DISCLOSURE
Go to Answer 13.
DISCLOSURE
PREASSESSMENT QUIZ
1. True or False: Sellers who have never lived in the house don’t need to provide the Seller’s Disclosure Notice to a Buyer.
2. True or False If a Seller enters into a contract and does not provide a
Buyer the Seller’s Disclosure Notice the Seller is automatically in default.
3. True or False The Seller is selling both sides of a duplex in which he
lives in one side. The Seller is only legally required to fill out the Seller’s
Disclosure Notice for the side he lives in.
4. True or False The Seller has new information from an inspection
report provided by a Buyer who terminated their contract. The Seller is
now required by the Property Code to update his Seller’s Disclosure Notice.
5. All of the following Sellers are exempt from providing the Seller’s
Disclosure Notice to a Buyer under the provisions of the Property Code
except for.
A. A trustee in a bankruptcy case.
B. A spouse selling to the other spouse in a divorce settlement.
C. An executor of a will selling the Property.
D. An heir who has inherited the Property he has never seen and has no
knowledge of the condition of the Property and is now selling it.
E. All of the above Sellers are exempt.
6. Which of the following does the law required to be disclosed?
A. A death on the Property by natural causes.
B. A death on the Property by suicide.
C. A death on the Property caused by a faulty stair railing.
D. A violent death in the driveway but not in the house itself.
E. All of these deaths have to be disclosed.
F. None of these deaths have to be disclosed
G. Only C and D have to be disclosed.
7. Which of the preceding deaths should be disclosed regardless of
the requirements of the law but due to prudent business practices.
8. True or False There are ten Sellers who are exempt from the
requirements of section 5.007 of the Property Code.
9. True or False If the Seller is exempt from the requirements of the
Property Code then that Seller is exempt from disclosing even known defects.
10. True or False If a Person died of AIDS living in the house then that
has to be disclosed including that he died of AIDS.
11. True or False A Seller is required to disclose to a Buyer the amount of
square footage of the house and the source of that data.
12. True or False Because our CMA’s are based on price per square feet
value then the Buyer is protected if the Property ends up with less square feet
than stated in MLS.
13. True or False If the Seller in completing a Seller’s Disclosure Notice is
not sure of some of the terminology then the agent should explain the termin-
ology so the Seller can accurately complete the notice.
14. True or False All repairs made by a Seller must be disclosed even
though the defect has been repaired and is no longer a defect.
15. True or False Under the Property Code the Seller must disclose if
they have made any insurance claims on the Property.
16. Which of the following is most true under the Property Code?
A. Seller must disclose any inspections he has received in the past 4 years.
B. Seller must provide the Buyer with copies of any inspections from the past
4 years.
C. Seller must provide any appraisals from the past 4 years.
D. The Seller’s Disclosure Notice must reflect any information the Seller has
from any inspections from which he has received information.
DISCLOSURE
PREASSESSMENT QUIZ
1. True or False: Sellers who have never lived in the house don’t need to provide the Seller’s Disclosure Notice to a Buyer.
Click here to see the answer.
FALSE: Just not living in the house will not exempt seller from not d provide the Seller’s Disclosure Notice to a Buyer.
2. True or False If a Seller enters into a contract and does not provide a
Buyer the Seller’s Disclosure Notice the Seller is automatically in default.
No. The purchaser may terminate the contract for any reason within seven
(7) days after receiving the notice. If seller never provides the SD, the
purchaser may terminate the contract for any reason all the way to closing
date.
There are other two key points here;
1. There is nothing automatically happens
2. If a paragraph / item has its own rules about not meeting that item, it will not go to the default paragraph.
3. True or False The Seller is selling both sides of a duplex in which he
lives in one side. The Seller is only legally required to fill out the Seller’s
Disclosure Notice for the side he lives in.
If the seller sells the entire units (both sides) he does not have to provide SD,
but if he sells one side, he has to provide SD.
4. True or False The Seller has new information from an inspection
report provided by a Buyer who terminated their contract. The Seller is
now required by the Property Code to update his Seller’s Disclosure Notice.
With the property code, he does not have to provide updates to SD, but
With TAR he has to provide
5. All of the following Sellers are exempt from providing the Seller’s
Disclosure Notice to a Buyer under the provisions of the Property Code
except for.
A. A trustee in a bankruptcy case.
B. A spouse selling to the other spouse in a divorce settlement.
C. An executor of a will selling the Property.
D. An heir who has inherited the Property he has never seen and has no
knowledge of the condition of the Property and is now selling it.
He is the owner now and must provide SD. He could check unknown, but he has to provide SD
E. All of the above Sellers are exempt.
6. Which of the following does the law required to be disclosed?
A. A death on the Property by natural causes.
B. A death on the Property by suicide.
C. A death on the Property caused by a faulty stair railing.
D. A violent death in the driveway but not in the house itself.
E. All of these deaths have to be disclosed.
F. None of these deaths have to be disclosed
G. Only C and D have to be disclosed.
There are only three types of deaths are exempt fron property code, they are:
A death on the Property by natural causes.
A death on the Property by suicide.
A death on the Property by accident.
And C and D are not part of it. Therefore G (Both C and D) is correct.
7. Which of the preceding deaths should be disclosed regardless of
the requirements of the law but due to prudent business practices. A, B, C, D.
In some cases when dealing with cultural differences and/or believes
A and B could also be a problem and should be disclosed.
8. True or False There are ten Sellers who are exempt from the
requirements of section 5.007 5.008 of the Property Code.
No, there are 11 Sellers who are exempt. They are:
1. Seller of residential property consisting of more than one dwelling unit.
2. New home or builder exemption
3. Trustee or executor of an estate exemption
3.1 By a Trustee in a bankruptcy case
3.2 By an executor of a will selling the Property
4. Foreclosure Sale
5. Relocation Company, unless the Relocation Company is the Seller.
6. To or from any governmental entity
7. Seller who have never lived in the house.
7.1 Investor
7.2 An heir who has inherited the Property he has never seen and has no
knowledge of the condition of the Proerty and is now selling it.
8. From one co-owner to one or more other co-owners
9.Made to a spouse or to a person or persons in the lineal line of consanguinity of
one or more of the transfers
10. Between sposes resulting from a decree of dissolution of marriage or a decree
of legal separation or from a property settlement agreement to such a
decree.
11. Of real property where the value of any dwelling does not exceed five (5%)
percent of the value of the property.
9. True or False If the Seller is exempt from the requirements of the
Property Code then that Seller is exempt from disclosing even known defects.
No. Property Code defines the minimum requirements. Other requirements
from DPTA (Deceptive Trading Act) and from local agencies, organizations,
ethics could be required to disclose known facts.
10. True or False If a Person died of AIDS living in the house then that
has to be disclosed including that he died of AIDS.
NO, AIDS patients are protected class in Fair Housing ..
11. True or False A Seller is required to disclose to a Buyer the amount of
square footage of the house and the source of that data.
The seller is not required, but if the buyer wants, he should do it.
12. True or False Because our CMA’s are based on price per square feet
value then the Buyer is protected if the Property ends up with less square feet
than stated in MLS.
13. True or False If the Seller in completing a Seller’s Disclosure Notice is
not sure of some of the terminology then the agent should explain the termin-
ology so the Seller can accurately complete the notice.
No No, Do not explain the terminology. Just tell them to fill out the SD form
based on what they know and understand or refer seller to attorney to get
accurate advise.
14. True or False All repairs made by a Seller must be disclosed even
though the defect has been repaired and is no longer a defect.
Because of word ALL, the statement is in-correct or False.
There are some problems such as Termite, foundation repair, roof repair,
Fire needs to be disclosed even if the problems have been fixed.
15. True or False Under the Property Code the Seller must disclose if
they have made any insurance claims on the Property.
Property code doesn’t require revealing about Insurance money.
However, TAR requires it.
16. Which of the following is most true under the Property Code?
A. Seller must disclose any inspections he has received in the past 4 years.
B. Seller must provide the Buyer with copies of any inspections from the past
4 years.
C. Seller must provide any appraisals from the past 4 years.
D. The Seller’s Disclosure Notice must reflect any information the Seller has
from any inspections from which he has received information.
Note: As of today January 1st, 2011, sexual orientation is not protected class from federal or state law. However, there are some locals that make it protected such as city of Dallas.
FORMS PRE-ASSESSMENT QUIZ
1. True or False The Protection period in the listing agreement ceases to
exist in all cases if the Seller lists the Property with another Broker.
2. True or False The T-47 Residential Property Affidavit can not
be used if the Seller has made changes to the Property since the date of the
existing survey.
3. True or False The Non-Realty Items Addendum to Contract is good
to use because it is a separate agreement between the Buyer and Seller and
doesn’t have to be given to the Buyer’s Lender.
4. True or False If the Seller conveys Non-Realty Items to the Buyer by
using the Addendum then the Seller warrants the condition of the items.
5. True or False The Seller’s Invitation to Buyer to Submit New Offer is
not actually a rejection of the Buyer’s Offer but is just a request for another
offer from the Buyer that hopefully will be better.
6. True or False It is okay to just verbally tell your client where you got
important information since there is not a form that would identify the
source of the information.
7. True or False If the agent and the Seller want to extend the term of a
listing agreement they should line through the previous end date in the listing
agreement, put in the new end date and both should initial the change.
8. True or False The TREC Promulgated Notice of Buyer’s Termination
of Contract form not only terminates the contract but also serves as a release
of the earnest money.
9. True or False Both the Buyer and Seller sign the Notice of Buyer’s
Termination of Contract form.
10. True or False The agent(s) are required to give written notice to the Buyer that the Buyer should have an abstract covering the Property examined by an attorney of their choice or they should be furnished with or obtain a title insurance policy.
11. If question 10 is true then how does the agent give that notice?
________________________________________________________________
________________________________________________________________
12. The Buyer is obtaining conventional third party financing, the Property is
located in a mandatory homeowners subdivision and the Buyer has a house
they are selling. The required addenda to be used in this transaction are:
A. The Third Party Financing Condition form, the Mandatory HOA form and the Sale of Other Property by Buyer form.
B. The Third Party Financing Condition form and the Mandatory HOA
C. Only the Third Party Financing Condition form.
D. None of the addenda are required in this transaction.
13. True or False There is no form to caution the Buyer of square
footage issues so you should just verbally give them notice.
FORMS PRE-ASSESSMENT QUIZ
1. True or False The Protection period in the listing agreement ceases to
exist in all cases if the Seller lists the Property with another Broker.
Click 1.a1.b to Find the Correct Answer
2. True or False The T-47 Residential Property Affidavit can not
be used if the Seller has made changes to the Property since the date of the
existing survey.
Click Here to Find the Correct Answer
3. True or False The Non-Realty Items Addendum to Contract is good
to use because it is a separate agreement between the Buyer and Seller and
doesn’t have to be given to the Buyer’s Lender.
Click Here to Find the Correct Answer
4. True or False If the Seller conveys Non-Realty Items to the Buyer by
using the Addendum then the Seller warrants the condition of the items.
Click Here to Find the Correct Answer
5. True or False The Seller’s Invitation to Buyer to Submit New Offer is
not actually a rejection of the Buyer’s Offer but is just a request for another
offer from the Buyer that hopefully will be better.
Click Here to Find the Correct Answer
6. True or False It is okay to just verbally tell your client where you got
important information since there is not a form that would identify the
source of the information.
Click Here to Find the Correct Answer
7. True or False If the agent and the Seller want to extend the term of a
listing agreement they should line through the previous end date in the listing
agreement, put in the new end date and both should initial the change.
Click Here to Find the Correct Answer
8. True or False The TREC Promulgated Notice of Buyer’s Termination
of Contract form not only terminates the contract but also serves as a release
of the earnest money.
Click Here to Find the Correct Answer
9. True or False Both the Buyer and Seller sign the Notice of Buyer’s
Termination of Contract form.
Click Here to Find the Correct Answer
10. True or False The agent(s) are required to give written notice to the Buyer that the Buyer should have an abstract covering the Property examined by an attorney of their choice or they should be furnished with or obtain a title insurance policy. .
Click Here to Find the Correct Answer
11. If question 10 is true then how does the agent give that notice?
________________________________________________________________
________________________________________________________________
Click Here to Find the Correct Answer
12. The Buyer is obtaining conventional third party financing, the Property is
located in a mandatory homeowners subdivision and the Buyer has a house
they are selling. The required addenda to be used in this transaction are:
A. The Third Party Financing Condition form, the Mandatory HOA form and the Sale of Other Property by Buyer form.
B. The Third Party Financing Condition form and the Mandatory HOA
C. Only the Third Party Financing Condition form.
D. None of the addenda are required in this transaction.
Click Here to Find the Correct Answer
13. True or False There is no form to caution the Buyer of square
footage issues so you should just verbally give them notice.
Click Here to Find the Correct Answer
Answers and Explanation to Questions
1. True or False
The Protection period in the listing agreement ceases to exist in all cases if the Seller lists the Property with another Broker.
a. Answer: FALSE
b. Reason: The exemption does not apply if that Broker is not a member of NAR.
2. True or False
The T-47 Residential Property Affidavit can not be used if the Seller has made changes to the Property since the date of the existing survey.
a. Answer: FALSE
b. Reason: It is not the listing agent or the buyer rep. job to interpret that T-47 is good or bad. Title Company is the one that looks at the changes and decides whether or not to accept the existing T-47.
3. True or False
The Non-Realty Items Addendum to Contract is good to use because it is a separate agreement between the Buyer and Seller and doesn’t have to be given to the Buyer’s Lender.
a. Answer: FALSE
b. Reason: It is not a separate agreement, it is an addendum to the contract and must be given to all parties including to the Buyer’s Lender (as it is with any other addendum)
4. True or False
If the Seller conveys Non-Realty Items to the Buyer by using the Addendum then the Seller warrants the condition of the items.
a. Answer: FALSE
b. Reason: Paragraph C of the Non-Realty items Addendum to contract exactly spells out the Seller Does NOT warrants the condition of items. Make sure the Buyer knows and understand about it.
5. True or False
The Seller’s Invitation to Buyer to Submit New Offer is not actually a rejection of the Buyer’s Offer but is just a request for another offer from the Buyer that hopefully will be better.
a. Answer: FALSE
b. Reason: Paragraph (1) of the Seller’s Invitation to Buyer to Submit New Offer spells out the Seller Does NOT accept the existing offer, which means the Seller rejects the offer. This is not a counter offer and even if the Buyer submits a new offer with requested suggestions, the Seller is under no obligation to accept the new offer meeting his request. Also, the Seller could send different version of this invitation to different potential Buyers. It doesn’t have to be the same invitation for all Buyers, but you need to be careful you don’t violate the Fair Housing Act. You could put time frame for each invitation form. Make sure the Buyer knows and understand that the Seller is under no obligation to accept the new offer though meeting all Sellers’ request.
6. True or False
It is okay to just verbally tell your client where you got important information since there is not a form that would identify the source of the information.
a. Answer: FALSE
b. Reason: There is a form (“TAR-2502 NOTICE OF INFORMATION FROM OTHER SOURCES”) for this purpose. However, this is applicable mostly for Property Condition Information and not Personal information.
7. True or False
If the agent and the Seller want to extend the term of a listing agreement they should line through the previous end date in the listing agreement, put in the new end date and both should initial the change.
a. Answer: FALSE
b. Reason: They should sign a new agreement.
8. True or False
The TREC Promulgated Notice of Buyer’s Termination of Contract form not only terminates the contract but also serves as a release of the earnest money.
a. Answer: FALSE
b. Reason: This Notice only terminates the contract and has nothing to do with Releasing the Earnest Money. Buyer and Seller could terminate the contract, but still fighting over the Earnest Money.
9. True or False
Both the Buyer and Seller sign the Notice of Buyer’s Termination of Contract form.
a. Answer: FALSE
b. Reason: As it shows in the form, Only Buyer(s) sign the form.
10. True or False
The agent(s) are required to give written notice to the Buyer that the Buyer should have an abstract covering the Property examined by an attorney of their choice or they should be furnished with or obtain a title insurance policy.
a. Answer: TRUE
b. Reason: As it is shown on the first line of the form “TAR-2505: NOTICE TO PREOSPECTIVE BUYER” it is Required by Law.
11. If question 10 is true then how does the agent give that notice?
a. If you are using TREC or TAR BUYER REPRESENTATIVE AGREEMENT, it is already covered on these forms (TREC under Paragraph 6E (6E1 and 6E2)). If you are NOT using TREC or TAR form (e.g., using Builder Contract in purchasing new homes, etc…), You MUST give this notice via “TAR-2505: NOTICE TO PREOSPECTIVE BUYER” to the buyer, otherwise, the Agent is not entitled to Commission.
12. The Buyer is obtaining conventional third party financing, the Property is located in a mandatory homeowners subdivision and the Buyer has a house they are selling. The required addenda to be used in this transaction are:
A. The Third Party Financing Condition form, the Mandatory HOA form and the Sale of Other Property by Buyer form.
B. The Third Party Financing Condition form and the Mandatory HOA
C. Only the Third Party Financing Condition form.
D. None of the addenda are required in this transaction.
a. Answer: D
b. Reason: …..
13. True or False
There is no form to caution the Buyer of square footage issues so you should just verbally give them notice.
a. Answer: FALSE
b. Reason: There is a form given to us by Bob Baker, entitled “SQUARE FOOTAGE NOTICE”
PRE-ASSESSMENT QUIZ
1-4 FAMILY CONTRACT
PARAGRAPHS 7-23
1. True or False The Buyer has a right to do their own inspection and does not
have to have a license or use a licensed inspector.
2. True or False There are no exceptions to the requirement that utilities must
be on for inspections and the Seller must always pay for them to be on.
3. True or False The listing agent has the Seller’s Disclosure Notice in MLS
for Buyers to access so it is reasonable to presume that the Buyer does in
fact have the Seller’s Disclosure Notice and 7B1 should be checked.
4. True or False If none of the boxes in paragraph 7B have been checked then
the Buyer has no termination rights regarding the Seller’s Disclosure Notice.
5. If 7D1 is checked which of the following is truest?
A. The Buyer may do inspection of the Property but can not ask the Seller to
do any repairs.
B. This contract now clearly meets the legal requirements for an “as is” contract
and the agents should tell both Parties that it is an “as is” contract.
C. The Seller is not required to do any repairs due to the Buyer’s acceptance of
the condition of the Property.
D. Based on what the Buyer knows now regarding the condition of the Property
the Buyer is not asking the Seller for any specific repairs or treatments.
6. True or False The closing date in paragraph 9A is November 15 but the Buyer
is now ready to close so the “on or before” language in 9A means the Seller has
to close now that the Buyer is ready.
7. True or False Only the wife is on the contract and it will be their homestead so
when the lender requires the husband to sign documents at closing paragraph
9B3 means the husband must comply and sign the necessary documents.
8. True or False If closing and funding is the choice in paragraph 10 then the
Seller has until midnight that day to move out.
9. Which of the following is it most acceptable for an agent to insert in paragraph
11?
A. This contract is contingent upon a satisfactory inspection of the Property.
B. Seller must respond by 5:00 p.m. of the day following the offer.
C. The Property must appraise for the Sales Price or the contract is terminated.
d. Buyer has a Texas real estate broker’s license.
10. True or False Only an attorney can insert anything other than factual
statements or business details in paragraph 11.
11. True or False If language inserted in paragraph 11 conflicts with any pre-
printed text in the contract then we have a dispute of which prevails.
12. True or False The Parties to the contract have the legal ability to agree to
any terms of the contract including the amount in paragraph 12A1b.
13. True of False Only the Seller pays any prorations for the day of closing.
14. True or False If the Property experiences a significant casualty loss two
weeks prior to closing and can easily restore the Property to its previous
condition prior to closing but chooses not to do so then the Buyer must choose
one of the remedies stated in paragraph 14 of the contract.
15. True or False If the Seller decides not to close and is therefore in default of the contract then the Buyer must take action according to paragraph 15.
16. True or False Paragraph 17 refers to “reasonable attorney’s fees”. So any
fee paid to the prevailing party under this paragraph is reasonable.
17. Which of the following is the truest under paragraph 18?
A. The escrow agent under paragraph 18C must deliver the demand for the
release of earnest money to the other Party at that Parties address.
B. If the escrow agent does not receive a written objection within 15 days then
under the terms of paragraph 18C the earnest money must be released.
C. Paragraph 18C addresses the release of earnest money and paragraph 18D
addresses the potential damages if a Party wrongfully refuses to release the
earnest money.
D. The escrow agent’s demand for the earnest money is effective when that Party
receives the demand.
18. True or False In paragraph 21 the notice to Seller is a street address in
another city. Therefore notices may be sent any of the four ways stated in
this paragraph.
19. True or False If the Buyer does not pay the option fee within two days then
the Buyer is in default and the Seller can terminate the contract.
20. True or False The Seller fully accepted the Buyer’s offer on Sunday and the
Buyer’s agent took the contract and earnest money to the title company on
Monday so the effective date of the contract is Monday.
PRE-ASSESSMENT QUIZ
TEN KEY STEPS YOU MAY BE MISSING
IN THE CONTRACT
1. True or False: In paragraph one we only need the persons who are on the
Deed to sell the Property unless it is their homestead.
2. True or False: A wife can not buy a Property without her husband also
being on the contract and the Warranty Deed.
3. True or False: In MLS it says exclude the custom chandelier in the dining
room and it is in all the graphics and at the house there is a tag that says this
item is excluded and will not be conveyed with the Property. Thus the Buyer
must accept the Property with that exclusion and state that in Paragraph 11.
4. True or False: The Seller has excluded the above ground pool in the back
yard by stating that in paragraph 2D therefore the Seller must remove it.
5. True or False: The Buyer is paying for the Owner’s title policy but the
Seller would like to use their title company so the Seller can negotiate the
choice of title company under this scenario?
6. Which statement is most true?
A. The title company will always exclude the survey from coverage for the
Buyer on the Owner’s title policy.
B. Survey deletion means the title company will stand behind all mistakes
on the survey.
C. Shortages in area means the house has a different square footage than
the Seller said on the MLS sheet.
D. The Buyer has no recourse against the surveyor for mistakes on the survey
when the Buyer is accepting the Seller’s existing survey.
7. All of the following relating to paragraph 6C1 are true except for:
A. The Seller has a certain number of days to deliver the existing survey and a Residential Real Property Affidavit to Buyer and Title company.
B. The two boxes in this paragraph tells us who pays for a new survey if one is
required by this paragraph.
C. The Seller must have the Affidavit notarized for it to be a valid affidavit.
D. If a new survey is ordered the Buyer must obtain it no later than 3 days
prior to closing.
8. True or False: In paragraph 6D it establishes the Buyer’s automatic right to object to any and all matters relating to the Commitment, Exception Documents and the survey.
9. True or False: In paragraph 6D in the number of days to object blank there
is 5 days and the Buyer gets the survey the day before closing so he has
only one day to object under this paragraph.
10. True or False: In the previous example if the Buyer objects the day prior
to closing then the Seller may extend the closing to cure the objection.
11. True or False: If in paragraph 6E2 the box is checked that the Property is
subject to mandatory membership in a property owner’s association then the
Addendum for Mandatory Membership may be used but it’s not required.
12. True or False: Paragraph 6E 7 addresses a Public Improvement District but
since we don’t have any in this area this paragraph can be ignored.
13. True or False: Under the terms of the contract in paragraph 7A it is okay
for the Buyer’s Uncle Charlie to inspect the roof even though he is not a
roofer.
14. True or False: According to the contract the Seller must deliver the Seller’s
Disclosure notice prior to the executed contract.
15. True or False: If paragraph 7H of the contract has $485.00 in the blank
then the Seller must pay $485.00 to the Buyer at closing.
16. True or False: If the closing date in paragraph 9A is on a Sunday or federal
holiday then the closing must be changed to another day since funding can
not occur on either of those days.
17. Which of the following statements is most true of paragraph 11?
A. If the Buyer wants the contract contingent upon the sale of his current home
then it should be stated here and an addendum attached to the contract.
B. This is where the agent can create an appraisal clause and insert it to protect
the Buyer in case the Property does not appraise for the sales price.
C. This is the paragraph where the Buyer and Seller will reference a lease that
they are entering into until the Buyer can actually buy the Property.
D. If the Seller has a real estate license this would be the place to state that.
18. True or False: The Seller contribution to the Buyer in paragraph 12A1b is
a negotiable amount and subject only to how much the Seller is willing to pay
19. True or False: In paragraph 21, Notices, only the Parties should be listed
since this is for notices from one Party to another.
20. Which of these statements is most true of the Effective Date on page 7:
A. It is always the Broker who must fill in this date or instruct the agent to.
B. The contract is not binding and enforceable without this date.
C. The Buyer’s agent is the one to fill in the date since they are
going to take the contract and the earnest money to the title company.
D. It is very important for the contract to have this date since most of the time
lines in the contract run from this date.
Pre-assessment Quiz
1-4 Family Contract paragraphs 1 through 6
1. True or False Only the persons stated in the Deed need to be included in
paragraph One of the contract.
2. True or False If it is a cash transaction and the wife is buying the Property
her husband still needs to be a Party to the contract.
3. True or False Seven Brothers and Sisters have inherited the Property so they
need to choose one of them to be in the contract as Seller since there is not
room for all of them in paragraph One of the contract.
4. True or False On the effective date of the contract there is a fireplace screen
sitting in the den but not attached to the Property in any manner so the Seller
is free to take the fireplace screen and does not need to exclude it in the
contract.
5. True or False If it’s not on the list in paragraphs 2B or 2C then it is not part
of the Property.
6. True or False If the Seller lists something in paragraph 2D then he MUST
remove the item before closing or he is in default.
7. True or False The time frame for the contingency in paragraph 4A1 is the
same time frame as stated in the Third Party Financing Condition Addendum.
8. True or False When the Buyer selects 4A2a then the Seller must accept the
contingency and allow the Third Party Financing Condition Addendum.
9. True or False If the Buyer fails to deposit the earnest money within two days
then the Buyer is in default of the contract.
10. What is truest about paragraph 6A8?
A. This is an exception that only applies to existing surveys.
B. If the Buyer wants to amend this exception they should use the TREC
Promulgated Amendment form.
C. This paragraph allows the Buyer to eliminate the survey exception from the
Title Insurance Policy.
D. This paragraph allows the Buyer to amend this exception but not eliminate it
entirely.
11. True or False Amending paragraph 6A8 can only be done if the Buyer is
obtaining an existing survey.
12. Which statement is truest about “survey deletion?”
A. It is the process by which the Buyer eliminates the survey exception found in
paragraph 6A8 of the contract.
B. It is not really a deletion of coverage by the title company for survey claims
but is actually an amendment of the coverage for survey claims.
C. The cost for this change in coverage varies among Title Companies.
D. Shortages in area means how many square feet are in the House.
13. True or False The two boxes in paragraph 6C1 tells us who will pay for a new
survey if the Seller delivers the existing survey and Residential Real Property
Affidavit and the Survey or Affidavit is not found to be acceptable.
14. True or False If a new survey is ordered under any provision of paragraph
6C1 then it is okay if the Buyer doesn’t get it until the day of closing.
15. True or False The Buyer is obtaining a new survey under paragraph 6C2 and
has 10 days in the blank but doesn’t get it until 15 days after the effective date
of the contract and has in paragraph 6D 5 days to object after receiving
the survey so the 5 days starts after the 15 days.
16. True or False The Buyer wants to build an in ground pool but doesn’t put that
in paragraph 6D because if utility easements prevent building the pool he can
always object and get out of the contract if the Seller can’t cure the objection.
17. True or False If the objection time blank in paragraph 6D is blank that is good for the Seller.
18. True or False The Buyer sends an objection to the Seller one day prior to
closing so the closing date can be delayed 14 days.
19. True or False Paragraph 6E 2 is checked that the Property is subject to a
mandatory HOA so the Mandatory HOA addendum must be included with the
contract.
20. True or False The first 19 questions were very tricky so if Bob grades using
Tommy Thompson’s “tricky quiz” curve then I have a good chance of passing
this quiz.
PRE-ASSESSMENT QUIZ
TERMINATIONS
1. True or False There is a TREC Promulgated form for all termination rights of the Buyer.
2. True or False Only the Buyer is required to sign the TREC termination of contract form.
3. True or False Even though the Buyer signs the TREC form the Seller has to approve the Buyer’s right to terminate.
4. True or False If the Property does not meet the Lender’s underwriting
requirements then the Buyer has a right to terminate the contract.
5. True or False If the Buyer does not obtain Financing Approval within the
Number of days in the Third Party Financing Condition Addendum then the contract terminates.
6. Which of the following is a statutory right of termination by the Buyer?
A. The right to terminate under the Mandatory HOA addendum.
B. The right to terminate under the third party financing addendum.
C. The right to terminate based on receipt of the Seller’s Disclosure Notice.
D. The right to terminate under paragraph 23, the Termination option.
7. True or False If the Seller can not or will not cure objections by the
Buyer under paragraph 6D then the contract automatically terminates.
8. Which of the following is not true when using the Short Sale addendum?
A. If Seller does not notify the Buyer of Lienholder’s consent by the date in
Paragraph D then the Buyer can waive the requirement and continue to
Be in an active short sale contract.
B. Since the option period does not start until the amended effective date then
The Buyer can not terminate under that provision until that date.
C. The Seller’s timeline to provide the Subdivision Information under the
Mandatory HOA addendum is tied to the effective date of the contract.
D. The Buyer should wait until they have the Seller’s Lienholder consent
Before paying the option fee and earnest money.
E. All of the above are not true.
9. True or False Only the Buyer has rights of termination under the terms of
The contract or any addendum to the contract.
10. True or False If the Seller agrees to complete all lender required repairs
At the Seller’s expense then there are no circumstances under which the
Buyer may terminate the contract.
11. True or False If the Property does not appraise for the Sales Price or
Higher then the contract terminates unless the Seller reduces the Sales
Price or the Buyer agrees to pay the difference.
12. True or False If the Property suffers significant wind damage two days
Prior to closing and the Seller can not restore the Property by closing then
The contract automatically terminates.
13. The effective date of the contract is Wednesday November 24th and Thursday November 25th is Thanksgiving. Late on Wednesday after the contract has been executed the Buyer decides to terminate under paragraph 23 the Termination Option. Which of he following is true?
A. The Buyer must pay the option fee and earnest money before he can
Terminate under the option provision.
B. The Buyer only needs to pay the option fee to terminate and will not
Need to pay the earnest money.
C. The Buyer has two days to pay the option fee so if he terminates before
The two days time period he does not need to pay the option fee.
D. There are no circumstances under which the Buyer can terminate if
He has not paid the option fee.
14. The effective date of the contract is Friday October 15th. Paragraph 7B2 is checked, there is a mandatory HOA with 10 days in paragraph A which is checked and there is a 10 day option period in paragraph 23. On
October 22nd the Seller’s Disclosure Notice is delivered and on October
26th the Subdivision Information is delivered to the Title Company which
Delivers it to the Buyer October 27th and closing is set for October 29th.
Describe the timelines for the termination rights of the Buyer under each
Of the above provisions.
Option period:
Seller’s Disclosure Notice:
HOA:
15. True or False All termination notices are effective when sent to the
Listing agent because what the agent knows the client knows legally.
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