1.

• Avery Yarbrough & Associates

Real Estate License

Cram Course Review

Thursday & Friday

9 till 4 with an hour for lunch

2.

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.

Lots of different material to cover in 2 days

• • A cres toZ oning

• 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

• • • Dont read anything into question

• • Any test you dont study for will be hard

5.

• 6 sections 100 Questions&40 on Alabama law

• 1Listing Property31%of general knowledge test

• 2Selling Property21%

• 3Property Management 14%

• 4Settlement/ Transfer of Ownership14%

• 5Financing10%

• 6Professional Responsibilities10%

• Law is 28% of total test

• We will have lecture then shorttest

• • 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 wordsReliction, 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

• Listento 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- 12 hours

Dont study past 9PM

Go to sleep early and let your brain rest

10.

On the day of test

Get up early and be relaxed , not rushed

Dont read paper or listen to news

Eat a good breakfast

No more studying

Get to test site early

• 15 minutes late and you cant take test

11.

At test site

Have photo ID and 1 more with signature

• Do practice questions on computer

• Maintain pace throughout exam

• Dont wrestle with a question

• Read question twice

• Read answers twice

• • You will know answer in your brain

• • If you dont 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.

Finance has 10 questions

• Most students have trouble with real estate math

We go over math, but dont 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.

FHAinsuresloans

• 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 Maesold mortgage backed securities to investors

17.

I950s 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

1960s government realized it was in trouble

Turned into private companies

Didnt want risky mortgages

G innie Mae came about to buy risky loans

• G overnment owned

• G uarantees loans

18.

3 Financial Intermediaries

• Primary Lenders

InstitutionalRetail Banker

• Loan their own money- Fiduciary

Non- InstitutionalWholesaleBroker

• Loan money that is not their own

Insurance companies and pension plans

• Have lots of money to invest

• Alabama retirement fund

19.

Mortgage Brokers

• Not their money

• Get it fromnon - 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 Citizengets 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

• • Plus

• • Index-measure of change such as Consumer Price Index

• Cap per year/life2/6

23.

Amortized Loan Equal payments until note dies

• Also called- direct reduction loan- Includes:

• • P rinciple the amount borrowed

• • I nterest-Rate remains constant through life of loan

Mortgage payment also will include:

• Escrow forT axes &I nsurance

• 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.

AccelerationClause(like accelerator petal on car)

• Miss 3 payments and lender speeds up loan

• • Foreclosure starts and borrower (mortgag or ) 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

Dont ignore lender- work with them

• They dont want the house

Short Sale Bank agrees to take less than owed

25.

Defeasance Clause

• • 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.

OR

• Gives

EE

• Gets

Confusing---Mortgagor & Mortgagee

Mortgage is a promise backed by security instrument

• Mortgag or(Borrower) gives promise to pay

• Mortgag ee(Lender) gets promise

27.

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

• • Lenderand borrower

Trust Deed

• Three parties

• • Trustor Lender

• • Trustee Holds title

• • Beneficiary -- Borrower

UsuryLaw 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

• Prefixsub-means beneath

Alabama is a deficiency state

• Lender will get judgment claim against borrower

Property taxes always have first priority

30.

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

• • Permanentbuy-down forlength 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 Mortgage2 ndMortgage

• • Purchaser has title

Owner Finance

• Seller keeps legal title until paid off

• • Bond for title

• • Land sale contract

• • Contract of deed

• • Installment Contract

33.

FHAinsures (% upfront + % each month)

• Ends when principle < 80% of original appraisal

VAguarantees (government)

• CRV Certificate of reasonable value

• • Same as appraisal

Veteran must qualify& property must qualify

• Can substitute anothers guarantee

Conventional PMI (private mortgageinsurance )

• On amount more than 80% of appraisal value

34.

Sale- Lease Back

• 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.

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.

Alabama License Law

40 of the 140--29% 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.

RECADReal Estate Consumer Agency Disclosure

4 ways to have relationship with consumer

• Written disclosure to consumer to alleviate distrust

Single Agent-- Agency with one partywork For - Advise

Limited Consensual Dual Agent--

• Agency for both Seller & Buyer

Transaction Broker-- Non Agencywork 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.

Consumers are either:

CustomerNON-client / NON-Agent

• No advice

• WorkingWith

• Transaction Broker

Client- Agency Relationship

• Give Advice

• WorkingFor

• Fiduciary

40.

Agency Duties- Fiduciary

Drive clients inOLD CAR

O bedience- Obey lawful commands

L oyalty- Put clients interest above your own

D isclosure Everything you know about transaction

C onfidentiality-Keep confidential information confidential

A ccounting Account for all funds

R easonable Care Use reasonable care

41.

Customers Non Agency No fiduciary

Must answer theirHARD?

H onesty

A ccountable

R easonable Care

D isclosure

?Questions must be answered truthfully

42.

Law Test

Go over even # questions

Answer on separate paper then later:

• Highlight correct answers to use as study guide

43.

Lunch1 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 Salvadors

• McAlisters- On Hwy on right mile to the left

• McDonalds- Just past McAlisters

• Burger KingJust before McAlisters

• Chinese- Shopping center across from McAlisters

• 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

• Prescriptionused for a length of time 20 years

• • Adverse Possession

• Servient tenement Serves another property

• Dominant tenement Property thatbenefits from easement

• • Ingress & Egress from landlocked property

• Personal easement terminates upon death of either party

• Encroachment Illegal extension on anothers 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 someones 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

• Grantors signature

• • Grantee (buyer) signature not needed

• Must be delivered during grantors lifetime

48.

Condominium

• 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 P ossession,I nterest,T ime,T itle

• • If ownership changes,

• • • PITT doesnt change new owner is a tenant in common

• Tenants inCommon (In the condo pool with thecommon 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

Separateproperty 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-6 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

• Appraiser is aCSIinvestigator

C ost What it cost to build

• Special purpose - church

S ales Comparison what have othersimilarhomes sold for

I ncome Income producing properties

• Capitalization rate=Net Income / Price

Real Estate Agents perform:

• Comparative Market Analysis(using Sales Comparisons)

• May notcall it an appraisal

54.

Appraisals

CIAdoesnt wantCBSwatching them

C omparableI nferiorA dd

C omparableB etterS ubtract

Neveradjust 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

• New construction, special purpose

• White House - cost approach (2008) $130,000,000

Cost = Total of Materials + Land + Labor + Profit

• Reproduction Cost = exact duplicateYour DNA

• Replacement Cost = similarAdopt

Capitalization Rate

• Rate investment will return

GIVEN

G rossI ncome V acancy E xpenses =N et 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 1 stmonument

• • Meters & Directions

• POB P ointO fB eginningand around to starting point

Rectangular Survey government (Squares)

• Townships - 6 miles X 6 miles

• Sections 1 mile square- 36 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 =T ownship1 S outh

• • 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.

Section is 640 Acres

• section has 160 acres

• of of has 10 acres

Acre 43,560 square feet--208.71 X 208.71

711Ask at the 7-11 store about an acre

Mile is5 , 280feet

Oak Mountain is5miles down Highway280

60.

Day 2

Page 73--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

• 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

• Itbeginsand itends

• • Period of time doesnt matter

• • 30 minutes or 30 days or 30 years

Period ic Tenancy

• Periodto 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:

• • Periodic Tenancy

65.

Lease can be either Gross or Net

Net lease charges tenant for following in addition to rent:

• T axes,I nsurance,M aintenance-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

• 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 moremust be recorded in first year to be enforceable

Maximum lease is 99 years

Escalation Lease will be go upover 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

• • List Assets & Liabilities

• Profit & Loss

• • List net profit after expenses

70.

Sub- lease

• Assignment of

• • 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.

Contract

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.

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

• Option

• • May buy at end of lease or not

74.

Unilateral Contract

• One person has made promise

• Listing Agreement

Bi- lateral

• Two parties have agreed to contract

• Sales Contract

75. 76.

Legal remedies

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.

Earnest Money is not required for a valid contract

• If earnest money is included

• • Sellermayaccept 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

• • 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 Friday @5)

79.

Bundle of Rights(Sticks in a bundle)

• UPEED

• U se

• P ossession

• E ncumber

• E xclude others

• D isposition

• Subject to Government rights (PETE)

80.

Zoning (Primary Purpose is to protect thehealth, safety and welfare of the public)

RCA IS ZoningDistricts

R esidential

C ommercial

A gricultural

I ndustrial

S pecial Purpose ( Hospital, Library, Church)

81.

Non Conforming Use (Zoning)

• Use that does not conform to surrounding properties

• • Day care center inresidential 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

• Money for working

Capital Gains

• 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.

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 payboot

• • • Moneyin 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.

Int er state commerce (regulated by SEC)

• Regulated by federal government

Int ra state commerce ( Alabama Blue Sky Law)

• Not regulated by federal government, but Alabama

86.

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

• Gift of real property by will

Bequeath Bouquet

• Gift of personal property by will

Legacy

• Gift of money by will

88.

Government Powers

PETEworks for the government

P olice- Zoning is one police power

E minentDomain (right), Condemnation (Process)

T axation

E scheat- 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.

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 grantors ownership of property

Quit Claim no warranty

• As is

• Used to quiet a cloud on title

92.

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

• Owner ask for it - Mortgage

Involuntary Lien

• Owner didnt 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.

RESPAReal 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

• Debt owed

• Takes money away

Credits are good

• Credit to an account

96.

Important Dates

Civil Rights Act 1866

• Prohibits discrimination based on race

Civil Rights Act 1968 Expands protected classes

Fair Housing Act of 1988

• Protects FR E SH C O RN

• E&O insurance doesnt cover,Equal Opportunity

Familial, Race, Sex, Handicap, Color, Religion, National Origin

Doesnt protect age

Handicap includes physical and mental

• Includes AIDS

• Includes recovering addicts

97.

Redlining

• 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:

• 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.

ADAAmericans 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 doesnt 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

• Home price is positively affected by nice newhomes around it

Regression

• Home price is negatively affectedby run down homes around it

105.

Federal Reserve Policy controls interest rates

• Selling BondsTakescash out of the system

• • Causing interest rates to increase due to less supply of money

• • • Due to Supply and Demand of money

• Buying BondsPutscash 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?