Agent Prep

Crash Course

-gross rent multiplier = price / rent 
-Deed of trust= trustor, trustee, Beneficiary 
legal title = the right to sell 
Equtible title = the right to use and posses 
Deed= evidence of transfer 
Quit claim Deed = no expressed or implied warranties 
Bargain and sale deed = no warranties transfers owner interest 
Package loan = covers real property and personal property 
Budget loan = covers taxes, insurance + interest and principle reductions 
- PETE = Police power, Eminent Domain, Taxation, Escheat 
Fully Amortized loan = payment fixed for annual terms
Balloon loan = payment fixed for short time + payment due at end (Partially amortized)
 Negative Amortization = partial interest payments, paid in full 
Straight note = payment on interest only 
Term Loan = fixed rate and adjustable rate based on time 
Blanket Loan= used to fund more then 1 piece of real property 
- listings= the broker is hired by the seller to find a willing and able buyer - the listing is an employment contract 
Exclusive agency listing- owner sells you get nothing (has defined termination date) 
Exclusive right to sell- agent get paid no matter what (has defined termination date) 
Open listing- more then one broker, not exclusive to anybody (unilaterial contract) 
Net listing- broker gets paid the net amount
 -safety clause or protection period clause - interm occupancy agreement 
Appraisal - estimate of value 
 Market Data Approach, Cost Approach, Capitalization income Approach (converts income into value) 
GRM- Relationship between the value of the property and the rent (Price divided by Rent) 
Value_STUD Scarcity, Transferability, Utility, Demand 
Fixture test_MARIA Method of attachment, Adatability, Relationship, Intention, Agreement 
Fixture= personal property that becomes real property 
Types of ownership -severlty -concurrent estate 
Joint tenancy= Time,Title,Interest,Possession, Right of suvivorship 
Tenancy in common= possession Buyer Agent Dual Agent/No Breach Confidentiality? Avoid the appearance of impropriety 
Fiduciary Duty Cold-AC Care= Reasonable prudent Real Estate person would act E,O Insurance 
Obedience= Acing in Good Faith all lawful instructions of the principle 
Loyalty=Self Deal best interest and cant buy the property for self without disclosure 
Disclosure= Material facts known material defects in the property, Latent defects? 
Accounting= No commingling funds; No Conversion illegal 
Confidentiality= Survives the relationship. 

what is the difference between 
Licensed residential appraisers= SFR 2-4 units Residential Property $1million if non-complex
 SFR or 2 to 4 units that are complex up to $250K 

Certified General Appraisers= No limit on value or complexity SFR 2 to 4 units residential properties 

Certified General Appraisers= Any type property residential Commercial no limits 

Finance_ Points Definition_ 1 Point= 1% of the loan amount or .01 x loan amount Formulas: 

Points= Fee paid/Loan amount Fee paid= Loan amount x Points Ex. 1. A borrower pays $500 for a $10,000 loan.
 How many points are paid? $500/10,000= .05 = 5 points 2. A borrower pays 5 points on a $10,000 loan.
 What is the fee paid $10,000x .05 = $500 3. A borrower pays $500 as 5 points on a loan.
 What is the loan amount? $500/ .05 = $10,000 Loan-to-Value Ratio (LTV) Formulas: LTV ratio= LOAN/Price(value)
 Loan= LTV ratio x Price (value) Price(value)= Loan/ LTV ratio Examples 1. 
A borrower can get a $265,600 loan on a $332,000 home. What is the LTV ratio LTV Ratio = $265,600/ $332,000= 80% 2.
 A borrower can get an 80% loan on a $332,000 home. What is the loan amount Loan= $332,000 x .80= $265,600 3.
 A bprrpwer obtained an 80% loan for $265,600. What was the price of the home? 
Price (value)= $265,600/.80 = $332,000 Financial Qualification_ 

Income ratio qualification Formula: Monthly Principles & Interest (PI) payment = Income ratio x Monthly gross income
 Example A lender uses a 28% income ratio for the PI payment. A borrower grosses $30,000 per year.
 what monthly PI payment can the borrower afford? Monthly PI payments = ($30,000/12) x .28 = $700
 How much can the borrower borrow if the loan constant is 6.3207? (see also- loan constants)
 Loan amount = ($700/6.3207) x 1,000= $110,747.22 Debt ratio qualification Formulas: 

Debt ratio= Housing expense+ Other debt payment/Monthly gross income 
Housing expenses = (monthly gross income x Debt ratio)- other debt payments 
Examples: A lender uses a 36% debt ratio. A borrower earns $30,000/yearband has monthly non- housing debt payments of $500.
 What housing payment can she afford

 Warranty deeds typically contain 5-6 covenants
 Bundle of Rights = Possession, Control, Exclusion, Enjoyment, Disposition 

Contracts
 Caluses habendum clause= statement that describes the rights and interests being givin 
(almost allways begins with the words to have and to hold)
 Alienation clause= provision in a mortgage or deed of trust states that 
the borrower must paid the mortgage in full before the borrower can transfer the property 
Defeasance clause= required contract provision that insures the title for the property is 
transfered the buyer once the mortgage is fully paid off 
Antitrust Violations -Price fixing -Dividing Territories -Conspiracy to Boycott

after your brake go back to work and drink coffee again.