Promulgated Contract Forms

Front 1

Mutual Consent

Back 1

A “meeting of the minds”

Front 2

Unilateral Contract

Back 2

A contract in which only one party is obligated to perform

Front 3

Consideration

Back 3

Something given in exchange for a promise

Front 4

Option

Back 4

An agreement between a buyer and seller giving the buyer the right to purchase a property at a preset price for a given period of time

Front 5

Unenforceable contract

Back 5

A contract that cannot be enforced due to some flaw or other issue in the contract

Front 6

Valid contract

Back 6

Is one that meets all of the requirements of law

Front 7

Void Contract

Back 7

Is invalid from the beginning and does not affect the parties

Front 8

Voidable contract

Back 8

Is one that cannot be enforced against one or more parties.

Example would be with a minor

Front 9

Unenforceable contract

Back 9

Is one that cannot be enforced due to some flaw in the contract, passage of time or other issues that make enforcement impossible

Front 10

Competent parties

Back 10

All parties to a contract have read it and understand it.

Front 11

Legal purpose

Back 11

All contracts must have this to be valid. Contracts for an illegal purpose is void.

Front 12

In writing

Back 12

In order to comply with the statute of frauds

Front 13

Executory Contract

Back 13

A contract that is binding on the parties, with one or more of the parties having contractual duties that have not yet been performed

Front 14

Bilateral contract

Back 14

Both parties are obligated to perform

Front 15

Amendments

Back 15

A change or alteration to a existing contract.

Front 16

Addendum

Back 16

To a contract is an attachment that adds or further describes the rights and duties of the parties

Front 17

Assignment

Back 17

Of a contract transfers all of the rights related to the contract to another party

Front 18

Novation

Back 18

When a new contract is substituted for an existing one

Front 19

Terminated

Back 19

When a further performance of duties under the agreement is brought to a premature end

Front 20

Promulgated Forms

Back 20

Contract forms published by TREC

Front 21

Counteroffer

Back 21

A rejection of the original offer coupled with a new offer

Front 22

Unauthorized Practice of Law

Back 22

License holders add complex provisions to a contract

Front 23

Communication

Back 23

Also referred to as notification

Front 24

Offeror

Back 24

The party making the offer

Front 25

Offer

Back 25

Made by a offeror. Could be communicated by phone, fax, e-mail, letter or hand delivery. All offers must be presented.

Front 26

Offeree

Back 26

The party to whom the offer is made to

Front 27

Acceptance

Back 27

That the accepting party does so with no change to the contract whatsoever

Front 28

Loan Assumption

Back 28

Buyer pays the seller’s existing mortgage as part of a contract for sale

Front 29

Parties

Back 29

The buyer and seller

Front 30

Government loans

Back 30

Mortgages insured or guaranteed by the U.S government FHA, VA, USDA

Front 31

Non-realty items

Back 31

Personal property included in a sale

Front 32

Legal Description

Back 32

The location and size of a property

Front 33

Third Party Financing

Back 33

Divided into two broad categories: Government Loans and Conventional Loans

Front 34

Conventional Loans

Back 34

Is best described as any loan that is not a government loan

Front 35

Fixed-rate mortgage

Back 35

The rate does not change over the term of the loan

Front 36

Earnest money

Back 36

A “deposit” paid upfront by the buyer

Front 37

Survey

Back 37

A measurement of boundaries and land area required in some sales contracts

Front 38

Title policy

Back 38

Insurance policy against losses resulting from defects in title

Front 39

Endorsement

Back 39

A change made to a standard insurance policy

Front 40

Seller’s Disclosure Notice

Back 40

Form stating known facts and defects concerning a property

Front 41

Option

Back 41

Gives buyer the unrestricted right to terminate the contract within the option period. Does not need a reason for termination

Front 42

Default

Back 42

Failure to meet a contractual obligation

Front 43

Mediation

Back 43

Process of resolving contractual disagreements between parties

Front 44

Escrow

Back 44

Funds held by a third party until performance of a contract

Front 45

Option period

Back 45

The time allowed for buyer-specified inspections

Front 46

Prorations

Back 46

Expenses divided between parties at closing

Front 47

Closing

Back 47

The closing date is a date agreed by the seller and the buyer. Aka “on or before” date

Front 48

Possession

Back 48

Should be given to the buyer upon closing and funding

Front 49

Possession

Back 49

Should be given to the buyer upon closing and funding

Front 50

Special provisions

Back 50

Paragraph is only for factual business details or statements not addressed in the contract form and which there is no TREC-promulgated addendum, lease or other mandatory forms

Front 51

Settlement

Back 51

And buyers and sellers expenses costs are stated. Even though printed in the form to be paid by one party or the other, they are negotiable.

Front 52

Casualty loss

Back 52

When a property under contract is damaged. This does not release the parties from the contract.

Front 53

Cooperative Sale

Back 53

When the listing firm works with a buyer and agent from another firm

Front 54

In house sale

Back 54

When the same broker is representing the seller and is also working with the buyer

Front 55

Rollback Taxes

Back 55

Tax assessed when a property no longer has an agricultural exemption

Front 56

Farm and Ranch Contract

Back 56

Contains provisions for surface leases related to a property

Front 57

New Home Contract

Back 57

Contains provisions for various concerns regarding new construction

Front 58

Agricultural Use Exemption

Back 58

Method for evaluating tax burden of properties used for agriculture

Front 59

Unimproved Property Contract

Back 59

Used for the sale of properties with no existing structures

Front 60

Blockbusting

Back 60

An attempt to induce panic selling in a given neighborhood

Front 61

Stigmatized

Back 61

Property where a murder or alleged haunting has occurred

Front 62

Steering

Back 62

Also known as channeling

Front 63

Straw buyer

Back 63

A person used to buy property in order to conceal the actual owner

Front 64

Equity Theft

Back 64

Fraudsters use forgery to obtain new liens on a property

Front 65

Churning

Back 65

Is excessive selling/lending activity for the purpose of generating fees and commissions.

Front 66

Chunking

Back 66

When a fraudster shows investors how to get rich by real estate investing. The fraudster promises to handle the transaction and takes a significant portion of the loan amounts as his fee.

Front 67

Foreclosure Rescue Scam

Back 67

Involves a home owner who is deceived into signing over title to the property believing the he will be able to remain in the house as a renter and eventually repurchases it over time.

Front 68

Property Flipping

Back 68

When a property is refinanced or resold immediately after purchase for an artificially inflated value. (Not always a fraud)

Front 69

UFFI

Back 69

Pumped into walls as a foam, it hardens and insulates

Front 70

Radon

Back 70

A naturally occurring, colorless and odorless gas produced by the decay of radioactive materials in rocks under the ground

Front 71

Asbestos

Back 71

Used to insulate pipes, chimneys, floors, and siding

Front 72

Right of First Refusal

Back 72

A provision in a lease that gives the tenant the right to purchase the leased property by matching of bettering any offer before the property will be sold to someone else

Front 73

Net sheet

Back 73

An estimate of the net proceeds to the seller that should be based upon the offer being considered

Front 74

Broker-Lawyer Committee

Back 74

Writes residential contract forms that, with few exceptions, are mandatory for license holders

Front 75

TREC

Back 75

Comprised of 9 members

Front 76

Lease-purchase agreement

Back 76

Gives the tenant occupancy in the present time and the right to purchase at a future date

Front 77

Input notice

Back 77

An offer is presumed to have been delivered to the principal when it is delivered to the agent

Front 78

Seller contribution

Back 78

Reduces the amount of cash needed by the buyer at closing

Front 79

Liquidated Damages

Back 79

Seller can choose to accept buyers earnest money as liquidated damages

Front 80

Monetary Damages

Back 80

In addition to specific performance, the injured party may “seek such other relief as may be provided by law”. Which would be an award of monetary damages by the court.

Front 81

Specific Performance

Back 81

When pursuing specific performance, the injured party files a court action seeking an order of the court directing the defaulting party to perform according to the terms of the contract