Posted by admin on June 27, 2010 under Real Estate License Basics | 
In any real estate school, there will be a lot of information about deeds as they relate to a real estate transaction. For the purposes of this edition of Real Estate Basics we will focus on helping you to understand enough about deeds to you earn your real estate license and be successful.
Where the title of the property represents the bundle of rights to a property, and alienation is the rights and evidence of ownership of the land; a deed is the document that provides evidence of title. The seller of the property is referred to as the Grantor, and the receiver of the property is called the grantee. A deed transfers ownership of a property one time from grantor to grantee. There are four basic types of deeds depending mainly upon what covenants or promises are made by the seller or grantor of the property.
A general warranty deed must contain five covenants. The Covenant of Seisin is the promise that the grantor owns the property and has the right to sell it. The Covenant of Quiet Enjoyment is the promise by the grantor that no one shall interfere with the grantee taking possession of the property or their rights to use it. The Covenant Against Encumbrances promises that there are no known liens or encroachments on the property that are not stated on the deed. The Covenant of Further Assurance is the promise that the grantor will resolve any problems or defects. Finally, the general warranty deed must include the Covenant of a Warranty Forever, which is the assurance that the promises go as far back as public record will allow.
A special warranty deed comes with the promise that the title has been clear in the time the grantor owned the property. The only promises made are made only based upon the time that the grantor owned the property and any defects or flaws occurred during that time will be resolved. However, the grantor on a special warranty deed makes no promises at all for anything before they took ownership of the property.
With a bargain and sale deed, the grantor makes no promises at all to the grantee beyond the promise that they do, in fact, own the property. Finally, there is the quit claim deed. This type of deed offers very little protection for the grantee because there is no promise at all being made by the grantor, not even the promise of ownership. This type of deed is used often in cases where something has been misspelled before it clouds the title of the property. Once there is a cloud on the title it must be cleared with a Quiet the Title Lawsuit.
Understanding the different types of deeds and the specific differences between them is crucial to your real estate training, not only in earning your real estate license, but also to your future success as a real estate agent.
Posted by admin on under Real Estate License Basics |
Understanding the legislation associated with loans and lending is crucial to succeeding with your real estate license. In the light of the mortgage industry crisis it is more important than ever to know what makes a potential buyer creditworthy. Real estate courses will review in many laws associated with lending. In this installment of Real Estate Basics we will concentrate on the Equal Credit Opportunity Act.
The Equal Credit Opportunity Act is federal legislation established in 1974 designed to ensure that financial institutions extend credit fairly and without discrimination. This legislation is enforced by the Federal Trade Commission and dictates that no one can be denied credit on the basis of their race, religion, color, nationality, sex, marital status, age or income received from public assistance programs like Social Security.
The Equal Credit Opportunity Act also enforces the Consumer Credit Protection Act which states that any consumer denied credit has the right to know the reason the creditor has denied them credit. This act is applicable to any person or institution that extends or arranges for the extension of credit regularly. If you have your real estate license and assist in facilitating financing for your clients by determining their creditworthiness, you are considered a “creditor”.
Lenders are required to extend credit based upon a consumer’s income, job stability, net worth and overall credit rating. According to the terms of the Equal Credit Opportunity Act, lenders are prohibited from many practices as they relate to loan underwriting. A lender may not disregard any verifiable income that is from sources like part-time employment, child support or separate maintenance if the applicant has asked to include it. The loan officer is not permitted to ask if any income they receive is from any of these sources.
If a spouse’s income is not to be included on the loan application the lender may not request that the spouse sign any document for the loan. Additionally a lender is not permitted to ask any questions regarding age, sex, religion, race or nationality, except as the law requires. It is also prohibited for a loan officer to make assumptions of income reduction due to pregnancy or raising children interfering with employment. Asking questions about an applicant’s plans for having children or use of birth control is illegal.
The Equal Credit Opportunity Act states that if a loan request is denied, or if a loan with different terms is being offered to the applicant, the lender must notify the applicant in writing with the specific reasons for the denial of credit.
Success in a post housing crisis real estate career will require a greater understanding of credit and lending practices. All real estate training at accredited real estate schools will include sections on the Equal Credit Opportunity Act and other legislation associated with lending. A solid understanding of lending basics can only make you more successful with your real estate license.
