Promulgated Contract Forms

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When a buyer purchases a condominium they are buying the:

Airspace between the walls

When the parties agree to change or revise a contract the proper form to use is the:

Amendment

In the 1-4 Family Residential Contract, any party to the contract wrongfully fails to sign a release acceptable to the escrow agent within 7 days of receipt of the request will be liable to the other party for liquidated damages in the amount of all

Any expenses the title company incurred related to holding the earnest money

What should be entered in paragraph 11 Special Provisions?

Only factual statements and business details about the sale

If a Buyer wants the Seller to pay some or all of their closing costs, it should be added to the contract in:

Paragraph #12 - Seller participation in the Buyer's costs

Paragraph 23 'termination option' of the TREC 1-4 Family Residential Contract:

Requires a fee for a specified period of time

In Texas, dual agency has been replaced with Intermediary

True

It is considered illegal for a contract to include any discriminatory provisions.

True

Steering is illegal and is described as channeling a minority to or away from an area to change the character of the neighborhood.

True

The TREC PROMULGATED CONTRACT FORMS are drafted by the Broker Lawyer Committee

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.

True

The sales price is determined in paragraph 3 by adding the down payment and the loan amount.

True

If the option money is not delivered to the proper party within the proper timeframe what is the status of the contract?

Valid - But, the buyer shall not have the unrestricted right to terminate this contract

If the seller fails to provide the buyer with the sellers disclosure of property condition as required by Section 5.008 of the Texas property code what is the status of the purchase contract?

Voidable

If a buyer is concerned about the presence of endangered species, toxic substances or wetlands on a property, the agent should:

add the environmental assessment addendum to the contract

A document that transfers contract obligations to another party but does NOT release the first party's obligation is:

an assignment

A sales contract in which a promise is exchanged for a promise is:

bilateral

An agent would use the same contract for new construction no matter if it was completed or incomplete.

false

If a home is to be sold, with lender's consent, at a price less than the outstanding balance on a mortgage, the sale is known as:

short sale

Who is responsible for filling in the effective day in the contract?

the broker

How long does a buyer have to object to defects, exceptions and encumbrances to title disclosed in the survey and the title commitment?

the negotiated days stated in contract

A voluntary dispute resolution is called litigation

False

An expressed agency cannot be orally agreed but must be in writing.

False

Per Paragraph #16 of the Residential Contract (Mediation), If a buyer and/or seller agrees to mediate, they are giving up their right to pursue relief through the courts.

False

Regarding mediation - the Buyer and Seller are obligated under the terms of the Residential contract to abide by the ruling of the mediator.

False

The Seller must notify the Buyer to have the abstract of title examined by an attorney or obtain a policy of title insurance.

False

All written notices between the parties are effective when:

A) Mailed B) Hand delivered C) faxed or emailed

A Back-Up contract to an existing contract can be terminated at any time under the termination option paragraph:

A) Only if option money has been submitted to the seller at the time the Back-up contract is signed and agreed by all parties B) It has not moved to primary position, at which time the number of days in paragraph 23 (Option paragraph) dictates the 'time is of the essence' C) The Back-Up Addendum form is attached to the contract

The Information About Brokerage Services (IBS) states the broker may represent the:

A) Owner B) Buyer C) Both owner and buyer as intermediary

Federal Fair Housing Laws forbids discriminatory practices by parties including:

A) Owners of properties B) Lenders C) Real estate broker

ttachments required in a Resale Certificate for Property Subject to Mandatory Membership in an Owner's Association includes:

A) Restrictions B) Current operating budget C) Rules and bylaws

In the event of the seller's default, the buyer may do any of the following

A) Terminate the contract B) Enforce specific performance C) Seek such relief as provided by law

If a contract is amended, copies of the amendment should go to:

A) The title company B) The lender C) Both buyer's agent and listing agent

The financing paragraph will be used to indicate:

A) Third party financing B) Assumption C) Seller financing

Use of the TREC promulgated One to Four Family Residential Contract (resale) is allowed on the sale of a residential condominium.

False

Per paragraph 9 (Closing) what type of deed is called for in a standard residential sale?

General warranty deed

Property approval, according to paragraph 7 of the one - four family contract includes;

If the property does not satisfy the lenders underwriting requirements for the loan, buyer may terminate this contract.

Which form informs the customer or client how agents represent consumers of real estate services?

Information About Brokerage Services (IABS)

Any changes to the original contract once it is finalized and receipted must be done:

On an amendment

Fraud is defined as a deliberate act of deception made for personal gain or to damage another individual.

True

If the property is subject to mandatory membership in an HOA, subdivision information means:

A) a current copy of restrictions apply into the subdivision and bylaws and rules of Association B) a resale certificate, all of which are described by section 207.003 of the Texas property code C) restrictions

How many resale certificates are currently promulgated by TREC?

2

The Condominium Resale Certificate called for in paragraph 2 of the TREC Residential Condominium Contract (Resale) must have been prepared no more than _________ before the date it is delivered to the buyer.

3 months

In Paragraph 3 of the One to Four Family Residential Contract (Resale), now includes the financing addendum options previously in Paragraph ____.

4

If a Seller is to remain in the property after closing:

A Seller's Temporary Lease Form promulgated by TREC should be completed and signed by buyer and seller and attached to the contract

The Non-Realty Items addendum form for transfer of personal property can include the following EXCEPT:

A warranty and guarantee from the seller that the items are in working condition

In Paragraph 3 of the One to Four Family Residential Contract (Resale), now includes the financing addendum options previously in Paragraph ____.

A) 4

Which addendum warns buyers that Texas may have the right to take their property?

A) Addendum for Property located Seaward of the Gulf Intercoastal Waterway B) Addendum for Coastal Area Propert

Addendum warns buyers that Texas may have the right to take their property?

A) Addendum for Property located Seaward of the Gulf Intercoastal Waterway B) Addendum for Coastal Area Property

A contractual agreement in which each party agrees to perform or forbear in exchange for the other party's promise to perform or forebear.

Bilateral Contract

Nonperformance of the legal terms of a valid contract.

Breach

What is the legal proceedings brought by party to a contract against another party to compel action call forth in the agreement?

Breach of contract

Brokerage Fee splits are agreement between the?

Broker to Broker

The Texas Real Estate Commission (promulgates an addendum to be used in a short sale. This Short Sale Addendum is to be signed by:

Buyer and seller

Once a contract is finalized and receipted it:

Can be amended multiple times if all parties agree

The disclosure of relationship with a residential service company requires disclosure of:

Compensation to the Broker

A party who has legal capacity to enter into a binding contract.

Competent Party

Your buyers have signed a contract to buy a new home. The contract is subject to the sale of their present home. This is called a:

Contingency

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?

Contingency clause

Which form must be displayed in the residential brokers office?

Equal Housing Opportunity Poster

For a Broker to act as Intermediary in a transaction, it requires written consent from only one of the parties.

FALSE

Paragraph 4 (Financing) in the 1-4 Family Residential Contract is also used for cash transactions.

FALSE

Per Paragraph #16 of the Residential Contract (Mediation), If a buyer and/or seller agrees to mediate, they are giving up their right to pursue relief through the courts.

FALSE

There are no promulgated forms for a lease for temporary occupancy for a buyer prior to closing.

FALSE

On the Seller's default, what should happen to the earnest money?

It should be returned to the Buyer

When a 'fixture' in a property does not remain for the buyer, how do we inform the buyer of that fact and make sure the item does not convey with the property?

List the item on the 'Residential Contract'

Failure on the part of the broker/sales associate to advise the purchaser in writing to have an abstract of title examined by an attorney or obtain a title insurance policy:

May be cause to have the agent's license suspended or revoked, and precludes receiving any commissions or agreed fees associated with the sale.

If a bonus is offered by an owner or an owner's agent, Buyer's broker:

May retain the additional compensation

Can a party accept earnest money as liquidated damages and also sue the third party for specific performance?

No

What form is used if the buyer wants the seller to leave the refrigerator with the home after closing?

Non-Reality Items addendum

The biggest majority of lawsuits come from the issue of:

Non-disclosure

If a buyer elects 8-B (No Intermediary Status), in the Residential Buyer/Tenant Representation Agreement, the client will:

Not be shown any of the broker's listings

Which form is used for the owner to tell the buyer about known problems with the property?

Sellers disclosure of property condition

The law that requires the contract to be in writing and signed by the parties is the:

Statute of Frauds

Brokers fees are mentioined in the 1-4 Family Residential Contract (resale) between the Buyer and the Seller.

TRUE

If a Buyer checks item 7D(2) under Property Condition, the buyer can only ask for specific repairs, and cannot use general terms such as subject to inspection.

TRUE

The Residential Condominium Contract allows a limit to the amount a Buyer will pay for Association transfer fees.

TRUE

The TREC promulgated Seller Financing Addendum states that if the buyer does not furnish the required qualifying documentation with the time limit allowed, Seller may terminate the contract and keep the earnest money.

TRUE

When completing the finance portion of the contract, the number of days you select to get the buyer's loan approved should not exceed:

The closing date

If there is an existing survey on the property, what does the seller take to the title company and the lender?

The existing survey and a notarized affidavit stating if there have been any changes in the survey since the time the existing survey was completed

According to the TREC 1-4 Residential Contract (Resale), who is responsible for paying the owner policy of title insurance fee?

The party stipulated in the contract

If the seller is financing the sale, the mortgagees Title policy will protect:

The seller

The Seller contracts to furnish the buyer an existing survey, but neglects to furnish an 'affidavit' with the time specified. The lender requests a new survey be furnished. Who pays for the new survey?

The seller

A suit for specific performance is:

To force either the buyer or the seller to perform on the terms of the contract

An agent is required by law to cover the agency relationships described in the Information About Brokerage Services.

True

Brokers fees are mentioined in the 1-4 Family Residential Contract (resale) between the Buyer and the Seller.

True

During the option period in the 1-4 Family Residential Contract (resale), the Buyer has the unrestricted right to terminate the contract if they find a different house they would like to buy.

True

FHA loans are government insured. VA loans are guaranteed by the government.

True

How does the Texas Real Estate License Act define the first face-to-face meeting with required agency disclosure?

When a substantive dialogue about a specific real property occurs

The 'effective date' of the contract is:

When the last person signs and initials all changes

If there is no time limit specified in an offer, then the time will expire:

Within a reasonable time


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