Maryland Real Estate Preperation 18th Edition _ch1-5
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Transcript of Maryland Real Estate Preperation 18th Edition _ch1-5
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8/12/2019 Maryland Real Estate Preperation 18th Edition _ch1-5
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Modern Real Estate Practice18th Edition
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Chapter 1Introduction to the Real Estate
BusinessThe real estate business is more than just houses.As this chapter says, Real estate is big business,and includes commercial properties, condominiums,and open land in addition to single-family homes.
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32010 Kaplan, Inc.
1 Introduction to the Real Estate
Business Learning objectives
Identifythe various careers available in realestate, and the professional organizations thatsupport them
Describethe five categories of real property
Explainthe operation of supply and demand inthe real estate market
Distinguishthe economic, political, and socialfactors that influence supply and demand
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1 Introduction to the Real Estate
Business A business of many specializations
Brokerage
Appraisal Property management
Financing
Subdivision and development
Home inspection Counseling
Education
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1 Introduction to the Real Estate
Business Types of real property
Residential
Commercial Mixed-use
Industrial
Agricultural
Special Purpose
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1 Introduction to the Real Estate
Business The real estate market
Supply and demand
Factors affecting supply Factors affecting demand
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Many types of property define real estatesproduct. Land is one of the fundamental conceptsof real estate, as well as improvements in theform of houses and outbuildings. The fence
suggests the limits of ownership.
Chapter 2Real Property and the Law
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2 Real Property and the Law
Learning objectives
Identifythe rights that convey with ownershipof real property and the characteristics of realestate
Describethe difference between real andpersonal property
Explainthe types of laws that affect real estate
Distinguishbetween the concepts of land, realestate, and real property
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2 Real Property and the Law
Land: the earths surface extendingdownward to the center of the earth andupward to infinity, including permanent
natural objects
Real estate: land at, above, and below theearths surface, plus all things permanently
attached to it, whether natural or artificial Real property: the interests, benefits, and
rights that are automatically included in theownership of land and real estate
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2 Real Property and the Law
Land
Earths surface to the center of the
earth and the airspace above the
land, including the trees and water
Real Estate
Land plus permanent
human-made additions
Real Property
Real estate plus
bundle of legal rights
Air Rights
Surface
Rights
Subsurface
Rights
Physical
Improvements
The Bundle
of Rights
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Bundle of Legal Rights
2 Real Property and the Law
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2 Real Property and the Law
Real property rights
Surface rights
Subsurface rights Air rights
Water rights
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2 Real Property and the Law
Personal property (all property that doesnot fit the definition of real property)
Manufactured housing
Plants Fixtures
Intent
Method of annexation Adaptation to real estate
Agreement
Trade fixtures
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2 Real Property and the Law
Characteristics of real property
Economic characteristics
Scarcity
Improvements
Permanence of investment
Area preference or location
Physical characteristics
Immobility
Indestructibility
Uniqueness
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2 Real Property and the Law
Laws affecting real estate
Contract law
General property law Agency law
Real estate license law
Federal regulations
Federal, state, and local tax laws Zoning and land use laws
Federal, state, and local environmentalregulations
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Chapter 3Concepts of Home Ownership
A variety of housing types are available under thegeneral heading of home ownership, includingsingle family, small multifamily residences, andhigh-rise condos.
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3 Concepts of Home Ownership
Learning objectives
Identifythe various types of housing choicesavailable to homebuyers
Describethe issues involved in making a homeownership decision
Explainthe tax benefits of home ownership
Distinguishthe various types of homeownersinsurance policy coverage
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3 Concepts of Home Ownership
Types of housing
Single-family home
Apartment complex Condominium
Cooperative
Planned Unit Development (PUD)
Retirement community
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3 Concepts of Home Ownership
Types of housing
High-rise development
Converted-use property Manufactured housing
Modular homes
Time-share
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3 Concepts of Home Ownership
Housing affordability
Mortgage terms
Ownership expenses and ability to pay Investment considerations
Tax benefits
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3 Concepts of Home Ownership
Homeowners insurance
Coverage and claims
Basic versus broad-form policies Liability
Coinsurance clause
Comprehensive Loss Underwriting Exchange
(CLUE) National Flood Insurance Program
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Real estate is an industry about property, but itsalso an industry about people. The concept ofagency is entirely about people, and relationshipsbetween and among them.
Chapter 4Agency
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4 Agency
Learning objectives
Identifythe various types of agencyrelationships common in the real estate
profession and the characteristics of each Describethe fiduciary duties involved in an
agency relationship
Explainthe process by which agency is
created and terminated and the role ofdisclosure in agency relationships
Distinguishthe duties owed by an agent tohis or her client from those owed to customers
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4 Agency
Real estate agency
Common-law history
Definitions: Agent Principal
Agency
Fiduciary
Client
Customer
Nonagent
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4 Agency
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4 Agency
Fiduciary duties of an agent
Care
Obedience
Loyalty
Disclosure
Accounting
Confidentiality
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4 Agency
Creation and termination of agency Creation
Express agency
Implied agency Termination
Completion, performance, or fulfillment
Death or incapacity
Destruction or condemnation of the property
Expiration
Mutual agreement
Breach
Operation of law
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4 Agency
Limitations on authority
Universal agent
Empowered to do anything the principal could do
personally
General agent
Represents the principal in a broad range of mattersrelated to a particular business or activity
Special agent Authorized to represent the principal in one specific act
or business transaction under detailed instructions
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4 Agency
Types of agency relationships
Single agency
Seller representation
Buyer representation
Owner as principal
Dual agency
Disclosed dual agency Designated agency
Undisclosed dual agency
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4 Agency
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4 Agency
Types of agency relationships
Disclosure laws
Nonagency
Agency statutes
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4 Agency
Customer-level services
Reasonable care and skill in performance
Honest and fair dealing
Disclosure of all facts the licensee knows (orshould be expected to know) that materiallyaffect the value or desirability of the property
State law may require additional services ordisclosures
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4 Agency
Puffing
Exaggerationof a propertys benefits
Misrepresentation Fraud: Intentionalmisrepresentation of a
material fact to harm or take advantage ofanother
Negligent Misrepresentation: Broker should haveknowna statement was false
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4 Agency
Property conditions
Latent defect
A hidden structural defect that would not be discovered
by ordinary inspection
Stigmatized property
Properties branded undesirable because of actual orrumored criminal, tragic, or scandalous events that
occurred on the property
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A real estate brokerage is more than a room fullof desks. Its a hive of activity; dependent onpeople, information, and technology to keep thebusiness running.
Chapter 5Real Estate Brokerage
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Learning objectives Identifythe role of technology, personnel, and
license laws in the operation of a real estate
business Describethe various types of antitrust
violations common in the real estate industry,and the penalties involved with each
Explainhow a brokers compensation is usually
determined Distinguishemployees from independent
contractors and explain why the distinction isimportant
5 Real Estate Brokerage
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5 Real Estate Brokerage
Brokerage
The business of bringing parties together
Real estate broker A person licensedto buy, sell, exchange, or
lease real propertyfor others and to charge a feefor these services
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5 Real Estate Brokerage
Broker-salesperson relationship
A real estate salesperson is licensed to performreal estate activities on behalf of a licensed real
estate broker
Employeebroker may require employee tofollow rules for hours, attendance, etc.
Independent contractorbroker cannot require
specific office hours, attendance, etc.
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5 Real Estate Brokerage
Brokers compensation
Commission is always negotiable
Commission is usually earnedwhen A completed sales contract has been executed by a
ready, willing, and able buyer
The contract is accepted and executed by the seller
Copies of the contract are in the possession of all
parties
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5 Real Estate Brokerage
Brokers compensation
Procuring cause
Broker started a chain of events that resulted in a sale
Ready, willing, and able buyer
One who is prepared to buy on the sellers terms andready to take positive steps toward consummation ofthe transaction
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5 Real Estate Brokerage
Salespersons compensation
Amount and method of compensation is set byagreement between the broker and the
salesperson
Fixed salary
Share of commission
100% commission plan
Graduated commission split
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5 Real Estate Brokerage
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5 Real Estate Brokerage
Antitrust laws
Price-fixing
Group boycotting
Allocation of customers or markets
Tie-in (or tying) agreements
Penalties
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5 Real Estate Brokerage
Legal considerations and technology
Internet, Web Sites, e-mail
Internet advertising
Electronic contracting
Do-not-call registry