Chapter 1 Flashcards
Air Rights
The right to control, occupy, or use the vertical space above a property, subject to necessary and reasonable use by neighbor and others (other aircraft).
Bilateral Contract
A reciprocal arrangement between two parties where each promises to perform an act in exchange for the other party’s act.
Bundle of rights
A set of legal rights afforded to the real estate title holder which can include the right of possession(property is owned by title holder), the right of control(the owner controls the property’s use), the right of exclusion(the holder can deny people access to the property), the right of enjoyment(the holder can use the property in any legal manner), and the right of disposition(owner an buy and sell).
Easement
A right to cross or otherwise use someone else’s land for a specified purpose.
Eminent domain
The power to take private property for public use by a state, municipality, or private person or corporation authorized to exercise functions of public character, following the payment of just compensation to the owner of that property.
Encroachment
A situation where a property owner violates the property rights of his neighbor by building something on the neighbor’s land or by allowing something to hang over onto the neighbor’s property.
Encumbrance
A claim against, limitation on or liability against real estate; include liens, deed restrictions, easements, assessments and taxes.
Equitable title
The portion of control that a buyer has while a party in a contract for a deed or an installment contract for the property; the ability to gain full control and title to property while someone else owns a legal title.
Estate at sufferance
An agreement in which a property renter is permitted to live in a property after a lease term has expired but before the landlord demands the tenant vacate the property.
Estate at will
A tenancy agreement where a tenant occupies property with the consent of the owner, but without an agreement that specifies a definite rental period or the regular payment of rent.
Estate for years
An estate, interest, in real property held under a rental agreement by which the owner gives another the right to occupy or use the land for a period of time.
Estate from period to period
An interest in leased property that continues from period to period - week to week, month to month, or year to year.
Executed contract
A contract that has been fully performed by both parties.
Executory contract
A contract under which one or more parties has not yet performed.
Express contract
A contract whose terms are clearly spelled out, usually in writing.
Freehold estate
An estate in which ownership is for an undefined length of time.
Homestead
A legal life estate occupied as the family home.
Involuntary alienation
The loss of property due to an adverse action such as a foreclosure or tax sale.
Leasehold estate
A form of property tenure where one party buys the right to occupy land or a building for a given length of time.
Legal description
The geographical description of a real estate property for the purpose of identifying the property for legal transactions.
Legal life estate
A form of life estate created by state law.
Littoral rights
Rights relating to the ownership of property that abuts an ocean, sea, or lake.
Marketable title
Ownership and possession of real property that is readily transferable since it is free from valid claims by outside parties.
Personal property
A type of property which can include any asset other than real estate.
Primary mortgage market
The market where borrowers and mortgage originators come together to negotiate terms and effectuate mortgage transactions; includes mortgage brokers, mortgage bankers, credit unions and banks.
Real property
Any property that is attached directly to land, as well as the land itself.
Riparian rights
A system for allocating water among those who possess land along its path.
Secondary mortgage market
A market for buying and selling mortgages.
Subsurface rights
Landowner’s rights to the water and other substances below the surface of land.
Surface rights
Ownership rights in a parcel of real estate that are limited to the surface; does not include air rights or subsurface rights.
Survey
An assessment of property lines to determine the exact amount of land that a homeowner owns.
Title
A legal document evidencing a person’s right to or ownership of a property.
Unilateral contract
A contract created by an offer that an only be accepted by performance.
Valid contract
A contract that meets all requirements of law, is binding upon its parties, and is enforceable in a court of law.
Void contract
A formal agreement that is illegitimate and unenforceable from the moment it is created.
Voidable contract
A formal agreement between two parties that may be rendered unenforceable for a number of legal reasons.
Voluntary alienation
A transfer of real property through one’s intentional actions.
Water rights
One of the interests that may attach to the real estate ownership, and pertain to the rights to use adjacent bodies of water.
Acceleration clause
A contract provision that allows a lender to require a borrower to repay all or part of an outstanding loan if certain requirements are not met.
Addendum
A document attached to and made part of the original contract. It can be explanatory, informational, or indicate other requirements of the parties that aren’t clearly spelled out in the contract.
Amendment
A document that makes a change to the ratified sales contract.
Amortized loan
Installment loan in which the monthly payments are applied first toward reducing the interest balance, and any remaining sum towards the principal balance.
Appraisal
The process of valuing real property, using one of three approaches; cost approach, income capitalization approach, or sales comparison approach.
Balloon payment
The final installment of a loan to be paid in an amount that is disproportionately larger than the regular installment.
Closing
The completion of a transaction involving the sale or exchange of real estate.
Computer Loan Origination (CLO)
An electronic network for handling loan applications through remote computer terminals linked to various lenders’ computers.
Contingency
A provision in a real estate contract that specifies the contract would cease to exist upon the occurrence of a certain event.
Counteroffer
An offer made in response to a previous offer by the other party during negotiations for a final contract.
Deed of trust
A type of secured real estate transaction that some states use instead of mortgages.
Earnest money
A deposit made to a seller showing the buyer’s good intentions in a transaction.
Exclusive agency listing
An agency agreement in which the seller reserves the right to sell the property on his or her own, without paying a commission to the agent.
Exclusive right-to-sell listing
An agency agreement under which a real estate agent has the sole right to sell a specified property.
Land contract
A contract between a seller and buyer of real property in which the seller provides financing to buyer to purchase the property for an agreed-upon purchase price and the buyer repays the loan in installments.
Lease
A legal document outlining the terms under which one party agrees to rent property from another party.
Mortgage
A debt instrument, secured by the collateral of a specified real estate property, that the borrower is obliged to pay back with a predetermined set of payments.
Net listing
Listing in which the broker’s commission is the excess of the sales price over an agreed-upon (net) price to the seller; illegal in some states, not Texas.
Offer to purchase
A preliminary agreement, secured by the payment of earnest money, between a buyer and a seller as an offer to purchase real estate.
Open listing
A property listing that uses multiple real estate agents to sell it; with an open listing, the agent that sells the property gets the commission.
Option
An agreement in which one party buys the right to have the first chance of purchasing a piece of property at a specific price at some point in the future.
Promissory note
A written, signed, unconditional promise to pay a certain amount of money on demand at a specified time.
Proration
The amount of or the act of determining a portion or share of a cost or benefit to be allocated between the two parties.
Recission
The unmaking or termination of a contract between parties.
Short sale
Any sale of real estate that generates proceeds that are less than the amount owed on the property.
Underwriter
Typically works for a lender to go over all the required paperwork and give the final approval for a loan.
What is the purpose of TRELA?
To safeguard the public interest and protect consumers of real estate services.
How many members make up TREC?
Increased in 1979 from 6 to 9 members - 6 brokers (active for at least 5 years prior to appointment), 3 members with no financial interest in real estate.
In what year did the Texas legislature pass the Real Estate Dealer’s License Act, which required all real estate agents to obtain licenses.
1939
What year was the Real Estate Dealer’s License Act changed to the Texas Real Estate License Act (TRELA)?
1955
