A person commits a (criminal) offense if the person acts as a broker or salesperson without holding a license… (Texas Occupations Code, Section 1101.758)
There are six licensing needs the Texas Real Estate Commission has prescribed for one to do real estate practice. An individual has to take particular courses, have high moral character, have fingerprints on file, pass the real estate exam, get a license as an inactive real estate salesperson, and receive an active real estate license through broker sponsorship.
The first hurdle is to take and pass the real estate exam. Educational requirements must be met to qualify for the exam.
Other than traffic tickets, lack of convictions for felonies or misdemeanor reflects an person’s moral character. Advance filing may be done by individuals with convictions to determine if their records impede licensing.
To get a real estate license, applicants have to have fingerprints on file with the FBI through the Texas DPS or Department of Public Safety. The fingerprints have to be taken within a six month period from the date of inactive license application. Using the fingerprints, a criminal background check is conducted by the FBI. L-1 Identity Solutions —Enrollment Service administers the process.
An applicant must first visit http://www.trec.state.tx.us/FASTPrintPass/ to get a FAST Print Pass before getting fingerprinted. L-1 Identity Solutions coordinates the process after. Some sites that administer the exam offer fingerprinting when a candidate sets an appointment in advance with the statewide L-1 Identity Solutions. If not, the applicant should schedule an appointment with L-1 Identity Solutions at the nearest location. Help can be given by the local Board of Realtors. Go to http://l1enrollment.com/locations/?st=tx for the 82 L-1 Identity Solutions fingerprinting locations. The candidate may register via phone at 1-888-467-2080 or online at https://tx.ibtfingerprint.com. There may be additional fees when the fingerprints are taken (see p. 7)
Real Estate Exam
The applicant forwards an “Application for Inactive Salesperson License” and exam fees to the commission once the educational requirements are satisfied and confirmation from the commission is received. A Candidate Information Brochure (CIB) is issued by test provider Psychological Services, Inc. (PSI) if the application is accepted. The applicant is then qualified to take the real estate exam once an additional fee is paid to PSI.
The candidate has to pass the exam within a year from the date the commission receives the inactive license application.
The candidate has to indicate any criminal conviction, not including misdemeanor traffic violations, when forwarding an “Application for Inactive Salesperson License.” A candidate may be disqualified from taking the exam as well as getting a real estate license if he or she has a serious misdemeanor violation or felony conviction. To remove any doubt, individuals with questionable records may file a “Request for Moral Character Determination” before spending time and money to satisfy the educational requirements.
Inactive Real Estate Salesperson License
An inactive real estate salesperson license is issued after an individual passes the exam and places fingerprints on file. No further application to the commission is needed for the issuance of the license.
Active Real Estate Salesperson License
The candidate looks for a sponsoring real estate broker after receiving an inactive salesperson license. A “Salesperson Sponsorship Form” is completed and submitted to the commission by the applicant and the sponsoring broker. An active real estate salesperson license is issued if the application is accepted. This entitles the licensee to practice real estate through the sponsorship or support of the broker.
Yes. Beginning Sept. 1, 2012, the sponsoring broker should attend, within the term of the license, a minimum of six classroom hours of commission-approved education courses on broker responsibility. The hours may be used by the broker to complete MCE requirements.
The Texas Legislature passed the Real Estate License Act in 1939. At present, Texas Occupations Code Chapter 1101 contains the act. The Texas Real Estate Commission, which is in charge of the administration of real estate license rules and regulations, was created by the act. Moreover, the commission has the authority to make rules in carrying out its mission. The Texas Administrative Code Chapters 531 through 543 Title, Part 23 contains these administrative rules.
Nine real estate commissioners compose the commission. The governor appoints them with advice and consent from the senate. The agency’s responsibilities are carried out by full-time staff under an administrator. These tasks consist of supervising the needs for acquiring, issuance as well as renewal of real estate licenses. Furthermore, the commission manages, issues as well as renews real estate inspector, residential service companies and residential rental locators licenses.
With the exclusion of a probationary license, the commission issues three kinds of real estate licenses.
The preliminary stage in acquiring an active real estate license is the inactive real estate license. According to commission’s rules, an applicant can complete this step without a sponsoring broker. An inactive real estate license does not entitle an individual to real estate practice.
The next phase in being able to practice real estate is having an active real estate salesperson license. This permits a holder to practice real estate with the supervision of licensed real estate broker. During this period, the salesperson person is not allowed to accept real estate transaction fees or commission apart from the sponsoring broker.
The highest licensing status issued by the commission is a real estate broker’s license. An individual can take the real estate broker’s license exam following the maintenance of an active real estate salesperson license for the 24 of the past 36 month and completion of 60 post-secondary education semester hours in particular courses. This publication does not discuss the requirements for acquiring a real estate broker’s license. All discussion about licensing refer to either an inactive or active real estate salesperson license.
Particular real estate activities done on behalf of another for an expected or actual fee, commission or other payment requires an active license. These moves include:
An active real estate license is required for right-of-way agents. Apart from the listed activities, an active real estate license is a must for any individual tasked to sell a part of or all parcel of land for a commission, fee, salary or other value consideration.
In addition, any individual who collects an advance fee or charges fee via contract to promote real estate sale must have an active real estate license. Promotion can be done through referral or real estate publication.
Particular real estate activities, professions as well as people do not need an active real estate license. The exemption includes:
There are questions raised by the act regarding other particular activities or persons that are exempt or require licensing. Rules and regulations in the code were promulgated by the commission to explain a number of these issues. A summary is found in Appendix A on page 11. Anyone who wants an active real estate license may verify if an activity is part of the exemption.
Civil and criminal sanctions await a person who fail to procure the needed active real estate license. A Class B misdemeanor is slapped for the first violation. Subsequent violations merit more severe penalties.
If compensation is received by the violator, a civil suit may be filed by the payer to recover an amount equal to but not greater that three times the payment. If a commission, fee or other remuneration was promised to the violator but none was received, the unlicensed person is not allowed to use the courts to recover the commission, fee or other remuneration.
Additionally, when an individual is performing or about to perform conduct in violation of the act, the commission or the county or the district attorney, by power of the attorney general, may prohibit or nullify the activity.
Inactive real estate license eligibility requires an individual to be:
Furthermore, the education requirements should have been completed by the applicant.
The age requirement is not eliminated by changing minority status. For instance, women who are married, but younger than 18, are not considered minors in line with Texas law. However, married women still have to be 18 to be eligible for a real estate license.
Meanwhile, the qualifying exam score discussed later solely determines an applicant’s competency.
An individual’s Texas residency status is not changed by military service. To lose Texas residency, legal residence elsewhere must be established by military personnel after leaving service.
Each applicant should complete at least 14 semester hours equivalent to 210 post-secondary education classroom hours. Specific core real estate courses must comprise 150 classroom hours or ten of the semester hours. The remaining 60 classroom hours or four semester hours have to be in either core or related courses.
Principles of Real Estate must comprise four of the ten semester hours, Agency Law is two, Contract Law is two and any core course/s is another two. The four semester hours that remain may be in related or core courses.
Each applicant should complete at least 12 semester hours equivalent to 180 post-secondary education classroom hours, of particular core curriculum courses. Principles of Real Estate must comprise at least four of the semester hours.
Of the remaining eight semester hours, Agency Law is two, Contract Law is two, Real Estate Financing is two and Contract Forms and Addendums is another two. Detailed descriptions of the courses are on the following page. If a core course is taken more than once within any two-year term, no credit is given.
However, each applicant is required a minimum of three coursework classroom hours on community reinvestment, housing credit discrimination, and local, state and federal laws governing housing discrimination or a minimum of three classroom hours in constitutional law. Classroom hours can be integrate into core courses like the principles of real estate or in other courses.
Yes. The education requirements may be waived by the commission when the applicant is a licensed Texas salesperson or broker within six months prior to the date of application. Nonetheless if the applicant has a previous salesperson license instead of a broker’s, he or she has to show proof of completion of the coursework that would have been needed had the license been maintained without interruption by the salesperson within the same period.
15 classroom hours is equal to one semester hour. Completing 45 classroom hours is equal to a three-hour semester.
Ten classroom hours is equal to one quarter hour. 30 classroom hours is equivalent to a three-hour course under the quarter system. A classroom hour system is applied for most college-level and proprietary schools continuing education courses. Applicants have to pinpoint whether a course is stated in quarter hours, semester hours or classroom hours and adapt them to a common unit. Quarter hours, semester hours, and classroom hours in any combination is accepted as long as they adhere to commission requirements. When doing analysis of educational requirements, all completed coursework are reduced by the commission to equivalent classroom hours.
Core courses needed to get a real estate license consist of, but are not restricted to, the following:
The title as well as content of other real estate core courses may be established by the commission.
Apart from the core courses contained in the act, the following has been added by the commission
All or some of the licensing requirements including education requirements may be waived by the commission if the candidate has been licensed within the last six months.
The commission has the discretion of designating non-core or related courses. Visit the commission’s website at www.trec.state.tx.us/education/related.asp for a list of related course topics.
This is comprised of 31 general categories with a maximum of 22 subtopics under each. The categories consist of speech, sociology/anthropology, science, real estate, psychology, philosophy, petroleum and management, mathematics, marketing, management, law, journalism, investments, insurance, home economics, history, government/political science, geology/geography, finance, English, education, economics, construction, computer, civil engineering, general business, banking, architecture, agriculture, advertising, and accounting.
Other courses can be proposed for consideration. The proposal must have the official catalog description taken straight from the college catalog. The attachment can be clipped or reproduced.
Educational requirements are satisfied based on the successful completion of acceptable subjects and not the degrees earned.
Before an applicant can earn credit, a core course must be approved by the commission.
Proprietary real estate schools, universities and various junior and community colleges offer pre-license, post-license as well as correspondence courses according to the commission’s guidelines. Courses that adhere to the commission’s requirements may also be offered by Local Boards and Association of Realtors. However, commission approval must first be obtained by the board or association to offer the course as an accredited provider or school.
To determine your exact educational needs, you can call CELI toll free at 1-888-333-3735 or register for the discounted 6-course/180 hour package online for convenience and price savings.
Courses should be completed at one of the types of schools below to be acceptable:
Before Jan. 1, 2010, all transcripts as well as other course completion certifications had to be submitted by a candidate to the commission for review. This was needed prior to filing an inactive salesperson license application. This has been changed.
Certifications and transcripts are now incorporated in the inactive salesperson license application.
Nonetheless if more than the needed number has been completed from various accredited institutions, the candidate may want to limit the number of core courses utilized for pre-licensing credit. The hours can be saved as well applied for real estate license renewal.
The candidate should file the Application for an Inactive Salesperson License (TREC Form ISL-1) once the general qualifications, which include educational requirements, have been met. The form can be accessed from the commission’s website or reproduce the copy in Appendix B.
Beginning Dec. 1, 2011, e-mail address, telephone number as well as current mailing address must be provided in the application. While the application is pending, the commission must be notified of any change in the said information.
A list of criminal offenses (felonies as well as misdemeanors, except traffic violations), employment history for the last five years, and driver’s license number should also be provided before Dec. 1, 2011. If the application is tendered after Sept. 1, 1995, the Social Security number of the applicant is needed but is kept confidential. Social Security numbers are not kept confidential for applications submitted before Sept. 1, 1995. All other info contain in the form may become public record.
For reasons discussed the following section, a candidate with criminal records (felony as well as misdemeanor convictions apart from traffic violations) may want to file a Request for Moral Character Determination (TREC Form MCD-5) (Appendix D) before filing an inactive license application.
Upon the submission and signing of the application form, the commission is authorized to investigate any info deemed necessary. To verify the criminal record of the candidate, the DPS is contacted. To confirm if a student loan is in default, the Texas Guaranteed Student Loan Corporation (TGSLC) is contacted. When a licensee defaults on a TGSLC-guaranteed student loan, state law prohibits the renewal of license more than once. The Attorney General’s Office may also be contacted by the commission with regard to unpaid child support. If the individual is delinquent in paying child support, Issuance of real estate license can be done, but not renewal.
A felony or serious misdemeanor convict may be ineligible for a real estate license. Prior to the filing of any other paperwork with the commission, the act provides for a determination of moral character. A $25 filing fee is required for the Request for Moral Character form (Appendix D). The form need not be filed if there is no criminal record.
A candidate is not barred from acquiring a real estate license by bankruptcy proceedings, civil judgments or criminal convictions. Nonetheless bad moral character according to the facts may cause the commission’s disapproval. In general, the integrity, trustworthiness and honesty of the applicant is not considered by commission until all licensing requirements have been met, which includes passing the exam. For individuals concerned with this issue, form pre-filing is recommended.
Candidates are required by the commission to indicate criminal convictions, except misdemeanor traffic violations. Nolo contendere (no contest) or guilty pleas to a felony are included. In addition, regardless of whether community supervision or probation has been granted after the suspension or conviction, the candidate should indicate if the time for appeal has passed or the conviction or judgment has been asserted on appeal.
The commission checks the veracity of the candidate’s disclosure with the DPS. Denial of license may ensue for nondisclosure of a serious misdemeanor or felony.
Based on adopted guidelines, provisional moral character determination may be issued by the commission.
Beginning Jan. 1, 2008, additional requirement on criminal history must be met by applicants. The DPS must be provided a complete, readable set of fingerprints. The prints should be taken at a commission-approved location and must follow the required format by the FBI. At present, there are around 82 locations statewide. Prints should be taken within six months of the date of inactive license application. The fingerprints are used by the DPS and the FBI to verify the criminal history of an applicant.
The fingerprints should be given in a commission-provided form. The procedure and form is tackled earlier in this article. The DPS may collect an additional fee for taking the prints.
An application is rejected because:
In keeping with instructions on the form, the applicant should make sure that:
Incomplete applications will not be returned. The additional information is requested by a follow-up letter.
An application is voided and not processed further if the candidate does not:
$127 should be paid for an application. In addition, a $10 Texas Recovery Fund and a $20 processing fee must be paid. Fees are non-refundable.
The application is reviewed by the commission and is either rejected or accepted. If accepted, Psychological Services Inc. (PSI), the test provider, mails the applicant a Candidate Information Brochure (CIB). The candidate is given one year from the time of receipt of application to take and pass the real estate license exam.
The one year is calculated upon the receipt of the application by the commission, not from the receipt of the CIB by the applicant. Any exam taken prior to the commission’s receipt of the application or after the expiration of the one year period, will not be counted for licensing.
A Certificate of Eligibility was issued by the commission once an application was accepted before June 1, 1996. The CIB has replaced this. The change was prompted by the administration of the real estate exam by a private company.
PSI administers the license examinations. Information as well as instructions for reservations to take the exam are contained in the CIB mailed to the applicant. Moreover, study material as well as instructions with regard to licensing is also in the CIB. The PSI handles all the details of the exam process once an applicant receives the CIB. Applicants must not get in touch with the commission.
The exam is administered at PSI centers in the following cities:
*treated as a Texas site
To safeguard the confidentiality of the test material, the code as well as the license application form was changed since the exams are now administered under contract.
Disciplinary action is expected for acquiring or attempting to acquire questions as well as answers from the commission, an applicant or any individual linked with the testing service. Similarly, a pending exam application may be revoked or denied for removing or trying to remove answers or question from a test site or offering or trying to offer test answers or question to a prospective applicant or another applicant.
In general, the earliest schedule an applicant may take an exam is two days following registration. For instance, if the registration form is received on Monday, the exam may be taken on Thursday. The exam is administered by PSI Monday through Saturday.
The information needed for exam registration is contained in the exam registration form found in the CIB or the one indicated online with PSI. However, applicants covered under the Americans with Disabilities Act who need special accommodations should describe in writing the particular accommodations they need and attach supporting official letterhead documentation from a licensed professional. Allocate two weeks for the processing of special arrangements.
Two forms must be presented by an applicant. One should be a valid government-issued ID (military ID, passport, state ID, driver’s license), which bears a complete physical description or the signature and photograph of the applicant. The second ID should bear the signature as well as preprinted legal name of the applicant. All IDs should match the name on the mail label on the CIB, the registration confirmation notice as well as the examination registration form.
A missed appointment is incurred for failure to supply the needed identification at the time of the exam without prior notice to PSI. The exam cannot be taken by the applicant and the registration fee is forfeited.
No reference material can be brought since the exam is closed book. Candidates should bring a calculator that is non-programmable, silent and battery-operated. It cannot have a keyboard with alphabets or have paper-tape printing capabilities.
Books and notes cannot be brought, nor are children, purses, pagers or cell phones. No drinking, eating or smoking is permitted in the exam center. Candidates are not allowed to leave the building during the exam.
Candidates may not communicate or copy exam contents to other individuals; doing so may cause disqualification or legal action for copyright violation.
Prior to taking the exam, answering questions as well as reviewing answers, candidates may spend a maximum of 15 minutes to familiarize themselves with the computer and keyboard. The 15-minute tutorial is not part of the exam time.
All questions have been approved by a panel of Texas real estate experts and are multiple choice. Great care is put into place to come up with a fair exam which is bias-free and intended to measure the abilities, skills and knowledge of applicants.
The exam is made up of national as well as state sections. There are 80 items in the national section while there are 30 in the state. Candidates are given 105 minutes for the national exam and 45 minutes for the state.
Both parts should be taken by an applicant the first time. No retake is needed for a part that is passed. Both parts should be passed within a year from the receipt of application by the commission.
Test results will be immediately available after the exam. The exam is analyzed by PSI to point out areas of weakness for applicants who fail. The exam cannot be retaken immediately by those who fail. Actually, due to processing as well as reporting of scores, the candidate is not allowed to schedule a retake on the day the test was failed. Retakes may be listed by fax, phone or online the next day.
In keeping with the original schedule, the candidate has to wait two days before he or she is allowed to take the exam. For instance, if a candidate fails the exam on Monday, he or she may schedule another exam on Tuesday and take it on Thursday.
Within the one-year period, the applicant is allowed to take the whole exam or the part which was failed as many times as he or she wishes, if there is space and he or she pays needed test fee each time.
The commission may print the inactive real estate license of the applicant within two business days when he or she passes the whole exam (two parts) and completes other requirement like fingerprinting and the determination of moral character.
The commission will advise the applicant if all requirement have not been completed.
There are a couple of ways to obtain an active real estate license, in chronological order. A sponsoring real estate broker is needed for each. Appendix C contains the three forms.
The first method uses the Salesperson Sponsorship Form-2 (Form SF 2-1) either (1) after application submission and before issuance of inactive license or (2) after the notification of the person that he or she has an inactive license (receipt of license is not needed at this point). The form must be signed and submitted to the commission by both the salesperson as well as sponsoring broker. No fee is needed.
The second method uses the Salesperson Sponsorship Form-1 (Form SF1-1) when a sponsoring broker was found by the salesperson prior to the inactivation of their present license. This is appropriate when the applicants wants to obtain an active license under another sponsoring broker. The form must be signed and submitted to the commission by both the salesperson and the new sponsoring broker. A $20 filing fee is collected.
For a license renewal, the licensee should satisfy either the Mandatory Continuing Education (MCE) or Salesperson Annual Education requirements annually. The SAE requirements should be completed first. This means the submission to the commission of 90 classroom hours or six semester hours of other core courses.
Unexpectedly, the coursework for the SAE requirement can be completed before or after the receipt of a license. Timing the submission of evidence of completed coursework to the commission is key. The requirements for renewal hinge upon the number of classroom hours submitted over the minimum needed for an inactive license.
The licensee should tender proof of completion of 30 classroom hours or two semester hours of coursework for every renewal for the initial three years if only the least number of hours was submitted. Subsequently, the MCE requirements should be met.
The SAE requirements have been completed if the applicant tenders at least six classroom hours of core courses over the minimum required for a license. After that, the annual MCE requirement for renewals must be met by the licensee.
The following discusses the process of license renewal when the submitted semester hours of coursework is less than six over the minimum requirements.
The licensee should tender another hour for the first renewal if one excess hour is submitted. After that, two additional hours should be tendered for the second renewal and an additional two hours for the third renewal.
No additional hours are needed for the first renewal if two excess hours are submitted. Nonetheless one additional hour should be tendered for the second renewal and an additional two hours for the third renewal.
No additional hours are needed for the first renewal if three excess hours are submitted. Nonetheless one additional hour should be tendered for the second renewal and an additional two hours for the third renewal.
No additional hours are needed for the first or second renewal if four excess hours are submitted. Nonetheless an additional two hours are needed for the third renewal.
Finally, no additional hours are needed for the first or second renewal if five excess hours are submitted. An additional hour is needed for the third renewal.
The MCE requirements begin automatically when six hours over the required hours for licensing is submitted.
When a course certification or transcript is tendered, all relevant courses are applied by the commission first to the licensing need, then to SAE requirements. The commission cannot be asked to apply to licensing a particular number of hours and set aside the remaining for renewals throughout the SAE.
Nonetheless all course certifications and transcripts need not be submitted at once for applicants who garner approved educational credits from various accredited schools or colleges. For instance, the licensing requirements can be satisfied if a transcript has six semester hours of core courses as well as six semester hours of acceptable core or related courses. To complete renewals during the SAE, certificates or transcript from accomplished core course at other schools can be set aside and submitted. Nonetheless the MCE requirements automatically start when 90 classroom hours or six semester hours are tendered above the first six semester hours for licensing. The postponement of MCE requirement completion is the sole reason for saving course work.
The MCE requirements must be satisfied by the licensee once he or she tenders evidence of completion of 18 semester hours of post-secondary education. 14 of the 18 semester hours should be core courses regardless if the completion was done before or after the receipt of the real estate license. For each license renewal, the licensee must complete 15 classroom hours (six should be on particular legal topics). After Sept. 1, 2012, the first renewal required 18 semester hours of course work.
A person is entitled to appraise real estate for a fee if he or she has a real estate broker license. Nonetheless a real estate license is not a license for an appraiser.
Some knowledge of the Chapter 1103 of the Texas Occupations Code or the Texas Appraiser Licensing and Certification act is needed to understand the relationship between a real estate license as well as an appraiser’s license.
In 1989, Title XI, Financial Institutions Reform, Recovery, and Enforcement Act (12 U.S.C.A. Section 3331 et seq.) was passed by the Federal Legislature. As amended, the act necessitates that a state agency-licensed or certified individual should conduct any federally related transaction appraisal valued at over $250,000. The Uniform Standards of Professional Appraisal Practice must be followed for the appraisal.
In 1991, the 72nd Legislature created Texas Appraiser Licensing and Certification Board (TALCB) took over the responsibility for appraising licensing and certification from the commission.
Therefore, an individual should be certified or licensed by the TALCB to do a federally related transaction appraisal—for instance, any real estate related transaction regulated by, engaged in or contracted for the Resolution Trust Corporation or a federal institution regulatory agency, valued at over $250,000. No real estate salesperson or broker license is needed.
An individual who is not certified or licensed by the TALCB may do non-federally related transactions or federally related transactions appraisal of $250,000 or less. A Texas real estate broker license is needed for such. Nonetheless the following should be indicated verbatim on the report: “THIS IS AN OPINION OF VALUE OR COMPARATIVE MARKET ANALYSIS AND SHOULD NOT BE CONSIDERED AN APPRAISAL. In making any decision that relies upon my work, you should know that I have not followed the guidelines for development of an appraisal or analysis contained in the Uniform Standards of Professional Appraisal Practice of the Appraisal Foundation.”
Except via the sponsoring broker, a real estate salesperson that is not certified or licensed by the TALCB may not do real property appraisal for a fee. The real estate salesperson may present, sign as well as make appraisals in behalf of the sponsoring broker. However, the appraisal should be tendered in the name of the broker and the broker should take responsibility.
When under contract as a real estate agent for the seller and a licensee tries to purchase a property for himself or herself, special rules are in effect. The licensee should tell the sell his or her opinion about the property’s value.
A salesperson who does an appraisal in behalf of the Veterans Administration should perform the task through the sponsoring broker. An association or trade organization should have a broker license to be able to offer to appraise or do real estate appraisal for compensation.
Lastly, a real estate license is not needed if an employee were to appraise property for the investment firm or financial institution he or she works for provided that the appraisal is reflective of an investment or a loan by the employees.