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Package Deal Bundle For Texas Promulgated Contracts-CHAMPIONS Exam 2022-2023
10 Items
TEXAS PROMULGATED CONTRACT FORMS
A competent party is one that is: - correct answer At least 18 years of age Mentally competent Cannot be temporary incompetent The Texas Real Estate ... [Show More] Commission regulates a licensee in which of the following situations? - correct answer When the licensee is selling a house for a client What is a legal agreement between parties to do (performance) or not to do (forbearance) a certain act for consideration? - correct answer A contract All of the following are necessary to create a valid contract except which one? - correct answer Earnest money What law requires all contracts for real property to be in writing to be enforceable? - correct answer Statute of Frauds Which of the following would be an example of "good consideration"? - correct answer Love of a friend What is duress? - correct answer Use of force What is it called when a person listens to both sides of the situation and makes a decision. His or her decision is binding and court action cannot be pursued. - correct answer Arbitration What is defined as agreement to all the terms by all the parties of the contract? - correct answer Mutual assent When all promises in a contract have been met, that contract is called what? - correct answer Executed What is a contract called which defers material action by either party into the future? - correct answer Executory When a written agreement is legal and every item is completely agreed to, it is said to be which of the following? - correct answer Valid When an essential element is missing in an agreement and the courts would not hold it as a contract, then the agreement would be: - correct answer Void When one party could change their mind and exit a contract, it is said to be: - correct answer Voidable When one party may be in default but because of the nature of the agreement, the damaged party would not have the ability to sue the other party in court, this is what type of contract? - correct answer Unenforceable When a change needs to be made to the TREC ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE) TREC 20-14, what is the best way to handle it? - correct answer Changes should be made using the "Amendment to Contract" addendum. For which of the following reasons could a contract need to be changed? - correct answer For repairs For financing For termination of the option What law requires any amendment or addenda used must be in writing and signed by both parties to be enforceable? - correct answer Statute of Frauds Which of the following is the correct definition of the "Four Corners Doctrine"? - correct answer The interpretation of any disputed clause in a contract will be influenced by the document as a whole. What rule in contract cases prevents a party to a written contract from presenting oral evidence that contradicts or adds to the written terms of the contract that appears to be whole? - correct answer Parol Evidence Rule How long is the Statute of Limitations for a written contract in Texas? - correct answer Four years How long is the Statute of Limitations for an oral contract in Texas? - correct answer Four years Which of the following items would need to be disclosed by a seller prior to selling his or her property? - correct answer Asbestos Lead-based paint Mold What type of contract dispute results in going to court and usually involves attorneys and research? - correct answer Litigation How difficult was the real estate license to acquire prior to the 1930's? - correct answer There was no test. The Texas Real Estate License Act was formerly known as - correct answer the Real Estate Dealer's License Act. What damages could a seller possibly claim if the buyer is in breach of contract? - correct answer Loss of marketing time Any fees actually paid Mental duress What might be a reason for the necessity to change the closing date of a contract? - correct answer The repairs will take longer than anticipated. The seller needs more time to find another home. The buyer cannot get out of his or her lease. What repairs might be noted on the Texas Real Estate Commission Amendment to Contract? - correct answer Swimming pool has missing tiles that are to be replaced. The sink in the main bathroom is cracked and is to be replaced. Fix leaky pipe in the laundry room. How many amendments are allowed on a valid contract? - correct answer Multiple What is the legal age in Texas to enter into a valid, binding contract? - correct answer 18 Which of these forms is a Texas Real Estate Commission (TREC) promulgated form? - correct answer New Home Contract (Completed Construction) If both the buyer and seller agree to have the real estate professional write a contract for their specific situation and will put this request in writing, can the agent then write the contract for the customers? - correct answer Not under any circumstances Which of the following is true? - correct answer A real estate licensee may give advice to their clients What is an error in the meaning of words, laws, or facts which causes one or both parties to enter into the contract without fully understanding the outcomes or responsibilities implied by the contract? - correct answer Mistake Which of the following is a real estate agent not allowed to do? - correct answer An agent acting properly should always include all names including nick names and fictitious names as well as full names for the parties of a contract. What law prohibits price fixing? - correct answer The Sherman Anti-Trust Act? What entity promulgates real estate contracts for use by licensees? - correct answer The Texas Real Estate Commission Which of the following situations is NOT an exception to the use of promulgated forms? - correct answer A standard purchase agreement bought from a business supply store Which of the following groups does the Texas Real Estate Commission govern? - correct answer Real estate licensees What is it called when two or more real estate brokers work together to conspire to charge the same commission? - correct answer Price Fixing What is it called when a buyer puts together the paperwork necessary to buy a house from a seller and that paperwork is presented to the seller? - correct answer An offer When an offer is presented to a seller to purchase, the seller has all which of the following potential responses? - correct answer Accept it Fail to act on it Alter it When should a licensee communicate the agreement of a buyer to buy and a seller to sell? - correct answer As soon as possible What is the least appropriate way to communicate the agreement of a buyer and seller? - correct answer By postal mail Which of the following is an exemption to a real estate agent using Texas Real Estate Commission promulgated forms? - correct answer A form directed to be used by a new home builder. A form directed to be used by a land developer. Commercial real estate forms. Can a real estate agent use a contract drafted by a builder/owner of new homes? - correct answer Yes, it is an exception. Which of the following statements is true regarding offers? - correct answer The buyer may withdraw his offer any time prior to acceptance by the seller. The Broker-Lawyer Committee is made up of - correct answer 6 lawyers, 6 brokers, and one member of the public. What is the maximum amount of commission allowed by law? - correct answer No limit When does a purchase agreement become binding if both parties have signed and both parties have been notified? - correct answer At that time Which of the following statements is FALSE regarding reformation? - correct answer One of the parties assigned his duties under the contract to a third party. What is another term for "rewritten"? - correct answer Reformation Which of the following is a real estate agent allowed to do? - correct answer Give advice as to the pricing of an owner's property What is another term for "cancellation"? - correct answer Rescission The TREC One to Four Family Residential Contract (Resale) should be used in which of the following transactions? - correct answer A duplex Suppose a buyer was willing to offer a seller $285,000 on a property with a first lien of $200,000 and a second lien of $60,000, with $25,000 as a down payment. What would the licensee put in paragraph 3.B of the TREC One to Four Family Residential Contract (Resale)? - correct answer $260,000 Who is a "third party" to a contract? - correct answer Anyone listed on the contract that is not the buyer or seller How should a licensee fill out a TREC One to Four Family Residential Contract (Resale) if the seller is willing to finance the transaction for the buyer? - correct answer Use paragraph 3.B and check the appropriate box for Seller Financing Addendum. Which addendum spells out the details of the loan and will be included on almost all contracts? - correct answer Third Party Financing Addendum Using a TREC promulgated purchase agreement, who is required to pay for the title insurance? - correct answer It's negotiable Which of the following is true? - correct answer A seller that has agreed to pay for both the owner's and buyer's title policy can require a buyer to use a specific title company. What is the difference between a title policy and a title commitment? - correct answer A title commitment is issued prior to closing to describe the items on the title policy which will be issued after closing. What is a disclosure statement by the seller that states no changes have been made on the property that could affect the survey? - correct answer T-47 Affidavit What is the fee that is charged every time a property changes hands? - correct answer Transfer fee The seller must allow the buyer the right to have the property inspected during which times? - correct answer Reasonable times According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE), who is responsible for having the utilities turned on? - correct answer Seller A lead-based paint notification is required on all properties built prior to what year? - correct answer 1978 According to the TREC promulgated ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE), who is required to pay for lender-required repairs? - correct answer Neither party When should the Third Party Financing Addendum be used? - correct answer If the buyer is applying for a loan with conventional, FHA, VA or other forms of financing? Should addendums be attached to the main contract? - correct answer Yes, under after being noted in Paragraph 22 of the One to Four Family Residential Contract (Resale). How is the interest rate in the Third Party Financing addendum determined? - correct answer By negotiation between the buyer and lender Which FHA loan is typically the lowest down payment loan for a buyer? - correct answer 203 (b) With the Loan Assumption addendum, what happens if the seller does not respond to the buyer's creditworthiness after seven days? - correct answer The contract is valid. Why might a buyer want to assume a note and not originate a new loan? - correct answer Both 1 and 2 What does "ad valorem" mean? - correct answer According to value When should the Seller Financing Addendum be used? - correct answer It is used when the seller carries a note for a buyer for all or any portion of the sales price. How many days is the buyer allowed to get financial information to the seller in the Seller Financing Addendum? - correct answer It is dependent upon paragraph A of the Seller Financing Addendum Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement is used for what type of situation? - correct answer When a seller wants to be released from further liability on the VA assumed loan and wants their VA entitlement restored. In the Texas Real Estate Commission One to Four Family Residential Contract (Resale), where would you find down payment for the property identified? - correct answer paragraph 3.A For sellers who are carrying notes for buyers, Texas Real Estate Commission promulgated Seller Financing addendum requires a late payment fee of _________ for any payment made more than 10 days late. - correct answer 5% [Show Less]
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TEXAS PROMULGATED CONTRACTS
addenda - correct answer additions to a completed contract that specify supplementary information to the contract amendment - correct answer change or m... [Show More] odification to an already agreed-upon contract bilateral contract - correct answer a contract wherein both parties are obligated to perform in an exchange of promises buyer rebate - correct answer anything during a transaction that causes money to go back to the buyer, either at or after closing, without the knowledge of the lender casualty loss - correct answer a sudden, unexpected event like a fire, flood, storm, earthquake that causes damage to a property consideration - correct answer something of value exchanged by the parties as evidence of agreement to the terms of a contract contract - correct answer a legally enforceable and binding agreement between parties wherein a promise to do or not do something is given in exchange for valuable consideration counteroffer - correct answer a contract proposal submitted in response to a previous offer, modifying the terms of the original offer; considered a rejection of the original offer disability - correct answer a physical or mental impairment that substantially limits one or more major life activities, the record of such impairment, or being regarded as having such an impairment earnest money - correct answer funds paid to confirm or commit to a contract effective date - correct answer the date a contract becomes binding between the parties endorsement - correct answer additional coverage that can be added onto an insurance policy escrow - correct answer a process in which funds and/or financial documents are held by a disinterested third party on behalf of the other two parties in the real estate transaction until specific conditions are satisfied executed contract - correct answer a contract in which all terms have been fulfilled by all parties executory contract - correct answer a contract that has not yet been fully performed (both sides have not yet completed their obligations) Fair Housing Act of 1968 - correct answer a federal law that prohibits discrimination in housing based upon race, color, religion, or national origin and was amended to include sex, disability, and familial status fair lending laws - correct answer laws that prevent lenders from discriminating against protected classes when extending credit; protected classes include race, color, national origin, religion, sex, familial status, disability, gender expression, sexuality, age, marital status, or receipt of public income goodwill - correct answer good consideration, such as love and affection, that can be exchanged for valuable consideration in a contract or agreement; the exchange of which is generally seen as a gift on the part of the party giving up the valuable consideration house flipping - correct answer a mortgage fraud scheme that involves an inflated appraisal and a straw buyer legally competent - correct answer when a party can legally sign a binding contract; they have the age of majority and have not been declared mentally incompetent by a judge loan-to-value ratio - correct answer the amount of money being loaned compared to the value of the property mortgagee title policy - correct answer a title insurance policy that protects the lender's interests in the property should a problem with the title arise novation - correct answer a mutual agreement of the parties to replace an existing contract with a new one occupancy standards - correct answer rules about the maximum number of people that are allowed to live together in a single dwelling offer - correct answer a proposition made by an offeror to an offeree to agree to the terms of a binding contract; becomes a contract upon acceptance option money - correct answer a payment that the prospective buyer makes to the seller in exchange for the exclusive option to terminate the sales contract within a specified period of time (known as the "option period") without penalty; also known as the option fee option period - correct answer the window of time during which a buyer can opt out of a contract without penalty; a right that is purchased by the buyer performance - correct answer the fulfillment of an obligation, duty, or contract predatory lending - correct answer imposing unfair and abusive loan terms on borrowers promulgated contracts - correct answer contracts prepared and authorized by the Texas Real Estate Commission that must be used by real estate license holders; there are a few exceptions to this rule quitclaim deed - correct answer a type of deed that conveys any interest, title, or right to a parcel of land the grantor has at the time the deed is executed Residential Real Property Affidavit (form T-47) - correct answer a way for the seller to assure the buyer that they haven't changed the boundaries of the property residential service contract - correct answer policy that insures household items such as the air conditioner, heater, and large kitchen appliances restrictive covenant - correct answer a type of provision in a deed limiting the use of the property and prohibiting certain uses rollback taxes - correct answer taxes that can be assessed if the zoning of the property changes when it is sold statute of limitations - correct answer a legal concept that establishes time limits for bringing certain kinds of legal actions subagency - correct answer a form of agency that arises when an agent enlists the use of other agents to accomplish a client's goal survey - correct answer the process and physical product of finding and measuring the boundaries of a piece of real estate, including the location of improvements, encroachments, and easements title policy - correct answer a policy that protects homeowners (and likewise, lenders) from certain financial losses due to title issues, such as defects, encumbrances, and liens unenforceable contract - correct answer a contract lacking the essential elements necessary to be legally binding and obligate performance of a valid contract [Show Less]
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TEXAS PROMULGATED CONTRACT FORMS - CHAPTER 6
Condominium - correct answer A form of ownership of real property that consists of individual ownership of some aspects and co-ownership in other aspects o... [Show More] f the property is known as a...? Condominium Tenancy in common Cooperative Time-share Residential Condominium Contract - Resale - correct answer Which of the following contracts should be used when purchasing a condominium apartment...? One to Four Family Residential Contract - Resale Multi-family Residential Contract - Resale Residential Condominium Contract - Resale TREC Residential Apartment Contract - Resale Property and condominium documents - correct answer Paragraph 2 of the Residential Condominium Contract describes which of the following...? Parties Notices Financing Property and condominium documents All of the above - correct answer Which of the following is considered an accessory to a condominium unit...? Window air conditioning unit Stove Door keys All of the above The parties - correct answer Paragraph 1 of the Residential Condominium Contract describes which of the following...? The parties Financing Disclosures Property and condominium documents All of the above - correct answer Which of the following are considered improvements within a condominium unit...? Ceiling fans wall-to-wall carpeting Plumbing fixtures All of the above 6 - correct answer The buyer of a condominium may terminate the contract within ......... days of receiving the condominium's bylaws, if the buyer received the bylaws after signing the contract? 2 6 7 30 License holder disclosure - correct answer Paragraph 4 of the Residential Condominium Contract - Resale describes which of the following...? Earnest money The parties Notices License holder disclosure 15 - correct answer According to paragraph 6 of the Residential Condominium Contract - Resale, the seller is given .......days to cure any objections from the buyer? 7 10 15 30 8 - correct answer How many title notices are provided in paragraph 6D of the Residential Condominium Contract - Resale...? 2 6 8 9 Settlement and other expenses - correct answer Paragraph 12 of the Residential Condominium Contract describes which of the following...? Settlement and other expenses Disclosures The parties Title policy The buyer - correct answer Who is responsible for paying any deposits for reserves required at closing by a condominium's association...? The seller The buyer Both the buyer and seller equally The condominium association themselves Seller - correct answer Any special condominium assessments due and unpaid at closing will be the obligation of the...? Seller Buyer Both the buyer and seller equally Neither the buyer or seller Farm and Ranch Contract - correct answer Agricultural properties will use which of the following promulgated contracts...? One to Four Family Residential Contract - Resale Residential Condominium Contract - Resale Special Purpose Property Contract Farm and Ranch Contract 2B1 - correct answer Farm and ranch improvements are discussed in paragraph ..........of the Farm and Ranch Contract? 2A 2B1 2C 4 All of the above - correct answer Which of the following are considered farm and ranch improvements...? Windmills Barns Sheds All of the above All of the above - correct answer Which of the following may be considered farm and ranch accessories...? Hunting blinds Fuel tanks Game feeders All of the above T (True) - correct answer According to the Farm and Ranch Contract, unless otherwise agreed upon in writing, the seller has the right to harvest all growing crops until delivery of possession of the property...? T (True) F (False) Dollars per acre - correct answer If the sales price on a farm needs to be adjusted after the buyer reviews the survey, the sales price will be adjusted on what basis...? Dollars per acre Dollars per square feet Dollars per cubic yards Dollars per shares of stock All of the above - correct answer Paragraph 2 of the Unimproved Property Contract lacks which of the following as compared to the One to Four Family Residential Contract - Resale...? Improvements Accessories Exclusions All of the above [Show Less]
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TEXAS PROMULGATED CONTRACT FORMS - CHAPTER 1
Performance - correct answer The execution of a contract by which the contracting parties are automatically discharged of their obligations under it is kno... [Show More] wn as...? Consideration Novation Performance Void All of the above - correct answer Which of the following is an example of consideration...? Money Personal services Cash All of the above Statute of Frauds - correct answer A State law requiring certain contracts to be in writing and signed before they will be enforceable at law is known as the...? Statute of Frauds Statute of Limitations Statute of Contracts Statute of Records Options contract - correct answer Which of the following is an example of a forbearance contract...? Listing contract Options contract Sales contract All of the above Binding - correct answer A valid contract must be .......... and enforceable? Binding Waived Notarized Recorded Competent parties - correct answer A party to a contract that is forced to sign a contract under duress violates this element of a valid contract...? Consideration Competent parties Mutual agreement Lawful objective Leases under one year - correct answer Which of the following real estate contracts does not have to be in-writing...? Real estate sales contract Leases under one year Listing contracts All real estate contracts must be in writing Mutual agreement - correct answer If one of the parties to a contract does not voluntarily agree to the contract, this element of a valid contract is violated...? Mutual agreement Consideration Competent parties Lawful objective Void - correct answer To have no force or effect is referred to as a .......... contract? Void Valid Enforceable Executed Voidable - correct answer That which is capable of being adjusted void, but is not unless action is taken to make it so, is referred to as a/an ............ contract? Unenforceable Voidable Executed Expired Majority - correct answer In order to be considered a competent party, an individual must be of the age of the...? Majority Minority Other party None of the above Voidable contract - correct answer A contract in which one of the parties is a minor is considered a...? Void contract Executed contract Voidable contract Waived contract Non-fraudulent party - correct answer A contract in which there is fraud by either commission or omission is voidable by the...? Either the non-fraudulent or fraudulent party Fraudulent party The contract is not voidable Non-fraudulent party Void - correct answer A contract that is missing one or more of the elements of a valid contract is considered...? Enforceable Executed Expired Void Bilateral contract - correct answer A contract in which each party promises to do something is referred to as a...? Unilateral contract Bilateral contract Void contract Exclusive contract Unilateral contract - correct answer When one party promises to do something if the other party performs a certain act, but the other party does not promise to perform it, it is referred to as a...? Unilateral contract Bilateral contract Void contract Exclusive contract Unilateral contract - correct answer An options contract is an example of a/an...? Unilateral contract Bilateral contract Void contract Unenforceable contract All of the above - correct answer Which of the following is an example of a bilateral contract...? Listing contract Sales contract Independent contractor agreement All of the above Assignment - correct answer A transfer of benefits and obligations within a contract to a 3rd party who is not originally a party to the contract is known as a/an...? Assignment Amendment Novation Bulletin Novation - correct answer The substitution or exchange of a new obligation or contract for an old one by the mutual agreement of the parties is known as...? Amendment Bulletin Novation Assignment Executory - correct answer An assignment can occur when a contract is...? Executory Executed Void Enforced Amend the existing contract - correct answer Which of the following may be used as an alternative to novation...? [Show Less]
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ACEABLE AGENT - PROMULGATED CONTRACTS
VOID - correct answer A contract that has no legal effect. VOIDABLE - correct answer When one or more of the parties has the authority to rescind the co... [Show More] ntract. It appears to be valid, but one party may disaffirm because they are a minor, were subject to duress, or a victim of fraud or misrepresentation. STATUTE OF FRAUDS - correct answer A law that requires real estate contracts be in writing is the ______________________? PAROLE EVIDENCE RULE - correct answer Prevents a party to a written contract from presenting additional evidence that adds to the written terms of the contract. VOID - correct answer If 2 people have a legal contract for one party to sell illegal drugs to the other party, this contract would be _______________? EARNEST MONEY - correct answer Paragraph 5 in a sales contract? OPTION MONEY - correct answer Paragraph 23 in a sales contract? DOCTRINE OF LACHES - correct answer Legal loss of a right with the thought that "if you don't use it, you lose it." EFFECTIVE DATE - correct answer A written contract has been accepted, signed, and communicated to the other party. PAROLE EVIDENCE RULE - correct answer Prevents a party to a written contract from presenting additional evidence that adds to the written PAROLE EVIDENCE RULE - correct answer Prevents a party LICENSE ACT - correct answer If a licensed agent uses an old promulgated TREC form, what is this in violation of? PARAGRAPH 2D EXCLUSIONS - correct answer If a seller does not want to leave a chandelier where should they put this information in the 1-4 Family Residential Contract? NON-REALTY ITEMS ADDENDUM - correct answer What addendum can you attach to the sales contract if your client wishes to have additional personal property to stay with the property (that is not listed in Paragraph 2B or 2C)? LTV RATIO - correct answer Loan to value ratio that represents how much of the sales price is covered by the mortgage loan. RECOURSE LOAN - correct answer Loan in which the lender is allowed to seize the collateral property and could go after the borrower's other assets if the sale of the property doesn't cover the whole amount owed to the lender. SEND A WRITTEN DEMAND TO THE TITLE CO - correct answer After a real estate transaction fails, both parties can't agree who gets the earnest money, what should a buyer's agent do? SELLER - correct answer Who should the option money be delivered to? PARAGRAPH 23 - correct answer What paragraph is used for option period? ENDORSEMENTS - correct answer Amendments to the standard coverage in a title policy. RESTRICTIVE COVENANT - correct answer Provision in a deed limiting the use of property and prohibiting certain uses. 1. STANDARD PRINTED EXCEPTION AS TO MARITAL RIGHTS 2. STANDARD PRINTED EXCEPTION FOR STANDBY FEES, TAXES, AND ASSESSMENTS 3. RESTRICTIVE COVENANTS (DEED RESTRICTIONS) COMMON TO THE PLATTED SUBDIVISION - correct answer What are examples of exceptions of the title policy? RESIDENTIAL REAL PROPERTY AFFIDAVIT - correct answer A form that is completed by the seller to assure the buyer that they haven't changed the boundaries of the property since the last survey was completed. BOTH PARTIES NEGOTIATE - correct answer According to the 1-4 Family Residential Agreement who is responsible to pay for the owner's title policy, the seller or buyer? 2ND BUSINESS DAY, CLOSE OF BUSINESS - correct answer When should an agent deposit an earnest money check with an escrow agent? DEFAULT - correct answer If the buyer fails to deposit the earnest money on time, they will be in ____________? 15 DAYS - correct answer How many days does a seller have to cure a valid objection listed by the buyer in Paragraph 6D? LIST IN PARAGRAPH 6D AS A VALID OBJECTION - correct answer If the agent isn't sure of restrictions of the property, how can an agent protect the buyer and give them an out under the contract? TRUE - correct answer T/F? If there is an active lease on the property when the property is transferred, the seller needs to supply the buyer with a copy of the lease and move-in condition form within 7 days after the effective date. EFFECTIVE DAY OF LEASE - correct answer When is rent for a Buyer's Temporary Residential Lease Agreement paid? SELLER AND BUYER - correct answer Who does escrow protect? YES - correct answer Does the contract permit sellers to continue to show properties for back up offers before contract termination period? TAXES FOR PREVIOUS YEAR - correct answer What does it mean to pay property taxes in arrears? SIX - correct answer How many promulgated forms does TREC have? NEW HOME CONTRACT (COMPLETE CONSTRUCTION) - correct answer Which contract would you use for a brand new constructed home? BUYER - correct answer If a buyer wants to buy a property that was once zoned for farming, but wants to change to residential, who is responsible for the rollback taxes charged for new zoning of property? 10% - correct answer If a new survey is completed on a farm or ranch, at what percentage of the sales price INCREASE OR DECREASE of the property can either party of the contract terminate due to the price change? UNIMPROVED PROPERTY CONTRACT - correct answer The seller of unimproved property provides a disclosure in the _____________________? UNIMPROVED PROPERTY CONTRACT - correct answer Which contract should not be used for transactions that include land used for ranching or farming, and where surface leases and mineral estates may exist. UNIMPROVED PROPERTY CONTRACT - correct answer Which contract could be used for commercially zoned land in urban areas or smaller rural tracts? PROPERTY DESCRIPTION - correct answer Paragraph 2 is always used for what? FARM AND RANCH - correct answer Which contract has a place for Exception Documents and Surface Leases? ONE TO FOUR FAMILY RESIDENTIAL CONTRACT - correct answer Which contract would an agent use to sell a Townhouse? CONTINGENCY ADDENDUM / ADDENDUM FOR SALE OF OTHER PROPERTY BY BUYER - correct answer What addendum do you attach to the 1-4 Family Residential contract if your seller client wants to buy a home before they close on their own home? TRUE - correct answer T/F? If a buyer has a new offer and had an option to terminate, the right to terminate continues from the original effective date through the # of days starting from the new effective amended date. NO - correct answer Do Mineral Estates include grave, limestone, and sand? BUYER - correct answer Who signs the Notice of Termination Contract? 10 DAYS - correct answer How long could it take for a buyer to get their earnest money refunded? 3 DAYS - correct answer How many days does a buyer have to terminate a contract after receiving Subdivision/ HOA information? ON 2ND BUSINESS DAY AFTER ORIGINAL EFFECTIVE DATE - correct answer In a Short Sale, when does the Earnest money need to be delivered to the Title co? WITHIN 3 DAYS OF THE ORIGINAL EFFECTIVE DATE - correct answer In a Short Sale, when does the Option money need to be delivered to the Seller or Seller's Agent? ON ORIGINAL EFFECTIVE DATE - correct answer When does the right to terminate begin in a Short Sale Addendum? NOTICE OF BUYERS TERMINATION CONTRACT - correct answer If a buyer is exercising the unrestricted right to terminate the contract under Paragraph 23 of the contract, they are using what contract? HOMEOWNERS ASSOCIATION - correct answer Who is meant to complete the Subdivision information? SHORT SALE ADDENDUM - correct answer Which addendum is used when the transaction is contingent upon the approval of the seller's lender? OIL AND GAS ATTORNEY - correct answer If there are questions about mineral rights, who should be asked the questions? NO / BUYER - correct answer Does the Notice of Buyer's Termination Contract address Earnest Money? Who signs this contract? [Show Less]
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TEXAS PROMULGATED CONTRACT FORMS - CHAPTER 4
Earnest money - correct answer A down payment made by a purchaser of real estate as evidence of good faith is referred to as...? Buy-down money Earnest... [Show More] money Discount money Origination deposit Trust funds - correct answer Money, or other things of value, that a real estate agent receives on behalf of the principal or any other person involved in a transaction is known as...? Earnest funds Agent fees Deposit funds Trust funds Earnest money - correct answer Which of the following acts as liquidated damages if the buyer defaults on the purchase contract...? Earnest money Buy-down money Discount money Origination deposit F (False) - correct answer An earnest money deposit is required in all residential transactions...? T (True) F (False) Option - correct answer Which of the following refers to a right given for a consideration to purchase or lease a property upon specified terms within a specified time, without obligating the party who receives the right to exercise the right...? Exclusive agreement Earnest agreement Open agreement Option Optionee - correct answer A person who receives an option is known as the...? Optionee Optionor Trustee Trustor Optionor - correct answer A person who gives an option is known as the...? Optionee Optionor Trustee Trustor Equitable title to the property - correct answer A buyer has ............ during the options period? Legal title to the property Full title to the property Equitable title to the property Interim title to the property Perform his due diligence - correct answer Marcus has entered into a contract to purchase a new house. What will Marcus do during the options period to ensure the property is in the proper condition...? Perform his due diligence Obtain title insurance Obtain a certificate of occupancy for the property All of the above 3 - correct answer The buyer loses their right to a termination option if they fail to provide the options money within how many days of the effective date of the contract...? 1 3 7 30 6A - correct answer The title policy for a property is discussed in paragraph ........of the One to Four Family Residential Contract - Resale? 1 3A 5 6A Either the buyer or seller, whatever is agreed upon - correct answer Who pays for the title policy as stated in the purchase contract...? The seller only The buyer only Either the buyer or seller, whatever is agreed upon The escrow company RESPA - correct answer Which of the following prohibits the seller from requiring a specific title company as a condition of the sale...? HUD TREC NAR RESPA T (True) - correct answer The title company used in a transaction must be agreed upon by both the buyer and seller...? T (True) F (False) Binding and enforceable - correct answer Since a title policy is a contract, it is...? Binding and enforceable Unenforceable Acknowledged and recorded Void Covenants - correct answer Agreements written into deeds and other instruments promising performance or nonperformance of certain acts, or stipulating certain uses or non-uses of the property are known as...? Covenants Surveys Commitments Endorsements Restrictive covenants - correct answer Rules regarding pets in a subdivision are included under which of the following...? Commitments Endorsements Title policy Restrictive covenants The property's deed - correct answer Restrictive covenants are written into what document...? The mortgage commitment letter The property's deed The Certificate of Occupancy The building permit 6D - correct answer A buyer's objections to defects or encumbrances to title are described in which paragraph...? 2 [Show Less]
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TEXAS PROMULGATED CONTRACT -REAL ESTATE EXPRESS
TRELA changed from REDLA - correct answer Texas legislature passed the Real Estate Dealer's License Act (REDLA), which required real estate agents to obtai... [Show More] n licenses. KEY CONCEPT This act was administered by the Secretary of State until 1949 when the Texas Real Estate Commission (TREC) assumed the administrative responsibilities associated with it. In 1949, the REDLA was changed into the Texas Real Estate License Act (TRELA) Contract law is based on the principle expressed in the Latin phrase, pacta sunt servanda, - correct answer agreements are to be kept" What are the four basic elements of a contract? - correct answer Agreement, competency, consideration, and legal objective What group administers the Texas Real Estate License Act? - correct answer TREC Acceptance - correct answer "must be absolute and must be entered into freely and voluntarily. The contract cannot contain: Misrepresentation - correct answer an error Fraud - correct answer - intentional misrepresentation Duress - correct answer - use of force Menace - - correct answer threat of violence Undue Influence - - correct answer use of power two types of consideration, - correct answer valuable consideration and good consideration. Valuable consideration is something of value. It is usually cash, but it could be anything of monetary value. Good consideration is "love and affection." What is misrepresentation? - correct answer An error What is a court's primary objective when interpreting a contract? - correct answer To ascertain and give effect to the intent of the parties What is duress? - correct answer Use of force What is it called when all terms in a contract are agreed to by all the parties of the contract? - correct answer Mutual agreement What is it called when someone listens to both sides of the situation and makes a decision? - correct answer Arbitration A valid contract - correct answer is legally binding and enforceable A contract is valid when all of these five conditions are met: - correct answer "The written agreement is legal, the parties to the contract have a legal right to enter the contract The written agreement is legal, the parties to the contract have a legal right to enter the contract Every item is completely agreed to The buyer and seller are sane and of legal age There is nothing in the document that is illegal or against public policy, the contract is for legal purposes All of the applicable addenda to a contract are included in the document void contract - correct answer is invalid and completely without legal force or binding effect. When all of the items for a valid contract are not met, the contract is void. Void translates - correct answer as "absence of", meaning the contract never existed. A common cause of a void contract - correct answer is the inclusion of contract terms that are illegal or become illegal due to changes in law. a contract can become voidable - correct answer by mistake or error in the contract? However, failure to read the contract doesn't make a contract voidable. between the causes that can make a contract void, and the causes that can make a contract voidable. - correct answer The fundamental difference between these two types of contracts is that a void contract is not legally valid or enforceable at any point. A voidable contract can be legal and enforceable depending on how the contract is used. A legally binding agreement that is clear and definite is an - correct answer xpress contract Any contract that is not clear, but where agreement is indicated through the actions of the parties, is an - correct answer implied contract. In a unilateral contract - correct answer one side has all the rights and no obligations. The other side has all the obligations and no rights. Option contracts and feasibility studies are examples of unilateral contracts. Reasonable time - correct answer s defined as that amount of time which is fairly necessary, conveniently, to do what the contract requires to be done, as soon as circumstances permit. It is the period determined from trade practice, custom, or from circumstances. What legal status does a void contract have? - correct answer A contract that never existed What is the definition of an executory contract? - correct answer Contract for deed, lease option, or purchase option longer than 180 days An amendment - correct answer is a modification to an existing document An addendum - correct answer is adding to an existing contract. If the addendum is not on the list, - correct answer then it should be written into the line that says "Other" and that box should be checked. Any amendments must be in writing and - correct answer signed by both parties to comply with the Statute of Frauds. One item that cannot be changed by using an amendment is the - correct answer brokerage fee, also called a commission. If a contract is modified before it is signed, - correct answer such changes are not "amendments If the parties wish to handwrite a change on a contract that has been printed out for signature, - correct answer you can use a pen to do so and have both parties initial it. The most common amendment to the One to Four Family Residential Contract (Resale), - correct answer is the Amendment to Contract Form 39-8 - correct answer Amendment to Contract A different addendum should be used by the buyer to cancel the contract. It is called the - correct answer Notice of Buyer's Termination of Contract. Third Party Financing Addendum. Paragraph 8 - correct answer In this addendum, the buyer agrees in paragraph 2A to some number of days in which they would let the seller know if financing could not be obtained.By using paragraph (8) of the Amendment, the buyer is asking for a longer period of time before closing. How can an agent determine the terms of the buyer's loan when completing the Third Party Financing Addendum? - correct answer The lender will provide this information after negotiations with the buyer Alicia is set to close on her new home in three days, but today she received a phone call from her agent stating that the lender needs to push closing back seven days. What, if any, action needs to be done? - correct answer submit an "Amendment to Contract" with the new closing date to the seller's agent In completing a sales contract, the sale price should equal what? - correct answer down payment and the loan amount are added together Performance - correct answer is the fulfillment of one's obligations required by contract. Specific performance - correct answer compels a party to execute the agreement according to its terms where monetary damages would be inadequate compensation for the breach of an agreement. This is the case with the sale of land. Specific performance of a contract may be demanded in a lawsuit Four Corners Doctrine. - correct answer his means that the interpretation of any disputed clause will be influenced by the document as a whole. No phrase will be lifted out of the document to determine the meaning but will be looked at in the total context of the document as a whole. This helps any person outside of the agreement evaluate what the two parties to the contract were agreeing to. parol evidence, a common-law rule. - correct answer prevents a party to a written contract from presenting oral evidence that contradicts, or adds to, the written terms of the contract that appears to be whole. The rationale is that since the contracting parties have reduced their agreement to a written contract, past oral agreements or terms should not be considered when interpreting that writing. For example, in verbal discussions, the seller may have stated they would paint the house prior to closing. If this information did not appear in the contract itself, the buyer could not later, during testimony, use this verbal statement to alter what the contract said. In Texas, both written and oral contracts have a statute of limitations - correct answer of four (4) years. What does the Four Corners Doctrine direct a judge to look at? - correct answer Document as a whole How long is the Statute of Limitations for a written contract in Texas? - correct answer 4 yrs What are some examples of discharging a contract? - correct answer Contract could not be accomplished legally, fraud, or some action of the law Which of these forms is a Texas Real Estate Commission (TREC) promulgated form? - correct answer New Home Contract (Completed Construction) TREC does not govern either the seller, the party of the first part, nor the buyer, the party of the second part. - correct answer TREC only gets involved when one person is acting in a third party position. Broker-Lawyer Committee. - correct answer he purpose of this committee is to draft and revise contracts and forms for use by agents. There are 13 members on the Broker-Lawyer Committee. It is made up of: - correct answer Six lawyers appointed by the president of the state bar of Texas Six real estate brokers appointed by the Texas Real Estate Commission One public member who is appointed by the governor exas Real Estate License Act (TRELA). - correct answer his is the main law that governs the real estate industry in Texas. TRELA dictates what you can and cannot do as an agent. What is the main law that governs the real estate industry? - correct answer is authorized to regulate and monitor TRELA. f a principal directs you to use a different form, you may do so because it is an - correct answer exception under the TRELA. A licensee may not: - correct answer practice law, (2) offer, give or attempt to give legal advice, directly or indirectly; (3) give advice or opinions as to the legal effect of any contracts or other such instruments which may affect the title to real estate; (4) give opinions concerning the status or validity of title to real estate; or (5) attempt to prevent or in any manner whatsoever discourage any principal to a real estate transaction from employing a lawyer. Licensee Disclosures - correct answer c) Nothing in this section shall be deemed to limit the licensee's fiduciary obligation to disclose to the licensee's principals all pertinent facts which are within the knowledge of the licensee, including such facts which might affect the status of or title to real estate. To be an acceptable listing contract, TREC requires that the listing form contains what items? - correct answer A provision informing the parties to the contract that commissions are negotiable Which of the following is an exception to an agent using a TREC promulgated form? - correct answer The form is prepared and required by the property owner In what year was the TRELA written? - correct answer 1939 [Show Less]
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TEXAS PROMULGATED FORMS
When a contract contains all of the essential elements that make it legally sufficient or enforceable and is binding in a court of law, it is - correct ans... [Show More] wer The answer is valid. A valid contract meets all of the required essential elements (i.e., offer and acceptance, consideration, legal purpose, consent, and legal capacity). A valid legal contract must have - correct answer legally competent parties. The parties must be of legal age and have enough mental capacity to understand the nature or consequences of their actions in the contract. A contract is said to be bilateral if - correct answer all parties to the contract exchange binding promises. Bilateral mean that each of the parties agrees to give something (i.e., buyer and seller, seller and listing broker, landlord and tenant). A contract can be discharged or terminated - correct answer by impossibility of performance. Impossibility of performance means that an act required by the contract cannot be legally accomplished. For example, suppose a contract stipulates that a buyer must be able to park his RV in the driveway of the property. After research, it is determined that deed restrictions prohibit that action. The statute of limitations for a written contract for the sale of real estate in Texas is - correct answer four years. In Texas, the statute of limitations for filing a legal suit on a written contract is four years. Remember that the statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable, so the statute of limitations on a contract for the sale of real estate is four years. Which of these promulgated forms does NOT include "time is of the essence"? - correct answer Loan Assumption Addendum. 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. One party cancelling or terminating a contract as though it had never been made is - correct answer rescission. Rescission returns the parties to their original positions before the contract, so any monies exchanged must be returned. Rescission is normally a contractual remedy for a breach. An agreement entered into involuntarily by a party is - correct answer void. This agreement lacks mutual agreement, which means that the parties must enter the contract freely and voluntarily. Without mutual agreement, the agreement is void. Previous Next Go to Summary If parties to a real estate contract in Texas are held to very strict deadlines for performance, the contract likely includes the phrase - correct answer "time is of the essence." Courts must hold the parties to exact performance within the time specified when "time is of the essence." Which of these addenda does NOT include "time is of the essence"? - correct answer Addendum for Coastal Area Property. 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. Which of the following would NOT be considered a competent party? - correct answer The answer is a 30-year-old attorney under the influence of marijuana at the time she entered into an agreement. A competent party is a person who is at least 18 years old, sane, and sober. A contract may be discharged under substantial performance when - correct answer one party does not complete all the details exactly as the contract requires but has to a large extent performed on the contract, which may be enough to force payment. An example of this is a newly constructed addition to a home that is finished except for polishing the brass door knobs, in which case the contractor may be entitled to the final payment and the contract is discharged. Which of the following is required for a valid contract? - correct answer The answer is consideration. Consideration is something of legal value offered by one party and accepted by another as an inducement to perform or to refrain from performing some act. Anything that has been bargained for and exchanged is legally sufficient to satisfy the requirement for consideration. When a contract appears to be valid but may be rescinded or disaffirmed by one or both parties based on some legal principle it is - correct answer voidable. A contract with a minor, for example, is voidable. However, a voidable contract is considered by the courts to be valid if the party who has the option to disaffirm the agreement does not do so within a period of time. A contract is classified as bilateral if - correct answer all parties to the contract exchange binding promises. A contract is said to be bilateral if both parties to the agreement make promises to each other to do something (promise for a promise). Which of the following is TRUE regarding amendments and addenda? - correct answer an amendment is completed after a contract has been executed, but addenda are completed at the same time as the sales contract. An amendment is a change or modification to the existing content of a contract, and an addendum contains additional information that is part of the original contract/agreement. An addendum is - correct answer additional information given in the offer. An addendum is any additional material that is part of the original agreement. If an addendum is needed, it is ideal to have it added to the original contract form during the offer stage. In Texas, the statute of limitations for an oral contract for a lease of less than one year is - correct answer two years. Under the statute of frauds, leases for one year or less do not have to be in writing. An oral contract for the lease of a property for one year or less has a statute of limitation of two years. A buyer and seller enter into a contract for the sale of a four-bedroom home. If either party defaults under the contract, the other party has how much time to file a lawsuit for damages? - correct answer four years. In Texas, the statute of limitations for filing a legal suit on a written contract is four years. Remember that the statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable, so the statute of limitations on a contract for the sale of real estate is four years. Once a sales contract is completed with all parties fulfilling their promises, the ownership changing hands, and the seller receiving the sales price amount, the sales contract is a(n) - correct answer executed contract. At closing, after the seller has conveyed the property to the buyer and the seller has received the sales price amount, the contract is considered an executed contract. The main difference between an amendment and an addendum is that an amendment - correct answer is a change to the existing content in the contract. The use of an amendment and an addendum are often confused. An amendment is a change to what is in the original contract; an addendum is material being added to the contract. In either case, the other party must sign off on the change or addition for the contract to remain in full force. In Texas, the statute of limitations is two years for - correct answer oral contracts for a lease of less than one year. Under the statute of frauds, leases for one year or less do not have to be in writing. An oral contract for the lease of a property for one year or less has a statute of limitation of two years. Which of the following is TRUE for the statute of limitations for contracts for the sale of real estate and oral contracts for leases of less than one year? - correct answer statute of limitations is four years for the sale and two years for the lease. In Texas, the statute of limitations for filing a legal suit on a written contract is four years. Remember that the statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable, so the statute of limitations on a contract for the sale of real estate is four years. Under the statute of frauds, leases for one year or less do not have to be in writing. An oral contract for the lease of a property for one year or less has a statute of limitation of two years. The statute of limitations is four years for which of the following? - correct answer a contract for the sale of real estate. In Texas, the statute of limitations for filing a legal suit on a written contract is four years. Remember that the statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable, so the statute of limitations on a contract for the sale of real estate is four years. Under the statute of frauds, leases for one year or less do not have to be in writing. An oral contract for the lease of a property for one year or less has a statute of limitation of two years. In Texas, the statute of limitations is four years for - correct answer contract for the sale of real estate. In Texas, the statute of limitations for filing a legal suit on a written contract is four years. Remember that the statute of frauds requires agreements affecting title to or interest in real estate in Texas to be in writing to be enforceable, so the statute of limitations on a contract for the sale of real estate is four years. Which of the following is an exception to using TREC promulgated contract forms? - correct answer when the licensee is acting as a principal and not as an agent. One of the exceptions for when a licensee must use a TREC promulgated contract form is in transactions in which the licensee is functioning solely as a principal, not as an agent. What law specifically prohibits licensees from practicing law? - correct answer Texas Real Estate Licensing Act (TRELA). The TRELA specifically prohibits licensees from practicing law. How many members are on the Broker-Lawyer Committee? - correct answer 13. The committee is composed of 6 Real Estate Commission appointees (who are licensed real estate brokers) and 6 lawyers, appointed by the president of the State Bar of Texas, and 1 public member, appointed by the governor. They serve staggered six-year terms. A seller wants to use her own contract. What are the agent's legal options? - correct answer the agent can use the contract because it is an exception. According to Section 537.11(a)(3), transactions for which a contract form has been prepared by a principal to the transaction are an exception to the rule that TREC promulgated forms must be used. Which of the following is a TREC promulgated contract? - correct answer The answer is Residential Condominium Contract. The Residential Condominium Contract is one of six TREC promulgated contracts. Which of the following is an exception to using a TREC promulgated contract form? - correct answer transactions in which a United States government agency requires a different form to be used. When a United States government agency requires a specific form to be used, a TREC promulgated form does not need to be used. Which of the following committees is responsible for drafting and revising contract forms? - correct answer Broker-Lawyer Committee. The Broker-Lawyer Committee drafts and revises contract forms for use by real estate licensees. The purpose is to expedite real estate transactions and reduce controversies while protecting the interests of the parties involved. According to the Texas Real Estate License Act, which of the following requires that a licensee be a practicing attorney? - correct answer advising a person regarding the validity of title to real property. TRELA Section 1101.654 states that "The commission shall suspend or revoke the license or certificate of registration of a license or certificate holder who is not a licensed attorney in this state and who, for consideration, a reward, or in a pecuniary benefit, present or anticipated, direct or indirect, or in connection with the person's employment, agency, or fiduciary relationship as a license or certificate holder...advises a person regarding the validity or legal sufficiency of an instrument or the validity of title to real property." What does the Broker-Lawyer Committee do? - correct answer drafts contracts. The Broker-Lawyer Committee develops forms and recommends their adoption, but it is the TREC that promulgates the forms for mandatory use. If the offer is acceptable to the seller, the offer is signed and dated and returned to the buyer. It is now a contract for sale. If the offer is rejected, the offer is returned to the buyer marked - correct answer "rejected." The offer should be returned and marked as rejected by the seller to let the buyer know that the seller did not accept the offer. Which of the following is a TREC promulgated form? - correct answer Addendum for Sale of Other Property by Buyer. The Addendum for Sale of Other Property by Buyer is a TREC promulgated addendum; the other choices are TREC approved forms. An offer to purchase by a potential buyer is considered accepted when the - correct answer buyer is notified that the seller has accepted the offer. In today's electronic world, there may be a question as to when an acceptance, rejection, or counteroffer has been made and accepted. A standard contract may state that electronic transmissions are valid. [Show Less]
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PROMULGATED CONTRACT FORMS FINAL EXAM
When earnest money is deposited with an escrow agent, the escrow agent: - correct answer A) Is not responsible for the performance of any signatory B) Has ... [Show More] the right to secure written release of all signatories C) Is not liable for interest on the money How does the Texas Real Estate License Act define the first face-to-face meeting with required agency disclosure? - correct answer When a substantive dialogue about a specific real property occurs If a property was built before 1978, what specific addendum is required? - correct answer Disclosure of Lead-Base Paint Addendum The Buyer's Agency Agreement allows an agent to show the same properties to competing clients - correct answer true The Third Party Financing Condition Addendum is not used with - correct answer Seller financing The Texas Real Estate Commission (TREC) promulgates an addendum to be used in a short sale. This Short Sale Addendum is to be signed by: - correct answer Buyer and seller In Paragraph #14 of the Residential Contract (casualty loss), If a seller cannot complete the repairs within the time limit, the buyer has the option of: - correct answer Terminating the contract In Paragraph 3B of the sales contract, the "sum of all financing" - correct answer Excludes any loan funding fee or mortgage insurance premium The TREC promulgated 1-4 Family Residential Contract (resale) states that if the cost of lender required repairs and treatment exceed _______% of the sales price, buyer may terminate the contract and the earnest money will be refunded to the buyer. - correct answer 5% The financing paragraph will be used to indicate: - correct answer A) Third party financing B) Assumption C) Seller financing If a Seller is to remain in the property after closing: - correct answer D) A Seller's Temporary Lease Form promulgated by TREC should be completed and signed by buyer and seller and attached to the contract. - 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: - correct answer Contingency In the event of buyer's default, the seller may: - correct answer A) Terminate the contract B) Receive the earnest money as liquidated damages C) Enforce specific performance If there is an existing survey on the property, what does the seller take to the title company and the lender? - correct answer 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 - 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: - correct answer May be cause to have the agent's license suspended or revoked, and precludes receiving any commissions or agreed fees associated with the sale. Who is designated as responsible for promptly sending a copy of the contract to any attorneys that are named in the contract? - correct answer The broker Intermediary requires: - correct answer A) Disclosure of who represents whom in a transaction B) Written agreement by both seller and buyer C) involvement of only one company What must a Buyer's Representation Agreement have? - correct answer A termination date Once a contract is finalized and receipted it: - correct answer Can be amended multiple times if all parties agree If a buyer and/or seller agree to mediate, they are giving up their right to pursue relief through the courts. - correct answer false A contract is described as an agreement between two or more parties to do or not do something: - correct answer true A voluntary dispute resolution is called litigation: - correct answer true Brokers fees are included in the 1-4 Family Residential Contract (resale) between the Buyer and the Seller. - correct answer false The Residential Condominium Contract allows a limit to the amount a Buyer will pay for Association transfer fees: - correct answer true An addendum has been provided by TREC for voluntary use to provide for transfer of personal property (Non-Realty Items): - correct answer true A Buyer/Tenant Representation Agreement is only available through the Texas Real Estate Commission (TREC): - correct answer true 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: - correct answer false Federal Fair Housing Laws forbids discriminatory practices by parties including: - correct answer A) Owners of properties B) Lenders C) Real estate brokers Use of the TREC promulgated One to Four Family Residential Contract (resale) is allowed on the sale of a residential condominium. - correct answer false In a real estate transaction, a street address is considered sufficient to described the property being conveyed: - correct answer false If a property has a "Sale of Other Property" contingency contract on it, Seller: - correct answer Can ask the original buyer to remove the contingency if the Seller has accepted another offer as a back -up On the Seller's default, what should happen to the earnest money? - correct answer It should be returned to the Buyer 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? - correct answer The seller Time is of the essence means that certain items in the contract must be performed: - correct answer As specified in the contract The Information About Brokerage Services (IBS) states the broker may represent the: - correct answer A) Owner B) Buyer C) Both owner and buyer as intermediary Fraud is: - correct answer A) A crime B) A civil law violation According to the Real Estate License Act of Texas, which one of the following actions is a fair and impartial act for an Intermediary? - correct answer Appointing associated licensees to work with the parties Steering is illegal and is described as channeling a minority to or away from an area to change the character of the neighborhood. - correct answer true The sales price is determined in paragraph 3 by adding the down payment (3A) and the loan amount (3B). - correct answer true 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? - correct answer List the item on the "Residential Contract" 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. - correct answer 3 months The Seller as well as the Buyer has the unrestricted right to terminate the contract under the option period: - correct answer false If a Buyer wants the Seller to pay some or all of their closing costs, it should be added to the contract in: - correct answer Paragraph #12 - Seller participation in the Buyer's costs A suit for specific performance is: - correct answer To force the seller not to default on the contract If the contract includes an option period for the buyer and the buyer does not tender the option fee to the Seller within the time limit (currently with 3 days from effective date of the contract) the Buyer no longer has an unrestricted right to terminate under the option: - correct [Show Less]
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TEXAS PROMULGATED CONTRACT FORMS & ADDENDA FINAL EXAMS
Which of the following is an example of a Bilateral contract? - correct answer A Promise in exchange for a promise - Purchase Contract. Unilateral Contrac... [Show More] ts - Listing Agreement, Buyer's Rep, Option Contract Who is responsible for filling in the effective date, who, when & what? - correct answer Broker. Between the buyer and the seller, The date on which the communication was made. The date of initialing and signing of the parties. The last party to initial/Sign fills in the day. Broker. Last party to accept must communicate back to other party & fill in the date What is a legal proceeding brought by a party to a contract against another party to compel action called for in the agreement? - correct answer Breach of a contract, one-party defaults, sues for specific performance, seek other relief - arbitration, mediation, injunction to sue for compensatory Damages. If a seller fails to provide the buyer with the seller's disclosure of property condition as required by Section 5.008 of the Texas Property Code, what is the status of the purchase contract? - correct answer Voidable at the option of the buyer. Voidable by buyer any time prior to closing and the earnest money will be refunded to the buyer. Which term identifies the substitution of a new contract for an existing contract? - correct answer Novation When using a Power of Attorney to transfer title to real property? - correct answer Attorney-in-fact - Legal description and the subject of the authority Who must convey to the principal all known information that would affect the principal's decision to accept or reject offers? - correct answer Licensee - the listing agent/selling agent When a legally enforceable promise is exchanged for a legally enforceable promise? - correct answer It is a Bilateral Contract. If the seller has already sent a counteroffer to a prospective buyer and then receives another offer that is even better, the seller: - correct answer Withdraw the counteroffer first then consider new offer Which law requires the contract for real property to be in writing and signed to be enforceable? - correct answer Statute of Frauds To have a valid real property contract, something of value must be exchanged. This is called: - correct answer Consideration When may a potential purchase's offer to buy real estate be withdrawn? - correct answer at any time before it's accepted Which of the following is NOT addressed by a TREC-promulgated contract? - correct answer Lease with an option to purchase. Lease purchase - new Condo contract When is a financing addendum not required? - correct answer When the buyer pays in cash. When third financing addendum is waived Items that are preprinted in paragraphs 1 and 2 of the contract include all the following except? - correct answer Exclusions When will the third party financing addendum credit approval not be used? - correct answer 1. all cash 2. When Third Part Financing contingency is waived Which addenda will the Purchaser use when purchasing a property for cash? - correct answer None- no addendum will be used. Which addendum is commonly used in a transaction involving a 90 percent fixed rate loan with PMI? - correct answer Third party financing addendum. What form is used if the buyer wants the seller to leave the refrigerator with the home after closing? - correct answer Non-- Reality items addendum In Third party financing addendum for credit approval, what should the Cap On interest rates? - correct answer MARKET RATE----- Should be on what the buyer and lender have agreed on and it should not exceed that amount. Federal law dictates that an addendum addressing the possible presence of lead-based paint and lead based paint hazard be attached to the purchase agreement when the house is being so that was built before? - correct answer Prior to 1978. Earnest money is to be deposited? - correct answer By the close of the escrow agent's second business day following the signing of the agreement. By the end of the 2nd business day after the effective date. days of the effective date of the contract. If the seller furnishes the existing survey to the buyer, but it is not acceptable to the buyers lender, the cost of the new survey may be at whose expense? - correct answer The Buyer Which form is used for the owner to tell the buyer about known problems with the property? - correct answer Sellers disclosure of property condition. The notice about obtaining an abstract or title policy is a required notice from? - correct answer Buyer's broker When I licensees using a builder's contract or a form prepared by an attorney that is not promulgated by TREC, what is the wisest way to notify the buyer about title insurance or abstract.? - correct answer OP-C Notice to prospective buyer - Suggest that he get an abstract or a title insurance prior to closing - TAR - Buyer's Rep Buyer's Agent is known as the? - correct answer Selling Agent Which of the following is not true about paragraph 11 special provisions? - correct answer Paragraph 11 special provisions calls for: Insert only factual statements and business details to the sale. TREC prohibits licensee from adding factual statements for business detail where to contract addendum lease or other form has been promulgated by TREC for mandatory use. Which of the following is true about TREC addenda? - correct answer It adds to the contract but does not change the contract. Which is acceptable language for special provisions of 22-TREC contract form? - correct answer Only factual or business details. Can a party accept earnest money as liquidated damages and also sue the third party for specific performance? - correct answer No - one or the other. Regarding closing and the buyer's possession of the property? - correct answer Seller shall deliver possession of property in it's present or require condition, or wear and tear excepted; 1. Upon closing or funding; Or date agreed upon 2. according to a temporary lease form promulgated by TREC or other written lease required by the parties. If clients want an agent to write a statement that defines a legal remedy? - correct answer The agent should decline and referring the client to a lawyer. Which of the following made the address by agent in paragraph 11 (special provisions)? - correct answer Insert only factual statements and business detail applicable to the sale. TREC rules prohibit licensees for adding factual statements or business details for which a contract addendum, lease or other form has been promulgated by TREC for mandatory use. If the broker's information is blank on the final page of the contract the contract is? - correct answer Still Valid - He will not get paid a commission. Which of the following characteristics of insulation installed in a new home must be builders reveal? - correct answer The R Value or rating Which contract does not address rollback taxes? - correct answer 1 to 4 family residential contract resell Condo Resale Rollback taxes are discussed in: - correct answer New home contract completed, New home contract incomplete Farm and ranch contracts Which contract would be used for a 50-acre track with a small cottage outside the city? - correct answer Farm and ranch contract Which of the following should not be listed as an addendum to a promulgated TREC contract form? - correct answer Amendment-none listed below.... 1. Addendum for Sell Other Property by Buyer, 2. Addendum for Back - up Contract, 3. Addendum for Release of Liability on Assumed Loan and/or Restoration of Sellers VA Entitlement, 4. Addendum for Coastal Area Property, 5. ADDENDUM for Property located Seaboard of the Intercoastal Waterway, 6. Addendum for Property Subject to Mandatory Membership in an Owners Association, 7. Addendum for Reservation of Oil, Gas, and Other . Minerals, 8. Lead-based Addendum, 9. Non-Reality Items Addendum, 10. Short Sale Addendum, 11. Loan Assumption Addendum, 12. Third Party Financing Addendum for Credit Approval. ----- Anything other than above listed should NOT be included. How many resale certificates are currently promulgated by TREC? - correct answer 2 1. Condominium Resale Certificate, 2. Subdivision Information including Resale Certificate for Property Subject to Membership in a Property Owners Association. Which form informs the customer or client how agents represent consumers of real estate services? - correct answer Information About Brokerage Services. Which addendum warns buyers that Texas may have the right to take their property? - correct answer 1. Addendum for Property located Seaward of the Gulf Inter coastal Waterway, 2. Addendum for Coastal Area Property. Which form must be displayed in the residential brokers office? - correct answer TREC - Notice to Consumer Equal Housing Opportunity Poster --should be posted at the broker's office In accordance to the Fair Housing Amendment Act of 1988 requires it to be posted. Brokerage Fee splits are agreement between the? - correct answer Listing Broker & Selling Broker Four statutory agency position; - correct answer 1. Seller's agent, 2. Subagent, 3. Buyers agent, 4. Intermediary. In the TREC option Par. 23, which statement is true? a) The option fee is refunded if the option is not exercised b) The property must be purchased within the option period c) Third party financing cannot be obtained until the option period has expired d) The optionee may withdraw from the contract during that period - correct answer d A Back up contract with a 12-day option period was executed on August 9. On August 15, the seller notified the buyer that the first contract was terminated when does the buyers option end? - correct answer August 27. Addendum for Coastal Area Property and the Addendum for Property located Seaward of the Gulf Intracoastal Waterway contains the notices required by the? - correct answer Texas Natural Resource Code Sections -33.135 and 61.025 respectfully. Who is required to execute the notice of termination of a contract? - correct answer The buyer. If the option money is not delivered to the proper party within the proper Time frame what is the status of the contract? - correct answer Valid but no option period. If buyer fails to pay the option fee to seller within the time prescribed this paragraph will not be part of this contract and the buyer shall not have the unrestricted right to terminate this contract. The TREC contract forms that discuss rollback taxes say that if the rollback taxes are assessed because If seller change the use of the property prior to closing. - correct answer The seller will be obligated to pay the Rollback Taxes. If the seller changes the use of the property prior to closing or denial of the special use valuation on the property claim by seller results in assessments appeared prior to closing, the assessment will be the obligation of the seller. FARM & RANCH Property approval, according to paragraph 4 of the one - four family contract includes; - correct answer Third Party Financing Seller's Financing Loan Assumption Financing If the property does not satisfy the lenders underwriting requirements for the loan including, but not limited to appraisal, insurability, and the lender required repairs, buyer may terminate this contract by giving notice to the seller prior to closing and the earnest money will be refunded to the buyer. If the seller is doing all the financing in a sale, the mortgagees Title policy will protect - correct answer The seller That he has a first lien position or second lien position on the property. When a buyer purchases a condominium they are buying the? - correct answer ownership of the airspace within the unit itself, plus share [Show Less]
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