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Principles > Principles of Real Estate 1 > Flashcards

Principles of Real Estate 1 Flashcards

1
Q

statutory law

A

the body of laws an regulations enacted by federal and state legislative bodies

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2
Q

common law

A

the body of law based on custom, usage and court decisions

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3
Q

Brokerage

A

the aspect of the real estate business that pertains to overseeing the needs of the parties and completing a transaction
for a commission or fee, bringing together parties interested buying, selling, exchanging or leasing real property

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4
Q

appraisal

A

• Providing a professional opinion of the value of real property

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5
Q

mortgage lending

A

• Providing money to individuals or corporations for the conditional transfer or pledge of real estate as security for the payment of a debt

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6
Q

RMLOs

A

Residential Mortgage Loan Originators

• Licensed in Texas through the Texas Department of Savings and Mortgage Lending

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7
Q

property management

A
  • The management of residential and commercial properties on behalf of the investor – owner of the property.
  • Generally responsible for the day-to-day operations of the property, maintenance, and tenant relations.
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8
Q

apartment locators

A
  • Work for firms that specialize in locating units for tenants in multi-family complexes.
  • Locator should have knowledge of amenities of all complexes in the market area.
  • Locators in Texas must have a Texas Real Estate License
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9
Q

home inspectors

A

• Licensed in Texas by the Texas Real Estate Commission (TREC)

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10
Q

real estate development

A

• Involves the acquisition of land for development into residential subdivisions, retail centers and other commercial uses.

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11
Q

oil and gas

A

• Companies employ a large number of individuals with a real estate background.

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12
Q

Education Standards Advisory Committee

A

12 members
• 7 of 12 members must be brokers who have been active in real estate for no less than 5 years
• 4 must be education-related members who have been instrumental in the instruction of real estate core curriculum or continuing education
• 1 public member

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13
Q

National Association of Realtors (NAR)

A

 The largest professional organization for real estate professionals, both commercial and residential.

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14
Q

Institute of Real Estate Management (IREM)

A
  • An international community of real estate managers
  • Dedicated to
  • ethical business practices
  • maximizing the value of investment real estate
  • promoting superior management through education and information sharing
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15
Q

CCIM Institute

A
  • Established to give commercial real estate practitioners an opportunity to further their business practices though education and networking opportunities.
  • The institute administers the Certified Commercial Investment Member (CCIM) designation
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16
Q

Society of Industrial and Office Realtors (SIOR)

A
  • A professional affiliate of the National Association of Realtors
  • Designees can hold the following specialty designations
  • Industrial
  • Office
  • Sales manager
  • Executive Manager
  • Advisory Service
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17
Q

International Council of Shopping Centers

A

• The purpose is to advance the shopping center industry and to promote its role in the commercial distribution of consumer goods and services.

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18
Q

Building Owners and Managers Association (BOMA) International

A
  • Members are
  • Building owners
  • Managers
  • Developers
  • Leasing professionals
  • Corporate facility managers
  • Asset managers
  • The providers of the products and services needed to operate commercial properties.
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19
Q

benefits of home ownership

A 
occupancy 
tax benefits
pride of ownership
security
investment
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20
Q

occupancy

A

-The owner occupies the residence

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21
Q

tax benefits

A

mortgage interest and property taxes may be tax deductible

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22
Q

pride of ownership

A

many home owners see the home as a sign of accomplishment

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23
Q

security

A

home ownership protects the individual or family from future increases in rental rates

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24
Q

investment

A

properties are purchased and held in anticipation of income, appreciation or both
-money directed toward the purchase, improvement, and development of an asset in expectation of income or profits

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25
Q

physical characteristics of land

A

indestructibility or durability
immobility
nonhomogeneity

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26
Q

indestructibility or durability

A

• Refers to the fact that land cannot be destroyed.

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27
Q

immobility

A

• Refers to the fact that land cannot be moved

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28
Q

nonhomogeneity

A

• Refers to the fact that no two parcels of land are the same.

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29
Q

economic characteristics of land

A

scarcity
modification
fixity
situs

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30
Q

scarcity

A
  • Comes from the theory of supply and demand

* When there is a shortage of something that individuals want, the price goes up.

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31
Q

modification

A

• Value is affected by man-made changes to the land. The changes can be to the land itself or off-site.

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32
Q

fixity

A

-performance; in real estate, the fact that land is permanent, and cannot be moved

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33
Q

situs

A 
•	Refers to the location of the property or land from an economic, not geographic, viewpoint.
•	Both natural and man-made factors will have an impact on preferences 
	Climate
	Views	
	Access to natural recreation
	Schools
	Job opportunities
	Transportation
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34
Q

value

A

 A fair return or equivalent in goods, services, or money for something exchanged
 The monetary worth of something

35
Q

supply affected by

A
  • land costs
  • construction costs
  • taxation
  • economics
  • local government building codes and zoning ordinances
36
Q

demand affected by

A
  • growth in employment
  • transportation system
  • personal preference
  • availability of credit
  • federal government policy
37
Q

real estate licensees must have a good understanding of various aspects of law

A
  • agency law
  • contract law
  • real estate licensing laws and rules
  • finance regulations
  • advertising
  • consumer protection law
38
Q

Texas Real Estate License Act (TRELA)

A

the purpose is to protect the public against unscrupulous brokers and salespersons
-the statute that controls the licensing of persons permitted to practice real estate brokerage in texas

39
Q

Texas Real Estate Commission (TREC)

A
  • Primary purpose is to carry out the provisions of the license act
  • 9 members
  • Members are appointed by the governor and approved by the senate
  • Serve for a 6 year term
  • 6 are broker members that have been brokers for at least 5 years
  • 3 are public members
40
Q

powers of the TREC

A
  • Issue salesperson and broker licenses
  • Enact rules and regulations that have the full force and effect of the law and advise with reference to these rules and laws
  • Suspend or revoke licenses of those who violate the license act
  • Place a licensee on probation
  • Require additional education
  • Subpoena books, records and witnesses, and if a licensee fails to respond to the subpoena, file suit with the Attorney General to enforce it
  • File an action against a licensee on its own motion
  • Assess administrative penalties up to $5,000 per day against offending licensed and unlicensed individuals
  • Promulgate forms which are mandatory for licensees
41
Q

land

A

• Defined as the surface of the earth extending downward to the center of the earth and upward above the surface to infinity

42
Q

real estate

A
  • All that is encompassed in land

* With the addition of all things permanently attached, whether by nature or by a person, any and every interest in land

43
Q

real property

A

• All that is encompassed in land
• With the addition of all things permanently attached, whether by nature or by a person, any and every interest in land
as well as the interest, benefits and rights inherent in real estate ownership
“bundle of rights”
rights are severable

44
Q

bundle of legal rights

A

the concept of land ownership that means ownership of all legal rights to the land rather than ownership of the land itself

45
Q

surface rights

A

ownership rights in a parcel of real estate that are limited to the surface of the property, and do not include the air above it or minerals below the surface

46
Q

subsurface rights

A

ownership rights in a parcel of real estate to the minerals, gas, oil and so forth that lie beneath the surface of the property

47
Q

air rights

A

the right to use the open space above a property, generally allowing the surface to be used for another purpose

48
Q

improvement

A
  • an improvement on land is any structure, usually privately owned, erected on a site to enhance the value of the property
  • an improvement to land is usually a publicly owned structure
49
Q

personal property

A

 Things of temporary or movable nature

50
Q

personalty

A

items of personal property

51
Q

chattel

A

personal property

52
Q

bill of sale

A

a written instrument given to pass title to personal property

53
Q

fixture

A

an item of personal property that has been converted to real property by being permanently installed or attached to the real property

54
Q

annexation

A

• The process of attaching personal property so that it becomes real property

55
Q

severance

A

changing an item of real estate to personal property by detaching it from the land

56
Q

tests to determine if fixture or personal property

A
  • intention of parties
  • method of attachment
  • adaptation to the property
57
Q

intention of partie

A

was the item intended to be permanent

58
Q

method of attachment

A

 How an item was attached to the property

59
Q

adaptation to the property

A

 How the item fits the property

60
Q

trade fixtures

A

article installed by a tenant under the terms of a lease and removable by the tenant before the lease expires
-remain personal property and are not true fixtures

61
Q

emblements

A

growing crops that are produced annually through labor and industry
-deemed to be personal property

62
Q

accession

A

acquiring title to additions or improvements to real property as a result of the annexation of fixtures or the accretion of alluvial deposits along the banks of streams

63
Q

manufactured home

A

 A home that is built in a factory according to a federal building code administered by HUD
- Built on a frame that includes axles and towing components
• Home is towed to the site in one or more units
-not a mobile home

64
Q

HUD

A

US Department of Housing and Urban Development

65
Q

modular homes

A

 Primarily built off site in a factory

66
Q

Single-family home

A

Not attached to another dwelling

Most often situated in the subdivision of homes of similar price and styling

67
Q

Covenants conditions and restrictions (CCRs)

A

Deed restrictions
Imposed by the developer of the subdivision
Establish standard for home size, style, type of construction, location on a lot, type of landscaping installed

68
Q

Condominiums

A

Multifamily complexes individually owned units
Three interests
-fee simple ownership of the unit
-fee simple ownership in an undivided interest in the common area
-an easement to the airspace occupied by the unit
Interest are not several must be conveyed at the same time

69
Q

Cooperatives

A

Similar to condo
Units owned by a corporation
When somebody purchases the cooperative they buy stock and receive proprietary lease on the unit

70
Q

townhomes

A

 Sold as a distinct living unit on an individual lot

 The units share a common wall (party wall)

71
Q

retro- commissioned or converted structures

A

 Include the conversion of existing buildings into residential units

72
Q

mixed-use developments

A

 Building types or combinations of buildings that allow for a “mix” of uses

73
Q

timeshare

A

 Gives the owner the right to occupy a property for a certain time interval
 The purchaser receives the right to a specific time period annually, and the time allotted may change from year to year depending on the agreement.

74
Q

capital gain

A

income earned from the sale of an asset

75
Q

Homeowners insurance

A

 A contract between the insurance company and the policyholder
 Homeowners need insurance coverage to protect them from losses related to the structure, personal possessions and liability
aka hazard insurance

76
Q

HO-A Policies

A
  • Provide limited, actual cash- value coverage of a home and its contents.
  • Only the types of damage specifically listed in the policy are covered
77
Q

Renters insurance

A
  • A landlord’s insurance does not cover a renter’s personal property
  • Renters insurance covers belongings, provides liability protection, and pays additional living expenses if a fire or other event stated in the policy forces the policyholder to move temporarily
78
Q

condominium insurance

A
  • Condominium insurance covers belongings, provides liability protection, and pays additional living expenses
  • It also covers damage to improvements, additions, and alterations to the condo
79
Q

townhouse insurance

A
  • Townhouses may be insures by either an individual homeowners policy or an association master policy
  • If a townhouse is owner-occupied and the townhouse association does not have a master policy on the building, a homeowners policy can be purchased on the individual unit
  • If the association has a master policy, a TX tenant homeowners policy can insure the personal property
80
Q

mobilowners insurance

A
  • Mobile homes without wheels and resting one blocks or a permanent foundation may qualify for a homeowners policy
  • However, most mobile homes are insured by a mobilowners policy is an auto policy that covers mobile homes used as residences
81
Q

farm and ranch insurance

A

• Farm and ranch owners policies insure homes outside of city limits on land used for farming and raising livestock

82
Q

coinsurance clause

A

a provision in insurance policies covering real property that required the policyholder to maintain fire insurance coverage generally equal to at least 80% of the property’s actual replacement cost

83
Q

factors that affect insurance premiums

A
  • Age and condition
  • The home’s replacement cost
  • Construction materials used in the home
  • Location
  • Availability of local fire protection
  • The policyholder’s claims history
  • The policyholder’s credit score
84
Q

comprehensive loss underwriting exchange (CLUE)

A

a claims history database that enables insurance companies to access consumer claims information when they are underwriting or rating an insurance policy

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