Default of contract and types of damages (pg 137)
(Ans-
Liquidated Damages - The seller can choose to accept the buyer's earnest money as liquidated da... [Show More] mages, releasing all parties from any further obligation under the contract. Liquidated damages are damages that are established in the contract.
Monetary Damages - The injured party may "seek such other relief as may be provided by law." This would be an award of monetary damages by the court. Because monetary damages are awarded by the court, one never knows what they will be until the court rules.
Specific Performance - The injured party files a court action seeking an order of the court directing the defaulting party to perform according to the terms of the contract. Specific performance is the only remedy that would possibly result in the full execution (closing) of the transaction.
Leases and "right of first refusal" (pg 19)
(Ans-
Right of first refusal - Gives the tenant the right to purchase the leased property by matching or bettering any offer before the property will be sold to someone else.
There's also the possibility of a leasing having an option to purchase, AKA lease-purchase agreement, which gives the tenant occupancy in the present time and the right to purchase at a future date.
Default remedies and their results (pg 137)
(Ans-
Seller Default - in the event of default by the seller, the buyer becomes the injured party. The buyer has the option of:
Specific Performance
Monetary Damages
Refund of Earnest Money. The buyer's acceptance of an earnest money refund terminates the contract, releasing both parties from any further obligation under the contract.
Buyer Default - Options are:
Liquidated damages
Monetary Damages
Specific Performance
TVLB Programs and Provisions (pg 196)
(Ans-
Texas Veteran's Loan Program - Veteran obtains an FHA, VA, or Conventional Loan from a participating lender. The qualification process is the same as for any other FHA, VA, or Conventional Loan. The difference is that the loan is sold to the Texas Veterans Land Board (VLB), as opposed to a secondary market purchaser such as Fannie Mae or Freddie Mac. The primary benefit is that the rate on the VLB loan is often up to 1% below prevailing market rates.
Economic and Physical Characteristics of Land (pg 44)
(Ans-
Physical:
1. Indestructibility or Durability - Land cannot be destroyed.
2. Immobility - Land cannot be moved
3. No homogeneity - No two parcels of land are the same.
Economic:
1. Scarcity - theory of supply and demand (low inventory = price increase)
2. Modification - value is affected by man-made changes to the land (ex: railroads, freeways, roads, etc.)
3. Fixity - land and buildings take a long period to pay for themselves
4. Situs - location of the property or land from an economic, not a geographic viewpoint.
Responsibility of agents when receiving an offer (pg 123)
(Ans- The agents must present all offers to the seller. The agent doesn't have the authority to dismiss an offer without presenting it unless the party has given the agent instruction to the contrary. The exception is if the agent has written instruction to reject an offer of a certain price.
Title policy, abstracts, commitments, opinion of title (pg 217)
(Ans- Abstract of title - a complete history of the title of a piece of property that includes deeds, easements, liens, foreclosures, wills, marriages, deaths, life estates, fee simple estates, and anything else that may have ever been recorded about a property.
Sovereignty of the soil - the government is the original owner of all land
Patents transfer ownership from the government to an individual and looks much like a deed.
Attorney's Opinion of Title - An opinion regarding the state of the title and its ability to be transferred.
TREC Temporary lease agreements and features (pg 18)
(Ans- Buyer's Temporary Residential Lease - for use when the buyer occupies the property for no more than 91 days prior to closing
Seller's Temporary Residential Lease - for use when the seller occupies the property for no more than 91 days after closing
Option Contracts (pg 65)
(Ans- An agreement between a buyer and seller or landlord and tenant. A seller, in exchange for some form of consideration (an option fee), gives the buyer the right to purchase the property at some preset price and terms for a period. (ex: a buyer has a one-year option to purchase a tract of land at $150,000 cash, the buyer can exercise the option and purchase the property at that price any time during the year.)
Paragraph 11 - Special Provisions - What can an agent write (pg 135) (Ans- This space is where terms can be addressed that are not covered in standard contracts or addenda forms. License holders should ensure that any special provisions added to a contract are factual statements that do not change the legal effect of the contract.
Prorations and Prorated Items at closing (pg 135)
(Ans- Proration for property taxes and property owner association fees will be calculated. Taxes for the year that have not been paid will be deducted from the seller's proceeds, usually through the day of closing. Prepaid items such as a property owner association fees will be collected from the buyer from closing to the end of the year.
Government Rights in Land (pg 73)
(Ans-
PETE:
Police Power
Eminent Domain
Taxation
Escheat
Offers, Counteroffers, Rejections, Acceptance (pg 125)
(Ans-
Offers - Need to be in writing, ideally, but can be communicated over the phone too.
Counteroffers - When a party makes any changes to an offer and communicates it to the other party.
Rejections - offers can be rejected without explanation or comment. It's a less than desirable response because it doesn't invite any further negotiations.
Acceptance - acceptance of an offer means that the accepting party does so with no change to the contract whatsoever. Any changes, no matter how small, turns the offer into a counteroffer.
Real and Personal Property Transfer Documents at Closing (pg 41)
(Ans- Personal Property - things of a temporary or movable nature are not part of the real property. Also known as chattel.
Fixture - personal property that has become attached to the land in such a way as to become real property. Removal of the fixtures is called severance. (Ex: wall-to-wall carpeting, ceiling fans, etc.)
Bill of Sales - generally used to accomplish the transfer of personal property along with the real property, normally accompanied with the deed.
RESPA - Rules and Prohibitions (pg 269)
(Ans- Real Estate Settlement Procedures Act - Prohibits any person who, pursuant to any agreement or understanding, gives or receives a fee or a thing of value (including payments, commissions, fees, gifts, or special privileges) for the referral of a set [Show Less]
