1. Chapter 1 Introduction to the Real Estate Business
The 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.

2. 1 Introduction to the Real Estate Business
Learning Objectives
Identify the various careers available in real estate, and the professional organizations that support them
Describe the five categories of real property
Explain the operation of supply and demand in the real estate market
Distinguish the economic, political and social factors that influence supply and demand
Modern Real Estate Practice 17th Edition

3. A Business of Many Specializations
1 Introduction to the Real Estate Business
A Business of Many Specializations
Brokerage
Appraisal
Property management
Financing
Subdivision and development
Home inspection
Counseling
Education
Modern Real Estate Practice 17th Edition

4. 1 Introduction to the Real Estate Business
Types of Real Property
Residential
Commercial
Industrial
Agricultural
Special Purpose
Modern Real Estate Practice 17th Edition

5. 1 Introduction to the Real Estate Business
The Real Estate Market
Supply and Demand
Factors Affecting Supply
Factors Affecting Demand
Modern Real Estate Practice 17th Edition

6. Chapter 2 Real Property and the Law
Many types of property define real estate’s “product.” Land is one of the fundamental concepts of real estate, as well as “improvements” in the form of houses and outbuildings. The fence suggests the limits of ownership.

7. 2 Real Property and the Law
Learning Objectives
Identify the rights that convey with ownership of real property and the characteristics of real estate
Describe the difference between real and personal property, and the various types of personalty
Explain the types of laws that affect real estate
Distinguish among the concepts of land, real estate and real property
Modern Real Estate Practice 17th Edition

8. 2 Real Property and the Law
Land - The earth’s surface extending downward to the center of the earth and upward to infinity, including permanent natural objects
Real Estate - Land at, above and below the earth’s surface, plus all things permanently attached to it, whether natural or artificial
Real Property - The interests, benefits and rights that are automatically included in the ownership of land and real estate
Modern Real Estate Practice 17th Edition

9. 2 Real Property and the Law
Modern Real Estate Practice 17th Edition

10. 2 Real Property and the Law
Bundle of Legal Rights
Modern Real Estate Practice 17th Edition

11. 2 Real Property and the Law
Real Property Rights
Surface Rights
Subsurface Rights
Air Rights
Water Rights
Modern Real Estate Practice 17th Edition

12. 2 Real Property and the Law
Personal Property
All property that does not fit the definition of real property
Manufactured Housing
Plants
Fixtures
Intent
Method of annexation
Adaptation to real estate
Agreement
Trade Fixtures
Modern Real Estate Practice 17th Edition

13. Characteristics of Real Property
2 Real Property and the Law
Characteristics of Real Property
Economic Characteristics
Scarcity
Improvements
Permanence of investment
Location
Physical Characteristics
Immobility
Indestructibility
Uniqueness
Modern Real Estate Practice 17th Edition

14. Laws Affecting Real Estate
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 environmental regulations
Modern Real Estate Practice 17th Edition

15. Chapter 3 Concepts of Home Ownership
A variety of housing types are available under the general heading of “home ownership”: single family, small multifamily residences, and high-rise condos.

16. 3 Concepts of Home Ownership
Learning Objectives
Identify the various types of housing choices available to home buyers
Describe the issues involved in making a home ownership decision
Explain the tax benefits of home ownership and the provisions of recent changes to the Tax Code
Distinguish the various types of homeowner’s insurance policy coverage
Modern Real Estate Practice 17th Edition

17. 3 Concepts of Home Ownership
Types of Housing
Apartment Complex
Condominium
Cooperative
Planned Unit Development (PUD)
Retirement Community
Modern Real Estate Practice 17th Edition

18. 3 Concepts of Home Ownership
Types of Housing
Highrise Development
Converted-use Property
Manufactured Housing
Modular Homes
Time-share
Modern Real Estate Practice 17th Edition

19. Housing Affordability
3 Concepts of Home Ownership
Housing Affordability
Mortgage Terms
Ownership Expenses and Ability to Pay
Investment Considerations
Tax Benefits
Modern Real Estate Practice 17th Edition

20. Homeowner’s Insurance
3 Concepts of Home Ownership
Homeowner’s Insurance
Coverage and Claims
Basic vs. Broad-form Policies
Liability
Coinsurance Clause
National Flood Insurance Program
Modern Real Estate Practice 17th Edition

21. Chapter 4 Agency
Real estate is an industry about property, but it’s also an industry about people. The concept of agency is entirely about people, and relationships between and among them.

22. 4 Agency Learning Objectives
Identify the various types of agency relationships common in the real estate profession and the characteristics of each
Describe the fiduciary duties involved in an agency relationship
Explain the process by which agency is created and terminated and the role of disclosure in agency relationships
Distinguish the duties owed by an agent to his or her client from those owed to customers
Modern Real Estate Practice 17th Edition

23. 4 Agency
Modern Real Estate Practice 17th Edition

24. 4 Agency
Modern Real Estate Practice 17th Edition

25. 4 Agency Real Estate Agency Common-law history Definitions: Agent
Subagent
Principal
Agency
Fiduciary
Client
Customer
Nonagent
Modern Real Estate Practice 17th Edition

26. Fiduciary Duties of an Agent
4 Agency
Fiduciary Duties of an Agent
Care
Obedience
Loyalty
Disclosure
Accounting
Confidentiality
Modern Real Estate Practice 17th Edition

27. Creation and Termination of Agency
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
Modern Real Estate Practice 17th Edition

28. Limitations on Authority
4 Agency
Limitations on Authority
Modern Real Estate Practice 17th Edition

29. Types of Agency Relationships
Single Agency
Subagency
Seller Representation
Buyer Representation
Owner as Principal
Modern Real Estate Practice 17th Edition

30. Types of Agency Relationships
Dual Agency
Disclosed Dual Agency
Designated Agency
Undisclosed Dual Agency
Disclosure Laws
Nonagency
Agency Statutes
Modern Real Estate Practice 17th Edition

31. Customer-Level Services
4 Agency
Customer-Level Services
Reasonable care and skill in performance
Honest and fair dealing
Disclosure of all facts the licensee knows (or should be expected to know) that materially affect the value or desirability of the property
State law may require additional services or disclosures
Modern Real Estate Practice 17th Edition

32. 4 Agency
Modern Real Estate Practice 17th Edition

33. 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 or rumored criminal, tragic or scandalous events that occurred on the property
Modern Real Estate Practice 17th Edition

34. Chapter 5 Real Estate Brokerage
A real estate brokerage is more than a room full of desks. It’s a hive of activity, dependent on people, information, and technology to keep the business running.

35. 5 Real Estate Brokerage Learning Objectives
Identify the role of technologies, personnel and license laws in the operation of a real estate business
Describe the various types of antitrust violations common in the real estate industry, and the penalties involved with each
Explain how a broker’s compensation is usually determined
Distinguish employees from independent contractors and explain why the distinction is important
Modern Real Estate Practice 17th Edition

36. 5 Real Estate Brokerage Brokerage Real Estate Broker
The business of bringing parties together.
Real Estate Broker
A person licensed to buy, sell, exchange or lease real property for others and to charge a fee for these services.
Modern Real Estate Practice 17th Edition

37. Broker-Salesperson Relationship
5 Real Estate Brokerage
Broker-Salesperson Relationship
A real estate salesperson is licensed to perform real estate activities on behalf of a licensed real estate broker
Employee – broker may require employee to follow rules for hours, attendance, etc.
Independent Contractor – broker cannot require specific office hours, attendance, etc.
Modern Real Estate Practice 17th Edition

38. 5 Real Estate Brokerage Technology Computers and Laptops
Internet, Web Sites,
Cell Phones, Digital Cameras, PDAs
Internet Advertising
Security
Electronic Contracting
Modern Real Estate Practice 17th Edition

39. Broker’s Compensation
5 Real Estate Brokerage
Broker’s Compensation
Commission is always negotiable
Commission is usually earned when
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
Modern Real Estate Practice 17th Edition

40. Broker’s Compensation
5 Real Estate Brokerage
Broker’s 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 seller’s terms and ready to take positive steps toward consummation of the transaction
Modern Real Estate Practice 17th Edition

41. Salesperson’s Compensation
5 Real Estate Brokerage
Salesperson’s Compensation
Amount and method of compensation is set by agreement between the broker and the salesperson
Fixed salary
Share of commission
100% Commission Plan
Graduated Commission Split
Modern Real Estate Practice 17th Edition

42. 5 Real Estate Brokerage
Modern Real Estate Practice 17th Edition

43. 5 Real Estate Brokerage Antitrust Laws Price-fixing Group boycotting
Allocation of customers or markets
Tie-in agreements
Penalties
Modern Real Estate Practice 17th Edition

44. 5 Real Estate Brokerage Recent Issues Fee-for-Services
Minimum Level of Service
Do-Not-Call Registry
Modern Real Estate Practice 17th Edition