Texas Principles of Real Estate

Economic Characteristics of Land

The economic characteristics of land include its scarcity, improvements, location, and permanence, which together influence its value and utility in real estate.

Physical Characteristics of Land

Immobility, Nonhomegility, and Indestructibility

Value

Foundation of a Real Estate Buisness

Market

A place where goods and services can be bought and sold, with relatively stable price levels established.

Supply

The amount of goods available in the market at a given price

Demand

The amount of good consumers are willing to buy at a given price

Business Cycles

Expansions, Recession, Depression, and Revival

Seven Sources of Law

U.S Constitution

Laws Passed by Congress

Federal and State Regulations

State Constitutions

Laws Passed by State Legislators

Court Decisions

Local Ordinates

Common Law

Rules and Principles founded on previous court decisions

The TRECLA

Governs the licensing and conducts Real Esate Professionals in Texas

The TREC

Governs Real Estate practices in the state of Texas

Land

Earths surface along with mineral deposits

Improvements

man made improvements attached to the land

Real Property

Real Estate Plus the Bundle of Rights

Bundle of Rights

UPTEE

Use

Possesion

Transfer

Encumber

Enjoyment

Severed

creating two or more distinct ownership interest

Personal Property (Chattles)

Moovable

Fixtures

Personal Property that was permanently attached to land (Chandeliers)

Trade Fixture

Personal Property attached to real property by tentant for tentants business. Will take with them when lease is up ( dentist chair)

Condominiums (Condo)

Individual owned residential unit in a complex

Coopertives

Where residents don’t directly own their units. They own shares in a corporation that owns an entire building or development.

Townhouses

Multistory, single family attached home. Typically shared wall with a neighboring unit.

Time shared home

a property where multiple individuals share ownership and the right to use it for specific periods of the year.

Married Homeowners who file jointly

are able to exclude up to $500,000 of Capital Gains on the sale of exchange

Coinsurance Clause

Property must be insured at least 80% of its replacement cost.

FEME

makes flood insurance mandatory for people who wish to obtain property in flood zone areas.

Brokerage

A business of bringing people together who wish to buy, sell, exchange, or lease real estate.

Special Agent

A real estate broker hired by the seller or buyer to sell or find a parcel of real estate

Principle

The person who hires the broker

Listing Agreement

A contract between the seller ( principle) and the broker/agent. Creates express agency

Express Agency

executed agreement, either written or oral, made between the client (principal) and an agent/broker.

Implied Agency

a situation where an agency relationship between a principal (e.g., a seller or buyer) and an agent (e.g., a real estate broker) is created through the actions and conduct of the parties involved, rather than through a formal written or oral agreement

Fiduciary Relationship

agent owes the principal the duties of care, obedience, accounting, loyalty, and disclosure.

Puffing

making exaggerated or subjective claims to make property more appealing to potential buyers.

Multiple Listing

is a subtype of exclusive listing with additional authority

Net Listing

based on the net price the sellers will receive if the property is sold

Open Listing

Brokers’ commission is depends on finding a buyer before the property is sold by the seller or another broker

Exclusive Agency Listing

The broker is given the exclusive right to represent the sellers. But the seller can avoid paying broker commission by selling the property without a s help’s help.

Exclusive-Right to sell

The sellers appoint one broker to represent them and must pay that broker commission regardless of whether the seller or broker finds a buyer.

Limmited Liablity Company

combines the pass-through tax advantages of a limited partnership with the limited liability offered by an S corporation.

Syndicate

is an association of two or more people or firms to make a real estate investment.

General Partnership

May be personally responsible for all business losses

Limited Partnerships

protect the personal assets of limited partners and includes both general and limited partners

Sole Proprietorship

a single individual operates a business, owns all assets, and assumes personal liability for all debts.

In creating a trust

Title of the property is conveyed by the trustor to the trustee who hold the title and manages it for the beneficiary

Community Property

Pertains to land owned by Husband and Wife and acquired by joint efforts during marriage

Separate Property

Properties acquired by a spouse before the marriage.

Joint Tenancy

Involved two or more owners with the right of survivorship

Right of Survivorship

allows jointly owned property to pass directly to the surviving owner(s) upon the death of one owner, bypassing probate

Tenacy in Common

Each party hold an undivided interest in severalty

Severalty

Ownership or title is held by one person

antri - trust

Prohibits brokers from conspiring to fix prices, boycott competitors, or allocate customers or markets.

Texas Deceptive Trade Practices (DTPA)

This act prohibits real estate brokers and other providers of good and services from deceiving or misleading consumers

Civil Rights Act of 1866

which prohibits all racial discrimination

Fair Housing Act

which prohibits discrimination on the basis of race, color, religion, sex, national orgin, disablitiy, or family status.

Lots and Blocks

a method used in real estate to identify and describe the location and boundaries of a property

Recorded Subdivision Plat

a method of legally describing and identifying land parcels, particularly in urban and suburban areas

A survery Sketch

shows the location and dismissal of a parcel

Improvement Survey

A survey that shows the location, size, and shape of the improvement located on the lot

Air lots

the designated airspace above a specific parcel of land

Datum

A piece of information