Texas Promulgated Contract Forms Quiz

Which TREC contract(s) should not be used for condominiums?

Unimproved property contract and One to Four Family Residential Contract (Resale)

When should a real estate agent give a customer the Information About Brokerage Services form?

Upon the first substantial discussion about real estate.

When does an offer become a contract?

When all parties have signed/and or initialed the contracts and both parties have been notified.

A real estate agent's client buyer is interested in a builder's new home listing. How can the real estate agent protect her commission in completing the transaction?

The real estate agent must register her client before showing the model home.

If a contract is terminated using the TREC Notice of Buyer's Termination of Contract,____ determine (s) if the buyer's earnest money will be refunded.

The reason for terminating

The TREC Third Party Financing Addendum is used when n____ a buyer is

applying for a loan with conventional, FHA, VA or other forms of financing

How old must a person be to be of legal age in TEXAS, unless they are in the military or married?

18

If a home is built prior of what year does it trigger the mandatory disclosure on lead based paint?

1978

If a buyer fails to provide her financial information to the seller by the deadline specified in the TREC Seller Financing Addendum, how long can the seller wait to terminate the agreement?

7 days

Which addendum listed in Paragraph 22 on the TREC Residential Condominium Contract (Resale) does not appear in the same paragraph on the One to Four Family Residential Contract (Resale)?

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

What does a condo owner own?

Airspace

Seller Brittany has agreed to a contract term that allows the buyer to purchase her property within 2 months at an agreed upon price. Which contract feature has Brittany agreed to?

An option

When purchasing a condominium, a buyer should carefully read overas the information could affect the buyer willingness to live at the property.

Association' bylaws and rules

When purchasing a condominium, a buyer should carefully read over ___ as the information could affect the buyer willingness to live at the property.

Associations' bylaws and rules

What agreement is required when a buyer moves in before closing?

Buyer's Temporary Residential Lease

To make a valid contract, there must be four elements, including agreement, competent parties and legal objective. Which one is missing?

CONSIDERATION

Due to ____ property purchased along the coastline can change.

EROSION

In accordance with the Loan Assumption Addendum, what could happen if the total principal balance of an assumed loan is greater than $500 at closing?

Either party can terminate and the earnest money will be refunded to the buyer

What are Ground Fault Circuit Interrupters?

Electric plugs near a water source to help prevent electric shock.

What type of contract is it when two parties agreed to a contract and sign it?

Executed

What action by an owner may be a violation of federal wetland laws?

Filling in areas with topsoil

____ requires that any investor that is not a U.S. Citizen buying property in the U.S. declare that he or she is not a U.S. citizen.

Foreign Investment in Real Property Tax Act

What should the real estate agent do with the TREC Notice to Prospective Buyer form?

Give a copy to the buyer and retain the original in file.

When would the seller be required to pay rollback taxes?

If the property changes from agricultural to residential

When should the Seller Financing Addendum be used?

If the seller is carrying a note for a buyer for all or a portion of the sales price

What should be done with the TREC Seller's Disclosure Notice in relation to the Multiple Listing Service (MLS)?

It should be uploaded to the MLS for open distribution, if possible.

The pamphlet about Lead exposure is called Protect Your Family From

Lead in Your Home.

What type of contract dispute results in going to court and usually involves attorneys and research?

Litigation

What is a reason that a survey may not be required?

No lender

Which paragraph in the TREC promulgated One to Four Family Residential Contract (Resale) is used to put in items that have no other paragraph addressing them?

Paragraph 11 - Special Provisions

What contract does not have a survey paragraph?

Residential Condominium Contract (Resale)

What addendum in used in a transaction where the seller owes more on a property than it is worth?

Short Sale Addendum

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 using the TREC Addendum for Back-Up Contract.

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 using the TREC Addendum for Back-up Contract.

If the buyer likes the home and the seller's disclosure is acceptable, what should they do next?

Submit and offer

What type of lease is a hunting lease?

Surface lease

When using the TREC promulgated Seller's Temporary Lease, who is the Tenant?

The Seller

Who normally pays for environmental assessments?

The buyer

For a short sale to go through, who must give approval?

The buyer's lender

In a transaction that does not involve owner financing or cash, who typically requires a title policy?

The lender

According to TREC, who should advise a buyer, in writing, that the buyer should have an abstract examined by an attorney?

The license holder

Why does a Property Owner's Association (POA) enforce deed restrictions?

To maintain the value of the homes and subdivisions.

What is the effective date of the contract?

Upon both parties acceptance and communication of that acceptance to the all parties.

When should a real estate agent give a customer the information About Brokerage Services form?

Upon the first substantial discussion about real estate

Which of the following transaction require a TREC Seller's Disclosure Notice, to be provided?

When the transfer is from an investor in real estate

Under the Texas Real Estate License Act, a real estate agent will not be in violation of practicing law without license if she

fills in the blanks on a standardized contract

Consideration is also known as_

something in exchange for something else.

Paragraph 5 of the TREC Notice of Buyer's Termination of Contract, allows a buyer to terminate an agreement due to

the seller's failure to disclose material facts

One reason that a survey may not be required in a Farm and Ranch Transaction is because___

they are very expensive.

Compliance for the TREC Addendum for Sale of Other Property by Buyer

uses time is of the essence

To write a legal description for a large ranch, the real estate agent would

want to attach an addendum to completely describe a property.

What form is used to request Subdivision Information from a Property Owner's Association (POA) for the buyer to review before closing?

The TREC Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in a Property Owner's Association

What happens to the contract if one party receives the earnest money as liquidated damages?

The contract is terminated

For purposes of performance, what is the effective date of a back-up contract according to the TREC Addendum for "Back-Up" Contract?

The date the buyer is notified that the first contract terminated.

What figures are used to establish the sale price?

The down payment and the sum of all loans.

Which of the following transaction would use the Unimproved Property Contract?

The sale of a spec home

What is added to the TREC Farm and Ranch Contract in paragraph 3 that does not appear on the TREC Residential Contract?

Sales price adjustment

What is a professional analysis of a property and its location relative to other property?

Survey

What is the main law that governs the real estate industry?

Texas Real Estate License Act

What is the best solution if a situation arises and both the seller and buyer agree to alter a binding, signed One to Four Family Residential Contract (Resale)?

The "Amendment" must be completed and signed by both parties.

What happens to the penalty funds collected from transfer fee violators?

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?

Title Policy and Survey

What is the best protection for a buyer that the property he/she is buying will be defended in the future in case of a dispute of ownership?

Title policy

The TREC Addendum for Property Located Seaward of the Gulf Intracoastal Waterway is____

a document that warns of everything that can go wrong with a coastal purchase.

To be an acceptable listing contract in Texas, the Texas Real Estate Commission requires that the listing form contain:

a provision informing the parties to the contract that real estate commissions are negotiable.

The TREC Seller Financing Addendum is used when ____

a seller is carrying the note for all or a portion of the sales price for the buyer.

The primary focus of the TREC Addendum for Property Located Seaward of the Gulf Intracoastal Waterway is _to

inform the buyer of the possibility that erosion can cause a structure to eventually end up on a public beach.

Private transfer fees are

not binding or enforceable.

A Residential Service Company_

sells warranties to owners, covering any repairs on listed items in the home for a pre-determined length of time.

Which of the following best defines the concept of "consideration"

something in exchange for something else.

The Seller's Disclosure Notice (SDN)_is

statement of the items and systems a property has and whether those work properly or not.

Which of the following contact terms is designed to create an action?

Performance

Which paragraph in the TREC promulgated Residential Contract, typically creates the most legal risk for real estate agents?

Paragraph 11- Special Provisions

If a home is built prior to what year does it trigger the mandatory disclosure on lead based paint?

1978

On the TREC Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum, which box is most often checked?

All three boxes are normally checked

What form should be used to make changes to a contract that has already been agreed to, where both parties want to change some portion of it?

Amendment

What is TREC's main purpose?

Protect the public

What is the best description of contract that is between two parties?

Bilateral contract

What can be done if a seller needs extra time and wants to remain in the home past the closing date?

Both parties sign the Seller's Temporary Residential Lease

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" 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 real estate agents?

Brokers Lawyer Committee

How does a buyer determine if property is located in a flood plain?

Check a FEMA Flood map

Which of the following is NOT one of Fraud's three main elements?

Refusal

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

What is it called when all terms in a contract are agreed to by all the parties of the contract?

Mutual assent

Which paragraph in the TREC promulgated Residential Contract, typically creates the most legal risk for real estate agents?

Paragraph 11 - Special Provisions

Which of the following forms is NOT promulgated by the Texas Real Estate Commission?

Residential Listing Agreement

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

Which of the following is true?

TREC has a form to notify buyers to obtain an abstract or a title policy

Who promulgates contracts for real estate agents to use?

Texas Real Estate Commission

An example of information a broker would provide to a Residential Service Company (RSC) is the

brand and serial number of the air conditioning compressor

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

The One to Four Family Residential Contract (Resale) bares a notice that states: not

not for use for condominium transactions

A form that has formally been made public ad its use mandated is said to be

promulgated.

The primary purpose of the Texas Real Estate Commission is to:

protect the public

When there is a dispute in a written contact the judge will use what doctrine?

Four Corners

What is a court's primary objective when interpreting a contract?

To ascertain and give effect to the intent o the parties.

11. Novation occurs when ____

a current contract is substituted with a new contract.