TREC Family Residential Contract Flashcards

Questions and Answers

What is the equation described in Paragraph 3?

The cash portion plus the financing equals the sales price.

What does Texas law require regarding real estate license holders in a transaction according to Paragraph 4?

They must notify the other party in writing before entering into a contract of sale.

What is required of the Buyer within 3 days after the Effective Date according to Paragraph 5?

The Buyer must deliver earnest money to the escrow agent.

How many days does the title company have to provide the title commitment as per Paragraph 6B?

20 days Signup and view all the answers

Within _____ days after the Effective Date of the contract, Seller shall furnish to Buyer and Title Company Seller's existing survey.

specified number of days Signup and view all the answers

What option does Paragraph 6D give to the buyer regarding title commitment and survey?

The buyer may choose a number of days to review both. Signup and view all the answers

What does the Texas Water Code require from the Seller according to Paragraph 6.E.(3)?

The Seller must deliver and the Buyer must sign the M.U.D. disclosure. Signup and view all the answers

What must the buyer be notified about if the property is located in a M.U.D. according to Paragraph 6.E.(6)?

There may be an extra charge for having water and sewer services connected. Signup and view all the answers

What is the Seller required to do regarding utilities during the contract as stated in Paragraph 7.A.?

Keep the utilities on during the time the contract is in effect. Signup and view all the answers

When must a Seller's Disclosure of Property Condition be given to the buyer according to the relevant card?

Before the buyer signs an offer. Signup and view all the answers

What happens if the buyer does not receive the Seller's Disclosure within the specified days as detailed in Paragraph 7.B.(2)?

The buyer can terminate the contract. Signup and view all the answers

In what situations is a seller's disclosure not required as mentioned in Paragraph 7.B.(3)?

In a foreclosure sale, tax sale, certain sales by guardians, or sales by a builder of a new home. Signup and view all the answers

According to Paragraph 7.D.(1), Buyer accepts the Property As Is.

True Signup and view all the answers

What may occur if lender-required repairs exceed 5% of the Sale Price according to Paragraph 7.E?

The Buyer may terminate the contract and receive a refund of earnest money paid. Signup and view all the answers

What is included in the SPECIAL PROVISIONS section as per Paragraph 11?

Factual statements and business details applicable to the sale. Signup and view all the answers

What does the default paragraph in TREC contracts state according to Paragraph 15?

If either party defaults, the injured party can sue for specific performance or terminate the contract. Signup and view all the answers

What is required of the parties for dispute resolution as per Paragraph 16?

The parties must agree to mediation. Signup and view all the answers

What happens if mediation fails according to the relevant card?

The parties may move to arbitration. Signup and view all the answers

What must occur if the escrow agent receives a demand for release of earnest money as described in Paragraph 18.C?

They must notify the other party. Signup and view all the answers

What should be reviewed according to Paragraph 22?

The Addenda. Signup and view all the answers

When are the Seller's Temporary Lease Addendum and Buyer's Temporary Lease Addendum used?

When the lease period is for 90 days or less. Signup and view all the answers

Study Notes

Paragraph 3

Sales price calculation involves adding cash portion to financing.

Paragraph 4

Real estate license holders involved in a transaction must provide written notice to the other party before entering a sales contract, especially if acting on behalf of family members.

Paragraph 5

Earnest money must be delivered to the escrow agent within 3 days of the Effective Date; timing is critical.

Paragraph 6B

Title company is obligated to deliver the title commitment within 20 days of receiving the sales contract.

Paragraph 6C.(1)

Seller must provide the existing survey and an Insurance T-47 Affidavit to the Buyer and Title Company within a specified number of days after the contract's Effective Date.

Paragraph 6D

Buyer has a designated period to review both the title commitment and survey; concerns must be addressed within that timeframe if any issues arise.

Paragraph 6.E.(3)

Texas Water Code mandates delivering the M.U.D. disclosure to the Buyer before finalizing the contract; failure to provide allows the buyer to terminate.

Paragraph 6.E.(6)

Buyers in Municipal Utility Districts (M.U.D.) must be informed about possible additional charges for water and sewer service connections.

Paragraph 7.A

Seller must maintain utility services during the contract period at their expense.

Seller's Disclosure of Property Condition

Required to be given to the buyer before they sign an offer to make it binding.

Paragraph 7.B.(2)

Buyer sets a time limit for receiving the Seller’s Disclosure; if not received in that period, the buyer can terminate the contract. Upon receipt, the buyer has 7 days to terminate for any reason.

Paragraph 7.B.(3)

Seller's disclosure is exempt in cases of foreclosure, tax sales, or new home sales without prior occupancy, and not required if property value is less than 5% of the sales price.

Paragraph 7.D.(1)

Buyer agrees to accept the property in its current condition ("As Is").

Paragraph 7.E

If required repairs exceed 5% of the sale price, Buyer has the option to terminate the contract and reclaim their earnest money.

Paragraph 11

Special provisions for factual statements and business details may be included but must comply with TREC rules regarding mandatory forms.

Paragraph 15

Default provisions detail rights for the injured party, including suing for specific performance or terminating the contract upon default by either party.

Paragraph 16

Contracts stipulate mediation as the initial method for dispute resolution, allowing a mediator to facilitate agreement between parties.

If Mediation Fails

Parties may progress to arbitration, where an arbitrator will determine the outcome based on arguments from both sides.

Paragraph 18.C

Upon contract termination, the escrow agent must notify the other party if they receive a demand for earnest money release; disbursement occurs if no objection is received within 15 days.

Paragraph 22

Includes reviewing any addenda relevant to the contract.

Temporary Lease Addenda

Applicable for lease periods of 90 days or less, ensuring clarity on terms during the transition.

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Description

Test your knowledge of the TREC 1-4 Family Residential Contract with these informative flashcards. Each card focuses on essential paragraphs and their implications in real estate transactions in Texas. Perfect for aspiring real estate professionals and students preparing for licensing exams.