Texas Promulgated Forms
The following four things must take place in order for the contract to become binding and effective (becoming the effective date in the contract):
1. Be in writing 2. Buyer and seller sign final contract and initial all changes 3. Acceptance is complete, without doubt 4. Last party to accept communicates (can be verbal) that written acceptance has taken place to the other party (or the other party's agent)
How long does seller have to provide buyer a title commitment under paragraph 6 of the One to Four Family Residential Contract? A) 20 days after the title company receives a copy of the contract B) 21 days after execution of the contract C) 20 days after execution of the contract D) 21 days after the title company receives a copy of the contract
A) 20 days after the title company receives a copy of the contract
Which of the following is NOT an item that must be disclosed by a real estate license holder under paragraph 4 of the contract? A) Acting on behalf of a business entity in which the license holder owns more than 5% B) Acting on behalf of the agent's child C) Acting on behalf of a trust of which the agent is a trustee D) Acting on behalf of a business entity in which the license holder owns more than 10%
A) Acting on behalf of a business entity in which the license holder owns more than 5%
How many resale certificate forms are promulgated by TREC? A) 2 B) 3 C) 6 D) 19
A) 2
A seller and buyer agree that the buyer will purchase a home "as is" with an option period of five days using the TREC One to Four Family Residential Contract. Paragraph 7D includes a lengthy list of repairs. What are the buyer's choices during the option period? A) All of these. B) The buyer may have the property inspected. C) The buyer may terminate the contract. D) The buyer may negotiate additional repairs.
A) All of these.
A married seller wishes to sell her separate property. Which of the following is an appropriate way to identify her in the TREC One to Four Family Residential Contract? A) Jane Doe, as separate property B) Jane Doe, as individual legal owner C) Jane Doe, a married person with consent of John Doe D) Jane Doe
A) Jane Doe, as separate property
TREC promulgates the Loan Assumption Addendum. In a transaction where a buyer is assuming a seller's loan A) TREC's Loan Assumption Addendum is required. B) TREC's amendment is required. C) TREC's Loan Assumption Addendum is required if the loan being assumed is greater than $50,000. D) the buyer and seller should hire an attorney to draft an addendum to address this.
A) TREC's Loan Assumption Addendum is required.
The owner's title policy is a contract between which two parties? A) The buyer and the title company B) The seller and the title company C) The seller and the buyer D) The lender and the title company
A) The buyer and the title company
Which of the following is TRUE regarding the Loan Assumption Addendum? A) The period for the seller to terminate under the Loan Assumption Addendum is seven days. B) The period for the seller to terminate under the Loan Assumption Addendum is negotiable. C) The period for the buyer to provide credit documentation to the seller is seven days after the effective date of the contract. D) If the buyer provides the credit documentation but the seller decides the buyer's credit is unacceptable and terminates, the earnest money will be paid to the seller.
A) The period for the seller to terminate under the Loan Assumption Addendum is seven days.
The sellers want to sell the refrigerator to the buyers. How should it be noted in the contract? A) Use the Non-Realty Items Addendum B) Add the refrigerator to paragraph 11 C) Add the refrigerator to the list in paragraph 2 D) Note the refrigerator as an exclusion
A) Use the Non-Realty Items Addendum
What is buyer required to do under paragraph 20 of the One to Four Family Residential Contract if seller is a foreign person? A) Withhold an amount sufficient to comply with tax law B) Notify the IRS before closing C) Obtain the consent of the IRS before closing D) Notify the IRS at closing
A) Withhold an amount sufficient to comply with tax law
The Seller's Temporary Residential Lease is A) a promulgated addendum. B) an approved optional/voluntary use form. C) a promulgated amendment. D) a promulgated notice.
A) a promulgated addendum.
The Subdivision Information, Including Resale Certificate for Property Subject to Mandatory Membership in an Owners Association form is A) a promulgated amendment. B) a promulgated addendum. C) an approved optional/voluntary use form. D) a promulgated notice.
A) a promulgated amendment.
The Seller's Disclosure Notice is A) a voluntary use form. B) a promulgated amendment. C) not a TREC form. D) a promulgated addendum.
A) a voluntary use form.
The real estate agent representing the seller should encourage the seller to A) require as much earnest money as can be negotiated with the buyer. B) accept only cash as earnest money because that is necessary for a binding contract. C) accept whatever earnest money is offered. D) use only option contracts.
A) require as much earnest money as can be negotiated with the buyer.
The "trigger" year requiring the lead-based paint disclosure is A) 1987. B) no longer in effect. C) 1978. D) a result of TREC rules.
C) 1978.
How are the earnest money and option fee typically paid under the One to Four Family Residential Contract? A) One check to the title company for both amounts B) One check to the seller for both amounts C) A check to the title company and a check to the seller D) One check to the listing agent for both amounts
C) A check to the title company and a check to the seller
Who is allowed to insert legal rights or remedies in the special provisions paragraph of the One to Four Family Residential Contract? A) Seller's agent during negotiation B) Listing broker C) A party D) Buyer's agent as part of the offer
C) A party
Which of the following may be included in paragraph 11, Special Provisions, of the One to Four Family Residential Contract? A) Multiple sellers if the blanks in paragraph 1 are insufficient B) The license holders using the words time is of the essence C) The license holder inserting contingencies D) The appraisal must meet the contact price
A) Multiple sellers if the blanks in paragraph 1 are insufficient
In which paragraphs or forms would you address the fact that the buyer will be acquiring the eight-burner freestanding propane grill on the pool deck as part of the transaction? A) Non-Realty Items Addendum and paragraph 22 B) Paragraph 2C C) Paragraph 2B D) Non-Realty Items Addendum
A) Non-Realty Items Addendum and paragraph 22
Which of the following is NOT a promulgated form? A) Seller's Disclosure Notice B) Disclosure of Relationship with Residential Service Company C) One to Four Family Residential Contract D) Amendment to Contract
A) Seller's Disclosure Notice
Paragraph 16 addresses litigation as a means of dispute resolution. True False
The statement is false. Paragraph 16 addresses mediation as a means of dispute resolution. Mediation has become the preferred alternative dispute-resolution approach in Texas and has enjoyed a very high success rate.
The license holder who obtains the first signatures must fill out the executed date. True False
The statement is false. The executed date is to be entered on the contract form when all signatures have been received and acceptance has been communicated to the other party.
Escrow agents are required to use the earnest money receipt in the contract. True False
The statement is false. The receipt is issued by the escrow agent, not the listing or selling license holder. Some escrow agents may choose to use their own receipt form for the contract and the earnest money instead of the form at the end of the contract.
Parties can use paragraph 11 (Special Provisions) in lieu of using a TREC addendum. True False
false. If TREC provides a promulgated addendum that addresses a situation, the addendum must be used. It is a violation of TREC Rules for an agent to write something in Special Provisions if TREC has an addendum that addresses the situation.
Equitable Owner
Buyer has equitable title and is known as the owner in equity or equitable owner
Under the contract form, if a party sends a demand for release of the earnest money to the escrow agent, with a copy to the other party, if no objection is received by the escrow agent after _____, the agent may release the funds to the party making the demand. A) 10 business days B) one week C) 15 days D) the period agreed upon by the parties
C) 15 days
Which of the following is legal for the license holder to draw up? A) Note B) Contract C) None of these D) Deed
C) None of these
Bilateral Contract
A promise in exchange for a promise
A buyer wanted to move in early before closing. Which TREC promulgated addendum should be used? A) Lease Prior to Closing Addendum B) Buyer's Temporary Residential Lease C) Addendum for Maximum 90-Day Residential Lease D) Addendum for Buyer's Move-in Pre-Closing
B) Buyer's Temporary Residential Lease
The Unimproved Property Contract addresses rollback taxes. True False
true. Rollback taxes are addressed in the New Home Contracts, Unimproved Property Contract, and the Farm and Ranch Contract.
Unilateral Contract
A promise in exchange for an act
Which of the following is NOT a TREC promulgated contract? A) One to Four Family Residential Contract B) Unimproved Property Contract C) New Home Contract D) Contract for Deed
D) Contract for Deed
Which of the following is NOT a benefit of the Texas veterans loan program? A) Lower fixed rates B) No mortgage insurance requirement C) Possible availability if VA benefit has been used D) Lower rates on refinancing of existing loans
D) Lower rates on refinancing of existing loans
The Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement allows the parties seven days to fulfill their duties. True False
false. The form allows the parties to negotiate the time to complete their duties under the agreement.
The statute of limitations requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable. True False
false. The statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable.
A buyer purchases a house from seller that is currently occupied by a tenant. What happens to the security deposit at closing under the TREC One to Four Family Residential Contract? A) It is credited to closing costs. B) The seller keeps it. C) The seller must transfer it to the buyer. D) It is returned to the tenant.
C) The seller must transfer it to the buyer.
Which of the following is TRUE regarding the Seller's Disclosure of Property Condition? A) The TREC Seller's Disclosure of Property Condition is a mandatory form. B) The Seller's Disclosure of Property Condition form is not promulgated by TREC. C) The TREC Seller's Disclosure of Property Condition is an optional form. D) The TREC Seller's Disclosure of Property Condition is required in all contracts.
C) The TREC Seller's Disclosure of Property Condition is an optional form.
The legal description of the property, improvements, accessories, and any exclusions to improvements or accessories are A) in paragraph 1. B) in paragraph 3. C) not covered in the promulgated contract forms. D) in paragraph 2.
D) in paragraph 2.
Who issues the receipt for the earnest money under the One to Four Family Residential Contract? A) The seller B) The buyer's agent C) The escrow agent D) The listing agent
C) The escrow agent
In a seller financing situation, the buyer's liability continues until the buyer sells the house. True False
alse. The note under D(1)(b) in the Seller Financing Addendum reminds buyers that their liability continues until the loan is paid in full unless they receive a release of liability from the seller. Most sellers will want the right to give their consent to any sale of the property while they still have an outstanding loan secured by the property.
Tort
an act that damages another individual and gives rise to legal action
The buyer agrees to purchase a home "as is" in part relying on an existing inspection report. The buyer uses the One to Four Family Residential Contract with an option period of 14 days. What are the buyer's choices during the option period? A) The buyer may not negotiate additional repairs. B) The buyer may not have the property inspected again. C) The buyer may have the property inspected again. D) The buyer may terminate the contract, but she will forfeit the earnest money.
c) The buyer may have the property inspected again.
A variable commission is A) a commission that can be negotiated down if a competing brokerage offers to list the property for a lower rate than it is currently listed. B) a commission that can increase if the agent is able to convince the buyer to close earlier than the contract requires. C) a commission that changes in amount/percentage depending on whether it comes from within or from outside the listing broker's office. D) a commission that changes depending on the contingencies being required by competing buyers.
C) a commission that changes in amount/percentage depending on whether it comes from within or from outside the listing broker's office.
Which of the following is NOT a TREC promulgated addendum? A) Seller's Temporary Residential Lease B) Addendum for Back-Up Contract C) Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement D) Reverse Mortgage Financing Addendum
D) Reverse Mortgage Financing Addendum
How many promulgated contracts does TREC issue? A) Nine B) Four C) Eight D) Six
D) Six
A contract with a person under duress is A) void. B) enforceable. C) valid. D) voidable.
D) voidable.
If the right to terminate under paragraph 23 is about to expire, and we know the paragraph contains a time is of the essence clause, which of the following might a buyer's agent suggest as a way to extend the deadline? A) Preservation of a single-issue termination right B) Additional option money to extend deadline C) Any of these D) Termination of the contract if the deadline cannot be extended
C) Any of these
The earnest money was paid on time. The effective date of contract is July 4. The notice to terminate specifies 10 days from effective date. What is the last date and time to give notice of termination under paragraph 23 of the contract? A) July 15, midnight local time B) July 14, midnight local time C) July 14, 5:00 pm local time D) July 15, 5:00 pm local time
C) July 14, 5:00 pm local time
The painter contracts to paint the exterior of the home for $1,750 plus the cost of paint and any other necessary materials. About three-fourths of the way through the job, the contractor breaks his leg and can't finish. The owner offers to pay the contract price less deductions for the cost of having the job completed by another painter, and the original painter accepts the offer. The contract has been discharged under the principle of A) partial performance. B) mutual agreement. C) substantial performance. D) Impossibility.
C) substantial performance.
TREC may NOT prohibit a license holder from using a contract form A) that has been approved by the National Association of Realtors® advisory committee. B) that is not a promulgated form but is prepared by the license holder's managing broker C) that is prepared by the property owner. D) promulgated by another state.
C) that is prepared by the property owner.
Which addendum, if used, must be signed by the buyer, the seller, and both of their respective brokers? A) Addendum for "Back-Up" Contract B) Addendum for Coastal Area Property C) Addendum for Sale of Other Property by Buyer D) Lead-based paint addendum
D) Lead-based paint addendum
Voidable Contrasts can include:
- Minor - Seller Disclosure - Fraud - Association Documents - MUD
If the buyer wishes to make an all cash offer, how should paragraph 3 of the TREC One to Four Family Residential Contract be completed? A) 3A and 3B will be the same amount. B) 3A and 3C will be the same amount. C) 3B and 3C will be the same amount. D) 3A, 3B, and 3C will be the same amount.
B) 3A and 3C will be the same amount.
When is the best time to clarify which accessories the sellers wish to take with them in the TREC One to Four Family Residential Contract? A) When the first offer comes in B) At the listing appointment C) During the option period D) At closing
B) At the listing appointment
Under paragraph 13 of the One to Four Family Residential Contract, what happens if taxes are not paid at or prior to closing? A) Seller shall pay taxes for the current year. B) Buyer shall pay taxes for the current year. C) Buyer's agent shall pay taxes for the current year. D) Seller's agent shall pay taxes for the current year.
B) Buyer shall pay taxes for the current year.
When must the agent deliver the earnest money to the title company? A) By the close of business on the third day after the effective date B) By the close of business on the second day after the effective date C) By midnight on the third day after the effective date D) By midnight on the second day after the effective date
B) By the close of business on the second day after the effective date
Where is earnest money first applied at closing under paragraph 18 of the One to Four Family Residential Contract? A) Buyer's expenses B) Cash down payment C) Seller's expenses D) Commission to agents
B) Cash down payment
A seller wishes to keep an item listed as an accessory. How should the TREC One to Four Family Residential Contract be filled out? A) Cross out the item where it is listed in Accessories B) List the item under Exclusions C) Use the Non-Realty Items Addendum D) Identify the item in paragraph 11
B) List the item under Exclusions
Which of the following is an appropriate use for paragraph 11, Special Provisions, of the One to Four Family Residential Contract? A) The property is subject to mandatory membership in a property owners' association. B) None of these are correct. C) The assumption transaction is contingent upon the seller's restoration of VA entitlement. D) The buyer wishes to retain mineral rights.
B) None of these are correct.
A buyer promises to pay an option fee of $100 within three days of execution under paragraph 23 of the TREC One to Four Family Residential Contract to purchase a 10-day option to terminate. What happens if the buyer fails to pay the fee? A) The buyer may terminate, but she will forfeit the earnest money. B) The buyer will not have the unrestricted right to terminate the contract. C) The buyer may still terminate, but she will forfeit the option fee. D) The contract is void.
B) The buyer will not have the unrestricted right to terminate the contract.
A buyer promises to pay an option fee of $500 within three days of execution under paragraph 23 of the TREC One to Four Family Residential Contract to purchase a 15-day option to terminate. What happens if the buyer pays the fee four days after execution? A) The buyer may still terminate because time is not of the essence. B) The buyer will not have the unrestricted right to terminate the contract. C) The right to terminate shifts to the seller. D) The buyer may still terminate, but she will forfeit the earnest money if she terminates.
B) The buyer will not have the unrestricted right to terminate the contract.
Seller and buyer enter into a contract where buyer will take out a loan to purchase a home. The lender requires the roof to be replaced before it will issue a loan to the buyer. Both seller and buyer refuse to pay to replace the roof. What happens to the earnest money if buyer terminates the contract under the One to Four Family Residential Contract? A) The earnest money is paid to seller. B) The earnest money is refunded to buyer. C) The earnest money is paid to the lender. D) The buyer and seller split the earnest money.
B) The earnest money is refunded to buyer.
Which of the following is TRUE regarding properties with the same sales price? A) The premium cost to insure the title of the property can vary by 5% at all title companies in the state. B) The premium cost to insure the title of the property is the same at all title companies in the state. C) The premium cost to insure the title of the property is different at all title companies in the state. D) The premium cost to insure the title of the property can vary at all title companies in the state depending on the location of the property.
B) The premium cost to insure the title of the property is the same at all title companies in the state.
Under the TREC Seller's Temporary Residential Lease, what happens if seller wants to stay in the property for one week longer than the term provided in the lease? A) The seller may stay three days more than the lease term at no extra charge. B) The seller must pay an additional daily holdover fee. C) The seller must vacate the property unconditionally at the end of the lease term. D) The seller may stay seven days longer than the lease term by paying the daily rental fee.
B) The seller must pay an additional daily holdover fee.
Buyer and seller enter into a contract for buyer to purchase seller's house using the One to Four Family Residential Contract. Buyer wishes to purchase a 10-day option to terminate the contract. How long does the buyer have to pay the option fee? A) Two days B) Three days C) The time period is negotiated by the parties D) The time period is negotiated by the agents
B) Three days
If the buyer and the seller have agreed upon an option to terminate under paragraph 23 of the contract, which of the following would be an invalid reason to terminate, resulting in loss of earnest money? A) Local municipality passing ordinance prohibiting ownership of the type of dog owned by buyer B) Spouses discovery that a former spouse lived next door to the property C) Failure to give notice to terminate by the time and date specified D) Unexpected loss of employment
C) Failure to give notice to terminate by the time and date specified
What should a license holder do if the seller wishes to retain an item not specifically listed as an improvement or accessory in paragraph 2 of the TREC One to Four Family Residential Contract? A) Tell the buyer's agent that the seller wishes to withhold the item. B) Do not list the item as an exclusion in paragraph 2D. C) List the item as an exclusion in paragraph 2D. D) Use the Non-Realty Items Addendum to retain the item.
C) List the item as an exclusion in paragraph 2D.
A buyer and seller agree that buyer will buy the seller's home for $475,000 with no option to terminate using the TREC One to Four Family Residential Contract. The lender requires the roof to be replaced, the perimeter to be treated for termites, and the stucco on the back of the house to be repaired. The roof will cost $10,000, the termite treatment will cost $1,800, and the stucco repair is estimated to cost $8,000. Seller agrees to pay for everything. What are the buyer's options? A) The buyer may terminate so long as the buyer pays an option fee during the feasibility period. B) The buyer may terminate the contract and the earnest money will be refunded to the buyer. C) The buyer may not terminate the contract. D) The buyer may terminate the contract, but the earnest money will be paid to seller.
C) The buyer may not terminate the contract.
For which of the following actions may the Texas Real Estate Commission NOT suspend a license holder's license? A) The license holder drafts an instrument (other than a form promulgated by TREC) that transfers an interest in real property. B) All of these are violations and are subject to suspension. C) The license holder explains to the principals the meaning of the factual statements or business details contained in the contracts. D) The license holder used a TREC promulgated purchase agreement that was specifically designed to work for a different type of transaction.
C) The license holder explains to the principals the meaning of the factual statements or business details contained in the contracts.
Which of the following may be included in paragraph 11, Special Provisions, of the One to Four Family Residential Contract? A) The contract is in a second or back-up position. B) The transaction is contingent upon the sale of another property. C) The seller is unavailable by phone Tuesdays and Thursdays from 1:00 to 4:00 pm. D) The assumption transaction is contingent upon the seller's release of liability.
C) The seller is unavailable by phone Tuesdays and Thursdays from 1:00 to 4:00
The property is in a propane gas system service area, which means you would use A) a text to inform the buyer of this. B) the promulgated amendment to address this. C) the promulgated addendum created for this purpose. D) the approved/voluntary use form created for this purpose.
C) the promulgated addendum created for this purpose.
The six elements of a valid real estate contract:
Competent parties Consideration Mutual agreement (mutual assent) Lawful objective In writing and signed by the parties Contain a legal description
Which of the following is a TREC promulgated form? A) Non-Realty Items Addendum B) Lead-Based Paint Addendum C) Seller's Disclosure of Property Condition D) Addendum for Sale of Other Property by Buyer
D) Addendum for Sale of Other Property by Buyer
Under the One to Four Family Residential Contract, what should the buyer do if she wants to park her boat in the driveway of the home she wants to purchase and is concerned about deed restrictions? A) Write it into Special Provisions B) List the boat as an exception under paragraph 2 C) Use the Residential Personal Property Affidavit D) List it as an objection under paragraph 6D
D) List it as an objection under paragraph 6D
The seller reviews and signs the offer at 6:00 pm Saturday. She texts her acceptance to her broker. The broker does not read the text until 7:00 am Sunday, and then immediately forwards it to the buyer's broker. Meanwhile, the buyer changes her mind and texts a withdrawal of the offer directly to the seller. A few minutes later, the seller's broker texts the original notice of acceptance to the seller. Is there a binding contract? A) Yes, because the contract was "formed" immediately upon the seller's acceptance. B) Yes, because acceptance sent to the buyer's broker is the same as acceptance communicated directly to the buyer. C) No, because the acceptance had to go directly to the buyer, not the buyer's broker. D) No, because the withdrawal of the offer was made and communicated to the seller before the buyer was notified of the acceptance.
D) No, because the withdrawal of the offer was made and communicated to the seller before the buyer was notified of the acceptance.
The antique cabinet that holds dishes has been made to appear to be built into an alcove in the dining room by surrounding the alcove with a frame; however, the cabinet is not attached to the walls or the floor of the alcove. The buyer wants to include the item in the sale. In which paragraph or form should this be documented? A) Non-Realty Items Addendum B) None of the forms deal with this situation C) Paragraph 2B covers this item D) Non-Realty Items Addendum and paragraph 22
D) Non-Realty Items Addendum and paragraph 22
As the buyer and her agent are In the process of completing the promulgated form to make an offer on the property, the buyer gives the agent a list of furniture, light fixtures, window coverings, and artwork that she wants included. Fearful of having the offer rejected if these items are included, the agent assures the buyer that "that sort of stuff is always included anyway; let's not make this any more complex than we have to" and convinces her to omit this list. Is the agent practicing law or just giving the client a better chance to have the offer accepted? A) Practicing law because the agent is making a legal judgment about what the seller may or may not do B) Not practicing law because the personal property has no impact on the title to the property C) Not practicing law because this is just negotiating advice, not legal advice D) Practicing law
D) Practicing law
Under paragraph 5 of the TREC One to Four Family Residential Contract, what happens if the buyer fails to deposit the earnest money? A) The contract is not executed. B) The contract is terminated. C) The contract is void. D) The buyer is in default.
D) The buyer is in default.
Under paragraph 5 of the TREC One to Four Family Residential Contract, what happens if the buyer fails to timely deposit the earnest money? A) The buyer automatically gets five more days to deposit the money. B) The contract is void. C) The contract terminates automatically. D) The buyer is in default.
D) The buyer is in default.
A license holder is purchasing property for himself. A TREC promulgated contract is appropriate for this purchase, but the license holder decides to be creative and draft his own contract from what he has learned in his real estate classes. Which of the following is most likely to be TRUE? A) This is a violation of Section 1-1a of the TRELA. B) The license holder could be held as practicing law and could have his license suspended or revoked by TREC. C) If the other party signed it, it would be voidable by the other party. D) The license holder has the right to draft his own contract.
D) The license holder has the right to draft his own contract.
What is the purpose of paragraph 24 of the One to Four Family Residential Contract? A) The parties may add contact information of their agents. B) It requires the names of all attorneys, including the agents' attorneys. C) It requires the parties to each get an attorney. D) The parties may add contact information of their attorneys.
D) The parties may add contact information of their attorneys.
Who pays for a residential service contract under the TREC One to Four Family Residential Contract? A) The seller B) The listing agent C) The buyer D) The parties may negotiate who pays
D) The parties may negotiate who pays
What happens to the earnest money at closing under paragraph 23 of the One to Four Family Residential Contract? A) It is automatically credited to the sales price at closing. B) It is paid to the title company. C) It is automatically used to pay closing costs. D) The parties negotiate whether it will be credited to the sales price at closing.
D) The parties negotiate whether it will be credited to the sales price at closing.
Under the TREC One to Four Family Residential Contract, how long does the seller have to complete required repairs? A) Within the option period B) Three days before closing C) Three days after closing D) Until closing
D) Until closing
The buyer needs to sell his existing home before buying a home from the seller. What should the buyer's agent do? A) Instruct the buyer to write in the special provisions paragraph that the transaction is contingent upon the sale of another property. B) Tell the buyer to wait until the first property is under contract before making an offer. C) Write in the special provisions paragraph that the transaction is contingent upon the sale of another property. D) Use the Addendum for Sale of Other Property by Buyer.
D) Use the Addendum for Sale of Other Property by Buyer.
Buyer and seller enter into a contract for buyer to purchase seller's property using the One to Four Family Residential Contract. Buyer purchases a seven-day option to terminate the contract. The buyer wishes to amend the contract to extend the closing date. How should the One to Four Family Residential Contract be amended? A) By changing and initialing the closing date on the original contract B) By email C) The parties can agree orally on the changed closing date D) Using the Amendment to Contract form
D) Using the Amendment to Contract form
Which of the following is an exception to using TREC promulgated contract forms? A) All of these B) When a license holder is not representing either party in the transaction C) When the license holder is solely leasing property D) When the license holder is acting as a principal and not as an agent
D) When the license holder is acting as a principal and not as an agent
When Does the Offer Become a Contract?
The offer becomes a contract when all parties have agreed to all terms of the offer and have signed the contract. That final date of acceptance is the date on which the contract becomes binding between the parties.
According to the contract, taxes for the current year, interest, maintenance fees, assessments, dues, and rents will be prorated through the closing date. True False
True
Buyer and seller enter into a contract for buyer to purchase seller's property using the One to Four Family Residential Contract. The seller fails to show up to closing. Which of the following is one of the buyer's options under paragraph 15? A) Enforce specific performance and receive the earnest money as damages. B) Make seller pay three times earnest money as penalty. C) Enforce specific performance. D) Terminate the contract and receive the option fee as damages.
enforce specific performance. Paragraph 15 provides that "If Seller fails to comply with this contract, Seller will be in default and Buyer may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money, thereby releasing both parties from this contract."
An independent contractor agreement is an example of a unilateral agreement. True False
false. An independent contractor agreement is a bilateral agreement; it defines the working relationship between sales associate and sponsoring broker.
The New Home Contracts are required to be used for the sale of all new homes in Texas. True False
false. If a builder does not specify a particular contract form, new homes may be sold using one of two TREC forms: New Home Contract (Completed Construction), and New Home Contract (Incomplete Construction).
Even if a nonbreaching party to a contract accepts earnest money as liquidated damages, that party can still sue for damages. True False
false. Once one of the parties accepts the earnest money as liquidated damages, everyone is released from the contract with no further remedies.
The Farm and Ranch Contract requires the sales price to be adjusted if the survey reveals a difference in the number of acres being conveyed. True False
false. The Sales Price paragraph allows the parties to negotiate what will happen in this event.
All TREC addenda are promulgated for required use by license holders. True False
false. There are many promulgated addenda, but there are also addenda that are approved by TREC and provided for voluntary use.
Paragraph 7 requires the use of TREC's seller disclosure form and the lead-based paint addendum. True False
false. While paragraph 7 discusses both the seller disclosure of property condition and the presence of lead-based paint, the TREC forms that make these disclosures are optional-use forms.
According to the settlement paragraph, buyer's expenses include appraisal fees and loan application fees. True False
true. The settlement paragraph lists the expenses payable by the buyer and the seller. The buyer is responsible for many costs, including appraisal fees and loan application fees.
All six promulgated contract forms include "time is of the essence." True False
true. The six promulgated contract forms and four addenda include "time is of the essence": Addendum for Sale of Other Property by Buyer, Addendum for Back-Up Contract, Third Party Financing Addendum, and Short Sale Addendum.
Offers and counteroffers remain open until accepted, rejected, or withdrawn. True False
true. This is important to note for situations in which a seller is dealing with multiple interested parties (and offers) simultaneously.
