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Texas Promulgated Contract Forms & Addenda, Exams of Advanced Education

Harvard UniversityAdvanced Education

Various aspects of real estate contracts and addenda used in texas. It includes information on topics such as the buyer-seller relationship, financing options, property condition disclosures, and the use of specific contract forms and addenda. Insights into the legal proceedings involved in real estate transactions, the status of purchase contracts, and the requirements for enforceable contracts. It also covers topics related to power of attorney, third-party financing, seller's disclosures, and the use of promulgated forms by real estate licensees. The document delves into the details of contract paragraphs, addenda, and the obligations of the parties involved in a real estate transaction under texas law.

Typology: Exams

2023/2024

Available from 08/01/2024

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Texas Promulgated Contract Forms & Addenda
Final Exam Questions and Answers (2023 – 2024)
Which of the following is an example of a Bilateral contract? - A Promise in exchange for a
promise - Purchase Contract.
Unilateral Contracts - Listing Agreement, Buyer's Rep, Option Contract
Who is responsible for filling in the effective date, who, when & what? - 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? - 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? - 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? - Novation
When using a Power of Attorney to transfer title to real property? - 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? - Licensee - the listing agent/selling agent
When a legally enforceable promise is exchanged for a legally enforceable promise? - 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: - 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? - Statute of Frauds
To have a valid real property contract, something of value must be exchanged. This is
called: - Consideration
When may a potential purchase's offer to buy real estate be withdrawn? - at any time
before it's accepted
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Texas Promulgated Contract Forms & Addenda

Final Exam Questions and Answers (2023 – 2024)

Which of the following is an example of a Bilateral contract? - A Promise in exchange for a promise - Purchase Contract. Unilateral Contracts - Listing Agreement, Buyer's Rep, Option Contract Who is responsible for filling in the effective date, who, when & what? - 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? - 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? - 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? - Novation When using a Power of Attorney to transfer title to real property? - 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? - Licensee - the listing agent/selling agent When a legally enforceable promise is exchanged for a legally enforceable promise? - 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: - 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? - Statute of Frauds To have a valid real property contract, something of value must be exchanged. This is called: - Consideration When may a potential purchase's offer to buy real estate be withdrawn? - at any time before it's accepted

Which of the following is NOT addressed by a TREC-promulgated contract? - Lease with an option to purchase. Lease purchase - new Condo contract When is a financing addendum not required? - 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? - Exclusions When will the third party financing addendum credit approval not be used? - 1. all cash

  1. When Third Part Financing contingency is waived Which addenda will the Purchaser use when purchasing a property for cash? - None- no addendum will be used. Which addendum is commonly used in a transaction involving a 90 percent fixed rate loan with PMI? - Third party financing addendum. What form is used if the buyer wants the seller to leave the refrigerator with the home after closing? - Non-- Reality items addendum In Third party financing addendum for credit approval, what should the Cap On interest rates? - 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? - Prior to 1978. Earnest money is to be deposited? - 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? - The Buyer Which form is used for the owner to tell the buyer about known problems with the property? - Sellers disclosure of property condition. The notice about obtaining an abstract or title policy is a required notice from? - Buyer's broker

Farm and ranch contracts Which contract would be used for a 50-acre track with a small cottage outside the city? - Farm and ranch contract Which of the following should not be listed as an addendum to a promulgated TREC contract form? - 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? - 2
  13. Condominium Resale Certificate,
  14. 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? - Information About Brokerage Services. Which addendum warns buyers that Texas may have the right to take their property? - 1. Addendum for Property located Seaward of the Gulf Inter coastal Waterway,
  15. Addendum for Coastal Area Property. Which form must be displayed in the residential brokers office? - 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? - Listing Broker & Selling Broker

Four statutory agency position; - 1. Seller's agent,

  1. Subagent,
  2. Buyers agent,
  3. 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 - 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? - 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? - Texas Natural Resource Code Sections -33.135 and 61.025 respectfully. Who is required to execute the notice of termination of a contract? - 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? - 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. - 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; - 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,

In Loan assumption, If the buyer doesn't deliver the credit information to the seller, how long does the seller have to terminate? - 7 calendar days. In Third-party financing, what does the buyer do if the lender says, I cannot loan you the money at this time? - The buyer must send a notice to the seller stating they don't qualify. Who must fill in the executed date? - The broker or the agent who represents the broker. Who are the two people who signed the amendment? - The buyer and seller. if the buyer never receives a seller's disclosure of property condition, what does it make the contract? - Voidable - in a court of law. In Leases what is a holdover fee? - It is the fee charged by the tenant, if the party does not leave - Fee is usually a hefty payment 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. In 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. The broker fees that are split in MLS Is between who? - Broker and broker - if Ebby agrees to pay Century 21 and an LS agreement. The buyer's representation agreement is an addendum to a contract? - False - it is a separate contract between a buyer and a broker. In Farm and ranch the rollback taxes are paid by the party that? - Changes the usage of the property. 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. 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 In 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.

In how many addendum's and in what place in the contract that states -- "time is of the essence"? - 1. In One to Four Family - Paragraph 23 under option section,

  1. Short sale addendum,
  2. Sale of other property addendum,
  3. Back up addendum,
  4. Third party financing addendum. In General information notice, Where can I buyer find information about waterways? - Texas Natural Resource Code. In 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. In HOA - Name two 2 resell certificates? - Condominium resale certificate Subdivision information including resale certificate for property subject to membership in a property owners Association. In Sellers financing addendum, Seller has how many days to check the buyer's credit? - 7 - days. In New home, What is the name of the Insulation measurement? - R -factor or R-value. In 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. In 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,
  5. Addendum for Sale of the Property by Buyer - promulgated,
  6. Addendum for Back up Contract - promulgated.
  7. Addendum for Release of Liability on Assumed Loan and\or Restoration of Seller's VA Entitlement. - Promulgated
  8. Seller's Temporary Residential Lease--Promulgated-No more than 90 days after the closing use form.
  9. Buyer's Temporary Residential Lease-- promulgated. No more than 90 days.