Questions and Answers
What does IABS stand for?
What is the purpose of naming the parties in a contract?
To get the full, legal names of the parties and clarify relationships and ownership interests.
What is included in the definition of property?
Land and improvements attached to the land.
What is derived from a recorded plat?
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What are improvements in the context of real estate?
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What are accessories in real estate?
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What must be included in the contract regarding exclusions?
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What is a Comparative Market Analysis (CMA)?
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What does the cash portion specify?
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What must the sum of all financing equal?
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What must a real estate license holder disclose?
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What is earnest money?
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What is a title policy?
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What is the seller required to provide regarding title commitment?
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Study Notes
Before The Contract Disclose Representation
- Involves IABS and various agreements like TAR-1101 and TAR-1501.
Paragraph 1: PARTIES
- Requires naming of principals and asking buyers about property title preferences.
- Full legal names of parties must be obtained.
- Relationships and ownership interests should be clearly stated.
Paragraph 2: PROPERTY
- Includes land and any improvements attached to it.
- Legal description must be accurate for contract enforceability.
Paragraph 2A: LAND
- Defined by lot, block, and subdivision based on a recorded plat.
Paragraph 2B: IMPROVEMENTS
- Refers to additions like houses, garages, fixtures, and landscape features permanently affixed to the property.
Paragraph 2C: ACCESSORIES
- Items enhancing the property's utility or appearance, such as draperies or mailbox keys.
Paragraph 2D: EXCLUSIONS
- Seller retains certain improvements; these should be removed before possession transfer and listed in the contract.
Paragraph 3: SALES PRICE
- Comparative Market Analysis (CMA) aids in determining realistic property pricing.
- List price is seller's duty; offering price is buyer’s responsibility.
Paragraph 3A: CASH PORTION
- Specifies the down payment to be presented at closing.
Paragraph 3B: SUM OF ALL FINANCING
- Outlines buyer's financing options, with each type requiring a specific addendum.
Paragraph 3C: SALES PRICE
- Ensures sum of down payment (3A) and financing (3B) equals overall sales price (3C).
Paragraph 4: LICENSE HOLDER DISCLOSURE
- Texas law mandates disclosure by licensed agents of personal interest in transactions, including relationships with family or entities owned.
Paragraph 5: EARNEST MONEY
- Acts as a gesture of good faith; no legal requirement for earnest money to validate contracts.
- Buyer defaults if earnest money isn't deposited as per contract terms.
Paragraph 6A: TITLE POLICY
- Seller must provide a title insurance policy, detailing eight exceptions.
- Buyer should consider having an attorney examine the abstract of title.
Paragraph 6B: COMMITMENT
- Seller must provide a title commitment copy within 20 days post-contract receipt by the title company.
- Buyer can seek earnest money refund if documents are not delivered timely.
Paragraph 6C: SURVEY
- Seller must provide both the survey and the affidavit approved by the lender and title company.
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Description
Study the key terms and definitions related to real estate contracts, particularly focusing on family residential contracts. This quiz will help you understand important concepts such as representation and the parties involved in these agreements.
