Your FREE Texas Real Estate Flashcards 2026 – 200+ Cards

The Texas Real Estate Commission — the state agency that licenses and regulates Texas brokers and sales agents under TRELA.

The Texas Real Estate License Act — Chapter 1101 of the Texas Occupations Code; it creates TREC and governs real estate licensing in Texas.

Nine, appointed by the Governor with Senate consent — six licensed brokers and three members of the public.

180 hours of TREC-approved education to become a sales agent — six 30-hour courses.

Principles of Real Estate I, Principles of Real Estate II, Law of Agency, Law of Contracts, Promulgated Contract Forms, and Real Estate Finance (30 hours each).

The licensed Texas broker who sponsors a sales agent. A sales agent's license is inactive until sponsored, and the agent may act only for and be paid by the sponsoring broker.

No. A sales agent must be sponsored by and work under a licensed broker; the license is inactive until a broker sponsors it.

Only the agent's sponsoring broker — never a client or another broker directly.

TREC's mandatory written notice (TREC No. IABS 1-0) explaining a broker's possible roles, given at the first substantive communication with a party.

At the first substantive communication with a party about a specific property or proposed transaction (TRELA Sec. 1101.558).

For a residential lease of one year or less with no sale contemplated, or when the party is already represented by another license holder.

The relationship in which a BROKER represents both buyer and seller, only with each party's written consent stating who pays the broker (TRELA Sec. 1101.559).

No. Texas abolished dual agency; when one firm represents both sides, the broker acts as a statutory intermediary instead.

Only the broker — never a sales agent. The broker may appoint associated license holders to advise each party.

Associates the intermediary broker appoints, with written consent, to communicate with and advise one party each; the broker stays neutral.

Disclose one party's price or negotiating position to the other without written permission, or favor one party over the other.

Standard contract forms TREC adopts by rule that license holders must use for the transactions they cover.

The One to Four Family Residential Contract (Resale), TREC No. 20-18.

The six-broker, six-attorney TREC committee that drafts and revises the promulgated contract forms (TRELA Sec. 1101.155).

No. Agents fill in factual blanks on promulgated forms but may not draft provisions — that is the unauthorized practice of law.

18 hours every two-year renewal after the first: 4 hrs Legal Update I, 4 hrs Legal Update II, 3 hrs contract coursework, 7 hrs electives.

The two 4-hour CE courses (8 hours total) that keep Texas license holders current on TRELA, TREC rules, and contract forms.

No. Under 22 TAC 535.146, a sales agent may not maintain a trust account and must immediately deliver any money received to the sponsoring broker.

Title 22, Part 23 of the Texas Administrative Code (22 TAC Ch. 531-543).

18 years old, and the applicant must meet TREC's honesty, trustworthiness, and integrity standards.

A request to TREC, before applying, to decide whether a past criminal or disciplinary history would bar licensure.

Pearson VUE administers the Texas sales agent licensing exam (national + state portions).

A national (general) portion and a Texas state-law portion, taken in one session; each is graded separately and both must be passed.

40 scored state-law questions (the national portion has 85 scored questions).

Applicants must submit fingerprints for an FBI/DPS criminal background check.

Lists prohibited conduct that subjects a license holder to discipline — material misrepresentation, failing to disclose a known latent defect, commingling, and more.

A Texas license holder buying or selling for their own account must disclose in writing that they are a licensed real estate agent acting on their own behalf.

A listing must be in writing and signed by the party to be charged for the broker to recover a commission (TRELA Sec. 1101.806).

To be a broker, hold an active license, gain qualifying experience (points over ~4 years), and complete 270 additional qualifying hours plus 630 total points/hours.

Licenses are renewed every two years; CE must be completed before the license expires.

An escrow agent generally may not release contested earnest money without the parties' written agreement or a court order.

A TREC-administered fund that may pay an aggrieved person who wins a judgment against a license holder for certain violations, up to statutory limits.

All advertising must include the broker's name and may not be misleading; a sales agent must advertise under the sponsoring broker's name.

A team name in advertising must include the broker's name (or be clearly tied to the sponsoring broker) and use words like 'team' or 'group,' not 'broker' or 'company.'

Mixing a client's money with the broker's own funds — a TRELA violation; brokers must keep client funds in a separate trust account.

Using a client's trust money for the license holder's own purposes — a serious TRELA violation, worse than commingling.

Texas Property Code Sec. 5.008 requires the seller of a single residential dwelling to give the buyer a written notice of the property's condition.

Tightly restricted — a broker may use one only if it does not violate the broker's fiduciary duty and the seller sets a fixed net the broker won't manipulate.

The agent whose actions set in motion the unbroken chain of events leading to the sale earns the commission.

Administers and enforces the Texas Fair Housing Act, the state counterpart to the federal Fair Housing Act.

TREC investigates complaints against license holders and may discipline by reprimand, fine, probation, suspension, or revocation under TRELA.

A license holder who represents the buyer; owes the buyer the fiduciary duties and must put the buyer's interests first.

Communication about a specific property or a party's needs (not a mere open-house greeting) that triggers the IABS-notice requirement.

The Texas Constitution (Art. XVI) protects an owner's principal residence from forced sale for most unsecured debts.

Both spouses generally must sign to convey or encumber homestead property, even if only one spouse is on the title.

The official form number for the Information About Brokerage Services notice.

A license expired up to six months may be renewed late with a fee; longer lapses may require reinstatement or reapplication.

TREC also licenses and regulates Texas real estate inspectors (a separate license type).

A business entity holding a Texas broker license must designate an individual broker to act for it.

A fee a buyer pays the seller in a TREC contract for an unrestricted right to terminate during a negotiated option period.

Land plus everything permanently attached to it (improvements and fixtures) and the bundle of legal rights of ownership.

Movable items not permanently affixed to land; they don't transfer with the real property unless agreed.

Possession, use (enjoyment), exclusion, disposition (transfer), and control — the rights of ownership.

Personal property attached to real property so it becomes part of it and transfers with the land.

Method of attachment, Adaptability, Relationship of parties, Intention, Agreement — used to decide if an item is a fixture.

An item a business tenant attaches for trade; it stays personal property and may be removed before the lease ends.

The most complete ownership — absolute, of unlimited duration, freely transferable by deed or will.

A freehold estate lasting for a named person's lifetime; it ends at death and cannot be willed.

A tenant's right to possess and use property for a term without owning it.

Police power, Eminent domain, Taxation, Escheat — the four powers that limit even fee-simple ownership.

Government regulation of land for public health, safety, and welfare — zoning and building codes — with no payment to the owner.

Government's power to take private property for public use through condemnation, paying just compensation.

Property reverts to the state when an owner dies with no will and no legal heirs.

A nonpossessory right to use another's land for a specific purpose, like a driveway or utility line.

Appurtenant benefits an adjacent parcel and runs with the land; in gross benefits a person or company (e.g., a utility).

An unauthorized intrusion of an improvement onto a neighbor's land; usually found by a survey.

A legal description using distances (metes) and compass directions (bounds) traced back to a point of beginning.

One square mile of land — 640 acres — and one thirty-sixth of a 6-mile-square township.

A land area equal to 43,560 square feet.

Identifies land by reference to a recorded subdivision plat (lot, block, and subdivision).

A zoning exception granted for a hardship, allowing a use that otherwise violates the ordinance.

Sole ownership of property by one person or entity.

Co-ownership with the right of survivorship; requires the four unities (time, title, interest, possession).

Co-ownership where each owner holds an undivided, willable share; no right of survivorship.

A deceased co-owner's share passes to the surviving co-owners, not to heirs.

Property either spouse acquires during marriage is presumed owned equally by both spouses (Texas Family Code).

Property owned before marriage, or received during marriage by gift or inheritance.

Yes — one of nine; property acquired during marriage is presumed community property owned 50/50.

The written instrument that conveys title from the grantor (seller) to the grantee (buyer).

Gives the most protection; the grantor warrants clear title against all defects, even those before the grantor's ownership.

Warrants title only against defects arising during the grantor's ownership — common in Texas commercial sales.

Conveys only whatever interest the grantor has, with no warranties; used to clear a cloud on title.

On delivery and acceptance of the deed — not on recording. The grantee does not sign the deed.

Entering a deed in the county records; it gives constructive notice to the world and establishes lien priority.

Notice the law presumes everyone has because a document is recorded or possession is visible.

A policy protecting the insured against loss from title defects that existed before the policy date.

The recorded history of ownership of a parcel from the original grant to the present owner.

Any claim or encumbrance that impairs clear title; often removed with a quitclaim deed or suit to quiet title.

Acquiring title by open, notorious, hostile, continuous possession for the statutory period (varies in Texas by claim type).

The most probable price a property should bring in a competitive open market under fair conditions — an opinion of value.

Value is an opinion of the most probable price; price is the actual amount a property sold for.

An impartial, supported opinion of value by a licensed appraiser as of a specific date, following USPAP.

A licensee's estimate of value from recent comparable sales, used to price a listing — not a formal appraisal.

The legal, physically possible, financially feasible, and most profitable use of a site — the basis of value.

Compares the subject to recently sold similar properties, adjusting for differences; best for homes.

Land value plus the cost to rebuild improvements new, minus depreciation; best for new or special-use property.

Value = net operating income ÷ capitalization rate; best for income-producing property.

Effective gross income minus operating expenses, before any mortgage payment.

The rate of return on an income property: NOI ÷ value. A higher cap rate implies more risk and lower value.

Weighing the three value indications into one final opinion — not simply averaging them.

A buyer pays no more than the cost of an equally desirable substitute property.

Value is maximized when a property fits its surroundings in use, size, and style.

A modest home gains value near larger ones (progression); a fine home loses value near lesser ones (regression).

Loss in value from physical deterioration, functional obsolescence, or external (economic) obsolescence.

A loss in value from outdated or poorly designed features (e.g., a one-car garage in a market expecting two).

A loss in value from forces outside the property, such as a nearby nuisance or a declining economy.

Sale price ÷ monthly (or annual) gross rent; a quick value screen for small rental properties.

Mutual agreement (offer and acceptance), consideration, legal purpose, and competent parties.

Requires real estate contracts (and most leases over a year) to be in writing to be enforceable.

Void = missing an essential element, no legal effect; voidable = valid until a party with the right (e.g., a minor) rescinds.

A promise for a promise — both parties are obligated (a typical purchase agreement).

A promise in exchange for an act; only one party is obligated until the act is performed (e.g., an open listing).

A buyer's good-faith deposit; in a TREC contract it is usually held by the title company and applied to the price at closing.

A condition that must be met for a contract to become binding — financing, inspection, or appraisal.

A court remedy compelling a defaulting party to complete the contract because real estate is unique.

An agreed amount (often the earnest money) the parties set as the remedy for a buyer's default.

The listing broker earns the commission no matter who finds the buyer.

The broker earns the commission unless the owner finds the buyer themselves.

Only the broker who actually finds the buyer earns a commission; the owner may list with several.

A fiduciary relationship in which an agent represents a principal in dealings with third parties.

Obedience, Loyalty, Disclosure, Confidentiality, Accounting, and Reasonable care.

Confidentiality — an agent must keep a client's information private even after the agency ends.

Texas does not allow common-law dual agency; one firm representing both sides uses the broker-as-intermediary relationship instead.

A general agent (e.g., a property manager) handles ongoing affairs; a special agent (a listing broker) handles one transaction.

Express agency is created by a written or oral agreement; implied agency arises from the parties' conduct.

A counteroffer rejects and terminates the original offer; the original cannot then be accepted.

Transferring contract rights to another party; allowed unless the contract or law forbids it.

Substituting a new contract or party for the original, releasing the original party from the obligation.

Gives a buyer the right (not the obligation) to buy within a set period for consideration (a TREC option fee).

Under TRELA Sec. 1101.806, a broker cannot recover a commission unless the agreement is in writing and signed.

Race, color, religion, national origin, sex, familial status, and disability — seven federal protected classes.

Protection for households with children under 18 and for pregnant persons under the Fair Housing Act.

Illegally guiding buyers toward or away from areas based on a protected class.

Inducing owners to sell by claiming a protected class is moving in, to profit from turnover — illegal.

A lender's illegal refusal to lend or insure in certain areas based on the area's racial or ethnic makeup.

A rule change (e.g., allowing a service animal) a housing provider must make for a person with a disability.

A physical change (e.g., a ramp) a person with a disability may make, usually at their own expense.

A broker's separate account holding client funds like earnest money; mixing them with the broker's funds is commingling.

A sales agent may not hold client funds — they must be turned over immediately to the sponsoring broker.

Brokers agreeing to set commission rates is illegal; commission rates are always negotiable.

Competitors agreeing to exclude or refuse to deal with another broker — an illegal antitrust violation.

The landlord pays the property's operating expenses; the tenant pays a flat rent.

The tenant pays rent plus some property expenses (taxes, insurance, or maintenance).

Retail rent is a base amount plus a percentage of the tenant's sales.

The lessor is the landlord (owner) granting the lease; the lessee is the tenant.

A contract employing a broker as a general agent to manage an owner's property for a fee.

A tenant's deposit against damage or unpaid rent; Texas law governs its return and any deductions.

A fact that would affect a reasonable buyer's decision to buy or the price they'd pay; it must be disclosed.

A hidden physical defect not discoverable by ordinary inspection; a known latent defect must be disclosed.

Required under Property Code Sec. 5.008 for a single residential dwelling; the seller discloses known condition issues.

The seller of residential property of not more than one dwelling unit — based on the seller's actual knowledge.

The Seller's Disclosure Notice asks whether the property is in a 100-year floodplain, a flood pool, or a reservoir, and about flood history.

A death by natural causes, suicide, or accident unrelated to the property's condition, and a prior occupant's HIV/AIDS, need not be disclosed.

A property psychologically impacted by an event (e.g., a crime); disclosure rules vary, and Texas limits required death disclosures.

For housing built before 1978, the seller/landlord must disclose known lead paint, give the EPA pamphlet, and (for sales) allow a 10-day test window.

The federal law behind the lead-based paint disclosure rule for pre-1978 housing.

An odorless, radioactive gas from soil; the second-leading cause of lung cancer, mitigated by venting.

A fibrous material in old insulation and flooring; hazardous when airborne — remove or encapsulate.

Grows in damp areas; may require disclosure and remediation, and can affect habitability.

A buried tank that can leak and contaminate soil and groundwater, creating cleanup liability.

'Let the buyer beware' — the old rule, now limited by statutory disclosure laws like Texas Property Code Sec. 5.008.

The federal law imposing liability for cleaning up hazardous-substance contamination, even on later owners.

Federally protected areas where development requires permits; affects buildability and disclosure.

The borrower's written promise to repay the debt; the deed of trust secures it.

Secures a Texas real estate loan; the borrower conveys the property to a trustee who can conduct a non-judicial foreclosure on default.

The trustee sells the property at a public sale (usually the first Tuesday of the month) under the deed of trust's power of sale, without going to court.

Repaying a loan with regular interest-and-principal payments so the balance reaches zero by the term's end.

Loan amount ÷ value (or price); a higher LTV means a smaller down payment and more lender risk.

Required on a conventional loan when the LTV is above 80% (down payment under 20%).

A loan not insured or guaranteed by the government; PMI applies when LTV tops 80%.

Insured by the Federal Housing Administration; low down payments with mortgage insurance premiums.

Guaranteed by the Department of Veterans Affairs for eligible veterans; often no down payment.

Prepaid interest paid at closing to lower the loan's rate; one point equals 1% of the loan amount.

Lets the lender demand the full loan balance immediately on default.

Requires the loan to be paid in full when the property is sold.

The Real Estate Settlement Procedures Act — requires settlement-cost disclosures and bans kickbacks for referrals.

The Truth in Lending Act — requires lenders to disclose the cost of credit, including the APR.

A standardized loan-cost disclosure due within three business days of a borrower's application.

The final loan-cost form that must reach the borrower at least three business days before closing.

Typically handled by a title company that disburses funds and records the documents.

The legal process by which a lender forces the sale of property to recover an unpaid debt.

The owner's value in the property — market value minus the debt secured against it.

Multiply acres by 43,560 to get square feet; divide square feet by 43,560 to get acres.

Length × width; e.g., a 150 ft × 290 ft lot = 43,500 sq ft.

Commission = sale price × commission rate.

Net ÷ (1 − commission rate). A $282,000 net after a 6% commission = $282,000 ÷ 0.94 = $300,000.

Gain (or loss) ÷ original cost. A $20,000 gain on a $200,000 cost is a 10% profit.

Loan ÷ value. An 80% LTV on a $300,000 home is a $240,000 loan.

Value = net operating income ÷ capitalization rate. $90,000 NOI ÷ 0.09 = $1,000,000.

One-thousandth of a dollar ($0.001) of tax per dollar of assessed value; 18 mills = 0.018 = 1.8%.

Assessed value × tax rate (or mills × 0.001). A $320,000 assessment at 18 mills = $5,760.

Splitting taxes, rent, or interest between buyer and seller by days of ownership as of the closing date.

A 360-day year (twelve 30-day months) many proration problems use unless told otherwise.

A section is one square mile = 640 acres; a township is 36 sections.

Interest = principal × rate × time. $200,000 × 0.06 × 1 year = $12,000.