TX Real Estate cheat sheet

Fiduciary duties owed to a principal: Care, Obedience, Accounting, Loyalty, Disclosure, Confidentiality, plus reasonable skill and diligence.

Intermediary status requires the written consent of both buyer and seller before the broker may act for both in the same transaction.

An intermediary must treat both parties impartially, may not advocate for one over the other, and may not reveal one party's confidential information to the other.

To act as intermediary the broker must either appoint a designated agent for each party or personally act impartially with written notice to both parties.

Listing agreements must be in writing; common types are exclusive right to sell, exclusive agency, and open listing.

A buyer representation agreement must be in writing to be enforceable under Texas law.

Agency terminates by performance, expiration of the term, mutual agreement, revocation by the principal, or operation of law (death, incapacity, bankruptcy).

A license holder must obtain written consent from all parties before receiving compensation from more than one party in a transaction.

License holders must use TREC promulgated forms for most residential sales and leases; exceptions include forms prepared by a party's attorney or by a party acting for themselves.

The effective date is the date the last party signs and communicates acceptance; most contract deadlines run from that date.

Earnest money is typically delivered to the escrow agent within three days after the effective date.

The option fee buys the buyer an unrestricted right to terminate within the option period; it is nonrefundable and is not credited to the sales price.

Termination during the option period must be in writing and delivered to the seller or seller's agent within the option period.

The seller ordinarily furnishes the owner's title policy; the buyer pays for the lender's policy and any endorsements and may obtain a new survey at buyer's expense.

Required addenda include the HOA addendum, MUD notice, lead-based paint disclosure for pre-1978 housing, and the seller's disclosure notice.

Statute of Frauds: contracts for the sale of land and leases longer than one year must be in writing and signed by the party to be charged.

Amendments and addenda must be in writing, signed by both parties, and become part of the contract; license holders may not otherwise alter promulgated forms.

Fee simple absolute is the highest estate; a life estate ends at the life tenant's death, with the property passing to a remainderman or reverting to the grantor.

Texas homestead protection has no dollar cap and covers up to 10 acres in a municipality, 100 rural acres for a single adult, or 200 rural acres for a family.

Homestead property can be force-sold for property taxes, purchase-money debt, home equity and refinance loans, and certain condo or POA assessments.

An easement appurtenant benefits a neighboring parcel; an easement in gross benefits a person or entity; easements arise by express grant, implication, necessity, or prescription.

Liens are classified as specific or general and as voluntary or involuntary; the property tax lien is specific and takes priority over most other liens.

Texas is a community property state: property acquired during marriage is presumed community, while separate property comes from before marriage, gift, inheritance, or partition.

Deed types: general warranty (six statutory covenants), special warranty (grantor warrants only against claims through the grantor), and quitclaim (no warranty).

Adverse possession statutes in Texas run in 3-, 5-, 10-, and 25-year periods depending on whether the claim is under color of title and whether the land is enclosed or cultivated.

Mechanic's lien affidavits must be filed within statutory deadlines after the debt accrues, with shorter deadlines for subcontractors than for original contractors.

PITI = principal, interest, property taxes, and hazard insurance; mortgage insurance and HOA dues are often added to the monthly obligation.

Loan-to-value ratio = loan amount divided by the lesser of the sales price or appraised value; conventional PMI is generally required above 80% LTV and cancelable at 78%.

FHA loans require a 3.5% minimum down payment and mortgage insurance premiums; VA loans offer 0% down for eligible veterans with a funding fee.

TRID timing: the Loan Estimate must be delivered within three business days of application, and the Closing Disclosure at least three business days before consummation.

Texas Section 50(a)(6) home equity lending is limited to 80% of value on homestead property and foreclosure requires a court order.

Texas uses a deed of trust, a three-party instrument involving a trustee whose power of sale allows nonjudicial foreclosure.

Common underwriting ratios are 28/36 for conventional loans and 31/43 for FHA; the first number is housing expense to income, the second total debt to income.

Discount points are prepaid interest (one point = 1% of the loan amount); an origination fee is a separate lender charge for making the loan.

Texas Property Code Chapter 92 governs residential tenancies; Texas imposes no statutory dollar cap on security deposits for most private residential leases.

A landlord must refund the security deposit or deliver a written itemized list of deductions within 30 days after the tenant vacates and provides a forwarding address.

Bad-faith retention of a security deposit exposes the landlord to a statutory penalty of $100 plus three times the wrongfully withheld amount and attorney's fees.

For nonpayment of rent, the landlord must give at least three days' written notice to vacate before filing a forcible detainer suit in justice court.

A Texas real estate license is generally required to lease or manage property for others for compensation, subject to narrow exemptions such as owners and certain on-site managers.

Trust funds belonging to clients or tenants must be held in a separate trust account; commingling with the broker's own funds is prohibited.

Statute of Frauds: a lease for a term longer than one year must be in writing and signed to be enforceable.

Federal Fair Housing protected classes are race, color, religion, sex, national origin, familial status, and disability; state and local ordinances may add classes.

A landlord must repair conditions that materially affect health and safety after written notice from the tenant, subject to statutory timeframes.

Commission = sales price × commission rate; each side's split is calculated from the total commission, not from the price.

Area conversions: 1 acre = 43,560 square feet; 1 square mile = 1 section = 640 acres; a quarter section = 160 acres.

Seller's net proceeds = sales price − loan payoff − commission − seller closing costs − prorated expenses owed by seller + prorated income credited to seller.

Prorations in Texas are commonly computed using actual days over a 365-day year: annual amount × (days owned ÷ 365).

On the settlement statement, seller debits include the payoff, commission, owner's title policy, and taxes owed; buyer credits include earnest money and new loan proceeds.

One discount point = 1% of the loan amount; two points on a $250,000 loan cost $5,000.

Texas imposes no state or local real estate transfer tax; closing charges consist of title premiums, recording fees, and lender fees.

Per-diem interest = principal × annual rate ÷ 365; monthly interest = principal × annual rate ÷ 12.

Owner's title insurance premiums in Texas are set by rates promulgated by the Texas Department of Insurance, so competing underwriters quote the same basic premium.

When Texas land receiving an agricultural appraisal changes to non-agricultural use, a rollback tax is owed for three of the five preceding years plus interest.

Under the Texas Uniform Condominium Act, a condominium reseller must deliver a resale certificate; late or missing delivery can give the buyer a right to cancel.

The Residential Construction Liability Act requires a homeowner to give the builder written notice and an opportunity to inspect and offer repairs before suing for construction defects.

Property Code Chapter 209 (Texas Residential Property Owners Protection Act) requires a POA to give notice and an opportunity to cure before imposing certain fines or foreclosing on assessments.

The Texas Timeshare Act requires written disclosures and gives the purchaser a statutory right to cancel the purchase contract within the stated period.

Subdivision platting is regulated by cities under Property Code Chapter 212 and by counties under Chapter 232 for land outside city limits.

Commercial transactions commonly use a letter of intent, estoppel certificates from tenants, and CAM charge reconciliations in the lease.

Texas trustee's foreclosure sales occur on the first Tuesday of the month, with notice posted at least 21 days before the sale and filed with the county clerk.

The mineral estate can be severed from the surface estate, and the mineral owner's right to develop generally dominates the surface owner's use.

The Texas Real Estate Commission is composed of nine members appointed by the governor; it adopts rules, sets education standards, and disciplines license holders.

A Texas real estate license is valid for two years and expires on the licensee's birthdate.

Continuing education for each two-year renewal totals 18 hours: 4 Legal Update I, 4 Legal Update II, 3 contract-related, 3 ethics, and 4 electives.

A new sales agent must complete 90 hours of Sales Agent Apprenticeship Education (SAE) before the first license renewal.

Qualifying education is 180 classroom hours for a sales agent license and 270 hours plus four years of active experience for a broker license.

TREC may impose an administrative penalty of up to $5,000 per violation in addition to reprimand, suspension, or revocation.

A license holder may not pay or share a commission with an unlicensed person, and may not accept compensation from a party without the required written consent.

The Information About Brokerage Services (IABS) form must be provided at the first substantive communication about a transaction.

Advertising must identify the brokerage; a team using a name other than the broker's must register the team name with TREC, and brokerage records must be retained four years.