Study Guide Flashcards
Brokerage
overseeing the needs of the parties to a real estate transaction and seeing to its completion
Appraisal
providing a professional opinion of the value of real property
Appraiser
licensed or certified individual who provide the informed decisions of the value of real property
Mortage Lending
the business of providing money to individuals or corporations for the conditional transfer or pledge of real estate as security for the payment of a debt
Property managers are responsible for:
Day-to-day operations
Maintenance
Tenant relations
Keeping proper accounts
works for a firm that specializes in locating units for tenants in multifamily complexes
Apartment Locator
he business of providing a limited visual and general inspection of a property
by an inspector
Home inspection
Involves the acquisition of land for development into residential subdi
visions, retail centers, and other commercial uses.
Real Estate Development
Individual who is employed by oil and gas companies to do title work to deter
mine mineral ownership
Petroleum landman
BENEFITS OF HOMEOWNERSHIP
- Security
- Investment
- Occupancy
- Tax Benefits
land does not move; you must go to the land
Immobility
land does not wear out; it cannot be destroyed
Indestructibility
no two pieces of land are exactly alike; they don’t occupy the same place
Nonhomogeneity
PHYSICAL CHARACTERISTICS OF LAND
Immobility
Indestructibility
Nonhomogeneity
comes from the theory of supply and demand
Scarcity
refers to the fact that value is affected by man-made changes to the land
Modification
refers to the fact that land, and additions to the land such as buildings, take long
period to pay for themselves
Fixity
refers to the location of the property or land from an economic, not a geographic
viewpoint
Situs
ECONOMIC CHARACTERISTICS OF LAND
Scarcity
Modification
Fixity
Situs
An economic relationship of the quantity of a commodity a person wants to sell at certain prices and
the quantity a consumer wants to buy at various prices.
SUPPLY AND DEMAND
Demand is affected by
availability of credit
personal preferences
growth in employment
a body of law developed in England and based upon “common sense” and local
custom
Common Law
body of laws and enacted by federal and state legislative bodies
Statutory Law
passed in 1939 to protect the public against unscrupulous brokers
and sales agents in a real estate transaction
Texas Real Estate License Act
TEXAS REAL ESTATE COMMISSION May assess an administrative penalty of up to $______________ per day
5000
May issue or revoke real estate licenses
TEXAS REAL ESTATE COMMISSION
TEXAS REAL ESTATE COMMISSION is a nine-member commission, created in _________, to carry out the provisions of the License Act
1949
- Defined as the surface of the earth, extending downward to the center of the earth and upward
above the surface to infinity. - Includes natural things such as trees, crops, and water.
LAND
Rights that a person has in the land
Bundle of rights
Everything that is encompassed with land, including man-made additions (improve
ments) such as roads, houses, and commercial buildings
Real estate
Physical real estate plus the rights an individual has in the land
A broader term, stretching beyond the physical real estate that includes the rights that a per
son has in the land
Real property
Any permanent man-made addition to the land is considered to become part of the land
Such as buildings, landscaping, fences, patios, decks, roads, curbs
Improvements
EMBLEMENTS
- Annual crops produced with labor
- Attached to the land
- Personal property
- Belong to the person who planted them
The rights to oil, gas, and other minerals.
Commonly conveyed through a lease, mineral deed, or by reservation.
SUBSURFACE RIGHTS
Personal property that has been attached in such a way that it has become part of the real
property
Ceiling fans, window coverings, wall-to-wall carpet
Remain with the property when sold
FIXTURE
THREE TESTS OF A FIXTURE
Method of Attachment – permanent attachment
Adaptation – how it fits in
Intention of the parties – often considered the most important test
Extend above the surface without limitation.
Air Rights
Air rights can be
leased
sold
mortgaged
he right to develop (improve) the surface and use the resources extracted from or
near the surface, including stone, gravel, water, and limestone
Surface rights
To be cut off from
Surface rights, subsurface rights, and air rights may be removed from ownership
Severable
The process of real property becoming personal property
Severance
The right to use wind above a property
Wind rights
PERSONAL PROPERTY:
Chattel or Personality.
Something movable or temporary in nature.
Everything that is not real property
Transferred with a Bill of Sale
Freestanding
land can be privately owned by individuals
Allodial system
The right of the government to regulate and control the way land is used
The most common example of police power is zoning
A change in a zoning law may create a non-conforming use of the property
Police Power
The right of the government to take private land for public use.
The action of taking the land is called condemnation
EMINENT DOMAIN
The right the government retains to tax real property
Property taxes are ad valorem taxes
According to value
Create the highest priority lien on real property
Always paid first at a foreclosure sale
Taxation
separates one land use from another, such as residential use from commercial use
Buffer zone
ESCHEAT
- If a person dies intestate (without a will) and without heirs, the government will take title to
his real property under the right of escheat. - If the property is abandoned, escheat will also be the solution.
- The government does not want land to be unowned.
- Note: Single, without children does not mean without heirs.
Fee Simple or fee simple absolute is ownership with the most rights in land
Ownership of real property
FREEHOLD ESTATES
Interest in real property that is less than a freehold estate
LEASEHOLD ESTATES
- Specific starting date and ending date
- Survives the sale of the property and death of the landlord or tenant
Estate for years
- Automatically renews for like periods of time
- Termination notice needed
Periodic estate
- May be terminated by either party at will
- Terminates upon the landlord’s death
Estate at will
- Tenant remains on the property after the lease expires
- Tenant becomes a “holdover tenant”
- When a landlord accepts rent from a holdover tenant, the landlord creates a holdover
tenancy
Tenancy at sufferance
- Gives possession without ownership
- Personal Property
- Binding on the heirs of the landlord and the tenant
Lease
Estates created by statute or law
Statutory estates
- Protects a property someone lives in from forced sale
- Automatic
- Cannot be waived
HOMESTEAD PROTECTION
Exceptions to Homestead Protection
- Ad Valorem tax foreclosure
- HOA/POA foreclosure
- Mechanics and Materialman’s Lien (M and M Lien)
- Purchase loan foreclosure
A right or privilege that creates an interest in land that is less than ownership or possession
but nonetheless exists
liens, easements
EQUITABLE ESTATES
CATEGORIES OF LIENS
- General vs Specific
- Voluntary vs Involuntary
Attaches to one or more specific properties
SPECIFIC LIEN
Specific Liens include:
- Mortgage
- Mechanics and Materialman’s lien
- Ad Valorem Tax lien
Attaches to everything a person owns
GENERAL LIEN
General Liens include:
IRS judgement
Judgements
a lien that is freely given like a mortgage
Voluntary lien
a lien that is placed on the property against the wishes of the property owner,
like judgments and tax liens
Involuntary lien
- rights or privileges create an interest that is less than ownership or possession but nonetheless
exists - place limitations on property owners
- liens, easements, encroachments, restrictions, and leases
ENCUMBRANCE
- a right or privilege, or improvement that belongs to and passes with land but is not necessarily
a part of the land - Easements
- Leases that are binding on a new owner when the property is sold
- Fixtures
- Buildings and other improvements
APPURTENANCE
The intrusion of one’s property onto another’s property
Encroachment
The right to use someone else’s property
EASEMENT
The easement is specifically given by one party to the other. “A” sold lot “B” and
granted the easement in the deed.
Grant
The seller, in granting property to a buyer, reserves an easement in the deed.
“B” sold lot “A” and reserved the right to cross over “A” in the deed.
Reservation
In selling lot “B,” “A” did not explicitly grant the easement in writing but
implied in word or action that access to property “B” would be by an easement
Implied grant
Continuous use of the land over some time without the owner’s permission
may establish the right to use the land. (An encroachment is the unauthorized intrusion of
another’s property onto an adjoining property. An encroachment that is allowed to remain
can eventually acquire the right to be there.)
Prescription
Prescription may also be called limitation.
The court requires the easement or states it is necessary for the benefit of the
owner. (Usually in the case of “landlocked” property.)
Necessity
The government, under its power of eminent domain, takes an easement.
The government will take an easement for itself, the utilities, or the railroads.
Condemnation
Bringing two or more properties together, May terminate an easement
MERGER
The right of a landowner to use water that borders a property.
Water rights
The right to use water from a lake, ocean, or sea
Littoral Rights
The right to use water from a river or stream
Riparian Rights
a parcel of land that has never been developed
Greenfield
a parcel of land capable of redevelopment
Greyfield
a site known or suspected to be hazardous that is usually occupied by industrial manufacturers or chemical plants. Has the highest potential to be hazardous
Brownfield
A home that is not attached to another dwelling.
Often situated in a subdivision of similar properties unattached to each other
SINGLE FAMILY HOME
Multifamily complexes containing units with individual fee simple ownership of
the unit and interest in common areas
Condominium
Buildings owned by a corporation with shares of the corporation owned by the occupants of
the building.
The occupants have a proprietary lease on their unit.
Not real property.
Cooperative
Distinct living unit on an individual lot that shares a common wall with another unit
Townhome
Building types or combinations of buildings that allow mixed use like
residential, office, retail, and entertainment spaces.
Mixed-use development
The owner has the right to occupy a property for a specified time interval, often by the week.
Often condominiums that are situated in resort areas.
Timeshare
The profit on the sale of an asset
Tax Exempt limits $250,000 for an individual return and $500,000 if married and filing
jointly
CAPITAL GAIN
The market value of a property less the outstanding debt
Equity
A contract between the insurance company and the policyholder covering a private residence
covering losses related to the main structure, outbuildings, contents, and personal liability
Does not cover flooding
HOMEOWNERS INSURANCE
A claims history database that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy
Comprehensive Loss Underwriting Exchange (CLUE)
Windstorm Insurance
Insurance underwritten in Texas by the Texas Windstorm Insurance Association (TWIA) to cover wind and hail damage on properties along the gulf coast.
Flood insurance
Insurance through the National Flood Insurance Program (NFIP) to cover properties that
flood. Standard homeowner insurance does not cover flooding
Insurance for personal property within a building
Personal Property Coverage
A sole individual or entity owns real estate
Estate in Severalty
Ownership of real estate by two or more unmarried owners
Co-ownership
Ownership of real estate by two or more entities in the undivided interests
The most common type of co-ownership
Ownership passes to heirs
TENANCY IN COMMON
A type of co-ownership with the right of survivorship
Four unities of joint tenancy are time, title, interest, and possession
A poor man’s will
JOINT TENANCY
In some states, ownership by spouses
Not recognized in Texas
A type of joint tenancy
Tenancy by the Entirety
- A concept of Spanish law, and marriage is regarded as a partnership, rather than husband and
wife becoming one as in English law. - Most property acquired during a marriage is owned equally by both spouses and cannot be
conveyed or sold without the signature of both parties - Property inherited by one spouse may remain separate property
- Income or profit from separate property may remain separate property
COMMUNITY PROPERTY
Entities An entity created for the benefit of another
Trusts
A business venture that is owned by one individual.
Sole proprietorships
A business venture created with an agreement between more than one person
Partnership
Ownership by a corporation. A corporation is an entity that can own real
estate.
Corporate ownership
Gives the owner the right to occupy the property for a certain time period, typically
by the week
Timeshare
A relationship between one person and another when one person acts for or on behalf of another person.
Agency
A person who represents another from whom he has derived authority
Represents of works for the principal
AGENT
The person an agent works for or on behalf of
Hires and gives authority to an agent
PRINCIPAL
Another name for principal
Client
A person who works in an agency relationship for or on behalf of another person.
A relationship based on trust
FIDUCIARY
OLD CAR
Obedience
Loyalty
Disclosure
Confidentiality
Accounting
Reasonable Care
handle funds with care. Never engage in commingling or conversion
Accounting
____________ is NOT a duty.
Trust
At the first contact with a party to a potential transaction, a license
holder must disclose to that party whom he or she represents and maybe done orally or in writing.
Disclosure of Representation
An agency relationship that allows the agent to transact all matters for the client.
Agent may bind their client
UNIVERSAL AGENCY
An agency relationship that allows the agent to bind/obligate the client into a particular
transaction or business.
Carry out the affairs or business of another
GENERAL AGENCY
The most limited of all the agency relationships
Referred to as “limited agency.”
Agent may perform only limited duties for NOT able to bind the principal
SPECIAL AGENCY
A person whom an agent does not represent
Customer
Oral or written instructions
Express Authority
The behavior of the parties
Created by actions or evidence
IMPLIED AGENCY
When actions lead another person to assume that one is an agent
Ostensible Agency
When an agent acts without prior authorization, and upon learning of this
action, the principal accepts it
Agency by ratification
A broker that will only represent one client in a transaction at a time.
Single-Agency Broker
A broker that facilitates a buyer and seller to reach an agreement in a real
estate transaction both does not represent either party
Transactional Broker
A broker who has written consent to represent both the buyer and the seller
in the same transaction
Dual Agency Broker
The seller side of the transaction.
Listing Side
The buyer side of the transaction.
The buyer retains the services of a broker
SELLING SIDE
A transaction that has one broker working with the seller and another broker
working with the buyer.
Cooperative Sale
When one firm sells a property listed by another firm to a buyer it does not represent,
the selling firm represents the seller
Subagency
When a single firm sells one of its listings
In-House Sale
A set of rules that make it possible to bring client buyers and sellers together while at the same
time representing their best interests
The broker represents both parties in a single transaction
Requires written consent of both parties
Appointed associates may give advice and opinion to their respective parties
INTERMEDIARY
The required method in Texas to provide written notice to consumers regarding information
about brokerage services.
Must be provided at first substantive dialogue
IABS: INFORMATION ABOUT BROKERAGE SERVICES
receive a 1099-NEC for tax purposes
Independent Contractors
most license holders are ____________ _________________ of the brokerage
Independent Contractors
Broker returns sales agent’s license to TREC immediately upon
termination
Terminate Sponsorship
Texas consumer protection law
Deceptive Trade Practices Act
Received by a broker
Negotiated between the broker and the client (seller or buyer)
Not set between brokers
COMMISSION
UNLICENSED ASSISTANTS ALLOWED ACTIVITIES
Answer phone calls
Register prospects
Greet prospects and give general information about the area
Type correspondence
Schedule appointments
Be a closing or transaction coordinator
Telemarket, if not soliciting for listings or buyers
When a broker or sales agent is the owner of a property being sold or is interested in buying a
property.
This dual role must be disclosed by the license holder.
AGENCY COUPLED WITH AN INTEREST
Passed in 1939
Protect the public against unscrupulous brokers and sales agents
1101 of the Occupations Code
TEXAS REAL ESTATE LICENSE ACT (TRELA)
Created in 1949
Protects the consumer from unscrupulous brokers and sales agents
Issues and revokes real estate licenses
Oversees the provisions of the License Act
Calls witnesses
Examines witnesses under oath
Inspecting records and document
TEXAS REAL ESTATE COMMISSION (TREC)
A person who, in exchange for a commission or other valuable consideration or with the
expectation of receiving a commission or other valuable consideration, performs for another person a brokerage service
Broker
A domestic entity or foreign entity as defined by Section 1.002, Business Organizations Code, that is qualified to transact business in this state.
Business Entity
A person registered by TREC to sell, buy, lease, or transfer easements or right
of way for another for compensation.
Certificate Holder
A negotiated compensation in a broker’s employment contract
Commission
A broker or sales agent licensed under the Texas Real Estate License Act.
License Holder
A person who offers for consideration to locate a unit in an apartment
complex for lease to a prospective tenant
Residential Rental Locator
A person who is sponsored by a licensed broker for the purpose of performing a bro
kerage service
Sales Agent
A license holder who represents a principal through cooperation with and the consent of a broker representing the principal; and is not sponsored by or associated with the principal’s broker
Subagent
Texas legislation providing for the review of the Texas Real Estate Commission
and the Texas Appraiser Licensing & Certification Board by the Sunset Commission.
Texas Sunset Act
Housed at Texas A&M University, this center collects and
compiles data relating to real estate in Texas.
Texas Real Estate Research Center
Comprised of 13 members, this committee drafts and revises con
tract forms that are capable of being standardized to expedite real estate transactions and minimize
controversy.
Broker-Lawyer Committee
A broker that represents both parties of the transaction.
Intermediary
The purpose of the account is to protect aggrieved individuals who suffer a monetary loss due to illegal acts of license holders.
REAL ESTATE RECOVERY TRUST ACCOUNT
_____________ is the maximum per transaction
$50,000
____________ is the maximum on behalf of any one license holder
$100,000
Maximum payment amounts are set by the __________, not by TREC.
legislature
Each applicant for licensure pays _________ towards the Trust Account
$10
___________ administers the Recovery Trust Account
TREC
An aggrieved person who obtains a court judgment against a license or certificate holder for an act described by Section 1101.602 may, after final judgment is entered, execution returned nulla bona, and a judgment lien perfected, file a verified claim in the court that entered the
judgment.
REAL ESTATE RECOVERY TRUST ACCOUNT
TREC invests in
Treasury Bills and Notes
If the amount in the account exceeds _________ million, the excess goes into the state’s general
revenue fund.
$3.5 million
A consumer has ____ years from the date of an incident to file a complaint with TREC
against a license holder
4
A broker on inactive status:
may not perform any real estate activity
must pay renewal fees.
Production for inspection and copying of records and documents
Calling of witnesses
Examination of witnesses under oath
SUBPOENA AUTHORITY OF TREC
REQUIREMENTS TO OBTAIN A TEXAS REAL ESTATE SALES AGENT LICENSE
be a citizen of the United States or a lawfully admitted alien
be at least 18 years of age
be determined, by the commission, fit to engage in the profession
meet the education requirements
submit application with or without a sponsoring broker
show competency by passing the state test
submit fingerprints to TREC using the TREC form
complete the educational requirements for the sales agent total 180 hours in qualifying real estate courses
________ may solicit and accept gifts, grants and donations from any source
TREC
Part of the TREC Rules requiring fidelity, integrity, competency, the use of Consumer Information Notice, and the refraining of discriminating
practices
Canons of Professional Ethics and Conduct
A real estate broker or sales agent, while acting as an agent for another is a fiduciary and must place the interest of the client of that of the agent.
Represent the best interest of the client
Meticulously - Marked by extreme or excessive care in the consideration or treatment of details; careful.
Scrupulously Acting in strict regard for what is considered right or proper; punctiliously exact; painstaking.
Fidelity
A real estate broker or sales agent has a special obligation to exercise integrity in the discharge of the license holder’s responsibilities by employing prudence and caution so as to avoid
misrepresentation by acts of omission or commission
Integrity
The broker or sales agent must be knowledgeable and competent as a real estate brokerage practitioner.
Competency
A written notice published by TREC to be provided by a broker or a sales
agent to a consumer
Consumer Protection
No real estate license holder shall inquire about, respond to or facilitate
inquiries about, or make disclosure which is intended to indicate any preference, limitation, or discrimination of a protected class of people
Discriminatory Practices
Founded in 1908, the largest trade association in the United States, the National Association of REALTORS supports its members and protects the public through the association’s Code of Ethics
National Association of REALTORS®
Federal law that prohibits discrimination based on race or color.
Civil Rights Act of 1866
Civil penalties but not criminal penalties
Civil Rights Act of 1968
The Federal Fair Housing Act
Civil Rights Act of 1968
Parents or guardians living with children
Protects families from being steered into particular buildings at an apartment complex
Familial Status
Taking buyers or renters to or away from a particular area based on race, religion, etc.
Steering
Any attempt to induce panic selling in a neighborhood for financial gain
Also known as panic peddling
Blockbusting
A change to a rule, policy, or service for a disabled person to be able
to use housing
Reasonable Accommodation
A voluntary marketing agreement that is negotiated between HUD and national associations that represent the housing industry promoting equal housing opportunities for all.
VAMA
Passed in 1989
Texas Fair Housing Act
A federal law prohibiting discrimination against people with disabilities by denying them the full and equal enjoyment of goods, facilities, accommodations, services, and privileges
Americans with Disabilities Act (ADA)
Exemptions from American with Disabilities Act
A private club
A historic building
A single-family home
Religious organizations
The federal agency that is responsible for enforcing federal consumer financial law.
Consumer Financial Protection Bureau
A federal law requiring that each credit applicant must be evaluated based on the same information as every other applicant
Prohibits discrimination in lending
Equal Credit Opportunity Act
Prohibits redlining by banks
Community Reinvestment Act
The refusal to lend money in a particular area because of its location
Redlining
A federal law designed to protect consumers against unfair credit
reporting practices and protect credit privacy.
Fair Credit Reporting Act
Used instead of Government Survey System
METES AND BOUNDS
Most common legal description
METES AND BOUNDS
A legal description that uses terminal points and angles to describe a parcel of land
METES AND BOUNDS
A permanent marker installed on the land by a surveyor used as a reference for the pint of beginning of a metes and bounds survey
Monument
A legal description that uses a recorded map or plat to describe land
LOT AND BLOCK
Commonly used in residential subdivisions
LOT AND BLOCK
The design of a new subdivision and lay out the streets, lots, utilities, common
areas, and easements recorded at the county
Recorded Plat
DEED RESTRICTIONS
Restrictive Covenants
Private agreements
Covenants, Conditions, and Restrictions (CC&Rs)
Recorded in public records
Adopted by Congress in 1785
GOVERNMENT SURVEY SYSTEM
the system is the overlay of a grid upon the land
GOVERNMENT SURVEY SYSTEM
Also known as the Rectangular Survey System and the Public Lands Survey System
GOVERNMENT SURVEY SYSTEM
An overlay of vertical and horizontal lines creating a system of squares over land.
Grid
North/south lines at six-mile intervals as part of the government survey system
Ranges Lines
East/west lines at six-mile intervals as part of the government survey system
Township Lines
Informal Reference
Street address
A technique used to determine the position of points and boundaries of land.
LAND SURVEYING
The technique, profession, and science of accurately determining the terrestrial or three-dimensional position of points and the distances and angles between them.
LAND SURVEYING
Commonly practiced by licensed surveyors and members of various building profession
LAND SURVEYING
43,560 square feet
ACRE
Convert Acres to Feet
multiply acres X 43,560 sq ft
Convert Feet to Acres
Divide feet by 43,560 sq ft
Division of a property between multiple owners
May require a survey
PARTITION
One of such certainty and accuracy that an individual can go to the ground and identify the
land
LEGAL DESCRIPTION
All conveyances of real property must contain a
LEGAL DESCRIPTION
An employment contract between a seller or landlord and the broker
Listing Agreement
A listing that gives the seller the right to list the property with multiple competing
brokers and to sell the property personally without liability for payment of a commission
Open Listing
A listing that the seller agrees to list the property with only one broker during
the listing term, with the provision that the seller can sell the property independently, without pay
ing a commission
Exclusive Agency
the broker is the only listing broker, and a commission is paid even if the property is sold by
the owner
Avoids a procuring cause controversy
Exclusive Right to Sell
A listing that makes the broker’s commission the difference between the seller’s established
net and the price that the buyer is willing to pay
Net Listing
A marketing tool used to expose a listing to the greatest pool of buyers
Allows member brokers to share their inventory of listings with other member brokers
MULTIPLE LISTING SERVICE
Sales information from the MLS data to show a seller the market
value of the property
Comparative Market Analysis
An analysis of price used by a broker and typically requested by an attorney, a relocation company, or by a lender.
Broker’s Price Opinion
The individual who, through a series of uninterrupted activities or actions,
brought about the completion of a contract
Procuring cause of sale
Texas consumer protection law
Deceptive Trade Practices Act
Marketing that uses adjectives and opinions rather than details or facts
Not misrepresentation
Puffing
Fungi that may be found both indoors and outdoors
Mold
PRESENTATION OF OFFERS
All offers must be presented
No required order of presentation
If the seller defaults on the contract, the buyer is the injured party
DEFAULT
Listings terminate by the expiration of the time period stated in the listing agreement
TERMINATION OF A LISTING
Exceptions for the requirement of a Seller’s Disclosure include:
A sale by a bankruptcy trustee
A sale from one co-owner to one or more other co-owners
A sale to or from any governmental industry
Stigmatized properties include
allegedly haunted properties
An agreement between two or more parties to do something or to refrain from doing something.
Contract
A contract created by behavior,
Actions or evidence
Implied Contract
A contract created by acceptance of an offer
Express Contract
A contract that is binding on both parties requiring both parties to perform,
and creating mutuality.
Bilateral Contract
A contract where only one party made a promise, only one party can be sued
Lacks mutuality
Unilateral Contract
A contract that meets all of the requirements of law
Valid contract
Voidable Contract
A contract that cannot be enforced against one or more of the parties.
A minor has a voidable contract
Someone under the influence of alcohol may have a voidable contract
A contract that does not meet the requirements of law and does not affect the parties.
Void Contract
A contract that cannot be enforced because a flaw in the contract or some other issue
A contract that violates the statute of frauds
Unenforceable Contract
Both parties agree to terminate a contract
Mutual Rescission
A law that states that contracts for the conveyance of any interest in real estate
must be in writing to be enforceable
Statute of Frauds
The period of time from the effective date of the contract through the closing
of the contract
Executory Contract
When a party to a contract fails to perform under the contract
The defaulting party injures the other party
DEFAULT
REMEDIES IN TREC’S CONTRACTS
Suit for Specific Performance
Suit for Monetary Damages
Keep earnest money as Liquidated Damages
A contract that has all of its terms and conditions met.
A contract is fully executed at closing
Fully Executed
A transfer of all of the rights related to the contract to another party known as the
assignee
Assignment
A new contract is substituted for an existing one
Novation
The process of dispute resolution as an alternative to settling the dispute in court.
Mediation
Gives the buyer the unrestricted right to terminate the contract within the option period
Option
drafts/writes the contract forms and addenda that TREC
promulgates
The Broker-Lawyer Committee
TREC CONTRACTS
One-to-Four Family Residential Contract (Resale)
Residential Condominium Contract (Resale)
New Home Contract (Completed Construction)
New Home Contract (Incomplete Construction)
Unimproved Property Contract
Farm and Ranch Contract
TREC has no promulgated contract forms for the sale of cooperatives (co-ops) nor for commercial transactions
