TX RE Broker key terms

The state agency that licenses and regulates Texas real estate brokers and sales agents, adopts promulgated contract forms, and enforces the Real Estate License Act through rules and disciplinary action.

A licensed Texas broker who supervises and is responsible for the real estate activities of a sponsored sales agent or broker associate; the agent's license is tied to this broker.

The individual broker responsible for the real estate brokerage activities of a licensed business entity such as a corporation or LLC, and who holds the brokerage license for that entity.

An opinion of a property's likely sale price prepared by a licensed broker, often for a lender or servicer; it is not an appraisal and cannot substitute where an appraisal is legally required.

A Texas brokerage arrangement in which the broker, with the written consent of all parties, represents both buyer and seller or both landlord and tenant, and must treat both fairly without disclosing one party's confidential information to the other.

A TREC-required written notice a license holder gives to a party at the first substantive communication, explaining whether the broker represents that party and identifying the broker's client.

The legal obligation an agent owes a principal, including loyalty, obedience, disclosure, confidentiality, reasonable care, and accounting; in Texas these duties run to the client, not to a customer.

A written contract between a buyer and a broker that creates the agency relationship, sets out the broker's duties, and states how and when compensation is earned, along with its term and termination.

A good-faith deposit by a buyer, delivered to a title company or escrow agent, that is credited to the purchase price at closing or forfeited under the contract's terms if the buyer defaults.

A negotiated period in Texas residential contracts during which the buyer may terminate for any reason and recover the earnest money, typically in exchange for a nonrefundable option fee paid to the seller.

Contract and addendum forms adopted by TREC that license holders must use for specified residential transactions; a license holder may not alter a form's printed wording except through permitted addenda.

A TREC form attached to a contract that makes the buyer's performance contingent on obtaining specified financing and sets out the buyer's termination and earnest money rights if approval fails.

The security instrument used in Texas in place of a mortgage; it conveys bare legal title to a trustee who may conduct a nonjudicial foreclosure if the borrower defaults on the note.

The borrower's written promise to repay a loan on stated terms, including principal, interest rate, payment schedule, and maturity; it is the debt obligation the deed of trust secures.

An account held by a lender or servicer into which the borrower pays monthly amounts for property taxes and insurance, with funds disbursed when those bills become due.

The loan amount divided by the property's appraised value or purchase price, whichever is less; lenders use it to measure risk and to set requirements such as mortgage insurance.

A federally required form the lender must deliver to the borrower at least three business days before closing, itemizing the loan terms, projected payments, and closing costs.

A Texas constitutional protection for a person's principal residence that limits forced sale by most creditors and provides property tax exemptions, with acreage limits for urban and rural homesteads.

The Texas marital property system under which most property acquired during marriage by either spouse is owned one-half by each; separate property is owned before marriage or acquired by gift or inheritance.

A deed in which the grantor warrants title against defects arising both before and during the grantor's ownership, giving the grantee the broadest protection among common deed forms.

A deed in which the grantor warrants title only against defects created by or through the grantor, not against earlier defects; it is common in foreclosure, trustee, and corporate transfers.

A title company's offer to issue a title policy, listing the current owner, proposed insured, requirements that must be met to close, and exceptions or encumbrances that will not be covered.

A doctrine letting a person who openly, actually, exclusively, hostilely, and continuously occupies another's land for the statutory period gain ownership, with Texas periods generally ranging from three to twenty-five years depending on the claim.

An appraisal method that estimates value by comparing the subject property with recent similar sales and adjusting for differences in features, condition, location, and date of sale.

The reasonably probable, legally permissible, physically possible, and financially feasible use of a property that produces the highest value; it frames how an appraiser approaches the valuation.

An analysis of recent sales and current listings that a broker or agent prepares to help a client choose a list price; it is a price opinion, not a licensed appraisal.

A rough income-approach tool calculated as sale price divided by gross rent; the resulting multiplier is applied to a comparable property's rent to estimate market value.

Local government regulation of land use by districts that specifies permitted uses, density, height, setbacks, and lot size; changes may be pursued through rezoning, variances, or special permits.

An administrative authorization letting an owner depart from a zoning standard, such as a setback or height limit, because of a hardship unique to that property rather than a general condition.

A use that lawfully existed before a zoning change but no longer complies with current rules; it may generally continue but usually cannot be expanded or revived after abandonment.

A Texas special district that issues bonds to fund water, sewer, and drainage infrastructure and repays them through taxes or fees added to the bills of property owners in the district.

A Texas district that finances amenities and infrastructure through assessments levied on properties within it; the assessment appears on the property tax bill and should be disclosed to buyers.

The government's power to take private property for public use upon payment of just compensation; a Texas owner may contest the taking or the amount offered.

An area shown on FEMA flood maps as having at least a one percent chance of flooding in any year; federally related lenders generally require flood insurance for structures located there.

An organization of owners in a subdivision or condominium that enforces deed restrictions and maintains common areas, funded by mandatory assessments that can become liens on the property.

Private limits recorded in the chain of title that control how land may be used, such as setbacks, building size, or prohibited activities, and that are enforced by owners or an association rather than by zoning officials.

A bank account a broker uses to hold other people's money, such as earnest money, security deposits, or rents; TREC rules require accurate records, no commingling, and periodic reconciliation.

A lease in which the tenant pays base rent plus some or all operating expenses such as taxes, insurance, and maintenance; a triple net lease shifts all three to the tenant.

Money a tenant gives a landlord to cover unpaid rent or damage beyond normal wear; the Texas Property Code sets rules for withholding and returning it, generally within thirty days.

A tax-deferred swap of business or investment real property for like-kind property under the Internal Revenue Code, using a qualified intermediary and meeting strict identification and closing deadlines.