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0:00
did you know that your real estate exam
0:02
success can be spelled in 10 Concepts
0:05
and today we are breaking down the
0:08
topics that you must know to beg an A on
0:11
your exam but we are not just covering
0:14
these 10 Concepts I'm telling you
0:16
specifically what you need to know for
0:18
the exam so without further Ado let's
0:22
jump into it the 10 essential Concepts
0:26
number one agency relationships the very
0:30
first concept we are tackling today is
0:32
agency if we had to be fair there's no
0:35
real estate industry without agency
0:38
relationships so you can be sure that
0:40
you will see an agency related question
0:42
on the exam agency is a relationship
0:46
between a client and a real estate agent
0:49
when you're faced with an agency
0:51
question it will often revolve around
0:53
two parties the customer or client and
0:56
the agent if you get a question about a
0:59
principle
1:00
just remember that a principal and a
1:02
client are one and the same different
1:05
names but the same meaning and if you
1:07
want to learn more about agency then
1:09
check out our video on the topic I will
1:11
leave a link to the video in the
1:13
description what you need to know for
1:15
the exam the first thing that you need
1:17
to understand is the difference between
1:19
a customer and a client a customer is a
1:22
potential client they have not yet
1:25
signed an agreement with an agent but
1:27
have expressed interest in the agent
1:29
services
1:30
but once the agreement is signed then
1:32
you have a client or principal you will
1:36
also need to know the different types of
1:39
Agents there is a special agent oras I
1:42
like to call them one task agents
1:44
special agents are limited in their
1:46
scope of work they can only complete the
1:49
specific task that they are hired for
1:52
then we have a general agent whose tasks
1:55
are defined by the terms of their
1:57
contract with the principal this
1:59
relationship is continues finally we
2:02
have a universal agent who has the full
2:04
authority to act on behalf of the
2:07
principal these agents are very rare and
2:10
far in between number two Government
2:13
powers Government powers summarize the
2:16
authority that the government has to
2:19
enact laws for the welfare of the
2:21
general public we use the acronym Pete
2:23
to remember the four types of
2:25
governmental Powers if you CAU our
2:27
acronyms video then chess is arbit you
2:29
know what this term is all about if not
2:32
then there's a link in the description
2:33
to the video with your name on it what
2:36
you need to know for the exam you need
2:39
to know the definitions and applications
2:42
of the four powers police power which is
2:45
the government's authority to regulate
2:47
your use of real estate eminent domain
2:50
is the government's right to take or
2:52
possess property for the public good
2:55
taxation which is precisely what the
2:57
name suggests clearing the Deb with
2:59
Uncle Sam and finally a cheat which is
3:03
the government's power to possess an
3:05
individual's property should they pass
3:07
without a will or HS okay on the next
3:12
concept number three
3:14
leans a lean is a claim placed against
3:18
the property as a result of debt think
3:20
of a mortgage when you borrow money to
3:23
purchase a home the lender has the right
3:25
to claim the property should you fail to
3:27
pay that claim is a lean
3:30
what you need to know for the
3:33
exam you will need to know the two main
3:35
types of Lans voluntary and involuntary
3:39
voluntary leans result from a contract
3:41
between the lender and the borrower like
3:43
in our mortgage example above
3:46
involuntary leans on the other hand are
3:48
issued without the property owner's
3:50
consent they usually result from a court
3:53
judgment a good example here is a
3:55
mechanic lean one other thing I want you
3:58
to remember is the difference between a
4:00
general and a specific lean a general
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lean means that the claim can extend to
4:05
all your assets while a specific clean
4:08
is specific to the property in question
4:11
imagine a financial judgment against
4:13
someone should they fail to pay the
4:15
court can order all their properties to
4:17
be seized and auctioned to repay the
4:19
debt that is a general Le but if you
4:22
fail to pay your mortgage the bank will
4:24
specifically seize only the home number
4:28
four fair housing law La fairh housing
4:31
laws are a set of laws enacted in 1968
4:35
to protect both sellers and buyers from
4:37
unfair and vicious housing
4:40
practices what you need to know for the
4:42
exam for the exam I want you guys to
4:45
remember the five major fair housing
4:48
violations steering blockbusting Panic
4:52
peddling Panic selling and
4:55
redlining of course we have a
4:57
comprehensive guide on the fair housing
5:00
and that link will be waiting for you in
5:02
the description number five contracts
5:06
simply put a contract is an agreement
5:09
between two or more parties in real
5:11
estate these two parties are usually a
5:14
buyer and a seller what you need to know
5:16
for the exam when you walk into the exam
5:19
room I want you to be aware of these
5:21
three different types of contracts valid
5:24
void and voidable a valid contract is
5:27
fully enforceable and breaking it often
5:30
results in litigation there are four
5:32
conditions required for a contract to be
5:34
considered valid capable or competent
5:37
parties lawful purpose offer and
5:40
acceptance and consideration these four
5:43
required for a contract to be deemed
5:46
enforceable and if any component is
5:48
missing we cannot consider it a valid
5:51
contract a void contract lacks one or
5:54
more elements that constitute a valid
5:56
contract for example a contract may be
5:59
EST established with a minor who in this
6:01
case is not a capable party or maybe a
6:04
house is being sold for an illegal
6:06
purpose whatever it lacks void contract
6:09
is not legally enforcable and then we
6:11
have a middle ground between the two a
6:14
voidable contract avoidable contract is
6:17
one that is enforcable but has an error
6:19
that could void it think of a contract
6:22
stating you are buying 25.5 acres of
6:25
land only to realize after signing that
6:28
it is actually 20 4.5 Acres you can
6:31
decide to void a contract because of
6:33
this error since that is not what you
6:35
signed to purchase number six financing
6:39
and
6:40
settlement to pass a real estate exam
6:42
you must understand financing and
6:45
settlement financing covers the venues
6:48
buyers can use to purchase a home and
6:50
for us normal Americans that often means
6:52
one thing
6:54
loans what you need to know for the exam
6:57
the different types of loans you must
6:59
know for exam include VA loans which are
7:02
specifically for veterans these loans do
7:05
not require a deposit and offer
7:08
favorable requirements for Our Heroes
7:10
kind of like a thank you for your
7:12
service gift F A loans coming from the
7:16
federal housing Administration these
7:18
loans are designed for low to moderate
7:21
income families buyers still need a down
7:24
payment and mortgage insurance premiums
7:27
USDA loans from the Department of
7:29
Agriculture and created specifically to
7:32
support housing in rural areas
7:34
applicants must meet income eligibility
7:37
requirements conventional loans are the
7:39
most common type of loan and must follow
7:41
the guidelines set by Fanny May and
7:43
Freddy ma they require lenders to have a
7:46
good credit score and pay a hefty down
7:48
payment adjustable rate mortgages and
7:51
fixed rate mortgages an adjustable rate
7:53
mortgage allows buyers to pay a fixed
7:56
amount over a specific period say 5
7:58
years and then pay an adjustable amount
8:01
based on predetermined benchmarks the
8:04
fixed rate mortgage however is a
8:05
mortgager safety net it allows buyers to
8:08
pay a predetermined rate over the course
8:11
of the loan you already know what you
8:13
have to pay and when of course you will
8:16
also need to know the basics of earnest
8:18
money inflation and interest rates
8:21
number seven leasing a lease is a
8:24
contractual agreement in which one party
8:27
uh L see is granted rights to a proper y
8:30
by a lesser for a specific period the
8:33
most common type or example of a lease
8:36
is a rental agreement what you need to
8:38
know for the exam this is a concept we
8:41
have all experienced at some point in
8:43
our lives or at least we know someone
8:45
who has so for the exam I want you guys
8:48
to remember the four main types of
8:50
leases sandwich lease in a sandwich list
8:54
LSC also becomes a lesser simply put an
8:57
individual rents a property and then
9:00
leases it percentage lease in this type
9:03
of lease the leie pays a portion AKA
9:06
percentage of their revenue to the
9:08
Lesser as rent net least in a net Le a
9:12
lassi also carries the burden of paying
9:14
for a part of the taxes maintenance and
9:17
insurance of the property there are
9:20
three types of net leases single double
9:23
and trial grass leas a grass Le only
9:26
demands that alasi pays a flat agreement
9:29
the pond fee for the duration of the
9:31
lease this is the type of lease we see
9:33
mainly in residential
9:36
markets while on the topic of leasing we
9:39
cannot ignore Property Management
9:41
Property Management can be defined as
9:43
the overseeing of real estate and like
9:46
we discussed in agency relationships
9:49
property managers have a fiduciary duty
9:51
to the clients the property owners
9:54
number eight antitrust laws antitrust
9:57
laws are a group of federal and state
9:59
laws created to ensure good business
10:02
practices I like to think of them this
10:04
way they are laws created against Market
10:07
monopolies what you need to know for the
10:09
exam yes you guess it right you must
10:12
know the Sherman Antitrust laws they
10:14
were created in 1890 to hold Market
10:17
practices that hindered Fair competition
10:20
as far as the Sherman Antitrust laws go
10:23
you must know price fixing which is the
10:26
ill practice of businesses agreeing on a
10:28
standard Market price to push buyers
10:30
into buying at a higher price bid
10:33
rigging is also an unfair practice in
10:36
which two or more parties cude to
10:39
manipulate the bidding process in a way
10:41
that limits Fair competition and can
10:44
artificially inflate prices imagine if
10:47
agents decide to work together to secure
10:49
a property at a lower price by agreeing
10:52
that one of them will submit a low bid
10:54
while the other refrains from bidding or
10:57
submits an even lower bid this reduces
11:00
competition and may discourage other
11:02
potential buyers from submitting
11:04
competitive bids group boycotting this
11:07
is a bullish tactic in which a group of
11:09
competitors gangs up against another by
11:12
refusing to collaborate or work with
11:14
them they conspire to exclude boycott or
11:18
otherwise discriminate against a
11:19
particular competitor group of
11:21
competitors or a certain class of
11:24
individuals Market allocation which
11:26
occurs when competitors divide or
11:28
allocate the market among themselves
11:30
limiting competition in agreed upon
11:32
territories or for specific types of
11:35
properties or clients and tying
11:38
agreements tying agreements happen when
11:40
a seller ties one service to another
11:43
making it mandatory for a client to buy
11:45
both number nine disclosures disclosures
11:49
mean in real estate exactly what they
11:51
mean in the normal English language
11:53
making something known normally making
11:56
something known with a negative
11:58
connotation the purpose of a disclosure
12:00
is to ensure the buyer understands what
12:02
they are purchasing disclosure
12:04
requirements differ from state to state
12:07
so you will need to review your state
12:09
guidelines to know what to prepare for
12:11
the state specific exam however the
12:14
general rule is that the seller must
12:16
disclose any material defects and
12:18
environmental issues think of a house
12:21
with lead based paint groundwater
12:24
contamination or a property located near
12:26
flop planes these are some of the
12:29
factors that can negatively affect the
12:31
buyer so the seller will have to
12:33
disclose them number 10 real estate math
12:36
though not necessarily a concept real
12:39
estate math is such a crucial part of
12:41
the exam we just had to include it what
12:44
you need to know for the exam there are
12:46
several formulas you need to know for
12:48
the real estate exam like the 28 per 36
12:52
rule used in calculating mortgage
12:54
affordability cross rent multiplier
12:56
which is the property price divided by
12:58
the gross proper income and the tart
13:01
formula which is an absolute
13:03
timesaver we love it so much we have a
13:05
whole video on how to apply the formula
13:07
to several math questions
13:10
congratulations you have 10 Concepts
13:12
down and a successful exam to go is
13:15
there a specific topic you'd like us to
13:17
cover please leave us a comment below
13:20
and have you code our vocabulary video
13:22
yet we cover 150 terms you need to know
13:25
in order to pass the exam so go and
13:28
check it out here like share and
13:30
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