Texas Real Estate Exam

3 Types of Land Use Controls

1. Private 2. Public - zoning ordinances ( gov) put into place by real estate developers (non gov) 3. Publicly owned land - streets, highways, parks

Recovery trust account should maintain a balance of what?

1.7 million

How many days does someone have to reject an earnest money request

15

How much CE is required for TREC licensees?

18 hours every 2 years

How many people per bedroom allowed in Texas property code?

3

Statute of Frauds

A state statute under which certain types of contracts must be in writing to be enforceable.

Sales price paragraph

cash price, sum of all financing, sales price

What info is required in the Deed of Trust paragraph in seller financing addendum

consent of property transfer, tax and insurance escrow

CC&Rs

covenants, conditions, and restrictions restrictions are given by developers not HOA Covenants is an agreement between 2 parties

Consumer Information

display the TREC No. CN 1-2 in a prominent location in each place of business maintained by a broker Tells consumer how to file a complaint against license holder

If a person dies testate

he left a will

encroachment

intrusion on a person's territory, rights, etc.

mitigate

lessen the damage

When does timing for certain contract requirements begin?

on the first full day after executed date

Net Operating Income (NOI)

operating expenses - gross income

Lead based paint

paint produced before 1978 which, when ingested, causes nervous system damage, stunted growth, and delayed development

Penalties collected from violation will be

put into Real estate Recovery Trust Account

Errors and Omissions Insurance

real estate equivalent of malpractice coverage If broker does not own more than (% of company then they are required to purchase E&O insurance with minimum limit of 1 million annually

Description of replacement costs

similar utility and current material

Where in the Texas sales contract should you indicate that is is being used for a 1031 exchange?

special provisions

Deed

the official document transferring ownership of real estate from seller to buyer

Avulsion

the sudden loss of land by flood, or when a stream or river changes course

Seller Financing Addendum

to be used if the seller is financing the buyer into the property either in full or in part

At whose expense are any property inspections conducted?

Buyer

Severance

Changing an item of real estate to personal property by detaching it from the land; for example, cutting down a tree.

Cannons of Professional Ethics

Fidelity, Integrity, Competency, Consumer info, Discriminatory Practice, IABS doc

Trade Fixtures

Fixtures and equipment that may be attached to a building during a tenant's occupancy, with the intention that they be removed when the tenant leaves

Seller's Temporary Residential Lease

For use when the seller occupies the property for no more than 90 days after closing.

4 types of estates

Freehold, leasehold, equitable, and concurrent

Payments from the Real Estate Recovery Account

May not exceed 50K per transaction max 100k

Bearing

Measurement involving NSEW coordinates and angles

what takes place in primary market?

Mortgage lenders and borrowers come together to negotiate and create new mortgages.

When must earnest money check be deposited?

Must be deposited to escrow agent by the 2nd working day contract is executed

Can a sales agent legally maintain a trust account?

No, only a broker can

Correct way to name seller when completing a contract

Silas M. Webber, a single person

Fiduciary

Someone who manages property or money for someone else

escrow fees

Split equally between buyer and seller

Novation

Substitution of one contract for another

option period

Timeframe negotiated between parties. Buyer can terminate contract for any reason during option period as long as they: deliver option fee to escrow agent within.3 days give notice to seller within negotiated timeframe

According to TRELA, what must. a license holder advise a buyer client prior to closing

To have the abstract covering the real estate examined by an attorney or be provided with or obtain a title insurance policy

Who are the.3 parties on a deed

Trustor ( borrower ) , Beneficiary (lender) , trustee (third party)

rectangular survey system

Uses latitude, longitude, standard and baselines to divide earth into areas

Required clause in Texas deed: describes type of warranty being made by grantor

Warranty

Who is responsible for funding real estate recovery trust account?

all real estate licensees and certificate holders

Emblements

annual crops

encumbrance

any claim or right against a property held by another that is not the fee title owner often block a sale until resolved

Scarcity

finite number of parcel of land

condemnation

formal act of using power of eminent domain to transfer property title from private to government

fixity

real estate exists in a fixed location and cannot be moved

Situs

refers to the economic significance of a property's location

accretion

results in gradual increase of land area through soil deposits

Loan Assumption Addendum

to be used when the buyer assumes the sellers existing loan / mortgage

Short sale

when a residential property cannot be sold for the full amount of the loan and the lender accepts the selling price as satisfying the mortgage

Bilateral Contract

A type of contract that arises when a promise is given in exchange for a return promise.

zoning variance

-property owner seeks permission from the government to violate some specific element of the local zoning ordinance -intended to offset the "one size fits all" approach within a zoning classification

Inverse Condemnation

An action brought by a property owner seeking just compensation for land taken for public use when the taker of the property does not intend to bring eminent domain proceedings. Property is condemned because its use and value have been diminished due to an adjacent property's public use.

Riparian Rights

An owner's rights in land that borders on or includes a stream, river, or lake. These rights include access to and use of the water.

Easement Appurtenant

Runs with the land

Deficiency Judgment

If foreclosure does not generate enough money to pay off loan and foreclosure costs the lender can seek this

Commingling

Illegally mixing deposits or monies, collected from a client, with one's personal or business account. Taking money out too soon or putting it into escrow too late (10 banking days).

When the association of a salesperson with the sponsoring broker is terminated, the broker MUST:

Immediately return salespersons license to the Commission

Unimproved Land

Land upon which no buildings have been constructed. No accessories

Who may sue to collect commissions?

Licensed real estate broker and sales agent

PETE

Police Power, Eminent Domain, Taxation, Escheat

eminent domain

Power of a government to take private property for public use.

PITI

Principal, Interest, Taxes, Insurance

LTV (Loan to Value)

Ratio of a loan to the value of an asset purchased

Assumed Business Name

Register name with Commission on form approved by Commission Register the name with county clerks office or Secretary of State, providing written evidence of legal authority to use it then__ If not wanting to use name anymore broker must notify Commission by 10th day they decided to stop using it

Negative Easement

Restricts a servient owner from something specific (usually legal), usually a building restriction that might block a view or sunlight.

Rollback Taxes

Tax assessed when a property no longer has an agricultural exemption (ex becomes a residential property) Seller who changed it is responsible for paying roll back tax

net listing

The broker agrees to sell the property in order to achieve a net price to the owner, and anything which is received above the net price is the broker's commission. A net listing is illegal

Littoral Rights

The right of a property owner whose land borders on a body of water, such as a lake, ocean or sea, to reasonable use and enjoyment of the shore and water the property borders on.

Escheat

The state takes property upon an owners death if there is no will & no heirs exist.

Voluntary Alienation

The transfer of title by a deed. by sale or gift

assessed value

The value of an asset determined by tax authorities (governemnt ) for the purpose of calculating taxes

Third Party Financing Addendum

Which of the following addenda are used when the buyer is obtaining a conventional mortgage to purchase a property...?

Must you have a license to show a property?

Yes

Equitable Interest

a buyers immediate interest in real property

contingency

a future event or circumstance that is possible but cannot be predicted with certainty

Survey

a legally valid drawing of the dimensions of real estate

A subprime loan

a mortgage with an interest rate higher than prime mortgages due to the higher risk associated with a less qualified borrower might be the only option for a borrower with low credit score

A homestead is defined as:

a property that a person or family owns and occupies as their primary residence

Easment

a right to cross or otherwise use someone else's land for a specified purpose.

Title Insurance

a type of insurance that protects the buyer if problems with the title are found later

Fee Simple Defeasible Estate

"a fee estate that is qualified by some condition that, if violated, may "defeat" the estate and lead to its loss and reversion to the grantor."

How long must Texas brokers hold trust account records and completed real estate forms?

4 years

How many square feet are in an acre?

43,560

How many feet are in a mile?

5280

How many acres in a township section?

640

Broker License Requirements

900 classroom hours including 30 in Real Estate Brokerage and at least four years active experience in Texas as a licensed real estate sales agent. An applicant must demonstrate not less than 3600 points of qualifying practical experience obtained during four out of five years as required by 535.56(b) of the Rules of the Texas Real Estate Commission

Bill of Sale

A document used to transfer ownership of personal property.

Texas Homestead Protection Law

A homeowner can lose his house of they default on their mortgage

Estoppel

A legal theory under which a person is barred from asserting or denying a fact because of the person's previous acts or words.

fully amortized loan

A loan consisting of equal, regular payments satisfying the total payment of principal and interest by the due date.

Lot and Block

A method of land description frequently used after land has been subdivided into building lots; also referred to as the recorded plat method. (Must have a plat map to find the property) used in urban and suburban real estate

Metes and Bounds

A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land. Has POB point of begining

Easement in Gross

Easement owned by a person or corporation - such as a utility easement; does not pass with the land. ex. power lines, billboards

Affirmative Easement

Easement that gives the dominant tenement owner the right to use the servient tenement.