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Principles of Real Estate Part 1 > Real Estate Professionals > Flashcards

Real Estate Professionals Flashcards

1
Q

Real estate professionals

A

individuals and business organizations whose sole enterprise is performing a real estate-related service or function.

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2
Q

Creation and Improvement

A

Creating real properties from raw land involves capital formation, financing, construction contracting, and regulatory approvals.

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3
Q

Key parties involved in ‘Creating real properties from raw land’

A

the developer, the landowner, and the mortgage lender; market analysts, architects, engineers, space planners, interior designers, and construction subcontractors.

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4
Q

Key parties involved in ‘Managing and Maintaining’

A

property managers, asset managers, maintenance engineers, maintenance technicians, corporate managers

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5
Q

Key parties involved in ‘Destroying’

A

demolition contractors, excavators

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6
Q

Key parties involved in ‘Investment Ownership’

A

investors, corporate managers

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7
Q

Key parties involved in ‘Regulating’

A

assessors, public planners, zoning administrators, building inspectors

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8
Q

Key parties involved in ‘Transferring’

A

brokers and agents, appraisers, lenders and bankers, mortgage brokers, title and escrow companies, attorneys, insurers, surveyors.

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9
Q

Broker

A

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.

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10
Q

Agent

A

is the party in an agency relationship (a licensed employee of the broker) who is hired by the principal to perform certain duties.

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11
Q

Lenders

A

those who make loans

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12
Q

Bankers

A

those who either own or act as officers in a bank.

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13
Q

Title Company

A

completes an “abstract of title,” which is a search of the records in the county where the property is held.

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14
Q

Escrow Company

A

hold money or documents until certain terms and conditions of the escrow are met.

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15
Q

Insurers

A

Those who sell insurance policies protecting (providing compensation) for loss or damage sustained.

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16
Q

Appraisers

A

A duly trained and licensed professional authorized to perform appraisals for other parties.

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17
Q

Mortgage Brokers

A

People who are paid a fee to bring borrowers and lenders together.

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18
Q

Mortgage Bankers

A

people who sell, and service loans.

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19
Q

Attorneys

A

An individual who represents a client and is licensed to give legal advice.

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20
Q

Surveyors

A

One who is licensed to take formal measurements of the boundaries, dimensions, and elevations of a parcel of real estate.

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21
Q

Residential Property

A

property that is owned and used for habitation.

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22
Q

Commercial Property

A

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.

23
Q

Investment Property

A

any property that is held by its owners for investment purposes.

24
Q

Classifications of Real Property

A

Residential, Residential income, Office, Retail, Industrial, Farm and ranch, Special purpose, Land

25
Q

Type of property type

A

Residential agents, Commercial agents (office, retail), Industrial agents, Land agents

26
Q

Geographical Area

A

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.

27
Q

Type of transactions

A

sales, leases and subleases, exchanges, and options.

28
Q

Type of client

A

Brokers increasingly represent buyers and tenants as well as sellers and landlords.

29
Q

Type of relationship

A

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.

30
Q

Individual brokerage services w/pre-set fees

A

comparative price analysis, database search, prospect screening, site analysis

31
Q

Why do most people entering the real estate profession begin by working with residential properties?

A

volume of business; familiarity with product; relative simplicity of transactions; availability of employment.

32
Q

Why do brokers and agents often specialize in a type of property, geographical area, type of transaction, type of client, or type of relationship?

A

size and complexity of markets; competitive factors; difficulty of achieving competence in more than one specialty.

33
Q

Why is education important in real estate professions, and why do government agencies regulate educational requirements?

A

complexity of the business; duty to serve the public; legal complexities; pitfalls and liabilities.

34
Q

5 ways the commission protects consumers

A

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.

35
Q

Intent of the license law.

A

Promote public welfare and Ensure licensee competence

36
Q

Creation of the Texas Real Estate Commission

A

Enforce license law and Enact rules and regulations to support law

37
Q

Members of the Commission

A

9 board members, 6 members from real estate industry, 3 members from general public, appointed by governor, term is 6 calendar years

38
Q

Commission organization and employees.

A

Governor designates a presiding officer; Commission appoints an administrator and staff to discharge the Commission’s duties.

39
Q

Powers and Duties of the Commission

A
  • 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
40
Q

Duties of the administrator

A

Discharge commission’s duties as executive officer; Hire and supervise staff

41
Q

Real Estate Recovery Fund

A
  • Used for reimbursement to members of the public harmed by licensees misconduct
  • Partially supported by licensee fees
42
Q

Licensee

A

an individual who holds “any type of license issued by the Commission and shall include a broker, and a salesperson.”

43
Q

What do you have to do to get your Texas salesperson’s license? How many did you get?

A
  • 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
44
Q

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?

A
  • the broker: the boss or a broker who just sells and lists

- the salesperson: a selling or listing salesperson

45
Q

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?

A
  • 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
46
Q

The licensee may renew, but does not have to take any continuing education.

A

Status: inactive

47
Q

The licensee must cease practicing on renewal notice deadline, if he fails to renew.

A

Status: inactive

48
Q

The licensee must complete CE in order to renew under the same status.

A

Status: active

49
Q

The licensee must meet the same requirements as a new applicant to renew.

A

Status: expired > 6 years

50
Q

A licensee reactivates six months after expiration, but is not required to complete the CE requirement.

A

Status: inactive

51
Q

A licensee has been disciplined by the Commission. Status: suspended

A

Status: suspended

52
Q

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.

A
  • 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
53
Q

The Commission may impose any one or more of the following penalties:

A
  • 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
54
Q

Fiduciary duties owed clients are:

A
  • care, skill, and diligence
  • obedience
  • accounting
  • loyalty (confidentiality)
  • disclosure

Principles of Real Estate Part 1 (2 decks)

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