TX RE Broker common mistakes
TX RE Broker · Understand the traps and how to avoid them.
Computes a contract deadline (option period, financing termination, closing date) by counting the effective date as day one, then advises the client the deadline is a day earlier than it actually is - or lets a deadline pass because the last day fell on a Sunday.
Most candidates practice with inclusive calendar counting, and phone calendar apps default to counting the start date. Under the contract's time-computation language the day of the triggering event is not counted, and a last day landing on a weekend or legal holiday rolls forward.
What to do instead
Write the trigger date in the margin, start counting the following day, and always ask 'what happens if the last day is a weekend or holiday?' before quoting a date. Put the computed date into the contract blank rather than a day count, so the client never has to redo the math.
Acts as an intermediary between a buyer and a seller (or two buyers) by appointing one associated licensee to each side, but only explains intermediary status orally and never obtains the parties' written consent before the appointments are made.
Intermediary practice is unique to Texas and candidates memorize the definition ('a broker who represents both parties') without memorizing the procedural sequence: disclose, obtain written consent, then appoint. Because the parties rarely object out loud, the missing paper feels harmless.
What to do instead
Drill the sequence as a checklist: written intermediary notice and consent first, then written appointment of associated licensees, then written notice of who represents whom. Treat the consent as a precondition to acting, not paperwork to collect at closing.
Shows property, discusses price and terms, or takes a listing from a consumer without first delivering the Information About Brokerage Services notice at the first substantive communication.
Candidates mentally attach the disclosure to the listing agreement or the sales contract, so they assume handing it over at signing satisfies the rule. The rule attaches to the conversation, not the signature.
What to do instead
Keep the IABS in the car and the email template, and treat 'first substantive communication' as the moment the conversation turns to a specific property, price, or motivation. Deliver it, note the delivery date in the file, and repeat delivery if a new party joins.
States that the Closing Disclosure can be handed to the borrower at the closing table, or that the Loan Estimate must be delivered within three business days before consummation.
The two disclosures have similar names and mirrored timing rules; under exam pressure candidates swap the trigger events and the three-business-day direction.
What to do instead
Anchor each to its trigger: Loan Estimate - within three business days after application; Closing Disclosure - received by the consumer at least three business days before consummation. Say the pairing out loud in that order whenever a disclosure question appears.
Advises a seller that a spouse whose name is not on the deed does not need to sign the deed, or prepares a conveyance of a homestead without the non-titled spouse's joinder.
Candidates apply the general title principle that only record owners convey, and forget that Texas homestead protection gives the non-owner spouse a constitutional interest that survives a deed signed without them.
What to do instead
Before any residential conveyance, ask two questions: is this the seller's homestead, and is there a spouse? If both answers are yes, both spouses sign the deed and the deed of trust regardless of who is on title.
Reconciles an appraisal by averaging the adjusted values of the comparables, or adjusts the comparable in the wrong direction because it is superior in a feature.
Averaging is the intuitive 'fair' move and it is taught in many statistics contexts, while adjustment direction requires holding the subject constant and thinking in reverse.
What to do instead
State the rule as a sentence: you adjust the comparable toward the subject, so a feature the comparable has and the subject lacks is a subtraction. Then reconcile by weighting - the most similar, most recent, best-supported comparable carries the most weight - and never average.
Tells a buyer that a legal nonconforming use (an older commercial use in a newly residential zone) can be expanded, rebuilt after a total loss, or resumed after a long vacancy, without checking the local ordinance.
Candidates learn the concept 'grandfathered use is allowed to continue' and treat it as a durable property right, missing that most ordinances allow continuation only, with limits on expansion, discontinuance, and reconstruction.
What to do instead
Answer the exam question at the level of the general principle (continuation is protected, expansion is not), and in practice read the specific zoning ordinance for the discontinuance period and the reconstruction percentage before advising anyone.
Handles a tenant security deposit through the brokerage's general operating account, or manages rental property for an owner without a written property management agreement in place.
Candidates associate trust-account discipline with earnest money and assume deposits collected under a management agreement are ordinary business receipts; similarly, the management agreement feels like an internal document rather than a regulated one.
What to do instead
Treat every dollar held for another person - earnest money, security deposits, owner rents, reserve funds - as trust funds, deposited and disbursed under the same rules. Get the management agreement signed in writing before the first showing or collection, with the scope of authority and the fee stated.
Tells a seller client that the seller's disclosure notice can be skipped because the buyer is purchasing 'as is', is a builder, or already had an inspection.
Candidates confuse the contractual 'as is' posture with the statutory disclosure duty, and the two live in different sources of law. A buyer's knowledge does not extinguish the seller's statutory obligation.
What to do instead
Separate the two concepts explicitly: the as-is clause addresses the condition of the property and the buyer's remedies; the disclosure notice is a statutory seller obligation on the resale of a single-family home. When in doubt, complete and deliver the notice and let the contract, not the shortcut, allocate risk.
Promises a client that TREC will investigate the transaction and decide who is entitled to the earnest money, or advises that TREC can award the deposit to the wronged party.
Consumers and candidates both treat the licensing agency as a general consumer complaint court, so the promise sounds helpful and is repeated under pressure.
What to do instead
State the correct division of labor: TREC handles licensing and disciplinary matters, not private money disputes. Earnest money disputes are resolved by the parties, by the escrow agent under the contract's escrow provisions, or by interpleader - and the broker should never guarantee an outcome.