Real Estate Principle I
handwritten contracts
(in written contracts) that contradicts any other term of that contract will overrule and take precedence
1 mile in feet
5,280 ft
Which of the following is not true regarding a sponsorship agreement
A broker may retain a licensee as a self-employed independent contractor. Texas law requires a written sponsorship agreement. A real estate broker may enter into a written sponsorship agreement. To meet IRS requirements, real estate brokers have independent contractor agreements with their sales agents and associate brokers to avoid the taxes associated with an employee.
listing agreement
A contract between the property owner and the brokerage to place properties for sale with the brokerage is a
Honest mistake
A mistake that does not question the honesty, competence, or diligence of a person and does not constitute a breach of duty
listing agreement
A private employment agreement between a seller and a real estate broker
ethics
A set of principles an individual uses to guide his or her own behavior and others
name of the license holder or team
All license holders' advertisements must include:
prescription easment
An easement given to an owner of land who adversely and openly crosses another owner's land uninterrupted over a certain amount of time
encroachment
An intrusion into, under, or over the property of another without that person's permission
emblements
Annual crops cultivated by tenant farmers and sharecroppers
Statute of Limitations
Anyone seeking relief for a breach of contract must do so within these guidelines
encumbrance
Anything that burdens or affects the use or the title of the property
exempt from TRELA licensing requirements
Attorneys
seller's role in listing agreement
Being honest in relating the condition of the property to the listing agent and prospective buyers Allowing flexibility in regard to property being available to show Maintaining the property in "showing" condition
"do-not-call" rules
Calls must be made between 8:00 AM and 9:00 PM
TRELA
Combats dishonesty among real estate brokers and their sales agents Requires real estate brokers and their sales agents to have licenses Stops fraudulent activities among real estate brokers and their sales agents
abandonment
Deserting property with the intent not to occupy the property as one's residence
Community Reinvestment Act
Encourages regulated financial institutions to serve their immediate community's needs Requires that lenders meet their local communities' needs first Requires that lenders lend to low to moderate income families for housing, small business, and farming
mortgage insurance
Insurance that provides coverage for the upper part of a residential loan in the event of default
establishing an agency relationship
It is standard practice to establish an agency with a buyer representation form. It is standard practice to establish an agency with a listing agreement. Ideally, the agency relationship should be stated in writing although verbal are allowed(harder to prove in court)
Ownership in Severalty
Owned by a single corporation whose rights are not shared with any other person Owner's description on the deed is often listed as an unmarried man or woman Owned by one person whose rights are not shared with any other person
Severalty
Ownership of real property by one person only, also called sole ownership.
specific leins
Property taxes and special assessments
Texas Real Estate Commission (TREC)
Regulates Texas real estate license holders
3 fundamental reasons for requiring a land description and survey in a real estate transaction
Relationship of the property to adjoining properties Relationship of occupied lines to recorded lines Existence of the property
in 1582, explorers and missionaries claimed the land that is now TX for the king of
Spain
Texas Occupations Code
TRELA is found in the
Subjacent Support
The absolute right of the property owner to have his or her land supported from beneath its surface
replacement value
The amount it will cost to rebuild the same structure if it is built today
price fixing
The collaboration of one or more persons setting a fixed price for goods or services to remove the free market's ability to influence prices
when an employing broker's license is suspended or revoked
The employed sales agent must transfer his or her license to another broker
Concealment
The failure to disclose a material fact, if intended to induce or allow a false belief
life tenant
The person to whom a life estate is conveyed
point of beginning (POB)
The point at which a metes and bounds description begins.
cyclical
The relationship between demand and supply makes the real estate markets
air rights
The rights inherent in the vertical place above ground level (estate, title, interest, and rights)
ground water
The water beneath the surface of the land that fills the spaces and cavities between the rocks and soil
groundwater
The water beneath the surface of the land that fills the spaces and cavities between the rocks and soil
writing the legal description in a contract
To sell real property in Texas, the contract must have a legal description of the property to be conveyed. An inaccuracy in the legal description can create possible financial liability on the part of the broker. An inaccuracy in the legal description can create serious problems for the owner
surface water
Water found in bodies of water such as ponds, lakes, and bays and in a flowing watercourse such as a stream or river; owned by the state of TX and held in trust for citizens of trust
monopoly
When a person or group has exclusive control over a product or service within a given region
Broker Associate
a broker who chooses to place their license under a sponsoring broker
producing cause
a cause that is legally sufficient to result in liability
a fee simple subject to condition subsequent
a fee estate that contains a condition that if violated, could lead to the termination of the estate
escrow account
a fund the lender may require the borrower to establish in order to pay mortgage default insurance, property taxes, and/or hazard insurance as they become due on the property during the year
landmark
a geographical feature, such as a large rock, an old tree, a fork in the road, or the intersection of two roads
nonexclusive listing
a listing agreement that gives the seller the right to retain more than one agent simultaneously; first broker to obtain a buyer who meets the terms of the listing, and whose offer is accepted by the seller, is the procuring cause of the sale and earns the commission
datum
a point, line, or surface from which elevations are measured or indicated
Transfer of loan servicing
a process in which a loan is sold to a third party who will service the loan in the future
urban homestead
a property that is located within a municipality and is served by police and fire protection as well as three of the following municipality services: electric, gas, sewer, storm sewer, and water
Regulation
a rule issued by an administrative agency to enforce or amplify a statute.
a trade organization
a voluntary nonprofit organization of independent and competing business units engaged in the same industry or trade
trade association
a voluntary nonprofit organization of independent and competing business units engaged in the same industry or trade, formed to help solve industry problems, promote progress, and enhance service
oil and gas rights holder has authority to
access the surface for both ingress and egress including building roads, holding tanks and derricks
general lein
affects all property both real and personal of the owner, such as a judgment lien or federal or state income taliens
Truth in Lending Act
aimed at promoting the informed use of consumer credit by requiring disclosures about its terms and costs and also requires the lender to state a maximum interest rate in variable rate contracts secured by a borrower's dwelling
typical apperutances (pass with the sale of real property)
air rights, water rights, right-of-way, easements, support rights
street address
an informal reference and is not sufficient for a legal description;it only tells you how to find a property but not the boundaries of the property
taxing authority
any organization that is legally able to levy and collect a tax
Punitive Damages
are awarded not to compensate the plaintiff, but to punish the defendant and are sometimes referred to as exemplary damages
community property interests
are severed through divorce proceedings
a real estate licensee can cause his or her license to be suspended or revoked
aying any portion of a commission or a fee to an unlicensed associate.
Golden Rule/ Ethic of Reciprocity
basis of the NAR Code of Ethics ; do unto others as you would have them do unto you
TX real estate license requirements
be a citizen of the United States or a lawfully admitted alien. be at least 18 years old. meet any applicable residency requirement
horizontal agreements against Antitrust Laws
boycotting, price fixing, dividing the market, and tying
2 types of real estate licenses
broker's license and sales agent's license
horizontal agreements
business agreements between competitors
lawsuit for money damages
can be filed by the innocent party if damages to an injured party are expressed in a dollar amount
property
can be real; It is anything capable of private ownership; It can have corporeal or incorporeal rights
Short-term fluctuations
changes in business and economic activity that occur within the year
exempt from property taxes
churches schools hospitals government buildings
The RESIDENTIAL BUYER/TENANT REPRESENTATION AGREEMENT
common contract for residential property only that defines the working relationship between a buyer and buyer's agent and creates an agency relationship. A variation exists for commercial property
money damages classifications
compensatory damages. nominal damages. punitive damages
types of undivided interest
concurrent ownership business ownership timeshares common interest developments
executory
contract is considered this until all terms are completed and escrow closes
voidable contract
contract with a minor
Actual Cash Value
covers a structure at the depreciated value of loss
cultivated plants vs wild plants
cultivated plants may be considered personal property before they are harvested
an unmarried man/woman
describes a person's status on the deed, if the person obtains title to property in severalty
a lease that lasts 6 months or any time less than 1 year
does not have to be in writing according to the statute of frauds
Accounting
duty owed to a client requires agents to remit a client's funds into a trust or escrow account according to the terms of an agreement
Texas Real Estate Commission (TREC)
enforces the provisions of TRELA and determines administrative policy
Education Standards Advisory Committee
est. in 2012; 12 members; reviews and revises course content requirements, curriculum standards, instructor certification requirements
Sole Proprietorship
exists when a single individual operates a business with no other owners. owns all assets and assumes all liabilities can be sold at the owner's will
General Partnership
exists when two or more businesses or individuals join to operate a business for profit
other names for a fee simple absolute estate
fee in simple, fee interest, estate in fee, or a fee
Information About On-Site Sewer Facility Form
form published by TAR is designed to be used by the seller to deliver additional information to the buyer about the septic system or other on-site sewer facility
Keybox Authorization by Tenant Form
form that enables the agent to obtain permission from the tenant to place a keybox on the property if the property is tenant occupied
Canons of Professional Ethics and Conduct
found in the Texas Administrative Code Rule §531.19 of the Canons addresses discriminatory practices
rule of capture
grants landowners the right to capture the water beneath their property such as groundwater
natural attachments
growing plants attached by their roots such as trees, shrubs, or flowers
ways to terminate a brokerage agreement
impossibility of performance. breach of contract. agreement of the parties
pitch of a roof
incline or rise- determines the life expectancy of the roof; the steeper the longer
undivided interests
interest held under the same title by two or more people, whether their rights are equal or unequal in value or quantity
3 types of agent representation
intermediary, buyer's agent, seller's agent
Statute
is a law passed by a legislature
General agent
is authorized by a principal to perform all tasks associated with the continued operation of a particular project
written disclosure to all parties
is necessary prior to a broker acting as an intermediary in a real estate transaction
Groundwater
is private property of the owner of the overlying land
Regulation B
issued by the Bureau of Consumer Financial Protection to implement the provisions of the Equal Credit Opportunity Act
TREC Responsibilities
issuing licenses and certificates of registration. implementing continuing education requirements. setting standards for real estate schools
primary difference between a joint tenancy and a tenancy in common
joint tenancy has the right of survivorship
homestead protectection
lasts indefinitely until there is solid proof of transfer, abandonment, or death
redlining
lenders tending to avoid lending in high-risk communities and neighborhoods
Horizontal Datum
longitude and latitude
mean sea level
most common datum used in the US
fee simple absolute estate
most complete form of ownership of land
parol evidence rule
no further outside promises, oral or written, are allowed after establishing a final contract.
secret profit
occurs when a licensee is compensated without the full knowledge and consent of the parties in a real estate transaction
blockbusting
occurs when a real estate licensee persuades an owner to sell or rent housing by saying that a particular race, religion, etc, are moving into the neighborhood
general leins
other government taxes such as unpaid income tax
addendum
overrules pre-printed contract
creating an intermediary brokerage
permission for intermediary status is needed from the buyer and seller. a written contract signed by the buyer and seller is mandatory. the buyer representation agreement addresses intermediary status.
tangible personal property
personal property that can be seen, weighed, measured, felt, or perceived by the senses.
Information About Brokerage Services (IABS) statement
presents a broker's duties and obligations to a prospective client or customer. However, it does not establish or disclose an agency relationship or the existence of an agency relationship between two parties
the 1866 Civil Rights Act
prohibits discrimination based on race in all property transactions
Addendum for Reservation of Oil, Gas, and Other Minerals
promulgated form used if the seller reserves all or a portion of the Mineral Estate
Title Insurance
protects a property owner against loss if the title to the property is shown to have a defect
Fair Housing Act
protects against discrimination based on religion. race. color. sex. national origin. familial status. handicap.
Fair Credit Reporting Act
protects consumer identity and credit information and is designed to promote the accuracy, fairness, and privacy of the information collected and maintained by credit reporting agencies
Deceptive Trade Practices and Consumer Protection Act (DTPA)
protects consumer's rights found starting in Section 17.41 of the Business and Commerce Code
Intermediary Brokerage
provides brokers with a way to represent both parties to a transaction while avoiding pitfalls of dual agency
real estate association
purpose is to upgrade the reputation and dignity of the real estate business.
TREC Regulates
real estate inspectors. residential service companies. timeshare developers easement or right-of-way agents
tenancy
refers to a mode or method of ownership or holding title to property
common law
refers to the body of law based on custom and judicial precedent rather than on codified statutes
18 hours
required CE for RE agents and brokers
Protection Period Clause
secures the listing broker's commission if the owner personally sells the property to any person whose attention was called to the property during the listing
land survey
should always show occupied lines deed record lines extent of any mismatch
legal description
should be written in such a way that any person in the future would be able to understand the description and determine the property location, with reasonable certainty.
earnest money
signifies a buyer's seriousness of his or her offer to purchase
Intangible personal property
stock, bonds, notes,accounts receivable, franchise, license or permit, contracts, cause of action, goodwill, certificate of deposit, shared deposit account, insurance policy, annuity, pension
4 basic tenancies recognized by law
tenancy at sufferance. tenancy for years. periodic tenancy tenancy at will.
licensees must use contract forms prepped by
the Texas Real Estate Broker-Lawyer Committee and approved by TREC
The principal
the client in a single agency relationship with regard to a real estate transaction
title vesting
the evidence that the owner of land is in lawful possession; it is the proof of ownership
Job Growth
the number of jobs added or deleted if the growth is negative, to the number of jobs in an area
metes and bounds system
the oldest method to describe land- the geometry of the perimeter of the parcel of the land
tenancy in common
the only form of tenancy that allows unequal interests in the property
Redlining
the practice of designating certain neighborhoods as areas where loans will not be made
Texas Constitution
the supreme law of Texas and establishes the fundamental legal rights of its citizens
Representation and Agency
the types of disclosures required by The Real Estate License Act
To reasonably locate the property during a transfer of title
there must be a sufficient legal description when testing the validity of a deed
4 characteristics of tenants in common
they may: take title at different times. have an undivided interest or equal right of possession(one unity). take title on separate deeds. have unequal interests
minerals in place
those minerals that have not been removed from the ground; (as soon as they are above surface they are personal property)
4 unities for joint tenancy
time, title, interest, and possession
under deed of trust-2 types of foreclosure for lender
trustee's sale and judicial foreclosure
general partnership
type of business structure in which each owner is jointly and severally liable
utility easemnt
type of easement that allows employees of a utility company to gain access to the property for installation and maintenance
land surveys
used in the construction process in order to assess: boundaries for properties. topography for engineering designs. elevations for flood insurance for home sites
vertical datums
used to measure height, as in a condominium level, or depth, such as subsurface mineral rights
sales comparison approach
uses the principle of substitution to compare similar properties by looking at the current selling price of a similar property and adjusting it for any differences to determine the market value for the subject property
Doing Business As (DBA)
when the owner of a sole proprietorship decides to operate under a different type of name, the must file this
typewrittencontracts
will overrule any addendum.
