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Law of CONTRACTS- study set [specify promulgated forms]
Terms in this set (73)
1. The effective date- who, what, and when?
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.
2. What is the legal proceedings brought by party to a contract against another party to compel action call forth in the agreement?
Breach of a contract, one-party defaults, sues for specific performance, seek other relief - arbitration, mediation, injunction to sue for compensatory Damages.
3. If the seller fails to provide the buyer with the sellers disclosure of property condition as required by Section 5.008 of the Texas property code what is the status of the purchase contract?
Voidable - The buyer may terminate the contract anytime prior to closing and the earnest money will be refunded to the buyer.
4. Which of the following is not addressed by TRAC - promulgated contracts.
1. Transactions with the licensee is functioning Soley as the principal, not as an agent.
2. Transactions in which an agency of the United States government requires a different form to be used.
3. Transactions for which a contract form has been prepared by property owner or prepared by an attorney and required by the property owner.
4. Transactions for which most standard contract form has been promulgated by the Texas real estate commission, and the licensee uses a form prepared by the attorney at law licensed by this state and approved by the attorney for a particular kind of transaction involved or prepared by the Texas real estate Broker - lawyer committee and made available for trial use By licensees with the consent of the commission.
5. When is a financing addendum not required?
When the buyer pays in cash.
Wiave third financing addendum
6. Items that are preprinted in paragraphs 1 and 2 of the contract include all the following except?
7. When will the third party financing addendum credit approval not be used?
1. Buyer pays cash.
2. Seller financing.,
8. Which addenda will the Purchaser use when purchasing a property for cash?
None- no addendum will be used.
9. Which addendum is commonly used in a transaction involving a 90 percent fixed rate loan with PMI?
Third party financing addendum.
10. What form is used if the buyer wants the seller to leave the refrigerator with the home after closing?
Non-- Reality items addendum
11. In Third party financing addendum for credit approval, what should the On interest rates?
Should be on what the buyer and lender have agreed on and it should not exceed that amount.
12. 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?
Prior to 1978.
13. Earnest money is to be deposited?
By the end of the 2nd business day after the effective date. days of the effective date of the contract.
14. 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?
The buyer.- 6c-1
15. Which form is used for the owner to tell the buyer about known problems with the property?
Sellers disclosure of property condition.
16. The notice about obtaining an abstract or title policy is a required notice from?
17. When I licensees using a builders contract or you won't prepared by attorney that is not promulgated by
TREC, what is the wisest way to notify the buyer about title insurance or abstract.?
Notice to prospective buyer - Suggest that he get an abstract or a title insurance prior to closing
18. Which of the following is not true about
about paragraph 11 special provisions?
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.
19. Which of the following is true about TREC addenda?
It adds to the contract but does not change the contract.
20. Which is acceptable language for special provisions of 22-TREC contract form?
Only factual or business details.
21. Can a party accept earnest money as liquidated damages and also sue the third party for specific performance
No - one or the other.
22. Regarding closing and the buyer's possession of the property?
Seller shall deliver possession of property in it's present or require condition, or wear and tear excepted; 1. Upon closing or funding; Or 2. according to a temporary lease form promulgated by TREC or other written lease required by the parties.
23. If clients want an agent to write a statement that defines a legal remedy,?
The agent should decline and referring the client to a lawyer.
24. Which of the following made the address by agent in paragraph 11 (special provisions,?
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.
25. If the broker's information is blank on the final page of the contract the contract is?
He will not get paid a commission.
26. Which of the following characteristics of insulation installed in a new home must be builders reveal?
The R Value or rating
27. Which contract does not address rollback taxes?
Farm and ranch contracts require prorations disclosure.
New home contract completed,
New home contract incomplete
Not required on prorations is 1 to 4 family residential contract - resell
28. Which contract would be used for a 50 acre track with a small cottage outside the city?
Farm and ranch contract
29. Which of the following should not be listed as an addendum to a promulgated TREC contract form?
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
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.
30. How many resale certificates are currently promulgated by TREC?
1. Condominium Resale Certificate,
2. Subdivision Information including Resale Certificate for Property Subject to Membership in a Property Owners Association.
31. Which form informs the customer or client how agents represent consumers of real estate services?
Information About Brokerage Services.
32. Which addendum warns buyers that Texas may have the right to take their property?
1.Addendum for Property located Seaward of the Gulf Intercoastal Waterway,
2. Addendum for Coastal Area Property.
33. Which form must be displayed in the residential brokers office?
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.
34. Brokerage Fee splits are agreement between the?
Broker to Broker
Four statutory agency position;
1. Seller's agent,
3. Buyers agent,
35. In the TREC option Par. 23, which statement is true?
For normal consideration, the receipt of which is hereby acknowledged by the seller, and the buyers agreement to pay the seller ---option Fee,---- Within two days after the effective date of the contract, seller grants buyer the unrestricted right to terminate this contract by giving notice of termination to the seller within 2 days after the effective date of the contract - option period.
If Buyer fails stated as an option fee or if the buyer fails to pay an option fee to the seller within the prescribed time, this paragraph will not be part of the contract and buyer shall not have the unrestricted right to terminate this contract. Yeah Bier gives notice of termination within the time prescribed, the option fee will not be refunded; however, Any earnest money will
be refunded to the buyer. The option fee will or will not be credited to the sales price at closing. Time is of the essence for this paragraph and restricts compliance with in the time for performance is required.
36. A Back up contract with a 12 day option period was executed on August 9. On August 15, the seller notify the buyer that the first contract was terminated when does the buyers option end.;?
37. Addendum for Coastal Area Property and the Addendum for Property located Seaward of the Gulf Intercoastal Waterway contains the notices required by the?
Texas Natural Resource Code Sections -33.135 and 61.025 respectfully.
38. Who is required to execute the notice of termination of a contract?j
39. If the option money is not delivered to the proper party within the proper timeframe what is the status of the contract?
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.
40. 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.
If the seller change 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.
41. Property approval, according to paragraph 4 of the one - four family contract includes;
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.
42. If the seller is doing all the financing in a sale, the mortgagees Title policy will protect;
The seller That he has a first lien position or second lien position on the property.
43. When a buyer purchases a condominium they are buying the?
Involves individual ownership of the airspace within the unit itself, plus share ownership of common facility such as halls, elevators, and the land as undivided interest.
44. The seller of unimproved property provides the property condition disclosure;
Paragraph 7 -Property Condition; access, inspection, and utilities; seller shall permit buyer to buyer's agent access to the property at reasonable times. The buyer may have the property inspected by inspectors selected by the buyer and licensed by TREC or other permitted by law to make inspections. Seller at sellers expense shall immediately cause existing utilities to be turned on and shall keep utilities on during time this contract is in effect.
45. If the property is subject to mandatory membership in an HOA, subdivision information means?
(i). A current copy of restrictions apply into the subdivision and bylaws and rules of Association,
and (ii). a resale certificate, all of which are described by section 207.003 of the Texas property code.
46. The disclosure of relationship with a residential service company requires disclosure of all?
Kick-backs or Compensations by Broker
The purchase of a residential service contract is optional - neither a broker or salesperson nor a seller may condition the sale of the property on the buyers purchase at a residential service contract.
47. If the buyer fails to give the notice required by the third-party financing statement for credit approval?
If buyer does not give the notice with in the time required, this contract will know longer be subject to credit approval. Time is of the essence for this paragraph and strict compliance with time for performance is required.
48. The option fee is paid to?
An amendment to a contract is?
Change of Contract or a new contract.
1. Condo; - What two things is a buyer actually purchasing when they buy a condo?
The Unit and common areas. net and common area.
2. Loan assumption; - If the buyer doesn't deliver the credit information to the seller, how long does the seller have to terminate?
Seven calendar days.
3. Third-party financing: - What does the buyer do if the lender says, I can loan you the money at this time?
The buyer must send a notice to the seller stating they don't qualify.
4. Bonus; - Who must fill in the executed date?
The broker - agent represents broker.
5. Amendments: - Who are the two people who signed the amendments or amendment?
The buyer and seller.
6. Bonus: - if the buyer never receives a sellers disclosure of property condition, what does it make what does it make the contract?
Voidable - in a court of law.
7. Leasees; - what is a holdover fee?
It is the fee paid if they party does that leave - Fee is usually a hefty per day to
get them out between 200 and $300. On the second page of the seller and buyer temporary lease, there is a space to put a date.
8. Leases; - when is the total rent due?
After closing or funding of the contract - a house and closes and not be funded in temporary leases which is called Lease backup.
9. Bonus; - The broker fees that are split in MLS Is the between who?
Broker and broker - if Ebby agrees to pay Century 21 and an LS agreement.
10. Bonus; - true or false - the buyer's representation agreement is an addendum to a contract?
False - it is a separate contract between a buyer and a broker.
11. Farm and ranch: - rollback taxes are paid by the party that?
Changes the usage of the property.
12. Bonus; -. The earnest money is to be deposited with the title company in how many days?
By the close of business on the 2nd calendar day.
13. Sell of other property - What is a kick out and when is it due?
If the seller gets another contract then he kicks that buyer out because the contract is better and not contingent upon sale of home.
The backup contract Has to remove the contingency and come out of the money or he gets kicked out as a backup usually within three days seller will give him three days to remove the contingency.
14. Sellers financing addendum; -. The seller is protected by what kind of title policy?
Mortgagees title policy. Example - there are two Title policies. Sellers policy - they pay - and the buyers policy pays to protect the mortgage lender from buyers default. Buyer pays a small portion of both policies.
15. Addendum's; -. How many addendum's and places in the contract that states --time is of the essence? How many and name them? - Not the contract where is it?
1. Paragraph 23 under option section,
2. Short sale addendum,
3. Sale of other property addendum,
4. Back up addendum,
5. Third party financing addendum.
16. General information notice; -.
Where can I buyer find information about waterways?
Texas Natural Resource Code.
17. Short sale; -. How long of a timeframe should you put in the form for a buyer to wait for bank approval?
It is negotiable.--Example; agents can recommend 60 days. Ask the buyer, how long do you want to wait for this? Agent cannot tell the buyer what to do or decide.
18. HOA: - Name two 2 resell certificates?
Condominium resale certificate - TREC 32 - three,
Subdivision information including resale certificate for property subject to membership in a property owners Association Trac 37 - four.
19. Sellers financing addendum; -. Seller has how many days to check the buyer's credit?
Seven- 7 -days.
20.New home -;. What is the name of the Insulation measurement?
R -factor or R-value.
21. Farm and ranch; -. Can the sales rights be automatically changed?
No.--Example; parties can agree beforehand that they are automatically going to be change, so it doesn't have to be renegotiated, but it's not automatically.
22. Home Warranty:-. What must an agent disclose and to whom?
Most people disclose that they are receiving a kick back, must disclose and agents client - example; if these buyer and sellers listing agreement see disclosure affiliated business relationship, -See - disclosure affiliated business relation - paragraph number eight on buyers and paragraph number 12 on sellers agreement.
What forms are approved or promulgated by the Texas real estate commission?
1. Unimproved Property Contract - Promulgated by TREC,
2. Addendum for Sale of the Property by Buyer - promulgated,
3. Addendum for Back up Contract - promulgated.
4. Addendum for Release of Liability on Assumed Loan and\or Restoration of Seller's VA VA Entitlement. - Promulgated
5. Seller's Temporary Residential Lease--Promulgated.-No more than 90 days after the closing use form.
6. Buyer's Temporary Resdential Lease-- promulgated. No more than 90 days.
7. New Home Contract Incomplete construction-. Promulgated.
8. New Home Contract - complete construction -. Promulgated
9. Farm and Ranch Contract -. Promulgated
10. Seller Financing Addendum -. Promulgated.
11. Environmental Assessment, Threatened or Endangered Species, and Wet Lands Addendum--. Promulgated,
12. Residential Condominium Contract Resale -. Promulgated.
13. Condominium resale certificate -.
14. Addendum for coastal area property -.
15. Addendum for property located Seaward of the gulf intercoastal waterway -. Promulgated
16. Addendum for property subject to mandatory
membership in a property owners Association -. Promulgated
17. Subdivision information, including resale certificate for property subject to mandatory
membership in a property owners Association -. Promulgated
18. Notice of buyers termination of contract/.
19. Amendment to contract -. Promulgated,
20. Third party financing addendum for credit approval -. Promulgated,
21. Loan assumption addendum -. Promulgated,
22. Addendum for reservation of oil - Gas other minerals -. Promulgated,
23. Short sale addendum -. Promulgated
24. Notice to prospective buyer -. Approved.
25. Sellers disclosure of property condition -. Approved.
26. Texas real estate consumer notice concerning hazards or deficiencies -. Approved,
27. Information about brokerage service -. Approved,
28. Lead base Addendum for sellers disclosure of information on lead-based paint and leg days a hazard as required by federal law -. Approved.
29. Nonrealty items addendum -. Approved
30. Disclosure of relationship with residential
service company -. Promulgated
Warning to buyer.,
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