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Avery Yarbrough & Associates

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1 Avery Yarbrough & Associates
Real Estate License Cram Course Review Thursday & Friday 9 till 4 with an hour for lunch

2 Breaks – each hour -Be back at 10 minutes
House Keeping Rules Cell Phones -Off Computers - Off Breaks – each hour -Be back at 10 minutes Restrooms are in break room No smoking at front door – go to end of building Mindful of your classmates We have a lot of material to cover Hold questions till breaks

3 Welcome Everyone, classroom students, online, other schools Materials Green Book Law Booklet & Law Test Handout Packet Handouts We need your contact information Fill out at break

4 Acres to Zoning Lots of different material to cover in 2 days
Need to know about acres and zoning to pass test 140 questions – can miss 42 and still pass 100 general & 40 Alabama Law More than one answer may look right Test taking anxiety Think long, think wrong Analytical personalities think too hard Don’t read anything into question Any test you don’t study for will be hard

5 6 sections 100 Questions & 40 on Alabama law
1 Listing Property 31% of general knowledge test 2 Selling Property 21% 3 Property Management 14% 4 Settlement/ Transfer of Ownership 14% 5 Financing 10% 6 Professional Responsibilities 10% Law is 28% of total test We will have lecture then short test Do better with this method

6 65% to &70% pass test on first try
Only about 60% online pass on first try About 80% of our students pass on first try Second test try – pass rates drop And drops even more on third try, only 20% pass Test should be difficult Dealing with important subjects Do it right the first time $71 per test It is important that you take this seriously

7 Look at the packet on the right Outline of class
Words – Know vocabulary Nerd Words on test Obscure words Reliction, Riparian, Reentry, Remainderman, Recording, Range, Reconciliation, Rectangular System, Redlining, Regression The way we studied as children is the way to learn Read, Study, Test Our other classes Post License, Broker, CE

8 Test taking tips 80% of those that fail get between 65 to 69
Only 1 point between success and failure Listen to lecture Make notes

9 Schedule a morning test Anxiety is less in AM – no time to worry
Brain sharper in AM Review night before Eat fruit night before – brain food hours Don’t study past 9PM Go to sleep early and let your brain rest

10 Get up early and be relaxed , not rushed
On the day of test Get up early and be relaxed , not rushed Don’t read paper or listen to news Eat a good breakfast No more studying Get to test site early – 15 minutes late and you can’t take test

11 Have photo ID and 1 more with signature
At test site Have photo ID and 1 more with signature Do practice questions on computer Maintain pace throughout exam Don’t wrestle with a question Read question twice Read answers twice You will know answer in your brain If you don’t know, then bookmark and move on Bookmark math and skip -- work them last DO NOT GO BACK AND CHANGE AN ANSWER Will usually get it wrong

12 We go over math, but don’t teach math Having Trouble?
Finance has 10 questions Most students have trouble with real estate math We go over math, but don’t teach math We will help as much as you need Having Trouble? Call us for extra help – this is what we do No extra charge for this We want you to do well on the test

13 Power Point Handout is your Outline Take notes on handout
Study them later More important to listen to lecture Story about Finance Elementary concept

14 1934 Mortgage industry began under FDR
Horrible economy – end of Depression Housing - the way to make economy grow 50% down payment at that time FHA created 3% down payment More likely to default Walk away if times get tough Insures lender

15 FHA mortgage defaults - FHA pays FHA set maximum loan amounts
FHA insures loans – Does not loan money or build homes FHA mortgage defaults - FHA pays FHA set maximum loan amounts People started buying homes Economy began to recover Lenders ran out of money What could they do?

16 Secondary market created to buy mortgages
Primary lenders sold pools of mortgages Fanny Mae bought these mortgages Primary lenders collected payments Escrow for taxes and insurance Service loan for a fee Lenders also charged closing cost to make money Origination, Discount, Service fee Fanny Mae sold mortgage backed securities to investors

17 I950’s more buyers wanted a piece of the pie
Private Mortgage Insurance – PMI 5% down payment on larger loans Saving & Loan Banks needed secondary source Freddie Mac created Today they both buy the same loans 1960’s government realized it was in trouble Turned into private companies Didn’t want risky mortgages Ginnie Mae came about to buy risky loans Government owned Guarantees loans

18 3 Financial Intermediaries Institutional Retail Banker
Primary Lenders Institutional Retail Banker Loan their own money - Fiduciary Non- Institutional Wholesale Broker Loan money that is not their own Insurance companies and pension plans Have lots of money to invest Alabama retirement fund

19 Mortgage Brokers Insurers Secondary Market FAMA, FRMAC, GNMA
Not their money Get it from non - institutional source They know someone who has money Insurers FHA , VA, PMI Secondary Market FAMA, FRMAC, GNMA

20 Loan products Blanket Mortgage – think of a quilt with patches
Developer buys land, puts lien on entire development When house is built on one parcel and sold Partial release clause – releases lien on that parcel (patch) Package Mortgage – Real and Personal property Includes Appliances, Furniture Popular at beach (condo and furniture) Farm Equipment

21 Open end mortgage – Like credit card
Leave mortgage open to add to in future Graduated payment mortgage (FHA245) Goes up about 5% each year for 5 years Negative Amortization Adds to principle – will owe more than borrowed for years Reverse Annuity Mortgage Senior Citizen gets check for part of equity each month Upon death, home is sold by family and debt paid

22 Adjustable Rate Mortgage Protects lender from interest rate changes
Changes Each year (up or down) Principle Plus Margin – profit to lender - Fixed during life of loan Index- measure of change such as Consumer Price Index Cap per year/life 2/6

23 Amortized Loan –Equal payments until note dies
Also called - direct reduction loan - Includes: Principle – the amount borrowed Interest - Rate remains constant through life of loan Mortgage payment also will include: Escrow for Taxes & Insurance PITI Principle, Interest, Taxes, Insurance Interest is paid in arrears – ( at end of period when ) Straight loan – pay (interest only) each year (rare) Loan would renew each year Pay off principle later Balloon – Amortized over 30 years, but Balance is paid off with a big lump payment at 5 years * Most owner financing is Balloon

24 Acceleration Clause (like accelerator petal on car)
Miss 3 payments and lender speeds up loan Foreclosure starts and borrower (mortgagor) has: Equitable Right of Redemption Pay off loan before foreclosure sale Statutory Right of Redemption Pay back loan plus cost of sale within one year Don’t ignore lender- work with them They don’t want the house Short Sale – Bank agrees to take less than owed

25 Defeasance Clause Alienation Clause Acknowledgement = Notarize
Clause says lender must record satisfaction of mortgage Alienation Clause Clause says mortgage must be paid off at time of sale Acknowledgement = Notarize Necessary for recording Record in county where property located

26 Confusing --- Mortgagor & Mortgagee
Gives EE Gets Confusing Mortgagor & Mortgagee Mortgage is a promise backed by security instrument Mortgagor (Borrower) gives promise to pay Mortgagee (Lender) gets promise

27 Title record shows evidence of ownership
Title Theory - Alabama Lender has legal title Borrower has equitable title Lien Theory Lender has equitable title Borrower has legal title Title record shows evidence of ownership Not a piece of paper

28 Mortgages -- local Alabama custom
Negotiable Instrument – will be sold Two parties Lender and borrower Trust Deed Three parties Trustor – Lender Trustee – Holds title Beneficiary -- Borrower Usury Law – Limits the amount of interest charged

29 Priority of liens first to record, first to collect
Constructive notice (recorded) Actual notice (actual knowledge) Primary – gets first money from foreclosure Secondary – may not get any money Subordinate or junior Prefix sub- means beneath Alabama is a deficiency state Lender will get judgment claim against borrower Property taxes always have first priority

30 Seller makes promise to deliver marketable title Cloud on Title
Chain of ownership on property Marketable Title – 40 years – no challenges Seller makes promise to deliver marketable title Cloud on Title Break in chain of title Forgery Title Insurance – insures chain against defects Will have exclusions not covered – easements ALTA – unrecorded liens – materialman

31 Points - 1 point is 1 % of loan
Origination – Bank commission for selling loan Discount - % of upfront $ paid to reduce rate on loan Builder buy down for a couple of years Permanent buy-down for length of loan 1 point increases yield to bank about 1/8% Assumptions of Mortgage Rules vary by loan type Assume – Seller still responsible for debt Subject to – Seller not responsible for debt Novation – new note

32 Owner Finance Purchase Money Mortgage 2nd Mortgage
Purchaser has title Seller keeps legal title until paid off Bond for title Land sale contract Contract of deed Installment Contract

33 FHA insures (% upfront + % each month) VA guarantees (government)
Ends when principle < 80% of original appraisal VA guarantees (government) CRV Certificate of reasonable value Same as appraisal Veteran must qualify & property must qualify Can substitute another’s guarantee Conventional – PMI (private mortgage insurance) On amount more than 80% of appraisal value

34 Sale- Lease Back Owner Finance Owner needs money to expand operations
Will sell building to investor and lease back Owner Finance Vendor - Seller (retains title) Vendee – Purchaser (gets equitable title)

35 Put exam answers on separate page
Test on page 146 About an hour You must be comfortable with the way test is worded In front of green book are pages with confusing words Except, Not, Least, Best, Difference, Most Likely, ect. Put exam answers on separate page Later highlight correct answers to use as review

36 Straight forward information – memorize Concepts of common law
Alabama License Law 40 of the % of test Know the violations! Page 16 – 18 AREC can suspend or revoke license Fines $100 to $2500 Straight forward information – memorize Concepts of common law Know fees

37 RECAD Real Estate Consumer Agency Disclosure
4 ways to have relationship with consumer Written disclosure to consumer to alleviate distrust Single Agent -- Agency with one party work For - Advise Limited Consensual Dual Agent -- Agency for both Seller & Buyer Transaction Broker -- Non Agency work With - Assist Sub-Agent -- Pre-RECAD way things worked All agents worked for the seller All relationships start as Transaction Broker Until: A written agreement is signed with consumer

38 RECAD Must be presented at first contact with consumer, before any confidential information is disclosed to another Must be signed by agent and kept in file for 3 years Consumer not required to sign Keep all real estate contracts, listings, ect. for 3 Years

39 Customer NON-client / NON-Agent
Consumers are either: Customer NON-client / NON-Agent No advice Working With Transaction Broker Client - Agency Relationship Give Advice Working For Fiduciary

40 Agency Duties - Fiduciary
Drive clients in OLD CAR Obedience - Obey lawful commands Loyalty - Put clients interest above your own Disclosure – Everything you know about transaction Confidentiality - Keep confidential information confidential Accounting – Account for all funds Reasonable Care – Use reasonable care

41 Customers – Non Agency – No fiduciary
Must answer their HARD? Honesty Accountable Reasonable Care Disclosure ? Questions must be answered truthfully

42 Go over even # questions Answer on separate paper then later:
Law Test Go over even # questions Answer on separate paper then later: Highlight correct answers to use as study guide

43 Lunch 1 Hour – Please be back on time Nearby Restaurants
Mexican – at end of this building Green Valley Drug Store – On down hill from here Subway - In parking lot across from Outback Salvador's - Next to Subway Golden Rule - Across Highway form Salvador’s McAlister’s - On Hwy on right ½ mile to the left McDonald’s - Just past McAlister’s Burger King Just before McAlister’s Chinese - Shopping center across from McAlister’s Krystal – Across from Burger King

44 Review Alabama Law Test
Know the violations!

45 Easements Right of one person to use the property of another
Necessity – was necessary to get to property Appurtenant – legally attached – runs with the land - deeded Commercial easements in gross Utility easements look “gross” Prescription used for a length of time – 20 years Adverse Possession Servient tenement– Serves another property Dominant tenement – Property that benefits from easement Ingress & Egress from landlocked property Personal easement terminates upon death of either party Encroachment – Illegal extension on another’s property

46 Life Estate – use for the life of a person
Reversion – goes back to original grantor Remainderman – goes to another at termination In either case Can not waste property Can do anything else in bundle of rights UPEED All rights under life estate are limited by someone’s life Pur Autre Vie – Based on the life of another

47 Deed – To transfer title Must have:
In writing Identify parties and property Conveyance language Consideration – something for something Amount not necessary to state Grantor’s signature Grantee (buyer) signature not needed Must be delivered during grantor’s lifetime

48 Condominium Includes:
Fee simple (absolutely best ownership – all rights) Own interior of unit fee simple Own common area as tenants in common Swimming in the condo pool with the common people Developer must record condominium declaration Includes: Legal Description Bylaws Covenants & Restrictions and bylaws Survey

49 Co-operative Apartment converted to ownership
Building owned as a corporation Own stock in corporation May get loan to buy this stock, secured by lease Proprietary lease on apartment

50 Co- ownership Joint Tenancy (Husband and wife joined together at the arm PITT) Usually family Right of survivorship – At death interest goes to other party PITT Possession, Interest, Time, Title If ownership changes, PITT doesn’t change – new owner is a tenant in common Tenants in Common (In the condo pool with the common people) Usually investment Interest % may be different If ownership changes nothing else changes At death of owner, their ownership goes to heirs

51 Community property - Not in Alabama
Tenancy by the entirety – Not in Alabama Separate property bought before marriage stays separate Property may be bought separately during marriage Property inherited stays separate

52 Obsolescence Economic – town is dying Not curable
Functional bedroom, 1 bath (or an outhouse) Curable – can be fixed economically In-Curable – cost more to fix than is worth

53 Methods for determining value Cost – What it cost to build
Appraiser is a CSI investigator Cost – What it cost to build Special purpose - church Sales Comparison – what have other similar homes sold for Income – Income producing properties Capitalization rate = Net Income / Price Real Estate Agents perform: Comparative Market Analysis (using Sales Comparisons) May not call it an appraisal

54 CIA doesn’t want CBS watching them Comparable Inferior Add
Appraisals CIA doesn’t want CBS watching them Comparable Inferior Add Comparable Better Subtract Never adjust subject value, only comparable The comparable next door has an extra bedroom worth $10,000 Adjust its sold price down to get the market value for your subject

55 Cost approach – Cost = Total of Materials + Land + Labor + Profit
New construction, special purpose White House - cost approach (2008) $130,000,000 Cost = Total of Materials + Land + Labor + Profit Reproduction Cost = exact duplicate Your DNA Replacement Cost = similar Adopt Capitalization Rate Rate investment will return GIVEN Gross Income – Vacancy – Expenses = Net Income Remember to change all #’s to annual

56 Certificate of Occupancy
All inspections have passed – ready to move in

57 Legal Descriptions 3 methods
Definition - A surveyor can find boundary of property Metes & Bounds - Plymouth Rock 1st monument Meters & Directions POB Point Of Beginning and around to starting point Rectangular Survey – government (Squares) Townships - 6 miles X 6 miles Sections – 1 mile square sections in a township Plat – Lot & Block - Recorded survey (subdivision) Must include, lot #, subdivision name, county & state

58 Township tier starts at Tennessee line (Base Line)
6 miles south of Tennessee line is another line Running north and south every 6 miles are range lines Intersections of township & range lines are called Townships – these are 6 miles square Townships are numbered by where they are: First tier south of the Tennessee line is T1S T1S = Township 1 South The north and south lines, Called Range Lines start in Huntsville, so The first one west of Huntsville is R1W R1W = Range 1 West

59 7 11 Ask at the 7-11 store about an acre Mile is 5,280 feet
Section is 640 Acres ¼ section has 160 acres ¼ of ¼ of ¼ has 10 acres Acre 43,560 square feet ’ X ’ Ask at the 7-11 store about an acre Mile is 5,280 feet Oak Mountain is 5 miles down Highway 280

60 Page 73 -- Property Management Property Manager (General Agent)
Day 2 Page Property Management Property Manager (General Agent) Works FOR owner – fiduciary (agency) of owner Objectives Make money (return on investment) Maintain property Property Manager supervises Resident Manager Maintenance Manager

61 Property Owner Must Eviction Provide Habitable Premises
Provide Quite Enjoyment Eviction Actual Eviction – not paying rent Constructive eviction - Landlord doesn't provide habitable premise Not providing heat when needed

62 Personal Property - personalty
Not attached to real estate Ceiling fan in box Can move it around May become Real Property – appurtenant as a fixture Real Property Attached to property Ceiling fan attached to ceiling Buy seed at Lowes – personal property Plant seed & it becomes a tree – real property – appurtenant Fructus naturales (no annual cultivation) – tree Fructus industriales (emblements) - crops Cut tree (severance) – now personal property Processed into lumber – personal property - sold at Lowes Used to build house – becomes real property upon attachment

63 Trade Fixtures Equipment to operate a business
Big refrigerator, Stainless Steel sinks Attached, but not considered Real Property Must be removed before lease expires Damage must be repaired If not removed, becomes property of owner

64 Leases Estate for years or Tenancy for years Periodic Tenancy
It begins and it ends Period of time doesn’t matter 30 minutes or 30 days or 30 years Periodic Tenancy Period to Period – no ending date – Month to Month, Year to Year Requires 1 period notice to terminate Estate at will Understanding to stay for a while (At will) Verbal agreement – likely family or friend Estate at Sufferance Holdover Tenancy Tenant remains after lease expires If landlord accepts next months rent it becomes:

65 Lease can be either Gross or Net
Net lease charges tenant for following in addition to rent: Taxes, Insurance, Maintenance - TIM Gross lease includes TIM in payment Percentage lease also charges a percentage of sales Includes a fixed rate, plus A percentage of tenants sales over a set amount CAM - Common Area Maintenance Some net commercial leases may have CAM charge

66 Percentage Lease on 10,000 square foot store
Base rent of $20 per Square Foot, plus 5% on store sales over $1,000,000 What if Store sales are $1,500,000 Base Rent per year is 10,000 X $20 = $200,000 Plus 5% on sales over $1,000,000 $1,500,000 -$1,000,000 = $500,000 X 5% = $25,000 Rent = Base $200,000 + $25,000 = $225,000 Monthly Rent $225,000 / 12 = $18,750

67 Commercial rental space is graded: A – New building in great location
B - Older building in great location that has been rehabbed C - Older building, may not be in great location or condition D - Run down building Rent is charged per square foot per year Class A space may be $20 per square foot 1500 sf. X $20 X 12 months = $30,000 per year Monthly rent would be $2,500

68 Statute of Frauds Statute of Limitation
Contracts involving real estate must be in writing To be enforceable Except a lease less than one year, may be oral (parol) 20 years or more must be recorded in first year to be enforceable Maximum lease is 99 years Escalation Lease will be go up over time to cover increased cost Tied to an index (Consumer Price Index) Statute of Limitation Time limit to bring action

69 Accounting reports Balance Sheet Profit & Loss
List Assets & Liabilities Profit & Loss List net profit after expenses

70 Sub- lease Novation Assignment of Original tenant has a sandwich lease
privilege of use Responsibility to pay rent Original tenant has a sandwich lease Novation Replaces agreement with another

71 Environmental Hazards Lead Paint (Written disclosure required- LPD)
Must also give pamphlet about danger to family No lead paint used in residential built after 1978 PCB – hazardous chemical in electrical transformers Radon – Decomposing soil builds up gas under home Colorless, Odorless, Gas Collects in home and may cause cancer Carbon Monoxide- Gas from using natural gas heat that may build up and kill you Asbestos – Cancer causing insulation Encapsulate – Seal it and leave it alone

72 Execute- to sign a contract Executed Contract is fulfilled – closed
Offer & Acceptance Agreement to do or not do something Seller promises to deliver good title Buyer promises to pay money

73 Unilateral contract - One promise
Option Unilateral contract - One promise Right to buy a property for a period Optionor – person giving promise to sell Optioner – person may buy or not Gives money for right to buy Lease Purchase is 2 agreements: Lease May buy at end of lease or not

74 Unilateral Contract Bi- lateral One person has made promise
Listing Agreement Bi- lateral Two parties have agreed to contract Sales Contract

75 Contract - Must Have: COLA
Consideration – Something for Something Valuable – Money or equivalent Good – Love & affection – Family situation Offer & Acceptance – Mutual, genuine assent Not under duress Legal Age Purpose Capacity Power of Attorney Agreement – set of promises

76 Legal remedies Contract date to close is a target date
Breach of Contract One party to contract does not perform Aggrieved party Suit for damages Specific performance Contract date to close is a target date May be circumstances that prevent closing “Time is of the essence” means: All times MUST be adhered to, or breach occurs One may lose rights through “latches” (sleeping on rights) Inspection date missed – one week

77 Must be turned in to broker immediately
Earnest Money is not required for a valid contract If earnest money is included Seller may accept earnest money as liquidated damages If contract breached by purchaser Money must be held in Escrow Account in An FDIC insured bank in Alabama Must be turned in to broker immediately Must be deposited in escrow account When offer becomes contract Offer (unilateral) becomes contract (bilateral) Unless contract states differently Money belongs to contract Creates equitable interest in property for purchaser Postdated check must be approved by seller

78 Offer May be accepted by seller May be rejected May be countered
Becomes a bi-lateral ( 2 sided) contract May be rejected Offer dies May be countered If seller makes a mark other than signature This creates a new unilateral contract (counter-offer) Sometimes one party may put a time limit (by

79 UPEED Bundle of Rights (Sticks in a bundle) Use Possession Encumber
Exclude others Disposition Subject to Government rights (PETE)

80 Zoning (Primary Purpose is to protect the
Zoning (Primary Purpose is to protect the health, safety and welfare of the public) RCA IS Zoning Districts Residential Commercial Agricultural Industrial Special Purpose ( Hospital, Library, Church)

81 Non Conforming Use (Zoning)
Use that does not conform to surrounding properties Day care center in residential zoning Grandfather Clause Use that may continue when surrounding zoning changes Home on highway where commercial has expanded Variance A property owner needs to build on a lot that is too small Building Codes are not Zoning Set minimum standards for material & workmanship Health & Safety - GFI plugs, ect.

82 Ordinary Income Capital Gains Money for working
Profit on gains from the sale of property or stocks Short term – owned less than a year Long term – owned more than a year Lower tax rates

83 1031 Tax Exchange – will be handled by intermediary
Income Deductions Depreciation Accounting Deduction per year of % of improvement Land does not depreciate Actual Depreciation – paint, roof 1031 Tax Exchange – will be handled by intermediary Tax code that allows the exchange of like property Income property for income property May not be even exchange One party may pay boot Money in addition to property – this money is taxed

84 Securities (regulated by SEC)
Stocks – ownership position in company REIT – Real Estate Investment Trust Colonial Properties is a REIT Get benefit of investment without management No say in management Securities sales requires a securities license Not a real estate sales license

85 Interstate commerce (regulated by SEC)
Regulated by federal government Intrastate commerce ( Alabama Blue Sky Law) Not regulated by federal government, but Alabama

86 Die leaving a will is Testate Die without a will is Intestate
Testament - Will Die leaving a will is Testate Die without a will is Intestate State Statute of Descent and Distribution State law determines how property is distributed Die without heirs Escheat = State get property ( One of PETE power) Will must be written to transfer interest in RE

87 Devise Bequeath – Bouquet Legacy Gift of real property by will
Gift of personal property by will Legacy Gift of money by will

88 Government Powers PETE works for the government Police - Zoning is one police power Eminent Domain (right), Condemnation (Process) Taxation Escheat - Person dies without heirs or will

89 Restrictions on use of property Private restrictions – CC&R
Covenants – To maintain uniformity – homogeneity ARC - Architectural Review Committee must approve Mailbox, color of house, trees May be forced to conform Can not take owners property under covenants

90 Fee Simple Defeasible (Defeatable) Conditions –
Restricts use of future owner Previous owner may have future rights Conditions Subsequent New owner must not perform some action (sell alcohol) Former owner retains “right of reentry” if condition is broken Must go through courts Fee Simple Determinable - Special Limitations Estate ends automatically due to violation of limitation “Possibility of Reverter” No court action required

91 Could have been issues in past that affect title
Deeds Warranty against title defects Could have been issues in past that affect title General Warranty Deed or Warranty Deed Bumper to Bumper warranty on car If there is a issue against title in future it will be fixed Special or Statutory Warranty Deed Limits to warranty Covers issues that may have happened during grantor’s ownership of property Quit Claim – no warranty As is Used to quiet a cloud on title

92 Opinion of Title – Attorney does Abstract
Title Insurance Protects against something in the past Different from other insurance that protects against event in future One time premium Opinion of Title – Attorney does Abstract Checks the chain of title – no warranty Will not know about unrecorded liens Will not know about forgery

93 Liens Voluntary Lien Involuntary Lien Specific General
Owner ask for it - Mortgage Involuntary Lien Owner didn’t ask for it – Property tax lien Specific Lien on a specific piece of property General Lien on all property, personal and real of a person

94 RESPA Real Estate Settlement & Procedures Act
1 to 4 unit family residential property Federally related loan Must use HUD1 form (24 hours before closing) Required Good Faith Estimate (GFE) within 3 days No Steering No Kickbacks Maximum 2 months escrow for taxes and insurance Fair Credit Act (truth in lending) Regulation Z Disclose the APR ( true annual percentage rate ) Truth in Advertising - Trigger words are %, payment 3 day right of recession on junior mortgages

95 Debits are bad Credits are good Debt owed Takes money away
Credit to an account

96 Protects FRESH CORN Important Dates Civil Rights Act 1866
Prohibits discrimination based on race Civil Rights Act 1968 – Expands protected classes Fair Housing Act of 1988 Protects FRESH CORN E&O insurance doesn’t cover, Equal Opportunity Familial, Race, Sex, Handicap, Color, Religion, National Origin Doesn’t protect age Handicap includes physical and mental Includes AIDS Includes recovering addicts

97 Redlining Steering Blockbusting
Insurance or Lender draws a red line around an area and refuses to do business there Steering Pushing people to a certain area Catholics to a Catholic neighborhood Blockbusting Telling people they need to move because a protected class is moving into the area and the property values are going to fall

98 Can discriminate if: Can not advertise the discrimination
Owns a 4 plex or less and lives in one unit Owns less than 3 homes Churches can discriminate based on religion Can not advertise the discrimination Race discrimination is never allowed Handicap reasonable accommodations must be made May require tenant return to original condition Exempt Churches – Membership may not discriminate Housing for older persons 62 or older 80% must be over 55

99 ADA Americans with Disability Act
Must make reasonable accommodations Assigned Handicap spot near door Service animals in a no pet building May require premises to be returned to original

100 Fair Credit Act Most of FRESH CORN Protects Marital Status instead of Familial No Age discrimination Includes dependence on public assistance

101 Independent Contractor
Employer doesn’t have to Pay Social Security Tax Employer May not: Dictate hours worked Dictate how work is to be done 90% of compensation must come from commissions and not hours worked

102 Anti-Trust Prohibits (Sherman Act)
Allocation of markets Price Fixing (or even taking about it between competitors) Group Boycotting Broker may: Set commission rate of office Set commission splits

103 Can a seller refuse to accept a full price offer?
Yes But, broker has earned commission Delivered a ready, willing, able buyer Show License Show permission to sell – Listing agreement Show to be procuring cause

104 Progression Regression
Home price is positively affected by nice new homes around it Regression Home price is negatively affected by run down homes around it

105 Federal Reserve Policy controls interest rates
Selling Bonds Takes cash out of the system Causing interest rates to increase due to less supply of money Due to Supply and Demand of money Buying Bonds Puts cash into the system Causing interest rates to drop because there is more money Reserve Requirements Banks must hold a percentage of cash in reserve More reserve requirement means less money in circulation More demand for money increases interest rates Discount Points – Rates banks charge each other Higher rates mean less money to lend – Means higher demand and higher interest rates

106 Any Questions?

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