex
2 Which of the following statements best defines "promulgated"?
A form that has been made public and its use mandated
2 Which of the following types of sellers would most likely use a contract prepared by an attorney?
A new home builder
2 To be an acceptable listing contract, TREC requires that the listing form contain what items?
A provision informing the parties to the contract that commissions are negotiable
3 What is the Seller's Disclosure Notice?
A statement of the items and systems a property has and whether those work properly or not
3 What is the difference between a title policy and a title commitment?
A title commitment is issued prior to closing to describe the items on the title policy which will be issued after closing.
3 Private transfer fees are considered what?
Not binding or enforceable
3 What is the purpose of paragraph 6.D, in the One to Four Family Residential Contract (Resale)
Objections
3 What are the ramifications if an owner does not pay the mandatory Homeowners Association dues?
The association could file a lien and there is the possibility of foreclosure
2 When does a purchase agreement become binding if both parties have signed and both parties have been notified? a At that time b 3 days c 7 days d 10 days
a At that time
1 What type of contract dispute results in going to court and usually involves attorneys and research? a Litigation b Mediation c Arbitration d Sublimation
a Litigation
2 What is another term for "cancellation"? a Rescission b Revocation c Renunciation d Reformatino
a Rescission
2 SCENARIO BASED LEARNING #2 ASSESSMENT In the second scenario the broker would be in violation for not using a _______________________ when one could be used. a TREC promulgated form b State bar promulgated contract c TREK promulgated form d The broker was not in violation
a TREC promulgated form
1 What was the Texas Real Estate License Act called in 1939? a The Real Estate Dealer's License Act b The Broker's Act of 1939 c The Real Estate Settlement Procedures Act d The Real Estate Investment Act
a The Real Estate Dealer's License Act
2 Can a real estate agent use a contract drafted by a builder / owner of new homes? a Yes, it is an exception b No, only Texas Real Estate Commission promulgated forms can be used by real estate agents. c Yes, but only if the builder contract was drawn up by an attorney licensed in the state of Texas d No, there is a contract that Texas Real Estate Commission has approved for such a transaction.
a Yes, it is an exception
2 SCENARIO BASED LEARNING #3 LEARNING ASSESSMENT In the third scenario, the broker could use a different form because __________________________. a he is an attorney b his lack of knowledge is excusable c he does what he wants d the broker must not use a different form for any reason
a he is an attorney
2 SCENARIO BASED LEARNING #4 ASSESSMENT In the fourth scenario, the broker was a principal of the transaction and could use a different form because ________________________. a that is one of the TREC exceptions b the broker may use any form at their discretion c there are no rules when you're the principal d the broker may not use a different form. Ever
a that is one of the TREC exceptions
1 Which of these forms is a Texas Real Estate Commission (TREC) promulgated form? a Broker-agent employment contract b New Home Contract (Completed Construction) c Listing Agreement d Information About Brokerage Services
b New Home Contract (Completed Construction)
