Providing
Award-Winning
Real Estate
Education
Since 1983
Champions School of Real Estate Awards Champions School Individual Awards
2014 Best Companies to Work For in Texas 2010 Top 50 Most Influential Women in Houston
2013 Houston Business Journal - #5 Best Places to Work 2008 Texas WCR Business Woman of the Year - Rita Santamaria
2013 BBB Award for Excellence 2008 HAR Hero of the Month for February - Rita Santamaria
2007 National Pinnacle Award, RealtyU 2007 WCR Houston Chapter Business Woman of the Year - Rita Santamaria
2006 National Pinnacle Award, RealtyU 2007 WCR Texas Business Woman of the Year - Rita Santamaria
2005 National Pinnacle Award, RealtyU 2002 & 2004 RealtyU Instructor of the Year - Sue Ikeler
2003 WCR TX Chapter Affiliate of the Year 2003 NAR REBAC Realtor® Hall of Fame - Rita Santamaria
2003 Chairman’s Leadership Award 1994 WCR Chapter President Award
2000 Chairman’s Leadership Award
Principles of Real Estate 2
Champions School of Real Estate® www.ChampionsSchool.com
TX-23-02-22_Principles_of_Real_Estate_2
, TABLE OF CONTENTS
CHAPTER 1: REAL ESTATE APPRAISAL ............................................................................................. 7
Real Estate Appraisal............................................................................................... 9
How Lenders Handle Appraisals............................................................................. 9
Principles of Residential Appraisals ........................................................................10
Market Value ....................................................................................................... 12
Appraisal Process ....................................................................................................14
!ree Approaches to Value .................................................................................. 15
Texas Appraiser Licensing Requirements ...............................................................31
CHAPTER 2: REAL ESTATE FINANCING PRINCIPLES ................................................................... 37
Overview of the Mortgage Market .........................................................................39
Primary Mortgage Market ...................................................................................39
Mortgage Lending Activities ...............................................................................41
Table of
Agencies and Laws A"ecting Mortgage Lending ................................................. 42
Contents
Secondary Mortgage Market ............................................................................... 48
Loan Application ....................................................................................................53
Uniform Residential Loan Application ............................................................... 54
Integrated Mortgage Disclosures......................................................................... 60
Final RESPA-TILA Integrated Disclosures Rule ............................................... 60
Fixed-Rate Mortgage .......................................................................................... 62
Adjustable-Rate Mortgages ................................................................................. 62
Other Loan Plans ................................................................................................ 66
Residential Lending Practices .................................................................................69
Government Loans ................................................................................................ 73
Texas Veterans Land Board ................................................................................... 83
CHAPTER 3: CONTROL OF LAND USE ............................................................................................... 87
Control of Land Use .............................................................................................. 89
II Public Control of Land Use ................................................................................. 89
Copyright © 2023 Champions School of Real Estate®
, Private Control of Land Use................................................................................ 91
Interstate Land Sales Full Disclosure Act ..................................................... 92
Environmental Issues ............................................................................................. 92
Environmental Protection Legislation ..................................................................95
Environmental Initiatives ...................................................................................... 97
CHAPTER 4: SPECIALIZATIONS .......................................................................................................103
Residential Brokerage .........................................................................................105
Farm and Ranch Brokerage ................................................................................105
Commercial Real Estate .....................................................................................106
Land Brokerage ..................................................................................................106
Investment ..........................................................................................................106
Leasing ..............................................................................................................107
REO ..................................................................................................................107
Foreclosure..........................................................................................................107 Table of
Contents
Short Sale ..........................................................................................................107
Auction ..............................................................................................................107
Resort .................................................................................................................107
Home Inspectors ................................................................................................108
Real Estate Development ..................................................................................108
Property Management ........................................................................................108
Finance ..............................................................................................................108
Appraisal ............................................................................................................108
CHAPTER 5: REAL ESTATE INVESTMENTS ................................................................................... 111
Investing in Real Estate ........................................................................................113
!e Benefits and Risks .......................................................................................113
Real Estate Investment Income and Expense .....................................................114
Real Estate Investment Syndicates .....................................................................118
Real Estate Investment Trusts (REIT) ..............................................................119 III
Copyright © 2023 Champions School of Real Estate®
, Real Estate Mortgage Investment Conduits.......................................................119
Real World Scenario - Investment .....................................................................121
CHAPTER 6: REAL ESTATE LEASES .................................................................................................125
Leasing Real Estate ............................................................................................. 127
Leasehold Estates .............................................................................................. 128
Types of Leases.................................................................................................. 128
Common Lease Provisions .......................................................................... 129
Texas Property Code, Title 8: Landlord And Tenant Act ................................... 129
CHAPTER 7: PROPERTY MANAGEMENT ....................................................................................... 155
Property Management ..........................................................................................157
Management Considerations ..............................................................................158
!e Management Profession .................................................................................159
Types of Property Management .........................................................................164
Table of
Trust Accounts ...................................................................................................166
Contents
Professional Organizations for Property Managers ............................................167
Information Resources ..........................................................................................171
CHAPTER 8: ESTATES, TRANSFERS, AND TITLES....................................................................... 173
Title ......................................................................................................................175
Evidence of Title ................................................................................................175
Estate Ownership ...............................................................................................179
Deeds ....................................................................................................................182
Public Records, Recording, And Acknowledgment ...........................................184
Types of Deeds ...................................................................................................184
Real World Scenario - Transfer of Real Property ...............................................190
CHAPTER 9: CLOSING PROCEDURES .............................................................................................. 195
Settlement and Closing.........................................................................................197
Closing the Transaction......................................................................................197
IV Closing Day ....................................................................................................... 203
Copyright © 2023 Champions School of Real Estate®
Award-Winning
Real Estate
Education
Since 1983
Champions School of Real Estate Awards Champions School Individual Awards
2014 Best Companies to Work For in Texas 2010 Top 50 Most Influential Women in Houston
2013 Houston Business Journal - #5 Best Places to Work 2008 Texas WCR Business Woman of the Year - Rita Santamaria
2013 BBB Award for Excellence 2008 HAR Hero of the Month for February - Rita Santamaria
2007 National Pinnacle Award, RealtyU 2007 WCR Houston Chapter Business Woman of the Year - Rita Santamaria
2006 National Pinnacle Award, RealtyU 2007 WCR Texas Business Woman of the Year - Rita Santamaria
2005 National Pinnacle Award, RealtyU 2002 & 2004 RealtyU Instructor of the Year - Sue Ikeler
2003 WCR TX Chapter Affiliate of the Year 2003 NAR REBAC Realtor® Hall of Fame - Rita Santamaria
2003 Chairman’s Leadership Award 1994 WCR Chapter President Award
2000 Chairman’s Leadership Award
Principles of Real Estate 2
Champions School of Real Estate® www.ChampionsSchool.com
TX-23-02-22_Principles_of_Real_Estate_2
, TABLE OF CONTENTS
CHAPTER 1: REAL ESTATE APPRAISAL ............................................................................................. 7
Real Estate Appraisal............................................................................................... 9
How Lenders Handle Appraisals............................................................................. 9
Principles of Residential Appraisals ........................................................................10
Market Value ....................................................................................................... 12
Appraisal Process ....................................................................................................14
!ree Approaches to Value .................................................................................. 15
Texas Appraiser Licensing Requirements ...............................................................31
CHAPTER 2: REAL ESTATE FINANCING PRINCIPLES ................................................................... 37
Overview of the Mortgage Market .........................................................................39
Primary Mortgage Market ...................................................................................39
Mortgage Lending Activities ...............................................................................41
Table of
Agencies and Laws A"ecting Mortgage Lending ................................................. 42
Contents
Secondary Mortgage Market ............................................................................... 48
Loan Application ....................................................................................................53
Uniform Residential Loan Application ............................................................... 54
Integrated Mortgage Disclosures......................................................................... 60
Final RESPA-TILA Integrated Disclosures Rule ............................................... 60
Fixed-Rate Mortgage .......................................................................................... 62
Adjustable-Rate Mortgages ................................................................................. 62
Other Loan Plans ................................................................................................ 66
Residential Lending Practices .................................................................................69
Government Loans ................................................................................................ 73
Texas Veterans Land Board ................................................................................... 83
CHAPTER 3: CONTROL OF LAND USE ............................................................................................... 87
Control of Land Use .............................................................................................. 89
II Public Control of Land Use ................................................................................. 89
Copyright © 2023 Champions School of Real Estate®
, Private Control of Land Use................................................................................ 91
Interstate Land Sales Full Disclosure Act ..................................................... 92
Environmental Issues ............................................................................................. 92
Environmental Protection Legislation ..................................................................95
Environmental Initiatives ...................................................................................... 97
CHAPTER 4: SPECIALIZATIONS .......................................................................................................103
Residential Brokerage .........................................................................................105
Farm and Ranch Brokerage ................................................................................105
Commercial Real Estate .....................................................................................106
Land Brokerage ..................................................................................................106
Investment ..........................................................................................................106
Leasing ..............................................................................................................107
REO ..................................................................................................................107
Foreclosure..........................................................................................................107 Table of
Contents
Short Sale ..........................................................................................................107
Auction ..............................................................................................................107
Resort .................................................................................................................107
Home Inspectors ................................................................................................108
Real Estate Development ..................................................................................108
Property Management ........................................................................................108
Finance ..............................................................................................................108
Appraisal ............................................................................................................108
CHAPTER 5: REAL ESTATE INVESTMENTS ................................................................................... 111
Investing in Real Estate ........................................................................................113
!e Benefits and Risks .......................................................................................113
Real Estate Investment Income and Expense .....................................................114
Real Estate Investment Syndicates .....................................................................118
Real Estate Investment Trusts (REIT) ..............................................................119 III
Copyright © 2023 Champions School of Real Estate®
, Real Estate Mortgage Investment Conduits.......................................................119
Real World Scenario - Investment .....................................................................121
CHAPTER 6: REAL ESTATE LEASES .................................................................................................125
Leasing Real Estate ............................................................................................. 127
Leasehold Estates .............................................................................................. 128
Types of Leases.................................................................................................. 128
Common Lease Provisions .......................................................................... 129
Texas Property Code, Title 8: Landlord And Tenant Act ................................... 129
CHAPTER 7: PROPERTY MANAGEMENT ....................................................................................... 155
Property Management ..........................................................................................157
Management Considerations ..............................................................................158
!e Management Profession .................................................................................159
Types of Property Management .........................................................................164
Table of
Trust Accounts ...................................................................................................166
Contents
Professional Organizations for Property Managers ............................................167
Information Resources ..........................................................................................171
CHAPTER 8: ESTATES, TRANSFERS, AND TITLES....................................................................... 173
Title ......................................................................................................................175
Evidence of Title ................................................................................................175
Estate Ownership ...............................................................................................179
Deeds ....................................................................................................................182
Public Records, Recording, And Acknowledgment ...........................................184
Types of Deeds ...................................................................................................184
Real World Scenario - Transfer of Real Property ...............................................190
CHAPTER 9: CLOSING PROCEDURES .............................................................................................. 195
Settlement and Closing.........................................................................................197
Closing the Transaction......................................................................................197
IV Closing Day ....................................................................................................... 203
Copyright © 2023 Champions School of Real Estate®
