RE Promulgated forms Ch. 3 Parties Property and the Money

-name(s) of sellers as on deed or owner's title policy including martial statues

-Name(s) of Buyers as buyer wish to take title; include martial status.

• Legal description: lot number, block number, section number, subdivision name, county, city, address, zip code
• -Excluded fixtures and accessories

• cash down payment
• Amount of 1st loan
• amount of 2nd loan
• Sales price

• or financing addenda
• -Type of financing
• -addenda needed
• -term of loan 1st; 2nd
• -Interest rate 1st; 2nd
• Assumption of loan balance

• Earnest money amount
• Additional earnest money and date of deposit if any
• -escrow officer
• -address

• -Who will pay for title policy
• -What company will issue the title policy
• -Survey: New or existing; Who will pay; Who will furnish
• -Number of days to furnish
• -Possible reasons for objections
• -How many days for Buyer to raise title objections
• -Is property subject to mandatory membership in an HOA

• -Has Buyer received Seller's disclosure notice
• -If not, how may days for Seller to furnish
• -Was house built prior to 1978
• -Do you need to use the Lead Addendum
• -Are there specific repairs required by the buyer
• -How much does the buyer want the seller to contribute to the price of a residential service contract

• -By what date will closing hopefully take place
• -When will possession occur
• -If possession is before or after closing, define the terms of the temporary tenancy on the appropriate TREC temporary lease.

Are there any business details not addressed in other parts of the contract

• -A breakdown of both the buyer's and seller's expenses can be found in paragraph 12.
• -Information in assisting you to estimate both the buyer's and the seller's expenses can be found in Texas Association of REALTORS (TAR) forms 1935 and 1936
• -Nonmembers many not use TAR forms; to complete paragraph 12, make a list of the items in paragraph 12 and create an estimated cost sheet for both the buyer and the seller. The Title company and lenders are great sources of information. Remember, the seller must pay all of the seller expenses plus any amount agreed to pay for buyer in paragraph 12
• -How much will Seller contribute towards Buyer's Expenses?

• Address of buyer and seller
• Phone numbers of buyer and seller
• Fax numbers of buyer and seller
• Email address of buyer and seller

What addenda will need to be added to the agreement

• How much is the option fee
• How many days is the option fee period being purchased
• Will the option fee be credited to the Sales Price at closing

• Name of Buyer's Attorney and Seller's Attorney
• Phone numbers of buyers attorney and Seller's Attorney
• Fax number of buyer's attorney and sellers Attorney
• E-mail address of buyer's attorney and sellers Attorney

legal identification (deeds, IDs, etc)

true

NAME, an unmarried person, or just put the name.

true

• NAME, as separate property
• EX: Steven Swan, as separate property

NAME and (husband/wife)NAME (married)

NAME and NAME, as tenants in common

• **When parties wish to create rights of survivorship or fractional interests are involved, the parties should be advised to seek the advice of a competent real estate attorney before proceeding to prepare an offer to purchase.
• EX: Sue Smith and John Jones, as tenants in common

Executor's or administrator's NAME, executor (administrator) of the estate of (decedent's NAME), deceased

EX: Tom Harold, Executor of an estate of Ron Harold, deceased.

• Business NAME, a Texan partnership, or
• Business NAME, a Texan partnership composed of NAME, NAME and NAME

Business NAME, a Texas limited partnership, NAME, as general partner acting for and on behalf of the partnership

• Company NAME, a Texas* corporation
• *or the name of the state in which the corporation is chartered 

***A corporation resolution, issued by the board of directors, grants the authority to and identifies the officers who can sign on behalf of the corporation. A licensee should request a copy of the corporate resolution prior to the execution of any written agreements. It is to be retained in the transaction file.

Company NAME, a Texas limited liability company

Company NAME, LLC

NAME, NAME, and NAME, trustees for and on behalf of (corporate name)

• 2A; legal description
• 2B (improvements) 2C (accessories): describe items to remain with the property unless specifically excluded in 2D.

legal description: recorded plat

Unincorporated or None

• N/A
• add an attachment to the contract with the description. 

The attachment can be made by copying the legal description in the seller's deed or title policy, for example.

N/A or none

personal property

TRECs Non-Realty items Addendum

the sales price

• 3A: down payment
• 3B: total of all loans
• 3C: sales price

3A and 3C would be the same and 3B will be 0

three different financing possibilities: 

• 1. Third party financing
• 2. Assumption
• 3. Seller Financing

**Each requires a different addendum

buyer taking over existing loan; addendum

license holder disclosure

true

the state and sell price of the property.

Apps on phone for rates/call title company

to make sure that the seller is the owner and to check liens, encumberances, etc.

seller, sometimes buyer

10-15 days; in case needing a new one; $700+, not many surveyors; better to use existing survey for time and money wise.

1. buyer be acting in good faith; correct info and documents needed for the loan officer promptly

2. For Financing Approval to take place (a) terms of loan must be available (b) the lender has determined the buyer's assets, income and credit history meet the requirements.

3. Buyer has right to terminate if the lender says the buyer does not meet the requirements

4. The buyer must act to terminate within a certain number of days negotiated by the parties, or the buyer loses the right to terminate under this addendum and there is no longer any financing contingency on this contract.

5. it states the time is of essence.

true

gives the parties the opportunity to negotiate for the buyer to provide the seller with items to establish creditworthness; must be delivered to the seller within the time negotiated in the blank.

What is the average time? What items are needed or can be used?

Credit Approval; gives the seller the right to terminate if the items are not received within the time frame; seller must do so within seven days after expiration of the time for delivery and give notice to the buyer; seller will receive earnest money.

the seller determines that the buyer's credit is not acceptable; buyer receives earnest money.

Assumption: describes the note(s) that is/are being assumed and cautions the buyer that the obligations imposed by the deed of trust securing these notes will continue.

C1: describes any first lien notes being assumed

C2: describes any second lien note being assumed.

• **Because the payments on an assumed loan are already set up, the buyer will follow the same payment schedule, starting with the first payment after the closing. 
• EX: if the seller has paid the January 1 and February 1 payments and then the loans are assumed on February 15, the buyer's first payment will be March 1.

1. what will happen if the balance varies: because the cash + the loan balance = the sales price, if the loan balance varies, either the cash or the sales price must be adjusted; check the appropriate box 

2. Gives the either party the right to terminate if the variance exceeds $500, unless the other party elects to pay the excess. If the parties terminate the contract for this reason, the earnest money will be refunded to the buyer. ????

Loan Assumption Terms and Consent by Noteholder: protect the buyer in the event the lender should charge an assumption fee or an interest rate more than what was agreed to or refuses to consent to the assumption; in any of these events, the earnest money will be refunded to the buyer.

Seller's Liens: protects the seller in the event the lender does not release the seller from liability: the seller would have a lien on the property and the ability to pay any delinquency to get the property back; the vendor's (seller's) lien is released when the lender relieves the seller of future liability.

Tax an insurance escrow: protects both parties; if there is a deficiency in the tax and insurance escrow account, the seller has to pay the deficiency; the buyer reimburses the seller for the amount in the account, so it there is any overage in the account the seller is paid for it.

true

gives the parties the opportunity to negotiate for the buyer to provide the seller with items to establish creditworthiness; items must be delivered to the seller within the time negotiated in the blank.

• gives the seller the right to terminate if the items are not received within the time frame; seller must do so within seven days after expiration of the time for delivery and give notice to the buyer; seller receives earnest money.
• Seller can also terminate if buyer has unacceptable credit; buyer receives the earnest money

describes the rate of interest for the loan, the buyer's right of prepayment of the loan, and the seller's right to collect late charges if payments are not received on time; provides the parties with three choices for loan repayment.

if buyer does not get items in order before delivery date; seller can terminate; seller gets earnest money

if buyer does not have acceptable credit; seller can terminate; buyer gets earnest money

D(1): discusses what will happen if the property is sold; most sellers what the right to give consent of any sale of the property while they still have an outstanding loan secured by the property; D(1)b; describes the seller's right to declare the balance of the loan due if the property is sold without consent.; the note under D(1)b reminds buyers that their liability continues until the loan is paid in full unless they receive a release of liability from the seller.

• D2: gives the parties an option to negotiate a requirement for a tax and insurance escrow account; seller's addendum can be used with other financing addendums, so many times there is not a need for an escrow account.
• EX: if a buyer is assuming a seller's first lien mortgage, with XYZ Savings and the seller financing is a second lien, only for a portion of the seller's equity, XYZ Savings might already by collecting a monthly escrow payment. 

• The same situation may exist if the buyer is getting new financing and first lien mortgage company is carrying an escrow account.
• EX; On an 80/10/10, the first lien company may have an 80% loan and the seller may have a 10% loan. In this case, there may be no need for the seller to carry an escrow account because the first lien mortgage company is doing so.

D(3); protects the seller by making a default on any superior lien a default under the seller's lien.

require a monthly amount cover payments of those items.

The Addendum for Release of Liability on Assumed Loan and/or Restoration of Seller's VA Entitlement.

62

Reverse Mortgage Financing Addendum.

Reverse Mortgage Financing Addendum

the parties, the property description, the sales price, and the financing.

Yes the seller can terminate the contract on September 28

October 3; no, after seven days termination period; the seller loses the right to terminate and is deemed to have approved the buyer's creditworthiness.

The buyer may terminate the contract, and earnest money will be refunded to buyer.

true

The buyer will pay, and it protects the seller

false; the terms of the loan described must be available, the buyer's assets and income meet the lenders underwriting requirements, and the buyer's credit history meets the lender's underwriting requirements are necessary

7

7

the appraisal, lender-required repairs and insuarability.

the sum of all financing