When representing buyers and sellers, one of the most important things a real estate licensee does is to prepare and review offers for them by filling in the blanks of promulgated forms.

In order to be knowledgeable, as required by the Cannons of Professional Ethics, it is necessary for licensees to not only know what goes in the blank but what is in the pre-printed portion of the contact.

Licensees may not give legal advice and must advise the parties to seek help from their own attorney if a question arises regarding legal rights or remedies.

Licensees can, however, point out to the parties the verbiage in the contact form. To fulfill that role licensees must be completely familiar with the forms.

Agency relationships are the foundation of most real estate transactions. The relationship between a licensee and his or her client is considered a fiduciary relationship, meaning that the client places trust in the licensee to fulfill certain duties towards the client. A broker or licensee can act as a sellers agent, a buyers agent, a subagent or an intermediary, and each of these four types of agency relationships has its own set of guidelines, as well its own ethical issues. Licensees who understand both the basics of agency law as well as the specific laws of agency in the state of Texas will be able to serve their clients and customers to the best of their abilities and avoid litigation.The beginning of this course covers the basics of agency law in general, including the brief history of real estate agency, the definition of agency, the parties involved in the relationship, the types and degrees of authority and the role of agency in real estate. Then, the course covers all relevant sections of the Texas Real Estate License Act and the Rules of the Texas Real Estate Commission. In addition, the student will learn about the creation and termination of agency relationships, the rules for agency disclosure, the duties required of agents, the agents liability, the Texas Deceptive Trade Practices Act, and the different types of agency agreements. The last two lessons in the course discuss the rules about commissions, antitrust laws and employment law in Texas. As the student completes this module, he or she should attempt to fit the information in with the big picture of the real estate profession. The conclusion of the module will assist in drawing the information together by presenting real world practice, comprehension questions and case studies for the students consideration.

Learning Objectives:

Upon completion of this course, the student will be able to:
– Identify the ways agency relationships are formed
– Describe the role of the agent, the principal and the third party in the agency relationship
– Name the different types of authority
– Outline the differences between the general and the special agent
– State the rules of agency disclosure
– Describe the duties that an agent owes the principal
– Recognize the Texas rules governing compensation of agents
– Outline the idea of tort liability
– Identify the circumstances under which a licensee may be held professionally liable
– Describe how the licensees duties apply to the four different agency positions
– Compare and contrast the different forms of listing agreements
– Interpret buyer representation agreements
– State the distinctive features of an intermediary relationship
– Describe how an agency relationship can be terminated

In the real estate industry, agreements are made every day. Whether a salesperson is promising to sell a property within a specified period of time, a buyer is placing an offer on a house or a buyer is trying to purchase a property, some type of contract will be involved. Before entering into a legally binding agreement, real estate professionals should fully understand the different types of contracts that govern their industry. If a real estate professional makes a mistake while making a contract, he or she will be held liable for that mistake. Therefore, it is vital that real estate professionals protect themselves against errors, oversights and misunderstandings. This course will begin by introducing the student to the components and elements of legally valid contracts and then moving on to the characteristics of different contracts such as express, unilateral, and bilateral. We will go through the different types of contracts that govern the real estate industry. We will discuss the importance of contracts, the laws that regulate contracts, and specific types of real estate contracts. This course will discuss the five components of a legally enforceable contract; a contract must have legally competent parties, have consideration, have lawful objective, adhere to the statute of frauds and have mutual assent. Once the student understands what comprises a valid contract, we will identify the important laws and rules that govern contracts; these include: the statute of frauds, the doctrine of laches, the Texas Real Estate License Act, promissory estoppel, the parol evidence rule, promissory estoppel, the Uniform Commercial Code and the Deceptive Trade Practices Act. This will set the foundation for the next section of the course, which will cover specific real estate contracts. There are several different types of real estate contracts, but we will focus on: listing agreements, sale contracts, contract for deeds, option agreements, leases, and TREC promulgated forms.

Learning Objectives:

Upon completion of this course, the student will be able to:
– Know the three elements of a contract
– Identify the five components of a legally enforceable contract
– Identify the differences between the various types of contracts
– Apply the laws, doctrines and statutes that govern real estate contracts
– Distinguish between the different types of real estate contracts
– Recognize and complete the forms promulgated by TREC
– Completely perform a contract
– Recall the important elements of leases and listing agreements
– Discern between valid, void, voidable and unenforceable contracts
– Identify the various consequences for breaching a contract
– List the remedies for breaching a contract
– Recognize when rescission is acceptable
– Understand the concepts of novation and assignment
– Understand when contract breaches occur and the consequences and/or remedies for a breach of contract
– Apply the knowledge gained from this course to complete a contracts activity

Texas Principles of Real Estate I is a 30-hour course required by the Texas Real Estate Commission (TREC) for anyone who wishes to become a licensed real estate agent in Texas. The course provides a comprehensive overview of real estate principles.Modules begin with an introduction, learning objectives and key terms. As students work through the course, they can keep the learning objectives in mind and refer to the key terms as necessary. The modules are divided into lessons, which are followed by quizzes to test student comprehension. Modules conclude with activities and case studies that allow students to apply the knowledge they have gained to real-world situations; each module is followed by a final quiz. The introductions, lesson summaries and module summaries are all available in a printable format for reference purposes.

Learning Objectives:

Upon completion of this course, the student will be able to:
– Outline the statutes and agencies governing real estate practice.
– Describe the purpose of license law.
– State the eligibility requirements and exemptions for licenses and the types of licenses.
– Name the steps of the application process.
– Identify the educational and testing requirements for obtaining and renewing a license.
– Sketch the license laws rules regarding the issuing, denial, display and expiration of licenses.
– Describe the licensees role in representing clients.
– Recognize the license laws disciplinary procedures and penalties.
– Describe the difference between land, real estate and real property.
– Recognize the difference between real property and personal property.
– State the definition of a fixture.
– Explain the general character of surface, subsurface, and air rights, as well as littoral and riparian rights.
– Outline the basic features of the metes and bounds survey method and the rectangular survey method.
– Distinguish the vertical method of land description from other survey methods.
– Name the basic public and private methods employed to control the use and development of land.
– Outline the highest and best use theory of land use.
– Identify the definition of ethics as used in this course.
– Describe the four business ethics approaches used in this course.
– List major categories of the Articles of the NAR® Code of Ethics.
– Describe the structure of the NAR® Code of Ethics and its supporting materials.
– Identify at least two aspiration concepts in the Preamble to the NAR® Code of Ethics, describe the concept of general business ethics and identify how the Code of Ethics compares and contrasts with the concept of general business ethics.
– Describe the concepts of at least two of the following Articles of the Code of Ethics Articles 1, 2, 3, 9, 11, 12, 16, and 17.
– Identify possible violations of the NAR® Code of Ethics given interactive learning methods such as case studies, quizzes, role playing, and group discussion of fact scenarios.
– Describe the professional standards enforcement process of a local board or association.
– Differentiate between intentional fraud, negligent misrepresentation, and negligence.
– List the three violations of antitrust laws price fixing, group boycotts, and market allocations.
– Describe how the existence of and adherence to the NAR® Code of Ethics is good for the real estate profession.
– Explain the purpose of the federal Fair Housing Laws and be able to identify the protected classes covered by the Fair Housing Act.
– Name the seven activities considered illegal as a result of the Fair Housing Laws.
– Identify the five exemptions federal Fair Housing Laws provide property owners.
– Recognize discrimination in real estate practice.
– Identify acts considered discriminatory under the Fair Housing Act of 1968 as amended in 1972 and 1988.
– Recognize the purpose of the federal Equal Credit Opportunity Act (ECOA) and know the classes it protects.
– Describe the purpose of the Americans with Disabilities Act (ADA).
– Outline how the ADA affects real estate practice.
– Describe how fair housing complaints are processed.
– List the penalties for non-compliance with Fair Housing Laws.
– Sketch various ways a broker might incorporate business practices designed to prevent discriminatory practices.
– Explain the purpose and importance of the HUD/NAR Partnership.
– State the basic guiding principle of HUDs Advertising Guidelines.
– Identify acceptable and unacceptable words and phrases in advertisements.
– Describe how to apply nondiscriminatory practices.
– Describe Texas state laws regarding fair housing.
– Identify the ways agency relationships are formed.
– Describe the agency relationship roles of the agent, the principal, and the third party.
– Name the different types of authority.
– Outline the differences between the general and the special agent.
– State the rules of agency disclosure.
– Describe the duties that an agent owes the principal.
– Recognize the Texas rules governing compensation of agents.
– Outline the idea of tort liability.
– Identify the circumstances under which a licensee may be held professionally liable.
– Describe how the licensees duties apply to the four different agency positions.
– Compare and contrast the different forms of listing agreements.
– Interpret buyer representation agreements.
– State the distinctive features of an intermediary relationship.
– Describe how an agency relationship can be terminated.
– Name the laws that prohibit deceptive trade practices.
– Name and explain the various components of a valid contract.
– Identify the differences between a unilateral and bilateral contract.
– Describe the various types of contracts.
– Outline the features of a contract (and the contracting parties) that make a contract legally binding.
– Identify when a contract can be discharged.
– Recognize the difference between a forbearance and performance agreement.
– Recognize the general features of a completed contract.
– Recognize the different kinds of real estate contracts.
– Distinguish the differences in contracts and purchase and sale agreements in the State of Texas.
– Identify recent laws that have an impact on environmental issues, including lead-based paint disclosure laws.
– State the procedures used to locate toxic waste sites, the responsibilities for cleanup and steps that may be taken to minimize future liabilities.
– Describe at least two major provisions of the Small Business Liability Relief and Brownfields Revitalization Act.
– Identify at least three sources of human exposure to PCBs and at least two health effects seen in humans exposed to PCBs.
– Sketch the nature of electromagnetic fields (EMFs) and the possible need for testing in areas where these are present.
– Describe the nature of major air pollutants and the remedies that may be applied to minimize their effects.
– Outline landowners responsibility for protecting wetlands areas on their property.
– Identify the issues landowners and developers face regarding endangered-species protection.
– Outline the current status of environmental laws and their effect on property insurance and mortgage lending.
– List the general requirements of a legally enforceable contract.

Online – Texas Principles of Real Estate II – TREC 0112

Texas Principles of Real Estate is a 60-hour course required by the Texas Real Estate Commission (TREC) for anyone who wishes to become a licensed real estate agent in Texas. The course provides a comprehensive overview of real estate principles.Course Number: (0111 and 0112)Texas Principles of Real Estate contains the following modules: Texas License Law Real Property Ownership and Land Use Code of Ethics in Real Estate Practice Fair Housing Agency Contracts, Purchase and Sale Agreements Environmental Hazards Deeds Titles and Records Liens, Taxes and Foreclosures Listing Agreements Closing and Settlement Costs Real Estate Appraisal Real Estate Finance Real Estate Math Modules begin with an introduction, learning objectives and key terms. As students work through the course, they can keep the learning objectives in mind and refer to the key terms as necessary. The modules are divided into lessons, which are followed by quizzes to test student comprehension. Modules conclude with activities and case studies that allow students to apply the knowledge they have gained to real-world situations; each module is followed by a final quiz. The introductions, lesson summaries and module summaries are all available in a printable format for reference purposes.

Learning Objectives:

Upon completion of this course, the student will be able to:
– Describe and list different types of foreclosures.
– Recognize alternatives to foreclosure and common scams related to foreclosure.
– Identify the types of liens in Texas.
– Determine tax exemptions in Texas.
– Describe foreclosures in the state of Texas.
– Describe the broker/owner relationship.
– Outline the legal aspects of the broker/owner relationship and other responsibilities created by listing agreements.
– Identify various types of listing agreements and explain the differences they make in a business relationship.
– Explain the listing process and basic marketing strategies to obtain listings.
– Describe the basic concept of Comparative Market Analysis (CMA) and the process involved in preparing one.
– State the basic content and form of a listing agreement.
– Name other forms typically executed along with a listing agreement, including forms required by federal law and others required by most states.
– Describe marketing strategies needed to obtain a buyer while maintaining customer loyalty.
– Outline the primary concerns that arise throughout the closing process, for both the buyer and the seller.
– Describe what both the buyer and the seller must do to prepare for the closing date.
– List the documents that the buyer and the seller must complete to close a typical real estate transaction.
– Explain a licensees responsibility with respect to IRS Form 1099-S and HUDs Notice to the Homebuyer form.
– Name and distinguish the different types of closings.
– Describe the licensees role in the closing process.
– Outline the basic requirements and regulations imposed by the Real Estate Settlement Procedures Act (RESPA).
– Identify which party is responsible for each expense in a typical closing transaction.
– Explain the concept of credit and the concept of debit.
– Prorate prepaid items and accrued expenses.
– Understand the HUD-1 Settlement Statement Form.
– Determine the regulations regarding closing and settlement costs in Texas.
– Identify the basic capacities and skills of a qualified appraiser.
– Differentiate between appraisal licensure and certification.
– Identify and explain the fundamental concepts and terminology used in real estate valuation and appraisal.
– Recognize the valuation principles used in real estate appraisal.
– Apply value theories to arrive at purchase prices of real estate.
– Characterize a favorable market for real estate sales.
– Differentiate the three approaches to value commonly used in appraisal.
– Follow the eight-step appraisal process to arrive at an accurate purchase price.
– Analyze and interpret an appraisal report.
– Understand the basic concepts and key terms of real estate financing.
– Describe how to qualify a buyer for the most common types of loans.
– Understand the use and function of escrow accounts.
– Define private mortgage insurance.
– Understand the process of underwriting its guidelines.
– Identify the three most common types of loans conventional, FHA, and VA.
– Explain the advantages and disadvantages of conventional loans.
– Distinguish how to use conventional qualifying ratios.
– Identify the differing FHA qualification ratios.
– State the advantages and disadvantages of FHA loans.
– Explain the advantages and disadvantages of VA loans.
– Describe VA eligibility and qualification periods.
– Calculate the amount of VA entitlement used.
– Calculate VA loan amounts and required down payments.
– Explain the process and qualifications for assuming VA and FHA loans.
– Identify other types of loans available.
– Understand how to underwrite and close loans.
– Name key terms used in real estate math problems.
– Apply fractions, decimals and percentages.
– Translate fractions into decimal and percentage forms.
– Determine the area and volume of a given object or parcel.
– Manipulate the principles involved in rate calculations.
– Use equations to calculate interest.
– Grasp the concept of amortization.
– Comprehend the principles of prorating and how to apply them.
– Understand and solve for appreciation and depreciation.
– Identify and apply calculation formulas to determine value and profit.
– Apply interest rates and loan discount rates.

This course provides an introduction to real estate finance. From qualifying the borrower and qualifying the property in the underwriting process to various types of financing, closing the sale, the Community Reinvestment Act and more, we discuss the monetary systems that control the market, delve into supply and demand, cover housing agencies and discuss the government influence on real estate. Most real estate is purchased with borrowed money. The methods of real estate finance are many and varied. Making real estate loans carries a certain amount of risk for lenders; for this reason, lenders must have a firm grasp of a borrowers financial qualifications. Lenders consider a borrowers income, credit, debt, source of funds and net worth. However, no analysis, no matter how thorough, of a borrowers creditworthiness can be enough to ensure that a loan is completely free of risk. You will learn the methods used by lenders to qualify loan applicants and how lenders qualify the property to be mortgaged. This involves a thorough and accurate property valuation, using the sales comparison or cost approach for residential property and a cap rate or discounted cash flow analysis for investment property. These methods of valuation will be discussed in depth so that you will feel confident and familiar with them when you meet them in the real world.The basics of the financing and the sale process are discussed over two lessons. You will learn how title (abstract ownership rights to the property) is transferred to the buyer with a deed. The earnest money contract will also be discussed: terms of the contract, contingencies and earnest money deposits. In another lesson, the focus turns to closing. You will learn the customary costs involved in a real estate transaction, how certain items are prorated between the buyer and the seller and the requirements set forth by the Real Estate Settlement and Procedures Act (RESPA).This course also covers foreclosure. We consider what happens when a borrower is in default of the mortgage contract and how lenders may help borrowers prevent foreclosure through forbearance, moratoriums and recasting. Also discussed is how, when these techniques fail, the property is foreclosed and sold at auction and how the creditors are repaid. No real estate finance course would be complete without discussing the types of mortgages available. We have two lessons that will detail the elements of conventional loans, both conforming and nonconforming; adjustable rate; graduated payment; growth equity; and reverse annuity mortgages, to name a few. The advantages and disadvantages of each type of financing are emphasized so that you may better understand the decision-making process inherent in real estate finance. Two specific types of financing, FHA-insured and VA-guaranteed loans, are reserved for separate lessons. FHA loans are insured by the government and perceived as less risky by lenders. They are available to all natural and naturalized U.S. citizens, but they carry a monthly insurance premium that cannot be canceled. VA loans are guaranteed in part by the government, but are available only to veterans, active servicemen and certain National Guard members and special reservists.The final lesson deals with a topic important to real estate investment: Internal Revenue Code (IRC) Section 1031 exchanges (a k a 1031s). Buying and selling real estate investments can be a tax-heavy business. By exchanging ones investments under the continuity of investment principle, investors can receive more financing and improve their portfolios.At the end of each lesson, you will be required to complete a quiz for that lesson before moving on to the next lesson. The course ends with a real-world practice lesson that brings together the concepts and material discussed throughout the entire course.

Learning Objectives:

Upon completion of this course, the student will be able to:
– Explain how the forces of supply and demand in the real estate market affect and are affected by the primary lending market, identifying them in case studies.
– Demonstrate how the government influences real estate finance through agencies such as the Federal Reserve (the Fed) and the Department of Housing and Urban Development (HUD), and be able to cite examples.
– Define real estate investment trusts (REITs), describing them in detail.
– Explain the basic concepts of real estate finance, describing them in detail.
– Distinguish between the principal instruments of financing the promissory note, the mortgage, and the deed of trust and explain how they are used.
– Explain how interest rates affect the real estate market.
– State who lends money to the purchasers of real estate, identifying them with 100% accuracy.
– Discuss the operations of the secondary market for loans.
– Calculate the monthly payments for a fully amortized, fixed-rate loan.
– Distinguish between the tax deductions and tax credits associated with real estate ownership, and calculate each.
– Explain the use of and legal requirements placed on escrow accounts.
– Distinguish between lien theory and title theory states, explaining each in detail.
– Explain the function of a discount point, when it is offered, and when it should be bought.
– List the main points an underwriter looks for in approving a loan.
– List the elements of a credit report, and explain how FICO scores affect a consumers borrowing ability.
– Explain the provisions of the federal legislation that affect real estate lending, and distinguish between those of the Fair Credit Reporting Act (FCRA), the Equal Credit Opportunity Act (ECOA) and the Truth in Lending Act.
– Calculate a lenders qualifying income ratios.
– List the classification of types of debts, identifying each in a case study.
– List the steps of the appraisal process, with 100% accuracy.
– Explain the principal methods of property valuation, providing examples for each.
– Distinguish between sales comparison approach and cost approach to value real property.
– Explain the most common approach to valuing income-producing property the cap rate analysis.
– List the elements of a pro forma projection, in order, and describe its uses in discounted cash flow analyses.
– Utilize spreadsheet and investment software to calculate net present values and internal rates of return.
– Distinguish between the role of mortgage brokers and loan officers in the financing process, describing characteristics of each.
– Distinguish between constructive and actual notice and explain the buyers obligations under the principle of caveat emptor.
– List the lenders requirements for qualifying the title and explain how, through a title search, a title insurance company verifies that a mortgagee will have the first lien.
– Distinguish between the purpose and content of an earnest money contract and the earnest money deposit.
– Explain what a deed is and list the types of interest it can convey.
– Explain the exceptions and reservations that can be placed on a title, providing specific examples.
– Detail the RESPA requirements for closing procedures and disclosures at closing.
– Distinguish between face-to-face and escrow closings, and cite who presides over each.
– Explain the principles of proration, distinguishing between calendar years and bankers years.
– Distinguish between prepaid items and accrued items and demonstrate how to divide them by calculating a daily rate.
– List the current Fannie Mae and Freddie Mac loan limits.
– Explain private mortgage insurance (PMI) and state when it is required, when it is advisable and when it is cancelable.
– Discuss the function of Fannie Maes Desktop Underwriter and Freddie Macs Loan Prospector electronic underwriting programs.
– List the requirements for a borrowers financial qualifications in a conforming loan, with 100% accuracy.
– Distinguish between the different types of mortgages, including ARMs, GEMs, GPMs and balloon mortgages, explaining each in detail.
– Distinguish between temporary and permanent buy downs, detailing the procedure for each.
– Demonstrate an understanding of the most important FHA programs, especially Section 203(b).
– Name the various underwriting requirements for FHA-insured loans, such as down-payment and closing-cost requirements.
– Distinguish between the FHAs mortgage insurance premium (MIP) and PMI, identifying each in a case study.
– List the key elements of the VA loan guarantee program.
– State who is eligible for the VA program and describe the documents required to prove ones eligibility.
– State the current amount of a veterans maximum entitlement and calculate remaining entitlement.
– Explain the purpose of Internal Revenue Code (IRC) Section 1031.
– Define like kind and discuss what property qualifies for a like-kind exchange.
– Calculate an investors adjusted basis in a property, and identify the relationship to boot.
– Distinguish between realized and recognized gain and explain how it is important to the tax laws.
– Explain how boot is calculated.
– Explain the delayed (Starker) exchange format the 45/180-day time limits and the rules for replacement property identification.
– Explain how an investor can leverage saved capital from tax-deferred exchanges, citing examples.
– Identify the role of the qualified intermediary (QI) in the delayed exchange as a safe harbor.
– Explain the reverse exchange format, detailing the exchange accommodation titleholder (EAT), title parking and describing allowable arrangements between the exchanger and the EAT.
– Explain the tax benefits of installment sales.