TX RE Broker flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

TREC

Texas Real Estate Commission, the state agency that licenses brokers and sales agents and enforces the Real Estate License Act.

Intermediary

A Texas broker who represents both buyer and seller in one transaction with written consent of both parties and without advocating for either side.

IABS form

Information About Brokerage Services; a TREC-required written disclosure of agency relationships given at first substantive communication or before signing.

Sales agent sponsorship

A Texas sales agent must work under a sponsoring broker, who is responsible for the agent's brokerage activities and receives the commission.

Fiduciary duty of loyalty

Requires the agent to put the client's interests first, avoid self-dealing, and not acquire secret profits from the transaction.

Confidentiality after termination

The duty to keep a former client's confidential information secret continues after the agency relationship ends.

Client versus customer

A client has an agency relationship and receives fiduciary duties; a customer gets honesty, fairness, and disclosure but no fiduciary duties.

Material defect disclosure

A Texas licensee must tell all parties about known property defects that could affect a reasonable buyer's decision.

Statute of Frauds

Requires real estate sale contracts and leases longer than one year to be in writing and signed by the party to be charged.

Option period

A buyer-paid option fee grants the unrestricted right to terminate the contract within the stated number of days.

Earnest money

A good-faith deposit held in escrow that is applied to the purchase price or disbursed per contract terms on default.

Seller's Disclosure Notice

Texas Property Code §5.008 requires most residential sellers to disclose known defects; the buyer may terminate for undisclosed items.

Loan-to-value ratio

Loan amount divided by the lesser of the purchase price or appraised value, expressed as a percentage.

Debt service coverage ratio

Net operating income divided by annual debt service; lenders typically require 1.20 or higher for income property.

Texas home equity 80% cap

Section 50(a)(6) loans cannot exceed 80% combined loan-to-value and only one may exist at a time.

Closing Disclosure timing

The borrower must receive the Closing Disclosure at least three business days before loan consummation under TRID rules.

Community property

Texas property acquired during marriage is presumed community; property owned before marriage or received by gift or inheritance is separate.

General warranty deed

Conveys title with covenants of seisin, quiet enjoyment, warranty, and further assurance against defects arising before the grantor.

Tenancy in common

Co-ownership with separate, transferable shares and no right of survivorship; each owner may convey or encumber their interest.

Texas homestead cap

Homestead protection covers up to 10 urban acres or 100 rural acres (200 for a family), shielding the home from most creditors.

Sales comparison approach

Estimates value by adjusting recent comparable sales to the subject; superior comparables are adjusted downward, inferior ones upward.

Capitalization rate

Net operating income divided by property value; used to convert income into an indication of value.

Gross rent multiplier

Sale price divided by monthly (or annual) rent; a quick screening tool for comparing income properties.

Highest and best use

The reasonably probable use that is legally permissible, physically possible, financially feasible, and maximally productive.

Variance

Administrative relief from a dimensional zoning standard such as a setback or height limit, granted for hardship.

Nonconforming use

A use that lawfully existed before a zoning change and may generally continue but not be expanded.

Extraterritorial jurisdiction

A city's statutory planning and platting authority over land outside its limits, ranging about one to five miles.

Phase I ESA

A due-diligence environmental site assessment that reviews records and site conditions for recognized environmental conditions without sampling.

Triple net lease

Tenant pays base rent plus taxes, insurance, and maintenance; common in commercial properties and lowers landlord risk.

Texas security deposit rule

Landlord must refund the deposit or provide a written itemized deduction list within 30 days after the tenant vacates.

Three-day notice to vacate

Texas residential landlords must give written notice and wait three days before filing a forcible detainer suit.

Percentage rent

Rent calculated as base rent plus a percentage of gross sales above a negotiated breakpoint.