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167 Cards in this Set
- Front
- Back
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Appraisal |
Providing a professional opinion of the value of real property |
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Brokerage |
Overseeing the needs of the parties to a real estate transaction and seeing it to its completion |
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Common Law |
Body of law based on common sense |
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Statutory law |
Body of laws and enacted by federal and state legislative bodies |
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Supply and demand |
The primary determinants of real estate values |
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Real Estate Careers |
- Appraisals - Mortgage Lending - Property Management - Apartment Locators - Home Inspectors - Real Estate Development - Petroleum Landmen |
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Mortgage Lending |
Is the business of providing money to individuals or corporations for the conditional transfer or pledge of real estate as security as for the payment of a debt |
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Property Management |
Includes the management of a residential and commercial properties on behalf of the investor-owner of the property |
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Apartment Locators |
Work for firms that specialize in locating units for tenants in multi family complexes |
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Home inspectors |
Licensed by TREC. Inspect properties |
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Real Estate Development |
Most often involves the acquisition of land for development into residential subdivisions, retail centers and other commercial uses |
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Petroleum Landmen |
Are individuals with a real estate background who are employed by oil and gas companies |
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Physical Characteristics of Land |
• Indestructibility or durability • Immobility Nonhomogeneity |
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Indestructibility or durability |
Land cannot be destroyed |
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Immobility |
Land cannot be moved |
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Nonhomogeneity |
No two parcels of land are the same |
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Economic Characteristics of Land |
• Scarcity • Modification • Fixity • Situs |
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Scarcity |
Theory of supply and demand When there is a shortage of something that individuals want, the price goes up |
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Modification |
Value is affected by man-made changes to the land Example: Disney World made land in Orlando increase in value |
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Fixity |
Land and additions to land take long periods to pay for themselves |
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Situs |
Location of the property or land from an economic viewpoint “Location, Location, Location” |
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Texas Real Estate License Act (TRELA) |
Established in 1939 Enforced laws put out by TREC |
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Texas Real Estate Commission (TREC) |
• Established in 1949 • 9 Member • 6 are brokers with at least 5 years of experience • 3 are public members |
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Emblements |
Annual crops produced with labor |
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Personal Property |
Items of a temporary or movable nature • AKA personalty or chattel |
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Fixture |
Personal property that has become attached to the land in such a way as to become real property |
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Real Property |
Physical real estate plus the rights an individual has to the land |
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Real Estate |
Everything that is encompassed with land including man made additions |
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Severable (in rights) |
Meaning different rights to a property can be sold or leased to someone else |
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Surface Rights |
The owner of surface rights can develop (improve) the surface and use the resources extracted from or near the surface including stone, gravel, water and limestone |
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Bundle of rights |
The rights that a person has in the land |
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Subsurface rights |
Includes the rights to oil, gas and other minerals |
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Air Rights |
Extend above the surface without limitations |
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Improvements |
Any permanent man-made addition to the land is considered to become part of the land |
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Accession |
If trade fixtures are not removed prior to lease expiration, they become the property of the landlord |
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Freehold estate |
Ownership of real property |
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Leasehold Estate |
One interest in real property that is less than a freehold estate • Estate for years • Periodic estate •Estate at will • Tenancy at sufferance |
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Statutory estates |
Estate created by law. |
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Equitable estates |
Liens, easements |
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Allodial System |
Land can be privately owned by individuals |
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Rights the Government retains in land (PETE) |
1. Police Power 2. Eminent Domain 3. Taxation 4. Escheat |
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Police Power |
The right of government to regulate and control the way land is used |
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Eminent Domain |
The right of the government to take private land for public use |
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Taxation |
The right the government retains to tax real property • Ad valorem taxes are property taxes |
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Escheat |
When someone dies intestate (without a will) and without heirs, the government will take the title to the property |
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Requirements of a valid lease |
• Competent Parties • Adequate consideration (rent) • Let and take agreement • Legal Purpose • Description of the Property (street address is sufficient) |
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Gross lease |
Landlord pays all the expenses of the property |
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Net lease |
Tenants pay rent plus a portion of expenses like taxes, maintenance or utilities |
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Percentage lease |
The tenant may pay a base rent plus a percentage of receipts |
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Encumbrance |
A claim, lien, charge or liability attached to and binding real property |
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Greenfields |
Parcels of land that have never been developed |
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Greyfields |
Parcels of land capable of redevelopment |
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Brownfields |
Sites known or suspected to be hazardous that usually occupied by industrial manufacturers or chemical plants |
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Wetlands |
Known as mires, swamps or marshes |
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Covenants, conditions, and restrictions |
(CC&Rs) the most common private controls of land use. Are found in recorded documents called a declaration of restrictions |
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Covenants, conditions, and restrictions |
(CC&Rs) the most common private controls of land use. Are found in recorded documents called a declaration of restrictions |
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Appurtenance |
A right or privilege or improvement that belongs to and passes with land but is not necessarily a part of the land |
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Encroachment |
The intrusion of one’s property onto another’s property |
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Water Rights |
• Riparian Rights • Littoral Rights These rights do not allow ownership of the water |
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Water Rights |
• Riparian Rights • Littoral Rights These rights do not allow ownership of the water |
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Riparian Rights |
Gives an owner the right to use water from a river or a stream on or next to a property |
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Littoral Rights |
Give an owner the right to use water from a lake, ocean or sea next to or on a property |
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Cooperatives |
Multi family complexes with proprietary leases for each unit |
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Mixed-Use development |
Combinations of buildings that allow for diverse uses |
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Townhome |
Distinct living unit on an individual lot that shares a common wall with another unit |
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Single family home |
Often situated in a subdivision of similar properties unattached to each other |
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Condominiums |
Multi family complexes containing units with individual fee simple ownership of the unit and interest in common areas |
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Timeshare |
Gives the owner the right to occupy a property for a specified time interval, often a week |
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Capital Gain |
Results when profit is made when an asset is sold |
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Equity |
The financial value of real estate minus the sum of all mortgage debt |
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Homeowners insurance |
Is a contract between the insurance company and the policy holder |
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Windstorm damage |
Is not covered by standard Texas homeowners policies. Majority of windstorm insurance policies are underwritten by the Texas Windstorm Insurance Association (TWIA) |
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Flood Insurance |
Covers direct physical loss caused by floods, which is defined as an excess of water on land that Normally is dry |
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Personal Property Coverage |
Aka contents coverage, is not included with building property coverage, sometimes referred to as “renter’s insurance” |
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Trusts |
Entity created for the benefit of another |
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Tenancy in common |
Ownership of real estate by two or more entities in the undivided interests |
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Sole Proprietorship |
A business venture owned by one individual |
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Partnership |
A business venture created with an agreement between more than one person |
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Estate in Severalty |
A sole individual or entity owns real estate |
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Co-Ownership |
Property held by two or more unmarried owners may be held in two different ways |
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Joint Tenancy |
Less popular type of ownership Aka right of survivorship Aka poor man’s will |
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Community Property |
Most property acquired during marriage is owned equally by both spouses and cannot be conveyed or sold without the signature of both parties |
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Corporate Ownership |
Comprised of three components • Shareholders • A board of directors • Corporate Officers |
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Agency |
Any relationship in which one party acts for or represents another |
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Agent |
A person who is authorized to act for another |
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Client |
Another name for the principal |
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License Holder |
A person who has the legal authority to act as a broker or sales agent in a real estate transaction |
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DTPA |
Deceptive Trade Practices Act A Texas consumer protection law |
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Principal |
Aka the Client |
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Fiduciary |
Relationship based on trust |
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Universal Agent |
Has full authority to conduct business on behalf of the client. Power of attorney is needed |
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General Agent |
An individual represents a principal in a particular type of transaction or business. Example: Property Manager |
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Special Agency |
Most limited of all agency relationships Aka limited agency Examples: Agent to Client |
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Customer |
Potential buyer, NOT CLIENT or PRINCIPAL |
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Express Authority |
Created by a listing agreement And can also be created by specific oral instructions from a principal |
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Implied Agency |
When a license holder behaves in a way that makes one believe that he is representing someone that he is not |
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Ostensible Agency |
When actions lead another person to assume that one is an agent |
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Agency by Ratification |
When an agent acts without prior authorization and is pardoned by his principal |
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Single-Agency Broker |
Will not act as a dual agent when his buyer-client is interested in purchasing one of the broker’s in-house listings |
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Transactional Broker |
Facilitates a buyer and seller to reach an agreement even though he does not have an agency relationship with either. Aka: Transaction coordinator, finds or middleman |
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Dual Agency Broker |
Agrees to represent both buyer and seller with their written permission |
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Listing Side |
When the seller retains the services of a broker |
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Selling side |
When the buyer retains the services of a broker |
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Cooperative Sale |
When a property is listed by one firm and sold by another |
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Subagency |
When a firm sells a property listed by another firm to a buyer it does not represent |
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In-House Sale |
When a brokerage sells its listing |
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Intermediary |
Is when a broker works with a client buyers and sellers at the same time - Intermediary With Appointments - Intermediary without Appointments |
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Information About Brokerage Services (IABS) |
Potential clients must be given this. Provides consumers with necessary information regarding agency relationship with license holders |
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Independent Contractors |
Not W2 “employees”. Receives 1099-MISC instead |
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Competency |
The license holder is obligated to be knowledgeable as a real estate brokerage practitioner |
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Integrity |
Agents must employ prudence and caution in the discharge of his responsibilities |
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Fidelity |
The license holder is a fiduciary for his client |
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Discriminatory Practices |
License Holders shall not facilitate inquiries about or make disclosures which indicates any preference on race, color, sex, National origin, ancestry, familial status or handicap of an owner, purchaser, etc... |
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Consumer Information |
Displays the TREC No. 1-2 in a prominent location in each place of business maintained by a broker |
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Steering |
Taking buyers/renters to or away from a particular area based on race, religion, etc... |
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Blockbusting |
Attempt to induce panic selling in a neighborhood for financial gain |
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Equal Credit Opportunity Act |
Each credit applicant must be evaluated based on the same information as every applicant |
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Community Reimbursement Act |
Prohibits redlining by banks |
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Fair Credit Reporting Act |
Governs consumer reporting agencies and those who access consumer credit reports |
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Civil Rights Act of 1866 |
Prohibited discrimination in housing based on race or color. |
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Civil Rights Act of 1968 |
Prohibits discrimination based on race, color, religion and national origin |
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Metes and bounds |
Uses terminal points and angles to describe land |
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Lot and Block |
Uses recorded map or play to describe land |
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Range lines |
North/South lines established at six mile intervals as part of the government survey system |
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Township lines |
East/West lines established at six mile intervals as part of the government survey system |
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Informal Reference |
A street address |
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Monument |
A permanent marker installed on the land by a surveyor. Reference point for the begging of a metes and bounds survey |
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Partition |
Division of a property between multiple owners |
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Land Surveying |
Technique, profession and science of accurately determining the terrestrial or three dimensional position of points and the distances and angles between them |
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Recorded map or plat |
This is what is referred to when it comes to lot and block |
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Government Survey System |
Aka Rectangular Survey System Adopted by congress in 1785 |
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Grid |
Concludes range lines and township lines Looks like a chessboard on a map |
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Consumer Financial Protection Bureau |
Responsible for enforcing federal consumer financial law |
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Voluntary Marketing Agreement VAMA |
An agreement by which housing associations promote voluntary compliance with civil right laws and project a willingness to comply with these laws |
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Americans with Disabilities Act |
An expansive law that affects almost all public accommodations |
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Reasonable Accommodation |
Landlords must make these for disabled people Example: A home with a no pet policy must allow a guide dog for a blind person |
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Reasonable Accommodation |
Landlords must make these for disabled people Example: A home with a no pet policy must allow a guide dog for a blind person |
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Texas Fair Housing Act |
Passed in 1989 Closely parallels the federal law |
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Puffing |
Marketing that uses adjectives and opinions rather than details or facts |
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Procuring cause of sale |
The individual who, through a series of uninterrupted activities or actions, brought about the completion of a contract |
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Open listing |
Seller lists their property with multiple brokers and can sell their own property without paying a fee |
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Net listing |
Seller establishes a minimum net amount for his/her proceeds at closing. The broker’s commission is the difference between the seller’s established net and the price that the buyer is willing to pay |
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Exclusive right to sell |
No matter who is the procuring cause of sale, the listing broker with get paid. |
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DTPA |
Deceptive Trade Practices Act Sellers disclosure notice is a good tool to use in defense in a DTPA lawsuit |
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BPO |
Brokers Price Opinion Similar to a CMA Brokers written opinion of value Mostly requested by a attorney, relocation company |
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CMA |
Comparative Market Analysis The agent uses sale information from the MLS to show a client the value of a property |
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MLS |
Multiple Listing Services |
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Exclusive agency |
When the seller lists their property with one broker but can sell the property themselves |
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Listing Agreement |
Employment contract between the seller/landlord and the broker |
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Mold |
Are fungi that can be found both indoors and outdoors |
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Unenforceable contract |
Is one that cannot be enforced due to some flaw in the contract, passage of time or other issues that make enforcement impossible |
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Voidable contract |
Is one that cannot be enforced against one or more of the parties. Example: contract with a minor |
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Void Contact |
Is invalid from the beginning and does not affect the parties. Also, is a contract to perform an illegal act |
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Valid Contract |
Is one that meets all of the requirements of law |
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Contract |
Is an agreement between two or more parties to do something or to refrain from doing something |
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Implied Contract |
Created by behavior Example: Ordering a meal |
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Express Contract |
Created by negotiation, offer and acceptance Example: Someone mowing a lawn |
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Bilateral Contract |
Both parties are obligated to perform |
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Unilateral contract |
Only one party is obligated to perform. Lacks mutuality |
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Promulgated forms |
Created by the broker-lawyer Committee |
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Mutual Rescission |
When both parties agree to terminate a contract |
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Statute of Frauds |
Contracts for the conveyance of ownership in real estate must be in writing to be enforceable |
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Executory Contract |
Once all the terms of an offer have been agreed to From the effective date to the closing date |
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Earnest Money |
Is a “deposit” paid upfront by the buyer to show that he is serious in intent |
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Novation |
When a new contract is substituted for an existing one |
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Assignment |
Transfers all the rights related to the contract to another party known as the assignor who remains secondarily liable |
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Default |
When a party fails to perform under the contract Aka breach of contract |
