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Promulgated Contract
Texas Real Estate License Exam Section 5 of 6: Promulgated Contracts
| Question | Answer |
|---|---|
| Contract | A legally binding and enforceable agreement to do or not to do a specific thing |
| Promulgated Contract | A contract that has been approved and is required to be used by license holders |
| Legally Competent | an individual that has reached the age of majority (18 years of age) and has not been declared mentally incompetent by a judge |
| Void Contract | the contract has no legal effect |
| Voidable Contract | one or more of the parties has the authority to rescind the contract |
| Consideration | a valuable item that each party exchanges in order to demonstrate that they agree to the contract terms |
| Valid Contract | legal agreement meeting all the essential, basic requirements of the law |
| Unenforceable Contract | a contract that cannot be enforced by the courts |
| Executory Contract | a contract that is not completely executed or performed |
| Executed Contract | a contract in which all terms have been fulfilled by all parties |
| Bilateral Contract | a contract in which one party must promise to do something for another party and that party must promise to do something for the first party |
| Unilateral Contract | a contract made between two or more parties in which only one of those parties makes a promise or otherwise accepts an obligation |
| Addenda | materials added to and included in the initial contract that provide more information on the transaction |
| Amendment | items that are attached to the original document and should never be changed after the document has been signed and accepted |
| Performance | the responsibility of all the parties to carry out their part of a contract |
| Quitclaim Deed | transfers ownership of whatever the grantor owns but make no guarantee of ownership and no promise to defend |
| Novation | the substitution of a new contract for an existing contract, relieves the original party of liability |
| Statute of Limitations | a law establishing a time limit for civil suits |
| Offer | a promise made by one party requesting something in exchange for that promise with the intention that the offeror will be bound to the terms if the offer is accepted |
| Counteroffer | a contract proposal submitted in response to a previous offer, modifying the terms of the original offer; considered a rejection of the original offer |
| Subagency | when an agent works with the buyer but is not representing the buyer |
| Loan-to-Value Ratio (LTV) | a ratio that represents how much of the sales price is covered by the mortgage loan |
| Recourse Loan | a loan in which the lender is allowed to seize the collateral property, and could also go after the borrower’s other assets if the sale of the property doesn’t cover the whole amount owed to the lender |
| Earnest Money | a deposit paid by the buyer in a real estate transaction to demonstrate good faith or seriousness about the sale |
| Option Money | money that a buyer pays a seller in exchange for the option to terminate the contract within a specified amount of days after the effective date, a.k.a. the option fee |
| Option Period | the period of time in which the buyer, who has paid an option fee, has the property reserved and the option to walk away from the transaction for any reason |
| Title Policy (also known as Title Insurance) | policy that protects homeowners (and likewise, lenders) from certain financial losses due to title issues, such as defects, encumbrances, and liens |
| Mortgagee Title Policy (also known as a Loan Policy | Title insurance for mortgage lenders, which protects their interests should a problem with the title arise |
| Endorsements | amendments to the standard coverage in the title policy |
| Restrictive Covenant | a type of encumbrance that restricts how a buyer could use the property they are buying |
| Survey | a professional assessment of a specific piece of real estate, showing the exact borders of the property and any easements or encroachments that may affect it |
| Residential Real Property Affidavit (also known as T-47) | a form completed by the seller to assure the buyer that they haven’t changed the boundaries of the property since the last survey was done |
| Residential Service Contract | also known as a Home Warranty; an agreement by a company to maintain, repair, or replace applicable components of a home for a specified period of time |
| Casualty Loss | a sudden, unexpected event, like a fire, flood, storm, earthquake that causes serious damage |
| Escrow | a process in which funds and/or financial documents are held by a disinterested third party on behalf of the other two parties in the real estate transaction |
| Rollback Taxes | taxes that can be assessed if the zoning (usage) of a property changes |
| Mineral Estate | the right of the owner to exploit, mine, and/or produce any or all of the minerals lying below the surface of the property |
| House flipping | a type of real estate fraud in which someone purchases a property and then quickly resells it at an artificially high value through the use of a false appraisal |
| Predatory Lending | lending practices that take advantage of consumers by charging unnecessary fees or unsubstantiated interest rates, making loans that are too big or risky for the borrower, or pressuring buyers into loans |
| Buyer Rebate | illegal action during a transaction that causes money to go back to the buyer, either at or after closing, without the knowledge of the lender |
| Fair Housing Act | a federal law that prohibits discrimination in housing based on race, color, religion, or national origin and was amended to include sex, disability, and familial status |
| Fair Lending Laws | laws prohibiting lenders from discriminating against all of the same protected classes as the Fair Housing Act, with the addition of age, marital status, and receipt of public income |
| Disability | a physical or mental impairment that limits one or more major life activities |
| Occupancy standards | rules about the maximum number of people allowed to live together in a single dwelling |
Created by:
jamesowens
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