• Residential Market Analysis and Highest and Best Use
• Residential Site Valuation and Cost Approach
• Residential Sales Comparison & Income Approaches

Topics Covered

• Legal Concepts of Real Estate
• Land Description
• Real Property Rights and Estates in Land
• Contracts
• Conveyance
• Encumbrance
• Foreclosures
• Recording Procedures
• Evidence of Titles

The breakdown is as follows:

• Part I – Introduction to Real Estate Finance
• Part II – Lending Rules
• Part III – How the Loan Process Works
• Part IV – Other Types of Financing
• Part V – Qualifying by the Numbers
• Part VI – Appendix

You will also learn how to calculate loan amounts, affordable monthly payments, property taxes, hazard and mortgage insurances (Conventional and FHA), qualifying ratios and income.

Learning Objectives

• Identify and discuss the Federal and State laws affecting real estate.
• Describe mortgage loan programs and the mortgage markets
• Calculate loan amounts, affordable monthly payments, property taxes, hazard and mortgage insurances (conventional and FHA), qualifying ratios and income
• Explain theoretical aspects of financing including sources of money for mortgages, various types of mortgages based on payment structure and financial agreement, and the different kinds of loans available in the market
• Utilize the basics applications of escrow, title, private mortgage insurance and credit reports
• Verify the required documentation in the mortgage lending practice

Topics Covered

Lesson 1: Real Estate Math for Finance

• Numbers
• Arithmetical Operations
• Solving Equations
• Sums
• Activity: Think of a Number

Lesson 2: The Effect of the Market and the Government on Real Estate

• Supply and Demand inflation
• The Federal Reserve
• Taxes
• The Department of Housing and Urban Development
• Real Estate Investment Trusts
• Activity: Critical Thinking
• Case Study

Lesson 3: Introduction to Real Estate Finance

• Mortgages Amortization
• Discount Points
• Lien Theory and Title Theory
• Assumptions
• Activity: Crossword Puzzle
• Case Study: Monthly Payment

Lesson 4: Financial Qualifications

• Income
• Credit
• Source of Funds
• Debt
• Net Worth
• Activity: Matching
• Case Study: Borrower Qualification

Lesson 5: Property Valuation

• Eight Steps of the Appraisal Process
• Appraisal Methods
• Cap Rate Analysis
• Pro Forma
• Discounted Cash Flow Analysis
• Taxes and Depreciation
• Activity: Critical Thinking
• Case Study: Net Present Value

Lesson 6: The Financing Process

• Mortgage Brokers Loan Officers
• Application
• Title
• Survey
• Earnest Money Contract
• Deed
• Closing
• Activity: Fill in the Blank
• Case Study: Caveat Emptor

Lesson 7: Closing

• Legal Requirements Required Documents
• Prorations
• Closing Costs
• Activity: Closing
• Case Study: Proration

Lesson 8: Foreclosure

• Default
• Foreclosure
• Properties in Distress
• Activity: Matching
• Case Study: Forbearance

Lesson 9: Conventional Loans

• Conforming Loan Limits
• Private Mortgage Insurance
• Fannie Mae Underwriting Guidelines
• Freddie Mac Underwriting Guidelines
• Activity: Underwriting
• Case Study: Conventional Loan

Lesson 10: Variations

• Adjustable Rate Mortgage
• 80-10-10 Piggie Back Loans
• Graduated Payment Mortgages
• Growth Equity Mortgages
• Balloon Mortgages
• Wraparound Mortgages
• Reverse Annuity Mortgages
• Blanket Mortgages
• Open End Mortgages
• Sale-Leaseback Mortgage
• Permanent Buydowns
• Temporary Buydowns
• Activity: Crossword Puzzle
• Case Study: Adjustable Rate Mortgage

Lesson 11: FHA Loans

• Qualifications
• FHA Programs
• Mortgage Insurance Premium
• FHA Underwriting Requirements
• Activity: The Percentage is Right
• Case Study: FHA Loan vs. Conventional Loan with PMI

Lesson 12: VA Loans

• Underwriting Requirements
• Eligibility
• Entitlement
• Documentation
• Activity: Matching
• Case Study: VA Loan

Lesson 13: 1031 Exchanges

• Like Kind Property Capital Gains
• Simultaneous Exchanges
• Delayed Exchanges
• Qualified Intermediaries
• Three-Party Trades
• Reverse Exchanges
• Installment Sales
• Activity: Exchanging Numbers
• Case Study: Delayed Exchange

Lesson 14: Real World Practice

• Activity
• Critical Thinking Questions
• Case Studies

There are five sections or modules to this course and their learning objectives are listed below:

1. Effective Communication

• Explain the difference between “artistic” and “inartistic” information and the order in which they should appear in a well-structured argument.
• Define the three different approaches (ethos, pathos and logos) used to present persuasively artistic information.
• Define “rhetoric” as the act of identifying and utilizing the means of persuasion available in a given situation.
• Use and present effectively inartistic information, or data.
• Present himself or herself as a respectable professional whom people will trust.
• Produce and manage emotions in a negotiation session.
• Utilize logic, emotion and the appearance of ethical character as persuasive tools.
• Identify the common persuasive tools that other people may attempt to utilize.

2. Emotional Intelligence

• Describe the development of emotional intelligence.
• Define emotional intelligence.
• Explain the relationship between cognitive and emotional intelligence.
• Develop his or her emotional intelligence.
• Utilize emotionally intelligent strategies to encourage successful negotiation sessions.
• Maintain a mutually beneficial mindset during negotiation sessions.
• Handle real estate transactions better by acting in an emotionally intelligent manner.

3. General Negotiations

• Explain why conflict is a common event in human life, and be able to describe common responses to conflict.
• Apply his understanding of conflict reactions to make judgments about which response is appropriate in a particular conflict.
• Describe the central role of concessions and commitments in negotiation.
• Discover and evaluate her best alternative to a negotiated agreement.
• Know how to rank his alternatives in terms of preference, and be able to explain how these preferences determine the scope of negotiation.
• Name and apply some basic strategies for evaluating the offers made during negotiation.
• Recognize the basic considerations she must explore to prepare for negotiation.
• Distinguish between the two common styles of negotiation, and make judgments about which style is appropriate for a particular conflict.
• Outline the central strategies of these negotiation methods, as well as the demands each approach places on negotiators.
• Spell out the purpose of high-pressure negotiating tactics, and give examples of both the tactics themselves and strategies for managing the high-pressure negotiator.
• Apply his ethical standard in negotiations, and be able to explain why unethical behavior is a potential problem in negotiation.
• State the common cognitive errors and psychological tendencies that are the primary pitfalls of the negotiation process, and give details about the problems these issues pose for negotiators.

4. Reading People

• Identify whether a person is lying, frustrated, happy, depressed, etc. from body language exhibited.
• Distinguish between the different types of nonverbal communication.
• Recognize behaviors in both familiar and unfamiliar acquaintances from verbal and nonverbal cues, including vocal traits, habits and physical traits.
• Comprehend the motivations that keep people from seeing objectively.
• Apply techniques to improve communication and aid understanding.
• Discern aspects of personality from environmental context, including office, home, social and geographic environments.
• Recognize hidden communications in conversation.

5. Real Estate Negotiations

• Describe the liability concerns facing all real estate salespeople, and outline how these affect the general negotiation process.
• Explain the basic conflicts common to real estate negotiation.
• Recognize general strategies that can help to minimize conflict in any negotiation.
• Explain why alternatives are important in real estate negotiation.
• Identify the problems created by deciding too much too early in the negotiation process, and the difficulties that result from adopting an overly competitive stance.
• Apply a clear method for determining which issues present problems in a given negotiation, and rank them according to the amount of negotiation it will take to resolve them.
• Describe the basic steps of successful communication.
• Outline the basic steps and purpose of active listening.
• Recognize the role that effective use of language plays in successful real estate negotiation.
• Distinguish the needs, wants and desires of the parties involved in a real estate transaction.
• State the way raw needs, wants and desires are translated into the benefits of a particular property.
• Use benefits to build the framework of a mutually acceptable deal.
• Identify and apply several general strategies for dealing with objections.
• Recognize the signs of concealed objections.
• Distinguish and explain general strategies that help a salesperson manage the offer-counter offer process effectively.
• Determine what kind of preparatory strategies are needed before attempting to close a deal.
• Describe three basic closing methods, and identify what features of a deal would make it appropriate to choose one particular method.
• Recognize when and how it is appropriate to use the purchase agreement as a negotiation tool.

There are seven sections or modules to this course and their learning objectives are listed below:

1. How to Build a Successful Business

• Be able to create a mission statement, business plan and marketing plan
• Be able to recognize the significance of market presence
• Be able to build lasting relationships with partners and clients
• Be able to use various marketing techniques in order to promote the services of a real estate brokerage firm
• Know how to develop effective communication skills
• Know how to hire and train employees
• Understand the characteristics of an effective manager
• Understand the risks and requirements of starting a business
• Understand the importance of referrals, prospecting and farming

2. Asset Management

• Be familiar with the basic concepts of asset management
• Be familiar with the common decisions faced by an asset manager
• Be familiar with the financial ratio methods of valuation, including Price to Earnings Ratios and Cap Rates
• Be familiar with distressed properties and how to handle them
• Be able to apply these concepts in the real world
• Be able to calculate the depreciation of residential and commercial real property held for business or investment
• Know the basics of a Discounted Cash Flow (DCF) analysis
• Know the important factors to consider when refinancing
• Know how to conduct a useful market study
• Know how to create a pro forma projection for a real estate investment alternative
• Know how to use the Net Present Value (NPV) and Internal Rate of Return (IRR) to compare the values of several alternatives
• Know what a Real Estate Investment Trust (REIT) is and the benefits of investing in one
• Understand the risks and rewards associated with real estate investment
• Understand how interest rates affect the real estate market

3. Tax-Favorable Real Estate Transactions

• Identify motivated buying and selling clients.
• Outline the attributes of qualified and non-qualified products and how they can benefit to the sales process.
• Describe the restrictive rulings of the 1031 exchange program.
• Explain how money can be accumulated using pre-tax dollars, accumulating interest on a tax-deferred basis and creating litigation protection.
• State charitable strategies for creating income and tax relief for individuals or families owning highly-appreciated real estate.
• Describe charitable gift annuities and the annuity payments, income benefits and tax advantages associated with them.
• State the parameters that the IRS uses to define a valid “like kind” exchange.
• Explain the advantages and disadvantages of various exchanging alternatives.
• Outline the mechanics of a successful tax-deferred exchange and the role of each party in those exchanges.
• Identify common exchange documentation and describe the role of a qualified intermediary.
• Define “boot” and explain how to deal with it.
• Calculate whether a sale is preferable to an exchange.

4. Code of Ethics

• Identify the definition of ethics used in this course.
• Briefly describe the four business ethics approaches used in this course.
• List major categories of the Articles of the NAR® Code of Ethics.
• Describe the structure of the NAR® Code of Ethics and its supporting materials.
• Identify at least two aspirational concepts in the Preamble to the NAR® Code of Ethics, describe the concept of general business ethics and identify how the Code of Ethics compares and contrasts with the concept of general business ethics.
• Describe the concepts of at least two of the following Articles of the Code of Ethics: Articles 1, 2, 3, 9, 11, 12, 16, and 17.
• Identify possible violations of the NAR® Code of Ethics given interactive learning methods such as case studies, quizzes, role playing and group discussion of fact scenarios.
• Briefly describe the professional standards enforcement process of a local board or association.
• Differentiate between intentional fraud, negligent misrepresentation and negligence.
• List the three violations of antitrust laws: price fixing, group boycotts and market allocations.
• Describe how the existence of and adherence to the NAR® Code of Ethics is good for the real estate profession.

5. Fair Housing

• Understand the purpose of the Federal Fair Housing Laws and be able to identify the protected classes covered by the Fair Housing Act.
• Be aware of the seven activities considered illegal as a result of the Fair Housing Laws.
• Know the five exemptions from the Federal Fair Housing Laws for property owners.
• Be able to recognize discrimination in real estate practice.
• Be able to identify acts considered discriminatory under the Fair Housing Act of 1968 as amended in 1972 and 1988.
• Understand the purpose of the Federal Equal Credit Opportunity Act (ECOA) and know the classes it protects.
• Understand the purpose of the Americans with Disabilities Act ADA).
• Know how the ADA affects real estate practice.
• Know how Fair Housing Complaints are handled.
• Know the penalties for non-compliance with Fair Housing Laws
• Know how to incorporate business practices designed to prevent discrimination by real estate professionals.
• Understand the purpose of the HUD/NAR Partnership and why it is important.
• Know the most important principle in following HUD Advertising Guidelines.
• Be able to identify acceptable and unacceptable words and phrases for use in advertisements.
• Have learned how to apply those practices that will assist a REALTOR® in evidencing that he or she does not discriminate.
• Know what the differences are between federal regulations and Texas State regulations on fair housing.

6. Real Estate Appraisal

• Identify and explain the fundamental concepts and terminology used in real estate valuation and appraisal.
• Identify the basic capacities and skills of a qualified appraiser.
• Recognize the valuation principles used in real estate appraisal.
• Apply value theories to arrive at purchase prices of real estate.
• Characterize a favorable market for real estate sales.
• Differentiate the three approaches to value commonly used in appraisal.
• Follow the eight steps to the appraisal process to arrive at an accurate purchase price.
• Analyze and interpret an appraisal report.
• Differentiate between appraisal licensure and certification.

7. Real Estate Finance

• Understand the basic concepts of real estate financing, and the key terms involved
• Know how to qualify a buyer for the most common types of loans
• Be familiar with the use and function of escrow accounts
• Know what a Mortgage Insurance Premium is
• Know the underwriting guidelines and process
• Be familiar with the three most common types of loans: Conventional, FHA and VA
• Know the advantages and disadvantages of conventional loans
• Know how to use conventional qualifying ratios
• Know the advantages and disadvantages of FHA loans
• Know about the differing FHA qualification ratios
• Know the advantages and disadvantages of VA loans
• Be familiar with VA eligibility and qualification periods
• Be able to calculate the amount of VA entitlement used
• Be able to calculate VA loan amounts and required down payments
• Know the process and qualifications for assuming VA and FHA loans
• Be familiar with other types of loans available
• Know how to underwrite and close loans