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Texas Real Estate Exam Prep

Terms in this set (141)

Broker Lawyer Committee
Write Texas contract forms. 6 attorneys (appointed by president of the State Bar), 6 brokers (appointed by TREC) and 1 public member (appointed by TREC)
Real Estate Recovery Trust Account
Account established to pay aggrieved persons who suffer a monetary loss due to unscrupulous acts of licensees
SAE
Salesman Annual Education; 60 hours of annual education in first year to renew license
MCE
Mandatory Continuing Education; 15 hours taken every two years
Branch office license
Required if a broker has more than one place of business
TREC 1-1
TREC Consumer Information Form 1-1 notifies the public of the recovery trust account - displayed in the broker's office
Referral Gift
Licensee may give cash referral gift to any unlicensed individual who provides a referral in a value up to up to $50.00
Commission Rebate
Broker shares a portion of their commission with a client within a transaction
Nonresident Broker
Broker with a Texas Real Estate broker's license but no home or office in the state. Can only work in Texas through a resident broker
Foreign Broker
A broker with a license from any state outside Texas - cannot engage in business in Texas, but may collect a commission from a Texas broker
SB 489
Senate Bill 489 - allows a broker to act as an intermediary in a transaction representing both parties
Information about Broker Services
Discloses how agency works - form designed by TREC and presented to prospect at first substantive dialogue
Disclosure of Representation
Mandatory disclosure by licensees representing a party, must be made to all other parties at first contact
Texas Subagent
Licensee representing a seller while being sponsored by a broker other than the listing broker
Seller's Disclosure of Property Condition
Must be provided before the buyer makes an offer in order for the offer to be binding on the buyer
Mediation
Alternative Dispute Resolution; non-binding
Arbitration
Arbitrator hears both sides and provides resolution; binding.
Certificated Service Area of a Utility Service Provider
Property owners face a charge for turning on the utilities. Disclosure must be given
Homestead Protection
Statutory Estate - family homestead protected from forced sale (except mortgage, property taxes, fees and liens)
DTPA
Deceptive Trade Practices Act - 2 years to file a complaint
M.U.D.
Municipal Utility District - provider of water and sewers to the district (notice must be given)
Intestate Succession
Laws that govern how a property passes when a party dies without a will
Eviction
Forcible Entry and Detainer
Rule P-53
Regulates title companies in Texas, limits incentives
Competency for Licensure
Passing state exam
Integrity for Licensure
Honest, Integrity and trustworthiness. Not be in default on student loans.
Designated Officer
Broker of a licensed real estate corporation
Designated Manager
Broker of a licensed real estate limited liability company
Secondary Notice of Intermediary
reminder notice when a buyer client is interested in purchasing an in-house listing - notice names the appointed associates
Substantive Dialogue
Substantial discussion of real estate or any mailing with substantial information about a property
Chain of Title
List of all owners of a property from the first to the present
Abstract of Title
List of all recorded events affecting the title to a property
Title Report
report outlining the current condition of the title - title commitment
RESPA
Real Estate Settlement Procedures Act - regulates closings on a 1-4 family residential property
HUD-1
The hud uniform settlement statement - closing statement dividing charges and expenses between buyer and seller
Escrow Agent
Responsible for closing the transaction
Alienation
Change in real property ownership
Voluntary Alienation
Owner transfers title to another; deed, will, power of attorney
Involuntary Alienation
Transfer of ownership through the court, foreclosure, bankruptcy, condemnation, escheat, acts of nature
Accretion
Soil (alluvion) deposited on land as a result of water, changing the land boundaries
Avulsion
Change of direction in a river or stream resulting in a change of land boundaries
Erosion
Soil washed away from land causing change in land boundaries
Reliction
Existing water dries up and land appears
conveyance
a document that transfers interest in real property (deed, patent, will, lease)
deed
document used to transfer ownership
grantor
the party who is transferring ownership in a deed
grantee
the party who is receiving ownership in a deed
Legal Consideration
Something of value given in exchange for an interest in real property in a deed
valuable consideration
money or something that can be converted to money
good consideration
love or affection
Words of conveyance
Granting clause in a deed - grantor transferring his interest to the grantee
Habendum Clause
to have and to hold clause in a deed stating the property interest ti be transferred
Execution of Deed
Grantor's signature on the deed
Delivery and Acceptance
Legal requirement for a deed to transfer from grantor to grantee
General Warranty Deed
grantor warrants or guarantees title to the sovereignty of the soil back to the first land owner, deed gives best protection
Special Warranty Deed
Grantor guarantees title only against defects arising during his period of ownership
Bargain and Sale Deed
Deed with only one covenant: the grantor has the right to convey title, used in foreclosure, tax sale, etc
Quitclaim Deed
Deed with no guarantees or warranties, least protection - cane used to correct or cure a cloud on title
Quiet Title Suit
court procedure to correct or cure a defect or cloud on title; "action to quiet title"
Covenant of Seisen
guarantee in a deed that the grantor has title and the right to transfer the title
Covenant Against Encumbrances
Guarantee in a deed that all known encumbrances are stated in the deed
Covenant of Quiet Enjoyment
guarantee in a deed that the ownership will not be interrupted by title claims
Patent
Conveyance used in government to transfer title to real property
Dedication
developer turning over the streets in a subdivision to the local government
Testator
Party who makes out a will
Testate
Party who has a valid will
Executor
Party named in a will to settle the estate of the deceased
Title by Devise
Title to real property held by those who inherited the property through a will
Intestate
Party without a will
Administrator
Party appointed by the court to settle the estate of an intestate
Laws of Descent and Distribution
The rules for distributing the property of an intestate
Title by Descent
Title to real property held by those who inherited the property without a will
Attorney in Fact
One who has power of attorney to act for another
Probate
The judicial process to prove or confirm a will or settle an estate
Recording
Entering a document into the public records to give notice to the world or constructive notice
Constructive Notice
Notice to the world by recording a document or taking possession
Acknowledgement
Declaration to notary that a signature is free and voluntary act
Title Insurance Policy
Insurance policy to compensate or reimburse the insured against loss as result of defects in the title
Subrogation Clause
Clause in title policy that allows title company to assume the rights of a buyer to any claim against a seller, if title company has made payments to satisfy the claim
Mortgagee's Title Policy
Policy of title insurance to protect the lender; valid up to loan balance
Economic Life
Period of time during which improvements contribute to value
Boot
Additional capital or property included in a transaction to even out an exchange
Tax Deferred Exchange
Exchange of investment property; IRS sanctioned method for real estate investors to defer taxation of capital gains
Foreign Investment and Real Property Tax Act
Federal law insures foreign investors will pay US income tax on gains from the sale of US property
Equitable Title
Interest in real property held by a buyer with a signed sales contract that has not yet gone to closing
Deficiency Judgement
Suit filed by a lender against a borrower whose debt was not completely satisfied by a foreclosure sale
Deed in Lieu of Foreclosure
Alternative to foreclosure wherein the lender accepts a deed rather than funds to settle the debt; friendly foreclosure; voluntary deed
Equity of Redemption
Borrower's right to pay what is owed and reclaim the forfeited property up to the moment of a foreclosure sale; equitable redemption
Lis Pendens
A recorded notice of a pending lawsuit
Short Sale
Sale of secured property for less than is owed, lender releases the lien
Prima Facie Evidence
Evidence so strong the party is guilty, no further investigation is required
Listing Agreement
Employment contract obligating the broker to act as fiduciary to a seller
Management Agreement
Employment contract obligating broker to act as fiduciary to property owner
Public Responsibilities
Honesty, Fairness and disclosure of material facts - responsibilities the broker has to customers or third parties
Fiduciary Responsibilities
Placing interest of client first, full disclosure of all facts, material and other, giving advice and opinions - responsibilities to a client in an agency relationship
Oral Agency
Agency relationship created by spoken agreeement
Implied Agency
Agency as result of customary, usual or typical conditions
Ostensible Agency
Agency as result of the actions of the agent and response of others to those actions
Agency by Ratification
Agency established when an agent acts without the permission of the principle and the principle accepts or ratifies those actions
Agency by Estoppel
A principle fails to maintain due diligence over his agent and as a result the courts prevent the principle from denying the agency relationship
Universal Agency
The principle gives the agent the power to transact matters of all types for him
General Agency
Principal give agent power to bind him in particular trade or business
Special Agency
Principal give agent power to preform specific acts, but no t bind the principal - also called limited agency
Limited Agency
Also called special agency - agent has power to preform specific acts but not bind the principle
Duties of an Agent
Obedience, Loyalty, Disclosure, Confidentiality, Accounting and Reasonable care - OLD CAR
Duties of a Principle
compensation, Reimbursement, Indemnification, Performance
Blind Ad
Prohibited; does not clearly indicate the status of the party placing the ad
Dual Agent
Broker who has written permission to represent both parties in a single transaction
Designated Agent
Licensee appointed by the broker in a dual agency situation to work with either the buyer or the seller in a transaction
Intermediary
Broker in Texas who has written permission to represent both the buyer and seller in a single transaction (Texas Dual Agent)
Appointed Associate
Licensee appointed by the broker in a dual agency situation to work with either the buyer or the seller in a transaction (Texas Designated Agent)
Open Listing
Seller reserves the right to list with as many brokers as he chooses, or sell the property himself - only the broker that brings the contract earns a commission
Exclusive Agency Listing
Seller is competing with his broker - the broker will earn a commission unless the seller sells it himself
Exclusive Right to Sell
Listing where one broker will earn a commission, no matter who sells it
Procuring Cause of Sale
Act of bringing a ready, willing and able buyer - results in the sale of property
Sherman Anti-trust Act
Preserves competition by prohibiting monopolies, monopolistic practices and restraint of trade - in real estate, commissions are always negotiable
Agency coupled with interest
Any transaction where the agent is also the seller or buyer - dual role must be disclosed
Material Fact
Any fact about the property that might influence the decision of a purchaser
Stigmatized property
Any property where there has been a murder, alleged haunting or is in the vicinity of a known sexual offender
Megan's Law
Federal Law requiring all states to release information to the public about a known sex offender
Puffing
Marketing using adjectives and opinions - not facts or details
Seller's Disclosure
Statement of property condition provided to prospective buyers by the seller
Federal Interstate Land Sales Full Disclosure Act
Regulates the sale of land in one state to buyers in another state with the purpose of preventing marketing fraud - developers must provide property report to prospective buyers or tenants
HOW Program
Home Owners Warranty plan covers defects in material, faulty workmanship, and structural problems for 10 years, available on new construction
Home Warranty Insurance
One year renewable policy for existing homes covering items such as heating, air conditioning, electrical, plumbing and appliances
Mitigation
Describes methods used to lower levels of radon in buildings
Abatement
Describes methods used to control asbestos found in property
Encapsulate
To contain, as in an asbestos abatement plan
UFFI
Urea Formaldehyde Foam Insulation - moisture dousing the release of hazardous gas
Lead Paint Disclosure
Notice to buyers of all properties built before 1978 that there may be lead
Underground Storage Tanks
Possible cause of groundwater contamination - licensees must disclose what they know and recommend testing
CERCLA
Comprehensive Environmental Response Compensation and Liability Act - created to fund spill clean-up and set guidelines for liability (strict, joint, and retroactive)
Escrow Account
Hold funds - also called: trust account, impound account, and reserve account
Commingling
Illegal act of mixing broker funds with client funds
Conversion
Illegal act of speeding commingles funds for broker expenses
Civil Rights Act of 1866
Prohibits discrimination based on skin color - no exemptions
Title VIII of the Civil Rights Act of 1968
Part of Federal Fair Housing Act - prohibits discrimination based on race, color, religion or national origin, sex, familial status or handicap
Familial Status
A minor living with a parent or guardian - family composition
Blockbusting
Causing panic selling by homeowners (panic peddling)
Steering
Taking buyers away from any neighborhood based on race, color, religion, national origin, sex, familial status or handicap
Independent Contractor
Licensee sponsored by broker but not an employee - written agreement must specify payment on the basis of performance rather than hours worked
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