Using Promulgated Forms and Presenting Offers Flashcards by A V

What law prohibits price fixing?

The Sherman Anti-Trust Act
The Texas Statute of Frauds
The Deceptive Trade Practices Act
The Real Estate Settlement Procedures Act
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The Sherman Anti-Trust Act

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What entity promulgates real estate contracts for use by licensees?

The State Attorney General
The Texas Real Estate Commission
The Broker-Lawyer Committee
The Legal Committee of TREC

The Texas Real Estate Commission

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Which of the following situations is NOT an exception to the use of promulgated forms?

The seller requires a different form to be used
Licensee is acting as a principal not as an agent
A standard purchase agreement bought from a business supply store
HUD requires a different form to be used

A standard purchase agreement bought from a business supply store

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Which of the following groups does the Texas Real Estate Commission govern?

Buyers
Sellers
Real estate licensees
All of the above

Real estate licensees

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What is it called when two or more real estate brokers work together to conspire to charge the same commission?

Fraud
Discrimination
Commission Collaboration
Price Fixing

Price fixing

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In the second scenario the broker would be in violation for not using a ________________ when one could be used.

TREC promulgated form
TREC promulgated contract
TREK promulgated form
The broker was not in violation.

TREC promulgated form

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By modifying the previous contract, the broker now would be in violation for____________________.

practicing law
not disclosing that he modified the form
copyright infringement
the broker would not be in violation

Practicing Law

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In the fourth scenario, the broker was a principal of the transaction and could use a different form because _____________________.

that is one of the TREC exceptions
the broker may use any form at their discretion.
there are no rules when you’re the principal.
the broker may not use a different form. Ever.

that is one of the TREC exceptions

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In the third scenario, the broker could use a different form because __________________.

he IS an attorney
his lack of knowledge is excusable.
he does what he wants
the broker must not use a different form for any reason.

he is an attorney

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What is it called when a buyer puts together the paperwork necessary to buy a house from a seller and that paperwork is presented to the seller?

A contract
A pending contract
An offer
An option contract

An offer

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When an offer is presented to a seller to purchase, the seller has all which of the following potential responses?

Accept it
Fail to act on it
Alter it
All of the above

All of the above

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When should a licensee communicate the agreement of a buyer to buy and a seller to sell?

As soon as possible
By the end of the third business day after the agreement
TREC requires the agreement to be communicated within 48 hours after signatures Accept, Reject, Counter
What the TREC promulgated purchase agreement states in paragraph 4

As soon as possible

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What is the least appropriate way to communicate the agreement of a buyer and seller?

By telephone
By postal mail
By email
By text

By postal mail

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Can a real estate agent use a contract drafted by an investor of real property?

Yes, it is an exception.
No, only Texas Real Estate Commission promulgated forms can be used by real estate agents.
Yes, but only if the investor contract was drawn up by an attorney licensed in the state of Texas.
No, there is a contract that Texas Real Estate Commission has approved for such a transaction.
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Yes, it is an exception

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Which of the following is FALSE regarding completion of contracts by real estate agents?

Real estate agents may strike out information on contract forms if the real estate agent feels it is necessary to do so.
Real estate agents may fill in the blanks to add factual statements and business details as desired by the principal.
Real estate agents may strike out only information desired by the principals and necessary to conform to the intent of the parties.
If one agent in the transaction strikes out information, the other agent in the transaction should point this out to his client and suggest that an attorney review the document.

Real estate agents may strike out information on contract forms if the real estate agent feels it is necessary to do so.

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Which of the following statements is true regarding offers?

If the seller’s counter-offer is rejected, the seller can then accept the original offer.
Acceptance of most of the contract terms creates an implied contract.
The buyer may withdraw his offer any time prior to acceptance by the seller.
Oral acceptance in the presences of a witness binds the parties until the written signatures can be obtained.

The buyer may withdraw his offer any time prior to acceptance by the seller.

Which of the following is an exemption to a real estate agent using Texas Real Estate Commission promulgated forms?

A form directed to be used by a new home builder.
A form directed to be used by a land developer.
Commercial real estate forms.
All of the above.

All of the above

When must a real estate agent communicate offer acceptance to the party making the offer?

Within 48 hours
Within 24 hours
Within 1 hour
As soon as possible

As soon as possible

Licensees are allowed to fill out blank portions of a promulgated contract form. They are also allowed to

strike information from the form, but only at the direction of the principle to the transaction

If the licensee feels that the change could materially affect the transaction, then the licensee should have the client

document in writing that he or she directed the salesperson to make the change and not the other way around.

Price fixing, boycotting and division of customers

are serious offenses to be avoided. Failure to property use forms correctly could result in suspension or revocation.

Price fixing

the conspiring of two or more brokers working together to charge the same commission

Boycotting

eliminating a third party from participating in free commerce

TREC governs a licensee only when acting in a

third party situation. When the licensee is buying or selling for him or herself then they can use their own forms. A licensee who wants to buy a listing to use as an investment property would not be considered an agent but would be considered a buyer and would not be governed by the commission.

The licensee may make factual statements concerning the transaction and avoid giving legal advice. The licensee should not be afraid of

answering questions concerning the contract but cannot give legal advice. The difference is explaining the contract form as opposed to telling the principal to change it in any way.

Licensees may use a form that has been created or revised and not yet

promulgated by TREC. Similarly, licensees can continue to use a form that is soon to be replaced or use a new form while the document is being promulgated.

using an outdated contract or form is a

violation of TREC rules

Licensees are subject to Section 1101.652(a)(8) which states:

“The commission may suspend or revoke a license issued under this chapter or take other disciplinary action authorized by this chapter if the license holder fails to use a contract form required by the commission under Section 1101.155."

Forms can be obtained through the use of several available software programs. Members of the Texas Association of REALTORS® will probably use

Zip Forms, which comes with membership in TAR.

Once a buyer decides such items as offering price, closing date, and other issues in the form, the offer will be delivered to the seller or listing agent. The owner has four ways they can respond:

Accept Reject Counter Fail to act

The offer can be accepted

which would make the offer a contract. The acceptance needs to be absolute, meaning the acceptance of all the terms of the offer by all the parties to the offer.

The offer could be rejected

This action would free the seller to consider other offers and it frees the buyer to consider other properties or to make another offer on the same property. Rejection of one term is a rejection of the entire offer. If the seller wants to change one aspect of the offer, that would be considered a counteroffer.

The owner will make a counteroffer

The seller will change something in the original offer that was unacceptable to him or her

The sellers could also fail to act

Failing to act is just not making a decision at the present time. The sellers could fail to act as long as the other side allows it. The buyers have the right to withdrawal their offer any time prior to the seller's acceptance.

The buyer has the same four options when responding to a counteroffer

however the salesperson should always think the first offer the buyer makes should be his or her best offer.

An offer only becomes a contract when

the last initials and signatures are placed by both parties and both sides have been notified.