Texas Real Estate Sales Agent ExamTexas Real Estate LawMedium
A real estate sales agent is representing a buyer who wants to include a clause in their offer that makes the purchase contingent upon the buyer selling their current home. Which of the following forms or methods is the most appropriate way for the sales agent to include this contingency in the contract?
- AUse the 'Addendum for Sale of Other Property by Buyer' promulgated by TREC.
- BDraft a detailed special provision in Paragraph 11 of the TREC One to Four Family Residential Contract (Resale).
- CHave the buyer's attorney draft a separate legal addendum to be attached to the contract.
- DAdvise the buyer to make the offer without this contingency and negotiate it after acceptance.
Show answer & explanationAnswer & explanation
Correct answer: A. Use the 'Addendum for Sale of Other Property by Buyer' promulgated by TREC.
TREC provides specific promulgated addenda for common contingencies, such as the sale of other property by the buyer. Using the correct promulgated form is the most appropriate and legally sound method for a real estate licensee.
Why the other options are wrong
- B. Drafting a detailed special provision for this complex contingency risks the unauthorized practice of law.
- C. While an attorney can draft addenda, TREC has already provided a specific form for this common situation, making it unnecessary and less efficient for the agent to recommend an attorney for this readily available form.
- D. Negotiating a contingency after acceptance is not good practice and may not be legally enforceable if not part of the original contract.
TREC Promulgated Addenda
The Texas Real Estate Commission (TREC) promulgates various addenda to be used with its standard contract forms to address common contingencies and situations in real estate transactions.
- Must be used by licensees for their intended purpose.
- Cover common scenarios like financing, property condition, and sale of other property.
- Prevent the unauthorized practice of law by agents.
Memory trick: When a buyer needs to sell, a TREC addendum is the correct way to compel.