Real Estate Principals and Practices

Instructor: Jan E. Beran, Esq.

Buying and Financing A Home - An Overview
I.   Role of the Broker.
     A.  Brokers representing sellers.
     B.  Brokers representing buyers.
     C.  Brokers representing both buyer and seller.
     D.  Brokers with other interests.
II.  Selecting an Attorney
     A.  Buyers may want to hire an attorney to review and explain documents.
     B.  Attorneys who act as settlement agents may not be able to represent
         the buyer alone.
III. Terms of Agreement of Sale
     A.  Usual agreement is a preprinted form.
     B.  All terms of the agreement are negotiable.
         1.  Sales/Purchase Price.
         2.  Seller should provide marketable title.  Cost of title insurance
             or for bringing title up to date is negotiable.
         3.  Contingent on financing.
         4.  Pest and Termite inspection and treatment.
         5.  Home inspection.
         6.  Lead-Based Paint Hazard (pre 1978 housing)
         7.  Other environmental concerns.
         8.  Other closing expenses and prorations
         9.  Escrow agent
        10.  Settlement costs.
IV.  Shopping for a Loan
     A.  Where to find a Loan
     B.  Types of Loans
     C.  Cost of financing
     D.  Lender required costs.
     E.  Loan costs
     F.  PITI
     G.  Assignment
     H.  Mortgage and flood insurance
     I.  Selecting a Settlement Agent
     J.  Securing Title Services
         1.  Owner's Policy
         2.  Title Commitment
         3.  Coverage and any reissue rate
         4.  Survey
V.   RESPA Disclosures.  Purpose is to help consumers become better shoppers
     for settlement services.  Requires certain disclosures.
     A.  Good Faith Estimate of Settlement Costs.  (At loan application)
     B.  Servicing Disclosure.  Lender must disclose whether lender or some-
         one else will be servicing the loan.
     C.  Affiliated business disclosure.
     D.  HUD-1 Statement
     E.  Escrow Account
VI.  Procession The Loan Application
     A.  Prohibits Discrimination:
         1.  ECOA:  race, color, religion, national origin, sex, marital status,
             age, the fact that all or part of the applicant's income comes from
             any public assistance program, or the fact that the applicant has
             exercised any right under any federal consumer credit protection law.
         2.  Fair Housing Act:  race, color, religion, sex, handicap, familial
             status or national origin.
     B.  Processing application no later than 30 days
     C.  Denial and obtaing copy of Credit Report and Appraisal
VII. RESPA Protection Against Certain Fees.
     A.  Prohibited Fees.  No person involved in transaction may receive or pay
         fee, kickback or anything of value for any referal of settlement service
         business IF THAT PERSON HAS NOT ACCTUALLY PERFORMED SETTLEMENT SER-
         VICES.
     B.  Permitted payments.  Title companies, mortgage brokers, appraisers,
         attorneys, settlement agents who actually perform a service in connection
         with the loan or settlement may receive payment for the reasonable value
         of their work.
IIX. Complaints.
     A.  Lawsuit in State or Federal court
     B.  Government agencies responsible for oversight.