Introduction to Modern Real Estate Practice Flashcards
Introduction to Modern Real Estate Practice
A real estate license holder who locates dwelling units for prospective tenants
Apartment locator
Duplex, triplex, or fourplex residences are all considered ___________ ________
Multi-family residences
Primarily made up of property that is used for business.
Commercial real estate
Includes commercial property used for:
Manufacturing, Storage, Distribution centers, Research, Warehousing, Data centers, Storage Units
Industrial Property
Involves locating property, deciding how it can be best used, and then building on it
Property Development
Examples include ranches, farms, and acreage tracts in subdivisions
Rural properties
States that a REALTOR® may provide a service they are not specialized in only after fully disclosing their lack of experience, or if the REALTOR® obtains assistance from someone competent in the field, in which case, the client must be informed.
Article 11
What does Article 11 state?
A realtor must disclose their lack of experience in a field to the client.
To review and revise curriculum standards, course content, and instructor certification requirements for both Qualifying and Continuing Education courses
The function of the Education Standards Advisory Committee
Consists of 12 members appointed by the Commission
Education Standards Advisory Committee
Who is on the Education Standards Advisory Committee?
Consists of 12 members, including license holders, education members, and a public representative
Occur naturally
Physical characteristics of real estate
Human-made
Economic characteristics
The actual piece of the earth, including anything below the surface of the land and the air above it.
Land
Made up of the land & any improvements attached to it
Real estate
Real estate PLUS the bundle of rights that come with ownership of it
Real property
Describes items that can easily be removed from the land
Personal property
Which of the following is not a feature of real estate?
a.) Only an owner has the right to use a property
b.) Property ownership can be transferred without transferring the property to another location.
c.) The person in possession of a property may not be the owner
d.) Property value is determined by the use of the land & the location of the property.
a.) - Only an owner has the right to use a property
The economic characteristic that informs the economic principle of supply and demand
Scarcity
The cost of real estate in a metropolitan area has gone up dramatically over the past year because an increasing number of people has been moving to that area, and there are only a finite number of parcels of land that are close to the downtown area. This is an example of:
Scarcity
What term identifies an economic preference for a certain location?
Situs
Refers to the fact that real estate exists in a fixed location and cannot be moved
Fixity
The relative difficulty of converting an asset to cash without loss of value
Illiquidity
Which term refers to the permanence of land?
Fixity
The price for which a property will sell if offered openly under normal conditions
Market Value
________ & ________ move in opposite directions.
Supply and price
Responsible for all laws in Texas
The Texas Legislature
The laws that affect the owners of real estate are referred to as
Property rights
What contains Fair Housing laws, community property laws, and homestead laws?
State constitutions & U.S. Constitution
2 main functions are to:
1.) Enforce all real estate-related statutes
2.) To adopt & enforce new rules
2 main functions of the Texas Real Estate Commission (TREC)
A Texas law that requires a commission, called the Sunset Commission, to evaluate every state agency every 12 years
Sunset Act
Has the authority to enforce all the statutes contained in the Real Estate License Act, and adopt and enforce new rules
The Commission
Chapter 1102 of the _______ ____________ _______ governs the practice of Texas Real Estate inspectors.
Texas Occupations Code
Role is to provide education and guidance to improve the practice of their members
The role of professional organizations
Must belong to at least one board in Texas.
A REALTOR®
Made up of three 30-hour courses that are required for first-time license holders prior to renewing their license two years after they received their license.
Graduate, REALTOR® Institute (GRI)
An impartial, qualified appraiser’s opinion of the value of a specific property on a specific date, supported by relevant market information.
An appraisal
A method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself
Cost to replace
A property appraisal method that estimates value by comparing the subject property to the sales prices of similar properties in the same market area
Sales comparison approach
A method of estimating the value of a property by applying a rate of return to the net income it produces
Income approach
The appraiser will compare estimates they made based on the cost approach, sales comparison approach, and/or income capitalization approach.
Reconciliation
Also known as the direct sales comparison approach or market data approach.
Sales comparison approach
A report that compares the prices of sold homes that are similar to the subject property
Comparative market analysis
- Can be performed by agents
- Usually done for free
- Simple, casual estimate
Comparative market analysis
- Requires an appraiser’s license
- Usually done for a fee
- Formal & detailed
- Required by most lenders
Appraisal
- Estimate market value of property
- Use a sales comparison approach
Both an appraisal & a CMA
The process used by a hired sales agent to determine the potential selling price or estimated value of a real estate property.
A Broker Price Opinion (BPO)
A market condition in which the number of properties for sale does not meet the demand (number of people looking to buy).
Seller’s Market
The average number of months it will take to sell a house in a buyer’s market is:
6 months or more
When an appraisal report is not available, which of the following provides the BEST data for setting a listing price?
The price willing buyers have recently paid for similar properties in the area
A seller is more likely to want to work with an agent who uses the words “________ __________” rather than “________ __________.”
price adjustment
price reduction
False statement, either spoken or written, that is made unintentionally
misrepresentation
The NAR® Code of Ethics is reviewed and updated _______ _______.
every year
Has an agency relationship with you or your broker
Client
Any other party in the transaction that doesn’t have an agency relationship with you
Customer
A person involved in a contract for sale, lease, or agency
Party
Many license holders find that providing a party with the ____________ ______ ____________ ___________ __________ to be the most convenient way to fulfill their obligation with respect to the written statement requirement.
Information About Brokerage Services Notice
To avoid _______________, a license holder should only give factual information from reputable sources, avoid speculation, and point potential buyers to the resources that can help with questions that you shouldn’t answer.
misrepresentation
Carelessness in the work that needs to be accomplished.
Negligence
Usually occurs when a license holder attempts to facilitate a type of transaction that they have never attempted
Incompetence
Avoid getting into trouble for misrepresentation by…
citing the source of any information you provide
A form every seller is required to provide with a potential buyer with the contract
Seller’s Disclosure Notice
The illegal act of a license holder mixing their own money with a client’s or customer’s money
Commingling
The act of a broker or sales agent using a client’s or customer’s money for their own use
Conversion
refers to any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win anything of value, whether such scheme or procedure is called a pool, lottery, raffle, gift, gift enterprise, sale, policy game, or some other name.
Lottery
An exaggeration to accomplish a goal, such as a sale
Puffing
What is the only scenario in which you do NOT need a real estate license to sell or lease a property?
If you are not receiving any commission from the sale of your
TRUE or FALSE: Employees working for a commercial firm do not have to have a real estate license if they are selling property owned by their firm.
TRUE
Which of the following actions does NOT require a real estate license?
A.) Selling a portion of a joint ownership in a property
B.) Showing the listing of a broker or licensed sales agent
C.) Handling funds in property management
D.) Supervising licensed people
A.) Selling a portion of a joint ownership in a property
A plea in a criminal court in which the defendant accepts the punishment without admitting guilt.
Nolo contendere
When does an inactive license become active?
When the license holder joins a brokerage
Allows an applicant to find out if TREC will grant them a license before they spend too much time and money
Moral Character Determination Form
Has characteristic of indestructibility
Land
Created solely by demand for land in particular areas
Economic Scarcity
Land is most valuable when it is in…
short supply and in high demand
Responsible for enforcing TRELA.
Texas Real Estate Commission (TREC)
