Promulgated Contract Forms Course 1
Stan was unable to obtain financing from his lender for the property he was hoping to buy. Which of the following reasons should Stan check on the Notice of Buyer's Termination Contract for having to terminate the contract?
"Buyer cannot obtain Buyer Approval in accordance with the Third Party Financing Addendum to the contract."
What is one of the exceptions to the rules requiring the use of TREC-promulgated forms?
A property owner may prepare an alternate form.
A buyer who's nervous about appliance repair costs might want to purchase ______.
A residential service contract
When a sales contract doesn't cover the terms needed by the parties, which of the following actions is a licensee allowed to take?
Add a standard addendum using standard language.
Roseanne is a Texas seller who agrees to allow the buyer to assume her VA loan. Which TREC-promulgated addendum will she need if she wants to indicate that she does NOT want the closing to be delayed if restoration of her VA entitlement is not approved by the closing date?
Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement
Amis is selling his condo. The closing is two weeks away, when a fire occurs and damages the unit. Which of the following is true?
Amis must return the unit to its previous condition as soon as possible, and before the closing.
Texas licensee Chip needs a form. TREC hasn't promulgated a form for this specific use, but does have an approved form available. Chip should ______.
Ask his broker which form to use.
Mary agreed to buy her mother's house when her mother planned to move to a senior living community. They signed a purchase agreement, but when Mary had to move because of work, she signed her rights in the contract over to her sister, Tina. Mary may still owe money if Tina can't come up with the agreed-upon funds. What's happening in this scenario?
Assignment
Any parties who prevail in a legal proceeding regarding the TREC One To Four Family Residential Contract (Resale) are entitled to recover their ______ as well as the costs of the legal proceeding.
Attorney's fees
Which as an acceptable way to identify Barbara Harrison as the administrator of her late husband, Geoffrey Harrison's, estate?
Barbara Harrison, administrator of the estate of Geoffrey Harrison, deceased
When crops are excluded from the sale of a farm or ranch, by when must they be removed from the property?
Before closing
Where is the version number located on a TREC-promulgated form?
Bottom right corner of every page
When it comes to buying unimproved land, which of the following is true?
Buyers should be aware that there are many pitfalls with purchasing unimproved land.
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
Two neighbors got into a disagreement about early-morning noise on the weekends. The two came to an agreement: One neighbor promised to not mow the lawn before 10 a.m., and the other neighbor promised to put bark collars on her dogs in the early morning hours. Their promises represent the ______ in their agreement.
Consideration
Plans, specifications, change orders, and allowances are part of the ______ and should be referenced in the New Home Contract (Incomplete Construction).
Construction documents
Georgie Banker is the widow of the late Gordon Banker. How should Georgie be listed as a party in a TREC sales contract regarding a property that Georgie owns?
Georgie Banker, an unmarried person
Chandra is a Texas seller who is considering financing a loan for a buyer. According to the TREC-promulgated Seller Financing Addendum, the buyer agreed to deliver credit documentation within five days of the effective date of the contract. That time has passed, and Chandra has not received the credit documentation, so she decides to terminate the contract. What must Chandra do next?
Give notice to the buyer that the contract is terminated within seven days of the expiration of the delivery date.
In what way does good consideration differ from valuable consideration?
Good consideration is a gift
The New Home Contract (Completed Construction) doesn't contain ______ in the property section, which is a key difference between this contract and the One to Four Family Residential Contract.
Improvements, accessories, or exclusions
Where does the buyer deposit the earnest money when the sales contract is signed?
Into an escrow account
Which of the following is the committee that is responsible for drafting and revising contract forms for TREC?
The Broker-Lawyer Committee
Teri is concerned that nearby wetlands will affect how she's able to use the property on which she's making an offer. Which Texas addendum should be attached to the contract?
The Environmental Assessment, Threatened or Endangered Species, and Wetlands Addendum
In the Addendum for Property Subject to Mandatory Membership in a Property Owners Association, what does the phrase "subdivision information" mean?
The POA's restrictions and rules, and a resale certificate
Elisha is a property manager at Oakwood Luxury Apartments in San Antonio. A family of seven recently inquired about renting a three-bedroom unit. What law can guide Elisha in her decision?
The Texas Landlord and Tenant Act
Nancy is in the market for some unimproved land. She's concerned that she doesn't know enough about the risks involved, and how to interpret all of the information. If she is your client, what should you tell her?
It would be wise to consult a real estate attorney before making a purchasing decision.
What typically happens to any earnest money when a sales transaction successfully closes?
It's applied to the down payment and closing costs owed by the buyer.
An example of a party in default of the TREC One To Four Family Residential Contract (Resale) would be:
Johann, who agreed to apply for an FHA loan by April 3, but he hasn't done so by April 10.
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 unmarried persons buying a property together.
Kelly is selling his property and has accepted an offer from a buyer, but there's a contingency that the buyer must sell an existing home first in order to fund the purchase. Which of the following is a true statement?
Kelly can accept another offer without a contingency.
Texas buyer Dee Dee Warren has found the perfect home. She's offering $304,000, with $74,000 in cash paid at closing, and wants to assume the sellers' mortgage loan of $230,000. To do this, she'll need to complete which of the following addenda to the TREC One to Four Family Residential Sales Contract (Resale)?
Loan Assumption Addendum
Your buyer client, Miranda, has two young daughters, and is concerned that there could be sex offenders in the neighborhood of a house she'd like to buy. By law, you:
May either divulge this information to her, if you know it, or recommend that she do her own research on the sex offender registry—depending on your brokerage's policy for handling such questions
Lena's buyer client Mindy is making an offer on Joe's house. Which party decides how much earnest money to offer?
Mindy
Which of the following would be a violation of the Texas Deceptive Trade Practices—Consumer Protection Act (DTPA)?
Misrepresenting the facts about the reasons for a price decrease
Kendra enters a contract to sell her home to Madge. After the inspection, Madge insists that Kendra replace the roof, which is damaged. Kendra refuses, and the parties agree to cancel the deal. Of what is this an example?
Mutually rescinding the contract
Per the Addendum for "Back-Up" Contract, which of the following statements about a "Back-Up" contract is true?
Neither party is required to perform under the contract until the first contract is terminated.
Which of the following Texas promulgated forms is most like the TREC New Home Contract (Completed Construction)?
New Home Contract (Incomplete Construction)
How many members does TREC have?
Nine
Blake, a licensee, has copied down the street address of a property from the MLS. Is this a legal description of the property?
No, a street address is not a legal description. He needs the information from a recorded plat or a metes and bounds description of the property.
You discover that there's a registered sex offender in the neighborhood and decide to disclose this information to your client. Are you breaking the law?
No, revealing this information isn't prohibited, but neither is it required. You should follow your brokerage's policy on the matter.
Licensee Marvin is using a real estate contract form drawn up by his property owner client, instead of using a form with a similar purpose promulgated by the Texas Real Estate Commission. This is ______.
Okay if Marvin's client required that form
Where can licensees find all of the required forms promulgated by TREC?
On the TREC website
When does timing for certain contract requirements begin?
On the first full day after the executed date (effective)
When does partial performance of a contract occur?
One or both parties have completed only a portion of the terms agreed to in the contract.
Offer to purchase, sales agreement, contract of purchase and sale, and purchase agreement are other names for which of the following?
Sales contract
You're helping a buyer, Salvador Valen, complete the TREC residential resale contract. He's not married. Which of the following is the best way to identify him in the contract?
Salvador Valen, an unmarried person
When a property owner agrees to provide a loan to the purchaser, which Texas addendum should be attached to the contract?
Seller Financing Addendum
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.
Before signing the Addendum for Property Located Seaward of the Gulf Intracoastal Waterway, which of the following should buyers take into consideration?
Shoreline erosion rates
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
Lloyd thinks he has purchased an investment property, but the seller refuses to deliver the title to him. Lloyd has met all of his obligations per the written contract that he and the seller signed. He decides to take the seller to court in an effort to force her to hand over the title. Of what is this an example?
Suing for specific performance
On which entity's website can you reference to find promulgated contract forms?
TREC
When presented with multiple offers, the seller should _______.
Take each offer into consideration
In buyer Brenda's TREC One To Four Family Residential Contract (Resale), her offer states that her closing fees may not exceed $3,800. If her closing fees turn out to be $5,000, Brenda can _______.
Terminate and get her earnest money back
What recourse do Texas buyers have under the terms of the TREC One to Four Family Residential Contract (Resale) if a seller is unable to cure the title issues within 15 days after receiving the buyer's list of objections?
Terminate the contract.
Which of the following statements about a buyer accepting a property in "as-is" condition is true?
The buyer retains the right to have the property inspected.
Cain purchased a residential service contract. If, during his year of contracted service, he has a repair issue, which of the following would likely be covered?
The dishwasher breaks
What typically happens to the earnest money when a buyer defaults on the sales contract?
The earnest money is paid to the seller.
In the Texas Loan Assumption Addendum, when does the buyer agree to pay the initial payment toward the loan?
The first payment due after closing
Who is responsible for appointing the members of the Texas Real Estate Commission?
The governor of Texas
Anything that's being hidden from ______ that relates to seller concessions, property condition, buyer qualification, or sales price is considered fraud.
The lender
Sally and Jake have signed an offer to purchase a home that is still being constructed. If rollback taxes are assessed, who must pay them?
The seller pays 75% and the buyer pays 25%.
Offering legal advice to your Texas client, whether intentionally or unintentionally, is considered ______.
The unauthorized practice of law
What is one major difference between condominiums and townhomes?
They each have different forms of ownership.
Buyers Joe Matheson and Antonio Rubes want to offer $200,000 on the property they've just found. They're making a $50,000 cash payment, and the rest will be financed with a VA loan. Which of the following addenda must be checked in paragraph 3 of the TREC One to Four Family Residential Sales Contract (Resale)?
Third Party Financing Addendum
Sylvester is a first-time home buyer who needs to take out a conventional loan to help finance his purchase. What type of financing addendum will Sylvester need to check in the Sales Price section of the TREC One to Four Family Residential Contract (Resale)?
Third Party Financing Addendum
When a Texas buyer needs to obtain a mortgage loan from a lender to purchase the property, the ______ must be attached to the contract.
Third Party Financing Addendum
According to the Addendum for Property Subject to Mandatory Membership in a Property Owners Association, within how many days of receiving subdivision information does the buyer have to terminate the contract?
Three
What's the purpose of a sales contract?
To document the agreement between a buyer and seller in a real estate sales transaction
What is the purpose of the Uniform Electronic Transactions Act?
To identify that electronic signatures are just as binding as written signatures
Why do government loans limit the amount of fees a buyer pays?
To make buyer qualification easier
What's the purpose of the Condominium Resale Certificate?
To provide information about the condominium owners association fees, issues, and finances
What options does the TREC-promulgated Addendum for the Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement give the Texas seller if the restoration of VA entitlement is not approved by closing?
To terminate the contract or not delay the closing
Meredith is a mother of five children, two of whom are age 18 or older. What is the minimum number of bedrooms she's allowed to rent, according to the occupancy standards under the Texas Landlord and Tenant Act?
Two
A Texas property is listed in the MLS, but the commission amount is blank, and the fee isn't listed in the buyer agency compensation. You should ______.
Verify that there are commission arrangements in writing
A building manager refused to grant an exception to a resident with a physical disability who used a service dog. The resident asked for a reserved parking space closer to his unit for easier access. Is this a violation, and if so, what type?
Violates fair housing
As part of the sales contract, Garth, the seller, was supposed to provide a copy of the seller's disclosure to the buyer, Melanie, but he failed to do so. What type of contract is this?
Voidable
Which of the following is an exception to the required use of promulgated contract forms in Texas?
When an attorney drafts the necessary form on the owner's behalf
Rollback taxes are assessed under what circumstance?
When the land's use is changed.
What is the correct way to use an addendum to a Texas contract?
When you want to make an addition to an existing contract
Your seller client, William, had multiple offers to consider. He decided to move forward with Ryan's offer, and reject the offer from Kevin. What should your client do with the offer from Kevin?
Write "rejected" on Kevin's offer
The addenda that are part of the TREC residential resale contract are listed in the ______ paragraph.
Agreement of Parties
Which groups are required to prominently display TREC's Consumer Protection Notice in their offices?
All real estate brokers and inspectors
Dave is selling his property to Matthew, and they are under contract. Dave's property backs up to beautiful, protected, open space in the foothills. Unfortunately, due to the lack of moisture, it was unseasonably dry and a brush fire started. Dave's property sustained fire damage that affected one-third of the home. Who or what entity is responsible for the repairs to the property?
Dave
Which of these is part of the "subdivision information" as defined in the Addendum for Property Subject to Mandatory Membership in a Property Owners Association?
Resale certificate
Which one of the following actions constitutes the unauthorized practice of law if performed by a real estate licensee who isn't also a licensed attorney?
Drafting a legal contract using legal language
In which of the following scenarios is impossibility of contract performance occurring?
Due to circumstances beyond their control, the parties can't legally or practically do what they've agreed to do.
Which of the following properties requires a lead disclosure?
Duplex built in 1959
Which of these becomes liquidated damages when a contract is terminated as a result of default?
Earnest money
Which of the following is an appropriate use of the Special Provisions section of the TREC One To Four Family Residential Contract (Resale)?
Expanding on statements presented elsewhere in the contract
If buyers _________________, they are defaulting on the contract and could lose their earnest money deposit to the seller.
Fail to remove a contingency before closing
When completing a contract for her buyer clients Phillip and Susan Crawford, a married couple, what should Rachel write in the naming of the parties section of the sales contract?
Phillip Crawford and Susan Crawford, a married couple
Which types of forms are the Property Located Seaward of the Gulf Intracoastal Waterway and the Coastal Area Property?
Promulgated Addenda
Which of the following describes the Tide Waters notice of the Title Notices provided in the TREC One to Four Family Residential Contract (Resale) in Texas?
Required by the Texas Natural Resources Code if the property abuts tidally influenced waters of the state