Unit 1: Introduction to Modern Real Estate Practice - Summary

1. Nature of Land:

   • Economic Characteristics: Scarcity, improvements, permanence of investment, and area preference (situs).

   • Physical Characteristics: Immobility, nonhomogeneity, and indestructibility.

2. Value and Price:

   • Value is the present worth of a property’s future benefits and is based on objective or subjective factors.

   • Price is determined by the marketplace.

3. Market Dynamics:

   • Market: A place where goods and services are bought and sold, and stable prices are established.

   • Supply and Demand:

     • Supply: Amount of goods available at a given price.

     • Demand: Quantity consumers are willing to buy at a given price.

     • Factors affecting supply and demand include population changes, wage and employment levels, construction costs, and government policy.

     • Price Movements: When demand decreases, prices fall; when supply decreases, prices rise.

4. Business Cycles:

   • Four stages: Expansion, Recession, Depression, and Revival.

   • Real estate cycles parallel general business cycles but may not coincide exactly.

5. Real Estate Services:

   • Involves selling, leasing, appraisal, property inspection, development, financing, and urban planning.

   • Requires multi-disciplinary competence due to its complex and competitive nature.

6. Property Classification:

   • Categories: Residential, commercial, industrial, agricultural, special purpose, or mixed-use.

   • Many brokers specialize in specific property types.

7. Legal Framework:

   • Sources of Law: U.S. Constitution, federal and state laws, state constitutions, local ordinances, and court decisions.

   • Federal and state regulations expand on statutory law.

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8. Real Estate Law in Texas:

   • Influenced by English common law and Spanish law.

   • Governed by the Texas Real Estate License Act, overseen by the Texas Real Estate Commission.

9. Professional Organizations:

   • Keep professionals updated on industry practices.

   • Notable organizations: National Association of REALTORS®, Texas REALTORS®, and the American Society of Home Inspectors.

This unit establishes the foundational concepts and legal framework for real estate practice, touching on the characteristics of land, economic principles, market dynamics, and regulations.