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Real Estate License > Real Estate > Flashcards

Real Estate Flashcards

1
Q

TREC

A

(enforcer of the law) includes 9 appointed people. Their purpose is to oversee the licensing, education requirements, and ethical standards. Is a government agency created by the Texas Legislature to enforce TRELA.

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2
Q

TRELA

A

(it’s the law) and is a smaller part of the Texas Occupations Code created by the Texas Legislature to govern Texas real estate 1101

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3
Q

ROI

A

return on investment

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4
Q

Article 11

A

states that a REALTOR® may provide a service they are not specialized in only after fully disclosing their lack of experience, or if the REALTOR® obtains assistance from someone competent in the field, in which case, the client must be informed.

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5
Q

Education Standards Advisory Committee (ESAC)

A

the function is to review and revise curriculum standards, course content, and instructor certification requirements for both Qualifying and Continuing Education courses (CE). This committee incudes 12 members: including license holders, education members, and a public representative.

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6
Q

SAE

A

Sales Agent Apprentice Education is an educational requirement that must be completed in the first two years of being licensed as a real estate agent. Each newly-licensed person must take three 30-hour courses before renewing their license at the end of the first two years of being a license holder.

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7
Q

CMA

A

comparative market analysis- compares the prices of similar properties

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8
Q

BPO

A

Brokers Price opinion is the process used by a hired sales agent to determine the potential selling price or estimated value of a real estate property. A lender asks for a BPO if the owners are wanting to refinance or if they are about to foreclose.

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9
Q

NOI

A

net operating income

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10
Q

The capitalization rate

A

or cap rate is a rough estimating of what the property will return over time

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11
Q

GPR

A

gross potential rate tells you the max amount of money you are bringing in if all of your spaces were rented out based on market value

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12
Q

sellers market

A

is a market condition in which the number of properties for sale does not meet the demand (number of people looking to buy). The pricing and negotiations of a transaction are often in favor of the seller in this type of market (hence the name), but this is not the case in 100% of situations.

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13
Q

buyer’s market

A

is the condition of having fewer buyers than the supply of homes for sale in the area.

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14
Q

Months of inventory to type of market

A

0-4 Sellers Market
4-6 Neutral Market
6 Buyers Market

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15
Q

misrepresentation

A

a false statement, either spoken or written, that is made unintentionally

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16
Q

IABS Notice

A

Information About Brokerage Services

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17
Q

Negligence

A

is carelessness in the work that needs to be accomplished.

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18
Q

Incompetence

A

usually occurs when a license holder attempts to facilitate a type of transaction that they have never attempted.

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19
Q

earnest money

A

a deposit that is submitted along with a contract to demonstrate seriousness about the offer

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20
Q

commingling

A

the illegal act of a license holder mixing their own money with a client’s or customer’s money.

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21
Q

conversion

A

he act of a broker or sales agent using a client’s or customer’s money for their own use

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22
Q

puffing

A

is an exaggeration to accomplish a goal, such as a sale.

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23
Q

AMC

A

Appraisal Management Companies is an entity authorized to provide appraisal management services by TALCB.

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24
Q

TALCB

A

Texas Appraiser Licensing and Certification Board is a subdivision of TREC

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25
Q

Sitis

A

desirability of a location-is an economic preference for a particular location and not a geographic one

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26
Q

fixity

A

permanence of land

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27
Q

comparative market analysis

A

used to establish market price

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28
Q

Sunset Act

A

is a common state law, which, in Texas, requires the Sunset Commission to evaluate all state agencies every 12 years with respect to their efficiency and the need for their services (essentially, to see if they are still needed).

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29
Q

land

A

natural resources seen on surface and the minerals below the surface and the air above the surface

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30
Q

real estate

A

land and human made improvements

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31
Q

real property

A

includes land, improvements and the set of rights associated with real estate ownership

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32
Q

bundle of rights

A

legal rights for real properties. includes the right of exclusion, the right of possession, the right of disposition, the right of quiet enjoyment

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33
Q

ownership rights

A

surface rights, subsurface rights, air rights and water rights

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34
Q

Riparian rights

A

govern the use of flowing water, such as a stream or river, that pass through or border a property. can use but don’t own.

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35
Q

Littoral Rights

A

govern lakefront or seafront property and usually allow the property owner to use the water bordering their property. can’t artificially change the water’s location

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36
Q

Another word for personal property

A

chattel

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37
Q

synonym for personal property

A

personalty

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38
Q

deed

A

ownership to a parcel of real estate is transferred by this recordable document

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39
Q

bill of sale

A

ownership to personal property transfers by this

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40
Q

affixing

A

common way to turn personal property into real property

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41
Q

trade fixture

A

is personal property that is owned by and needed for a tenant’s business.

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42
Q

accession

A

trade fixtures left behind after least ends become property of landlord

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43
Q

AAI

A

annexation, adaptation and intention

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44
Q

annexed

A

attached to land

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45
Q

adaptation

A

the use and modification of a particular item for a specific use in a property

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46
Q

intention

A

inferred from the nature of the item and blends annexation and adaptation

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47
Q

fructus naturales

A

trees, bushes, and grasses that do not require annual cultivation are real estate

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48
Q

fructus industriales

A

also known as emblements- cultivated annual crops that are personal property

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49
Q

2 ways to find out who owns property’s mineral rights

A

landman or oil and gas attorney

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50
Q

landman

A

search for property owners that have possession of their mineral rights in an attempt to obtain a lease on those rights for oil companies

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51
Q

mobile home built after 1976

A

manufactured home

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52
Q

modular homes

A

similar to manufactured homes. partially built in a factory and then the parts are trucked to the site. considered real property

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53
Q

condominium

A

ownership of the unit itself and joint ownership of the land and shared space.

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54
Q

cooperatives

A

or co-ops. a type of ownership where the title belongs to a legally created entity, the cooperative

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55
Q

assessments

A

are regular fees used to pay for things like the upkeep of common community areas, road repairs, and structural maintenance. also called HOA dues, maintenance fees etc.

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56
Q

PUD

A

planned unit development- is a subdivision or development that includes single-family dwellings along with some common elements such as parks, pools, community recreational centers, and/or golf courses. Operated by a homeowners association, or HOA.

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57
Q

multifamily homes

A

duplex, triplex and fourplex residences

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58
Q

economy of scale

A

reduced cost of maintaining one location that serves more than one family

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59
Q

timeshares

A

is one residence that has multiple owners who take turns using the property.

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60
Q

IRA Withdrawals

A

first time homeowners could potentially withdraw up to $10000 from their retirement account IRA to go towards their down payment

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61
Q

Capital gains

A

refers to the profit received from selling a capital asset.

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62
Q

capital loss

A

refers to the loss incurred from selling a capital asset

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63
Q

capital gain equation

A

Sales price - (Purchase price + Cost of improvements) + Total depreciation – Expenses = Gain

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64
Q

holding period

A

the amount of time between the day a property is bought and the day it is sold

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65
Q

short-term capital gain

A

holding period is less than one year

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66
Q

long-term capital gain

A

holding period is greater than or equal to one year

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67
Q

The Taxpayer Relief Act of 1997

A

created certain exclusions from capital gains taxes for homeowners- used every 2 years

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68
Q

rollover transactions

A

transfers of funds to investments of the same type, used to defer the payment of taxes

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69
Q

1031 Exchange

A

lets an investor sell a property, reinvest the proceeds in a brand new property, and defer all capital gain taxes.

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70
Q

PMI

A

prime mortgage insurance

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71
Q

homestead rights

A

This right is automatic and protects homeowners from claims by creditors being made against their homes, preventing any eviction by these creditors

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72
Q

homestead limits

A

10 acres for urban. It can be multiple lots but must be contiguous or adjoining.
200 acres for rural family and 100 acres for rural single person

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73
Q

Ad valorem taxes

A

are calculated according to the assessed value of real estate.

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74
Q

Assessed value

A

is the value placed on a property by a governmental unit for use in levying annual real estate taxes.

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75
Q

homestead tax exemption

A

will reduce the amount of ad valorem taxes paid on the homestead.

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76
Q

PITI

A

principal interest taxes and insurance

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77
Q

amortization

A

is the process of paying off a debt or mortgage in regular installments based on a fixed payment schedule.

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78
Q

PMI

A

private mortgage insurance for conventional loans. borrowers who put down less than 20%

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79
Q

MIP

A

mortgage insurance premium for FHA loans is paid through the duration of the loan

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80
Q

arrears

A

interest paid after it’s received/issued. ex. the feb 1 mortgage payment pays interest for the month of Jan

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81
Q

MUD

A

municipal utility district

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82
Q

National Flood iNsurance Act of 1968

A

subsidized flood insurance and requires land management and flood control programs

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83
Q

CLUE reports

A

Comprehensive Loss underwriting exchange- provides dates of claims, insurance company or companies involved, the type of policy, whether the loss was related to a named catastrophe (hurricane, etc.), location of the loss (on or off the property), the amount paid, and the cause of the loss.

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84
Q

Residential Condominium Contract

A

provides for a way for the prospective buyer to ask for the documents and is provided by TREC

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85
Q

single family home

A

Standalone house where the owner owns the house and land

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86
Q

townhouse

A

Owners own the dwelling AND the land it sits on, but might also share common elements like condominium owners do. The major difference between a condominium and a townhouse is the conveyance of the land with the residence by the deed.

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87
Q

agency relationship

A

is created when an individual authorizes another party to represent them and act in their best interest.

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88
Q

agent

A

the person who does the representing

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89
Q

client

A

the person who is being represented

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90
Q

principal

A

2 meanings. a major party who is a part of a real estate transaction. an individual who authorizes an agent to represent their interests as a client in a real estate transaction.

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91
Q

customer

A

are the people on the other side of the transaction. They’re the people who have signed an agency agreement with the other license holder.

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92
Q

Third party

A

is ANY person involved in a real estate transaction with you who is not your client.

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93
Q

listing agent

A

an agent representing a seller

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94
Q

buyer’s agent

A

an agent representing a buyer

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95
Q

special agency

A

the client grants their agent the authority to act on their behalf for specific actions.

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96
Q

commission

A

The commission rate is negotiated between the principal and the broker.

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97
Q

listings

A

If a sales agent switches brokerages, their clients remain with their previously sponsoring broker as their agency relationships were with that sponsoring broker.

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98
Q

general agency

A

Gives agents more power AND Holds the principal responsible for actions performed by their agent

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99
Q

universal agency

A

is the broadest classification of agency. It gives agents the power to act on behalf of their principal and make decisions on behalf of the principal.

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100
Q

Describe agency

A

in manner, authority and liability, and the form that it takes

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101
Q

Creating an agency

A

orally, in writing, by implication or action

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102
Q

express agency

A

is created by a written or oral agreement between the principal and the agent. All details are clear and definite.

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103
Q

implied agency

A

means there is nothing in writing. The agency relationship is recognized (or implied) because of the actions, conduct, and words of either or both parties.

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104
Q

agency by ratification

A

This occurs when a broker or sales agent has done something on behalf of, but without prior authorization of, a principal.

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105
Q

gratuitous agency

A

An agent can, of course, agree to work for no compensation. The agent is still held to all the duties of an agency relationship.

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106
Q

non-agency

A

the broker or the sales agent would have a contract with someone (either a seller, buyer, tenant, or landlord) and would only give services that do not require fiduciary duties.

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107
Q

The Sherman Antitrust Act

A

is a law that was passed in 1890 that prohibits trusts, contracts, combinations, or conspiracies “in the restraint of trade or commerce.” made monopolies a no no

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108
Q

Texas Fair Enterprise & Antitrust Act of 1983

A

a law that investigates and prosecutes things like price-fixing, bid-rigging, monopolies, cartels, group boycotts, and anti-competitive mergers and acquisitions.

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109
Q

fiduciary

A

meaning they have a legal and ethical responsibility to act in their client’s best interest

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110
Q

OLD CAR

A

obedience, loyalty, disclosure, confidentiality, accounting, reasonable care

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111
Q

IABS

A

is an agency disclosure notice (mandated by TRELA) that explains how agency is performed in real estate.

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112
Q

subagent

A

means a license holder who:
(A) represents a principal through cooperation with and the consent of a broker representing the principal and
(B) is not sponsored or associated with the principal’s broker.

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113
Q

SC:0

A

subagent commission- indicates that the brokerage is indicating that they will not share a commission with a subagent

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114
Q

BC:#

A

buyer representative commission- indicates percentage of the sales price that the buyer’s broker will receive

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115
Q

intermediary relationships

A

occur when the same real estate office is representing both the seller and the buyer as clients in the same transaction. The broker appoints associated license holders to work with both parties.

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116
Q

intermediary with appointments

A

frees up the two appointed agents to give a full degree of representation to both clients.

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117
Q

intermediary without appointments

A

the broker participates in an intermediary environment by being the single, neutral license holder working with both clients and overseeing the transaction

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118
Q

floor duty

A

or opportunity time is time where you can be the first to answer phone calls in the office to pick up potential clients

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119
Q

material fact

A

is any fact that is significant or essential to the transaction – that is, any piece of information that could reasonably be expected to influence a prudent individual’s decisions regarding the transaction.

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120
Q

substantive communication

A

is communication that involves a substantive discussion relating to specific real property.

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121
Q

obedience

A

only required if legal

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122
Q

reasonable care

A

assumes agent expertise will be used in handling clients concerns-standard is based on what most agents would do

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123
Q

disclosure

A

if it will help the client, the agent should share it- including sharing of material facts about a property

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124
Q

obedience

A

the principal is the ultimate decision maker-is only required if legal

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125
Q

loyalty

A

the principals best interests come before the agents interests-the buyers agent should get the lowest price possible, even if it means less commission

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126
Q

TDPTA

A

was enacted in 1973. The purpose of the act is to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty.

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127
Q

misrepresentation

A

which is the unintentional spread of false information

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128
Q

fraud

A

generally includes both affirmative misrepresentations and affirmative concealment, and the person making the misrepresentation is aware of the true facts.

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129
Q

economic damages

A

compensatory damages for pecuniary loss, including costs of repair and replacement

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130
Q

non economic damages

A

exemplary damages or damages for physical pain and mental anguish, loss of consortium, disfigurement, physical impairment, or loss of companionship and society-includes exemplary/punitive damages

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131
Q

treble damages

A

which is just a fancy legal-speak way of saying “three times as much

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132
Q

errors and omissions insurance

A

covers the entire office to avoid lawsuits whenever possible

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133
Q

warranty of authority

A

This is a kind of guarantee that an agent gives (explicitly or implicitly) to a third party that establishes that the agent has the authority to bind a principal – i.e., that the agent has the authority to make contracts, agreements, and enter into similar arrangements on the principal’s behalf.

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134
Q

FSBO

A

for sale by owner

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135
Q

Paragraph F7

A

one to four residential contract- stating that repairs should be performed by qualified and licensed workers

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136
Q

puffing

A

is describing a property in a flattering or favorable way.

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137
Q

equal opportunity in housing

A

is the concept that everyone will have equal access to housing with no discriminatory actions taking place.

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138
Q

Civil Rights Act of 1866

A

a set of basic rights regardless of their race, color, or previous condition of servitude.- to prevent housing discrimination- make and enforce contracts, to sue, be parties, and give evidence, to inherit, purchase, lease, sell, hold, and convey real and personal property.

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139
Q

Civil Rights act of 1964

A

included a prohibition against discrimination on the basis of race, color, sex and national origin in any program or service funded by the federal government such as schools, employment, public spaces

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140
Q

Executive Order 11063

A

1962-prohibited discrimination in the selling or leasing of property owned or funded by the federal government, including those properties relying upon Veterans Administration (VA) and Federal Housing Administration (FHA) loans.

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141
Q

Civil Rights Act of 1968

A

Title VIII of this act, also known as the Fair Housing Act, prohibits discrimination in real estate practices.

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142
Q

Fair Housing Act

A

says that it is unlawful to refuse to sell, rent to, or negotiate with any person because of that person’s inclusion in a protected class.

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143
Q

HUD

A

Department of Housing and Urban Development, commonly referred to as HUD, enforces the Fair Housing Act.

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144
Q

Protected classes

A

families crave resorts not small damp rooms: familial status, color, religion, national origin, sex, disability, race

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145
Q

ADA

A

Americans with Disabilities Act prohibits discrimination against people with disabilities in employment, transportation, public accommodation, communications, and governmental activities.

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146
Q

steering

A

s the illegal act of channeling buyers or tenants to certain areas based on demographics.

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147
Q

disparate impact

A

an action taken by a license holder could be adversely affecting a protected class.

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148
Q

Fair Housing Exemptions

A

housing for older persons, dwellings for religious organizations or private clubs, rental rooms in owner occupied property, single family residences sold by owner, housing for older persons, drug use record exemption

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149
Q

Texas Property Code

A

which includes an overview of people’s basic rights as tenants in a rental property, and the Texas Fair Housing Act.

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150
Q

TDHCA

A

Texas Department of Housing and Community Affairs helps protect and expand affordable housing

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151
Q

UPCS

A

uniform physical condition standards

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152
Q

LURA

A

land use restriction agreement

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153
Q

HTC

A

housing tax credit

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154
Q

HOPA

A

Housing for Older Persons Act

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155
Q

reasonable accomodation

A

is a change in rules, policies, or practices that may be necessary to afford a person with a disability an equal opportunity to use or enjoy a dwelling, such as assistance in filling out a rental application or allowing a unit transfer.

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156
Q

Housing and community Development act

A

1988- amendment to the Fair Housing Act that added familial status and disability to the list of protected classes.

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157
Q

Quality Housing and Work Responsibility Act of 1998

A

This act required HUD to set reasonable limitations on the number of occupants allowed in a dwelling. HUD concluded that a “two occupants per bedroom” rule — taking other factors into consideration — constitutes a good basic model.

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158
Q

Fair Housting Act Exemptions

A

religious organizations, private clubs, housing for older persons, drug use record, owner transactions

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159
Q

1997 Omnibus Appropriations Act

A

a privilege for lender-initiated self-tests of residential real estate related to lending transactions” as part of their efforts to ensure fair lending practices.

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160
Q

blockbusting

A

refers to the practice of encouraging the panic selling of homes below market value, generally by raising fears that an influx of individuals belonging to a particular minority group will decrease property values in a neighborhood and affect the area negatively.

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161
Q

conciliation

A

is an attempt to resolve the issues raised by a complaint or an investigation through informal negotiations between the aggrieved person, the respondent, and the HUD Secretary.

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162
Q

ECOA

A

Equal Credit Opportunity Act makes it illegal for a lender to discriminate against borrowers based on their membership in a protected class.

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163
Q

Community Reinvestment Ac

A

CRA- passed in 1977, the Act requires lenders to assist their local communities by participating in community development projects. The Act also says that lenders need to submit an annual statement including public comments about their attempts to help low-income communities.

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164
Q

redlining

A

areas where lenders would actually draw a line around a certain area on a map and refuse to lend to people in that area at all

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165
Q

Home Mortgage Disclosure Act

A

1975- This act requires lenders to disclose specific lending information, which HUD then uses to map lending patterns.

166
Q

Code of Ethics categories

A

Duties to clients and customers; duties to the public; duties to realtors

167
Q

preamble

A

The introduction to the National Association of REALTORS® Code of Ethics is called the:

168
Q

standard of practice

A

an example of how a particular Article has been applied

169
Q

NAR Code of Ethics

A

adopted in 1913

170
Q

Golden Rule

A

in NAR code of ethics and basically states treat others the way you want to be treated.

171
Q

3 qualities of REALTOR

A

competency, fairness, high integrity

172
Q

farming

A

sending out “seeds” in hopes of receiving a “harvest” of listings.

173
Q

TREC’s Canons of Professional Ethics and Conduct

A

are the ethical and professional standard for the real estate industry in Texas.

174
Q

6 Canons of Professional Ethics

A

Fidelity

Integrity

Competency

Consumer Information

Discriminatory Practices

Information About Brokerage Services

175
Q

fidelity

A

The real estate agent must place no personal interest above that of their clients.
The real estate agent must protect and promote the interests of their clients.
The real estate agent must be faithful and observant to trust placed in the agent.

176
Q

competency

A

stay informed on market conditions affecting the real estate business
exercise judgment and skill in the performance of the work
complete the continuing education
limit your activities to only the services that you’re fully qualified to provide

177
Q

IABS

A

The font size of the link should be 10-point if spelling out “Texas Real Estate Commission” and 12-point if using “TREC”.
A link to a completed IABS Notice in a readily noticeable place on the homepage of each business website should be provided.

178
Q

consumer information

A

let consumers know that TREC regulates brokers and agents
There are options for anyone who wants to check the license status of a real estate professional or file a complaint.
The homepage of the business website must have a link to the Notice in at least 10-point font.
display of Consumer Protection Notice TREC No. CN 1-2

179
Q

broker

A

is a person or business entity who is licensed to represent one of the parties in a real estate transaction in exchange for a commission or other valuable consideration.

180
Q

sales agent

A

a person who is associated with (sponsored by) a licensed broker for the purpose of performing any of the practices of real estate as described above and by TRELA.

181
Q

TREC Members

A

9 (All appointed by the governor and confirmed by at least 2/3 of the Texas Senate.)

182
Q

TREC membership term length

A

6 years

183
Q

Chapter 572

A

the law (chapter) imposes a code of ethics and standard of conduct on members of the Commission

184
Q

Promulgated Contracts

A

are contracts prepared and authorized by the Texas Real Estate Commission that must be used by real estate license holders.

185
Q

TRELA was passed in

A

1939

186
Q

TREC was created in

A

1949

187
Q

Texas Real Estate Broker-Lawyer Committee

A

is a committee that creates and corrects contract forms to be used by Texas real estate license holders. consists of 13 members- 6 appointed by commission- 6 from state bar of texas appointed by the president of the state bar- 1 public member appointed by governor

188
Q

broker license requirements

A

4 years of active experience as a license holder in texas, 900 classroom hours

189
Q

Renewal of license happens every

A

2 years

190
Q

Amount you pay if license is expired less than 90 days

A

1 1/2 the amount of renewal

191
Q

Amount you pay if license is expired between 90 days and 6 months

A

2x the amount of renewal

192
Q

easement

A

is a right owned by one party to use the land of another.

193
Q

right of way

A

is a type of easement used for passing through another’s land.

194
Q

abstract of title

A

is an abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances.

195
Q

exclusive single agency

A

when the broker has decided that they will represent either the seller or the buyer, but they will not represent both of them in a transaction

196
Q

Real Estate Recovery Trust Account

A

it is a fund managed by the Texas Real Estate Commission to provide payment to a party who has been damaged through the violation of The Real Estate License Act by a license holder.

197
Q

actual damages

A

also known as compensatory damages. These are based on the proven facts: the harm, loss, or injury suffered.

198
Q

punitive damages

A

compensation placed on mental distress or hardship

199
Q

nolo contendere

A

a person was accused of something and was a defendant in a trial, but will accept the decision of the court without pleading guilty to the charge.

200
Q

After receiving a notice of violation, how many days does a license holder have to request a hearing?

A

20 days

201
Q

How do you pay a penalty while still ensuring that your payment does not go through until the appeal is over?

A

give a supersedeas bond

202
Q

injunction

A

is an order that prevents a person from starting or continuing a specific action.

203
Q

number of members of Broker-Lawyer Committee

A

13 (6 brokers appointed by TREC, 6 lawyers appointed by the president of the Texas Bar, 1 public member appointed by the governor.) Term length is 6 years

204
Q

purpose of Broker-Lawyer Committee

A

Draft and revise contract forms for the approval and adoption by TREC.

205
Q

title insurance policy

A

sales agent must tell the buyer to get one for the property prior to close

206
Q

informal reference of property descriptions

A

street address

207
Q

legal property description

A

is a description that makes it clear to all parties exactly what property is being bought or sold.

208
Q

survey

A

is a legally valid drawing of the dimensions of a piece of real estate, including its boundaries and the location of improvements. (Improvements are permanent, human-made additions to the property.)

209
Q

metes and bounds

A

are a written legal land description identifying a piece of real estate’s exact dimensions and location in reference to a fixed and permanent monument.

210
Q

monuments

A

are objects used to mark the boundaries of a piece of real estate, are typically a metal pin or piece of rebar driven into the ground at each point of the description.

211
Q

metes

A

refers to the distance measurements used in the description.

212
Q

bounds

A

are the descriptions of the boundaries that enclose a parcel of real estate.

213
Q

point of beginning

A

definite starting point for a metes and bounds description

214
Q

rectangular survey system

A

also known as government survey system- uses a more refined version of the longitude and latitude system of mapping with a surveyed grid of meridians, baselines, townships, and ranges to describe a piece of land.

215
Q

plat

A

a drawing of a development used in the lot and block method

216
Q

parcel

A

individual lots combined to make a block

217
Q

lot

A

individual parcel of land measured and defined by the metes and bounds system

218
Q

block

A

a collection of lots (parcels)

219
Q

tract

A

the totality of the property represented on a plat

220
Q

lot and block system

A

also known as recorded plats

221
Q

1 township =

A

36 sections

222
Q

1 section =

A

640 acres (a square mile)

223
Q

1 acre =

A

43,560 square feet

224
Q

1 mile =

A

5,280 linear feet

225
Q

benchmark

A

s a permanent marker of known location and elevation, as established by a government survey team

226
Q

meridians

A

A true meridian running through an initial point, which with the baseline, forms the highest level framework for all rectangular surveys in a given area (longitude lines)

227
Q

baselines

A

A parallel of latitude, referenced to and established from a designated initial point, upon which all rectangular surveys in a defined area are based

228
Q

range

A

A column created by drawing a parallel line every six miles east and west of a principal meridian

229
Q

tiers

A

A measure of the distance north and south from a referenced principal baseline, in units of six miles

230
Q

section

A

A square made up of mile-long boundaries (1 square mile) that equates to 640 acres

231
Q

townships lines

A

Lines that intersect with range lines to create 36-square-mile parcels (6 x 6 square miles) called townships

232
Q

correction line

A

a line Every 24 miles north and south of a baseline

233
Q

guide meridian

A

every 24 miles east and west of a principal meridian

234
Q

check

A

every 24-by-24 mile area created by a guide meridian and a standard parallel is known as a

235
Q

datum

A

is a base point from which elevation is measured.

236
Q

contracts contain 1 of 2 types of agreements

A

performance agreement or forbearance agreement

237
Q

performance agreement

A

requires the contracting parties either to perform certain actions or to uphold certain contractual promises.

238
Q

forbearance agreement

A

requires one or more of the contracting parties to refrain from actions they are otherwise legally entitled to perform.

239
Q

addenda

A

are documents containing additional terms, information, or obligations that are attached to a contract.

240
Q

four corners doctrine

A

. This is a legal concept that states that the court can only consider what appears within the four corners of the documents.

241
Q

amendment

A

changes or makes modifications to an already agreed upon contract. All parties must sign amendments.

242
Q

bilateral contract

A

is an agreement in which both parties give consideration and promise to perform the actions specified in a contract.

243
Q

unilateral contract

A

is a contract in which only one of the two parties is bound to perform.

244
Q

executed contract

A

is a contract in which all promises and terms have been fulfilled by all parties.

245
Q

executory contract

A

is a contract that is not completely executed or performed.

246
Q

5 components of a valid contract

A

Mutual assent

Legally competent parties

Consideration

Lawful objective

Adherence to the Statute of Frauds

247
Q

3 types of acceptance

A

express acceptance, implied acceptance and conditional acceptance

248
Q

lawful objective

A

means that a contract cannot explicitly or implicitly call for any illegal activities.

249
Q

parol evidence rule

A

are the terms and conditions the parties discussed before the final contract was written

250
Q

assignment

A

Allows an individual to transfer their rights and obligations to a third party, who then takes on the role originally played by the person who made the transfer.

251
Q

novation

A

Allows an individual to create a new contract and replace the existing contract with the new, modified one.

252
Q

2 ways to notify world of ownership of property

A

actual notice (taking possession of property for others to observe directly) and recording the deed or constructive notice

253
Q

abstract of title

A

is a condensed history of title to a tract of land that summarizes the transfers of ownership and encumbrances.

254
Q

title insurance

A

is a policy that protects homeowners (and likewise, lenders) from certain financial losses due to title issues, such as defects, encumbrances, and liens.

255
Q

chain of title

A

(the complete history of the title, including all transfers from the original owner up until the present owner

256
Q

4 main types of estates

A

leasehold, equitable, freehold and concurrent estates

257
Q

assignment

A

rights are transferred

258
Q

wholesaling

A

The contract could be assigned to a new buyer with a fee paid to the original buyer. - form of assignment common in commercial real estate

259
Q

novation

A

it is understood to be the exchange of one contract for another.

260
Q

Statutory Estates

A

are created as a matter of state law, so they can vary from state to state.

261
Q

4 main types of estates

A

Freehold Estates

Leasehold Estates

Equitable Estates

Concurrent Estates

262
Q

freehold estate

A

it means that the individual with interest has some degree of ownership for an undetermined or unspecified and unlimited period of time.

263
Q

fee simple estate

A

It is of indefinite duration, freely transferable, and freely inheritable.

264
Q

Defeasible Fee Estates

A

is a property interest characterized by perpetual ownership on the condition that the property is used for a certain purpose or under specific conditions. (also called qualified fee)

265
Q

two common forms of defeasible fee estates

A

fee simple determinable and fee simple subect to condition subsequent

266
Q

fee simple determinable estate

A

This particular defeasible estate will come to an end automatically and immediately upon the occurrence of a designated event, the time of such occurrence is uncertain.

267
Q

fee simple subject to condition subsequent

A

These estates have specific requirements on them that, if they are not met, could cause the property to revert back to the original owner.

268
Q

life estates

A

is yet another type of freehold estate and is so named because it is owned for the duration of an individual’s life.

269
Q

remainder

A

refers to the estate that will pass to another party at the death of the person upon whom the life estate is based.

270
Q

reversion

A

is the concept that the property will revert back to the person who granted the life estate in the first place.

271
Q

remainderman

A

refers to the recipient of the remainder — either the grantor who set up the life estate or a designated third party.

272
Q

estate

A

he degree, quantity, and extent of interest one owns in property is referred to as

273
Q

statutory estates

A

re those that are created as a matter of state law, so they can vary from state to state.

274
Q

remainderman

A

recipient of the remainder, with a remainder interest (designated third party)

275
Q

reversion

A

Set themselves up for repossession of the property via -also known as reversionary interest

276
Q

If no third party is named as remainderman, when a life estate owner dies, the property reverts to the grantor.

A

grantor

277
Q

2 types of life estate

A

conventional life estate and legal life estate

278
Q

pur autre vie

A

When a conventional life estate is based on the life of someone other than the life tenant, it is referred to as

279
Q

conventional life estate

A

It is an estate created by the grantor that is based on the life of the life tenant OR the life of another.

280
Q

homestead

A

is a residence that is occupied by the individual or family who owns it.

281
Q

3 types of Freehold estates

A

fee simple absolute estate, defeasible fee estate, life estate

282
Q

leasehold estate

A

one party owns the property, but someone else lives there.

283
Q

reversionary right

A

possession of the property reverts back to the landlord after the lease term has expired.

284
Q

types of leasehold estates

A

estate for years, periodic estate, estate at will and tenancy at sufferance

285
Q

estate for years

A

leased possession of property for a certain, specific period of time stipulates a specific starting and ending time. notice is not required.

286
Q

periodic estate

A

has a fixed lease period wherein the lease is automatically renewed at the end of each lease period until the landlord or tenant act to terminate it. ex month to month lease. notice is required

287
Q

estate at will

A

When a tenant is occupying a property with the landlord’s knowledge and consent, but without a formal lease agreement

288
Q

tenancy at sufferance

A

occurs when a tenant remains in possession of the property beyond their lease term, without the consent of the landlord.

289
Q

holdover tenant

A

the tenant in a tenancy at sufferance

290
Q

equitable estate

A

This occurs when a freehold estate owner has ownership interest on the property, but another party has an interest in the property that is less than the interest afforded by ownership.

291
Q

encumbrance

A

ex. liens and easements- refers to any claim or right against a property held by another that is not the fee title owner.

292
Q

Equitable estates are commonly created by

A

encumbrances

293
Q

concurrent estates

A

an estate that is owned by two or more individuals (i.e., co-ownership).

294
Q

3 subcategories of concurrent estate

A

joint tenancy, tenants in common, community property

295
Q

joint tenancy

A

Property that is owned by two or more persons at the same time who all have an equal, undivided interest in the property

296
Q

tenants in common

A

When two or more parties own a property as a tenancy in common, each owner has a partial ownership interest and partial rights in a property

297
Q

community property

A

Recognized in Texas (and eight other states) as the type of joint tenancy that exists between married couples. The type of estate that is created by community property is also referred to as a statutory estate since it’s an estate that was established by law in the legal union of marriage.

298
Q

equitable estate

A

if another party has an easement on your property

commonly created by encumbrances

299
Q

freehold estates

A

defeasible fee estate

life estate

300
Q

leasehold estates

A

estate for years

periodic estate

301
Q

encumbrances

A

refers to any claim or right against a property held by another who is not the fee title owner.

302
Q

types of encumbrances

A

monetary (mortgage) or physical (easement)

303
Q

easement

A

is an interest in, or a right to use, another individual’s land or property, generally for a specific, limited purpose.

304
Q

easement appurtenant

A

exists when two tracts of adjacent land are owned by two different people.

305
Q

easement in gross

A

an individual or company is allowed to be on the owner’s property for specific purposes.

306
Q

encroachment

A

is an illegal use of another land owner’s property. It occurs when one owner’s property (such as a fence, tree, driveway) crosses the property boundaries of an adjacent property.

307
Q

quitclaim deed

A

“quits” or terminates their rights or claim to the property.

308
Q

cloud on the title

A

dispute on an otherwise clear title. ex. if there is a death and the property was inherited

309
Q

probate

A

is the legal process in which a court decides who will inherit property.

310
Q

special assessments

A

also known as improvement taxes

311
Q

ad valorem taxes

A

are general property taxes calculated according to the assessed value of real estate. (support state and local agencies)

312
Q

appropriation

A

The actual method by which a district imposes a tax. A district passes a law or ordinance that states the details of the proposed tax, and the district obtains the authority to collect needed funds for the proposed expenditures.

313
Q

tax levy

A

the action of the district officially imposing the tax

314
Q

equalization factor

A

used to multiply with the assessed value of a property to help equalize tax assessments throughout the state

315
Q

statutory lien

A

is a lien brought by a government entity

316
Q

tax lien

A

is a kind of statutory lien that is imposed against real property if the property owner becomes delinquent in the payment of taxes.

317
Q

general lien

A

A lien that includes the real estate and the personal property

318
Q

specific lien

A

. A lien that is against only the real estate

319
Q

voluntary liens

A

When a person takes some action that places a lien on their own property

320
Q

involuntary liens

A

when a property owner does not take any action to initiate the lien.

321
Q

statutory liens

A

Statutory liens are local, state, or federal law established liens for a specific set of circumstances. ex. federal tax liens, mechanical liens, ad valorem liens and judgment liens

322
Q

equitable liens

A

is a right that exists only in equity, with one party charging their property as security for a debt or loan. ex. vendors lien or if a buyer does not pay for a property in full

323
Q

mechanic’s lien

A

is created when a worker has not been paid for work done on a property.

324
Q

attachment lien

A

the court seizes property until it reaches a judgment- general and involuntary lien and may attach to all of the owner’s property except their homestead property.

325
Q

vendor lien

A

is a specific, involuntary lien on a property as security for the purchase price that arises when a seller has not yet received full payment for the property.

326
Q

80-10-10 loans

A

the buyer would make a 10% down payment, borrow 80% of the sales price from a mortgage company, and then finance the last 10% with the seller.

327
Q

vendee’s lien

A

is a document declaring a claim from a buyer that the seller has not transferred title to the buyer according to the agreement.

328
Q

Judgment Liens

A

When judgments specify the amount of money owed. These are general, involuntary liens and apply to both real and personal property

329
Q

Lis Pendens Notice

A

is used to inform the public when a lawsuit is filed that affects a specific piece of real estate.

330
Q

execution liens

A

can be issued by a court to force payment of monies owed from a judgment when a debtor does not pay. It gives court officers the right to confiscate and sell the debtor’s property to satisfy the debt. This is also known as a writ of execution.

331
Q

federal judgment lien

A

the government files this for failure to pay certain debts, such as student loans. These liens are filed in the county where the real property is held.

332
Q

bail bond liens

A

Bail bonds can be put up in the form of real estate in lieu of cash when a property owner is accused of a crime. this is a specific, statutory and involuntary lien.

333
Q

municipal utility liens

A

If a property owner refuses to pay bills for municipal utilities, the municipality can obtain this on the property. It’s specific and involuntary.

334
Q

mortgage

A

voluntary, specific lien

335
Q

mechanic’s lien

A

involuntary, specific

336
Q

federal judgment lien

A

involuntary, general

337
Q

judgement liens

A

takes effect only after it has been recorded in the county clerk’s office when decrees given by courts specify the amount of money owed

338
Q

execution liens

A

can be issued by a court to force payment of monies owed from a judgment when a debtor does not pay
gives court officers the right to confiscate and sell the debtor’s property to satisfy the debt

339
Q

municipal utility liens

A

when a property owner refuses to pay bills for municipal utilities

340
Q

protects professionals whose labor or materials has improved the value of real property
created when a worker has not been paid for work done on a property

A

mechanic’s liens

341
Q

bundle of rights

A

the ownership of land with all of the legal rights of possession, control, enjoyment, exclusion, and disposition

342
Q

riparian rights

A

govern the use of flowing water, such as rivers and streams that pass through or border a property. rivers and streams

343
Q

littoral rights

A

govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property. lakes and oceans

344
Q

accretion

A

is the process that results in the gradual increase in land area through deposits of soil by action of water.

345
Q

avulsion

A

is the sudden loss of land by flood or when a stream or river changes course. Because it’s a sudden change, no title is lost.

346
Q

alluvion

A

The soil itself that gets deposited is referred to as

347
Q

open beach law

A

This gives the public the right to use the beaches. This basically states that even though someone may own a lot, no building may be built in an area that is an easement for the public.

348
Q

doctrine of prior appropriation

A

“first in time, first in right”. laws that require water users to obtain a permit from the state. In general, those laws provide the highest priority to the earliest water users.

349
Q

TCEQ

A

Texas Commission on Environmental Quality is the agency responsible for governing water rights in Texas. They apply federal and state laws under the Texas Water Code.

350
Q

TCEQ commission

A

made up of 3 members appointed by governor and confirmed by state senate

351
Q

separate property

A

owned by just one of them, acquired before the marriage or by gift or inheritance

352
Q

4 types of encumbrances

A

lien, easement, deed restriction, encroachment

353
Q

3 forms of ownership

A

individually owned, co-owned, or held in trust

354
Q

individual ownership

A

occurs when one person is the owner of a property.

355
Q

severalty

A

property that is owned by a single individual is also sometimes referred to as being held in

356
Q

3 types of co-ownership

A

Tenancy in common,
Joint tenancy,
Community property, property held in partnership

357
Q

tenancy in common

A

each owner has a partial ownership interest and partial rights in a property

358
Q

who would hold the ownership of a co-owner who passes away?

A

the deceased’s named descendants

359
Q

joint tenancy

A

co-ownership in which the parties have an equal and undivided interest in the property.. This also has a right of survivorship.

360
Q

4 unities of joint tenancy

A

unity of interest, unity of time, unity of title, unity of possession

361
Q

community property

A

is property owned by a married couple, in which each spouse has ½ ownership of any property obtained during the marriage, plus a right of survivorship ownership after the death of either spouse.

362
Q

held in trust

A

an individual transfers ownership of that property to another individual, who in turn manages that property for a third party.

363
Q

trustor

A

The transferor or creator of the trust is called

364
Q

beneficiary

A

The individual who receives the trust is called

365
Q

trustee

A

The manager of the trust, a.k.a. the third party, is called

366
Q

3 types of trusts

A

living trust, testamentary trust, land trust

367
Q

living trust

A

created during someone’s life to manage their assets in life and in death.

368
Q

testamentary trust

A

is created through the use of a will when someone dies.

369
Q

land trust

A

land is purchased to be held for a long period of time for the benefit of certain people that are named when the trust document is created.

370
Q

revocable living trust

A

may be changed by the beneficiaries at any time.

371
Q

REITs

A

real estate investment trusts- made up of multiple investors investing in property

372
Q

general partnerships

A

in which the partners will be liable for all of the losses of the company. all partners can be held legally responsible for the other partners’ actions and commitments.

373
Q

limited partnerships

A

in which the partners have their personal assets protected and will only lose to the level of their investment.made up of both limited and general partners. The general partners do the work of managing and overseeing the business, and they usually accept unlimited personal liability.

Limited partners function more like investors, supplying capital (money) but playing no role in the day-to-day operation and management of the business.

374
Q

ingress

A

the right to enter property

375
Q

egress

A

the right to exit property

376
Q

partnership

A

is created when two or more parties agree to combine their property and talents to create a for-profit business.

377
Q

LLP

A

limited liability partnership- the general partners who see to the management and daily operations of the business assume full liability, while the limited partners (who function primarily as investors and are not involved in the day-to-day operations of the business) assume only limited liability for the amount they have invested.

378
Q

Uniform Partnership Act (UPA)

A

outlines the basic requirements of a partnership agreement, apart from any specific details that might be written into a particular partnership contract.

379
Q

Uniform Limited Partnership Act (ULPA)

A

written agreement - later amended to become RULPA revised uniform limited partnership act

380
Q

held in trust

A

involves a trustor, beneficiary, and trustee

created through the use of a will when someone dies

381
Q

partnership

A

creates financial and legal responsibilities for general partners
Limited partners’ liability is generally limited to the amount of their investments in a business.

382
Q

corporation

A

s a business entity that is considered to be an artificial person

383
Q

s corporation

A

Passes gains or losses to shareholders. there are no double taxes on this compared to another corporation. there can be no more than 100 shareholders.

384
Q

limited liability company

A

profits and losses pass through to partners. LLC is a hybrid of a limited partnership and an S corporation. none of the members (owners) of the company can be held personally liable for debt. The members have no interest or claim to the property that the company owns, plus the interest that the member has is considered to be personal property. multiple partners that actively participate but can’t be held liable for each others actions

385
Q

syndicates

A

is two or more people or companies that join together to create and run a real estate investment.

386
Q

LLP

A

limited liability partnership-multiple partners that actively participate but can’t be held liable for each others actions- profits and losses pass through to partners

387
Q

REIT

A

a trust that owns investment properties, investors buy shares

388
Q

listing agreement and buyer’s representation agreements

A

are basically service contracts made between a buyer or seller and a broker

389
Q

agency relationship

A

authorizing a license holder to represent the principal (the seller) and the principal’s property to third parties (buyers or tenants).

390
Q

the parties to the listing agreement

A

seller and broker

391
Q

cooperating broker

A

is the other broker or sales agent who shows the listed property to a buyer who subsequently purchases the property.

392
Q

MLS

A

multiple listings service– the service that exposes a property to a larger audience of buyers and also offers advantages to sellers, brokers, and buyers

393
Q

Owners of properties built before what year should be concerned about the possibility of lead paint contamination?

A

1978

394
Q

material fact

A

in a real estate transaction is any fact that is significant or essential to the transaction – that is, any piece of information that could reasonably be expected to influence a prudent individual’s decisions regarding the transaction

395
Q

Padgett v. Pharett (Cal. 1997)

A

material information wasn’t disclosed to the padgetts and they won the negligence law suet.

396
Q

seller’s disclosure notice

A

disclosure of the current piece of property that is filled out by sellers

397
Q

additional tax liability

A

must be disclosed to buyer. most common with ranches.

398
Q

Extra Territorial Jurisdictions (ETJ)

A

These are areas just a few miles outside the city limits that the city may decide to annex someday as part of their tax base. The distance limit for what counts as an ETJ is dependent on the population of the town or city.

399
Q

MUD

A

Municipal Utility District-taxing entity -Taxes are levied to support the building of infrastructure for basic utilities.

400
Q

Public Improvement District (PID).

A

If a county or city has made some type of improvement that benefits property owners in the area, there will be an additional tax that the owners will have to pay.

401
Q

Mold remediation certificate

A

If a home has had mold in the past, but the mold has been removed, the owner will receive this certificate from the company who worked on the home. It’s good for 5 years.

402
Q

Residential Real Estate Listing Agreement Exclusive Right to Sell

A

from TAR-The listing agreement outlines the relationship between the involved parties, what’s expected of them, and how the broker will be paid.

403
Q

open listing

A

multiple real estate brokers (and the owners themselves) have the right to sell the property. A commission will be paid to whichever agent is the procuring cause of the sale.

404
Q

pocket listings

A

listings that do not appear on the MLS or the time between when it is secured by the sellers’ agent and when it shows up on the MLS. can also happen when an owner wants to privately sell their home.

405
Q

exclusive right to sell listing

A

which is a listing contract in which the broker has the exclusive right to sell the property and the owner has agreed to pay them a commission

406
Q

exclusive agency addendum to listing

A

an addendum to the exclusive right to sell listing agreement that would turn the document into an exclusive agency listing and allow for this. In it, the sellers will name who they have in mind to sell the property to, or they will just reserve the right to sell it themselves.

407
Q

net listing

A

the seller names an amount they want the property to sell for, and the broker tries to sell it for more than that set price. the broker’s commission is the difference between the set listing price and the actual sales price.

408
Q

2 actions must take place before a license holder takes a net listing

A

the agent must give the seller an opinion of value for the property. the seller must insist that they want to sell using a net listing.

409
Q

Addendum for Property Subject to Mandatory Membership in a Property Owners Association.

A

disclosure of HOA fees and expections

410
Q

4 types of listings

A

net listing, exclusive agency, exclusive right to sell and open listing

Real Estate License (7 decks)

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