Promulgated Contract Forms #351
All the following are true about the Texas Real Estate Commission EXCEPT: A. There are nine members. B. All members are brokers with a minimum of 5 years' experience. C. Members of the Commission are appointed by the Governor. D. Members serve six years staggered terms.
All members are brokers with a minimum of 5 years' experience.
A valid contract: A. Is a written or expressed agreement between two parties to provide a product or service B. Must be entered into as a free and voluntary act of each party C. Must have all the essential elements and are binding and enforceable on both parties D. All of the above
All of the above
Essential elements of a contract include: A. Competent parties B. Offer and acceptance C. Consideration D. All of the above
All of the above
In Texas, two individuals can exchange real property using only: A. The agreed price B. The legal description C. The names of parties D. All of the above
All of the above
_______ This form is used to make changes from the original contract.
Amendment
______ is where the parties have fully performed their promises under a signed contract.
Executed
A contract in which each party promises to perform an act in exchange for the other party's promise to perform is a unilateral contract. A. True B. False
False
A license holder may undertake to draw or prepare documents fixing and defining the legal rights of the principals to a real estate transaction. A. True B. False
False
As long as any exclusion is on the Seller's Disclosure, it is not necessary to put in the contract itself. A. True B. False
False
Earnest money is the consideration in a contract. A. True B. False
False
If an agent is a principal in a transaction or has at least a 50% interest in the property, he must disclose this in paragraph # 4 of the contract. A. True B. False
False
If the buyer is seeking FHA or VA financing and the appraisal comes in below the asking price, the buyer must come up with the difference in the down payment. A. True B. False
False
In Texas, real estate licensees have the authority to make up their own amendments or addenda to contracts. A. True B. False
False
It is illegal to NOT divulge the existence of a second offer. A. True B. False
False
On the Loan Assumption Addendum, if the tax and insurance escrow is deficient, the buyer must pay the deficiency. A. True B. False
False
The sales price in the contracts includes the down payment, the loan, and the private mortgage insurance if the loan is greater than 80%. A. True B. False
False
The clause in a contract stating that "time is of the essence" would indicate: A. The contract must be finalized immediately. B. The contract must include the time of day the contract was executed. C. Strict performance of certain acts within the time stated in the contract. D. Monetary penalties will be incurred if the provisions are not met by certain times.
Strict performance of certain acts within the time stated in the contract.
In addition to providing an existing survey, the seller must also provide the _________________ if the parties want to use the existing survey for the new loan for the buyer.
T-47 affidavit
Contracts created by another entity other than TREC that can be used by licensees.
TAR
This is the policy making body that protects the public.
TREC
The One-to-Four Family Contract includes all the following EXCEPT: A. Street address and legal description B. Down payment, loan amount, and sales price C. Full and legal names of both parties D. Type of loan the buyer is obtaining
Type of loan the buyer is obtaining
If there is no time limit specified in an offer, then the time limit will expire: A. 30 days B. As stated by the broker. C. As determined by the seller D. Within a reasonable time
Within a reasonable time
With an FHA or VA loan, the buyer is not obligated to purchase the property if the house does not ____________.
appraise
It is absolutely essential to have a __________________________ to make the contract binding and legally enforceable.
correct legal description
Paragraph 3 A represents the ______________________ in the transaction.
down payment
The main job of the Joint Broker-Lawyer Committee is to ___________________________.
draft and revise contracts
The One-to-Four Family Residential Contract spells out the ______________________________________ of each party to successfully complete a transaction.
duties, responsibilities and financial obligations
This is the Canon of Professional Ethics that speaks to knowledge of the industry.
Competency
_______ is one of the elements that makes a contract valid.
Competent parties
________ A contract must be in writing to be this.
Enforceable
Understand that when you are in a multiple offer situation, you are in an adversarial situation with the other agent. A. True B. False
False
Which offer the seller accepts, if any, will be decided by the listing agent. A. True B. False
False
You can give legal advice to a buyer or seller if you understand all the facts. A. True B. False
False
Drafts and revises contracts.
Joint Broker-Lawyer Committee
List two of the most common agreements that are not promulgated by the Texas Real Estate Commission but are available through the Texas Association of Realtors ® for use by licensees who are members of TAR. ______________________________ ______________________________
Listing Agreement and Buyer Representation Agreement
What is true about the TREC promulgated contracts? A. The contracts are available to any persons. B. TREC revises contracts every year. C. Only brokers must use the promulgated contracts. D. A licensee must be in the real estate business for three months before using the pro-mulgated forms
The contracts are available to any persons.
TREC does NOT promulgate listing forms and Buyer Representation Agreements. A. True B. False
True
The Seller Financing Addendum is much more common than the Loan Assumption Addendum. A. True B. False
True
The TREC promulgated Seller Financing Addendum states that if a seller determines at seller's sole discretion that the buyer's credit is unacceptable, the seller may terminate the contract and return the earnest money to the buyer. A. True B. False
True
The VA release of liability is for the benefit of the seller. A. True B. False
True
The effective date on the contract is determined by the final date of acceptance. A. True B. False
True
The main purpose of the Broker-Lawyer Committee is to draft and revise contracts for use by the licensees in Texas. A. True B. False
True
The public can use the promulgated contract forms approved by TREC. A. True B. False
True
Under conventional financing, the buyer will normally get a 30-year amortized loan although 15-year and bi-monthly payment loans are available. A. True B. False
True
When representing a buyer, seller, landlord, or tenant, the agent pledges to protect and promote the interest of their client. A. True B. False
True
________ A contract can become this if the party was under undue influence or not of sound mind.
Voidable
A seller, age 30, enters into a contract with a buyer, age 17. The contract is: A. Valid for both parties B. Void for both parties C. Voidable by the buyer D. None of the above
Voidable by the buyer
If the earnest money is not deposited within two days, it is considered a(n) ___________________.
defect
There are two places to find the seller's name to fill in the contract. The name can be found in the ____________________ or in the ______________________.
MLS printout/ tax returns
All the following are common errors in the contracts EXCEPT: A. Improper use of the Special Provisions section B. Terms for performance too short C. Not disclosing what stays with the property D. Failure to date the contract
Not disclosing what stays with the property
This paragraph must have factual details only concerning the contract.
Paragraph 11 (Special Provisions)
If the buyer takes possession prior to closing, what needs to happen? A. The seller needs to sign an affidavit relinquishing responsibility for the house. B. The seller should contract the insurance company for additional coverage. C. The buyer should sign a waiver to release the seller of liability. D. The buyer needs to sign a temporary lease.
The buyer needs to sign a temporary lease.
A bilateral contract is: A. A promise in exchange for a promise B. A promise made only by the agent C. A promise made only be the seller D. No promises
A promise in exchange for a promise
Either party may withdraw an offer before it is accepted. A. True B. False
True
A real estate broker or salesperson, while acting as an agent for another, is a(n) _____________.
fiduciary
In a contract to purchase real property, what is the name of the clause that states that the buyer will NOT be held responsible to complete the purchase if the buyer cannot obtain sufficient financing? A. Acceleration clause B. Escalation clause C. Contingency clause D. "As is" clause
Contingency clause
_______ is a rejection of the original offer.
Counteroffer
A counteroffer is a rejection of the original offer. A. True B. False
True
Withdrawing an offer is called _____________________.
rescission
The Texas Real Estate Commission is a nine-member commission appointed by _____________.
the governor
In the One-to-Four Residential Contract, "property" includes the land, improvements, and accessories. A. True B. False
True
It is considered illegal for a contract to include any discriminatory provisions. A. True B. False
True
The Joint Broker-Lawyer Committee consists of _______________ members.
13
What year was the Texas Real Estate Commission created to administer TRELA? A. 1959 B. 1972 C. 1991 D. 1949
1949
The standard FHA loan used with most residential transactions is the FHA _________ program.
203b
Paragraph 4 is a disclosure clause. A. True B. False
True
The effective date is determined by the final date of acceptance. All the following are elements of final acceptance EXCEPT: A. The final contract must be in writing. B. Acceptance must be unequivocal. C. An email must be attached to the contract. D. The buyer and seller must sign the contract and initial all handwritten changes
An email must be attached to the contract.
_______ transfers all the rights and obligations of a contract from one person to another.
Assignment
______ is a promise for a promise.
Bilateral
A voidable contract is: A. Not valid in the state of Texas B. Binding on one party but not the other C. Binding and enforceable on both parties if neither party is a minor D. All of the above
Binding on one party but not the other
The biggest majority of lawsuits come from the issue of: A. Fixtures vs. personal items that convey with the property B. Misunderstandings between brokers C. Non-disclosure D. Repair items
Non-disclosure
______Most lawsuits come from this.
Non-disclosure
In paragraph 2 of the standard residential contract form, which of the following items would NOT be included in the sale unless otherwise provided for: A. Mini-blinds B. Stove C. Ceiling fans D. Oriental living room rug
Oriental living room rug
If the buyer cannot obtain financing for the purchase. A. The earnest money is automatically refunded. B. The lender will notify the seller. C. The underwriter will notify the seller. D. The buyer must terminate the contract within a certain number of days or lose the right to terminate.
The buyer must terminate the contract within a certain number of days or lose the right to terminate.
In the Third-Party Financing Addendum, all the following are true EXCEPT: A. The contract is not subject to financing approval. B. The addendum is for an FHA or VA contract. C. The option of seller financing is part of the Third-Party Financing Addendum. D. The Buyer has the right to terminate and have earnest money refunded if they cannot obtain a loan.
The option of seller financing is part of the Third-Party Financing Addendum.
In Texas, if the buyer is in default, the seller can receive the earnest money as liquidated damages. A. True B. False
True
_______ is where certain things must be performed at certain specific times stipulated in the contract.
Time is of the essence.
The obligation to the client's interests is primary but that does not relieve Realtors® of the obligation to _____________________. A. Explain your relationship with your client to all other parties in the transaction B. Treat all parties honestly C. Disclose your client's position D. Make the other party feel that they are being respected too
Treat all parties honestly
A contract is considered completely performed when all the terms of the contract have been carried out. A. True B. False
True
A rental lease is an example of an executory contract. A. True B. False
True
A unilateral contract only binds one party to perform. A. True B. False
True
Above all else, dealing honestly in a transaction is the most important duty. A. True B. False
True
An addendum is text that is added to the original text as it got omitted from the draft by mistake or by purpose. A. True B. False
True
As a Texas REALTOR® , you also have access to more than a hundred forms for various types of real estate transactions that are not covered by T REC-promulgated forms. A. True B. False
True
Built-in appliances, wall-to-wall carpeting, and heating and air conditioning units are all considered "improvements." A. True B. False
True
Contract termination doesn't necessarily have to involve the wrongdoing of one party. A. True B. False
True
FHA loans are government insured. VA loans are guaranteed by the government. A. True B. False
True
If a seller counters a buyer's offer, it is considered a rejection. A. True B. False
True
If the seller wants to have his VA entitlement reinstated in full, he must find a veteran who has sufficient eligibility to purchase the seller's home and is willing to substitute his eligibility for the seller. A. True B. False
True
In Texas, civil statute of limitation laws is anywhere from one to five years depending on the severity of the claim. A. True B. False
True
The typical survey which most purchasers obtain when they go to closing is called _____________________.
a real property survey
The three Canons of Professional Ethics are ____________, ___________, and ______________.
fidelity, integrity and competency
For proper naming of the parties in the contract, you should ask the buyer (if you are representing them) their ___________________________.
full and legal name
Wetlands are the link between ____________ and ________________.
land/water
Seller disclosure of ______________________ is required by Federal law for a residential dwelling constructed prior to 1978.
lead-based paint
When personal property is included in the sale, you will want to use the ____________________ addendum.
non-realty items
If the agent is a _________________________, he/she must disclose that fact.
party to the contract
Texas real estate license holders are _______________ to use forms promulgated by TREC when negotiating contacts for the sale of real property.
required
Having an inadequate legal description in the contract most often happens with ___________________ property.
rural
If there is an addendum that addresses the issue of concern, then it should be used and not stated in the _____________________________ paragraph of the contract.
special provisions
