LAW OF CONTRACTS CHAMPIONS PRACTICE AND STUDY GUIDE EXAMS, Exams of Nursing

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LAW OF CONTRACTS CHAMPIONS PRACTICE

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Buyers' and sellers' marital status is not required in the contract. true Which of the following is a physical characteristic of land? indestructability Which disclosure is provided to comply with federal requirements for properties built before 1978? Lead-Based Paint Disclosure If the loan factor is $4.49 and the loan amount is $357,500, taxes are $7300/year and the insurance is $3103 per year, what is the monthly PITI payment? $2,472. A loan assumption might be desirable because: The loan assumption is generally less costly than a new loan Earnest money is deposited in an escrow account when: The contract is signed by all parties and acceptance is communicated Jake (Seller) and Sarah (Buyer) entered into a contract for the sale of Jake's personal residence. In the contract, Jake promised to deliver a seller's disclosure of property condition within 5 days of the effective date of the contract. Jake never delivered the disclosure as promised. Which of the following statements is true? Sarah has the right to terminate the contract and receive a refund of earnest money prior to closing ( Damage or destruction of a property under contract prior to closing: May result in termination of the contract When a party is considering consulting an attorney for advice in a transaction an agent should: Never discourage the use of an attorney a counteroffer is: A(n) __________ is one that combines some of the elements of a sale with a lease.

lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: Can result in termination of the contract The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and __________. open listing In a __________ lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. percentage lease A(n) __________ is a type of seller financing wherein the owner retains title to the property while the purchaser takes possession of the premises and pays on the principal. contract for deed Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable? A(n) __________ is one that combines some of the elements of a sale with a lease. lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: Can result in termination of the contract The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and __________. open listing In a __________ lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. percentage lease A(n) __________ is one that combines some of the elements of a sale with a lease. lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: Can result in termination of the contract A(n) __________ is one that combines some of the elements of a sale with a lease. A(n) __________ is an agreement between two or more parties to do something or to refrain from doing something.

contract When an individual owns real property, he or she is said to have a (n) __________ in that property. freehold estate A(n) __________ is an agreement between two or more parties to do something or to refrain from doing something. Real Estate Center Created by the Legislature in the 1970s to collect and compile data about real estate in Texas. Located at Texas A&M University. Promulgated Forms Means - "to make known by open declaration; publish." These forms help to expedite the real estate transaction. Broker Lawyer Committee Established by TREC to write mandatory residential contract forms for license holders. Texas Real Estate Commission (TREC) Created by the Legislature in 1949 to carry out the provisions of TRELA. Real Estate Recovery Trust Account Administered by TREC to protect aggrieved individual who suffer a monetary loss due to illegal acts of license holders. Producing cause requires proof that the act or omission was a significant factor in bringing about injury TREC The Texas Real Estate Commission- 6 broker members and 3 public members- created to administer the provisions of the license act- they promulgated contract forms for licensees. TRELA The Texas Real Estate License Act- passed by legislation to protect the public Can a Real Estate agent give "advice?" A licenced Real Estate holder could have his or her license suspended or revoked if he or she is found to have advised or counseled a person as to the validity or legal sufficiency of an instrument or the validity of title to real estate. Does Trec have promulgated contract forms for the sale of cooperatives (co-ops)? No. TREC does not have promulgated contract forms for the sale of co-ops and has no forms for any type of commercial transaction.

What forms does TREC have?

1. Buyer's temporary residential lease - for use with the buyer occupies the property for no more than 90 days prior to closing.
2. Seller's temporary residential lease - for use when the seller occupies the property for no more than 90 days after closing. Some residential leases contain a right of first ___________, giving the tenant the right to purchase the leased property by matching or bettering any offer before the property will be sold to someone else. A right of first refusal What does services mean? Means - work, labor, or repair of goods. Brokerage is a service. (2 years - disclosure). When Myra told Kristina that the roofing contractor only uses "top-of-the-line material" and that the roof should last a very long time, she was most likely guilty of what? Misrepresentation What conditions are present that give Kristina the right to file a lawsuit against Myra and Dirt Cheap Realty? The misrepresentation was a key element in Kristina's decision to purchase the property, and the buyer was harmed by the purchase. If a lawsuit is filed, all of the following defenses could potentially help Myra EXCEPT what? A certificate showing the Myra took an online class about visual roof inspections. Which of the following is a requirement of a Texas real estate sales agent license? Show competency by passing the licensing exam. An active sales agent license may only be issued under what conditions? The sponsorship of a licensed broker. A license holder must not prepare which documents? A license holder must not prepare the option agreement, title commitment, and will. Improvements to the land Any man-made additions to the land that are permanent. What are surface rights? The ability to use extracted resources such as stone, gravel, and limestone. What is personal property? Things of a temporary or movable nature.

What are emblements? Annual crops that are considered personal property ever though they are attached to the land. What is common law? A body of law developed in England and based upon "common sense" and local custom. What is real estate? All that is encompassed in land, with the addition of all man-made additions to the land (improvements) such as roads, houses, and commercial buildings. What is a bill of sale? It is generally used to accomplish the transfer, which would normally accompany the deed. What is severance? The act of removing fixtures (by detaching them) from real property is called severance. What are the 3 physical characteristics of land?

1. Indestructibility or durability (cannot be destroyed) 2.Immobility (can't move) 3.Nonhomogeneity (no 2 parcels are the same) What is modification (1 of the 4 economic characteristics of land) It refers to the fact that value is affected by man-made changes to the land. These changes cna be on the land itself of off-site. What is ownership in severalty? One sole owner. When a sole individual or entity acquire real estate the owner is set apart from all others. Joint Tenancy When a joint tenant dies, his or her share is equally divided among the surviving joint tenants immediately. Sole Proprietorship The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. What is a cooperative? Owners within a cooperative do not own a specific unit. A corporation owns the entire cooperative complex. Those who live in the cooperative buy shares in the co-op and receive a proprietary lease to their unit.

Advertising in real estate should not have what in it?

1. Use of racial or ethnic terms.
2. Gender preference
3. Familial status (cannot discriminate on marital status or with children).
4. Religion
5. Handicapped Todd planted two live oaks and four magnolia trees on his 3-acre property. These trees are examples of what? Improvements Patti, David, and Arthur inherited several acres from their parents. They each own a third of the estate. What type of ownership do the siblings have? Tenancy in Common If you hire a mold remediator he must give you _____________ no later than 10 days after work is complete. Certificate of Mold Remediation Implied Contract A contract formed in whole or in part from the conduct of the parties. (behavior) Express contract A contract created by offer and acceptance. Executory contract A contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed. Bilateral Contract A contract requiring both parties to perform certain duties. Valid Contract A contract that must have competent parties, offer and acceptance, legal purpose, consideration, and be in writing. What is an option (period)? An option is an agreement between a buyer and seller or landlord and tenant. A seller, in exchange for some form of consideration ($), gives the buyer the right to purchase the property for a period of time, but they can back out during that time period should they need to. Unilateral Contract

The contract is a unilateral contract because only one party is obligated to perform. This type of contract is said to lack maturity. Voidable a term applied to a contract that one or both parties have the ability to either withdraw from or enforce valid A person under the age of 18 cannot enter into a contract. However, assuming no one took action to void the agreement, the contract is said to be valid and binding when the contract closes or when the minor achieves legal age.

Also, a contract is valid if all parties are of age, sane, and sober (at the time of executing the contract). comptent 18, Sane, and Sober - at the execution of the contract. Mutual Consent A meeting of the minds between the parties to a transaction. One of the four essential elements of a contract. What does COLIC mean in real estate? C = Competent O = Offer and acceptance (mutual agreement) L = Legal purpose I = In writing C = Consideration What is consideration? Anything of value. In order to comply with the Statue of Frauds, contracts must be what? Contracts must convey an interest in real estate or leases for a term of more than 1 year - must be in writing. Executed contracts When a sale is closed, the contract has been fully executed. All oral negotiations are voluntary and do not become binding until committed in writing. In order to comply with the _________, contracts for the conveyance of an interest in real estate or leases for a term of more than one year must be in writing. Statute of Frauds Broker Bernardo has a signed sales contract that has not yet gone to the closing table. Therefore, Bernardo has a(n) ______ contract.

Executory Bryan's client shows up to his closing after drinking three beers at a baseball game. Due to his consumption of alcohol, the closing cannot take place because Bryan's client is not legally _____ to sign. competent Freehold estate Occurs when an individual owns property. Statutory estate created by law Equitable estate Rights or privileges in land that are less than ownership, but exits. prior appropriation first in time is first in right police power The government's right to regulate land usage Buffer zone A buffer zone is an area of land separating one land use from another, such as residential from commercial. Freehold estate - Life estate A life estate is a ownership for the duration of someone's life. Statutory Estates Are created by statute of law. - Texas is a community property state. Homestead Law The law prevents the forced sale of the homestead for payment of all debts, with five exceptions:

1. Non-payment of property taxes
2. Non-payment of mortgage
3. Non-payment of mechanic's and materialman's
4. Non-payment of property owner association fees or dues
5. Non-payment of a home equity loan Dower Dower is the interest a wife has in the property of her husband. Prescription Easement

Continuous use of the land overtime without the permission of the owner establishes the right to use the land. Encumbrances A claim, lien, charge, or liability attached to and binding real property is an encumbrance. Easement by necessity An easement allowed by law as necessary for the full enjoyment of a parcel of real estate; for example, a right of ingress and egress over a grantor's land. Easement by condemnation Easement acquired by the government under the right of Eminent Domain- for use by the government, utilities or railroads The railroad commission controls what? All drilling of oil and gas in the state and regulates all drilling activity in the state. Radon Naturally occurring, colorless, and odorless gas produced by the decay of radioactive materials in rocks under the ground. Lead paint disclosures Lead is found in paint and pipes and soil. Environmental Site Assessment If a buyer has concerns about possible contamination of potential property, the buyer or the lender may opt to have an Environmental Sit Assessment. Lynne purchased a lake front lot in order to build her dream home. Under _______, Lynne has the right to construct a boat dock and anchor her pontoon boat on the water. Littoral rights Littoral rights rights of a landowner adjacent to a lake Remember "L" - Littoral/Lake Cities and municipalities have the right to regulate the type of buildings constructed in an area through _______________. Zoning Raparian Rights Water rights (river) (R) Many states recognizes statutory estates, including:

Community property, homestead, tenancy by the entirety, (all of the above). Listing Agreement Employment agreement for listing broker. Buyer- agency agreement employment contract between the agent (broker) and the buyer Lease An agreement that transfers the right to possess a property for a period of time. Option agreement Gives a potential buyer or tenant the right to purchase or lease a property Contract for deed Also called an installment contract, a land contract or a real estate contract. Discharge of contracts A contract is considered discharged when all parties have have performed. A contract may be discharged due to _______________________. The destruction of property. Examples include fires, earthquakes, acts of war, or hurricanes. A seller cannot intentionally destroy a property. Only a ________ may earn a commission, and only a ________ may sue to collect a commission. Broker, broker Regardless of representation, all buyers should be provided with a(n) ___________________ disclosure of representation af first contract. Oral, written, email - all of the above. Which of the following is an example of a contract used often in the real estate business? Property management, listing agreement, lease agreement - all of the above. Metes & Bounds A legal description of land having a point of beginning, using terminal points and angles, degrees and minutes to outline a property Lot and Block A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property) Casualty Loss

Damage due to destruction of property. Special Provisions Terms that are not covered in the standard contract forms or addenda. What does an agent have to do with contracts? All offers must be presented. Offer An offer becomes a binding contract when it is signed by all parties, and the acceptance is communicated to the offering party. Communication is also referred to as notification. What constitutes an offer? You an make an offer by: phone, fax, email, letter, hand delivery. Oral or in written. Which offer should Gary present? All known offers must be presented. What can Gary do to look out for his client's best interest? Gary can make sure that all offers know that this is a multiple offer situation, so they can all make their highest and best offer. How can Gary help Simon evaluate the offers? He can prepare net sheets on the offers being considered so Simon can compare all of the details and better determine the bottom line for each offer. Financing Addendum Financing information may be incorporated entirely in a separate addendum or maybe a part of the contract form. The most common type of financing is obtained from a third party. In Texas, financing information is not a separate addendum. What options does Simon have when responding to the offers? Accept, reject, Counteroffer, or do nothing. What does a real estate agent do with multiple offers on a property? He/she must present all offers to the client. Agent Jay has received an offer on his client's property, but they are still considering it. What is true in this situation? The offer is not yet a contract because agent Jay's clients have not accepted it. The Reeve's agent submitted an offer of$349,500.00 on a property priced at $365,000.00. The seller's agent informed the buyer's agent that the sellers had made a(n) _____________ of $359,900.00 instead.

Counteroffer Inspection Contingency Subject to a satisfactory inspection title contingency Subject to title examination Appraisal contingency Related to financing contingencies due to maximum loan amount being a percentage of the lesser of the sale price or appraised value. A lead paint form must be filled out and provided when selling a home before what year? 1978 Amendments changes Addendum add to What is not available to Lin? Lin can terminate the contract, but she will forfeit her earnest money - This is not true. What should Barbara do to make sure she is fulfilling her fiduciary responsibilities to Lin? Barabar should keep Lin informed of her option as well as the approaching deadlines. What additional amendments, contingencies, or addenda may be used if Lin and the seller decide to proceed with the sale at the lower sales price? Barbara must submit an amendment that reflects the new, lower sales price. Gerald and Finn are selling their classic 1959 mid century modern home. What form must they complete when they list their property? Addendum for Seller's disclosure of information on lead paint hazards. Sellers can _______________, the oil, gas, and minerals associated with their property. Sell, reserve, divide, all of the above. Which of the following is NOT considered a common addenda form? Exclusive right to sell (not common) Servicing

Sending monthly payment statements and collecting monthly payments, maintaining payment records and following up on delinquencies. What is a closing in real estate? Consummation of a contractual real estate transaction in which all appropriate documents are signed and the proceeds of the loan are disbursed by the lender. Promissory Note Borrower's unconditional promise to pay Underwriting The detailed process of evaluating a borrower's loan application to determine the risk involved for the lender. Foreclosure A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note. What is capacity? Capacity is measure of the borrower's ability to repay the debt and is demonstrated through current earnings and job stability. PMI (Private Mortgage Insurance) Insurance that protects the lender in case the borrower defaults and is unable to repay the loan. Generally a borrower must pay PMI if their equity is less than 20% of the home's value. MIP Mortgage Insurance Premium VHAP Texas Veterans Loan Assistance Program - a loan program for veterans. RMLOs in Texas are licensed through: a. Texas Real Estate Commission b. National Mortgage Bankers Association c. Texas Department of Savings and Mortgage Lending d. Texas Savings and Loan Board is mandated by the SAFE Act. The Dodd-Frank Act Transferred rule making authority for the SAFE Act to the CFPB, effective July 21, 2011. ECOA

Equal Credit Opportunity Act, federal law prohibiting discrimination in credit/lending Gift Deed A transfer of ownership made for love and affection. Creditors of the donor could still use the property for payment of the grantor's debts if it can be shown that the donor was insolvent and transferred the property to evade creditors. Special Warranty Deed A deed in which the grantor warrants, or guarantees, the title only against defects arising during the period of his or her tenure and ownership of the property and not against defects existing before that time, generally using the language, "by, through, or under the grantor but not otherwise." General Warranty Deed A deed in which the grantor fully warrants good, clear title to the premises. Used in most real estate deed transfers, a general warranty deed offers the greatest protection of any deed. Bargain and Sale Deed A deed that carries with it no warranties against liens or other encumbrances but that does imply that the grantor has the right to convey title. The grantor may add warranties to the deed at his or her discretion codicil an addition to a will Assemblage or plottage The combination of two or more properties into one Gene made a will naming his oldest daughter as executor. His other children are noted as heirs. In this circumstance, Gene is referred to as the _______. Testator The key to determining whether a conveyance is voluntary is the ____________. Absence of force Much to her six children's dismay, single mom Nancy died without making a will. Who will inherit her estate? Her children......standard succession laws apply. Prorations The TREC residential contract forms are: Drafted by the Broker Lawyer Committee Wrongful or criminal deception intended to result in financial or personal gain is called:

fraud Under the Deceptive Trade Practices Act, __________ are defined as tangible chattels. goods If a seller will continue to occupy the property for one month after the closing, the buyer and seller should: Enter into a Seller's Temporary Residential Lease The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: 90 days A seller's disclosure notice is not required at a foreclosure sale The type of law that deals with the relationship between the parties to a transaction, sales agents and brokers is: Law of Agency __________ is the body of laws and regulations enacted by federal and state legislative bodies. Statutory Law __________ extend above the surface without limitation. Air Rights Any man-made addition to land that is permanent, and is considered to become part of the land is known as a(n) __________. Improvement A(n) __________ is an entity created for the benefit of another. Trust An option contract is: Unilateral contract __________ is not a requirement of a valid contract. Earnest Money If a person has been judged to be incompetent, a contract is __________ because the person never had the capacity to enter into a contract in the first place. void

The five essential elements of a valid and enforceable contract are, Consideration, Offer and Acceptance, Legal purpose, In writing and __________. competent parties A(n) __________ is an agreement between two or more parties to do something or to refrain from doing something. contract When an individual owns real property, he or she is said to have a (n) __________ in that property. freehold estate If property violates zoning, the owners must request a __________, which is permission to violate the rules. variance An example(s) of an appurtenance would be: easements There is no upper limit on the value of a Texas homestead. true A(n) __________ is an area of land separating one land use from another. buffer zone The French term __________ means a life estate that is based on the life of another. pur autre vie In a residential lease with a "right of first refusal" provision: The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else A __________ is an employment agreement between the seller and the broker. listing agreement A(n) __________ is one that combines some of the elements of a sale with a lease. lease purchase agreement Prior to closing, severe damage to or destruction of a property under contract: Can result in termination of the contract The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and __________.

open listing In a __________ lease, the tenant's rent is based, in whole or in part, on the receipts of his or her business. percentage lease A(n) __________ is a type of seller financing wherein the owner retains title to the property while the purchaser takes possession of the premises and pays on the principal. contract for deed Which of the following requires a contract for the conveyance of real estate to be in writing to be enforceable? statute of frauds If a broker receives more than one offer on a property: All must be presented to the seller unless the seller has instructed the broker otherwise a counteroffer is: a rejection, a new offer, able to be withdrawn prior to acceptance A seller choosing to receive a buyer's earnest money after the buyer defaults on a contract is an example of: liquidated damages The most common form of financing used by buyers is: third party financing The Special Provisions paragraph of the contract allows license holders to insert: Factual business details, Statements not addressed in the contract, Information for which there is no TREC-promulgated addendum, lease or mandatory form An offer by a prospective purchaser can be terminated prior to acceptance due to: expiration of a specified time period, bankruptcy of either party, a change in the law that renders the contract illegal A(n) __________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. contingency The Lead-Based Paint Disclosure is: A federal requirement for residential property built prior to 1978 The closing date specified in a contract is usually a(n )"__________" date.

on or before In Texas, real estate contracts are subject to satisfactory inspections. false A(n) __________ to a contract is an attachment that adds or further describes the rights and duties of the parties. addendum The term __________ is synonymous with contingent. subject to Texas Veteran's Housing Assistance Program loans can be: FHA, VA, and convential The least common form of mortgage financing is seller financing Real estate agents play a role that includes arranging for the pre-qualification / pre-approval of buyers. true The __________ is the percentage of the lesser of the appraised value or sales price that the lender will loan. loan-to-value ratio If the loan factor is $5.53 on a $200,000 loan, taxes are $2400/year and insurance is $1800/year, what is the monthly PITI payment? 1, A __________ is a pledge of real estate as security for the repayment of a debt. mortgage A written history of all instruments and happenings that may affect title is called: an abstract of title When the title history of a parcel of land has been researched back to the original conveyance by the government, the history is said to go back to the __________. Sovereignty of the soil __________ is the process by which a lender exercises its power of sale under a mortgage that is in default. foreclosure

__________ occurs when an individual dies, leaving no valid will. intestate succession A(n) __________ description of property is a requirement for a valid deed. legal __________ occurs when an individual acquires title from the rightful owner through hostile, actual, and continuous occupation of the land for the statutory period. adverse possession RESPA regulates closings on: 1-4 family residential properties with federally related financing __________ of RESPA prohibits any person who, pursuant to any agreement or understanding, gives or receives a fee or a thing of value for the referral of settlement business. section 8 __________ implements the Real Estate Settlement Procedures Act. regulation x Ongoing expenses such as property taxes and property owner association fees that are divided between the buyer and the seller at closing are called __________. prorations Rule P-53 of the Texas Department of Insurance states that Title Companies: Cannot provide food and beverages for a picnic for a single firm, Cannot provide an annual party for a single firm, Cannot provide continuing education classes unless they charge the market rate for those classes A yearly tax bill is $2400 and has not been paid. The property has sold and closing is July 30th. How much will be owed at closing for taxes? (Use a 365-day year, round to the nearest dollar and the seller pays for closing day.) $1, Bill is the buyer purchasing a property from Sally. All contingencies have been met and the parties are ready to close. One day prior to closing, Sally announces that she has changed her mind and is going to keep the property. Bill is determined to complete the purchase and acquire the property. The only default remedy in the contract that could result in Bill acquiring the property is___________________________. specific performance Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no

problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has: Engaged in the unlawful practice of law The four economic characteristics of land are: scarcity, fixity, situs and ________. modification Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for $199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offer? Joe should present the offer to the seller An abstract of title is: a complete written history of title an option is: a unilateral contract A seller is going to continue to occupy a property for two days after closing. In this case, the parties should use the Buyer's Temporary Residential Lease form. false A contract in which only one party is obligated to perform is a________ contract. unilateral For tax prorations: If taxes are not paid at or prior to closing the buyer shall pay for the current year, If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available, The tax proration may be calculated taking into consideration any change in the exemptions that will affect the current year's taxes ________ is the right of the government to regulate and control the way land is used. police power A seller of coastal property abutting tidally influenced water must provide the ________. Notice Regarding Coastal Area Property RESPA prohibits ________, which is considered an abusive practice. kickbacks A claim, lien, charge, or liability attached to and binding real property is a(n) ________. encumbrance

A(n) ________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. waiver At closing, the contract is: fully executed FHA loans include two mortgage insurance premiums that must be paid by the borrower. They are the: UFMIP and Annual Premium ________ are changes that are made to the original contract, such as changes to the closing date or changes to the sales price, down payment and/or the amount financed. amendments According to the Deceptive Trade Practices Act (DTPA), brokerage falls under the category of ________. services ________ law is a body of law based on "common sense" and local custom. common Which kind of rights extend above the surface of property without limitation? air rights ________ is the legal procedure whereby secured property may be sold to satisfy a borrower's unpaid promissory note. foreclosure The five essential elements of a valid and enforceable contract are, competent parties, offer and acceptance, legal purpose, in writing and ________. consideration The SAFE Act mandated the term ________. Residential Mortgage Loan Originator A(n) ________ occurs when a new contract is substituted for an existing one. novation A(n) ________ is a business venture that is owned by one individual. Sole proprietorship A(n) ________ is a listing in which the real estate broker's commission is the difference between the minimum net established by the seller and the price that the buyer is willing to pay.

net listing The requirements for a valid lease are, competent parties, let and take agreement, in writing and ________. description of the property ________ of an offer means that the accepting party does so with no change to the contract whatsoever. acceptance The ________ ensures that all consumers are given an equal chance to obtain credit Equal Credit Opportunity Act The formal judicial proceeding to prove the validity of a will and to distribute the assets of a decedent's estate is called: probate A ________ is a deed with no guarantees or warranties. quitclaim deed A ________ is the borrower's unconditional promise to repay the lender. Promissory note A "Section 502 Loan" is insured by the ________. USDA ________ is evidence an individual has of his or her right to possess land. Probate A(n) ________ mortgage covers more than one piece of property. blanket Real property conveyed by will is called a ________. devise An offer may be withdrawn at any time prior to its acceptance by the offeree true The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and ________. Periodic tenancy In a residential lease with a "right of first refusal" provision:

The tenant has the right to match or better any offer the landlord receives to prevent the property from being sold to someone else The four ECONOMIC characteristics of land are:

1. Scarcity
2. Modification
3. Situs
4. Fixity

GIVES LAND ITS VALUE Brainpower Read More The Buyer and Seller Temporary Residential Lease forms may be used for a lease period not to exceed: 90 days A contract that is said to lack mutuality because only one party is obligated to perform is a________ contract. Unilateral Contract According to the Deceptive Trade Practices Act (DTPA), brokerage falls under the category of ________. Services The five essential elements of a valid and enforceable contract are: COLIC

1. Component parties
2. Offer and acceptance
3. Legal purpose
4. In writing
5. Consideration ________ law is a body of law based on "common sense" and local custom. Common Law A(n) ________ is a business venture that is owned by one individual. Sole proprietorship A(n) __________ is an agreement between two or more parties to do something or to refrain from doing something. Contract The fact that the value is affected by manmade changes to the land.

Modifications Jake (Seller) and Sarah (Buyer) entered into a contract for the sale of Jake's personal residence. In the contract, Jake promised to deliver a seller's disclosure of property condition within 5 days of the effective date of the contract. Jake never delivered the disclosure as promised. Which of the following statements is true? Sarah has the right to terminate the contract and receive a refund of earnest money prior to closing Owners within a __________________ do not actually own a specific unit. The entire cooperative complex is owned by a corporation. Those who wish to live in the cooperative buy shares in the corporation, and receive a proprietary lease on the unit. When listing and selling cooperatives, a real estate license is often not required because the sale of a cooperative is the sale of stock rather than real property. Cooperative ________ is the right of the government to regulate and control the way land is used. Police Power A claim, lien, charge, or liability attached to and binding real property is a(n) ________. Encumbrance An example(s) of an appurtenance would be: Easement The four major types of listing agreements are, exclusive agency, net listing, exclusive right to sell and __________. Open listing

*Know that with a NET LISTING, the real estate broker's commission is the difference between the minimum net established by the seller and the price that the buyer is willing to pay. The four categories of leasehold estates are: estate for years, tenancy at sufferance, tenancy at will and ________. Periodic tenancy or periodic estate If a broker receives more than one offer on a property: All must be presented to the seller unless the seller has instructed the broker otherwise; no offer has priority of presentation over another ___________________ is deposited in an escrow account when the contract is signed by all parties and acceptance is communicated. It's negotiable

Earnest money License holders should ensure that any _____________ ______________ added to a contract are factual statements that do not change the legal effect of the contact Special Provisions A(n) __________ is a provision in a contract that requires that a certain act or event happens in order for the contract to be binding on the party. Contingency ________ are changes that are made to the original contract, such as changes to the closing date or changes to the sales price, down payment and/or the amount financed.; repairs the seller agrees to perform and removal or waiver of contingencies Amendments Benefits of a loan assumption include:

1. The buyer is possibly assuming a loan at a rate that is not currently available.
2. The assumption of an existing loan is substantially less expensive than obtaining a new loan. Assumption fees are generally less than $500.
3. Even if the rate on the seller's existing loan is somewhat higher than a rate that is available today, the loan assumption might still make sense considering the savings in fees associated with a new loan. __________________ is not required on a contract but it will be indicated on a deed. Martial status Elmer Fleckenfleck, an agent with After Hours Realty, was preparing a contract. The seller told Elmer that he wanted to stay in the property for at least a week after closing. Elmer said that would be no problem and entered the following text to Paragraph 11: "Seller and Buyer agree that Seller will remain in the Property for 7 days after closing and funding." In this case, Elmer has:

(a) Properly represented the interests of both parties

(b) Completed the contract according to established regulations and procedures

(c) Engaged in the unlawful practice of law

(d) Violated numerous provisions of RESPA (c) Engaged in the unlawful practice of law Joe is an agent at Tried and True Realty. He gets a $150,000 offer on a property that is listed for $199,500. In a recent phone conversation, the seller told Joe he would accept no less than $185,000 for the property. Knowing the seller's "bottom line," what should Joe do with the offer?