1. Chapter 7: In This Chapter Introduction Foreign ownership Financing Commercial real estate Residential real estate Rental property MLSs Licensing and brokerage Government Legal system Economy and business Taxes and fees What you need to know Beyond the basics Key contacts Page 179

2. Map of USA Source: www.nationalatlas.gov Page 180

3. Introduction to USA Fifty states, District of Columbia, and five territories Immigration has created a multicultural, ethnically diverse nation Page 180-181

4. USA—The Rich Tapestry Source: Wikipedia Page 180-181

5. USA—The Rich Tapestry Source: Wikipedia Page 180-181

6. USA—The Rich Tapestry Source: Wikipedia Page 180-181

7. Foreign Ownership of Real Estate Real estate and the USA economy Why USA real estate is a good buy Who buys USA real estate? – Investors – Vacation home buyers – Immigrants US $68.2 billion in residential sales to foreign investors, recent immigrants, and temporary visa holders Page 181-187

8. Financing Types of mortgages – Interest-only – Buydown – GPM – Convertible and fixed-period ARM – Two-step – Option ARM Mortgage payments Method of property purchases Foreclosures – Judicial – Non-judicial – Title-theory – Lien-theory Page 187-192

9. Commercial Real Estate USA Office Market Fundamentals Indicator201220132014 Net Absorption (millions of ft 2 ) 48.250.060.3 Vacancy 15.7%15.1%14.3% New Deliveries (millions of ft 2 ) 23.627.131.2 Asking Rents $21.70$22.00$22.40 Investment Sales (billions) $77.6$85.1$125.3 Source: Cassidy Turley Page 193

10. Residential Real Estate Home prices on the rise on average Demand expected to wane due to rising prices and borrowing costs – Actions of Federal Reserve Source: Global Property Guide Page 194

11. Rental Property Typically pro-tenant Laws vary by state and locality Deposits usually 1-3 ½ months of rent – Often held in bank account Leases and rental agreements Rent usually paid monthly Eviction procedures differ by state Page 195

12. Multiple Listing Service (MLS) Foundation of efficient market Brokers share listings – Blanket offer of compensation National Association of REALTORS® defines policies for REALTOR® Association MLS operations Commercial Information Exchanges Page 195-197

13. Licensing and Brokerage Practices Licensing applies at the state level – High degree of uniformity in regulations – Practitioners may be licensed in more than one state Compensation Agency Escrow Page 198-200

14. What You Should Know About Government Democracy with executive, legislative, and judicial branches Two-party system – Democratic Party – Republican Party Page 200-201

15. Legal System Common law system Federal and state courts Federal and state laws affect real estate professionals Page 201

16. Economy and Business Largest economy in the world Companies free of barriers Highly technological – Computers – Medical – Aerospace – Military equipment Challenges include rising health care costs and aging population Page 201-202

17. Real Estate and Business Taxes and Fees Transaction costs Taxpayer identification number State and municipal real estate tax State and federal estate tax Federal income and capital gains tax 1031 tax-deferred exchanges Foreign Investment in Real Property Tax Act (FIRPTA) Page 202-206

18. What You Need to Know Financial information and transaction process for foreign buyers Real estate regulations and laws Property disclosure and due diligence Involvement of other professionals – Attorney – Inspector – Tax planner Page 206-209

19. Beyond the Basics Multiple cultures Egalitarianism Women in business Time is money Business dining Individualism and independence Work environment Gift giving Communications and language issues Negotiations Federal holidays Page 209-215

20. Key Contacts Local REALTOR® Association State REALTOR® Association National Association of REALTORS® State government trade or economic development office USA Embassy or Consulate in home market Page 215