<ul><li>Avery Yarbrough & Associates </li></ul><ul><li>Real Estate License </li></ul><ul><li>Cram Course Review </li></ul>...
<ul><li>House Keeping Rules </li></ul><ul><li>Cell Phones -Off </li></ul><ul><li>Computers - Off </li></ul><ul><li>Breaks ...
<ul><li>Welcome </li></ul><ul><ul><li>Everyone, classroom students, online, other schools </li></ul></ul><ul><li>Materials...
<ul><li>Lots of different material to cover in 2 days </li></ul><ul><ul><ul><li>A cres to  Z oning </li></ul></ul></ul><ul...
<ul><ul><li>6 sections 100 Questions  &  40 on Alabama law </li></ul></ul><ul><ul><li>1  Listing Property  31%  of general...
<ul><li>65% to &70% pass test on first try </li></ul><ul><li>Only about 60% online pass on first try </li></ul><ul><li>Abo...
<ul><li>Look at the packet on the right </li></ul><ul><li>Outline of class  </li></ul><ul><li>Words – Know vocabulary  </l...
<ul><li>Test taking tips </li></ul><ul><ul><li>80% of those that fail get between 65 to 69 </li></ul></ul><ul><ul><li>Only...
<ul><li>Schedule a morning test </li></ul><ul><li>Anxiety is less in AM – no time to worry </li></ul><ul><li>Brain sharper...
<ul><li>On the day of test </li></ul><ul><li>Get up early and be relaxed , not rushed </li></ul><ul><li>Don’t read paper o...
<ul><li>At test site  </li></ul><ul><li>Have photo ID and 1 more with signature </li></ul><ul><ul><li>Do practice question...
<ul><li>Finance has 10 questions </li></ul><ul><ul><li>Most students have trouble with real estate math </li></ul></ul><ul...
<ul><li>Power Point Handout is your Outline </li></ul><ul><li>Take notes on handout </li></ul><ul><li>Study them later </l...
<ul><li>1934 Mortgage industry began under FDR </li></ul><ul><li>Horrible economy – end of Depression </li></ul><ul><li>Ho...
<ul><li>FHA  insures  loans –  </li></ul><ul><ul><li>Does not loan money or build homes </li></ul></ul><ul><li>FHA mortgag...
<ul><li>Secondary market created to buy mortgages </li></ul><ul><li>Primary lenders sold pools of mortgages </li></ul><ul>...
<ul><li>I950’s more buyers wanted a piece of the pie </li></ul><ul><ul><li>Private Mortgage Insurance – PMI </li></ul></ul...
<ul><li>3 Financial Intermediaries  </li></ul><ul><ul><li>Primary Lenders </li></ul></ul><ul><li>Institutional  Retail Ban...
<ul><li>Mortgage Brokers </li></ul><ul><ul><li>Not their money </li></ul></ul><ul><ul><li>Get it from  non - institutional...
<ul><li>Loan products </li></ul><ul><ul><li>Blanket Mortgage – think of a quilt with patches </li></ul></ul><ul><ul><ul><l...
<ul><li>Open end mortgage – Like credit card  </li></ul><ul><ul><li>Leave mortgage open to add to in future </li></ul></ul...
<ul><li>Adjustable Rate Mortgage  </li></ul><ul><li>Protects lender from interest rate changes </li></ul><ul><ul><li>Chang...
<ul><li>Amortized Loan – Equal payments until note dies </li></ul><ul><ul><li>Also called  - direct reduction loan  - Incl...
<ul><li>Acceleration  Clause  (like accelerator petal on car) </li></ul><ul><ul><li>Miss 3 payments and lender speeds up l...
<ul><li>Defeasance Clause  </li></ul><ul><ul><ul><li>Clause says lender must record satisfaction of mortgage </li></ul></u...
<ul><li>OR </li></ul><ul><ul><li>Gives </li></ul></ul><ul><li>EE </li></ul><ul><ul><li>Gets </li></ul></ul><ul><li>Confusi...
<ul><li>Title Theory - Alabama </li></ul><ul><ul><li>Lender has legal title </li></ul></ul><ul><ul><li>Borrower has equita...
<ul><li>Mortgages  -- local Alabama custom </li></ul><ul><ul><li>Negotiable Instrument – will be sold </li></ul></ul><ul><...
<ul><li>Priority of liens first to record, first to collect </li></ul><ul><ul><li>Constructive notice (recorded) </li></ul...
<ul><li>Title </li></ul><ul><ul><li>Chain of ownership on property </li></ul></ul><ul><ul><li>Marketable Title – 40 years ...
<ul><li>Points  - 1 point is 1 % of loan </li></ul><ul><ul><li>Origination – Bank commission for selling loan </li></ul></...
<ul><li>Owner Finance </li></ul><ul><ul><li>Purchase Money Mortgage  2 nd  Mortgage </li></ul></ul><ul><ul><ul><li>Purchas...
<ul><li>FHA  insures   (% upfront + % each month) </li></ul><ul><ul><li>Ends when principle < 80% of original appraisal  <...
<ul><li>Sale- Lease Back </li></ul><ul><ul><li>Owner needs money to expand operations </li></ul></ul><ul><ul><li>Will sell...
<ul><li>Test on page 146 </li></ul><ul><ul><li>About an hour </li></ul></ul><ul><ul><li>You must be comfortable with the w...
<ul><li>Alabama License Law </li></ul><ul><li>40 of the 140  --  29% of test </li></ul><ul><ul><li>Know the violations!  P...
<ul><li>RECAD  Real Estate Consumer Agency Disclosure </li></ul><ul><li>4 ways to have relationship with consumer </li></u...
<ul><li>RECAD </li></ul><ul><li>Must be presented at first contact with consumer, before any confidential information is d...
<ul><li>Consumers are either:  </li></ul><ul><li>Customer  NON-client / NON-Agent </li></ul><ul><ul><li>No advice </li></u...
<ul><li>Agency Duties  - Fiduciary  </li></ul><ul><li>Drive clients in  OLD CAR </li></ul><ul><li>O bedience  - Obey lawfu...
<ul><li>Customers – Non Agency – No fiduciary  </li></ul><ul><li>Must answer their  HARD? </li></ul><ul><li>H onesty </li>...
<ul><li>Law Test </li></ul><ul><li>Go over even # questions </li></ul><ul><li>Answer on separate paper then later: </li></...
<ul><li>Lunch  1 Hour – Please be back on time </li></ul><ul><li>Nearby Restaurants </li></ul><ul><ul><li>Mexican – at end...
<ul><li>Review Alabama Law Test </li></ul><ul><li>Know the violations! </li></ul>
<ul><li>Easements </li></ul><ul><ul><li>Right of one person to use the property of another </li></ul></ul><ul><ul><li>Nece...
<ul><li>Life Estate – use for the life of a person </li></ul><ul><li>Reversion – goes back to original grantor </li></ul><...
<ul><li>Deed – To transfer title </li></ul><ul><li>Must have: </li></ul><ul><ul><li>In writing </li></ul></ul><ul><ul><li>...
<ul><li>Condominium  </li></ul><ul><ul><li>Fee simple (absolutely best ownership – all rights) </li></ul></ul><ul><ul><ul>...
<ul><li>Co-operative </li></ul><ul><ul><li>Apartment converted to ownership </li></ul></ul><ul><ul><li>Building owned as a...
<ul><li>Co- ownership </li></ul><ul><ul><li>Joint Tenancy  (Husband and wife joined together at the arm PITT) </li></ul></...
<ul><li>Community property  - Not in Alabama </li></ul><ul><li>Tenancy by the entirety – Not in Alabama </li></ul><ul><li>...
<ul><li>Obsolescence  </li></ul><ul><ul><li>Economic – town is dying </li></ul></ul><ul><ul><ul><li>Not curable </li></ul>...
<ul><li>Methods for determining value  </li></ul><ul><ul><li>Appraiser is a  CSI  investigator </li></ul></ul><ul><li>C os...
<ul><li>Appraisals </li></ul><ul><li>CIA  doesn’t want  CBS  watching them </li></ul><ul><li>C omparable  I nferior  A dd ...
<ul><li>Cost approach –  </li></ul><ul><ul><li>New construction, special purpose </li></ul></ul><ul><ul><li>White House - ...
<ul><li>Certificate of Occupancy  </li></ul><ul><ul><li>All inspections have passed – ready to move in </li></ul></ul>
<ul><li>Legal Descriptions 3 methods </li></ul><ul><ul><ul><li>Definition - A surveyor can find boundary of property </li>...
<ul><li>Township tier starts at Tennessee line  (Base Line) </li></ul><ul><ul><li>6 miles south of Tennessee line is anoth...
<ul><li>Section is 640 Acres  </li></ul><ul><ul><li>¼ section has 160 acres </li></ul></ul><ul><ul><li>¼ of ¼  of ¼ has 10...
<ul><li>Day 2  </li></ul><ul><li>Page 73  --  Property Management </li></ul><ul><li>Property Manager  (General Agent) </li...
<ul><li>Property Owner Must </li></ul><ul><ul><li>Provide Habitable Premises </li></ul></ul><ul><ul><li>Provide Quite Enjo...
<ul><li>Personal Property - personalty </li></ul><ul><ul><li>Not attached to real estate </li></ul></ul><ul><ul><li>Ceilin...
<ul><li>Trade Fixtures </li></ul><ul><ul><li>Equipment to operate a business </li></ul></ul><ul><ul><ul><li>Big refrigerat...
<ul><li>Leases </li></ul><ul><li>Estate for years or Tenancy for years </li></ul><ul><ul><li>It  begins  and it  ends </li...
<ul><li>Lease can be either Gross or Net </li></ul><ul><li>Net lease charges tenant for following in addition to rent: </l...
<ul><li>Percentage Lease on 10,000 square foot store </li></ul><ul><li>Base rent of $20 per Square Foot, plus </li></ul><u...
<ul><li>Commercial rental space is graded: </li></ul><ul><li>A – New building in great location </li></ul><ul><li>B  -  Ol...
<ul><li>Statute of Frauds </li></ul><ul><ul><li>Contracts involving real estate must be in writing  </li></ul></ul><ul><ul...
<ul><li>Accounting reports </li></ul><ul><ul><li>Balance Sheet </li></ul></ul><ul><ul><ul><li>List Assets & Liabilities </...
<ul><li>Sub- lease </li></ul><ul><ul><li>Assignment of  </li></ul></ul><ul><ul><ul><li>privilege of use </li></ul></ul></u...
<ul><li>Environmental Hazards  </li></ul><ul><li>Lead Paint  (Written disclosure required- LPD) </li></ul><ul><ul><li>Must...
<ul><li>Contract –  </li></ul><ul><li>Execute- to sign a contract </li></ul><ul><li>Executed Contract is fulfilled – close...
<ul><li>Option </li></ul><ul><li>Unilateral contract  - One promise </li></ul><ul><ul><li>Right to buy a property for a pe...
<ul><li>Unilateral Contract </li></ul><ul><ul><li>One person has made promise </li></ul></ul><ul><ul><li>Listing Agreement...
 
<ul><li>Legal remedies </li></ul><ul><li>Breach of Contract </li></ul><ul><ul><li>One party to contract does not perform  ...
<ul><li>Earnest Money is not required for a valid contract </li></ul><ul><ul><li>If earnest money is included </li></ul></...
<ul><li>Offer </li></ul><ul><ul><li>May be accepted by seller </li></ul></ul><ul><ul><ul><li>Becomes a bi-lateral ( 2 side...
<ul><li>Bundle of Rights  (Sticks in a bundle) </li></ul><ul><ul><li>UPEED </li></ul></ul><ul><ul><li>U se </li></ul></ul>...
<ul><li>Zoning   (Primary Purpose is to protect the  health, safety and welfare of the public) </li></ul><ul><li>RCA IS   ...
<ul><li>Non Conforming Use (Zoning) </li></ul><ul><ul><li>Use that does not conform to surrounding properties </li></ul></...
<ul><li>Ordinary Income </li></ul><ul><ul><li>Money for working </li></ul></ul><ul><li>Capital Gains </li></ul><ul><ul><li...
<ul><li>Income Deductions </li></ul><ul><ul><li>Depreciation  </li></ul></ul><ul><ul><ul><li>Accounting Deduction per year...
<ul><li>Securities (regulated by SEC) </li></ul><ul><ul><li>Stocks – ownership position in company </li></ul></ul><ul><li>...
<ul><li>Int er state commerce (regulated by SEC) </li></ul><ul><ul><li>Regulated by federal government </li></ul></ul><ul>...
<ul><li>Testament - Will </li></ul><ul><li>Die leaving a will is Testate </li></ul><ul><li>Die without a will is Intestate...
<ul><li>Devise </li></ul><ul><ul><li>Gift of real property by will </li></ul></ul><ul><li>Bequeath – Bouquet  </li></ul><u...
<ul><li>Government Powers </li></ul><ul><li>PETE  works for the government </li></ul><ul><li>P olice  - Zoning is one poli...
<ul><li>Restrictions on use of property </li></ul><ul><li>Private restrictions – CC&R </li></ul><ul><ul><li>Covenants –  <...
<ul><ul><li>Fee Simple Defeasible  (Defeatable)  </li></ul></ul><ul><ul><li>Conditions –  </li></ul></ul><ul><ul><ul><li>R...
<ul><li>Deeds </li></ul><ul><ul><li>Warranty against title defects </li></ul></ul><ul><li>Could have been issues in past t...
<ul><li>Title Insurance </li></ul><ul><ul><li>Protects against something in the past </li></ul></ul><ul><ul><ul><li>Differ...
<ul><li>Liens </li></ul><ul><li>Voluntary Lien </li></ul><ul><ul><li>Owner ask for it - Mortgage </li></ul></ul><ul><li>In...
<ul><li>RESPA  Real Estate Settlement & Procedures Act </li></ul><ul><ul><li>1 to 4 unit family residential property </li>...
<ul><li>Debits are bad </li></ul><ul><ul><li>Debt owed </li></ul></ul><ul><ul><li>Takes money away  </li></ul></ul><ul><li...
<ul><li>Important Dates </li></ul><ul><li>Civil Rights Act 1866  </li></ul><ul><ul><li>Prohibits discrimination based on r...
<ul><li>Redlining </li></ul><ul><ul><li>Insurance or Lender draws a red line around an area and refuses to do business the...
<ul><li>Can discriminate if: </li></ul><ul><ul><li>Owns a 4 plex or less and lives in one unit </li></ul></ul><ul><ul><li>...
<ul><li>ADA  Americans with Disability Act </li></ul><ul><ul><li>Must make reasonable accommodations </li></ul></ul><ul><u...
<ul><li>Fair Credit Act  </li></ul><ul><li>Most of FRESH CORN </li></ul><ul><li>Protects Marital Status instead of Familia...
<ul><li>Independent Contractor </li></ul><ul><ul><li>Employer doesn’t have to  </li></ul></ul><ul><ul><ul><li>Pay Social S...
<ul><li>Anti-Trust Prohibits (Sherman Act) </li></ul><ul><ul><li>Allocation of markets </li></ul></ul><ul><ul><li>Price Fi...
<ul><li>Can a seller refuse to accept a full price offer? </li></ul><ul><ul><li>Yes </li></ul></ul><ul><ul><li>But, broker...
<ul><li>Progression </li></ul><ul><ul><li>Home price is positively affected by nice new  homes around it </li></ul></ul><u...
<ul><li>Federal Reserve Policy controls interest rates </li></ul><ul><ul><li>Selling Bonds  Takes  cash out of the system ...
<ul><li>Any Questions? </li></ul>
Upcoming SlideShare
Loading in …5
×

Cram course

508 views

Published on

  • Be the first to comment

  • Be the first to like this

Cram course

  1. 1. <ul><li>Avery Yarbrough & Associates </li></ul><ul><li>Real Estate License </li></ul><ul><li>Cram Course Review </li></ul><ul><li>Thursday & Friday </li></ul><ul><li>9 till 4 with an hour for lunch </li></ul>
  2. 2. <ul><li>House Keeping Rules </li></ul><ul><li>Cell Phones -Off </li></ul><ul><li>Computers - Off </li></ul><ul><li>Breaks – each hour -Be back at 10 minutes </li></ul><ul><ul><li>Restrooms are in break room </li></ul></ul><ul><ul><li>No smoking at front door – go to end of building </li></ul></ul><ul><li>Mindful of your classmates </li></ul><ul><ul><li>We have a lot of material to cover </li></ul></ul><ul><ul><li>Hold questions till breaks </li></ul></ul>
  3. 3. <ul><li>Welcome </li></ul><ul><ul><li>Everyone, classroom students, online, other schools </li></ul></ul><ul><li>Materials </li></ul><ul><ul><li>Green Book </li></ul></ul><ul><ul><li>Law Booklet & Law Test </li></ul></ul><ul><ul><li>Handout Packet </li></ul></ul><ul><ul><li>Handouts </li></ul></ul><ul><li>We need your contact information </li></ul><ul><ul><li>Fill out at break </li></ul></ul>
  4. 4. <ul><li>Lots of different material to cover in 2 days </li></ul><ul><ul><ul><li>A cres to Z oning </li></ul></ul></ul><ul><ul><li>Need to know about acres and zoning to pass test </li></ul></ul><ul><ul><li>140 questions – can miss 42 and still pass </li></ul></ul><ul><ul><li>100 general & 40 Alabama Law </li></ul></ul><ul><ul><li>More than one answer may look right </li></ul></ul><ul><ul><ul><li>Test taking anxiety </li></ul></ul></ul><ul><ul><ul><ul><li>Think long, think wrong </li></ul></ul></ul></ul><ul><ul><ul><li>Analytical personalities think too hard </li></ul></ul></ul><ul><ul><ul><ul><li>Don’t read anything into question </li></ul></ul></ul></ul><ul><ul><ul><li>Any test you don’t study for will be hard </li></ul></ul></ul>
  5. 5. <ul><ul><li>6 sections 100 Questions & 40 on Alabama law </li></ul></ul><ul><ul><li>1 Listing Property 31% of general knowledge test </li></ul></ul><ul><ul><li>2 Selling Property 21% </li></ul></ul><ul><ul><li>3 Property Management 14% </li></ul></ul><ul><ul><li>4 Settlement/ Transfer of Ownership 14% </li></ul></ul><ul><ul><li>5 Financing 10% </li></ul></ul><ul><ul><li>6 Professional Responsibilities 10% </li></ul></ul><ul><ul><li>Law is 28% of total test </li></ul></ul><ul><ul><li>We will have lecture then short test </li></ul></ul><ul><ul><ul><li>Do better with this method </li></ul></ul></ul>
  6. 6. <ul><li>65% to &70% pass test on first try </li></ul><ul><li>Only about 60% online pass on first try </li></ul><ul><li>About 80% of our students pass on first try </li></ul><ul><li>Second test try – pass rates drop </li></ul><ul><ul><li>And drops even more on third try, only 20% pass </li></ul></ul><ul><li>Test should be difficult </li></ul><ul><ul><li>Dealing with important subjects </li></ul></ul><ul><ul><li>Do it right the first time </li></ul></ul><ul><ul><ul><li>$71 per test </li></ul></ul></ul><ul><ul><li>It is important that you take this seriously </li></ul></ul>
  7. 7. <ul><li>Look at the packet on the right </li></ul><ul><li>Outline of class </li></ul><ul><li>Words – Know vocabulary </li></ul><ul><ul><li>Nerd Words on test </li></ul></ul><ul><ul><li>Obscure words Reliction, Riparian, Reentry, Remainderman, Recording, Range, Reconciliation, Rectangular System, Redlining, Regression </li></ul></ul><ul><li>The way we studied as children is the way to learn </li></ul><ul><li>Read, Study, Test </li></ul><ul><li>Our other classes </li></ul><ul><ul><li>Post License, Broker, CE </li></ul></ul>
  8. 8. <ul><li>Test taking tips </li></ul><ul><ul><li>80% of those that fail get between 65 to 69 </li></ul></ul><ul><ul><li>Only 1 point between success and failure </li></ul></ul><ul><ul><li>Listen to lecture </li></ul></ul><ul><ul><ul><li>Make notes </li></ul></ul></ul>
  9. 9. <ul><li>Schedule a morning test </li></ul><ul><li>Anxiety is less in AM – no time to worry </li></ul><ul><li>Brain sharper in AM </li></ul><ul><li>Review night before </li></ul><ul><ul><li>Eat fruit night before – brain food - 12 hours </li></ul></ul><ul><li>Don’t study past 9PM </li></ul><ul><li>Go to sleep early and let your brain rest </li></ul>
  10. 10. <ul><li>On the day of test </li></ul><ul><li>Get up early and be relaxed , not rushed </li></ul><ul><li>Don’t read paper or listen to news </li></ul><ul><li>Eat a good breakfast </li></ul><ul><li>No more studying </li></ul><ul><li>Get to test site early – </li></ul><ul><ul><li>15 minutes late and you can’t take test </li></ul></ul>
  11. 11. <ul><li>At test site </li></ul><ul><li>Have photo ID and 1 more with signature </li></ul><ul><ul><li>Do practice questions on computer </li></ul></ul><ul><ul><li>Maintain pace throughout exam </li></ul></ul><ul><ul><li>Don’t wrestle with a question </li></ul></ul><ul><ul><li>Read question twice </li></ul></ul><ul><ul><li>Read answers twice </li></ul></ul><ul><ul><ul><li>You will know answer in your brain </li></ul></ul></ul><ul><ul><ul><li>If you don’t know, then bookmark and move on </li></ul></ul></ul><ul><ul><ul><li>Bookmark math and skip -- work them last </li></ul></ul></ul><ul><ul><li>DO NOT GO BACK AND CHANGE AN ANSWER </li></ul></ul><ul><ul><ul><li>Will usually get it wrong </li></ul></ul></ul>
  12. 12. <ul><li>Finance has 10 questions </li></ul><ul><ul><li>Most students have trouble with real estate math </li></ul></ul><ul><li>We go over math, but don’t teach math </li></ul><ul><ul><li>We will help as much as you need </li></ul></ul><ul><li>Having Trouble? </li></ul><ul><ul><li>Call us for extra help – this is what we do </li></ul></ul><ul><ul><li>No extra charge for this </li></ul></ul><ul><ul><li>We want you to do well on the test </li></ul></ul>
  13. 13. <ul><li>Power Point Handout is your Outline </li></ul><ul><li>Take notes on handout </li></ul><ul><li>Study them later </li></ul><ul><li>More important to listen to lecture </li></ul><ul><li>Story about Finance </li></ul><ul><ul><li>Elementary concept </li></ul></ul>
  14. 14. <ul><li>1934 Mortgage industry began under FDR </li></ul><ul><li>Horrible economy – end of Depression </li></ul><ul><li>Housing - the way to make economy grow </li></ul><ul><ul><li>50% down payment at that time </li></ul></ul><ul><li>FHA created 3% down payment </li></ul><ul><ul><li>More likely to default </li></ul></ul><ul><ul><ul><li>Walk away if times get tough </li></ul></ul></ul><ul><ul><ul><li>Insures lender </li></ul></ul></ul>
  15. 15. <ul><li>FHA insures loans – </li></ul><ul><ul><li>Does not loan money or build homes </li></ul></ul><ul><li>FHA mortgage defaults - FHA pays </li></ul><ul><li>FHA set maximum loan amounts </li></ul><ul><ul><li>People started buying homes </li></ul></ul><ul><ul><ul><li>Economy began to recover </li></ul></ul></ul><ul><ul><li>Lenders ran out of money </li></ul></ul><ul><ul><li>What could they do? </li></ul></ul>
  16. 16. <ul><li>Secondary market created to buy mortgages </li></ul><ul><li>Primary lenders sold pools of mortgages </li></ul><ul><li>Fanny Mae bought these mortgages </li></ul><ul><li>Primary lenders collected payments </li></ul><ul><ul><li>Escrow for taxes and insurance </li></ul></ul><ul><ul><li>Service loan for a fee </li></ul></ul><ul><ul><li>Lenders also charged closing cost to make money </li></ul></ul><ul><ul><ul><li>Origination, Discount, Service fee </li></ul></ul></ul><ul><li>Fanny Mae sold mortgage backed securities to investors </li></ul>
  17. 17. <ul><li>I950’s more buyers wanted a piece of the pie </li></ul><ul><ul><li>Private Mortgage Insurance – PMI </li></ul></ul><ul><ul><li>5% down payment on larger loans </li></ul></ul><ul><li>Saving & Loan Banks needed secondary source </li></ul><ul><li>Freddie Mac created </li></ul><ul><li>Today they both buy the same loans </li></ul><ul><li>1960’s government realized it was in trouble </li></ul><ul><li>Turned into private companies </li></ul><ul><li>Didn’t want risky mortgages </li></ul><ul><li>G innie Mae came about to buy risky loans </li></ul><ul><ul><li>G overnment owned </li></ul></ul><ul><ul><li>G uarantees loans </li></ul></ul>
  18. 18. <ul><li>3 Financial Intermediaries </li></ul><ul><ul><li>Primary Lenders </li></ul></ul><ul><li>Institutional Retail Banker </li></ul><ul><ul><li>Loan their own money - Fiduciary </li></ul></ul><ul><li>Non- Institutional Wholesale Broker </li></ul><ul><ul><li>Loan money that is not their own </li></ul></ul><ul><li>Insurance companies and pension plans </li></ul><ul><ul><li>Have lots of money to invest </li></ul></ul><ul><ul><li>Alabama retirement fund </li></ul></ul>
  19. 19. <ul><li>Mortgage Brokers </li></ul><ul><ul><li>Not their money </li></ul></ul><ul><ul><li>Get it from non - institutional source </li></ul></ul><ul><ul><ul><li>They know someone who has money </li></ul></ul></ul><ul><li>Insurers </li></ul><ul><ul><li>FHA , VA, PMI </li></ul></ul><ul><li>Secondary Market </li></ul><ul><li>FAMA, FRMAC, GNMA </li></ul>
  20. 20. <ul><li>Loan products </li></ul><ul><ul><li>Blanket Mortgage – think of a quilt with patches </li></ul></ul><ul><ul><ul><li>Developer buys land, puts lien on entire development </li></ul></ul></ul><ul><ul><ul><li>When house is built on one parcel and sold </li></ul></ul></ul><ul><ul><ul><ul><li>Partial release clause – releases lien on that parcel (patch) </li></ul></ul></ul></ul><ul><ul><li>Package Mortgage – Real and Personal property </li></ul></ul><ul><ul><ul><li>Includes Appliances, Furniture </li></ul></ul></ul><ul><ul><ul><li>Popular at beach (condo and furniture) </li></ul></ul></ul><ul><ul><ul><li>Farm Equipment </li></ul></ul></ul>
  21. 21. <ul><li>Open end mortgage – Like credit card </li></ul><ul><ul><li>Leave mortgage open to add to in future </li></ul></ul><ul><li>Graduated payment mortgage (FHA245) </li></ul><ul><ul><li>Goes up about 5% each year for 5 years </li></ul></ul><ul><ul><ul><li>Negative Amortization </li></ul></ul></ul><ul><ul><ul><li>Adds to principle – will owe more than borrowed for years </li></ul></ul></ul><ul><li>Reverse Annuity Mortgage </li></ul><ul><ul><li>Senior Citizen gets check for part of equity each month </li></ul></ul><ul><ul><li>Upon death , home is sold by family and debt paid </li></ul></ul>
  22. 22. <ul><li>Adjustable Rate Mortgage </li></ul><ul><li>Protects lender from interest rate changes </li></ul><ul><ul><li>Changes Each year (up or down) </li></ul></ul><ul><ul><ul><li>Principle </li></ul></ul></ul><ul><ul><ul><li>Plus </li></ul></ul></ul><ul><ul><ul><li>Margin – profit to lender - Fixed during life of loan </li></ul></ul></ul><ul><ul><ul><li>Plus </li></ul></ul></ul><ul><ul><ul><li>Index- measure of change such as Consumer Price Index </li></ul></ul></ul><ul><ul><li>Cap per year/life 2/6 </li></ul></ul>
  23. 23. <ul><li>Amortized Loan – Equal payments until note dies </li></ul><ul><ul><li>Also called - direct reduction loan - Includes: </li></ul></ul><ul><ul><ul><li>P rinciple – the amount borrowed </li></ul></ul></ul><ul><ul><ul><li>I nterest - Rate remains constant through life of loan </li></ul></ul></ul><ul><li>Mortgage payment also will include: </li></ul><ul><ul><li>Escrow for T axes & I nsurance </li></ul></ul><ul><ul><li>PITI Principle, Interest, Taxes, Insurance </li></ul></ul><ul><ul><li>Interest is paid in arrears – ( at end of period when ) </li></ul></ul><ul><li>Straight loan – pay (interest only) each year (rare) </li></ul><ul><ul><li>Loan would renew each year </li></ul></ul><ul><ul><ul><li>Pay off principle later </li></ul></ul></ul><ul><li>Balloon – Amortized over 30 years, but </li></ul><ul><li>Balance is paid off with a big lump payment at 5 years </li></ul><ul><li>* Most owner financing is Balloon </li></ul>
  24. 24. <ul><li>Acceleration Clause (like accelerator petal on car) </li></ul><ul><ul><li>Miss 3 payments and lender speeds up loan </li></ul></ul><ul><ul><ul><li>Foreclosure starts and borrower (mortgag or ) has: </li></ul></ul></ul><ul><li>Equitable Right of Redemption </li></ul><ul><ul><li>Pay off loan before foreclosure sale </li></ul></ul><ul><li>Statutory Right of Redemption </li></ul><ul><ul><li>Pay back loan plus cost of sale within one year </li></ul></ul><ul><li>Don’t ignore lender- work with them </li></ul><ul><ul><li>They don’t want the house </li></ul></ul><ul><li>Short Sale – Bank agrees to take less than owed </li></ul>
  25. 25. <ul><li>Defeasance Clause </li></ul><ul><ul><ul><li>Clause says lender must record satisfaction of mortgage </li></ul></ul></ul><ul><ul><li>Alienation Clause </li></ul></ul><ul><ul><ul><li>Clause says mortgage must be paid off at time of sale </li></ul></ul></ul><ul><ul><li>Acknowledgement = Notarize </li></ul></ul><ul><ul><ul><li>Necessary for recording </li></ul></ul></ul><ul><ul><ul><li>Record in county where property located </li></ul></ul></ul>
  26. 26. <ul><li>OR </li></ul><ul><ul><li>Gives </li></ul></ul><ul><li>EE </li></ul><ul><ul><li>Gets </li></ul></ul><ul><li>Confusing --- Mortgagor & Mortgagee </li></ul><ul><li>Mortgage is a promise backed by security instrument </li></ul><ul><ul><li>Mortgag or (Borrower) gives promise to pay </li></ul></ul><ul><ul><li>Mortgag ee (Lender) gets promise </li></ul></ul>
  27. 27. <ul><li>Title Theory - Alabama </li></ul><ul><ul><li>Lender has legal title </li></ul></ul><ul><ul><li>Borrower has equitable title </li></ul></ul><ul><li>Lien Theory </li></ul><ul><ul><li>Lender has equitable title </li></ul></ul><ul><ul><li>Borrower has legal title </li></ul></ul><ul><li>Title record shows evidence of ownership </li></ul><ul><ul><li>Not a piece of paper </li></ul></ul>
  28. 28. <ul><li>Mortgages -- local Alabama custom </li></ul><ul><ul><li>Negotiable Instrument – will be sold </li></ul></ul><ul><ul><li>Two parties </li></ul></ul><ul><ul><ul><li>Lender and borrower </li></ul></ul></ul><ul><li>Trust Deed </li></ul><ul><ul><li>Three parties </li></ul></ul><ul><ul><ul><li>Trustor – Lender </li></ul></ul></ul><ul><ul><ul><li>Trustee – Holds title </li></ul></ul></ul><ul><ul><ul><li>Beneficiary -- Borrower </li></ul></ul></ul><ul><li>Usury Law – Limits the amount of interest charged </li></ul>
  29. 29. <ul><li>Priority of liens first to record, first to collect </li></ul><ul><ul><li>Constructive notice (recorded) </li></ul></ul><ul><ul><li>Actual notice (actual knowledge) </li></ul></ul><ul><li>Primary – gets first money from foreclosure </li></ul><ul><li>Secondary – may not get any money </li></ul><ul><ul><li>Subordinate or junior </li></ul></ul><ul><ul><li>Prefix sub- means beneath </li></ul></ul><ul><li>Alabama is a deficiency state </li></ul><ul><ul><li>Lender will get judgment claim against borrower </li></ul></ul><ul><li>Property taxes always have first priority </li></ul>
  30. 30. <ul><li>Title </li></ul><ul><ul><li>Chain of ownership on property </li></ul></ul><ul><ul><li>Marketable Title – 40 years – no challenges </li></ul></ul><ul><li>Seller makes promise to deliver marketable title </li></ul><ul><li>Cloud on Title </li></ul><ul><ul><li>Break in chain of title </li></ul></ul><ul><ul><ul><li>Forgery </li></ul></ul></ul><ul><li>Title Insurance – insures chain against defects </li></ul><ul><ul><li>Will have exclusions not covered – easements </li></ul></ul><ul><ul><li>ALTA – unrecorded liens – materialman </li></ul></ul>
  31. 31. <ul><li>Points - 1 point is 1 % of loan </li></ul><ul><ul><li>Origination – Bank commission for selling loan </li></ul></ul><ul><ul><li>Discount - % of upfront $ paid to reduce rate on loan </li></ul></ul><ul><ul><ul><li>Builder buy down for a couple of years </li></ul></ul></ul><ul><ul><ul><li>Permanent buy-down for length of loan </li></ul></ul></ul><ul><ul><ul><li>1 point increases yield to bank about 1/8% </li></ul></ul></ul><ul><li>Assumptions of Mortgage </li></ul><ul><ul><li>Rules vary by loan type </li></ul></ul><ul><li>Assume – Seller still responsible for debt </li></ul><ul><li>Subject to – Seller not responsible for debt </li></ul><ul><li>Novation – new note </li></ul>
  32. 32. <ul><li>Owner Finance </li></ul><ul><ul><li>Purchase Money Mortgage 2 nd Mortgage </li></ul></ul><ul><ul><ul><li>Purchaser has title </li></ul></ul></ul><ul><li>Owner Finance </li></ul><ul><ul><li>Seller keeps legal title until paid off </li></ul></ul><ul><ul><ul><li>Bond for title </li></ul></ul></ul><ul><ul><ul><li>Land sale contract </li></ul></ul></ul><ul><ul><ul><li>Contract of deed </li></ul></ul></ul><ul><ul><ul><li>Installment Contract </li></ul></ul></ul>
  33. 33. <ul><li>FHA insures (% upfront + % each month) </li></ul><ul><ul><li>Ends when principle < 80% of original appraisal </li></ul></ul><ul><li>VA guarantees (government) </li></ul><ul><ul><li>CRV Certificate of reasonable value </li></ul></ul><ul><ul><ul><li>Same as appraisal </li></ul></ul></ul><ul><li>Veteran must qualify & property must qualify </li></ul><ul><ul><li>Can substitute another’s guarantee </li></ul></ul><ul><li>Conventional – PMI (private mortgage insurance ) </li></ul><ul><ul><li>On amount more than 80% of appraisal value </li></ul></ul>
  34. 34. <ul><li>Sale- Lease Back </li></ul><ul><ul><li>Owner needs money to expand operations </li></ul></ul><ul><ul><li>Will sell building to investor and lease back </li></ul></ul><ul><li>Owner Finance </li></ul><ul><ul><li>Vendor - Seller (retains title) </li></ul></ul><ul><ul><li>Vendee – Purchaser (gets equitable title) </li></ul></ul>
  35. 35. <ul><li>Test on page 146 </li></ul><ul><ul><li>About an hour </li></ul></ul><ul><ul><li>You must be comfortable with the way test is worded </li></ul></ul><ul><ul><li>In front of green book are pages with confusing words </li></ul></ul><ul><ul><li>Except, Not, Least, Best, Difference, Most Likely, ect. </li></ul></ul><ul><li>Put exam answers on separate page </li></ul><ul><ul><li>Later highlight correct answers to use as review </li></ul></ul>
  36. 36. <ul><li>Alabama License Law </li></ul><ul><li>40 of the 140 -- 29% of test </li></ul><ul><ul><li>Know the violations! Page 16 – 18 </li></ul></ul><ul><ul><li>AREC can suspend or revoke license </li></ul></ul><ul><ul><li>Fines $100 to $2500 </li></ul></ul><ul><li>Straight forward information – memorize </li></ul><ul><li>Concepts of common law </li></ul><ul><li>Know fees </li></ul>
  37. 37. <ul><li>RECAD Real Estate Consumer Agency Disclosure </li></ul><ul><li>4 ways to have relationship with consumer </li></ul><ul><ul><li>Written disclosure to consumer to alleviate distrust </li></ul></ul><ul><li>Single Agent -- Agency with one party work For - Advise </li></ul><ul><li>Limited Consensual Dual Agent -- </li></ul><ul><ul><li>Agency for both Seller & Buyer </li></ul></ul><ul><li>Transaction Broker -- Non Agency work With - Assist </li></ul><ul><li>Sub-Agent -- Pre-RECAD way things worked </li></ul><ul><ul><li>All agents worked for the seller </li></ul></ul><ul><li>All relationships start as Transaction Broker </li></ul><ul><ul><li>Until: </li></ul></ul><ul><li>A written agreement is signed with consumer </li></ul>
  38. 38. <ul><li>RECAD </li></ul><ul><li>Must be presented at first contact with consumer, before any confidential information is disclosed to another </li></ul><ul><li>Must be signed by agent and kept in file for 3 years </li></ul><ul><ul><li>Consumer not required to sign </li></ul></ul><ul><li>Keep all real estate contracts, listings, ect. for 3 Years </li></ul>
  39. 39. <ul><li>Consumers are either: </li></ul><ul><li>Customer NON-client / NON-Agent </li></ul><ul><ul><li>No advice </li></ul></ul><ul><ul><li>Working With </li></ul></ul><ul><ul><li>Transaction Broker </li></ul></ul><ul><li>Client - Agency Relationship </li></ul><ul><ul><li>Give Advice </li></ul></ul><ul><ul><li>Working For </li></ul></ul><ul><ul><li>Fiduciary </li></ul></ul>
  40. 40. <ul><li>Agency Duties - Fiduciary </li></ul><ul><li>Drive clients in OLD CAR </li></ul><ul><li>O bedience - Obey lawful commands </li></ul><ul><li>L oyalty - Put clients interest above your own </li></ul><ul><li>D isclosure – Everything you know about transaction </li></ul><ul><li>C onfidentiality - Keep confidential information confidential </li></ul><ul><li>A ccounting – Account for all funds </li></ul><ul><li>R easonable Care – Use reasonable care </li></ul>
  41. 41. <ul><li>Customers – Non Agency – No fiduciary </li></ul><ul><li>Must answer their HARD? </li></ul><ul><li>H onesty </li></ul><ul><li>A ccountable </li></ul><ul><li>R easonable Care </li></ul><ul><li>D isclosure </li></ul><ul><li>? Questions must be answered truthfully </li></ul>
  42. 42. <ul><li>Law Test </li></ul><ul><li>Go over even # questions </li></ul><ul><li>Answer on separate paper then later: </li></ul><ul><ul><li>Highlight correct answers to use as study guide </li></ul></ul>
  43. 43. <ul><li>Lunch 1 Hour – Please be back on time </li></ul><ul><li>Nearby Restaurants </li></ul><ul><ul><li>Mexican – at end of this building </li></ul></ul><ul><ul><li>Green Valley Drug Store – On down hill from here </li></ul></ul><ul><ul><li>Subway - In parking lot across from Outback </li></ul></ul><ul><ul><li>Salvador's - Next to Subway </li></ul></ul><ul><ul><li>Golden Rule - Across Highway form Salvador’s </li></ul></ul><ul><ul><li>McAlister’s - On Hwy on right ½ mile to the left </li></ul></ul><ul><ul><li>McDonald’s - Just past McAlister’s </li></ul></ul><ul><ul><li>Burger King Just before McAlister’s </li></ul></ul><ul><ul><li>Chinese - Shopping center across from McAlister’s </li></ul></ul><ul><ul><li>Krystal – Across from Burger King </li></ul></ul>
  44. 44. <ul><li>Review Alabama Law Test </li></ul><ul><li>Know the violations! </li></ul>
  45. 45. <ul><li>Easements </li></ul><ul><ul><li>Right of one person to use the property of another </li></ul></ul><ul><ul><li>Necessity – was necessary to get to property </li></ul></ul><ul><ul><li>Appurtenant – legally attached – runs with the land - deeded </li></ul></ul><ul><ul><ul><ul><ul><li>Commercial easements in gross </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Utility easements look “gross” </li></ul></ul></ul></ul></ul><ul><ul><li>Prescription used for a length of time – 20 years </li></ul></ul><ul><ul><ul><li>Adverse Possession </li></ul></ul></ul><ul><ul><li>Servient tenement– Serves another property </li></ul></ul><ul><ul><li>Dominant tenement – Property that benefits from easement </li></ul></ul><ul><ul><ul><li>Ingress & Egress from landlocked property </li></ul></ul></ul><ul><ul><li>Personal easement terminates upon death of either party </li></ul></ul><ul><ul><li>Encroachment – Illegal extension on another’s property </li></ul></ul>
  46. 46. <ul><li>Life Estate – use for the life of a person </li></ul><ul><li>Reversion – goes back to original grantor </li></ul><ul><li>Remainderman – goes to another at termination </li></ul><ul><li>In either case </li></ul><ul><ul><li>Can not waste property </li></ul></ul><ul><ul><li>Can do anything else in bundle of rights UPEED </li></ul></ul><ul><ul><li>All rights under life estate are limited by someone’s life </li></ul></ul><ul><ul><ul><li>Pur Autre Vie – Based on the life of another </li></ul></ul></ul>
  47. 47. <ul><li>Deed – To transfer title </li></ul><ul><li>Must have: </li></ul><ul><ul><li>In writing </li></ul></ul><ul><ul><li>Identify parties and property </li></ul></ul><ul><ul><li>Conveyance language </li></ul></ul><ul><ul><li>Consideration – something for something </li></ul></ul><ul><ul><ul><li>Amount not necessary to state </li></ul></ul></ul><ul><ul><li>Grantor’s signature </li></ul></ul><ul><ul><ul><li>Grantee (buyer) signature not needed </li></ul></ul></ul><ul><ul><li>Must be delivered during grantor’s lifetime </li></ul></ul>
  48. 48. <ul><li>Condominium </li></ul><ul><ul><li>Fee simple (absolutely best ownership – all rights) </li></ul></ul><ul><ul><ul><li>Own interior of unit fee simple </li></ul></ul></ul><ul><ul><ul><li>Own common area as tenants in common </li></ul></ul></ul><ul><ul><ul><ul><li>Swimming in the condo pool with the common people </li></ul></ul></ul></ul><ul><ul><li>Developer must record condominium declaration </li></ul></ul><ul><ul><li>Includes: </li></ul></ul><ul><ul><ul><li>Legal Description </li></ul></ul></ul><ul><ul><ul><li>Bylaws </li></ul></ul></ul><ul><ul><ul><li>Covenants & Restrictions and bylaws </li></ul></ul></ul><ul><ul><ul><li>Survey </li></ul></ul></ul>
  49. 49. <ul><li>Co-operative </li></ul><ul><ul><li>Apartment converted to ownership </li></ul></ul><ul><ul><li>Building owned as a corporation </li></ul></ul><ul><ul><ul><li>Own stock in corporation </li></ul></ul></ul><ul><ul><ul><li>May get loan to buy this stock, secured by lease </li></ul></ul></ul><ul><ul><li>Proprietary lease on apartment </li></ul></ul>
  50. 50. <ul><li>Co- ownership </li></ul><ul><ul><li>Joint Tenancy (Husband and wife joined together at the arm PITT) </li></ul></ul><ul><ul><ul><li>Usually family </li></ul></ul></ul><ul><ul><ul><li>Right of survivorship – </li></ul></ul></ul><ul><ul><ul><ul><li>At death interest goes to other party </li></ul></ul></ul></ul><ul><ul><ul><li>PITT P ossession, I nterest, T ime, T itle </li></ul></ul></ul><ul><ul><ul><li>If ownership changes, </li></ul></ul></ul><ul><ul><ul><ul><li>PITT doesn’t change – new owner is a tenant in common </li></ul></ul></ul></ul><ul><ul><li>Tenants in Common (In the condo pool with the common people ) </li></ul></ul><ul><ul><ul><li>Usually investment </li></ul></ul></ul><ul><ul><ul><li>Interest % may be different </li></ul></ul></ul><ul><ul><ul><li>If ownership changes nothing else changes </li></ul></ul></ul><ul><ul><ul><li>At death of owner, their ownership goes to heirs </li></ul></ul></ul>
  51. 51. <ul><li>Community property - Not in Alabama </li></ul><ul><li>Tenancy by the entirety – Not in Alabama </li></ul><ul><li>Separate property bought before marriage stays separate </li></ul><ul><ul><li>Property may be bought separately during marriage </li></ul></ul><ul><li>Property inherited stays separate </li></ul>
  52. 52. <ul><li>Obsolescence </li></ul><ul><ul><li>Economic – town is dying </li></ul></ul><ul><ul><ul><li>Not curable </li></ul></ul></ul><ul><ul><li>Functional - 6 bedroom, 1 bath (or an outhouse) </li></ul></ul><ul><ul><ul><li>Curable – can be fixed economically </li></ul></ul></ul><ul><ul><ul><li>In-Curable – cost more to fix than is worth </li></ul></ul></ul>
  53. 53. <ul><li>Methods for determining value </li></ul><ul><ul><li>Appraiser is a CSI investigator </li></ul></ul><ul><li>C ost – What it cost to build </li></ul><ul><ul><li>Special purpose - church </li></ul></ul><ul><li>S ales Comparison – what have other similar homes sold for </li></ul><ul><li>I ncome – Income producing properties </li></ul><ul><ul><li>Capitalization rate = Net Income / Price </li></ul></ul><ul><li>Real Estate Agents perform: </li></ul><ul><ul><li>Comparative Market Analysis (using Sales Comparisons) </li></ul></ul><ul><ul><li>May not call it an appraisal </li></ul></ul>
  54. 54. <ul><li>Appraisals </li></ul><ul><li>CIA doesn’t want CBS watching them </li></ul><ul><li>C omparable I nferior A dd </li></ul><ul><li>C omparable B etter S ubtract </li></ul><ul><li>Never adjust subject value, only comparable </li></ul><ul><ul><li>The comparable next door has an extra bedroom worth $10,000 </li></ul></ul><ul><ul><li>Adjust its sold price down to get the market value for your subject </li></ul></ul>
  55. 55. <ul><li>Cost approach – </li></ul><ul><ul><li>New construction, special purpose </li></ul></ul><ul><ul><li>White House - cost approach (2008) $130,000,000 </li></ul></ul><ul><li>Cost = Total of Materials + Land + Labor + Profit </li></ul><ul><ul><li>Reproduction Cost = exact duplicate Your DNA </li></ul></ul><ul><ul><li>Replacement Cost = similar Adopt </li></ul></ul><ul><li>Capitalization Rate </li></ul><ul><ul><li>Rate investment will return </li></ul></ul><ul><li>GIVEN </li></ul><ul><li>G ross I ncome – V acancy – E xpenses = N et Income </li></ul><ul><ul><li>Remember to change all #’s to annual </li></ul></ul>
  56. 56. <ul><li>Certificate of Occupancy </li></ul><ul><ul><li>All inspections have passed – ready to move in </li></ul></ul>
  57. 57. <ul><li>Legal Descriptions 3 methods </li></ul><ul><ul><ul><li>Definition - A surveyor can find boundary of property </li></ul></ul></ul><ul><li>Metes & Bounds - Plymouth Rock 1 st monument </li></ul><ul><ul><ul><li>Meters & Directions </li></ul></ul></ul><ul><ul><li>POB P oint O f B eginning and around to starting point </li></ul></ul><ul><li>Rectangular Survey – government (Squares) </li></ul><ul><ul><li>Townships - 6 miles X 6 miles </li></ul></ul><ul><ul><li>Sections – 1 mile square - 36 sections in a township </li></ul></ul><ul><li>Plat – Lot & Block - Recorded survey (subdivision) </li></ul><ul><ul><li>Must include, lot #, subdivision name, county & state </li></ul></ul>
  58. 58. <ul><li>Township tier starts at Tennessee line (Base Line) </li></ul><ul><ul><li>6 miles south of Tennessee line is another line </li></ul></ul><ul><li>Running north and south every 6 miles are range lines </li></ul><ul><ul><li>Intersections of township & range lines are called </li></ul></ul><ul><ul><li>Townships – these are 6 miles square </li></ul></ul><ul><ul><ul><li>Townships are numbered by where they are: </li></ul></ul></ul><ul><ul><ul><li>First tier south of the Tennessee line is T1S </li></ul></ul></ul><ul><ul><ul><ul><li>T1S = T ownship 1 S outh </li></ul></ul></ul></ul><ul><ul><ul><li>The north and south lines, Called Range Lines </li></ul></ul></ul><ul><ul><ul><ul><li>start in Huntsville, so </li></ul></ul></ul></ul><ul><ul><ul><ul><li>The first one west of Huntsville is R1W </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>R1W = Range 1 West </li></ul></ul></ul></ul></ul>
  59. 59. <ul><li>Section is 640 Acres </li></ul><ul><ul><li>¼ section has 160 acres </li></ul></ul><ul><ul><li>¼ of ¼ of ¼ has 10 acres </li></ul></ul><ul><li>Acre 43,560 square feet -- 208.71’ X 208.71’ </li></ul><ul><li>7 11 Ask at the 7-11 store about an acre </li></ul><ul><li>Mile is 5 , 280 feet </li></ul><ul><li>Oak Mountain is 5 miles down Highway 280 </li></ul>
  60. 60. <ul><li>Day 2 </li></ul><ul><li>Page 73 -- Property Management </li></ul><ul><li>Property Manager (General Agent) </li></ul><ul><ul><li>Works FOR owner – fiduciary (agency) of owner </li></ul></ul><ul><li>Objectives </li></ul><ul><ul><li>Make money (return on investment) </li></ul></ul><ul><ul><li>Maintain property </li></ul></ul><ul><li>Property Manager supervises </li></ul><ul><ul><li>Resident Manager </li></ul></ul><ul><ul><li>Maintenance Manager </li></ul></ul>
  61. 61. <ul><li>Property Owner Must </li></ul><ul><ul><li>Provide Habitable Premises </li></ul></ul><ul><ul><li>Provide Quite Enjoyment </li></ul></ul><ul><li>Eviction </li></ul><ul><ul><li>Actual Eviction – </li></ul></ul><ul><ul><ul><li>not paying rent </li></ul></ul></ul><ul><ul><li>Constructive eviction - </li></ul></ul><ul><ul><ul><li>Landlord doesn't provide habitable premise </li></ul></ul></ul><ul><ul><ul><ul><li>Not providing heat when needed </li></ul></ul></ul></ul>
  62. 62. <ul><li>Personal Property - personalty </li></ul><ul><ul><li>Not attached to real estate </li></ul></ul><ul><ul><li>Ceiling fan in box </li></ul></ul><ul><ul><ul><li>Can move it around </li></ul></ul></ul><ul><ul><ul><li>May become Real Property – appurtenant as a fixture </li></ul></ul></ul><ul><li>Real Property </li></ul><ul><ul><li>Attached to property </li></ul></ul><ul><ul><li>Ceiling fan attached to ceiling </li></ul></ul><ul><li>Buy seed at Lowes – personal property </li></ul><ul><li>Plant seed & it becomes a tree – real property – appurtenant </li></ul><ul><ul><ul><li>Fructus naturales (no annual cultivation) – tree </li></ul></ul></ul><ul><ul><ul><li>Fructus industriales (emblements) - crops </li></ul></ul></ul><ul><li>Cut tree (severance) – now personal property </li></ul><ul><li>Processed into lumber – personal property - sold at Lowes </li></ul><ul><li>Used to build house – becomes real property upon attachment </li></ul>
  63. 63. <ul><li>Trade Fixtures </li></ul><ul><ul><li>Equipment to operate a business </li></ul></ul><ul><ul><ul><li>Big refrigerator, Stainless Steel sinks </li></ul></ul></ul><ul><ul><ul><li>Attached, but not considered Real Property </li></ul></ul></ul><ul><ul><li>Must be removed before lease expires </li></ul></ul><ul><ul><ul><li>Damage must be repaired </li></ul></ul></ul><ul><ul><ul><li>If not removed, becomes property of owner </li></ul></ul></ul>
  64. 64. <ul><li>Leases </li></ul><ul><li>Estate for years or Tenancy for years </li></ul><ul><ul><li>It begins and it ends </li></ul></ul><ul><ul><ul><li>Period of time doesn’t matter </li></ul></ul></ul><ul><ul><ul><li>30 minutes or 30 days or 30 years </li></ul></ul></ul><ul><li>Period ic Tenancy </li></ul><ul><ul><li>Period to Period – no ending date – </li></ul></ul><ul><ul><ul><li>Month to Month, Year to Year </li></ul></ul></ul><ul><ul><ul><li>Requires 1 period notice to terminate </li></ul></ul></ul><ul><li>Estate at will </li></ul><ul><ul><li>Understanding to stay for a while (At will) </li></ul></ul><ul><ul><ul><li>Verbal agreement – likely family or friend </li></ul></ul></ul><ul><li>Estate at Sufferance </li></ul><ul><ul><li>Holdover Tenancy </li></ul></ul><ul><ul><li>Tenant remains after lease expires </li></ul></ul><ul><ul><li>If landlord accepts next months rent it becomes: </li></ul></ul><ul><ul><ul><li>Periodic Tenancy </li></ul></ul></ul>
  65. 65. <ul><li>Lease can be either Gross or Net </li></ul><ul><li>Net lease charges tenant for following in addition to rent: </li></ul><ul><ul><li>T axes, I nsurance, M aintenance - TIM </li></ul></ul><ul><li>Gross lease includes TIM in payment </li></ul><ul><li>Percentage lease also charges a percentage of sales </li></ul><ul><ul><li>Includes a fixed rate, plus </li></ul></ul><ul><ul><li>A percentage of tenants sales over a set amount </li></ul></ul><ul><li>CAM - Common Area Maintenance </li></ul><ul><ul><li>Some net commercial leases may have CAM charge </li></ul></ul>
  66. 66. <ul><li>Percentage Lease on 10,000 square foot store </li></ul><ul><li>Base rent of $20 per Square Foot, plus </li></ul><ul><li>5% on store sales over $1,000,000 </li></ul><ul><ul><li>What if Store sales are $1,500,000 </li></ul></ul><ul><li>Base Rent per year is 10,000 X $20 = $200,000 </li></ul><ul><li>Plus 5% on sales over $1,000,000 </li></ul><ul><li>$1,500,000 -$1,000,000 = $500,000 X 5% = $25,000 </li></ul><ul><li>Rent = Base $200,000 + $25,000 = $225,000 </li></ul><ul><li>Monthly Rent $225,000 / 12 = $18,750 </li></ul>
  67. 67. <ul><li>Commercial rental space is graded: </li></ul><ul><li>A – New building in great location </li></ul><ul><li>B - Older building in great location that has been rehabbed </li></ul><ul><li>C - Older building , may not be in great location or condition </li></ul><ul><li>D - Run down building </li></ul><ul><li>Rent is charged per square foot per year </li></ul><ul><li>Class A space may be $20 per square foot </li></ul><ul><li>1500 sf. X $20 X 12 months = $30,000 per year </li></ul><ul><ul><li>Monthly rent would be $2,500 </li></ul></ul>
  68. 68. <ul><li>Statute of Frauds </li></ul><ul><ul><li>Contracts involving real estate must be in writing </li></ul></ul><ul><ul><ul><li>To be enforceable </li></ul></ul></ul><ul><ul><li>Except a lease less than one year, may be oral (parol) </li></ul></ul><ul><li>20 years or more must be recorded in first year to be enforceable </li></ul><ul><li>Maximum lease is 99 years </li></ul><ul><li>Escalation Lease will be go up over time to cover increased cost </li></ul><ul><ul><li>Tied to an index (Consumer Price Index) </li></ul></ul><ul><li>Statute of Limitation </li></ul><ul><ul><li>Time limit to bring action </li></ul></ul>
  69. 69. <ul><li>Accounting reports </li></ul><ul><ul><li>Balance Sheet </li></ul></ul><ul><ul><ul><li>List Assets & Liabilities </li></ul></ul></ul><ul><ul><li>Profit & Loss </li></ul></ul><ul><ul><ul><li>List net profit after expenses </li></ul></ul></ul>
  70. 70. <ul><li>Sub- lease </li></ul><ul><ul><li>Assignment of </li></ul></ul><ul><ul><ul><li>privilege of use </li></ul></ul></ul><ul><ul><ul><li>Responsibility to pay rent </li></ul></ul></ul><ul><ul><li>Original tenant has a sandwich lease </li></ul></ul><ul><li>Novation </li></ul><ul><ul><ul><li>Replaces agreement with another </li></ul></ul></ul>
  71. 71. <ul><li>Environmental Hazards </li></ul><ul><li>Lead Paint (Written disclosure required- LPD) </li></ul><ul><ul><li>Must also give pamphlet about danger to family </li></ul></ul><ul><ul><li>No lead paint used in residential built after 1978 </li></ul></ul><ul><li>PCB – hazardous chemical in electrical transformers </li></ul><ul><li>Radon – Decomposing soil builds up gas under home </li></ul><ul><ul><ul><ul><li>Colorless, Odorless, Gas Collects in home and may cause cancer </li></ul></ul></ul></ul><ul><li>Carbon Monoxide- </li></ul><ul><ul><li>Gas from using natural gas heat that may build up and kill you </li></ul></ul><ul><li>Asbestos – Cancer causing insulation </li></ul><ul><ul><li>Encapsulate – Seal it and leave it alone </li></ul></ul>
  72. 72. <ul><li>Contract – </li></ul><ul><li>Execute- to sign a contract </li></ul><ul><li>Executed Contract is fulfilled – closed </li></ul><ul><li>Offer & Acceptance </li></ul><ul><ul><li>Agreement to do or not do something </li></ul></ul><ul><ul><ul><li>Seller promises to deliver good title </li></ul></ul></ul><ul><ul><ul><li>Buyer promises to pay money </li></ul></ul></ul>
  73. 73. <ul><li>Option </li></ul><ul><li>Unilateral contract - One promise </li></ul><ul><ul><li>Right to buy a property for a period </li></ul></ul><ul><ul><li>Optionor – person giving promise to sell </li></ul></ul><ul><ul><li>Optioner – person may buy or not </li></ul></ul><ul><ul><ul><li>Gives money for right to buy </li></ul></ul></ul><ul><li>Lease Purchase is 2 agreements: </li></ul><ul><ul><li>Lease </li></ul></ul><ul><ul><li>Option </li></ul></ul><ul><ul><ul><li>May buy at end of lease or not </li></ul></ul></ul>
  74. 74. <ul><li>Unilateral Contract </li></ul><ul><ul><li>One person has made promise </li></ul></ul><ul><ul><li>Listing Agreement </li></ul></ul><ul><li>Bi- lateral </li></ul><ul><ul><li>Two parties have agreed to contract </li></ul></ul><ul><ul><li>Sales Contract </li></ul></ul>
  75. 76. <ul><li>Legal remedies </li></ul><ul><li>Breach of Contract </li></ul><ul><ul><li>One party to contract does not perform </li></ul></ul><ul><ul><ul><li>Aggrieved party </li></ul></ul></ul><ul><ul><ul><ul><li>Suit for damages </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Specific performance </li></ul></ul></ul></ul><ul><li>Contract date to close is a target date </li></ul><ul><ul><li>May be circumstances that prevent closing </li></ul></ul><ul><li>“ Time is of the essence” means: </li></ul><ul><ul><li>All times MUST be adhered to, or breach occurs </li></ul></ul><ul><li>One may lose rights through “latches” (sleeping on rights) </li></ul><ul><ul><ul><li>Inspection date missed – one week </li></ul></ul></ul>
  76. 77. <ul><li>Earnest Money is not required for a valid contract </li></ul><ul><ul><li>If earnest money is included </li></ul></ul><ul><ul><ul><li>Seller may accept earnest money as liquidated damages </li></ul></ul></ul><ul><ul><ul><ul><li>If contract breached by purchaser </li></ul></ul></ul></ul><ul><ul><li>Money must be held in Escrow Account in </li></ul></ul><ul><ul><ul><li>An FDIC insured bank in Alabama </li></ul></ul></ul><ul><li>Must be turned in to broker immediately </li></ul><ul><li>Must be deposited in escrow account </li></ul><ul><ul><ul><li>When offer becomes contract </li></ul></ul></ul><ul><ul><ul><ul><li>Offer (unilateral) becomes contract (bilateral) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Unless contract states differently </li></ul></ul></ul></ul><ul><li>Money belongs to contract </li></ul><ul><ul><ul><li>Creates equitable interest in property for purchaser </li></ul></ul></ul><ul><li>Postdated check must be approved by seller </li></ul>
  77. 78. <ul><li>Offer </li></ul><ul><ul><li>May be accepted by seller </li></ul></ul><ul><ul><ul><li>Becomes a bi-lateral ( 2 sided) contract </li></ul></ul></ul><ul><ul><li>May be rejected </li></ul></ul><ul><ul><ul><li>Offer dies </li></ul></ul></ul><ul><ul><li>May be countered </li></ul></ul><ul><ul><ul><li>If seller makes a mark other than signature </li></ul></ul></ul><ul><ul><ul><li>This creates a new unilateral contract (counter-offer) </li></ul></ul></ul><ul><ul><ul><li>Sometimes one party may put a time limit (by Friday @5) </li></ul></ul></ul>
  78. 79. <ul><li>Bundle of Rights (Sticks in a bundle) </li></ul><ul><ul><li>UPEED </li></ul></ul><ul><ul><li>U se </li></ul></ul><ul><ul><li>P ossession </li></ul></ul><ul><ul><li>E ncumber </li></ul></ul><ul><ul><li>E xclude others </li></ul></ul><ul><ul><li>D isposition </li></ul></ul><ul><ul><li>Subject to Government rights (PETE) </li></ul></ul>
  79. 80. <ul><li>Zoning (Primary Purpose is to protect the health, safety and welfare of the public) </li></ul><ul><li>RCA IS Zoning Districts </li></ul><ul><li>R esidential </li></ul><ul><li>C ommercial </li></ul><ul><li>A gricultural </li></ul><ul><li>I ndustrial </li></ul><ul><li>S pecial Purpose ( Hospital, Library, Church) </li></ul>
  80. 81. <ul><li>Non Conforming Use (Zoning) </li></ul><ul><ul><li>Use that does not conform to surrounding properties </li></ul></ul><ul><ul><ul><li>Day care center in residential zoning </li></ul></ul></ul><ul><ul><li>Grandfather Clause </li></ul></ul><ul><ul><ul><li>Use that may continue when surrounding zoning changes </li></ul></ul></ul><ul><ul><ul><li>Home on highway where commercial has expanded </li></ul></ul></ul><ul><ul><li>Variance </li></ul></ul><ul><ul><ul><li>A property owner needs to build on a lot that is too small </li></ul></ul></ul><ul><li>Building Codes are not Zoning </li></ul><ul><ul><li>Set minimum standards for material & workmanship </li></ul></ul><ul><ul><ul><li>Health & Safety - GFI plugs, ect. </li></ul></ul></ul>
  81. 82. <ul><li>Ordinary Income </li></ul><ul><ul><li>Money for working </li></ul></ul><ul><li>Capital Gains </li></ul><ul><ul><li>Profit on gains from the sale of property or stocks </li></ul></ul><ul><ul><ul><li>Short term – owned less than a year </li></ul></ul></ul><ul><ul><ul><li>Long term – owned more than a year </li></ul></ul></ul><ul><ul><ul><ul><li>Lower tax rates </li></ul></ul></ul></ul>
  82. 83. <ul><li>Income Deductions </li></ul><ul><ul><li>Depreciation </li></ul></ul><ul><ul><ul><li>Accounting Deduction per year of % of improvement </li></ul></ul></ul><ul><ul><ul><ul><li>Land does not depreciate </li></ul></ul></ul></ul><ul><ul><ul><li>Actual Depreciation – paint, roof </li></ul></ul></ul><ul><li>1031 Tax Exchange – will be handled by intermediary </li></ul><ul><ul><li>Tax code that allows the exchange of like property </li></ul></ul><ul><ul><ul><li>Income property for income property </li></ul></ul></ul><ul><ul><li>May not be even exchange </li></ul></ul><ul><ul><ul><li>One party may pay boot </li></ul></ul></ul><ul><ul><ul><ul><li>Money in addition to property – this money is taxed </li></ul></ul></ul></ul>
  83. 84. <ul><li>Securities (regulated by SEC) </li></ul><ul><ul><li>Stocks – ownership position in company </li></ul></ul><ul><li>REIT – Real Estate Investment Trust </li></ul><ul><ul><li>Colonial Properties is a REIT </li></ul></ul><ul><ul><li>Get benefit of investment without management </li></ul></ul><ul><ul><ul><li>No say in management </li></ul></ul></ul><ul><ul><li>Securities sales requires a securities license </li></ul></ul><ul><ul><ul><li>Not a real estate sales license </li></ul></ul></ul>
  84. 85. <ul><li>Int er state commerce (regulated by SEC) </li></ul><ul><ul><li>Regulated by federal government </li></ul></ul><ul><li>Int ra state commerce ( Alabama Blue Sky Law) </li></ul><ul><ul><li>Not regulated by federal government, but Alabama </li></ul></ul>
  85. 86. <ul><li>Testament - Will </li></ul><ul><li>Die leaving a will is Testate </li></ul><ul><li>Die without a will is Intestate </li></ul><ul><ul><li>State Statute of Descent and Distribution </li></ul></ul><ul><ul><li>State law determines how property is distributed </li></ul></ul><ul><li>Die without heirs </li></ul><ul><ul><li>Escheat = State get property ( One of PETE power) </li></ul></ul><ul><li>Will must be written to transfer interest in RE </li></ul>
  86. 87. <ul><li>Devise </li></ul><ul><ul><li>Gift of real property by will </li></ul></ul><ul><li>Bequeath – Bouquet </li></ul><ul><ul><li>Gift of personal property by will </li></ul></ul><ul><li>Legacy </li></ul><ul><ul><li>Gift of money by will </li></ul></ul>
  87. 88. <ul><li>Government Powers </li></ul><ul><li>PETE works for the government </li></ul><ul><li>P olice - Zoning is one police power </li></ul><ul><li>E minent Domain (right), Condemnation (Process) </li></ul><ul><li>T axation </li></ul><ul><li>E scheat - Person dies without heirs or will </li></ul>
  88. 89. <ul><li>Restrictions on use of property </li></ul><ul><li>Private restrictions – CC&R </li></ul><ul><ul><li>Covenants – </li></ul></ul><ul><ul><ul><li>To maintain uniformity – homogeneity </li></ul></ul></ul><ul><ul><ul><li>ARC - Architectural Review Committee must approve </li></ul></ul></ul><ul><ul><ul><li>Mailbox, color of house, trees </li></ul></ul></ul><ul><ul><ul><li>May be forced to conform </li></ul></ul></ul><ul><ul><li>Can not take owners property under covenants </li></ul></ul>
  89. 90. <ul><ul><li>Fee Simple Defeasible (Defeatable) </li></ul></ul><ul><ul><li>Conditions – </li></ul></ul><ul><ul><ul><li>Restricts use of future owner </li></ul></ul></ul><ul><ul><ul><ul><li>Previous owner may have future rights </li></ul></ul></ul></ul><ul><ul><li>Conditions Subsequent </li></ul></ul><ul><ul><ul><li>New owner must not perform some action (sell alcohol) </li></ul></ul></ul><ul><ul><ul><ul><li>Former owner retains “right of reentry” if condition is broken </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Must go through courts </li></ul></ul></ul></ul><ul><ul><li>Fee Simple Determinable - Special Limitations </li></ul></ul><ul><ul><ul><li>Estate ends automatically due to violation of limitation </li></ul></ul></ul><ul><ul><ul><ul><li>“ Possibility of Reverter” </li></ul></ul></ul></ul><ul><ul><ul><ul><li>No court action required </li></ul></ul></ul></ul>
  90. 91. <ul><li>Deeds </li></ul><ul><ul><li>Warranty against title defects </li></ul></ul><ul><li>Could have been issues in past that affect title </li></ul><ul><li>General Warranty Deed or Warranty Deed </li></ul><ul><ul><li>Bumper to Bumper warranty on car </li></ul></ul><ul><ul><li>If there is a issue against title in future it will be fixed </li></ul></ul><ul><li>Special or Statutory Warranty Deed </li></ul><ul><ul><li>Limits to warranty </li></ul></ul><ul><ul><li>Covers issues that may have happened during grantor’s ownership of property </li></ul></ul><ul><li>Quit Claim – no warranty </li></ul><ul><ul><li>As is </li></ul></ul><ul><ul><li>Used to quiet a cloud on title </li></ul></ul>
  91. 92. <ul><li>Title Insurance </li></ul><ul><ul><li>Protects against something in the past </li></ul></ul><ul><ul><ul><li>Different from other insurance that protects against event in future </li></ul></ul></ul><ul><ul><li>One time premium </li></ul></ul><ul><li>Opinion of Title – Attorney does Abstract </li></ul><ul><ul><li>Checks the chain of title – no warranty </li></ul></ul><ul><ul><li>Will not know about unrecorded liens </li></ul></ul><ul><ul><li>Will not know about forgery </li></ul></ul>
  92. 93. <ul><li>Liens </li></ul><ul><li>Voluntary Lien </li></ul><ul><ul><li>Owner ask for it - Mortgage </li></ul></ul><ul><li>Involuntary Lien </li></ul><ul><ul><li>Owner didn’t ask for it – Property tax lien </li></ul></ul><ul><li>Specific </li></ul><ul><ul><li>Lien on a specific piece of property </li></ul></ul><ul><li>General </li></ul><ul><ul><li>Lien on all property, personal and real of a person </li></ul></ul>
  93. 94. <ul><li>RESPA Real Estate Settlement & Procedures Act </li></ul><ul><ul><li>1 to 4 unit family residential property </li></ul></ul><ul><ul><li>Federally related loan </li></ul></ul><ul><ul><li>Must use HUD1 form (24 hours before closing) </li></ul></ul><ul><ul><li>Required Good Faith Estimate (GFE) within 3 days </li></ul></ul><ul><ul><li>No Steering </li></ul></ul><ul><ul><li>No Kickbacks </li></ul></ul><ul><ul><li>Maximum 2 months escrow for taxes and insurance </li></ul></ul><ul><li>Fair Credit Act (truth in lending) Regulation Z </li></ul><ul><ul><li>Disclose the APR ( true annual percentage rate ) </li></ul></ul><ul><ul><li>Truth in Advertising - Trigger words are %, payment </li></ul></ul><ul><ul><li>3 day right of recession on junior mortgages </li></ul></ul>
  94. 95. <ul><li>Debits are bad </li></ul><ul><ul><li>Debt owed </li></ul></ul><ul><ul><li>Takes money away </li></ul></ul><ul><li>Credits are good </li></ul><ul><ul><li>Credit to an account </li></ul></ul>
  95. 96. <ul><li>Important Dates </li></ul><ul><li>Civil Rights Act 1866 </li></ul><ul><ul><li>Prohibits discrimination based on race </li></ul></ul><ul><li>Civil Rights Act 1968 – Expands protected classes </li></ul><ul><li>Fair Housing Act of 1988 </li></ul><ul><ul><li>Protects FR E SH C O RN </li></ul></ul><ul><ul><li>E&O insurance doesn’t cover, Equal Opportunity </li></ul></ul><ul><li>Familial, Race, Sex, Handicap, Color, Religion, National Origin </li></ul><ul><li>Doesn’t protect age </li></ul><ul><li>Handicap includes physical and mental </li></ul><ul><ul><li>Includes AIDS </li></ul></ul><ul><ul><li>Includes recovering addicts </li></ul></ul>
  96. 97. <ul><li>Redlining </li></ul><ul><ul><li>Insurance or Lender draws a red line around an area and refuses to do business there </li></ul></ul><ul><li>Steering </li></ul><ul><ul><li>Pushing people to a certain area </li></ul></ul><ul><ul><ul><li>Catholics to a Catholic neighborhood </li></ul></ul></ul><ul><li>Blockbusting </li></ul><ul><ul><li>Telling people they need to move because a protected class is moving into the area and the property values are going to fall </li></ul></ul>
  97. 98. <ul><li>Can discriminate if: </li></ul><ul><ul><li>Owns a 4 plex or less and lives in one unit </li></ul></ul><ul><ul><li>Owns less than 3 homes </li></ul></ul><ul><ul><li>Churches can discriminate based on religion </li></ul></ul><ul><li>Can not advertise the discrimination </li></ul><ul><li>Race discrimination is never allowed </li></ul><ul><li>Handicap reasonable accommodations must be made </li></ul><ul><ul><li>May require tenant return to original condition </li></ul></ul><ul><li>Exempt </li></ul><ul><ul><li>Churches – Membership may not discriminate </li></ul></ul><ul><ul><li>Housing for older persons </li></ul></ul><ul><ul><ul><li>62 or older </li></ul></ul></ul><ul><ul><ul><li>80% must be over 55 </li></ul></ul></ul>
  98. 99. <ul><li>ADA Americans with Disability Act </li></ul><ul><ul><li>Must make reasonable accommodations </li></ul></ul><ul><ul><ul><li>Assigned Handicap spot near door </li></ul></ul></ul><ul><ul><ul><li>Service animals in a no pet building </li></ul></ul></ul><ul><ul><li>May require premises to be returned to original </li></ul></ul>
  99. 100. <ul><li>Fair Credit Act </li></ul><ul><li>Most of FRESH CORN </li></ul><ul><li>Protects Marital Status instead of Familial </li></ul><ul><li>No Age discrimination </li></ul><ul><li>Includes dependence on public assistance </li></ul>
  100. 101. <ul><li>Independent Contractor </li></ul><ul><ul><li>Employer doesn’t have to </li></ul></ul><ul><ul><ul><li>Pay Social Security Tax </li></ul></ul></ul><ul><ul><li>Employer May not: </li></ul></ul><ul><ul><li>Dictate hours worked </li></ul></ul><ul><ul><li>Dictate how work is to be done </li></ul></ul><ul><li>90% of compensation must come from commissions and not hours worked </li></ul>
  101. 102. <ul><li>Anti-Trust Prohibits (Sherman Act) </li></ul><ul><ul><li>Allocation of markets </li></ul></ul><ul><ul><li>Price Fixing (or even taking about it between competitors) </li></ul></ul><ul><ul><li>Group Boycotting </li></ul></ul><ul><li>Broker may: </li></ul><ul><ul><li>Set commission rate of office </li></ul></ul><ul><ul><li>Set commission splits </li></ul></ul>
  102. 103. <ul><li>Can a seller refuse to accept a full price offer? </li></ul><ul><ul><li>Yes </li></ul></ul><ul><ul><li>But, broker has earned commission </li></ul></ul><ul><ul><ul><li>Delivered a ready, willing, able buyer </li></ul></ul></ul><ul><ul><ul><ul><li>Show License </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Show permission to sell – Listing agreement </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Show to be procuring cause </li></ul></ul></ul></ul>
  103. 104. <ul><li>Progression </li></ul><ul><ul><li>Home price is positively affected by nice new homes around it </li></ul></ul><ul><li>Regression </li></ul><ul><ul><li>Home price is negatively affected by run down homes around it </li></ul></ul>
  104. 105. <ul><li>Federal Reserve Policy controls interest rates </li></ul><ul><ul><li>Selling Bonds Takes cash out of the system </li></ul></ul><ul><ul><ul><li>Causing interest rates to increase due to less supply of money </li></ul></ul></ul><ul><ul><ul><ul><li>Due to Supply and Demand of money </li></ul></ul></ul></ul><ul><ul><li>Buying Bonds Puts cash into the system </li></ul></ul><ul><ul><ul><li>Causing interest rates to drop because there is more money </li></ul></ul></ul><ul><ul><li>Reserve Requirements </li></ul></ul><ul><ul><ul><li>Banks must hold a percentage of cash in reserve </li></ul></ul></ul><ul><ul><ul><li>More reserve requirement means less money in circulation </li></ul></ul></ul><ul><ul><ul><ul><li>More demand for money increases interest rates </li></ul></ul></ul></ul><ul><ul><li>Discount Points – Rates banks charge each other </li></ul></ul><ul><ul><ul><li>Higher rates mean less money to lend – </li></ul></ul></ul><ul><ul><ul><ul><li>Means higher demand and higher interest rates </li></ul></ul></ul></ul>
  105. 106. <ul><li>Any Questions? </li></ul>

×