Fundamentals of Real Estate Roles and Terms

Texas Real Estate License Exam Section 1 of 6: Principles of Real Estate 1 Question Apartment Locator Tenant Broker Client Sales Agent Apprentice Education (SAE) Consumer Land Real Estate Real Property Personal Property Immobility Puffing Nolo Contendere Allodial System Feudal System Improvement Subsurface Rights Surface Rights Air Rights Water Rights Littoral Rights Riparian Rights Personal Property Real Estate Real Property Fixture Trade Fixture Adaptation Fructus Naturales Fructus Industriales Cooperative Answer a real estate license holder who locates dwelling units for prospective tenants one who possesses a property under a lease without ownership someone who assists in buying and selling to receive a commission the person that an agent is representing, made official through a representation document an educational requirement for courses in the first two years of being licensed as a real estate agent a person or company that buys or leases any product or service the surface of the earth, extending down to the center of the earth and up into space includes the land and any natural or manmade improvements attached to it includes land and any natural or manmade improvements attached to it, plus the bundle of legal rights of ownership items that can easily be removed from the land characteristic of land stating that land has a particular geographical location that will remain constant, barring erosion or slow, geological changes the exaggeration of opinions about real estate a plea in a criminal court in which the defendant accepts the punishment without admitting guilt ownership of land in which the land is owned free and clear; it is the opposition of the feudal system a form of ownership from England’s past in which royalty owned the land any permanent man-made addition to land ownership of the minerals, gas, or oil beneath the surface of a piece of real estate ownership of the land in a parcel or real estate but limited only to the plane the right to use the airspace above the surface of land the right to enjoy the water that borders a property rights that govern lakefront or oceanfront property and usually allow the property owner to use the water bordering their property rights that govern the use of flowing water, such as rivers and streams that pass through or border a property any item that is not real estate, also known as chattel or personalty a part of the surface of land to the center of the earth and upward to space, plus all improvements made by man or nature land from the surface to the center of earth and upward into space including everything attached by man or nature as well as the bundle of legal rights of the ownership an object that was once personal property, but which has now been firmly attached to the land in such a way that it becomes part of the estate personal property attached to real property that is owned by and needed for a tenant’s business the use and modification of a particular item for a specific use in a property trees, bushes, grass, and uncultivated plants, usually considered to be real property because of their permanence annually cultivated crops generally considered to be personal property; also known as emblements a residential building in which the title is held by a corporation, the residents are stockholders in the corporation, and the residents have a lease a subdivision or development that includes single-family dwellings along with some common elements such as parks, pools, community recreational centers, or golf courses residence with multiple owners who share the right to possession for a specific period Timeshare of time with the other owners Ad Valorem Tax a tax calculated according to the assessed value of real estate Homestead Tax Exemption reduces the amount of ad valorem taxes assessed on a homestead the dividing of expenses for items like taxes, interest, and rent at the closing between Prorate the seller and the buyer the process of paying off a debt/mortgage in regular installments based on a fixed Amortization payment schedule Arrears payment for an item or service after it is received stands for Comprehensive Loss Underwriting Exchange, a database used by insurance CLUE Reports agencies that contains information on any claims made in the past five years by property owners on specific properties stands for Principal, Interest, Taxes, and Insurance, which are the components of most PITI mortgage payments Agency relationship between a client and a broker Express Agency agency created by a specific agreement created when an agent is given permission to act on behalf a client through conduct/communication but permission is not established orally/in writing. Doesn't Implied Agency have to be an action, can be a statement that leads the client to believe the agent is theirs. created when a license holder acts on behalf of but without prior authorization of a Agency by Ratification principal and that principal accepts the license holder’s action after the fact a broker who negotiates a contract between two parties that are both being Intermediary Broker represented by that broker Appointed License Holder a sales agent license holder who was designated to work with a client during an intermediary transaction the relationship between a broker and a principal wherein the broker has restricted Special Agency authority to act on behalf of the principal to achieve one specific objective Agent a person who acts on behalf of someone else a document filled out by the seller concerning any defects in the improvements on the Seller’s Disclosure Notice property a license holder from one office who represents the seller through cooperation with Subagent the listing broker of another company Material Fact any fact that is significant or essential to the transaction Fiduciary Duties a responsibility to act in the best interest of your client — the highest standard Fraud a misstatement made intentionally to deceive the first law that began to promise equal rights for all citizens regardless of race or Civil Rights Act of 1866 color a federal law that prohibits discrimination in housing based upon race, color, religion, Fair Housing Act or national origin and was amended to include sex, disability, and familial status; a.k.a. the Fair Housing Act of 1968 Disability a physical or mental impairment that limits at least one major activity in someone’s life an illegal act of channeling buyers or tenants to certain areas, either to keep the area Steering demographically the same or to change the demography of the area American with Disabilities a federal law enacted to remove barriers for individuals with disabilities Act Equal Opportunity in the concept that everyone will have equal access to housing with no discriminatory Housing actions taking place Texas Department of a department that administers assigned programs on Texas housing, invests resources Housing and Community strategically, and develops high quality affordable housing which allows Texas Affairs communities to thrive Reasonable a change in rules, policies, or practices that may be necessary to afford a person with a Accommodation disability an equal opportunity to use or enjoy a dwelling Protected Classes groups that are illegal to discriminate against, as defined by the Fair Housing Act Housing and Community a 1988 amendment to the Fair Housing Act, that added familial status and disability to Development Act the list of protected classes Planned Unit Development (PUD) Familial Status Blockbusting Equal Credit Opportunity Act (ECOA) Community Reinvestment Act Redlining Home Mortgage Disclosure Disability REALTOR® Code of Ethics Canons of Professional Ethics and Conduct Texas Real Estate License Act (TRELA) Texas Real Estate Commission (TREC) Broker Sales Agent Attorney Real Estate Center Promulgated Contracts Texas Real Estate BrokerLawyer Committee Errors and omissions insurance Abstract of Title Real Estate Recovery Trust Account Nolo Contendere Commingling Survey Metes and Bounds Point of Beginning Monument Rectangular Survey System Lot and Block Plat Longitude Lines/Meridians Latitude Lines/Parallels Range protected class that applies to any family with at least one person under 18 years of age with at least one parent or legal guardian the illegal practice of causing owners to sell their homes by creating fear that minorities are moving into the area; also known as panic peddling law prohibiting credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or use of public assistance helps commercial banks and savings associations meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods the illegal act of an lender denying mortgages in certain areas of town federal act that requires lenders to disclose specific lending information, which HUD then uses to map lending patterns a physical or mental impairment that substantially limits one or more of an individual’s major life activities a registered trademark designed for the sole use of identifying the members of a local board who are affiliated with the National Association of REALTORS® a document created by the National Association of REALTORS® that their members pledge to abide by the Texas Real Estate Commission’s code of ethics for real estate license holders; contained in Chapter 531 of the Texas Administrative Code a law that governs the licensing, education, and activities of real estate license holders practicing brokerage in this state a group of nine people appointed by the governor and confirmed by the state senate that are to set policy and rules from the real estate license act someone who assists in buying and selling to receive a commission a person who is licensed to practice real estate and is sponsored by a real estate broker a person who is licensed to give legal advice located at Texas A&M University to provide the results of research and education to license holders contracts prepared and authorized by the Texas Real Estate Commission that must be used by real estate license holders. There are a few exceptions to this rule. a committee that creates and corrects contract forms to be used by Texas real estate license holders insurance that protects against mistakes a license holder might make in real estate transactions; does not cover acts of fraud or other intentional misconduct an abbreviated history of a property, including info on any transfers, grants, wills, conveyances, liens, and encumbrances 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 a plea in a criminal court in which the defendant accepts the punishment without admitting guilt an illegal act of mixing personal funds with a client’s funds a legally valid drawing of the dimensions of a piece of real estate, including its boundaries and the location of improvements a legal land description method identifying a piece of real estate’s exact dimensions and location in reference to a fixed and permanent monument the definite starting point for a metes and bounds description an object used to mark the boundaries of a piece of real estate a method to describe land by using principal meridians and base lines; also known as the government survey system a way to describe a piece of land by referring to the lot and block numbers in a subdivision that were assigned by the developer a map of a subdivision indicating its location and property lines units of measurement that run north to south to Earth’s poles units of measurements that run east to west, parallel to the equator a column created by drawing a parallel line every six miles east and west of a principal meridian lines that intersect with range lines to create 36-square-mile parcels (6 x 6 square miles) called townships Acre a measure of the surface of land (43,560 square feet) Section a square made up of mile-long boundaries (1 square mile) that equates to 640 acres a base point from which measurement is taken by moving upward or downward, Datum marking standard heights or depths Air Lot airspace above a parcel of land a map where curved lines (contour lines) connect contiguous points of equal elevation Contour Map to define the contours of the land, also called a topographic map the science of determining points and the distances and angles between them, often Land Surveying for the purpose of establishing land maps and boundaries for ownership transfers of real estate Contract a legally binding and enforceable agreement to do or not to do a specific thing of a contract that requires the contracting parties either to perform certain Performance Agreement part actions or to uphold certain contractual promises part of a contract that requires one or more of the contracting parties to refrain from Forbearance Agreement actions they are otherwise legally entitled to perform an agreement in which both parties give consideration and promise to perform the Bilateral Contract actions specified in a contract an agreement in which one party promises to perform and the other party accepts this Unilateral Contract promise, requiring only one party to act Executed Contract a contract in which all terms have been fulfilled by all parties Executory Contract a contract that is not completely executed or performed documents containing additional terms, information, or obligations that are attached Addenda to a contract a legal concept stating that the court can only consider information that appears Four Corners Doctrine within the four corners of the documents Amendment changes or makes modifications to an already agreed upon contract a law which requires certain types of contracts to be in writing and to be signed by all Statute of Frauds parties who are bound by the contract a legal term that states that if the important details of an agreement were discussed Parol Evidence Rule but fail to make it into the written contract, the written and signed contract is given authority over any word of mouth this occurs when one or more of the contracting parties perform only a portion of the Partial Performance agreed-upon contractual duties when a party performs the majority of the contract’s requirements but does Substantial Performance occurs not perform according to the contract’s stipulations Contingencies stipulations or conditions that must be satisfied before the contract can be performed Assignment the transference of obligations in a contract from one party to another Novation the act of replacing an existing contract with a new, modified one the placing of documents about the claims and ownership of real estate in the county Recording clerk’s office at the courthouse a condensed history of title to a tract of land that summarizes the transfers of Abstract of Title ownership and encumbrances a document written by a lawyer that identifies any defects in an AOT that MOMN Attorney’s Opinion of Title state that the seller has marketable title to the property BOS; a document written to pass ownership of personal property to someone else insurance to protect the owner of a property if any other person proves ownership; Title Insurance covers the insured person’s investment into the property but does not guarantee continued ownership Estate the degree, quantity, nature, and extent of one’s interest in property Statutory Estate an estate that is created as a matter of state law Freehold Estate an estate in land in which ownership will last for an indeterminate duration a type of property interest allowing tenants to occupy and use a property they do not Leasehold Estate own; contains a reversionary right maximum ownership of real property, indefinite duration, freely transferable, and Fee Simple Estate freely inheritable; also called a fee or a fee simple absolute; it is of indefinite duration, freely transferable, and freely inheritable Township Lines also known as a fee simple defeasible or qualified fee, is a type of freehold estate in which the person who has possession of the property is only able to hold the property until an event takes place or does not occur; ... a defeasible fee estate in which a grantor conveys a parcel of real estate subject to a Fee Simple Subject to condition of ownership; the grantor must go to court to assert their right to retake Condition Subsequent ownership (right of re-entry) Fee Simple Determinable a defeasible fee estate that will come to an end automatically and immediately upon Estate the occurrence of a designated event, the time of which is uncertain an interest in real estate that will end upon the death of the life tenant or the pur autre Life Estate vie life type of freehold life estate created by a deed or will that lasts for the duration of the Conventional Life Estate a tenant’s life a type of freehold life estate created by an act of law; a Texas homestead would be one Legal life estate example a type of freehold life estate that grants someone ownership of a property for the Pur Autre Vie duration of another person’s life refers to the estate that will pass to another party at the death of the person upon Remainder whom the life estate is based the portion of an estate that will return to the original grantor when a life estate has Reversion ended refers to an an estate wherein, upon the death of the life estate owner, full ownership Reversionary Interest reverts to the original fee simple owner; also known as a revisionary right refers to recipient of the remainder — either the grantor who set up the life estate or a Remainderman designated third party a leased possession of property for a certain, specific period of time; also known as a Estate for Years tenancy for years Encumbrance any claim or right against a property held by another that is not the fee title owner. Easement a right to use or cross someone else’s land for a specific purpose Restriction an outline of what someone may not do on their own personal piece of property License the permission to use someone else’s property for a temporary period of time Conveyance a transfer of ownership of a piece of real estate from one person to another Probate the legal process in which a court decides who will inherit property when an owner’s property (such as a fence, tree, driveway) crosses the property Encroachment boundaries of another landowner Statutory Lien a lien brought by a government entity such as a tax lien General Lien a lien in which the real estate AND personal property may be sold to satisfy the debt Specific Lien a lien that is against only the real estate the order in which debts or taxes levied by the government will be paid off through a Priority of Liens court sale a lien that is created on purpose and with the agreement of the owner of the property Voluntary Lien in question, such as a mortgage Involuntary Lien a lien that is created without the property owner taking any action to initiate it Statutory Lien a lien established by local, state, or federal law for a specific set of circumstances a right that exists only in equity, with one party charging their property as security for Equitable Lien a debt or loan Mechanic’s Lien a lien created when a worker has not been paid for work done on a property a lien created by a writ of execution issued by a court to force payment of monies Execution Lien owed from a judgment when a debtor does not pay Federal Judgment Lien a lien filed by the government for failure to pay certain debts a document recording at the courthouse giving notice that a lawsuit is pending on a Lis Pendens particular piece of property a lien the seller has against a buyer as a security for the unpaid balance of the Vendor’s Lien purchase price a document declaring a claim from a buyer that the seller has not transferred title to Vendee’s Lien the buyer according to the agreement ownership of land with all of the legal rights of possession, control, enjoyment, Bundle of Legal Rights exclusion, and disposition Groundwater Rights property owners’ right to use water under the surface through the rule of capture Defeasible Fee Estate Accretion Avulsion Homestead Separate Property Individual Ownership In Severalty Co-Ownership Joint Tenancy Tenancy in Common Community Property Living Trust Testamentary Trust Land Trust Real Estate Investment Trust (REIT) Corporation Syndicate Limited Liability Corporation (LLC) Listing Agreement Special Agent Cooperating Broker Municipal Utility District (MUD) Public Improvement District (PID) Buyer Representation Agreement Arbitration Open Listing Exclusive Right to Sell Listing Exclusive Agency Listing Net Listing the process that results in the gradual increase in land area through deposits of soil by action of water the sudden loss of land by flood, or when a stream or river changes course a property that a person or family owns and occupies as their primary residence property owned by either spouse prior to the marriage or by gift or inheritance during the marriage a form of property ownership in which one person is the owner of a property and has absolute control over the distribution and use of the land describes undivided ownership of an estate, with an interest that is exclusive from other owners ownership of a property by more than one person co-ownership in which the parties have the right of survivorship — when one dies, the others receive that person’s portion of the estate co-ownership in which each co-owner of the property holds their individual portion of the ownership interest in severalty property owned by a married couple in which each spouse has half ownership of any property obtained during the marriage, plus a right of survivorship ownership after the death of either spouse a trust created during someone’s life to manage their assets in life and in death a trust created through the use of a will when someone dies a trust in which land is purchased to be held for a long period of time for the benefit of a named party an account in which 100 people or more place funds for the trust to invest in real property and then return the profits back to the investors an entity that is doing business two or more people or companies that join together to create and run a real estate investment a type of corporation in which none of the owners of the company can be held personally liable for debt a contract between a principal and a broker created for the broker to sell or lease a property an agent that is contracted by the client to perform a certain act; typically the broker of the agent involved in buying/selling transactions the other broker or salesperson that shows the listed property to a buyer who subsequently purchases the property rural districts of Texas with lower tax rates that exist to provide developers a way to finance or be reimbursed for utility improvements they make a district where property owners can decide on government financed and approved improvement projects for which they will be taxed a document that creates agency between a broker and a buyer a conflict resolution technique that requires a third party in the room to decide the best method of resolving the conflict an agreement that gives multiple real estate brokers (and the owners themselves) the right to sell the property with the individual considered the procuring cause of the sale of the property getting the commission a listing agreement which gives the agent the sole right to sell the property and guarantees that the broker receives a commission if the property is sold, even if the seller brings the buyer themselves a listing agreement in which the owner retains the right to sell the property themselves without paying a commission, or the commission will be paid to the named broker if the broker or any other party sells the property an agreement in which the seller names an amount they want their property to sell for, and then the broker tries to sell it for more, because they receive the difference (the dollar amount above what the owner wants) as their commission