Promulgated Forms Final Exam Study –Questions and Answers

1. The effective date- who, what, and when? - Answer- 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? - Answer- 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? - Answer- 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. - Answer- Lease purchase new Condocontract 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? - Answer- 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? - Answer- Exclusions 7. When will the third party financing addendum credit approval not be used? - Answer- 1. Buyer pays cash. 2. Seller financing., 8. Which addenda will the Purchaser use when purchasing a property for cash? - Answer- None- no addendum will be used. 9. Which addendum is commonly used in a transaction involving a 90 percent fixed rate loan with PMI? - Answer- Third party financing addendum. 10. What form is used if the buyer wants the seller to leave the refrigerator with the home after closing? - Answer- Non-- Reality items addendum 11. In Third party financing addendum for credit approval, what should the On interest rates? - Answer- MARKET RATE----- 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? - Answer- Prior to 1978. 13. Earnest money is to be deposited? - Answer- 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? - Answer- The buyer.- 6c-1 15. Which form is used for the owner to tell the buyer about known problems with the property? - Answer- Sellers disclosure of property condition. 16. The notice about obtaining an abstract or title policy is a required notice from? - Answer- Buyer's broker. 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.? - Answer- 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? - 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. 19. Which of the following is true about TREC addenda? - Answer- It adds to the contract but does not change the contract. 20. Which is acceptable language for special provisions of 22-TREC contract form? - Answer- Only factual or business details. 21. Can a party accept earnest money as liquidated damages and also sue the third party for specific performance - Answer- No - one or the other. 22. Regarding closing and the buyer's possession of the property? - 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 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,? - Answer- 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,? - 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. 25. If the broker's information is blank on the final page of the contract the contract is? - Answer- Valid - He will not get paid a commission. 26. Which of the following characteristics of insulation installed in a new home must be builders reveal? - Answer- The R Value or rating 27. Which contract does not address rollback taxes? - Answer- 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? - Answer- Farm and ranch contract 29. Which of the following should not be listed as an addendum to a promulgated TREC contract form? - 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. 30. How many resale certificates are currently promulgated by TREC? - Answer- 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? - Answer- Information About Brokerage Services. 32. Which addendum warns buyers that Texas may have the right to take their property? - Answer- 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? - Answer- 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? - Answer- Broker to Broker Four statutory agency position; 1. Seller's agent, 2. Subagent, 3. Buyers agent, 4. Intermediary. 35. In the TREC option Par. 23, which statement is true? - Answer- 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.;? - Answer- August 27. 37. Addendum for Coastal Area Property and the Addendum for Property located Seaward of the Gulf Intercoastal Waterway contains the notices required by the? - Answer- 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 - Answer- The buyer. 39. If the option money is not delivered to the proper party within the proper timeframe what is the status of the contract? - Answer- 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 th