Texas Real Estate Exam State National Flashcards

Texas Real Estate Exam/ State & National Flashcards Management AgreementAn employment contact obligating a broker to act as a fiduciary to a property owner.Time is of the EssenceA clause in a contract that allows each party to hold the other to strict performance of the date specified.AmendmentModification to an existing agreement is made and signed.Option ContractA unilateral contract where one party has the option to buy property at a preset price within a negotiated time period.Liquidated DamagesDamages specified in a contract that will be awarded in the event of default.Holdover TenantA tenant who continues to occupy property after the lease has expired.Universal AgencyA principal gives an agent the power to transact matters of all type for them.Duties of an AgentAn agent owes his client obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care (Old Car).ClientA party represented by a broker in an agency relationship- also called a principal.NovationThe substitution of a new contract for an existing one- the original agreement is terminated.Duties of a PrincipalA principal owes his agent compensation, reimbursement, indemnification, and performance.Fiduciary ResponsibilitiesThe responsibilities a broker has to clients in an agency relationship includes placing the interest of the client first, full of disclosure of all facts, material and other, and giving advice and opinions.AddendumAdditional material or supplemental information added to an agreement.Tenancy in CommonOwnership by two or more parties without rights of survivorship- unequal shares are permitted- upon the death of the owner, property passes to heirs at probate.AssignmentSubstitution of a new party into an existing agreement- can be used to shield the identity of a buyer who wishes to be anonymous.Sherman Anti-Trust ActFederal law that preserves business competition by prohibiting monopolies, monopolistic practices, and restraint of trade- in real estate the biggest impact is on commissions- always negotiable.General AgencyA principal gives an agent the power to bind him in a particular trade or business.Agency coupled with an interestAny transaction where the agent is also the seller, or the agent is also the buyer- this dual role must always be

disclosed.

Easement by PrescriptionAn easement acquired by constant use without permission for a required number of years- usually 10- also called easement by limitation or prescriptive easement.Dual AgentA broker who has the written permission of both the buyer and the seller to represent both parties in a single transaction.Suit for Specific PerformanceA lawsuit to hold the defaulting party to his duties under a contract.Periodic TenancyA lease that automatically renews for like periods unless one party acts to terminate it.Designated AgentA licensee appointed by a broker in a dual agency situation to work with either the buyer or the seller in the transaction Adverse PossessionAcquiring title to another's property by occupancy that is hostile, actual, continuous, visible, and distinct for a statutory period- "squatters rights".Property held in TrustProperty held by one party for the benefit of another.BrokerA properly licensed party who serves a principal in an agency relationship- also called an agent.Qualified Defeasible FeeOwnership with terms or conditions which if violated could cause the ownership to be defeated or terminated.PartitionLegal procedure to divide the co-owners' interests in real property.Listing AgreementAn employment contact obligating a broker to act as a fiduciary to a seller.CustomerA third party- one a broker is working with, but who is not represented by that broker.RemaindermanPerson who becomes the owner of property at the end of a life estate, the remainderman has fee simple.Right of First RefusalA clause in a lease allowing a tenant the right to match or better any offer before the property will be sold to another party.Life EstateOwnership for the duration of one's life- cannot be willed to heirs.Estate for yearsA leasehold with a specific starting and ending date- it survives death or the sale of the property.Exclusive Agency ListingA listing where one broker is the exclusive agent and will earn a commission if the property is sold, unless the seller sells it himself- the seller is competing with his broker.Pur Autre VieFor another's life- a life estate held by one party for the life of another.Ostensible AgencyAgency as a result of the actions of an agent and the response of others to those actions.Bilateral ContractAn exchange of promises binding both parties.Effective Date of a ContractThe date on which the last party signed.

Servient EstateProperty that is limited by an easement appurtenant.Breach of ContractWhen one of the parties to the contract is in default.Public ResponsibilitiesThe responsibilities a broker has to customers or third parties including honest, fairness, and disclosure of material facts.Fee SimpleOwnership with the greatest bundle of rights- the owner has all available rights to the property and can always pass it to his heirs- also called fee simple absolute.SubagentAn agent for a person who is already an agent for a principal- the listing salesperson under a listing broker- this is not a Texas definition Poor Man's WillJoint Tenancy SyndicateTwo or more parties join together to create and operate a real estate investment.Exclusive Right to SellA listing where one broker will earn a commission when the property is sold, no matter who sells it.CommissionA negotiate compensation in a broker's employment contact.Bundle of RightsA term used to describe an owner's legal rights in land- right to sell, lease, occupy, etc.General PartnerA partner who shares full responsibility and full liability.Rights of SurvivorshipA characteristic of joint tenancy- upon one owner's death his share passes to surviving co-owners- heirs have no claim on the property.Leasehold EstateAn interest in real property giving apart possession without ownership.Executory ContractA contract that has been signed by the parties, but not yet carried out- sales contract before closing, or contract for deed.Lease- Purchase AgreementLease with an option to buy- a tenant has occupancy now and the right to purchase at a specified future date and price.Life Estate with reversionA life estate set up so that at the end of the life estate the property goes back to the original owner.Blind AdAn advertisement that does not clearly indicate the licensed status of the party placing the ad- real estate licensees are prohibited from placing blind ads.Mutual RescissionThe parties to a contract agree to cancel the contract.Life TenantOwner of a life estate.Implied AgencyAgency as a result of customary, usual, or typical conditions.Option FeeAn amount paid to secure an option contract- paid upfront, directly to the seller, and never refundable.Indeterminate LengthA period of time with no set termination date- ownership or the freehold estate is of indeterminate length.