TX 122 Real Estate Principles II-Lesson 5 Flashcards
What is the primary role of a real estate broker?
Acts as an agent or intermediary between parties in real estate transactions.
What is the responsibility of a sales agent in Texas?
Works for the broker, providing services to prospective buyers and sellers.
What does FSBO stand for?
For Sale By Owner.
What is ‘farming’ in real estate?
Target marketing in a particular geographic area or property type.
Define property management.
Operation, control, and oversight of real estate.
What type of relationship do property managers typically have with landlords?
Brokerage relationship, often as an agent.
List three general duties of property management.
- Establish rent schedule
- Qualify tenants
- Supervise maintenance
What is a key aspect of resort sales specialization?
Brokering second homes in resort areas.
What has led to a surplus of timeshares on the market?
Original purchasers aging and attempting to resell their units.
What is ‘investment real estate’?
Properties bought for rental or investment, ranging from condos to large developments.
What is the goal of a broker when locating investment properties?
To find properties within the client’s budget that provide desired returns.
What are some methods of investment analysis?
- Rate of return
- Internal rate of return
- Gross rent multiplier
What is a challenge when marketing raw land?
It often involves longer-term projects than selling developed properties.
What does ‘agricultural real estate’ include?
Land used for producing agricultural commodities or products.
What is the USDA’s role in farmland value research?
Researching trends in farmland values and the effects of economic factors.
What are CSAs in agriculture?
Community Supported Agriculture organizations that market directly to local consumers.
What does REO stand for?
Real Estate Owned.
What happens to properties classified as REO?
They are properties taken as collateral for a loan after foreclosure.
What is a short sale in real estate?
A sale where proceeds are less than the amount owed on the property.
True or False: A short sale is preferable to foreclosure for the borrower.
True.
What must agents exercise when dealing with short sales?
Extreme caution due to potential pitfalls.
What is one of the main risks of short sales?
They often take longer to complete and can fall apart at the last minute.
What is a short sale in real estate?
A short sale is a transaction where a property is sold for less than the amount owed on the mortgage, typically requiring lender approval.
What should agents be cautious about when conducting short sales?
Agents should be cautious of the pitfalls involved in short sales and the limited control sellers have over transaction terms.
Who dictates the terms and conditions of a short sale?
The lender typically dictates the terms and conditions of the short sale.
What must agents disclose to clients in a short sale transaction?
Agents must disclose that the seller will incur losses and may need to pay closing costs.
What is the impact of a short sale on a seller’s credit?
A short sale will negatively impact the seller’s credit.
What are the fiduciary duties of an agent in a short sale?
Fiduciary duties include confidentiality, accounting, reasonable care and diligence, loyalty, obedience, accountability, and full disclosure.
What is dual agency in real estate?
Dual agency occurs when an agent represents both the buyer and the seller in a transaction.
In Texas, what is required for an agent to act as a dual agent?
Informed consent from both the buyer and seller is required for an agent to act as a dual agent in Texas.
What guidelines should agents follow for risk management in short sales?
Agents should follow company-mandated risk management procedures and adhere to TRELA and REALTOR@ Code of Ethics.
What advice should agents give to distressed borrowers considering short sales?
Agents should advise borrowers to be quick, persistent, prepared, and willing to ask for help.
What is the role of an attorney in a short sale process?
An attorney can send a letter to the lender requesting a modification or short sale.
What is the difference between REO and foreclosure properties?
REO properties are owned by the lender, while foreclosure properties are in the process of being foreclosed.
What is a foreclosure auction?
A foreclosure auction is a public sale of a property that occurs when the property owner defaults on their mortgage.
What is the primary responsibility of a leasing agent?
The primary responsibility is to bring tenants to the landlord or property owner/manager.
What defines single family residential properties?
Single family residential properties are defined as one to four family homes.
How do real estate professionals typically earn their income?
Real estate professionals earn income through commissions upon successful completion of transactions.
What is the importance of competition in real estate?
Competition allows consumers to save money and access a variety of services in home buying and selling.
What are antitrust laws designed to protect in real estate?
Antitrust laws protect competition and prevent restrictions like price fixing and monopolistic practices.
What is the minimum level of service a broker must provide to clients?
A broker must inform clients of material information and answer questions related to the transaction.
What is commercial real estate brokerage?
Commercial real estate brokerage involves representing clients in the acquisition, sale, and leasing of commercial properties.
What should a brokerage with specialized claims enforce?
A brokerage should enforce a continuing education and update policy to ensure brokers remain educated in their specialty.
What can lead to disciplinary action against a broker?
Acts of negligence, dishonesty, or misrepresentation can lead to disciplinary action against a broker.
What is the primary responsibility in property management?
The primary responsibility is to maximize the return on the investment.
What is the consequence of a false claim of being a specialist in real estate?
It could result in disciplinary action and economic consequences for the broker.
What is the primary responsibility of a leasing agent?
To bring tenant to the landlord or property owner/manager
The leasing agent also prepares lease agreements.
What is the primary responsibility in property management?
To maximize the return on the investment
This involves overseeing the management of property assets.
What responsibilities are associated with investments in real estate?
Managing the financial assets of another
This includes ensuring profitability and financial growth.
What is unique about short sales in real estate?
Special addendums are required
Short sales involve selling a property for less than the amount owed on the mortgage.
What types of properties are included in commercial real estate?
Office space, retail space, factories, warehouses
Retail space includes shopping centers and strip malls.
True or False: A broker can allow an unqualified licensee to manage a transaction without consequences.
False
Allowing unqualified individuals to manage transactions can lead to disastrous consequences.
Fill in the blank: The party who brings a tenant to a landlord or property manager and prepares a lease agreement is a _______.
Leasing agent
