Chapter 2 review ( more details)

Question 1

TREC’s main purpose

Answer 1

is to protect the public from unscrupulous licensees, TREC only gets involved when one person is acting in a third party position.

TREC is authorized to regulate and monitor TRELA.

Question 2

TRELA

Answer 2

dictates what you can and cannot do as an agent

Question 3

Which group has the task to draft and revise contracts and forms for use by agents?

Answer 3

Broker-Lawyer Committee

Question 4

TRELA Rules History

Answer 4

Verbiage from TRELA is italicized. Descriptions of rules are followed by explanations or examples, or both.

The act was written in 1939. At that time, salespeople only represented the owner and never represented the buyer. If a principal directs you to use a different form, you may do so because it is an exception under the TRELA.

Question 5

TRELA 3 rules briefly

Answer 5

(a). commission adopt rules public’s best interests. ( texas broker-lawyer committee & commission) use only TREC forms

(b). NOT PROHIBITED : sale, option, lease real property a contract form:

1. prepared by the property owner, or the lawyer and required by the property owner.

(c) contractual obligation between the seller and the licensed holder acting as an agent for the seller.

1. commission are negotiable.
2. Texas Coastal natural hazards info important to coastal residents.

Question 6

To be an acceptable listing contract, TREC requires that the listing form contains what items?

Answer 6

A provision informing the parties to the contract that commissions are negotiable.

Question 7

In what year was the TRELA written?

Answer 7

1939

Question 8

Rescission (TIP)

Answer 8

Rescission is only available if the non-mistaken party knows or should have known about the unilateral mistake. If the non-mistaken party knows that the other party has made a unilateral mistake, the result is usually contract rescission.On the other hand, if the other party was not aware of the mistake, the contract can usually be REFORMED.

Question 9

Avoid Contract Mistakes ( Just Read )

Answer 9

An agent acting properly should:

KEY CONCEPT Keep the contract neat.

Be sure that all the blanks are filled in correctly.

Always use full names for the parties of a contract.

Double-check all the numbers, figures and dates.

Be sure their clients initial each page, and any changes, sign the appropriate places.

Be sure their clients receive a copy of everything signed.

Ensure that all addendums necessary to the contract are with the contract.

Double-check the legal description to make sure it is written correctly.

Explain the contract to their clients, but not interpret the legal ramifications.

Not promise the contracts can do anything except put the parties’ desires in writing.

Not accept poorly written contracts from other agents.

Question 10

Sherman Antitrust Act

Answer 10

1. price-fixing, 2.boycotting, or 3. allocation
   Sales commissions are always negotiable

Question 11

Allocation

Answer 11

It is the division of customers based on location, income, or any other factor that limits the ability of licensees to compete for customer interest.

Question 12

Binding

Answer 12

the document the buyers and sellers are about to sign will bind them to the details contained in the document. When two parties agree to purchase and sell a real property, there are no days for automatic rescission.

Question 13

Once a contract is signed, how many days are there for automatic rescission?

Answer 13

Zero

Question 14

what does promulgated mean?( TREC)

Answer 14

The form was formally made public or created and mandated by TREC, and is to be used by licensees for the specific purpose intended, unless there is an exception of when you do not have to use the form.

Question 15

Exceptions in promulgated forms

Answer 15

1. When licensee is functioning only as a principal rather not the agent.
2. The Us government is the principal in this Transaction so they can direct the licensee to “FILL IN “ their contract. and the licensee has the right.
3. Contract prepared by the principal or his or her lawyer, like builders, investors.

Question 16

“prepared by an attorney” phrase

Answer 16

phrase actually has no significance. If an attorney draws up a form for which TREC has a form promulgated, you would be required to use the TREC form.

Question 17

computer-driven printers (promulgated)

Answer 17

The name and address of the person or firm responsible for developing the software program must be legibly printed below the border at the bottom of each page in no less than six-point type and in no larger than 10 point type.

Question 18

When buyer or seller may request you to strike a paragraph from the contract form ?

Answer 18

You may do so since you were instructed to do so

Question 19

Uncreated Forms by TREC

Answer 19

listing agreements, and buyer representation agreements that create relationships between clients and brokers. TREC does not regulate these situations.

Question 20

Unlicensed Practice of Law.

Answer 20

Preparing contracts or any documents which deal with the transfer of property in Texas by a licensee, is outside the Scope of real estate services.

Question 21

executory contract or executed agreement

Answer 21

If both parties have signed and initialed contracts agreeing to each of the details within offers and counteroffers, and all parties have been notified.

Question 22

If the seller wants to change one item of an offer

Answer 22

that would be a rejection of the entire offer.

Question 23

Failure to Act

Answer 23

The sellers could fail to act as long as the other side allows it. Buyers have the right to withdraw their offer any time prior to the seller’s acceptance.