Promulgated Contract Forms: Final Exam with complete solutions

When earnest money is deposited with an escrow agent, the escrow agent: - Answer- A) Is not responsible for the performance of any signatory B) Has the right to secure written release of all signatories C) Is not liable for interest on the money How does the Texas Real Estate License Act define the first face-to-face meeting with required agency disclosure? - Answer- When a substantive dialogue about a specific real property occurs If a property was built before 1978, what specific addendum is required? - Answer- Disclosure of Lead-Base Paint Addendum The Buyer's Agency Agreement allows an agent to show the same properties to competing clients - Answer- true The Third Party Financing Condition Addendum is not used with - Answer- Seller financing The Texas Real Estate Commission (TREC) promulgates an addendum to be used in a short sale. This Short Sale Addendum is to be signed by: - Answer- Buyer and seller In Paragraph #14 of the Residential Contract (casualty loss), If a seller cannot complete the repairs within the time limit, the buyer has the option of: - Answer- Terminating the contract In Paragraph 3B of the sales contract, the "sum of all financing" - Answer- Excludes any loan funding fee or mortgage insurance premium The TREC promulgated 1-4 Family Residential Contract (resale) states that if the cost of lender required repairs and treatment exceed _______% of the sales price, buyer may terminate the contract and the earnest money will be refunded to the buyer. - Answer- 5% The financing paragraph will be used to indicate: - Answer- A) Third party financing B) Assumption C) Seller financing If a Seller is to remain in the property after closing: - Answer- D) A Seller's Temporary Lease Form promulgated by TREC should be completed and signed by buyer and seller and attached to the contract. - Your buyers have signed a contract to buy a new home. The contract is subject to the sale of their present home. This is called a: - Answer- Contingency In the event of buyer's default, the seller may: - Answer- A) Terminate the contract B) Receive the earnest money as liquidated damages C) Enforce specific performance If there is an existing survey on the property, what does the seller take to the title company and the lender? - Answer- The existing survey and a notarized affidavit stating if there have been any changes in the survey since the time the existing survey was completed - Failure on the part of the broker/sales associate to advise the purchaser in writing to have an abstract of title examined by an attorney or obtain a title insurance policy: - Answer- May be cause to have the agent's license suspended or revoked, and precludes receiving any commissions or agreed fees associated with the sale. Who is designated as responsible for promptly sending a copy of the contract to any attorneys that are named in the contract? - Answer- The broker Intermediary requires: - Answer- A) Disclosure of who represents whom in a transaction B) Written agreement by both seller and buyer C) involvement of only one company What must a Buyer's Representation Agreement have? - Answer- A termination date Once a contract is finalized and receipted it: - Answer- Can be amended multiple times if all parties agree If a buyer and/or seller agree to mediate, they are giving up their right to pursue relief through the courts. - Answer- false A contract is described as an agreement between two or more parties to do or not do something: - Answer- true A voluntary dispute resolution is called litigation: - Answer- true Brokers fees are included in the 1-4 Family Residential Contract (resale) between the Buyer and the Seller. - Answer- false The Residential Condominium Contract allows a limit to the amount a Buyer will pay for Association transfer fees: - Answer- true An addendum has been provided by TREC for voluntary use to provide for transfer of personal property (Non-Realty Items): - Answer- true A Buyer/Tenant Representation Agreement is only available through the Texas Real Estate Commission (TREC): - Answer- true Per Paragraph #16 of the Residential Contract (Mediation), If a buyer and/or seller agrees to mediate, they are giving up their right to pursue relief through the courts: - Answer- false Federal Fair Housing Laws forbids discriminatory practices by parties including: - Answer- A) Owners of properties B) Lenders C) Real estate brokers Use of the TREC promulgated One to Four Family Residential Contract (resale) is allowed on the sale of a residential condominium. - Answer- false In a real estate transaction, a street address is considered sufficient to described the property being conveyed: - Answer- false If a property has a "Sale of Other Property" contingency contract on it, Seller: - Answer- Can ask the original buyer to remove the contingency if the Seller has accepted another offer as a back -up On the Seller's default, what should happen to the earnest money? - Answer- It should be returned to the Buyer The Seller contracts to furnish the buyer an existing survey, but neglects to furnish an "affidavit' with the time specified. The lender requests a new survey be furnished. Who pays for the new survey? - Answer- The seller Time is of the essence means that certain items in the contract must be performed: - Answer- As specified in the contract The Information About Brokerage Services (IBS) states the broker may represent the: - Answer- A) Owner B) Buyer C) Both owner and buyer as intermediary Fraud is: - Answer- A) A crime B) A civil law violation According to the Real Estate License Act of Texas, which one of the following actions is a fair and impartial act for an Intermediary? - Answer- Appointing associated licensees to work with the parties Steering is illegal and is described as channeling a minority to or away from an area to change the character of the neighborhood. - Answer- true The sales price is determined in paragraph 3 b