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Direct Sales FSBO Builders Resort Properties Sales by Brokers Realtors Sales by Dealers

Sale of Real Estate. Direct Sales FSBO Builders Resort Properties Sales by Brokers Realtors Sales by Dealers Portfolio Flipping. Two Types of Agents. Broker A broker is licensed to act on their own behalf and hire and supervise others in business

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Direct Sales FSBO Builders Resort Properties Sales by Brokers Realtors Sales by Dealers

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  1. Sale of Real Estate • Direct Sales • FSBO • Builders • Resort Properties • Sales by Brokers • Realtors • Sales by Dealers • Portfolio • Flipping

  2. Two Types of Agents • Broker • A broker is licensed to act on their own behalf and hire and supervise others in business • Sales Person (Real Estate Agents) • Licensed but must work for a broker

  3. Missouri Real Estate License • Be 18 years of age • Be of good moral character • Satisfactory completion of a course of study in real estate from a school accredited by the commission • Course of study requires 60 hours of classroom instruction on designated topics

  4. Where Do Buyers Come From? • In town buyers • Agents – 50% • Yard Signs – 17% • Newspaper Ads – 12% • Other – 21% • Out of town buyers • Agents – 61% • Yard Signs – 15% • Newspaper – 11% • Other - 13%

  5. For Owners Selling Property • Used only an agent to sell home – 70% • First tried to sell themselves but then used agent – 9% • Sold home themselves without agent – 14% • First listed with an agent then sold property themselves – 5% • Other purchase options – 2%

  6. Agency • Designated Agency Law • Sept 1st 1997 • Allows different types of agency • Agent can be: • Buyers Agent • Sellers Agent • Dual Agent • Transaction Agent

  7. Brokers Obligations • Tell the truth • Disclose all material facts • If they knowingly make false statements or conceal a material fact that is considered misrepresentation and can be sued under fraud statutes

  8. Fair Housing Act of 1968 • Bars any form of discrimination applies to landlords, sellers, brokers and agents: • Law covers race, religion, color, national origins and sex/gender. • Added recently age, #of children and disability.

  9. Broker Commissions • Changed since 70’s • All brokers use to charge the same commission • Real Estate Board set commissions • Federal Trade Commission stepped in and sued the boards for price fixing. • Today commissions are negotiable • Sliding Scale (Time or Price) • Flat Fee

  10. Listing Contracts • Open Listing • Exclusive Agency • Exclusive Right to Sell • Net Listing • Net Profit = Price – Commission(Price) – Closing Cost • Auction

  11. Mortgage Financing • TWO KEY DOCUMENTS • Promissory Note • Deed of Trust • Advantage to having two instruments gives lender more options that they can take against the borrower.

  12. Mortgages Cont. • Mortgage – Transaction between lender and borrower • Deeds of Trust – 3rd party transactions: Borrower, Lender and Trustee • Provides greater protection for lender • Conveys title of property to a trustee, who holds it as security for the debt • Empowers trustee to foreclose on your house • Deed of Release – Recorded by trustee when loan is paid off, showing debt has been paid

  13. Mortgage Controversies • Pre-payment Penalties • Lender charges 2 – 5% fee if mortgage is paid off early • Due On Sale Clauses • In every deed of trust and mortgage • If you sell the property you must pay the loan

  14. FNMA Covenants • Escrow Deposit • Borrower Must Insure Property • Borrower Must Maintain Property • Inspections • Negotiated Covenants

  15. Types of Mortgages • Conventional • Open-end • Package • Blanket • Budget • Government Sponsored • FHA • VA

  16. FHA Characteristics • Low Down Payment • Higher Risk Borrowers • 2.25% Insurance Premium • Monthly Insurance Premium • Interest Rate Varies with Market • Most are fixed rate mortgages • Loaned Monies come from Financial Institutions • Loan Limits • Assumable

  17. VA Characteristics • Guaranteed by Veterans Administration • Created in 1944 • Guaranteed no Insured • No Insurance Premiums • No Down Payment • Fixed Rate and ARMs • Entitlement Capped

  18. PMI • Private Mortgage Insurance • If only have 5 – 10% down payment • Started in 1920’s • Stopped during Great Depressions due to defaults • Until 1957 no PMI • Mortgage Guarantee Insurers Corp started it back up in Wisconsin

  19. Special Types of Mortgages • Home Equity Lines of Credit • Wrap Around • Blended Rate • Rollover Mortgage • Graduated Payment • Growing Equity • Shared Appreciation (SAM) • Adjustable Rate (ARM) • Reverse Annuity (RAM) • Bi-Weekly • 15 Year

  20. Mortgage Termination • Mortgage Satisfaction • Mortgage Default • Lender Options • Refinance • Voluntary Sale • Deed in Lieu • Foreclosure

  21. Mortgage Markets • Mortgage Banker • Mortgage Broker • Markets • Primary • Secondary • Transaction Types • Direct Sale Program • Mortgage Backed Securities

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