CHAMPIONS Principles of Real Estate 1 Study Guide

Comprehensive vocabulary flashcards covering the Champions School of Real Estate Principles 1 Study Guide, including definitions, legal acts, property types, and agency laws.

Brokerage

The oversight of needs of the parties to a real estate transaction and seeing to its completion.

Appraisal

The business of providing a professional opinion of the value of real property.

Appraiser

Licensed or certified individuals who provide informed decisions regarding the value of real property.

Mortgage Lending

The business of providing money to individuals or corporations for the conditional transfer or pledge of real estate as security for the payment of a debt.

Property Management

The management of residential and commercial property on behalf of the investor-owner of the property, including day-to-day operations, maintenance, and tenant relations.

Apartment Locator

A professional who works for a firm specializing in locating units for tenants in multifamily complexes.

Home inspection

The business of providing a limited visual and general inspection of a property by an inspector.

Real Estate Development

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

Petroleum landman

An individual employed by oil and gas companies to perform title work and determine mineral ownership.

Indestructibility

A physical characteristic of land meaning that land does not wear out and cannot be destroyed.

Immobility

A physical characteristic of land stating that land does not move; one must go to the land.

Nonhomogeneity

A physical characteristic of land stating that no two pieces of land are exactly alike and do not occupy the same place.

Scarcity

An economic characteristic of land derived from the theory of supply and demand.

Modification

An economic characteristic of land referring to the fact that property value is affected by man-made changes to the land.

Fixity

An economic characteristic of land referring to the fact that land and additions to the land take long periods to pay for themselves.

Situs

The location of the property or land from an economic viewpoint rather than a geographic one.

Common Law

A body of law developed in England based upon common sense and local custom.

Statutory Law

A body of laws enacted by federal and state legislative bodies.

Texas Real Estate License Act

Passed in $1939$ to protect the public against unscrupulous brokers and sales agents in real estate transactions.

Texas Real Estate Commission (TREC)

A $9$-member commission created in $1949$ to carry out the provisions of the License Act.

Land

The surface of the earth extending downward to the center of the earth and upward above the surface to infinity, including natural things such as trees and water.

Bundle of rights

The rights that a person possesses in relation to land.

Real estate

Land plus all man-made additions, known as improvements, such as roads and houses.

Real Property

A broad term that includes physical real estate plus the rights an individual has in the land.

Improvement

Any permanent man-made addition to the land, such as buildings, fences, or patios.

Emblements

Annual crops produced with labor that are attached to the land but considered personal property belonging to the planter.

Subsurface Rights

The rights to oil, gas, and other minerals, commonly conveyed through leases or mineral deeds.

Fixture

Personal property attached to the land in a way that it becomes part of the real property, such as ceiling fans or wall-to-wall carpet.

Air Rights

Rights extending above the surface without limitation that can be leased, sold, or mortgaged.

Severance

The process of real property being transformed into personal property.

Personal Property

Also known as Chattel or Personality, it is anything movable or temporary in nature transferred with a Bill of Sale.

Allodial system

A land ownership system where land can be privately owned by individuals.

Police Power

The right of the government to regulate and control land use, most commonly through zoning.

Eminent Domain

The right of the government to take private land for public use, with the action itself called condemnation.

Ad valorem taxes

Property taxes that are based according to the value of the property.

Escheat

The right of the government to take title to real property if a person dies intestate without heirs or if the property is abandoned.

Buffer zone

An area of land that separates one land use from another, such as residential from commercial.

Fee Simple

Also known as fee simple absolute, it is ownership of real property with the most rights in land.

Estate for years

A leasehold estate with a specific starting and ending date that survives the sale of the property or death of the parties.

Periodic estate

A leasehold estate that automatically renews for like periods of time and requires a termination notice.

Estate at will

A leasehold interest that may be terminated by either party at will and terminates upon the death of the landlord.

Tenancy at sufferance

Occurs when a tenant remains on the property after a lease expires, creating a holdover tenancy if the landlord accepts rent.

Homestead Protection

An automatic statutory protection for a primary residence from forced sale, with exceptions for tax, HOA, and mortgage foreclosures.

Specific Lien

A lien that attaches only to one or more specific properties, such as a mortgage or ad valorem tax lien.

General Lien

A lien that attaches to everything a person owns, such as an IRS judgment.

Encumbrance

An interest in land less than ownership that places limitations on the owner, such as liens, easements, or encroachments.

Appurtenance

A right, privilege, or improvement that belongs to and passes with land, such as easements or fixtures.

Encroachment

The unauthorized intrusion of one's property onto an adjoining property.

Easement

The right to use someone else's property, which may be created by grant, reservation, or necessity.

Riparian Rights

The right of a landowner to use water that borders their property from a river or stream.

Littoral Rights

The right of a landowner to use water from a lake, ocean, or sea bordering their property.

Greenfield

A parcel of land that has never been developed.

Greyfield

A parcel of land that is capable of redevelopment.

Brownfield

A site known or suspected to be hazardous, usually occupied by chemical plants or industrial manufacturers.

Condominium

Multifamily complexes where individual units are held in fee simple ownership alongside interest in common areas.

Cooperative

Buildings owned by a corporation where occupants own shares and have a proprietary lease on their unit; not considered real property.

Capital Gain

Profit from the sale of an asset, with tax exempt limits of $250,000$ for individuals and $500,000$ for married couples filing jointly.

Equity

The market value of a property minus the outstanding debt.

CLUE (Comprehensive Loss Underwriting Exchange)

A claims history database used by insurance companies to access consumer claims information during underwriting.

Estate in Severalty

Ownership of real estate by a sole individual or entity.

Tenancy in Common

Collective ownership by two or more entities where interests are undivided and ownership passes to heirs.

Joint Tenancy

A type of co-ownership with the right of survivorship requiring the four unities of time, title, interest, and possession.

Community Property

Ownership concept where marriage is a partnership and property acquired during marriage is owned equally by both spouses.

Agency

A relationship between two persons where one acts for or on behalf of the other.

Fiduciary

A person in an agency relationship who works for the benefit of another based on trust.

Universal Agency

The broadest agency relationship allowing the agent to transact all matters and bind the client.

General Agency

An agency relationship where the agent can bind the client into particular transactions or business affairs.

Special Agency

Referred to as limited agency, where the agent has limited duties and is unable to bind the principal.

Intermediary

A broker who represents both parties in a transaction while protecting their best interests, requiring written consent.

IABS (Information About Brokerage Services)

The Texas-required notice provided at the first substantive dialogue explaining how a license holder may represent a party.

Real Estate Research Center

Housed at Texas A&M University, it collects and compiles real estate data for Texas.

Broker-Lawyer Committee

A group of $13$ members that drafts and revises standardized contract forms to expedite transactions.

Real Estate Recovery Trust Account

An account administered by TREC to protect individuals from monetary loss due to illegal acts by license holders, with a per-transaction limit of $50,000$.

Fidelity

A canon of ethics requiring a primary duty to represent the best interests of the client as a fiduciary.

Integrity

A canon of ethics requiring the license holder to avoid misrepresentation by omission or commission through prudence and caution.

Civil Rights Act of 1866

Federal law prohibiting discrimination based on race or color.

Steering

The illegal practice of taking buyers toward or away from particular areas based on protected classes like race or religion.

Blockbusting

Also known as panic peddling, it is an attempt to induce panic selling in a neighborhood for financial gain.

Redlining

The refusal by banks to lend money in a particular area due to its location.

Metes and Bounds

A legal description utilizing terminal points, angles, and a point of beginning on the ground.

Lot and Block

A legal description referencing a recorded map or plat, common in residential subdivisions.

Acre

A measurement of land equal to $43,560$ square feet.

Exclusive Right to Sell

A listing agreement where the broker is the only listing broker and is paid regardless of who sells the property.

Net Listing

A listing where the commission is the difference between the seller's desired net and the actual purchase price.

Procuring cause of sale

The individual whose uninterrupted activities brought about the completion of a contract.

Puffing

Marketing that uses adjectives and opinions rather than facts; not considered misrepresentation.

Bilateral Contract

A contract binding on both parties that requires performance from both and creates mutuality.

Unilateral Contract

A contract where only one party makes a promise and only that party can be sued; it lacks mutuality.

Statute of Frauds

A law requiring contracts for real estate interest conveyance to be in writing to be enforceable.

Executory Contract

The stage of a contract from the effective date through the closing.

Novation

The substitution of a new contract for an existing one.

Assignment

The transfer of all contract rights to another party known as the assignee.