Closing and the buyer's possession of the property are addressed in paragraph __ and __.
9 and 10
Closing needs to occur __ or ______ a specific date, while possession can occur ____ or _____ the closing date.
on or before
before or after
If the closing date needs to be extended, it will require all parties to sign an ____________ to the contract.
amendment
The only way the closing date may be automatically extended is if...
objections have been made regarding the commitment and/or the survey
The seller is to convey title with...
a general warranty deed.
Paragraph 9 identifies the closing date and seller's and buyer's performances.
true
Paragraph 10 identifies whether possession of the property...
happens at funding or according to a lease
If the parties agree that possession will be other than "upon closing and funding" a ____________________ must be used.
temporary lease agreement
Seller's Temporary Residential Lease
Buyer's Temporary Residential Lease
If possession is to happen before or after the closing date, both parties need to consult their __________________ and determine if their interests are protected.
insurance agent.
A temporary lease form may not extend how many days? Why?
90 days, landlord is exempt from the requirements of an ordinary lease (fire alarms, windows the lock, etc.)
What happens if the tenancy exceeds 90 days?
The owner will need to regard the property as a residential rental property and bring it into compliance with Ch. 92 of the Texas Property Code, the ch that defines security devices, smoke detectors, and other features that must be provided in a residential rental unit.
When the seller is going to remain in the property after closing, what form must be used?
Seller's Temporary Lease form
The full amount of the daily rental and the security deposit is to be paid to the landlord (buyer) at the time of funding of the sale. The security deposit will be refunded after the seller vacates.
When the buyer moves in early, what form is used?
Buyer's Temporary Lease form
The amount of the daily rental (commencement date to closing date) will be paid to landlord (seller) at the time of commencement (start date). Any security deposit will be paid at the same time. The security deposit will be refunded at closing and funding. If the rental period winds up being longer than paid for (closing delayed) the difference will be due at funding.
Holdover is extending the lease for a few days. When considering an amount for a daily holdover it should...
be enough to discourage the tenant from staying.
Better for the tenant to go to a hotel.
Paragraph 11, Special Provisions, is used to put what and what is not allowed?
allowed:
-add factual statements or business details
-notice that a licensee is selling, agent is related to party, provisions that cannot fit into a space (multiple sellers)
NOT allowed:
-define legal rights; choose language wisely; consult attorney
-offer is contingent on...
-Info that TREC provides a promulgated addendum for
What are some words that are used for legal defining and should be avoided in the special provisions paragraph?
-contingent upon, terminate, refund earnest money on demand, cancel, time is of the essence
Paragraph 12 defines...
closing date, buyer's and seller's costs, and explains if any costs exceeds an amount one of the parties has agreed to pay, that party can terminate unless the other party agrees to pay the excess.
Why must agents study up on paragraph 12?
so they know which party is responsible to pay what
The seller pays on behalf of the buyer "unallowables and/or buyer's other expenses. What are unallowables? Where is the total amount of unallowables and other buyer's expenses put?
Are lender fees that the borrower is prohibited from paying, so the seller must pay them. FHA and VA loans have unallowables. Also, if the buyer wants the seller to pay for some of the buyer's closing, 12A(1)(b) is where the dollar amount would go.
Texas property taxes are paid in arrears, this means what?
tax prorations are based on last year's tax amount because the current year's tax amount is not yet available.
**paragraph 13 prorations; says the parties will work that out on their own.
Paragraph 14, Casually Loss, states what?
that the seller is responsible for the property up until the closing date
Paragraph 15 states that both parties have the same rights if the other party ______ under the contract.
defaults
What happens in arbitration?
the parties present their position to a third, disinterested party who listens and then renders a decision that may or may not be binding; binding only if the parties have contractually agreed that it will be so prior to the arbitration hearing.
What happens in litigation?
a judge or a jury will decide the outcome; outcome can be appealed to a higher court.
What happens in mediation?
a third, disinterested party facilitates communication between the disputing parties to enable them to move towards a point of agreement; does not make decisions on who is right or wrong; agreement in writing and legally binding.
The four most advantages of mediation is...
low cost; few hundred to $1,500 or more
fast
private
win-win
prevail
dominate; successfully persuade someone of something
covenant
an agreement between people, companies, or countries.
Paragraph 19, Representations, states that all representations will survive through closing and reminds the parties that the seller may continue to show the property for ___________ offers.
back-up offers
Paragraph 20, Federal Tax Requirements, states that when closing take place at a title company, the __________ agent makes certain that IRS regulations are followed.
escrow agent
IRS
Internal Revenue Services
Paragraph 21, Notices, asks the buyer and seller where notices are to be mailed, emailed or transmitted by fax.
true
DO NOT list or attach the what to the contract.
Seller's disclosure
Information About Broker Services (IABS)
The TAR Notification of Intermediary Relationship form
Employment agreements
other notices
There is no right to terminate option if the buyer fails to pay the money to the seller.
true
The termination option, agreement is for the the buyer to pay the seller within ___ days of the effective date of the contract.
3 days
The seller's agent may accept the option fee on behalf of the seller client and sign the receipt.
true
Days in the contract are ___________ days and time is of the essence for the termination option paragraph.
calendar days
Although paragraph 24, Consult an Attorney Before Signing, allows it, names of attorneys are not required. They can be included at the request of the parties.
true
What two checks does the licensee usually receive from the prospective buyer when writing an offer?
earnest money (made payable to the escrow or title company) and option money (made payable to the seller)
**The buyer's agent should hold onto those checks until the contact is finalized; once the offer is accepted and there is an effective date, the agent holding the checks has critical time restraints to get them delivered; earnest money must be to the escrow agent by the close of business on the second day after the effective date, and option money to seller or seller's agent within three days after the effective date.
Earnest money check is made payable to....
Option Money check is made payable to...
escrow or title company
seller
Page 9 of the contact is for information only.
true
Who fills out the Contract and Earnest Money Receipt on page 9?
escrow or title company agent
**Some escrow agents may choose to use their own receipt form for the contract and the earnest money instead of the form at the end of the contact.
Earnest money must be deposited to the title company by the close of business on the second day after the execution of the contract. The only exception occurs when...
the principals agree that a deposit may be delayed and a different time is expressly defined in para 11.
The lender is requiring an inspection by an electrician. Who will pay for that inspection?
the buyer
A property is to close on October 12. On October 11, the buyer goes to the property for a final walk-through inspection and finds the property has been vandalized. Is the buyer responsible for the repairs?
No, seller is under seller's insurance
A contract was negotiated with paragraph 6C2 checked. The Title Company ordered the survey. The contract did not close. The seller made a written demand for the earnest money. The Title Company notified the buyer that the seller was requesting the earnest money. The buyer never responded to the Title Company. Thirty-five days later, the Title Company plans to send a check to the seller. According to the contract, will the title company withhold the fee for the survey from the seller's funds?
No
ABC Realty is acting as an intermediary in a transaction, and they have appointed two different agents to assist the principals. The names of both agents from ABC should be on the contract. Where should the names be on the form? What should it say in Agreement between Brokers?
On the right side under Listing Broker
N/A because there is only one broker
The Third Party Financing Addendum for Credit Approval indicated that the total adjusted origination fees were not to exceed $1,200. Paragraph 12A(1)(b) indicated that the seller would pay $750 for that amount. The discount changed drastically, and now, the fees are $1,600. According to the contract, if the seller agrees to pay the excess, can the buyer terminate the contact? If the buyer agrees to pay the excess, can the seller terminate the contract? If the buyer agrees to split the excess with the seller, is the seller obligated to agree?
no on all
Should the Seller's Disclosure Notice be listed in paragraph 22 of the TREC contract/
no
If a buyer fills in the blanks in paragraph 23, in the TREC One to Four Family Residential Contract, but four days after the effective date the money has not been received by the seller or the seller's agent, what is the status of the contract?
Contract is valid; buyer has no option to terminate
If the tenant damages the property while occupying, the cost of repairs is the responsibility of the...
tenant
If a closing takes place in July, who will be responsible for payment of the annual taxes to the taxing authority when the tax statements arrive?
buyer
If one of the parties default and the non-defaulting party accepts the earnest money as damages, that party may also sue for other damages.
false, if they accept the earnest money they can do nothing more; the contract is terminated.
According to paragraph 18B, if no closing occurs, the title company may require unpaid expenses on behalf of the seller or buyer and a written release of liability of escrow agent.
true
If the escrow agent receives a demand for the earnest money from one party, the escrow agent will send a copy of the demand to the other party. If the escrow agent does not receive a written objection within __ days, the escrow agent may release the earnest money to the party making the demand.
15 days
If one of the parties wrongfully refuses to sign a release acceptable to the escrow agent within ___ days of receipt of the request for the release, they will be liable to the other party for liquated damages of _____ times the amount of the earnest money.
7; 3
Notices from one party to the other are effective when they are sent to
the email address or address listed in paragraph 21
According to paragraph 23 the option money is to be delivered to the
seller
If the option money is NOT delivered to the seller within the proper time frame, what is the status of the contract?
the contact is valid; paragraph 23 is not a part of the contract.
Author
Blue2xa88
ID
324837
Card Set
RE Promulgated Forms Ch. 5 Closing Possession and More
