Realtor chapter 1

A person who buys, sells, leases, rents, or manages his own property does not have to have a license.

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There are two kinds of licenses: a [broker's license] and a [salesperson's license]. Each salesperson must have a sponsoring broker before he can act as a real estate agent. The holder of a Texas Real Estate License can do any type of transaction anywhere in the state of Texas, but the licensee may decide to specialize in only one or two types of transactions

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• Facilitators: This group includes banks, real estate brokers, lawyers, and others that facilitate the purchase and sale of real estate.

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Durability: Real estate is durable. A building can last for decades or even centuries, and the land underneath it is practically indestructible. Because of this, real estate markets are modeled as a stock/flow market. About 98% of supply consists of the stock of existing houses, while about 2% consists of the flow of new development. The stock of real estate supply in any period is determined by the existing stock in the previous period, the rate of deterioration of the existing stock, the rate of renovation of the existing stock, plus the flow of new development in the current period. The effects of real estate market adjustments tend to be mitigated by the relatively large stock of existing buildings.

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Heterogeneity: Every unit of real estate is unique in terms of its location, its building, and its financing. This makes pricing difficult, increases search costs, creates information asymmetry, and greatly restricts substitutability. To get around this problem, beginning with Muth (1960), economists define supply in terms of service units; that is, any physical unit can be deconstructed into the services the unit provides. Olsen (1969) describes these units of housing services as an unobservable theoretical construct. Housing stock depreciates, making it qualitatively different from new buildings. The market-equilibrating process operates across multiple quality levels. Further, the real estate market is typically divided into residential, commercial, and industrial segments. The market can also be further divided into subcategories like recreational, income-generating, historical or protected, and the like.

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Dodd-Frank Act changed the disclosure requirements and laws around purchasing property

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A person may not refer to themselves as a REALTOR® until they have joined the National Association of REALTORS® .

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Market is defined as a place where buyers and sellers convene for the exchange of goods and services. There are many kinds of markets. Some markets deal in commodities; others deal in stocks and bonds; and still others deal with services. The market we are most interested in is the real estate market.

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An agent who specializes in listing owner-occupied residential property would complete a market analysis. This means comparing the "subject" property to other similar properties in the near vicinity. The three categories of subject properties will be: 1. Active listings: These are properties most similar to the subject property that are actively being marketed for sale. 2. Expired listings: These are properties most similar to the subject property that did not sell either because they were overpriced or under-marketed or both. 3. Sold listings: These are properties most similar to the subject property that have recently sold.

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CMA comparative market analysis

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An appraisal conducted for residential property may use the same sold comparables as the residential sales agent uses as comparables are one way to establish the value of the property. In the appraisal process, this is referred to as the sales comparison approach. However, there are two other approaches to value. One is the income approach. This calculates the value of the income stream over time. The third is the cost approach. Using current building material and labor costs the appraiser will estimate what it would cost to build a similar structure in today's economic climate.

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The Annual Property Operating Data (APOD) form can assist the agent and investor in analyzing any property that has an income stream. Most investors will use the Net Operating Income (NOI) produced by the property to determine the value by using a Capitalization Rate, or Cap Rate

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Most licensees will go into residential real estate because there are more transactions in residential than in other forms of real estate

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Texas Occupations Code Sec. 1101.002, 1101.004 and 1101.005 An active license is required for anyone who performs specific real estate activities on another's behalf for an actual or expected commission or other valuable consideration. Included are the following acts: • sells, exchanging, purchasing, or leasing real estate • offers to sell, exchange, purchase, or lease real estate • negotiates or attempts to negotiate the listing, sale, exchange, purchase, or leasing of real estate • listing, offering, attempting, or agreeing to list real estate for sale, lease, or exchange • auctioning, offering, attempting, or agreeing to auction real estate • buying, selling, or offering to buy or sell, or otherwise dealing in options on real estate, including a lease to purchase • aiding, attempting, or offering to aid in locating or obtaining real estate for purchase or lease • procuring or assisting in procuring properties for the purpose of selling, exchanging, or leasing real estate • selling, buying, leasing, or transferring an easement or right-of-way for use in connection with telecommunication, utility, railroad, or pipeline services • controlling the acceptance or deposit of rent from a resident of a single-family residential real property unit • providing a written analysis, opinion, or conclusion estimating the price of real property as long as: (1) it is not referred to as an appraisal, (2) it is provided in the ordinary course of the person's business, (3) it is related to the actual or potential management, acquisition, disposition, or encumbrance of an interest in real property • advising or offering advice to an owner of real estate concerning the negotiation or completion of a short sale Also, an active real estate license is required for anyone who charges an advance fee or collects a fee under a contract to promote the sale of real estate. The promotion may be through a real estate publication or a referral. Right-of-way agents must have an active real estate license or be registered with the Commission to practice their profession. Activities, professions exempt from active license Certain people, professions, and related real estate activities do not require an active real estate license. The license act exempts: • an attorney at law licensed in Texas • a person acting under a duly executed power of attorney when authorized to conduct not more than three real estate transactions annually • a public official in the conduct of official duties • a person calling the sale of real estate by authority of a Texas auctioneer's license, provided the person does not perform any other act of a real estate broker or sales agent as defined by the act © 1989 Vandiver-Morgan, Inc. dba The Real Estate Business School. All rights reserved. Except as permitted under the Copyright Act of 1976 this work may not be reproduced in whole or in part in any manner. Rev. 2.17.2020 14 Principles of Real Estate I Chapter 1: Introduction to Modern Real Estate Practice • a person conducting a real estate transaction under a court order or under the authority of a will or a written trust instrument • a person employed by an owner to sell both the structures and the land on which the structures rest, provided structures are erected by the owner in the due course of the business • an on-site manager of an apartment complex • an owner or owner's employee who leases the owner's improved or unimproved real estate • transactions involving the sale, lease, or transfer of cemetery lots • transactions involving the lease or management of a hotel or motel • transactions involving the sale, lease, or transfer of a mineral or mining interest in real estate • the sale of real property under a power of sale conferred by a deed of trust or other contract lien • constructing, remodeling, or repairing a home or other building • sponsoring, promoting, managing, or participating as a partner, principal, or financial manager of a real estate investment • entering an obligation to pay another person who is secured by an interest in real property

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TREC The Commission is made up of 9 members—6 are brokers and 3 are members of the public. The members of the Commission are appointed by the governor for 6-year terms.

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TREC is the state's regulatory agency for the following: • Real Estate Brokers and Sales Agents • Real Estate Inspectors • Education Providers for Real Estate and Inspection Courses • Residential Service Companies • Timeshare Developers • Easement or Right-of-Way (ERW) agents

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An appraisal is similar to the CMA but is a more sophisticated way of determining value and requires a special license(comparable market analysis)

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The top commercial real estate designation is the CCIM (Certified Commercial Investment Member. Recognized throughout the United States and even internationally as "the" designation in the commercial real estate profession, the CCIM Institute began offering this in 1969.

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The Education Standard Advisory Committee (ESAC) is a committee created by amendments to TRELA enacted in 2011 under Senate Bill 747. The committee reviews and revises curriculum standards, course content requirements, and instructor certification requirements for Qualifying and CE courses. The committee is made up of 12 members: seven members who have been engaged in the practice of real estate for at least five years, four members who are real estate instructors or owners of real estate schools accredited by TREC that provide core or continuing education, and one member who represents the public. A non-voting TREC staff member may also be appointed. All ESAC members are appointed by The Texas Real Estate Commission.

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In Texas, those who are choosing a career in real estate will be required to obtain a real estate license from the Texas Real Estate Commission

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All land has its own location on the earth, is immobile, and is indestructible. These are physical characteristics of the land.

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• Owner/user: These people are both owners and tenants. They purchase houses or commercial property as an investment and also to live in or utilize as a business.

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• Owner: These people are pure investors. They do not consume the real estate that they purchase. Typically, they rent out or lease the property to someone else.

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TREC

nine members, 6 licensed real estate brokers, 3 general public not regulated by commission, appointed by Governor for 6 year terms