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Champions School of Real Estate Terms

Terms in this set (198)

Paragraph 3 - The cash portion plus the financing = the Sales Price
Paragraph 4 - Texas law requires a real estate license holder who is a party to a transaction or acting
on behalf of a spouse, parent, or child... to notify the other party in writing before entering into a
contract of sale. (Agency coupled with an interest must be disclosed)
Paragraph 5 - Within 3 days after the Effective Date, BUYER must deliver earnest money to
escrow agent - Time is of the essence for this paragraph
Paragraph 6B. - The title company has 20 days to provide the title commitment after they receive
the sales contract.
Paragraph 6C.(1) - Within _____ days after the Effective Date of this contract, Seller shall furnish
to Buyer and Title Company Seller's existing survey and an Insurance T-47 Affidavit.
Paragraph 6D.- allows a buyer to choose a number of days to review both the title commitment and
the survey. If the buyer is unhappy with the results of either, he has the negotiated number of days
to address his/her concerns with the seller.
The purpose of a Municipal Utility District (also called a water supply corporation or a utility service
provider) is to provide flood control or drainage, water and sewers to residents of the district.
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Paragraph 6.E.(3) - Texas Water Code requires the Seller to deliver and the Buyer to sign the
M.U.D. disclosure prior to final execution of the contract. (A buyer who has not received the M.U.D.
disclosure has the right to terminate the contract.)
Paragraph 6.E.(6) - If the property is located in a Certificated Service area of a Utility Service Provider
(a M.U.D.) the buyer must be given notice of this, disclosing to the buyer that there may be an
extra charge for having water and sewer services connected.
Paragraph 7.A. - Seller at Seller's expense.....shall keep the utilities on during the time this contract
is in effect.
A Seller's Disclosure of Property Condition must be given to a buyer BEFORE HE SIGNS AN
OFFER to make that offer binding on the buyer
Paragraph 7.B.(2) - If the buyer has not received the Seller's Disclosure he chooses a number of days
for the Seller to provide it. If the buyer doesn't receive it within that number of days he can terminate
the contract. If the Buyer receives the disclosure, the Buyer will have 7 days after receiving it
to terminate for any reason.
Paragraph 7.B.(3) - A seller's disclosure is not required in a foreclosure sale, tax sale, sale by guardian,
executor, or administrator, or sale by a builder of a new home that has not been lived in. A
seller's disclosure is not required if the house is worth less than 5% of the price of the property.
Paragraph 7.D. (1) - Buyer accepts the Property As Is.
Paragraph 7.E. - ...If lender required repairs exceed 5% of the Sale Price, Buyer may terminate the
contract and receive a refund of earnest money paid.
Paragraph 11 - SPECIAL PROVISIONS - Factual statements and business details applicable to
the sale can be inserted here. It is prohibited by TREC rules to insert statements or business
details for which a contract addendum, lease or other form has been promulgated by TREC for
mandatory use.
Paragraph 15 - Default - All TREC contracts have a default paragraph. This paragraph states that
if either party defaults, the injured party can: sue for specific performance, seek such other relief as
may be provided by law, or both, or the injured party can terminate the contract.
Paragraph 16 - The contracts require the parties to agree to mediation for dispute resolution. In
mediation, a mediator hears both sides and tries to help the parties come to an agreement.
If mediation fails, the parties may move to arbitration. The arbitrator hears both sides and then tells
the parties how to proceed.
Paragraph 18.C. - If the contract is terminated and the escrow agent receives a demand of release
of earnest money from one party, they must notify the other party. If the other party does not send
a written objection to the demand within 15 days, the escrow agent may disburse the earnest money
to the party making the demand.
Paragraph 22 - review the Addenda.
The Seller's Temporary Lease Addendum and the Buyer's Temporary Lease Addendum are for use
when the lease period is for 90 days or less.
A seller of coastal property abutting tidally influenced water must provide the "Addendum for
Coastal Area Property." This notice tells buyers that owners may gain or lose portions of the land
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due to the actions of water. A seller who sells property located seaward of the Gulf Intracoastal
Waterway must provide the addendum to disclose that structures must not be erected seaward of
the vegetation line. If a structure is erected seaward of that line, or becomes seaward as a result of
natural causes, the structure would be subject to a lawsuit by the State of Texas for removal.
The HOA or POA Addendum allows a buyer to obtain a resale certificate on a property.
Paragraph 23 - within this paragraph be sure to understand: the Buyer must deliver the option fee
to the Seller within 3 days after the Effective Date of this contract. Day 1 of the option period is the
day following the effective date of the contract. Notice to terminate this agreement by the Buyer,
must be given by 5:00 pm on the date specified. The option fee is never refunded to the Buyer but
may be applied to the price if the parties agree. Time is of the Essence for this paragraph.
Paragraph 24 - if the parties need or want to see an attorney, an agent should send their clients to
an attorney before the clients sign the contract.
The last party to sign the contract is the party accepting the final change. The broker is responsible
for filling in the effective date after the last party signs.
NOTE: Specifically paragraphs 5, 7.D.(1), 11 and 23 should be recognized by their number!