FINANCING (back to top)

Finance Instruments
Promissory Note
Security Instruments
Priority
Subordination
Foreclosure
Acceleration--Due on Sale
Assuming--Taking Subject to a Mortgage
Prepayment

Types of Mortgages
Fixed Rate Mortgage (FRM)
Biweekly Mortgage
Adjustable Rate Mortgage (ARM)
Advantages of ARMs
Convertible ARMs
Growing Equity Mortgage (GEM)
Graduated Payment Mortgage (GPM)
Graduated Payment Adjustable Rate Mortgage (GPARM)
EQUAL™ Mortgage
Rate Improvement Mortgage (RIM)
Pledged Account Mortgage (PAM)
Flexible Loan Insurance Program (FLIP)
Reverse Mortgage
Zero Percent Mortgage (ZPM)
Shared Equity Mortgage (SEM)
Shared Appreciation Mortgage (SAM)
Unsecured Loan

The Secondary Mortgage Market
The Four Federal Underwriting Agencies
Federal National Mortgage Association (Fannie Mae)
Federal Home Loan Mortgage Corporation (Freddie Mac)
Government National Mortgage Association (Ginnie Mae)
Farm Service Agency (F.S.A.--Formerly Known as Farmer Mac)

Lending Sources
Institutional Lenders
Savings Associations (Formerly Savings and Loan Association
Savings Banks
Mortgage Companies (Mortgage Bankers)
Commercial Banks
Mortgage Brokers
Life Insurance Companies
Pension Funds
Endowment Funds
Credit Unions
"Wall Street" and Other Private Investors

Loan Underwriting
Income
Acceptable Types of Income
Unacceptable Types of Income
Assets Available for Down Payment and Closing
Liabilities
Recurring Obligations
Contingent Liabilities
Net Worth
Qualifying Ratios
Credit History
Major Indications of Derogatory Credit
Property Appraisal
Sales Comparison Approach to Value
Cost-Depreciation Approach to Value
Income Approach to Value
Final Reconciliation
Low Appraisals
Uniform Residential Appraisal Report (URAR)
Automated Underwriting

Conventional Financing
Documentation
Eligible Mortgages
Eligible Borrowers
Eligible Properties
Maximum Loan Amounts
Down Payment
Cash Reserves
Loan-to-Value Ratios (LTV)
Maximum LTVs
Escrow Account
Private Mortgage Insurance (PMI)
Qualifying Ratios
High-Ratio Mortgages
Compensating Factors
Secondary Financing
Refinancing
Financing Programs
Freddie Mac Lease Purchase Option
Fannie Mae Reverse "Home Keeper Mortgage"
Transamerica Homefirst Reverse Mortgages
Community Lending Programs
Community Home Buyer's Program (CHBP)
Community Living Group Homes
Commercial and Investment Properties
Financing Sources
Property Qualification
Construction

FHA Financing
Loan Underwriting
Documentation
Maximum Loan Amounts
Statutory Loan Limits
Maximum Loan-to-Value Ratios (LTVs)
Loan-to-Appraised-Value Limit
Calculating the Maximum Loan
Calculating the Cash Requirement
Items That May Be Added Directly to the Loan Amount
Secondary Financing from Family Members
Closing Costs
Qualifying Ratios
Mortgage Insurance Premiums (MIP)
Up-Front MIP (UFMIP)
Annual Premium
Discount Points
Interest Rates
Maximum Loan Term
Monthly Payments
Prepayment
Refinancing
Open-End Clause
Assumptions
Loans Originated Prior to 12/1/1986
Loans Originated Between 12/1/1986 and 12/15/1989
Restrictions of the HUD Reform Act of 1989
Buyer Protection Clauses
Amendatory Clause
Importance of Home Inspections

FHA Loan Programs
Section 203(b) Fixed Rate One- to Four-Family Dwellings
Section 203(b)(2) FHA Loans to Veterans
Section 203(i) Single-Family Mortgage Insurance for Outlying Areas
Section 203(h) Single-Family Home Mortgage Insurance for Disaster Victims
Section 203(k) Rehabilitation Home Mortgage Insurance
Section 221(d)(2) Mortgage Insurance for Low and Moderate Income Buyers
Section 234(c) Condominiums
Section 251 Adjustable Rate Mortgage (ARM)
Section 255 Home Equity Conversion Mortgage (HECM) (Reverse Mortgages)
Energy Efficient Mortgages
Title I Mobile Homes
FHA Title I Manufactured Homes

VA Financing
Purpose
Types of Loans
Automatic Approval System
Underwriting Guidelines
Documentation
Eligible Veterans
Service Eligibility
Entitlement
Restoration (Substitution) of Entitlement
Remaining (Available or Partial) Entitlement
Maximum Guaranty
Maximum Obtainable VA Loans
Energy Efficient Mortgages
Qualifying Guidelines
Ratio of Total Obligations to Income
Residual Income (Cash Flow) for Family Support
Compensating Factors
Lock-in Agreements
Features And Requirements of VA Loans
Occupancy
Down Payment
Secondary Financing
Interest Rate
Discount Points
Closing Costs
Maximum Term of Loan
Monthly Payments
Escrow Account
Refinancing
Veteran's Liability
Assumption
Joint Loans
Option Agreement
Manufactured-Home Financing
Graduated Payment Mortgage (GPM)
Provisions Applying to VA GPMs
Amortization Plan
Down Payment
Computing the Amount of Down Payment
Credit Underwriting
Buydown Program
Credit Underwriting
Seller Concessions
Seller Financing
Contributions
Buydowns
Permanent Buydown
Temporary Buydown
Fannie Mae Limitations of Buydown Contributions
FHA Limitations of Buydown Contributions
VA Buydown Requirements
Purchase-Money Mortgage
Primary Seller Financing
Secondary Seller Financing
Seller's Risk and Broker's Liability
Market for Purchase-Money Mortgages
Wraparound or All-Inclusive Deed of Trust
When Can a Wraparound Not Be Used?
When Is It Desirable To Use a Wraparound?
Advantages to Seller
Advantages to Buyer
Precautions for Protection of Seller
Precautions for Protection of Buyer
Procedure To Set Up an All-Inclusive Trust Deed
Preparation Is Essential
Lease with Option To Purchase
Advantages of Lease Option to the Optionee
Advantages of Lease Option to the Optionor

Truth-in-Lending Act
Required Items of Disclosure
ARM Disclosure Rules
Right of Rescission
Advertising
Is the Real Estate Broker Subject to the Truth-in-Lending Act?

Real Estate Settlement and Procedures Act (RESPA)
Controlled Business Arrangement
Transfer of Servicing Rights
Disclosure Requirements for Escrow Accounts
Computerized Loan Origination (CLO)
Transfer of Servicing Rights
Disclosure Requirements for Escrow Accounts

Selected Financial Tables
Monthly Payment To Amortize a Loan of $1,000
Amortization Table for $1,000 Loans
Monthly Payment To Amortize a Loan of $1,000
Annual Percentage Rates Table
Bi-Weekly, Weekly & Monthly Payment Schedule
Net & Gross Selling Price Table
Factors To Compute Interest of Loan Payments
Remaining Balance Table
Income Conversion Table
Equity Build-Up Table
Measurements
Determining Square Footage
Metric Measurements & Conversions
Distance, Temperature, Fraction, Area Conversions

HIGH-TECH SELLING (back to top)

Modern Technology
A New Era of Marketing Real Estate
How Successful Agents Use Technology
The Hardware You Need
The Software You Need
Connecting to the Internet
E-mail (Electronic Mail)
Newsgroups
Search Engines
Real Estate Related Web Sites
Real Estate Directories on the Internet
Your Own Web Site

Listing Techniques
Prerequisites for Success
Listing Goals
Time Management
Distinguish Serious Sellers from Maybe Sellers
Distinguish Serious Buyers from Shoppers
Prioritize Your Work
Farming
Two Types of Farms
Considerations in Selecting a Territorial Farm
Establishing the Size of a Farm
Farm Mailing List
Be a Specialist in Your Farm
Rejection-Free Method of Farming
Individual Farming Newsletters
Telephone Consumer Protection Act of 1991 (TCPA)
Telephone Techniques for Farming
For Sale by Owner (FSBO)
Sources for Leads
First Contact with Seller
Qualifying the Seller
Asking Permission To See the House and Meet the FSBO
The First Meeting inside the Home
Expired Listings
Seller Qualification by Telephone
The Appointment
Personal Referrals
Up-to-Date Records
Personal and Telephone Contacts
Mailings, Handouts, Special Promotions
Preparation for Listing Interview
Research
Comparative Market Analysis
Listing Appointment
Listing Kit
Seller's Motivation
Seller's Prior Experience in Selling Real Estate
Inspecting the Home
Reasons for Listing with You and Your Firm
The Right Asking Price
Agency Relationships
Need for Property Inspections and
Disclosures
Closing
Marketing and Servicing the Listing
Channels
Product Knowledge
Servicing the Listing

Selling Techniques
Agency Relationships
Definitions
Real Estate Agency Alternatives
Sources of Buyers
Time Management in Selling
Show Fewer Properties to More Buyers
Qualifying the Buyer
Knowing the Market
Floor Call Techniques
Advance Preparation
Objective
General Telephone Tips
Openers
How to Talk on the Phone with a Prospect
Make an Outline of Topics That Will Stir the Prospect's Interest
What If the Caller Wants the Address?
Showing the Home
Preparation
Planning
On the Way to the Home
Let the Buyers Discover the Home
Tips
Obtaining the Offer
Preparing the Offer and Counteroffer
Need for Property Inspections and Disclosures
Negotiating the Transaction
Preparation for Presentation of the Offer
Tips
Presenting the Offer
Multiple Offers
Transaction Follow-Through

Assistants
When To Hire an Assistant
Tasks for Unlicensed Assistants
Employment Status

Glossary of Technological Terms

RISK MANAGEMENT (back to top)

Managing Risk
Education
Risk Shifting
Errors and Omissions Insurance Coverage
Inspections or Evaluations by Third Party Experts
Risk Anticipation
Seller Disclosure Statements
Seller's Agents' Duty To Inspect for Red Flags
Verbal Representations To Be Confirmed in Writing
Protective Clauses
Risk Control

Misrepresentation and Nondisclosure
Intentional Misrepresentation (Active Fraud)
Intentional Concealment (Constructive Fraud)
Negligent Misrepresentation
Negligent Nondisclosure
Negligent Advice
Frequent Causes of Litigation and How To Avoid Them

Disclosure of Environmental Hazards
The Real Estate Agent's Role
Major Federal Environmental Legislation
Hazardous Substances and Environmental Laws
The Resource Conservation and Recovery Act of 1976 (RCRA)
Environmental Responsibilities under CERCLA/Superfund
Liability for Clean-Up
Limiting a Landowner's Liability
Specific Environmental Hazards
Asbestos
Formaldehyde
Radon
Indoor Air Quality
Lead
Requirements
Waste Disposal Sites
For Example
Underground Storage Tanks (USTs)
Water Quality and Groundwater Contamination
Polychlorinated Biphenyls (PCBs)
Handling Environmental Problems
General Precautionary Measures To Avoid Liability
Drug Property Forfeitures

Agency
Agency Problems in Real Estate
Consequences of Breach of Agency Duties
Risk Reduction Recommendations
A New Class of Broker Legislated in Some States

Subagency versus Buyer Agency
Subagency
Duties of a Seller's Agent to the Seller
Duties of a Seller's Agent to the Buyer
Buyer Agency
Duties of the Buyer's Agent to the Buyer
Duties of the Buyer's Agent to the Seller
The Choice
Client vs. Customer
Buyers Who Should or Must Be Clients
Buyer Representation Agreement
Disclosures to Listing Broker, Seller and Closing (Escrow) Agent
Compensation
Advantages of Buyer Brokerage
Dual Agency
Duties of a Dual Agent to Both Seller and Buyer
Disclosure of Agency Relationship
Written Disclosure with Informed Consent
Timing of Disclosure
Company Agency Policies
Seller Agency Exclusively
Buyer Agency Exclusively
Single Agency Whether Listing or Selling
Dual Agency for In-House Sales

Federal Fair Housing Laws
Conduct Prohibited by the Fair Housing Laws
Refusal To Sell or Rent
Racial Steering
Advertising That Expresses a Preference
Blockbusting
Handicapped Discrimination
Families with Children
Housing for Older Persons
Consequences of Fair Housing Law Violations
Risk Reduction Recommendations
Education and Training
Documentation

The Americans with Disabilities Act (ADA)
Title I &endash; Employment
Examples of Reasonable Accommodations
Pointers for Avoiding Claims of Discrimination under the ADA
Title III &endash; Public Accommodations and Commercial Facilities
Tax Credits
New Buildings
Reducing Risk of ADA Liability
ADA Requirements Fact Sheet
Employment
Public Accommodations
Transportation
State and Local Governments
Telecommunications
Disclaimer

Antitrust Laws
The Sherman Act
Conspiracies To Fix Real Estate Commission
Rates or Commission Splits
Restraint of Trade
Group Boycotts
Tying Agreements
Antitrust Enforcement
The Department of Justice
Private Enforcement
Reducing Risk of Antitrust Liability
Office Policies
What To Do
What Not To Do

Unauthorized Practice of Law

TAX INFORMATION (back to top)

Basis
Capital Improvements Versus Repairs
Classification of Real Estate
R.E. Held for Investment or for Production of Income
R.E. Held for Use in Trade or Business
R.E. Held as a Personal Residence
R.E. Held Primarily for Sale to Customers
Capital Gain
Alternative Minimum Tax
Depreciation--Cost Recovery
Elements of Cost Recovery (Depreciation)
Component Depreciation
Limitation on Interest and Other Deductions
Loss Limitation from Passive Activities
Investment Interest
Investment Tax Credit
Low-Income Housing
Rehabilitation of Nonresidential Buildings

Exchange Agreements
Balancing Equities
Tax-Deferred Exchanges
Internal Revenue Code Section 1031
Boot-Recognized Gain
Transfer of Basis
Multiple Exchanges
Starker Delayed Exchanges
Important Factors
Exchange Analysis
Installment Sales
Realized Gain
Contract Price
Reportable Gain
Computations
Mortgages Assumed in Installment Sales
Disposition and Hypothecation of Installment Sale Contracts
Prepayment of Installment Contract by Buyer
Imputed Interest

Personal Residences
Reduced Capital Gains Tax Rates
Penalty-Free IRA Withdrawals for Down Payments
Residence Interest
Deductible Expenses
Nondeductible Expenses
Partial Occupancy by Owner
Conversion of a Personal Residence to Income-Producing Property
Business Use of a Home
Tax Savings the Homebuyer Should Know About
Tax-Deductible Moving Expenses
Energy Tax Credit
Information Reporting on Real Estate Transactions

CHECKLISTS (back to top)

RESPA Info to Lender with Commitment Request
Checklist of Buyer's Closing Costs
Checklist of Seller's Closing Costs and Credits
Escrow Checklist for Selling Broker
Escrow Checklist for Listing Broker
Data Checklist for Single-Family Dwellings
Condominium Buyer's Checklist
Condominium Documents
Data Checklist for Manufactured (Mobile) Homes
Data Checklist for Apartment Houses
Data Checklist for Office Buildings
Data Checklist for Commercial Properties
Data Checklist for Industrial Properties
Data Checklist for Motels
Data Checklist for Farm Properties
Data Checklist for Undeveloped Land
Surveyors Terminology/Abbreviations
Checklist for Purchase of Development Lots
Data Checklist for Mobile Home Park Sites
Seller's Property Disclosure Statement
1. Title and Access
2. Land
3. Structural Disclosures
4. Roof, Gutters, Downspouts
5. Plumbing System
6. Electrical System
7. Heating, Air-Conditioning, Other Equipment
8. Built-In Appliances
9. Personal Property Included in the Purchase Price
10. Home Protection Program
11.Condominiums
12. Newly Constructed Residences
13. Ownership