A seller accepts a buyer's offer using the TREC One to Four Family Residential Contract. Two days later, the seller receives a higher offer from another buyer. The seller wants to accept the second offer. Under the executed contract, the seller:
Correct Answer
D) May not accept the second offer because the seller is bound by the executed contract with the first buyer
Once the seller accepts the first buyer's offer and the contract is executed, the seller is bound by the contract. The seller cannot unilaterally terminate to accept a higher offer. The option period gives the buyer, not the seller, the unrestricted right to terminate.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The Statute of Frauds is a legal requirement that certain types of contracts must be in writing and signed to be enforceable. In real estate, all contracts for the sale of land or interests in land must be in writing.
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
More Promulgated Contract Forms Questions
Under the TREC contract, all of the following contract terms may be changed through a TREC Amendment EXCEPT:
A buyer purchases a property for $450,000. The contract includes a $750 option fee and $12,000 in earnest money. The buyer defaults on the contract after the option period expires. The seller terminates and seeks liquidated damages. If the earnest money serves as liquidated damages, what is the maximum the seller can retain from the buyer's deposits?
A Texas license holder is asked to prepare a lease-purchase agreement for a residential property. TREC has a promulgated Residential Lease form and a promulgated One to Four Family Residential Contract, but no promulgated lease-purchase form. What should the license holder do?
Under the TREC contract, who typically pays for the mortgagee's (lender's) title insurance policy?
A relocation company purchases homes from transferred employees and then resells them. The company's attorney has drafted a standard purchase contract for all such transactions. A Texas license holder listing one of these properties receives an offer using the company's attorney-drafted contract. Should the license holder accept this contract?
- → License holder Kim is helping a buyer purchase a residential property that is currently a foreclosure being sold by a bank (REO property). The bank provides its own lengthy purchase agreement drafted by its corporate attorneys. Kim should:
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- → A Texas license holder prepares a TREC promulgated contract for a residential sale. Before the buyer signs, the license holder strikes through the paragraph regarding the survey requirement and writes 'N/A - Survey Waived' in the margin. What is the potential consequence for this license holder?
- → TREC categorizes its forms into different classifications. Which of the following is NOT a category of TREC forms?
- → Under TREC rules, a Texas license holder is permitted to use a non-promulgated contract form in all of the following situations EXCEPT:
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- → Which of the following transactions does NOT require the use of a TREC promulgated contract form by a Texas license holder?
- → A license holder in Texas assists a client with a for-sale-by-owner (FSBO) transaction where the license holder is only providing limited services (filling out paperwork). The client wants to use a contract downloaded from the internet. The license holder should:
- → All of the following are valid exceptions to the mandatory use of TREC promulgated contract forms EXCEPT:
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Previous Question
Under the TREC One to Four Family Residential Contract, Paragraph 21 specifies the accepted methods of delivering notices between parties. Which of the following is a recognized delivery method?
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Under the TREC One to Four Family Residential Contract, Paragraph 6C addresses the title commitment. The buyer receives the title commitment and discovers an existing lien from the seller's unpaid contractor. The buyer objects within the allowed timeframe. What must the seller do?