Study 179 common wrong-answer patterns across the National and Texas State portions. Search by term, choose a topic family, then compare the tempting mistake with the correct rule and its source.
An exam trap is a wrong answer that looks right because it reverses a rule, drops a condition, confuses two similar terms, or imports the wrong jurisdiction. Each card shows the tempting mistake, the correct rule, its National or Texas State scope, and a source you can verify.
Intermediary instead of dual agency, Texas tax rates stated per $100 of value, and no statewide real-property transfer tax. These are the details out-of-state summaries often miss.
Assignment vs novation, void vs voidable, mortgage vs deed of trust. The exam tests the one feature that separates them.
Adjust the comparable not the subject, who owns the closing day, add for inferior and subtract for superior. The setup decides the sign.
Search a term or select one topic family. Every result gives you the tempting answer, the rule that corrects it, the portion where it is tested, and a primary source.
Choose one family or keep the complete library open.
Showing 179 traps.
"The agent working with the buyer" does not mean the buyer is a client. Working with is not representing.
The party a broker represents in a transaction, owed the duties that come with representation.
Assuming a customer is owed nothing. Honesty and known material-defect disclosure are owed regardless of representation.
The party on the other side of a transaction, who is not represented by the broker but is still owed honesty and material-defect disclosure.
Treating the broker's professional judgment about a poor offer as a reason to withhold it. That is exactly the violation.
The floor of service a broker who represents a party must provide under TRELA Sec. 1101.557(b).
Sec. 1101.803 contains no knowledge requirement. "The broker did not know" is a distractor, not a defense.
A broker's liability for conduct engaged in under TRELA by the broker or by a sales agent associated with or acting for the broker.
Assuming the notice is always required. Memorize the three exceptions in Sec. 1101.558(c).
The moment the IABS notice becomes due: the first substantive communication with a party about a specific property.
Forgetting the compensation-source requirement. Consent alone is not enough under Sec. 1101.559(a)(2).
The consent of both parties that makes intermediary practice lawful, which must state the source of any expected compensation.
Treating a known material defect as confidential. Sec. 1101.651(d)(3)(C) expressly carves out information materially relating to property condition.
A party's negotiating position, which an intermediary may not disclose to the other side without written authorization.
Assuming a client's instruction not to mention a defect controls. It does not.
A known defect in a property's condition that must be disclosed, and which confidentiality does not cover.
Assuming an unlicensed assistant may not speak to the public at all. The exam rewards the precise line, not the cautious one.
A person who performs clerical support for a brokerage but may not perform acts requiring a real estate license.
Answering from the words open house alone. The statutory test is whether the host's broker represents the owner.
A limited property showing a broker may conduct without representing the party, added by SB 1968 effective January 1, 2026.
Confusing this with the IABS notice. The written agreement documents the arrangement required by Sec. 1101.563; IABS is a disclosure.
The written agreement required before showing residential real property to a prospective buyer, effective January 1, 2026.
Carrying subagency over from older study material or from another state's course.
An agency arrangement whose two references were removed from TRELA for 2026; TREC says the broader legal concept was not eliminated.
Treating IABS as a contract, or treating the Sec. 1101.563 writing rule as proof that implied agency is impossible.
A written agreement documenting that a broker represents a buyer, and a common place to obtain intermediary consent.
Assuming intermediary consent must be a separate document signed later. It is usually already in the representation agreement.
A written agreement documenting a broker's representation of a seller or landlord, and a common place to obtain intermediary consent.
Texas does not permit dual agency. If a question frames a single broker representing both sides, the correct concept is intermediary with written consent, sometimes with appointed license holders.
The Texas relationship in which one broker represents both the buyer and the seller in the same transaction with the written consent of both parties.
Appointment is not automatic. It requires written consent that authorizes appointments, and a license holder may be appointed to only one party in the transaction.
A license holder a broker may appoint, with written consent, to communicate with and advise one party while the broker acts as intermediary.
The IABS notice is a disclosure, not a representation agreement. Giving it to a consumer does not make that consumer a client.
The TREC notice required at the first substantive communication about a proposed transaction involving specific real property.
Fiduciary duties run to a client, not to a customer. A license holder still owes a customer honesty, fair dealing, and disclosure of known material defects.
The full duties of trust a broker owes a client, often memorized with the mnemonic OLD CAR.
Do not call the Texas model dual agency. Texas does not permit dual agency and uses the intermediary relationship instead.
One license holder fully representing both the buyer and the seller in the same transaction, a relationship Texas does not permit.
Commingling and conversion are not the same violation. Commingling is mixing trust money with personal funds. Conversion is using trust money for personal benefit and is the more serious offense.
Mixing money held in trust for others with a broker's personal or business funds, which is a TRELA violation.
If the funds were only mixed into the wrong account, that is commingling. Conversion requires that the funds were used.
Using money held in trust for others for the broker's own benefit, a serious TRELA violation that can carry criminal penalties.
The rule applies to social media and personal posts, not just yard signs. A sales agent's listing post without the broker's name is still a blind ad.
Real estate advertising that omits the broker's name, which the TREC Rules prohibit.
TREC enforces and adopts rules but does not create the statute. If a question asks who writes TRELA, the answer is the Texas Legislature.
The state agency that administers and enforces TRELA, adopts the TREC Rules, and licenses and disciplines Texas real estate license holders.
Do not confuse TRELA with the TREC Rules. TRELA is the statute passed by the Legislature; the rules are TREC's regulations implementing it.
The Texas statute, Occupations Code Chapter 1101, that governs real estate licensing and brokerage. License holders call it The Act.
Fee simple defeasible looks similar but carries a condition that can trigger forfeiture. Absolute means no such condition.
The highest and most complete form of property ownership, with rights that last indefinitely and pass to heirs.
A life tenant cannot commit waste. Letting the property deteriorate or failing to pay taxes is a breach, even though the life tenant has full use.
Ownership of property measured by the duration of a person's life, after which it passes to a remainderman or reverts to the grantor.
Whose name is on the title does not control. Property acquired during marriage is presumed community property even if titled in one spouse's name.
Property a married couple acquires during marriage, which Texas presumes belongs equally to both spouses.
The community-property presumption means a spouse claiming separate property must prove it. Acquisition during marriage points toward community property unless traced.
Property a spouse owns individually: owned before marriage, or received during marriage by gift, devise, or inheritance.
In Texas there is no automatic survivorship between joint owners. The owners must sign a written survivorship agreement, or the share passes to heirs as a tenancy in common.
Co-ownership with the right of survivorship that requires the four unities of time, title, interest, and possession.
Tenancy in common has no survivorship. In Texas it is the default when co-owners do not sign a written survivorship agreement.
The default form of co-ownership in which each owner holds a separate, possibly unequal interest that passes to heirs, with no survivorship.
Homestead creditor protection and the homestead tax exemption are not the same thing. One stops forced sale; the other lowers property tax.
Texas constitutional protection that shields a primary residence from forced sale by most creditors, subject to urban and rural acreage limits.
Assignment transfers rights but the assignor may stay liable. Novation replaces the party and ends that liability. The release is the dividing line.
Replacing an original party or contract with a new one, which releases the original party from liability.
Do not assume assignment releases the original party. Only novation does that.
Transferring contractual rights to a third party, while the original party often remains secondarily liable.
The contract is unenforceable, not automatically void. A party can still choose to perform; the issue is whether a court will force performance. Candidates also remember the writing and forget that Section 26.01(a)(2) wants a signature from the person to be charged.
The rule that contracts for the sale of real property must be in writing and signed to be enforceable.
Texas home loans commonly use a deed of trust with a power of sale. Do not turn that common structure into a claim that every Texas lien must be foreclosed without court involvement.
A security instrument commonly used in Texas that pledges real property and can give a trustee a power of sale after default.
The trustee or properly appointed substitute trustee conducts a deed-of-trust foreclosure sale. The beneficiary or mortgage servicer may appoint a substitute trustee, but the sale is conducted in the trustee role.
The person named or properly appointed under a deed of trust to exercise the power of sale and conduct a non-judicial foreclosure.
Texas does not require a lawsuit to foreclose a deed of trust. The trustee sells under the power of sale, unlike judicial-foreclosure states.
Foreclosure conducted by the trustee under a deed of trust's power of sale, without a court action, on the first Tuesday of the month in Texas.
A debt can exist without a security instrument, but a deed of trust cannot exist without a debt. The note is the controlling instrument.
The borrower's written promise to repay a debt, which is the instrument that actually creates the obligation.
Do not swap the two instruments. The note is the debt; the security instrument (a deed of trust in Texas) is the security.
A security instrument that pledges real property as collateral for a debt. In Texas, lenders use a deed of trust to play this role.
PMI protects the lender, not the borrower. Borrowers often assume it protects them, which is the tested misconception.
Insurance often required on a conventional loan above 80 percent LTV, protecting the lender if the borrower defaults.
The tax exemption and the creditor-protection homestead share a name but do different things. One lowers property tax; the other blocks forced sale.
A Texas property tax break that lowers the taxable value of an owner's primary residence, reducing the school and other taxes owed.
The cap limits the appraised value used for taxes, not the market value and not the tax rate. It applies only to a qualified residence homestead.
A Texas limit that holds the annual increase in the appraised value of a residence homestead to 10 percent, plus the value of new improvements.
The protest goes to the independent appraisal review board, not to the taxing units or the tax assessor. The board, not the appraiser, decides the protest.
A Texas owner's right to challenge the appraisal district's value or determinations before the appraisal review board.
Do not multiply appraised value by the rate before subtracting exemptions. Taxable value comes first, and the Texas convention is per 100, not mills.
The Texas property tax rate, expressed as dollars per $100 of taxable appraised value rather than in mills.
Do not subtract the mortgage payment when finding net operating income. Debt service stays outside the calculation.
The rate of return on an income property, equal to net operating income divided by value.
Do not use net income in the GRM. It is built on gross rent.
A quick valuation tool equal to sale price divided by gross rent, using gross income rather than net.
For a purchase problem that gives both the contract price and appraised value, use the lower value unless the question directs otherwise.
The ratio of the loan amount to the property value, used to size a loan and to decide whether PMI applies.
Work the fractions of a description from right to left and multiply them all. Applying only the last fraction is the common error.
A one-square-mile unit of the government survey system containing 640 acres, with 36 sections to a township.
A special warranty deed only covers the grantor's own period of ownership. A quitclaim deed warrants nothing. Only the general warranty deed covers the full chain.
The deed that gives a buyer the greatest protection, warranting the full chain of title against all defects.
A quitclaim deed makes no promises about title. A buyer in an arm's-length sale should not accept one in place of a warranty deed.
A deed that transfers whatever interest the grantor holds, if any, with no warranties of title.
Title insurance covers defects that predate the policy, not problems that arise afterward. It is not ongoing hazard coverage.
Insurance that protects against title defects existing before the policy date, with separate owner and lender policies.
Eminent domain is the power; condemnation is the process. Both require just compensation. Police power, by contrast, regulates without paying compensation.
The government's power to take private property for public use, which requires just compensation.
Police power regulates without compensation. A regulation so severe that it destroys nearly all value can become a taking, which then requires compensation through inverse condemnation.
The government's authority to regulate property to protect public health, safety, and welfare, without paying compensation.
Escheat requires both no will and no heirs. If either exists, the property passes through that channel instead.
The government power by which property passes to the state when an owner dies with no will and no heirs.
Ownership is not all-or-nothing. Individual rights in the bundle can be sold or leased separately.
The set of legal rights that come with real property ownership: possession, control, enjoyment, exclusion, and disposition.
Earnest money is not an element required for a valid contract. Consideration is required, but the deposit itself is not.
A good-faith deposit a buyer puts down to show serious intent, held in escrow and applied at closing.
Mixing trust money with the broker's own funds is commingling, even if none is spent. Spending it is the more serious conversion.
A separate account where money belonging to others is held apart from a broker's own funds, often at the title company in a Texas sale.
A seller cannot stay silent about a known, hidden defect just because the buyer did not ask. Certain stigmatizing facts, however, are not required disclosures under Texas law.
A fact that affects the value or desirability of property and that a license holder must disclose if it is not readily observable.
With a partially amortized or interest-only loan, the regular payments do not retire the full debt. A lump sum still comes due.
The gradual repayment of a loan through regular payments that cover both interest and principal until the balance reaches zero.
An acceleration clause is broader than a due-on-sale clause. Default triggers acceleration; sale triggers the due-on-sale version.
A mortgage provision that lets the lender demand the entire unpaid balance at once when the borrower defaults or another triggering event occurs.
Do not confuse this with a prepayment penalty. The due-on-sale clause is about transfer; a prepayment penalty is about paying the loan off early.
A mortgage clause that lets the lender call the full balance due if the borrower transfers the property without paying off the loan.
The property does not automatically satisfy the whole loan. A below-balance sale can leave the borrower owing the difference, reduced by any fair-market-value offset.
A court judgment against a borrower for the loan balance still owed after a foreclosure sale brings less than the debt.
Texas does not require a court action to foreclose a deed of trust. The trustee sells under the power of sale, unlike judicial-only states.
The process by which a lender forces the sale of property after default. Texas usually uses non-judicial foreclosure under a deed of trust.
Texas has no post-sale statutory redemption period for a deed-of-trust home loan. The exceptions are tax sales and certain association foreclosures.
The borrower's right to stop a foreclosure by paying the full amount owed before the foreclosure sale takes place.
Points are a percentage of the loan amount, not the purchase price, and discount points are not the same as origination points.
Prepaid interest a borrower pays at closing to lower the loan's interest rate, where one point equals one percent of the loan amount.
Do not confuse FHA (insured) with VA (guaranteed). FHA serves general buyers; VA serves eligible veterans.
A mortgage insured by the Federal Housing Administration that allows low down payments and requires mortgage insurance premiums.
VA loans have a funding fee, not FHA-style mortgage insurance premiums. Match the program to the borrower's veteran status.
A loan partly guaranteed by the U.S. Department of Veterans Affairs that can offer eligible borrowers no down payment and no monthly mortgage insurance.
For exam math, 20 percent down usually signals no borrower-paid PMI. In practice, coverage and cancellation depend on the loan and federal rules.
A mortgage that is not insured or guaranteed by a government agency and may require PMI when the original LTV exceeds 80 percent.
The borrower controls neither the index nor the margin. Caps limit increases, but the rate can still rise.
A mortgage whose interest rate changes over time based on an index plus a fixed margin, subject to rate caps.
Lis pendens is a notice, not a lien or a judgment. It warns of pending litigation.
A recorded notice that a lawsuit affecting title to a property is pending, warning third parties that the outcome could affect the property.
Paying the loan does not clear the record by itself. The recorded release is what removes the lien.
The document a lender records when a loan is fully paid, releasing the deed-of-trust lien from the property.
Not all liens are deeds of trust. Tax, judgment, and mechanic's liens are involuntary liens that can outrank a recorded loan lien in some cases.
A monetary claim against property that secures payment of a debt. It can be voluntary, like a mortgage, or involuntary, like a tax or judgment lien.
All liens are encumbrances, but not all encumbrances are liens. An easement is an encumbrance that is not a lien.
Any claim, lien, or restriction on a property that affects its title or use, such as a mortgage, easement, lien, or deed restriction.
An easement is a use right, not ownership. The holder cannot possess or sell the underlying land.
A right to use another person's land for a specific purpose, such as access or utilities, without owning it.
A ceiling fan bolted in place is ordinarily a fixture and is included unless the contract excludes it. The same fan boxed in the garage is personal property unless the contract includes it.
Personal property that has become permanently attached to real property and is treated as part of the real estate, conveying with it.
Fee simple absolute has no conditions. The presence of a condition that can cut the estate short makes it defeasible.
A fee simple estate held subject to a condition, so ownership can be lost or revert if the condition is violated.
Texas does not recognize tenancy by the entireties, and survivorship is not automatic; it requires a written survivorship agreement. Tenancy in common has no survivorship.
A feature that passes a deceased co-owner's share to the survivor. In Texas, co-owners create it through a written survivorship agreement.
A condominium owner owns the unit as real property. A cooperative owner owns shares and a lease, not the unit.
A form of ownership in which a buyer holds fee simple title to an individual unit plus an undivided share of the common elements.
A co-op owner does not hold a deed to a unit. The corporation owns the building; the resident owns shares.
A form of ownership in which a resident owns shares in a corporation that owns the building and holds a proprietary lease for the unit.
An assigned parking space is a limited common element. It is reserved for one unit but is not owned separately from the condominium.
The parts of a condominium owned collectively by all unit owners, such as the lobby, pool, and parking.
A MUD is a separate taxing unit, so its rate is added to the other rates that actually apply to the property. Do not assume every MUD property is also inside a city. Give the statutory purchaser notice when Texas Water Code Section 49.452 applies.
A Texas special district that finances and operates water, sewer, drainage, and similar utilities, often by levying its own property tax on the homes inside it.
Highest and best use is not always the current use. A use that fails any of the four tests cannot be the highest and best use.
The legally permissible, physically possible, financially feasible, and maximally productive use of a property, used as the basis for appraised value.
The cost approach adds land separately. Do not depreciate the land; only the improvements depreciate.
An appraisal method that adds land value to the depreciated cost to replace the improvements. It fits new or special-purpose buildings.
Never adjust the subject property. All adjustments go to the comparables.
An appraisal method that estimates value by comparing the subject to recent sales of similar properties and adjusting the comparables toward the subject.
Do not subtract debt service when finding net operating income, and divide by the cap rate rather than multiply.
An appraisal method that estimates value by dividing a property's net operating income by the capitalization rate.
Only the improvements depreciate, not the land. External obsolescence is the form the owner usually cannot cure.
In appraisal, a loss in value from physical deterioration, functional obsolescence, or external obsolescence.
A single sale price is market price, not necessarily market value. Market value assumes an arm's-length transaction with informed parties.
The most probable price a property should bring in a competitive and open market under fair conditions with informed, willing parties.
Do not swap the two. Littoral is for standing water; riparian is for rivers and streams.
The water rights of an owner whose land borders a standing body of water such as an ocean, sea, or lake.
Riparian is for rivers and streams. Use littoral for oceans, seas, and lakes.
The water rights of an owner whose land borders a flowing watercourse such as a river or stream.
If the description does not return to the point of beginning, the boundary does not close and the description is defective.
A legal description that starts at a point of beginning and traces directions, distances, and monuments around a parcel.
A special warranty deed is not the most protective deed. Only the general warranty deed covers defects from before the grantor's ownership.
A deed in which the grantor warrants the title only against defects that arose during the grantor's own period of ownership.
Recording is not a requirement for a valid deed. Delivery and acceptance are what transfer title between the parties.
The written instrument that transfers title to real property from the grantor to the grantee.
Constructive notice does not require that anyone actually saw the record. The law presumes notice once a document is properly recorded.
The legal presumption that the public is aware of a fact, such as ownership, because a document is recorded in the public record.
Recording is about protection and priority, not validity. A delivered, accepted deed is valid even if unrecorded.
Entering a deed or other instrument into the county public records, which gives constructive notice and establishes priority.
A title search examines the chain of title but cannot reveal every defect, which is why title insurance exists.
The recorded history of ownership of a property, tracing each transfer from owner to owner over time.
Zoning does not automatically override a private deed restriction. The more restrictive rule governs.
A private limitation on how a property may be used, written into a deed or recorded subdivision rules and enforced by owners or an association.
If the owner gave permission, the use is not hostile and adverse possession cannot succeed.
A way to gain legal title by openly possessing another owner's land without permission for the limitation period Texas law sets.
A sales agent cannot operate independently or take compensation for brokerage directly from a client or another broker. It flows through the sponsoring broker.
A Texas license holder who performs real estate brokerage only under the sponsorship and supervision of a broker.
Only a broker, not a sales agent, may run a brokerage independently and sponsor others. The broker answers for the sponsored agents' acts.
A Texas license holder who may operate a brokerage independently, hold trust money, and sponsor and supervise sales agents.
Without an active sponsoring broker, a sales agent license is inactive and the agent may not perform brokerage, even though the license exists.
The Texas broker who sponsors a sales agent, supervises the agent's brokerage activity, and is responsible for the agent's acts.
Do not confuse the one-time SAE requirement before the first renewal with the recurring continuing education required for renewals after that.
The additional Texas education a sales agent must complete before the first license renewal.
Do not confuse recurring continuing education with the one-time Sales Apprentice Education required before the first renewal.
The approved coursework a Texas license holder must complete each renewal period to keep a license active.
Principal meridians run north-south and base lines run east-west. Do not reverse them.
Also called the rectangular survey system, a method that describes land using townships and sections measured from principal meridians and base lines.
Do not confuse a township (36 sections) with a section (one mile square, 640 acres).
A six-mile-square block of the government survey system that contains 36 sections.
Lot and block requires a recorded plat. A perimeter traced by directions and distances is metes and bounds, not lot and block.
A legal description method that identifies a parcel by its lot and block numbers on a recorded subdivision plat.
If the courses do not return to the point of beginning, the boundary does not close and the description fails.
The fixed starting point of a metes and bounds description, where the boundary must also close.
Divide square feet by 43,560 to get acres. Multiplying instead is the common error.
A unit of land area equal to 43,560 square feet. A section of land contains 640 acres.
Get the direction right. With taxes paid in arrears, the seller owes the buyer, not the other way around.
The division of a recurring expense such as property tax, insurance, or HOA dues between buyer and seller at closing based on the closing date.
Never subtract the mortgage payment when finding net operating income. Debt service stays out of the calculation.
A property's income after operating expenses but before mortgage debt service, used in the income approach to value.
Equity is value minus debt, not the original down payment, and not the same as profit.
The owner's value in a property, equal to its current market value minus the debt owed against it.
A standard lot and block legal description depends on the recorded subdivision plat. A casual sketch is not a substitute for the recorded plat and its identified lot and block.
A recorded map of a subdivision showing the lots, blocks, streets, and easements, referenced by the lot and block description method.
A referral fee paid just for sending business, with no service performed, violates RESPA Section 8.
A federal law that governs disclosures in residential mortgage settlements and prohibits kickbacks and unearned fees.
Do not swap the two. The Loan Estimate comes early; the Closing Disclosure comes near the end.
The federal form showing final loan terms and closing costs, generally due at least three business days before consummation.
A blanket mortgage spreads one loan across several parcels. A package mortgage instead adds personal property to a single parcel.
A single mortgage that covers more than one parcel of land, often with a partial release clause so parcels can be freed as they sell.
Package adds personal property to one property. Blanket spreads one loan over multiple properties.
A mortgage that finances real property together with personal property, such as appliances and furniture, under one loan.
A wraparound does not pay off the old loan. The original loan stays in place underneath the new one.
A new, larger loan that wraps around an existing loan that stays in place, with the borrower paying the new lender who continues paying the old one.
Purchase-money financing is debt used to acquire the property. The lender may be the seller or a third-party lender, so do not treat seller financing as part of the definition.
A mortgage securing debt used to acquire the property, whether the credit comes from the seller or a third-party lender.
A construction loan is temporary. It is not the permanent mortgage that pays it off at completion.
Short-term financing disbursed in stages as a building project reaches milestones, with the balance due at completion.
No scheduled mortgage payment does not mean no housing costs. Missing taxes, insurance, or maintenance duties can place the loan in default.
A loan that lets an eligible older homeowner draw on home equity without scheduled monthly principal-and-interest payments.
Fannie Mae and Freddie Mac buy mortgages in the secondary market. Ginnie Mae does not buy loans; it guarantees timely payment on qualifying mortgage-backed securities. None lends directly to homebuyers.
The market where existing mortgage loans are bought and sold, giving lenders fresh capital to make new loans.
The Recovery Trust Account is not the brokerage trust account, and it pays only after a judgment cannot be collected from the license holder.
A Texas account that reimburses a member of the public who holds an uncollectible court judgment against a license holder for certain violations.
TREC sanctions are administrative, separate from any criminal charge. Disputed facts are heard at SOAH, not decided unilaterally without process.
The range of sanctions TREC may impose for a TRELA or rule violation, from a fine or reprimand to suspension or revocation.
When the facts are disputed, the hearing is at SOAH, not at a TREC meeting. TREC decides after the judge's proposal for decision.
The independent Texas body whose administrative law judges hear contested TREC cases and issue a proposal for decision.
Age and income are not protected classes under the federal Fair Housing Act. Familial status and disability are the two most often forgotten.
The federal law that prohibits housing discrimination based on race, color, religion, national origin, sex, familial status, and disability.
Steering directs buyers; blockbusting scares owners into selling; redlining is a lending denial. Match the behavior to the term.
The illegal practice of directing buyers toward or away from neighborhoods based on a protected class.
Blockbusting targets owners to induce selling. Steering targets buyers to channel where they look.
The illegal practice of inducing owners to sell by suggesting that members of a protected class are moving into the area.
Redlining is place-based discrimination in housing-related credit or services. Steering channels buyers and blockbusting pressures owners, so classify the conduct before choosing the term.
Place-based discrimination in residential real estate lending or related financial services because of protected-class characteristics.
Familial status is about children in the household, not marital status. Marital status is not a federal protected class.
A Fair Housing protected class covering households with children under 18 and pregnant people.
The Seller's Disclosure Notice is required for most residential sales but has statutory exemptions, such as some foreclosure and estate sales. It does not substitute for the buyer's own inspection.
The statutory Texas form on which a seller of most residential property discloses the property's known condition to the buyer.
Ad valorem is based on value, unlike a special assessment, which is based on the benefit a property receives.
A property tax based on the appraised value of real estate, set as of January 1 and paid in arrears in Texas.
A special assessment is not an ad valorem tax. Only the properties that benefit pay, and the basis is benefit received.
A charge levied only on the properties that benefit from a specific public improvement, based on benefit rather than value.
Do not import another state's tax-certificate-sale system into a Texas question. Texas Form 50-182 is a collector's statement about delinquent amounts.
A certificate from a Texas tax collector stating the delinquent taxes, penalties, interest, and known costs due on a property.
The federal disclosure trigger is target housing built before 1978. It does not mean the seller guarantees that the property is lead-free.
The federal rule for most pre-1978 housing requiring lead disclosures, an EPA pamphlet, and a buyer's inspection opportunity.
CERCLA generally excludes petroleum. A gasoline tank leak commonly starts with the UST program, not an automatic CERCLA answer.
The federal Superfund law authorizing responses to hazardous-substance releases and recovery of cleanup costs from liable parties.
SARA did not replace CERCLA. It amended and reauthorized it.
The 1986 Superfund Amendments and Reauthorization Act, which strengthened CERCLA and created EPCRA through Title III.
A clean Phase I is not a federal promise that contamination does not exist or that liability is impossible.
A nonintrusive review of property history, records, interviews, and site conditions used to identify environmental concerns.
Do not describe every Phase I as including samples. Sampling is the key Phase II signal.
Targeted sampling and laboratory analysis used to investigate a specific environmental concern identified at a property.
Brownfield does not mean a site already listed on Superfund's National Priorities List.
Property whose expansion, redevelopment, or reuse may be complicated by actual or potential environmental contamination.
Petroleum exclusion does not mean no cleanup liability. It means CERCLA may not be the primary legal route.
A regulated tank system below ground whose release can contaminate soil or groundwater and create cleanup obligations.
Do not assume that the absence of a universal federal sale form permits concealment of known asbestos.
A fibrous mineral building material that creates serious health risk when disturbed fibers become airborne and are inhaled.
Radon is a gas from soil, not a fibrous building material like asbestos.
A colorless, odorless radioactive soil gas that can accumulate indoors; EPA recommends action at 4 pCi/L.
The same license holder generally may not assess and remediate the same project.
Fungal growth associated with moisture; Texas licenses specified assessment and remediation work under Chapter 1958.
Not every wet area is automatically federally regulated, and zoning approval does not replace a required Section 404 permit.
Water-influenced areas that may be federally protected, limiting dredged or fill discharges under Clean Water Act Section 404.
An EIS evaluates a federal action. A Phase I evaluates property history and recognized environmental conditions.
A detailed NEPA document analyzing significant environmental effects and alternatives for a proposed major federal action.
A patent defect does not make misrepresentation acceptable. Visibility never creates permission to give a false assurance.
A significant property defect hidden from ordinary observation, such as structural damage concealed by finishes.
Leverage is about debt, not appreciation. Appreciation is a rise in value; leverage is the use of borrowed money.
The use of borrowed money to control a larger investment, which can magnify both returns and risk.
A Section 1031 exchange defers gain; it does not erase it. A personal-use primary residence does not qualify merely because it is real estate. The property must be held for investment or productive use in a trade or business.
A tax-deferred exchange under Internal Revenue Code Section 1031 for qualifying like-kind real property held for business or investment.
Do not equate cash flow with net operating income. The mortgage payment separates them.
The money left after subtracting operating expenses and mortgage debt service from a property's income.
A useful, scarce, and desired property still has no market value if it cannot be transferred.
The four things a property needs to have value: demand, utility, scarcity, and transferability, remembered as DUST.
The MLS is run by brokers, not the state. It is a cooperation tool, not a licensing body.
A cooperative system in which member brokers share their listings and offers of cooperation with one another.
Do not use Realtor as a synonym for licensee. Only association members may use the trademark.
A registered trademark of the National Association of Realtors, referring only to a licensee who is a member, not to every licensee.
Texas does not require all local zoning to conform to a state-mandated plan. Zoning is a municipal power, and large areas, including Houston, lack conventional zoning.
A Texas municipality's long-range land use plan, adopted under the Local Government Code to guide zoning and development.
A variance is not a change of use. It is narrow relief from a specific requirement because of a hardship.
Permission to deviate from a specific zoning requirement because strict compliance would cause an unnecessary hardship.
A nonconforming use is grandfathered, not a variance. It concerns use, while a variance concerns a dimensional rule.
A land use that was lawful before a zoning change and is allowed to continue, though generally not to expand; also called grandfathered.
A special exception is a permitted-with-conditions use, not relief from a hardship. That distinguishes it from a variance.
A use allowed in a zoning district only with specific approval after meeting stated conditions; also called a conditional use.
Do not swap the two. Building codes are about how to build; zoning is about what use is allowed.
Government standards that regulate how structures must be built for safety, separate from zoning, which regulates use.
Earnest money is not one of the four essentials. Consideration is required, but the deposit itself is not.
An agreement that has the four essential elements: competent parties, mutual assent, a legal purpose, and consideration.
A listing price is an invitation to negotiate, not an offer a buyer can accept to form a contract.
The matching offer and acceptance that create the mutual assent, or meeting of the minds, required for a contract.
Adequacy is not required. A contract can be valid even if one side seems to get a better bargain, as long as consideration exists.
Something of legal value that each party exchanges, which is required for a valid contract.
Do not call a minor's contract void. It is voidable, which gives the minor the choice to enforce or disaffirm. "Lack of capacity" alone does not decide it: unadjudicated incapacity is voidable, adjudicated incompetence is void.
A void contract was never legally valid; a voidable contract is valid until the protected party chooses to void it.
A standalone option contract is unilateral: only the optionor is bound to perform. The Texas termination option is the opposite trap, because it is a termination right inside a bilateral contract, not an option contract.
A bilateral contract is a promise for a promise; a unilateral contract is a promise in exchange for an act.
Do not confuse executed (fully performed) with merely signed. A signed contract awaiting closing is executory, not executed.
An executed contract is fully performed by both parties; an executory contract still has obligations left to complete.
Specific performance is a court order requiring the contract to be performed, often by conveying the property. Liquidated damages are a money remedy fixed by the contract. Match the remedy to what the party actually seeks.
A court order requiring a party to perform the contract, often used when damages are inadequate and the real property is unique.
Liquidated means set ahead of time. Do not confuse it with specific performance, which forces the sale rather than awarding money.
An amount the parties agree in advance that one will keep or pay if the other defaults, such as retained earnest money.
A contingency protects a party until a condition is met. Waiving or missing a contingency deadline can forfeit that protection.
A condition in a contract that must be satisfied for the deal to move forward, such as financing, inspection, or appraisal.
The optionee is not required to buy. The option gives a right to purchase, not a promise to purchase.
A unilateral contract in which the optionor must sell at a set price if the optionee exercises, while the optionee is not obligated to buy.
Not every failure is a breach. A party excused by an unmet contingency or by impossibility has not breached.
A failure to perform a contractual obligation without legal excuse, which gives the other party remedies.
Rescission unwinds the deal; specific performance enforces it. They are opposite responses to a contract problem.
Canceling a contract and returning the parties to the positions they held before it was made.
With this clause, even a small delay can be a breach. Do not assume a grace period applies.
A contract clause that makes the stated deadlines strictly enforceable, so missing a date is a breach.
Completing an authorized form is brokerage work. Writing a clause that changes legal rights or remedies can be unauthorized practice of law.
A contract form adopted by TREC for mandatory use by license holders when the form applies and no rule exception controls.
Do not confuse the three-day fee-delivery deadline with the negotiated option period. They are different clocks.
A negotiated period in the TREC residential contract during which the buyer may terminate for any reason, in exchange for an option fee.
A DTPA claim is a civil consumer remedy, separate from and in addition to any TREC disciplinary action for the same conduct.
The Texas consumer-protection statute that gives a consumer remedies for false, misleading, or deceptive acts, including in real estate.
The Veterans Land Board is a Texas state program, not the federal VA. A veteran may qualify for both, but they are different sources.
A Texas program that offers eligible veterans below-market loans for land, homes, and home improvements.
On a homestead, a mechanic's lien is valid only if the strict constitutional requirements are met, including a written contract signed before work begins and, for a married couple, both spouses' signatures.
A Texas lien that secures payment to a contractor or supplier for labor or materials furnished to improve real property.
Immediate vesting at death does not prove that one relative can convey the property. Debts, administration, and proof of heirship still stand between the heirs and a marketable deed.
The statutory order that decides who inherits Texas property when a decedent leaves no valid will covering it.
The 30-day clock runs from surrender of the premises, not from the lease end date, and the landlord's duty is not enforceable until the tenant supplies a written forwarding address.
Money a residential tenant gives a landlord, other than rent, to secure performance of the lease under Texas Property Code Chapter 92.
Releasing the lien so the sale can close is not the same as releasing the debt. A deficiency can remain unless the lienholder waives it in writing.
A sale in which the anticipated proceeds will not satisfy the secured debt, so every lienholder must approve the closing.
A POA resale certificate is not the sales-tax resale certificate, and it does not replace the seller's disclosure notice. The two documents answer different questions.
The statutory disclosure a Texas property owners association issues on resale, reporting assessments, restrictions, and known violations.
Equitable title does not give the buyer possession, the power to convey, or automatic priority. Those come from the contract terms, the deed, and the recording statutes.
The interest a buyer holds once a binding sales contract exists, before legal title passes by delivery of the deed.
A trap is a tempting wrong answer built from a reversed rule, a look-alike term, an omitted condition, or a national principle applied to a Texas-specific question. Each entry names the mistake, states the correct rule, and links to a sourced definition.
Yes. All 179 entries on this page are free with no signup. Each one links to a detailed glossary page with the applicable definition, exam use, example where relevant, and official sources.
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