Real Estate License Cram Course

Avery Yarbrough & Associates

Real Estate LicenseCram Course Review

Thursday & Friday9 till 4 with an hour for lunch

House Keeping Rules

Cell Phones -OffComputers - OffBreaks each hour -Be back at 10 minutesRestrooms are in break room No smoking at front door go to end of buildingMindful of your classmatesWe have a lot of material to coverHold questions till breaks

WelcomeEveryone, classroom students, online, other schoolsMaterialsGreen BookLaw Booklet & Law TestHandout PacketHandoutsWe need your contact information Fill out at break

Lots of different material to cover in 2 daysAcres to ZoningNeed to know about acres and zoning to pass test 140 questions can miss 42 and still pass100 general & 40 Alabama LawMore than one answer may look rightTest taking anxietyThink long, think wrongAnalytical personalities think too hardDont read anything into questionAny test you dont study for will be hard6 sections 100 Questions & 40 on Alabama law1 Listing Property 31% of general knowledge test2 Selling Property 21%3 Property Management 14%4 Settlement/ Transfer of Ownership 14%5 Financing 10%6 Professional Responsibilities 10%

Law is 28% of total test

We will have lecture then short testDo better with this method65% to &70% pass test on first tryOnly about 60% online pass on first tryAbout 80% of our students pass on first trySecond test try pass rates drop And drops even more on third try, only 20% passTest should be difficultDealing with important subjectsDo it right the first time $71 per testIt is important that you take this seriously

Look at the packet on the rightOutline of class Words Know vocabulary Nerd Words on testObscure words Reliction, Riparian, Reentry, Remainderman, Recording, Range, Reconciliation, Rectangular System, Redlining, RegressionThe way we studied as children is the way to learnRead, Study, TestOur other classesPost License, Broker, CETest taking tips80% of those that fail get between 65 to 69Only 1 point between success and failure

Listen to lectureMake notesSchedule a morning testAnxiety is less in AM no time to worryBrain sharper in AMReview night beforeEat fruit night before brain food - 12 hoursDont study past 9PMGo to sleep early and let your brain restOn the day of test

Get up early and be relaxed , not rushedDont read paper or listen to news Eat a good breakfast No more studying

Get to test site early 15 minutes late and you cant take testAt test site Have photo ID and 1 more with signatureDo practice questions on computerMaintain pace throughout examDont wrestle with a questionRead question twiceRead answers twiceYou will know answer in your brainIf you dont know, then bookmark and move onBookmark math and skip -- work them lastDO NOT GO BACK AND CHANGE AN ANSWERWill usually get it wrongFinance has 10 questionsMost students have trouble with real estate mathWe go over math, but dont teach mathWe will help as much as you needHaving Trouble?Call us for extra help this is what we doNo extra charge for this We want you to do well on the testPower Point Handout is your OutlineTake notes on handoutStudy them laterMore important to listen to lecture

Story about FinanceElementary concept

1934 Mortgage industry began under FDRHorrible economy end of DepressionHousing - the way to make economy grow50% down payment at that time

FHA created 3% down paymentMore likely to defaultWalk away if times get toughInsures lender FHA insures loans Does not loan money or build homesFHA mortgage defaults - FHA paysFHA set maximum loan amountsPeople started buying homesEconomy began to recoverLenders ran out of moneyWhat could they do?

Secondary market created to buy mortgagesPrimary lenders sold pools of mortgagesFanny Mae bought these mortgagesPrimary lenders collected paymentsEscrow for taxes and insuranceService loan for a feeLenders also charged closing cost to make moneyOrigination, Discount, Service feeFanny Mae sold mortgage backed securities to investors

I950s more buyers wanted a piece of the piePrivate Mortgage Insurance PMI5% down payment on larger loansSaving & Loan Banks needed secondary sourceFreddie Mac createdToday they both buy the same loans1960s government realized it was in troubleTurned into private companiesDidnt want risky mortgagesGinnie Mae came about to buy risky loansGovernment owned Guarantees loans

3 Financial Intermediaries Primary LendersInstitutional RetailBankerLoan their own money - Fiduciary Non- Institutional Wholesale BrokerLoan money that is not their ownInsurance companies and pension plansHave lots of money to investAlabama retirement fund

Mortgage BrokersNot their moneyGet it from non - institutional sourceThey know someone who has moneyInsurers FHA , VA, PMISecondary MarketFAMA, FRMAC, GNMALoan productsBlanket Mortgage think of a quilt with patchesDeveloper buys land, puts lien on entire developmentWhen house is built on one parcel and soldPartial release clause releases lien on that parcel (patch)Package Mortgage Real and Personal propertyIncludes Appliances, FurniturePopular at beach (condo and furniture)Farm Equipment

Open end mortgage Like credit card Leave mortgage open to add to in future

Graduated payment mortgage (FHA245)Goes up about 5% each year for 5 yearsNegative AmortizationAdds to principle will owe more than borrowed for years

Reverse Annuity MortgageSenior Citizen gets check for part of equity each monthUpon death, home is sold by family and debt paidAdjustable Rate Mortgage Protects lender from interest rate changesChanges Each year (up or down)PrinciplePlusMargin profit to lender - Fixed during life of loanPlusIndex- measure of change such as Consumer Price IndexCap per year/life 2/6

Amortized Loan Equal payments until note diesAlso called - direct reduction loan - Includes:Principle the amount borrowed Interest - Rate remains constant through life of loanMortgage payment also will include:Escrow for Taxes & InsurancePITI Principle, Interest, Taxes, InsuranceInterest is paid in arrears ( at end of period when )

Straight loan pay (interest only) each year (rare)Loan would renew each year Pay off principle later

Balloon Amortized over 30 years, butBalance is paid off with a big lump payment at 5 years * Most owner financing is Balloon

Acceleration Clause (like accelerator petal on car)Miss 3 payments and lender speeds up loanForeclosure starts and borrower (mortgagor) has:Equitable Right of RedemptionPay off loan before foreclosure saleStatutory Right of RedemptionPay back loan plus cost of sale within one year

Dont ignore lender- work with themThey dont want the house

Short Sale Bank agrees to take less than owed

Defeasance Clause Clause says lender must record satisfaction of mortgageAlienation ClauseClause says mortgage must be paid off at time of sale

Acknowledgement = NotarizeNecessary for recordingRecord in county where property located

ORGivesEEGets

Confusing --- Mortgagor & MortgageeMortgage is a promise backed by security instrument Mortgagor (Borrower) gives promise to payMortgagee (Lender) gets promiseTitle Theory - AlabamaLender has legal titleBorrower has equitable title

Lien TheoryLender has equitable titleBorrower has legal title

Title record shows evidence of ownershipNot a piece of paperMortgages -- local Alabama customNegotiable Instrument will be soldTwo partiesLender and borrowerTrust Deed Three partiesTrustor LenderTrustee Holds titleBeneficiary -- Borrower

Usury Law Limits the amount of interest chargedPriority of liens first to record, first to collectConstructive notice (recorded)Actual notice (actual knowledge)

Primary gets first money from foreclosureSecondary may not get any moneySubordinate or junior Prefix sub- means beneath

Alabama is a deficiency stateLender will get judgment claim against borrower

Property taxes always have first priorityTitleChain of ownership on propertyMarketable Title 40 years no challenges Seller makes promise to deliver marketable title

Cloud on TitleBreak in chain of titleForgery Title Insurance insures chain against defectsWill have exclusions not covered easementsALTA unrecorded liens materialman Points - 1 point is 1 % of loanOrigination Bank commission for selling loanDiscount - % of upfront $ paid to reduce rate on loanBuilder buy down for a couple of yearsPermanent buy-down for length of loan1 point increases yield to bank about 1/8%

Assumptions of Mortgage Rules vary by loan typeAssume Seller still responsible for debtSubject to Seller not responsible for debtNovation new note

Owner FinancePurchase Money Mortgage 2nd MortgagePurchaser has title

Owner FinanceSeller keeps legal title until paid offBond for titleLand sale contractContract of deedInstallment Contract

FHA insures (% upfront + % each month)Ends when principle < 80% of original appraisal VA guarantees (government)CRV Certificate of reasonable valueSame as appraisalVeteran must qualify & property must qualifyCan substitute anothers guaranteeConventional PMI (private mortgage insurance)On amount more than 80% of appraisal value

Sale- Lease BackOwner needs money to expand operationsWill sell building to investor and lease back

Owner FinanceVendor - Seller (retains title)Vendee Purchaser (gets equitable title)Test on page 146About an hourYou must be comfortable with the way test is wordedIn front of green book are pages with confusing wordsExcept, Not, Least, Best, Difference, Most Likely, ect.

Put exam answers on separate pageLater highlight correct answers to use as review

Alabama License Law40 of the 140 -- 29% of testKnow the violations! Page 16 18AREC can suspend or revoke licenseFines $100 to $2500 Straight forward information memorizeConcepts of common lawKnow fees RECAD Real Estate Consumer Agency Disclosure4 ways to have relationship with consumerWritten disclosure to consumer to alleviate distrustSingle Agent -- Agency with one party work For - AdviseLimited Consensual Dual Agent -- Agency for both Seller & BuyerTransaction Broker -- Non Agency work With - AssistSub-Agent -- Pre-RECAD way things workedAll agents worked for the seller

All relationships start as Transaction BrokerUntil:A written agreement is signed with consumer RECADMust be presented at first contact with consumer, before any confidential information is disclosed to another

Must be signed by agent and kept in file for 3 yearsConsumer not required to signKeep all real estate contracts, listings, ect. for 3 YearsConsumers are either:

Customer NON-client / NON-AgentNo adviceWorking With Transaction Broker

Client - Agency RelationshipGive AdviceWorking ForFiduciaryAgency Duties - Fiduciary Drive clients in OLD CAR

Obedience - Obey lawful commandsLoyalty - Put clients interest above your ownDisclosure Everything you know about transaction

Confidentiality - Keep confidential information confidentialAccounting Account for all fundsReasonable Care Use reasonable careCustomers Non Agency No fiduciary Must answer their HARD?

HonestyAccountableReasonable CareDisclosure? Questions must be answered truthfully Law TestGo over even # questionsAnswer on separate paper then later:Highlight correct answers to use as study guide

Lunch 1 Hour Please be back on timeNearby RestaurantsMexican at end of this buildingGreen Valley Drug Store On down hill from hereSubway - In parking lot across from OutbackSalvador's - Next to SubwayGolden Rule - Across Highway form SalvadorsMcAlisters - On Hwy on right mile to the leftMcDonalds - Just past McAlistersBurger King Just before McAlistersChinese - Shopping center across from McAlisters Krystal Across from Burger King

Review Alabama Law Test

Know the violations!44EasementsRight of one person to use the property of anotherNecessity was necessary to get to propertyAppurtenant legally attached runs with the land - deededCommercial easements in gross Utility easements look grossPrescription used for a length of time 20 yearsAdverse PossessionServient tenement Serves another propertyDominant tenement Property that benefits from easementIngress & Egress from landlocked propertyPersonal easement terminates upon death of either partyEncroachment Illegal extension on anothers property

Life Estate use for the life of a personReversion goes back to original grantorRemainderman goes to another at terminationIn either caseCan not waste propertyCan do anything else in bundle of rights UPEEDAll rights under life estate are limited by someones lifePur Autre Vie Based on the life of another

Deed To transfer titleMust have:In writingIdentify parties and propertyConveyance languageConsideration something for somethingAmount not necessary to stateGrantors signatureGrantee (buyer) signature not neededMust be delivered during grantors lifetimeCondominium Fee simple (absolutely best ownership all rights)Own interior of unit fee simpleOwn common area as tenants in common Swimming in the condo pool with the common peopleDeveloper must record condominium declarationIncludes:Legal DescriptionBylawsCovenants & Restrictions and bylawsSurvey

Co-operativeApartment converted to ownershipBuilding owned as a corporation Own stock in corporationMay get loan to buy this stock, secured by leaseProprietary lease on apartment

Co- ownershipJoint Tenancy (Husband and wife joined together at the arm PITT)Usually familyRight of survivorship At death interest goes to other partyPITT Possession, Interest, Time, TitleIf ownership changes, PITT doesnt change new owner is a tenant in common

Tenants in Common (In the condo pool with the common people)Usually investmentInterest % may be differentIf ownership changes nothing else changesAt death of owner, their ownership goes to heirsCommunity property - Not in AlabamaTenancy by the entirety Not in Alabama

Separate property bought before marriage stays separateProperty may be bought separately during marriageProperty inherited stays separateObsolescence Economic town is dyingNot curableFunctional - 6 bedroom, 1 bath (or an outhouse)Curable can be fixed economically In-Curable cost more to fix than is worth

Methods for determining value Appraiser is a CSI investigatorCost What it cost to build Special purpose - churchSales Comparison what have other similar homes sold forIncome Income producing propertiesCapitalization rate = Net Income / Price

Real Estate Agents perform:Comparative Market Analysis (using Sales Comparisons)May not call it an appraisal

AppraisalsCIA doesnt want CBS watching themComparable Inferior AddComparable Better Subtract

Never adjust subject value, only comparableThe comparable next door has an extra bedroom worth $10,000Adjust its sold price down to get the market value for your subject

Cost approach New construction, special purposeWhite House - cost approach (2008) $130,000,000Cost = Total of Materials + Land + Labor + ProfitReproduction Cost = exact duplicate Your DNAReplacement Cost = similar Adopt

Capitalization Rate Rate investment will return GIVEN Gross Income Vacancy Expenses = Net IncomeRemember to change all #s to annual

Certificate of Occupancy All inspections have passed ready to move inLegal Descriptions 3 methodsDefinition - A surveyor can find boundary of propertyMetes & Bounds - Plymouth Rock 1st monumentMeters & DirectionsPOB Point Of Beginning and around to starting pointRectangular Survey government (Squares)Townships - 6 miles X 6 milesSections 1 mile square - 36 sections in a townshipPlat Lot & Block - Recorded survey (subdivision)Must include, lot #, subdivision name, county & state

Township tier starts at Tennessee line (Base Line)6 miles south of Tennessee line is another lineRunning north and south every 6 miles are range linesIntersections of township & range lines are calledTownships these are 6 miles square Townships are numbered by where they are:First tier south of the Tennessee line is T1S T1S = Township 1 SouthThe north and south lines, Called Range Lines start in Huntsville, soThe first one west of Huntsville is R1WR1W = Range 1 WestSection is 640 Acres section has 160 acres of of has 10 acres

Acre 43,560 square feet -- 208.71 X 208.71 7 11 Ask at the 7-11 store about an acreMile is 5,280 feet Oak Mountain is 5 miles down Highway 280Day 2 Page 73 -- Property ManagementProperty Manager (General Agent)Works FOR owner fiduciary (agency) of ownerObjectivesMake money (return on investment)Maintain propertyProperty Manager supervises Resident ManagerMaintenance Manager

Property Owner MustProvide Habitable PremisesProvide Quite Enjoyment

EvictionActual Eviction not paying rentConstructive eviction -Landlord doesn't provide habitable premiseNot providing heat when neededPersonal Property - personaltyNot attached to real estateCeiling fan in box Can move it aroundMay become Real Property appurtenant as a fixture Real PropertyAttached to propertyCeiling fan attached to ceiling

Buy seed at Lowes personal propertyPlant seed & it becomes a tree real property appurtenant Fructus naturales (no annual cultivation) treeFructus industriales (emblements) - cropsCut tree (severance) now personal propertyProcessed into lumber personal property - sold at LowesUsed to build house becomes real property upon attachmentTrade FixturesEquipment to operate a businessBig refrigerator, Stainless Steel sinksAttached, but not considered Real Property

Must be removed before lease expiresDamage must be repairedIf not removed, becomes property of ownerLeasesEstate for years or Tenancy for yearsIt begins and it endsPeriod of time doesnt matter30 minutes or 30 days or 30 yearsPeriodic Tenancy Period to Period no ending date Month to Month, Year to YearRequires 1 period notice to terminateEstate at willUnderstanding to stay for a while (At will)Verbal agreement likely family or friendEstate at SufferanceHoldover TenancyTenant remains after lease expiresIf landlord accepts next months rent it becomes:Periodic TenancyLease can be either Gross or NetNet lease charges tenant for following in addition to rent:Taxes, Insurance, Maintenance - TIMGross lease includes TIM in paymentPercentage lease also charges a percentage of salesIncludes a fixed rate, plusA percentage of tenants sales over a set amountCAM - Common Area MaintenanceSome net commercial leases may have CAM charge

Percentage Lease on 10,000 square foot storeBase rent of $20 per Square Foot, plus5% on store sales over $1,000,000What if Store sales are $1,500,000

Base Rent per year is 10,000 X $20 = $200,000Plus 5% on sales over $1,000,000$1,500,000 -$1,000,000 = $500,000 X 5% = $25,000

Rent = Base $200,000 + $25,000 = $225,000Monthly Rent $225,000 / 12 = $18,750Commercial rental space is graded:A New building in great locationB - Older building in great location that has been rehabbedC - Older building, may not be in great location or conditionD - Run down building

Rent is charged per square foot per yearClass A space may be $20 per square foot1500 sf. X $20 X 12 months = $30,000 per yearMonthly rent would be $2,500Statute of FraudsContracts involving real estate must be in writing To be enforceableExcept a lease less than one year, may be oral (parol)20 years or more must be recorded in first year to be enforceableMaximum lease is 99 yearsEscalation Lease will be go up over time to cover increased costTied to an index (Consumer Price Index)Statute of Limitation Time limit to bring actionAccounting reportsBalance SheetList Assets & LiabilitiesProfit & LossList net profit after expenses

Sub- leaseAssignment of privilege of useResponsibility to pay rentOriginal tenant has a sandwich lease

NovationReplaces agreement with another

Environmental Hazards Lead Paint (Written disclosure required- LPD)Must also give pamphlet about danger to family No lead paint used in residential built after 1978PCB hazardous chemical in electrical transformersRadon Decomposing soil builds up gas under homeColorless, Odorless, Gas Collects in home and may cause cancer Carbon Monoxide- Gas from using natural gas heat that may build up and kill youAsbestos Cancer causing insulationEncapsulate Seal it and leave it alone

Contract Execute- to sign a contractExecuted Contract is fulfilled closed

Offer & AcceptanceAgreement to do or not do somethingSeller promises to deliver good titleBuyer promises to pay money

OptionUnilateral contract - One promiseRight to buy a property for a periodOptionor person giving promise to sellOptioner person may buy or notGives money for right to buy

Lease Purchase is 2 agreements:Lease OptionMay buy at end of lease or notUnilateral ContractOne person has made promiseListing Agreement

Bi- lateralTwo parties have agreed to contractSales ContractContract - Must Have: COLAConsideration Something for SomethingValuable Money or equivalentGood Love & affection Family situationOffer & Acceptance Mutual, genuine assent Not under duressLegalAgePurposeCapacityPower of AttorneyAgreement set of promisesLegal remediesBreach of ContractOne party to contract does not perform Aggrieved partySuit for damagesSpecific performance

Contract date to close is a target dateMay be circumstances that prevent closing

Time is of the essence means:All times MUST be adhered to, or breach occurs

One may lose rights through latches (sleeping on rights)Inspection date missed one week

Earnest Money is not required for a valid contractIf earnest money is includedSeller may accept earnest money as liquidated damagesIf contract breached by purchaserMoney must be held in Escrow Account in An FDIC insured bank in AlabamaMust be turned in to broker immediatelyMust be deposited in escrow account When offer becomes contract Offer (unilateral) becomes contract (bilateral)Unless contract states differentlyMoney belongs to contractCreates equitable interest in property for purchaser

Postdated check must be approved by sellerOfferMay be accepted by sellerBecomes a bi-lateral ( 2 sided) contractMay be rejectedOffer dies May be countered If seller makes a mark other than signatureThis creates a new unilateral contract (counter-offer)Sometimes one party may put a time limit (by Friday @5)Bundle of Rights (Sticks in a bundle)UPEED

UsePossessionEncumberExclude othersDisposition

Subject to Government rights (PETE)

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

RCA IS Zoning Districts

ResidentialCommercialAgricultural Industrial Special Purpose ( Hospital, Library, Church)

Non Conforming Use (Zoning)Use that does not conform to surrounding propertiesDay care center in residential zoningGrandfather ClauseUse that may continue when surrounding zoning changesHome on highway where commercial has expandedVarianceA property owner needs to build on a lot that is too small

Building Codes are not ZoningSet minimum standards for material & workmanshipHealth & Safety - GFI plugs, ect.Ordinary IncomeMoney for working

Capital GainsProfit on gains from the sale of property or stocksShort term owned less than a yearLong term owned more than a yearLower tax rates

Income DeductionsDepreciation Accounting Deduction per year of % of improvementLand does not depreciateActual Depreciation paint, roof1031 Tax Exchange will be handled by intermediary Tax code that allows the exchange of like propertyIncome property for income propertyMay not be even exchangeOne party may pay boot Money in addition to property this money is taxedSecurities (regulated by SEC)Stocks ownership position in company

REIT Real Estate Investment TrustColonial Properties is a REITGet benefit of investment without managementNo say in management Securities sales requires a securities licenseNot a real estate sales licenseInterstate commerce (regulated by SEC)Regulated by federal governmentIntrastate commerce ( Alabama Blue Sky Law)Not regulated by federal government, but AlabamaTestament - WillDie leaving a will is TestateDie without a will is IntestateState Statute of Descent and DistributionState law determines how property is distributedDie without heirsEscheat = State get property ( One of PETE power)Will must be written to transfer interest in RE

DeviseGift of real property by willBequeath Bouquet Gift of personal property by willLegacy Gift of money by will

Government Powers

PETE works for the government

Police - Zoning is one police powerEminent Domain (right), Condemnation (Process)TaxationEscheat - Person dies without heirs or will

Restrictions on use of propertyPrivate restrictions CC&RCovenants To maintain uniformity homogeneity ARC - Architectural Review Committee must approveMailbox, color of house, treesMay be forced to conformCan not take owners property under covenants

Fee Simple Defeasible (Defeatable)

Conditions Restricts use of future owner Previous owner may have future rights

Conditions Subsequent New owner must not perform some action (sell alcohol)Former owner retains right of reentry if condition is brokenMust go through courts

Fee Simple Determinable - Special LimitationsEstate ends automatically due to violation of limitationPossibility of Reverter No court action required

DeedsWarranty against title defectsCould have been issues in past that affect titleGeneral Warranty Deed or Warranty DeedBumper to Bumper warranty on carIf there is a issue against title in future it will be fixedSpecial or Statutory Warranty DeedLimits to warrantyCovers issues that may have happened during grantors ownership of propertyQuit Claim no warrantyAs isUsed to quiet a cloud on titleTitle InsuranceProtects against something in the pastDifferent from other insurance that protects against event in futureOne time premium

Opinion of Title Attorney does Abstract Checks the chain of title no warrantyWill not know about unrecorded liensWill not know about forgeryLiensVoluntary LienOwner ask for it - MortgageInvoluntary LienOwner didnt ask for it Property tax lienSpecificLien on a specific piece of propertyGeneralLien on all property, personal and real of a personRESPA Real Estate Settlement & Procedures Act1 to 4 unit family residential propertyFederally related loanMust use HUD1 form (24 hours before closing)Required Good Faith Estimate (GFE) within 3 daysNo SteeringNo KickbacksMaximum 2 months escrow for taxes and insuranceFair Credit Act (truth in lending) Regulation ZDisclose the APR ( true annual percentage rate )Truth in Advertising - Trigger words are %, payment3 day right of recession on junior mortgagesDebits are badDebt owedTakes money away

Credits are goodCredit to an accountImportant DatesCivil Rights Act 1866 Prohibits discrimination based on raceCivil Rights Act 1968 Expands protected classesFair Housing Act of 1988Protects FRESH CORN E&O insurance doesnt cover, Equal OpportunityFamilial, Race, Sex, Handicap, Color, Religion, National OriginDoesnt protect ageHandicap includes physical and mentalIncludes AIDSIncludes recovering addicts RedliningInsurance or Lender draws a red line around an area and refuses to do business thereSteeringPushing people to a certain area Catholics to a Catholic neighborhoodBlockbustingTelling people they need to move because a protected class is moving into the area and the property values are going to fallCan discriminate if:Owns a 4 plex or less and lives in one unitOwns less than 3 homesChurches can discriminate based on religionCan not advertise the discriminationRace discrimination is never allowedHandicap reasonable accommodations must be madeMay require tenant return to original conditionExemptChurches Membership may not discriminateHousing for older persons62 or older80% must be over 55

ADA Americans with Disability ActMust make reasonable accommodationsAssigned Handicap spot near door Service animals in a no pet buildingMay require premises to be returned to original

Fair Credit Act Most of FRESH CORNProtects Marital Status instead of FamilialNo Age discrimination Includes dependence on public assistanceIndependent ContractorEmployer doesnt have to Pay Social Security Tax

Employer May not: Dictate hours workedDictate how work is to be done

90% of compensation must come from commissions and not hours workedAnti-Trust Prohibits (Sherman Act)Allocation of marketsPrice Fixing (or even taking about it between competitors)Group BoycottingBroker may: Set commission rate of officeSet commission splits

Can a seller refuse to accept a full price offer?YesBut, broker has earned commissionDelivered a ready, willing, able buyerShow LicenseShow permission to sell Listing agreementShow to be procuring causeProgressionHome price is positively affected by nice new homes around itRegression Home price is negatively affected by run down homes around itFederal Reserve Policy controls interest ratesSelling Bonds Takes cash out of the systemCausing interest rates to increase due to less supply of moneyDue to Supply and Demand of moneyBuying Bonds Puts cash into the systemCausing interest rates to drop because there is more money Reserve Requirements Banks must hold a percentage of cash in reserveMore reserve requirement means less money in circulationMore demand for money increases interest ratesDiscount Points Rates banks charge each otherHigher rates mean less money to lend Means higher demand and higher interest rates

Any Questions?