Real Estate Professionals Flashcards
Real estate professionals
individuals and business organizations whose sole enterprise is performing a real estate-related service or function.
Creation and Improvement
Creating real properties from raw land involves capital formation, financing, construction contracting, and regulatory approvals.
Key parties involved in ‘Creating real properties from raw land’
the developer, the landowner, and the mortgage lender; market analysts, architects, engineers, space planners, interior designers, and construction subcontractors.
Key parties involved in ‘Managing and Maintaining’
property managers, asset managers, maintenance engineers, maintenance technicians, corporate managers
Key parties involved in ‘Destroying’
demolition contractors, excavators
Key parties involved in ‘Investment Ownership’
investors, corporate managers
Key parties involved in ‘Regulating’
assessors, public planners, zoning administrators, building inspectors
Key parties involved in ‘Transferring’
brokers and agents, appraisers, lenders and bankers, mortgage brokers, title and escrow companies, attorneys, insurers, surveyors.
Broker
is a direct agent of the principal (buyer or seller) who is hired for compensation to perform a stated service, such as negotiating the sale of property.
Agent
is the party in an agency relationship (a licensed employee of the broker) who is hired by the principal to perform certain duties.
Lenders
those who make loans
Bankers
those who either own or act as officers in a bank.
Title Company
completes an “abstract of title,” which is a search of the records in the county where the property is held.
Escrow Company
hold money or documents until certain terms and conditions of the escrow are met.
Insurers
Those who sell insurance policies protecting (providing compensation) for loss or damage sustained.
Appraisers
A duly trained and licensed professional authorized to perform appraisals for other parties.
Mortgage Brokers
People who are paid a fee to bring borrowers and lenders together.
Mortgage Bankers
people who sell, and service loans.
Attorneys
An individual who represents a client and is licensed to give legal advice.
Surveyors
One who is licensed to take formal measurements of the boundaries, dimensions, and elevations of a parcel of real estate.
Residential Property
property that is owned and used for habitation.
Commercial Property
retail and office properties, but may also include industrial real estate. The term “commercial” relates to the fact that the property can potentially generate income from a business’s usage.
Investment Property
any property that is held by its owners for investment purposes.
Classifications of Real Property
Residential, Residential income, Office, Retail, Industrial, Farm and ranch, Special purpose, Land
Type of property type
Residential agents, Commercial agents (office, retail), Industrial agents, Land agents
Geographical Area
Brokers and agents must maintain current, accurate data on properties; One’s area may be defined by natural barriers; by streets and highways; or by a certain set of subdivisions.
Type of transactions
sales, leases and subleases, exchanges, and options.
Type of client
Brokers increasingly represent buyers and tenants as well as sellers and landlords.
Type of relationship
many brokers have specialized in providing advisory services to clients instead of the traditional transaction-based, commission-compensated services. In the advisory relationship, the broker works on identified real estate tasks or projects in exchange for a fee, salary, or retainer.
Individual brokerage services w/pre-set fees
comparative price analysis, database search, prospect screening, site analysis
Why do most people entering the real estate profession begin by working with residential properties?
volume of business; familiarity with product; relative simplicity of transactions; availability of employment.
Why do brokers and agents often specialize in a type of property, geographical area, type of transaction, type of client, or type of relationship?
size and complexity of markets; competitive factors; difficulty of achieving competence in more than one specialty.
Why is education important in real estate professions, and why do government agencies regulate educational requirements?
complexity of the business; duty to serve the public; legal complexities; pitfalls and liabilities.
5 ways the commission protects consumers
Establishes minimum requirements for licenses, Requires three commissioners to be advocates for the public, Provides for effective professional education of licensees, Maintains records of all licensees, Enforces rules and punishes offenders.
Intent of the license law.
Promote public welfare and Ensure licensee competence
Creation of the Texas Real Estate Commission
Enforce license law and Enact rules and regulations to support law
Members of the Commission
9 board members, 6 members from real estate industry, 3 members from general public, appointed by governor, term is 6 calendar years
Commission organization and employees.
Governor designates a presiding officer; Commission appoints an administrator and staff to discharge the Commission’s duties.
Powers and Duties of the Commission
- Promulgate rules and regulations to support license law -Administer oaths
- Maintain official records
- Maintain records of all licensees
- Conduct real estate seminars and provide materials for licensee
- Collect fees, charges, fines and penalties
- Establish procedures for real estate auctions
- Establish professional standards of practice
- Conduct hearings and impose penalties
- Administers the Real Estate Recovery Fund
- Exercise subpoena powers
Duties of the administrator
Discharge commission’s duties as executive officer; Hire and supervise staff
Real Estate Recovery Fund
- Used for reimbursement to members of the public harmed by licensees misconduct
- Partially supported by licensee fees
Licensee
an individual who holds “any type of license issued by the Commission and shall include a broker, and a salesperson.”
What do you have to do to get your Texas salesperson’s license? How many did you get?
- be of majority age (18 years old)
- satisfy educational requirements
- satisfy experience requirements
- pass the appropriate licensing examination
- demonstrate a record of professional conduct
- provide evidence of honesty, trustworthiness and -integrity
- complete a criminal history background check
- pay the appropriate fees
A friend of yours wants to go into real estate, and she asks you which type of license she should get. For the first part of your answer, you tell her what the two types are and how they differ. What do you say?
- the broker: the boss or a broker who just sells and lists
- the salesperson: a selling or listing salesperson
Your cousin from Mississippi is moving to Texas and wants to go into real estate. He already has a license in Mississippi. How does he get a Texas license?
- meet the same requirements as residents, or
- show proof of current active broker licensure in the applicant’s home state
- pay the required fees
- agree to abide by the Texas Real Estate License Law
- furnish certification of licensure and any disciplinary history
- appoint the administrator or assistant administrator of the commission
- as the licensee’s agent for receiving notices of legal action
- agree to cooperate with any investigation
The licensee may renew, but does not have to take any continuing education.
Status: inactive
The licensee must cease practicing on renewal notice deadline, if he fails to renew.
Status: inactive
The licensee must complete CE in order to renew under the same status.
Status: active
The licensee must meet the same requirements as a new applicant to renew.
Status: expired > 6 years
A licensee reactivates six months after expiration, but is not required to complete the CE requirement.
Status: inactive
A licensee has been disciplined by the Commission. Status: suspended
Status: suspended
There are proper ways to disburse from a trust account, and there are improper ways. List as many “proper” circumstances where the broker may legitimately disburse trust account funds.
- upon reasonable interpretation of the contract
- upon securing a written agreement
- at the closing of the transaction
- upon the rejection of an offer to purchase, sell, rent, lease, exchange, or option real estate
- upon the withdrawal of an offer not yet accepted
- upon the order of a court
The Commission may impose any one or more of the following penalties:
- license suspension, revocation, or denial of renewal
- fines up to $5,000 for each violation
- completion of educational programs
- placement of conditions on the license or licensee’s practice
- other penalties as deemed appropriate by the Commission
Fiduciary duties owed clients are:
- care, skill, and diligence
- obedience
- accounting
- loyalty (confidentiality)
- disclosure
