©BRIGHTSTARS EXAM STUDY SOLUTIONS 8/13/2024 12:27 PM
Texas Principles of Real Estate 1 Chapter 1
Real Estate Professionals perform the following property-related functions: -
answer✔✔Creation/improvement.
Management/maintenance
Demolition
Investment Ownership
Regulation
Transfer
Creation and Management - answer✔✔Creating real properties from raw land involves capital
formation, financing, construction, contracting and regulatory approvals.
Parties in creation and improvements - answer✔✔Landowner, developer, mortgage lender,
market analysts, architects, engineers, space planners, interior designers, and subcontractors
Manage legal aspects of a development project - answer✔✔Attorneys, title company, surveyor,
insurance company, and government regulatory officials.
Management and Maintenance - answer✔✔Property and Asset Managers.
Property Managers - answer✔✔Oversee properties on behalf of owners, making sure condition
of property and financial performance meet standards. They find tenants, collect rent, rehab
space, and construct new spaces.
Asset Managers - answer✔✔Oversee groups of properties or portfolios to achieve the investment
objectives of the owner, as opposed to managing operations.
Maintenance personnel - answer✔✔Engineers, system techs, janitorial staff, and other
employees.
Demolition - answer✔✔Remove properties that are no longer economically viable in the market.
Investment Ownership - answer✔✔Investor who risks capital in order to buy, hold, and sell real
properties. The real estate investor provides capital and liquidity to the real estate market.
Regulation Areas - answer✔✔Usage, taxation, and housing administrators.
, ©BRIGHTSTARS EXAM STUDY SOLUTIONS 8/13/2024 12:27 PM
Professional Regulatory Functions - answer✔✔Public planners, zoning administrators, building
inspectors, assessors, and administrators of specific federal statutes, such as Federal Fair
Housing law.
Transfer - answer✔✔Right and interest can be bought, sold, assigned, leaded, exchanged,
inherited or transferred from one owner to another.
Brokers - answer✔✔A broker is a direct agent of the client hired for compensation to perform a
stated service, such as negotiating the sale of property.
Agent - answer✔✔Party in an agency relationship (a licensed employee of the broker) who is
hired by the client to perform certain duties. Must also uphold fiduciary (entrusted with money or
property) duties owed the client.
Property managers - answer✔✔Responsible for finding tenants, collecting rent,
rehabbing/constructing space, repairs, and overall maintenance of property.
Lenders - answer✔✔Those that make loans.
Bankers - answer✔✔Own or act as officers in a bank.
Title Company - answer✔✔Completes an "abstract of title," which is a search of the records in
the county where the property is held.
Escrow - answer✔✔Company holds money or documents until certain terms/conditions of
escrow are met.
Insurers - answer✔✔Sell insurance policies to protect for loss or damage.
Appraisers - answer✔✔Licensed professionals that perform appraisals of property value.
Mortgage Brokers - answer✔✔Paid a fee to bring borrowers and lenders together. Mortgage
BROKERS do not service loans. Mortgage BANKERS sell AND service loans.
Attorneys - answer✔✔Represents a client and licensed to give legal advice.
Inspectors - answer✔✔Licensed by Texas Real Estate Commission to Inspect properties and
offer opinions of property's condition. Includes structural, electrical, and mechanical systems, as
well as the presence of pests.
Surveyors - answer✔✔Licensed to take formal measurements of boundaries, dimensions, and
elevations of a parcel of real estate to identify possible encroachments, easements, and flood
hazards.
Real Estate Counselors - answer✔✔Offer prospective buyers information about the various
aspects of purchasing, using, or investing in property.
