LESSON 3: PARTIES, PROPERTIES, FINANCING Flashcards
(67 cards)
How many days after the buyer receives the Exception Documents, the Commitment, and the Survey does the buyer need to make objections?
The buyer typically has a specified number of days to raise objections, which should be outlined in the contract.
Is the property in a Mandatory Home Owner’s Association?
Check if the property is part of a mandatory HOA (Homeowners Association).
Has the buyer received and reviewed the Seller’s Disclosure Notice? If not, when?
Confirm whether the buyer has reviewed the Seller’s Disclosure Notice, and if not, determine when it will be provided.
Was the property built before 1978?
Determine if the property was constructed before 1978, which may affect certain disclosures and requirements.
Are there any specific treatments or repairs the buyer wants to ask to be included in the offer price?
Clarify if the buyer requests specific repairs or treatments as part of the offer price.
When do the parties plan to close?
Specify the intended closing date for the transaction.
Will possession be at closing and funding, or is a temporary lease needed?
Decide whether possession will occur at closing or if a temporary lease is required.
Are there any factual statements or business details that need to be added to Special Provisions?
Identify if there are any important facts or business details to include in the Special Provisions section.
Is the seller willing to pay any of the buyer’s closing costs?
Determine if the seller is willing to contribute to the buyer’s closing costs.
Where and how do the parties want any notices regarding the contract to be sent?
Confirm the method and address for sending any notices related to the contract.
What is the title of each form used?
The form title indicates its intended use (e.g., resale property, one-to-four family residential properties, etc.).
Why is the date in the right-hand corner of the form important?
The date shows when TREC approved the form, ensuring that the current form is used.
What does the TREC number indicate?
The TREC number shows the version of the form (e.g., 20-16 for the One to Four Family Residential Contract).
Why is it important to use the legal names of the parties in the contract?
To ensure accuracy, legal documents must reflect the correct legal names and marital status of the parties involved.
What should be considered for the seller’s name and property details?
Verify the seller’s name using original documents (e.g., title policy, deed) and ensure the correct legal description of the property.
What should be noted regarding the buyer’s identification?
The buyer must provide identification at closing, and their legal name must be used in the offer.
How should marital status be noted in Texas contracts?
In Texas, specify the marital status of parties, such as “Sue Smith, an unmarried person” or “Jim Johnson and wife Susan Johnson.”
What is the “interest not to exceed” in a mortgage?
It refers to the maximum interest rate for a loan. For fixed-rate mortgages, the interest rate remains the same for the entire term. For adjustable-rate mortgages (ARMs), the interest adjusts after a certain period, such as one year, and adjustment caps should be described in the Special Provisions.
What is the Third Party Financing Addendum?
The Third Party Financing Addendum describes both Buyer Approval and Property Approval. Both approvals are needed for full loan approval.
What happens if the buyer’s financing is not approved under the Third Party Financing Addendum?
If the buyer’s financing is not approved, the buyer can terminate the contract and receive a refund of earnest money within the agreed number of days. After this period, the financing contingency no longer applies, and if the loan fails after this date due to the buyer’s fault, the buyer will be in default.
What is a Conventional Loan?
A Conventional Loan is a mortgage that is not government-backed. It typically requires a 20% down payment, but private mortgage insurance (PMI) can be purchased to allow a smaller down payment.
What is the Texas Veterans Loan program?
The Texas Veterans Loan program provides veterans who reside in Texas with lower interest rates, lower closing costs, easier approval processes, and no mortgage insurance.
What are FHA Loans?
FHA Loans are insured by the Federal Housing Administration, require lower down payments, and have more flexible lending standards. Borrowers with FHA loans pay for mortgage insurance to protect the lender.
