Brokerage & Agency
Intermediary
Texas does not recognize dual agency. If a question frames a single broker fully representing both sides, the correct concept is intermediary with written consent, often with appointed license holders.
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The Texas exam trap library, the wrong answers that catch good candidates.
148 of the most common Texas exam traps, each tied to a term and the single way candidates miss it. Search, filter by area, and learn the trap before the exam shows it to you.
How to use this
Each card names a term and the most common trap tied to it. Read the trap, picture the question that would use it, and you will recognize the setup on exam day. Filter by your weakest area and drill those first.
Texas-specific
Texas changes the answer
Intermediary instead of dual agency, property tax per $100 of value, no transfer tax. The traps that catch out-of-state material live here.
Look-alikes
Terms that look interchangeable
Assignment vs novation, void vs voidable, mortgage vs deed of trust. The exam tests the one feature that separates them.
Direction errors
Adjustments and prorations
Adjust the comparable not the subject, who owns the closing day, add for inferior and subtract for superior. The setup decides the sign.
Showing 148 traps.
Brokerage & Agency
Appointed License Holder
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.
Brokerage & Agency
IABS (Information About Brokerage Services)
The IABS notice is a disclosure, not a representation agreement. Giving it to a consumer does not make that consumer a client.
Brokerage & Agency
Fiduciary Duties
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.
Brokerage & Agency
Dual Agency (Prohibited in Texas)
Do not call the Texas model dual agency. Texas abolished dual agency and uses the intermediary relationship instead.
Law & License
Commingling
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.
Law & License
Conversion
If the funds were only mixed into the wrong account, that is commingling. Conversion requires that the funds were used.
Law & License
Blind Ad
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.
Law & License
TREC (Texas Real Estate Commission)
TREC enforces and adopts rules but does not create the statute. If a question asks who writes TRELA, the answer is the Texas Legislature.
Law & License
TRELA (The Real Estate License Act)
Do not confuse TRELA with the TREC Rules. TRELA is the statute passed by the Legislature; the rules are TREC's regulations implementing it.
Property Rights & Ownership
Fee Simple Absolute
Fee simple defeasible looks similar but carries a condition that can trigger forfeiture. Absolute means no such condition.
Property Rights & Ownership
Life Estate
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.
Property Rights & Ownership
Community Property
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 Rights & Ownership
Separate Property
The community-property presumption means a spouse claiming separate property must prove it. Acquisition during marriage points toward community property unless traced.
Property Rights & Ownership
Joint Tenancy
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.
Property Rights & Ownership
Tenancy in Common
Tenancy in common has no survivorship. In Texas it is the default when co-owners do not sign a written survivorship agreement.
Property Rights & Ownership
Homestead (Texas Creditor Protection)
Homestead creditor protection and the homestead tax exemption are not the same thing. One stops forced sale; the other lowers property tax.
Contracts
Novation
Assignment transfers rights but the assignor may stay liable. Novation replaces the party and ends that liability. The release is the dividing line.
Contracts
Assignment
Do not assume assignment releases the original party. Only novation does that.
Contracts
Statute of Frauds
The contract is unenforceable, not automatically void. A party can still choose to perform; the issue is whether a court will force performance.
Finance & Mortgages
Deed of Trust
Texas residential lending uses a deed of trust, not a mortgage with judicial foreclosure. The trustee, not the lender, holds the power of sale.
Finance & Mortgages
Trustee (Deed of Trust)
The trustee, not the lender, conducts the foreclosure sale under a deed of trust. The lender appoints the trustee but does not hold the power of sale itself.
Finance & Mortgages
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.
Finance & Mortgages
Promissory Note
A debt can exist without a security instrument, but a deed of trust cannot exist without a debt. The note is the controlling instrument.
Finance & Mortgages
Mortgage
Do not swap the two instruments. The note is the debt; the security instrument (a deed of trust in Texas) is the security.
Finance & Mortgages
PMI (Private Mortgage Insurance)
PMI protects the lender, not the borrower. Borrowers often assume it protects them, which is the tested misconception.
Taxes & Closing Costs
Homestead Exemption (Texas Tax)
The tax exemption and the creditor-protection homestead share a name but do different things. One lowers property tax; the other blocks forced sale.
Taxes & Closing Costs
Homestead Appraisal Cap (10%)
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.
Taxes & Closing Costs
Property Tax Protest
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.
Taxes & Closing Costs
Property Tax Rate (per $100)
Do not multiply appraised value by the rate before subtracting exemptions. Taxable value comes first, and the Texas convention is per 100, not mills.
Valuation & Appraisal
Capitalization Rate (Cap Rate)
Do not subtract the mortgage payment when finding net operating income. Debt service stays outside the calculation.
Valuation & Appraisal
Gross Rent Multiplier (GRM)
Do not use net income in the GRM. It is built on gross rent.
Math & Measurement
Loan-to-Value Ratio (LTV)
Use the lower of appraised value and sale price for the denominator. Using the higher number inflates the loan the lender will make.
Math & Measurement
Section (640 Acres)
Work the fractions of a description from right to left and multiply them all. Applying only the last fraction is the common error.
Titles & Deeds
General Warranty Deed
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.
Titles & Deeds
Quitclaim Deed
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.
Titles & Deeds
Title Insurance
Title insurance covers defects that predate the policy, not problems that arise afterward. It is not ongoing hazard coverage.
Land Use & Environmental
Eminent Domain
Eminent domain is the power; condemnation is the process. Both require just compensation. Police power, by contrast, regulates without paying compensation.
Land Use & Environmental
Police Power
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.
Land Use & Environmental
Escheat
Escheat requires both no will and no heirs. If either exists, the property passes through that channel instead.
Property Rights & Ownership
Bundle of Rights
Ownership is not all-or-nothing. Individual rights in the bundle can be sold or leased separately.
Contracts
Earnest Money
Earnest money is not an element required for a valid contract. Consideration is required, but the deposit itself is not.
Law & License
Escrow / Trust Account
Mixing trust money with the broker's own funds is commingling, even if none is spent. Spending it is the more serious conversion.
Brokerage & Agency
Material Fact
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.
Finance & Mortgages
Amortization
With a partially amortized or interest-only loan, the regular payments do not retire the full debt. A lump sum still comes due.
Finance & Mortgages
Acceleration Clause
An acceleration clause is broader than a due-on-sale clause. Default triggers acceleration; sale triggers the due-on-sale version.
Finance & Mortgages
Due-on-Sale Clause (Alienation Clause)
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.
Finance & Mortgages
Deficiency Judgment
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.
Finance & Mortgages
Foreclosure
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.
Finance & Mortgages
Equity of Redemption
Texas has no post-sale statutory redemption period for a deed-of-trust home loan. The exceptions are tax sales and certain association foreclosures.
Finance & Mortgages
Discount Points
Points are a percentage of the loan amount, not the purchase price, and discount points are not the same as origination points.
Finance & Mortgages
FHA Loan
Do not confuse FHA (insured) with VA (guaranteed). FHA serves general buyers; VA serves eligible veterans.
Finance & Mortgages
VA Loan
VA loans have a funding fee, not FHA-style mortgage insurance premiums. Match the program to the borrower's veteran status.
Finance & Mortgages
Conventional Loan
A conventional loan with 20 percent down avoids PMI. Below 20 percent down, PMI applies until the balance reaches 78 percent.
Finance & Mortgages
Adjustable-Rate Mortgage (ARM)
The borrower controls neither the index nor the margin. Caps limit increases, but the rate can still rise.
Finance & Mortgages
Lis Pendens
Lis pendens is a notice, not a lien or a judgment. It warns of pending litigation.
Finance & Mortgages
Release of Lien (Satisfaction)
Paying the loan does not clear the record by itself. The recorded release is what removes the lien.
Titles & Deeds
Lien
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.
Titles & Deeds
Encumbrance
All liens are encumbrances, but not all encumbrances are liens. An easement is an encumbrance that is not a lien.
Property Rights & Ownership
Easement
An easement is a use right, not ownership. The holder cannot possess or sell the underlying land.
Property Rights & Ownership
Fixture
A ceiling fan bolted in place is a fixture and conveys. The same fan boxed in the garage is personal property and does not.
Property Rights & Ownership
Fee Simple Defeasible
Fee simple absolute has no conditions. The presence of a condition that can cut the estate short makes it defeasible.
Property Rights & Ownership
Right of Survivorship
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.
Property Rights & Ownership
Condominium
A condominium owner owns the unit as real property. A cooperative owner owns shares and a lease, not the unit.
Property Rights & Ownership
Cooperative (Co-op)
A co-op owner does not hold a deed to a unit. The corporation owns the building; the resident owns shares.
Property Rights & Ownership
Common Elements
An assigned parking space is a limited common element. It is reserved for one unit but is not owned separately from the condominium.
Taxes & Closing Costs
Municipal Utility District (MUD)
A MUD tax is on top of the usual city, county, and school taxes, so the combined rate is higher. The required MUD notice must be given to the buyer.
Valuation & Appraisal
Highest and Best Use
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.
Valuation & Appraisal
Cost Approach
The cost approach adds land separately. Do not depreciate the land; only the improvements depreciate.
Valuation & Appraisal
Sales Comparison Approach
Never adjust the subject property. All adjustments go to the comparables.
Valuation & Appraisal
Income Approach
Do not subtract debt service when finding net operating income, and divide by the cap rate rather than multiply.
Valuation & Appraisal
Depreciation (Appraisal)
Only the improvements depreciate, not the land. External obsolescence is the form the owner usually cannot cure.
Valuation & Appraisal
Market Value
A single sale price is market price, not necessarily market value. Market value assumes an arm's-length transaction with informed parties.
Property Rights & Ownership
Littoral Rights
Do not swap the two. Littoral is for standing water; riparian is for rivers and streams.
Property Rights & Ownership
Riparian Rights
Riparian is for rivers and streams. Use littoral for oceans, seas, and lakes.
Math & Measurement
Metes and Bounds
If the description does not return to the point of beginning, the boundary does not close and the description is defective.
Titles & Deeds
Special Warranty Deed
A special warranty deed is not the most protective deed. Only the general warranty deed covers defects from before the grantor's ownership.
Titles & Deeds
Deed
Recording is not a requirement for a valid deed. Delivery and acceptance are what transfer title between the parties.
Titles & Deeds
Constructive Notice
Constructive notice does not require that anyone actually saw the record. The law presumes notice once a document is properly recorded.
Titles & Deeds
Recording
Recording is about protection and priority, not validity. A delivered, accepted deed is valid even if unrecorded.
Titles & Deeds
Chain of Title
A title search examines the chain of title but cannot reveal every defect, which is why title insurance exists.
Titles & Deeds
Deed Restriction (Restrictive Covenant)
Zoning does not automatically override a private deed restriction. The more restrictive rule governs.
Property Rights & Ownership
Adverse Possession
If the owner gave permission, the use is not hostile and adverse possession cannot succeed.
Law & License
Sales Agent
A sales agent cannot operate independently or take compensation for brokerage directly from a client or another broker. It flows through the sponsoring broker.
Law & License
Broker
Only a broker, not a sales agent, may run a brokerage independently and sponsor others. The broker answers for the sponsored agents' acts.
Law & License
Sponsoring Broker
Without an active sponsoring broker, a sales agent license is inactive and the agent may not perform brokerage, even though the license exists.
Law & License
Sales Apprentice Education (SAE)
Do not confuse the one-time SAE requirement before the first renewal with the recurring continuing education required for renewals after that.
Law & License
Continuing Education (CE)
Do not confuse recurring continuing education with the one-time Sales Apprentice Education required before the first renewal.
Math & Measurement
Government Survey System
Principal meridians run north-south and base lines run east-west. Do not reverse them.
Math & Measurement
Township
Do not confuse a township (36 sections) with a section (one mile square, 640 acres).
Math & Measurement
Lot and Block
Lot and block requires a recorded plat. A perimeter traced by directions and distances is metes and bounds, not lot and block.
Math & Measurement
Point of Beginning (POB)
If the courses do not return to the point of beginning, the boundary does not close and the description fails.
Math & Measurement
Acre
Divide square feet by 43,560 to get acres. Multiplying instead is the common error.
Taxes & Closing Costs
Proration
Get the direction right. With taxes paid in arrears, the seller owes the buyer, not the other way around.
Valuation & Appraisal
Net Operating Income (NOI)
Never subtract the mortgage payment when finding net operating income. Debt service stays out of the calculation.
Finance & Mortgages
Equity
Equity is value minus debt, not the original down payment, and not the same as profit.
Titles & Deeds
Plat
The plat must be recorded for a lot and block description to be valid. An unrecorded sketch is not enough.
Finance & Mortgages
RESPA (Real Estate Settlement Procedures Act)
A referral fee paid just for sending business, with no service performed, violates RESPA Section 8.
Taxes & Closing Costs
Closing Disclosure
Do not swap the two. The Loan Estimate is early; the Closing Disclosure is the 3-day-before-closing form.
Finance & Mortgages
Blanket Mortgage
A blanket mortgage spreads one loan across several parcels. A package mortgage instead adds personal property to a single parcel.
Finance & Mortgages
Package Mortgage
Package adds personal property to one property. Blanket spreads one loan over multiple properties.
Finance & Mortgages
Wraparound Mortgage
A wraparound does not pay off the old loan. The original loan stays in place underneath the new one.
Finance & Mortgages
Purchase-Money Mortgage
Purchase-money financing frequently means the seller is the lender, not a bank.
Finance & Mortgages
Construction Loan
A construction loan is temporary. It is not the permanent mortgage that pays it off at completion.
Finance & Mortgages
Reverse Mortgage
A reverse mortgage is not a standard home equity loan with monthly payments. Repayment is deferred until a triggering event.
Finance & Mortgages
Secondary Mortgage Market
Fannie Mae, Freddie Mac, and Ginnie Mae operate in the secondary market. They buy loans; they do not lend directly to homebuyers.
Law & License
Real Estate Recovery Fund
The Recovery Trust Account is not the brokerage trust account, and it pays only after a judgment cannot be collected from the license holder.
Law & License
Disciplinary Action (TREC)
TREC sanctions are administrative, separate from any criminal charge. Disputed facts are heard at SOAH, not decided unilaterally without process.
Law & License
SOAH (State Office of Administrative Hearings)
When the facts are disputed, the hearing is at SOAH, not at a TREC meeting. TREC decides after the judge's proposal for decision.
Law & License
Fair Housing Act
Age and income are not protected classes under the federal Fair Housing Act. Familial status and disability are the two most often forgotten.
Law & License
Steering
Steering directs buyers; blockbusting scares owners into selling; redlining is a lending denial. Match the behavior to the term.
Law & License
Blockbusting
Blockbusting targets owners to induce selling. Steering targets buyers to channel where they look.
Law & License
Redlining
Redlining happens at the lender. Do not confuse it with steering or blockbusting, which involve agents and owners.
Law & License
Familial Status
Familial status is about children in the household, not marital status. Marital status is not a federal protected class.
Law & License
Seller's Disclosure Notice
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.
Taxes & Closing Costs
Ad Valorem Tax
Ad valorem is based on value, unlike a special assessment, which is based on the benefit a property receives.
Taxes & Closing Costs
Special Assessment
A special assessment is not an ad valorem tax. Only the properties that benefit pay, and the basis is benefit received.
Taxes & Closing Costs
Tax Lien and Tax Sale
Texas uses a tax-lien foreclosure and sale, not a sold tax certificate as some states do. A residence homestead has a longer redemption period after the sale.
Land Use & Environmental
Lead-Based Paint Disclosure
The rule applies only to housing built before 1978. Newer housing is exempt regardless of condition.
Finance & Mortgages
Leverage
Leverage is about debt, not appreciation. Appreciation is a rise in value; leverage is the use of borrowed money.
Taxes & Closing Costs
1031 Like-Kind Exchange
A 1031 exchange defers the tax, it does not erase it, and it cannot be used on a primary residence.
Valuation & Appraisal
Cash Flow
Do not equate cash flow with net operating income. The mortgage payment separates them.
Valuation & Appraisal
Elements of Value (DUST)
A useful, scarce, and desired property still has no market value if it cannot be transferred.
Brokerage & Agency
Multiple Listing Service (MLS)
The MLS is run by brokers, not the state. It is a cooperation tool, not a licensing body.
Brokerage & Agency
Realtor
Do not use Realtor as a synonym for licensee. Only association members may use the trademark.
Land Use & Environmental
Comprehensive Plan
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.
Land Use & Environmental
Variance
A variance is not a change of use. It is narrow relief from a specific requirement because of a hardship.
Land Use & Environmental
Nonconforming Use
A nonconforming use is grandfathered, not a variance. It concerns use, while a variance concerns a dimensional rule.
Land Use & Environmental
Special Exception (Conditional Use)
A special exception is a permitted-with-conditions use, not relief from a hardship. That distinguishes it from a variance.
Land Use & Environmental
Building Code
Do not swap the two. Building codes are about how to build; zoning is about what use is allowed.
Contracts
Valid Contract
Earnest money is not one of the four essentials. Consideration is required, but the deposit itself is not.
Contracts
Offer and Acceptance (Mutual Assent)
A listing price is an invitation to negotiate, not an offer a buyer can accept to form a contract.
Contracts
Consideration
Adequacy is not required. A contract can be valid even if one side seems to get a better bargain, as long as consideration exists.
Contracts
Void vs Voidable Contract
Do not call a minor's contract void. It is voidable, which gives the minor the choice to enforce or disaffirm.
Contracts
Bilateral vs Unilateral Contract
An option contract is unilateral, not bilateral. Only one party, the optionor, is bound to perform.
Contracts
Executed vs Executory Contract
Do not confuse executed (fully performed) with merely signed. A signed contract awaiting closing is executory, not executed.
Contracts
Specific Performance
Specific performance gives the property; liquidated damages give money. Match the remedy to what the party actually wants.
Contracts
Liquidated Damages
Liquidated means set ahead of time. Do not confuse it with specific performance, which forces the sale rather than awarding money.
Contracts
Contingency
A contingency protects a party until a condition is met. Waiving or missing a contingency deadline can forfeit that protection.
Contracts
Option Contract
The optionee is not required to buy. The option gives a right to purchase, not a promise to purchase.
Contracts
Breach of Contract
Not every failure is a breach. A party excused by an unmet contingency or by impossibility has not breached.
Contracts
Rescission
Rescission unwinds the deal; specific performance enforces it. They are opposite responses to a contract problem.
Contracts
Time Is of the Essence
With this clause, even a small delay can be a breach. Do not assume a grace period applies.
Contracts
Promulgated Form
A license holder cannot draft or rewrite contract language. The duty is to complete the promulgated form, not to author terms.
Contracts
Termination-Option Period
The option fee and the option period are negotiated between the parties. TREC does not fix the amount or the number of days.
Law & License
Deceptive Trade Practices Act (DTPA)
A DTPA claim is a civil consumer remedy, separate from and in addition to any TREC disciplinary action for the same conduct.
Finance & Mortgages
Veterans Land Board (VLB)
The Veterans Land Board is a Texas state program, not the federal VA. A veteran may qualify for both, but they are different sources.
Titles & Deeds
Mechanic's and Materialman's Lien
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.
What is a Texas real estate exam trap?+
A trap is the wrong-answer setup the exam uses to separate candidates who memorized a definition from those who understand it. Each entry names the term and the single most common way candidates get it wrong.
Is the Trap Library free?+
Yes. This sampler of 148 traps is free with no signup. It is drawn from the same Texas glossary used across this site, written from TREC, TRELA, the TREC Rules, and the Pearson VUE content outline.
How should I use the Trap Library to study?+
Read a trap, then ask yourself which answer you would have picked under time pressure. Filter by the area you are weakest in. Pair it with the flashcards to lock in the term, and with practice questions to see the trap inside a full question.
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Yes. The app's full Trap Library tags traps inside the 1,200+ question bank, so you see them in context with explanations, Math Coach, and weak-area tracking for one $59.99 purchase.
Traps drawn from the Pass Texas glossary, written from TREC, TRELA, the TREC Rules, and the Pearson VUE Texas content outline. Study aids for exam preparation, not copied exam questions.