TX Real Estate common mistakes
TX Real Estate · Understand the traps and how to avoid them.
Treating a brokerage relationship as intermediary or dual agency simply because both buyer and client are represented by the same broker, without confirming the required written consent and confidentiality limits.
Candidates memorize the label 'intermediary' but blur the procedural steps and assume it is automatic once one brokerage represents both sides.
What to do instead
Drill the sequence: identify the relationship in writing, obtain consent, explain that intermediary does not mean the broker can share one party's confidential information with the other, and assign appointments or act impartially as Texas law allows.
Using an outdated TREC promulgated contract form or inserting custom clauses into a promulgated form without recognizing when an addendum or separate agreement is required.
Candidates study general contract law but do not practice checking the current form number, effective date, and TREC-authorized addenda.
What to do instead
Practice with a current TREC form list and a checklist: form number/date, required notices, initial lines, option-fee deadline, earnest-money deadline, and whether a custom term belongs in an addendum rather than handwritten into the body.
Confusing an easement appurtenant with an easement in gross, or treating a lien and an encumbrance as mutually exclusive.
The terms sound similar and candidates memorize definitions without mapping them to who benefits and whether the right runs with the land.
What to do instead
For each interest, ask: who benefits, does it transfer with the property, and is it possessory? Build a comparison table for easement appurtenant, easement in gross, license, lien, deed restriction, and encroachment.
Calculating prorations and closing charges by counting the closing date incorrectly or by mixing a 360-day banker's year with actual calendar days.
Candidates learn one proration formula and apply it mechanically without checking the contract, closing instructions, or whether the seller or buyer owns the closing day.
What to do instead
Work several closing-statement scenarios where the closing date is included for one party and excluded for the other, and state the day-count convention before calculating. Verify debit/credit direction by asking who owes whom.
Qualifying a buyer using only principal and interest and ignoring property taxes, hazard insurance, mortgage insurance, HOA dues, or the lender's total-debt-to-income ceiling.
Candidates memorize a front-end ratio but forget that Texas property taxes and insurance materially change PITI and that lenders also test total debt.
What to do instead
Practice full PITI plus MIP/HOA calculations and compute both housing ratio and total-debt ratio. Label each monthly obligation before deciding whether the buyer fits the lender's guidelines.
Applying the Texas residential 30-day security-deposit return rule to a commercial lease, or failing to identify when the landlord must provide an itemized deduction list.
Candidates generalize residential tenant protections to all leases and do not separate residential from commercial leasing rules.
What to do instead
Classify the lease first: residential or commercial. For residential leases, memorize the surrender, forwarding-address, and 30-day itemization framework; for commercial leases, look to the lease terms and negotiate the deposit clause rather than assuming the residential statute controls.
Treating a promissory note and a deed of trust as interchangeable and missing that Texas foreclosure is typically nonjudicial under a deed of trust.
Candidates group all financing documents together and do not distinguish the promise to pay from the security instrument.
What to do instead
Separate the documents by function: note = promise to pay; deed of trust = security instrument with power of sale; closing statement = accounting. Then trace the default/foreclosure sequence and notice requirements.
Advertising a team name, assumed name, or personal name without including the brokerage's registered name as required, or using misleading superlatives and unverifiable claims.
Candidates treat advertising as general marketing rather than a TREC compliance issue and overlook name-disclosure and truthfulness rules.
What to do instead
Review every sample ad against a TREC advertising checklist: brokerage name present, team/assumed name registered properly, no misleading claims, and no implied expertise that cannot be substantiated.
Confusing a comparative market analysis with an appraisal, or failing to flag specialized-property issues such as mineral interests, floodplain status, HOA restrictions, or unimproved land access.
Candidates learn the standard residential transaction and then apply the same assumptions to farms, ranches, condos, and new construction.
What to do instead
For specialized properties, use a property-type checklist: access, utilities, minerals, easements, flood zone, HOA/condo documents, and valuation method. State clearly that a CMA is not an appraisal and identify when a licensed appraiser is needed.
Missing the option-period and earnest-money deadlines, or treating the option fee as part of the earnest money.
Candidates memorize that both are deposits but do not track the separate deadlines and separate purposes in the Texas residential contract.
What to do instead
Build a timeline from the effective date: earnest money due, option fee due, option-period expiration, and termination notice method. Label option fee as payment for the unrestricted right to terminate, not as earnest money.