Closing Costs — Finance & Math | TX RE Salesperson

Texas Real Estate Salesperson — Course Curriculum

Exam: Texas Real Estate Salesperson (TREC / Pearson VUE) Total Questions: ~165 (125 national + 40 Texas-specific) Passing Score: 70% Licensing Authority: Texas Real Estate Commission (TREC)

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Course Structure

| Chapter | Title | Files | Focus | |---|---|---|---| | 0 | Introduction | 1 | Exam overview, TX unique features | | 1 | Real Property Characteristics | 1 | National: fixtures, legal descriptions, land use | | 2 | Ownership and Title | 1 | National + TX: ownership forms, community property | | 3 | Property Value and Appraisal | 1 | National + TX: 3 approaches, appraisal gap | | 4 | Contracts and Agency | 1 | National + TX: CALCO, promulgated forms, Option Period | | 5 | Real Estate Practice | 1 | National + TX: antitrust, fair housing, NAR settlement | | 6 | Disclosures and Environment | 1 | National + TX: SDN, "as is," lead paint, flood | | 7 | Financing and Settlement | 1 | National + TX: deed of trust, non-judicial foreclosure | | 8 | Real Estate Math | 1 | National + TX: commission, proration, LTV, cap rate | | 9 | TX TREC Licensing and Agency | 2 | TX-specific: licensing, IABS, intermediary | | 10 | TX Promulgated Forms and Property Law | 2 | TX-specific: mandatory forms, homestead, community property |

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Chapter 0 — Introduction

0.1 - How to Use This Course

Exam format (165 questions, 70% to pass, Pearson VUE)
4 key TX unique concepts: promulgated forms, Option Period, intermediary, no transfer tax
Study priority: Chapters 9–10 first (TX-specific), then Contracts (Ch 4), then Practice and Math

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Chapter 1 — Real Property Characteristics (National)

Exam weight: 6–8 questions | Medium priority

1.1 - Real vs Personal Property

Real property: land + improvements + legal attachments (mineral rights, air rights)
Personal property (chattel): movable; not permanently attached
Fixture test: MARIA (Method, Adaptability, Relationship, Intention, Agreement)
Trade fixtures: commercial tenant's business equipment; remains personal property
Emblements: annual cultivated crops; personal property of tenant farmer
TX context: split estate (surface vs. mineral rights) common in Texas

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Chapter 2 — Ownership and Title (National + TX)

Exam weight: 6–8 questions | Medium priority

2.1 - Forms of Ownership

Freehold estates: fee simple absolute, fee simple defeasible (determinable vs. condition subsequent), life estate
Joint tenancy: 4 unities (TTIP), right of survivorship, severance by sale
Tenancy in common: unequal shares OK, no survivorship, partition available
Community property (TX): property acquired during marriage; both spouses equal owners; both must sign homestead conveyances
Separate property: pre-marital; gifts; inheritances — must be traceable
Community property with right of survivorship (CPWROS): TX allows via written agreement
Life estate: cannot commit waste; cannot convey fee simple; life > remainderman

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Chapter 3 — Property Value and Appraisal (National + TX)

Exam weight: 8–10 questions | Medium-High priority

3.1 - Appraisal Principles

DUST: Demand, Utility, Scarcity, Transferability
Key principles: substitution, contribution, highest and best use, conformity, regression, progression, anticipation
Sales comparison: CBS adjustment rule (Better → Subtract; Worse → Add)
Cost approach: land + depreciated improvements; best for special-purpose buildings
Income approach: Value = NOI ÷ Cap Rate; NOI excludes mortgage; best for investment property
Depreciation: physical (wear), functional (design flaw), external (incurable; outside forces)
TX-specific: lender uses LOWER of appraised value or purchase price for LTV; appraisal gap buyer must cover

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Chapter 4 — Contracts and Agency (National + TX)

Exam weight: 20–22 questions | Highest priority

4.1 - Texas Contracts

Valid contract elements: CALCO (Competent parties, Agreement, Legality, Consideration, in writing)
Contract status: valid, void, voidable, unenforceable
Statute of Frauds: all real estate contracts must be in writing
Offer/counteroffer: mirror image rule; any change = counteroffer
TX mandatory forms: agents MUST use TREC promulgated forms; attorneys may draft custom
Primary form: TREC 20-17 (One to Four Family Residential Contract)
Option Period: Option Fee to SELLER (non-refundable); unrestricted right to terminate; credited at closing
Earnest money: to ESCROW AGENT (title company); refundable under contingencies
Financing contingency: TREC 40-10 (Third Party Financing Addendum)
TX listing types: exclusive right to sell (strongest broker protection), exclusive agency, open, net

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Chapter 5 — Real Estate Practice (National + TX)

Exam weight: 16–18 questions | High priority

5.1 - Real Estate Practice

Sherman Antitrust Act: price fixing, market allocation, group boycotts — all per se violations
Fair housing: 7 federal protected classes; steering, blockbusting, redlining prohibited
TX enforcement: Texas Workforce Commission (state); HUD (federal)
Local additions: Austin, Dallas, Houston add sexual orientation, gender identity, source of income
Post-NAR settlement (Aug 2024): buyer compensation NOT in MLS; buyers sign agreement before touring
Property management: license required; 30-day security deposit return (TX); habitability duty
NAR Code of Ethics: Article 17 — arbitrate compensation disputes

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Chapter 6 — Disclosures and Environment (National + TX)

Exam weight: 7–9 questions | Medium priority

6.1 - Texas Disclosures

Texas Seller's Disclosure Notice (SDN): required for most residential sales; seller completes; covers structural, systems, flooding, hazards, HOA
"As is" addendum: seller won't repair; does NOT eliminate SDN obligation
Fraudulent concealment: buyer's remedy even in "as is" sale if seller hid known defect
Lead-based paint: federal requirement

Texas Real Estate Salesperson — Course Curriculum

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Course Structure

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Chapter 0 — Introduction

0.1 - How to Use This Course

Exam format (165 questions, 70% to pass, Pearson VUE)
4 key TX unique concepts: promulgated forms, Option Period, intermediary, no transfer tax
Study priority: Chapters 9–10 first (TX-specific), then Contracts (Ch 4), then Practice and Math

---

Chapter 1 — Real Property Characteristics (National)

Exam weight: 6–8 questions | Medium priority

1.1 - Real vs Personal Property

Real property: land + improvements + legal attachments (mineral rights, air rights)
Personal property (chattel): movable; not permanently attached
Fixture test: MARIA (Method, Adaptability, Relationship, Intention, Agreement)
Trade fixtures: commercial tenant's business equipment; remains personal property
Emblements: annual cultivated crops; personal property of tenant farmer
TX context: split estate (surface vs. mineral rights) common in Texas

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Chapter 2 — Ownership and Title (National + TX)

Exam weight: 6–8 questions | Medium priority

2.1 - Forms of Ownership

Freehold estates: fee simple absolute, fee simple defeasible (determinable vs. condition subsequent), life estate
Joint tenancy: 4 unities (TTIP), right of survivorship, severance by sale
Tenancy in common: unequal shares OK, no survivorship, partition available
Community property (TX): property acquired during marriage; both spouses equal owners; both must sign homestead conveyances
Separate property: pre-marital; gifts; inheritances — must be traceable
Community property with right of survivorship (CPWROS): TX allows via written agreement
Life estate: cannot commit waste; cannot convey fee simple; life > remainderman

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Chapter 3 — Property Value and Appraisal (National + TX)

Exam weight: 8–10 questions | Medium-High priority

3.1 - Appraisal Principles

DUST: Demand, Utility, Scarcity, Transferability
Key principles: substitution, contribution, highest and best use, conformity, regression, progression, anticipation
Sales comparison: CBS adjustment rule (Better → Subtract; Worse → Add)
Cost approach: land + depreciated improvements; best for special-purpose buildings
Income approach: Value = NOI ÷ Cap Rate; NOI excludes mortgage; best for investment property
Depreciation: physical (wear), functional (design flaw), external (incurable; outside forces)
TX-specific: lender uses LOWER of appraised value or purchase price for LTV; appraisal gap buyer must cover

---

Chapter 4 — Contracts and Agency (National + TX)

Exam weight: 20–22 questions | Highest priority

4.1 - Texas Contracts

Valid contract elements: CALCO (Competent parties, Agreement, Legality, Consideration, in writing)
Contract status: valid, void, voidable, unenforceable
Statute of Frauds: all real estate contracts must be in writing
Offer/counteroffer: mirror image rule; any change = counteroffer
TX mandatory forms: agents MUST use TREC promulgated forms; attorneys may draft custom
Primary form: TREC 20-17 (One to Four Family Residential Contract)
Option Period: Option Fee to SELLER (non-refundable); unrestricted right to terminate; credited at closing
Earnest money: to ESCROW AGENT (title company); refundable under contingencies
Financing contingency: TREC 40-10 (Third Party Financing Addendum)
TX listing types: exclusive right to sell (strongest broker protection), exclusive agency, open, net

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Chapter 5 — Real Estate Practice (National + TX)

Exam weight: 16–18 questions | High priority

5.1 - Real Estate Practice

Sherman Antitrust Act: price fixing, market allocation, group boycotts — all per se violations
Fair housing: 7 federal protected classes; steering, blockbusting, redlining prohibited
TX enforcement: Texas Workforce Commission (state); HUD (federal)
Local additions: Austin, Dallas, Houston add sexual orientation, gender identity, source of income
Post-NAR settlement (Aug 2024): buyer compensation NOT in MLS; buyers sign agreement before touring
Property management: license required; 30-day security deposit return (TX); habitability duty
NAR Code of Ethics: Article 17 — arbitrate compensation disputes

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Chapter 6 — Disclosures and Environment (National + TX)

Exam weight: 7–9 questions | Medium priority

6.1 - Texas Disclosures

Texas Seller's Disclosure Notice (SDN): required for most residential sales; seller completes; covers structural, systems, flooding, hazards, HOA
"As is" addendum: seller won't repair; does NOT eliminate SDN obligation
Fraudulent concealment: buyer's remedy even in "as is" sale if seller hid known defect
Lead-based paint: federal requirement