Real Estate Test

What is the purpose of TREC (Texas Real Estate Commission)?

Protect the public, Set minimum competency standards, provide discipline and enforcement, and to regulate real estate brokerage activity.

TREC has the authority to:

Issue and renew licenses,

Enforce TRELA

Create rules, not statutes

Conduct investigations and hearings

TRELA

Texas real estate license act

TREC does not have the authority to:

Enforce or interpret contracts

Resolve commission disputes

Give legal advice

Represent licensees

Decide civil damages

When is a license required

When acting for another person,

When receiving or expecting compensation,

In a real estate transaction

Exemptions to having a real estate license

Attorneys performing legal duties

On-site apartment managers

Executors / trustees acting under court authority

People selling their own property

Compensation includes

Money, gifts, future favors, and referral fees

Earnest money must..

Be deposited by the end of the next business day

Earnest money is deposited into

Commingling

Mixing funds (even temporarily)

Conversion

Using trust money as your own.

Which is worse ? Commingling or conversion

Conversion

Who does the interest belong to in a trust account

The principal, unless otherwise stated on a written agreement.

What are the requirements for intermediary in Texas?

Fiduciary Duties consist of..

Loyalty, confidentiality, accounting, obedience, disclosure, reasonable care

A sellers disclosure notice is required for..

1-4 family residential properties

If there are known defects and conditions