Exam 3 Question

Student question: "How many questions on Exam 3?"

Answer: 40 to 50 (max).

See you guys in the morning (10 AM in room 241)!

EXAM 3 in one week!

EXAM 3 is Saturday, April 19th at 10 AM in Room 241. Please bring your PHOTO ID, pencils, calculator, and Scan-tron answer sheet. (TVM final deadline is the following Saturday.)

Ch 11 Appraisal

Just a heads up regarding Chapter 11 Appraisal. This will be an important chapter on the next exam (which will be next Saturday!). I would definitely take a look at the extra materials and problems for this chapter (located on the website under the Chapter 11 materials).

Also, that crossword puzzle is a good tool to help with all the definitions in this chapter. It is harder than it looks!

Swearingen Job Opportunity from Greg Bennett

http://realestateprogram.blogspot.com/2008/04/swearingen-job-opportunity-from-greg.html

Greg can in to speak during Business Week and now he would like to hire someone full-time starting in May. Check out this link.

Axiom 1: Location, location, location...

This adage is usually expressed as a joke.

“What are the three most important real estate characteristics?”

Of course, the answer is “location, location, location.” It is certainly true that location attributes, or situs, are very important property features. As we should know by now, the spatial dimension of real estate is what makes every property different and this asset class truly unique.

Real estate and basically all other business disciplines can be thought of as branches or subsets of general economics. Do you remember a basic definition of 'economics' from you first economics class? It might go something like this, economics is the study of the allocation of scare resources. If everything was free and abundant, there would be no need for the study of economics.

Finance is a specialization developed from economics. Do you remember a definition of 'finance' from your first finance class? It might go something like this, finance is the allocation of scarce resources (i.e., money usually) over time. Time is an important dimension in finance and the reason we make such a bid deal about the time-value-of-money.

Real estate can be viewed as a specialization in finance. Do you remember a definition of 'real estate'? It might go something like this, real estate is the allocation of scare resources (i.e., real estate in this case!) over time and space. Space or geography is an important dimension of real estate and the reason why we make such a big deal about location, location, location.

Fastest Growing Area

a news article that recently came out says the DFW metroplex is the fastest growing in the US.

http://www.wfaa.com/sharedcontent/dws/news/localnews/tv/stories/wfaa080327_ac_census.59a6e06.html

CREW Network Scholarship Opportunity

Check out this link for a scholarship opportunity:

http://realestateprogram.blogspot.com/2008/03/crew-scholarship.html

Real Estate Axioms

Every industry has its axioms and real estate is no exception.  If you choose a career in real estate, you will run across the following three adages.

“Location, location, location”

“It’s a people business”

“Gut-feeling”

Although axioms can sometimes be a little annoying, they survive the test of time because they contain important nuggets of wisdom.  We will examine each one in subsequent posts.

VA Loans

I wanted to post a question I have recently encountered. We purchased our current home under a VA Loan and are about to purchase a second home with another VA Loan. What restrictions might come up when trying to do this?

Exam 2 Grades Posted on WebCT

Exam 2 grades have been upload to WebCT. www.uta.edu/webct (login with your UTA username and password).

Exam 2 Video/Audio Clip Posted on Website

The exam 2 video/audio clip review has been posted on our website. Please review the exam at your convenience. I will post grades on WebCT by Monday evening.

The class average was 78% and the highest grade was 100% and the lowest 40%. There was a one question curve (to calculate the grades I took the number of questions correct divided by 44- instead of 45, the total number of questions).

Overall a good job. Thanks once again for arriving promptly and bringing your Scan-trons, pencils, calculators, and photo IDs.

Exam 2 10 AM on Saturday March 8th

Just a friendly reminder that Exam 2 will start at 10 AM and end at 11 AM on Saturday, March 8th. We will be in the same classroom, room 241 Business Building. Saturday's weather looks clear and sunny. See you tomorrow!

Fidelity Investments Job Open House

Fidelity Investments is hosting a Networking Mixer for students on Wednesday, March 19th and want to invite UTA’s business students to attend. The information below spells out the details and allows students (does not specify if they are looking for undergraduate, graduate, or both) to attend via an RSVP mailbox. The Open House falls during spring break however Fidelity is hopeful that there will be plenty of students staying in town that week who may be searching for a career opportunity. Both the Personal & Workplace Investing business and the Pricing & Cash Management Services business want to hire UTA May graduates.

Have you recently graduated, or will you be graduating in 2008?Join Fidelity Investments for a networking mixer on March 19. Come meet our talented employees and managers and learn about our Personal Workplace & Investing and Pricing & Cash Management Services businesses in the southwest region.

Our beautiful Westlake campus is not to be missed!
Location: One Destiny Way, Westlake, TX
Time: 5:30 pm – 7:30 pm

Come dressed professionally and bring a resume to share.

► Reserve your spot today. Email WestlakeOpenHouse@FMR.com by March 15th

Texas Standard Sales Agreement

Good question Crystal in the post below this one.

My eyes are older than most, but I did not see a home sale contingency in the text book example (pleases post a comment if anyone else sees it). Let's find another example. One of the links on our class homepage is to the Texas Real Estate Commission or TREC. TREC produces standardized contracts for licenses brokers to use in Texas. The TREC contract is most standard single family residential transactions. Download the contract at http://www.trec.state.tx.us/pdf/contracts/24-7.pdf. This contract has a good example of a "mortgage contingency" clause (Item 4) which is a contingency that the buyer puts in to make sure they can obtain a mortgage before buying the property (if the buyer cannot obtain the mortgage then the contract is voidable by the buyer). However, I do not see a seller an "Other Home Sale" clause in this contract either.

TREC has a separate addendum for the "Sale of Other Property by Buyer" which you can download here: http://www.trec.state.tx.us/pdf/contracts/10-5.pdf. If this is included in the sales agreement, the seller is asking for the right to sell their existing home at a specified price as a contingency. Many times the seller needs to sell their existing house before they can buy a new house because they cannot afford the mortgages and upkeep on two houses. When the real estate market is active with many sales, this contingency might not be a problem. However, when the market is slow, this could be a problem.

As a potential seller would you like a finance and sale of other property contingency in your offer? No. This is risk to the seller. Therefore, if you have two contracts for the same amount (or close to it) except that one contract has contingencies and the other does not, which one are you going to take. Yes, the offer without the contingencies is a stronger offer to the seller, all else equal.

Contingency Sale?

When we bought our second house, we did a contingency sale. Meaning we had to sell our first house then would be free to buy the second. This was done courtesy of our realtor (for a fee of course). Does anyone know where, on the sales contract, that you would put that in? I didn't see it in those words, but would like to know where to look for it in the event we sell this one. I also want to know just in case we look at a contract from a buyer that might put it in their contract. You know, the whole knowledge is power thing... Hope you are all well. Good luck Saturday.

What is the best to study?

I was hoping to get some student recommendations. I studied for the last test and even felt prepared, but I still came up short. I think there are is so much to remember (I knew nothing coming into this) that I am struggling.

So the question is, what did you find most effective to focus on in your studying? The question answer sheets? Lecture outline? Terms?

Please reply especially if you got a good grade!

Exam 2, Saturday, March 8th at 10 AM Room 241

We have our second exam next Saturday. Exam 2 will cover chapters 2, 3, 4, 5, 6, and 7. The format will be 50 or fewer multiple choice questions. Please bring your photo ID, pencils, calculator, and Scan-tron answer sheet. See you live one week from today!

Property Tax Poll

The votes are in and it looks like we voted New York the highest property tax area, followed by Los Angeles. Dallas and Atlanta received just a couple votes each.

Let's see how are voting compares to reality.

A local appraiser, M. Lance Coyle, MAI www.coyleadvisors.com CEO, Coyle Realty Advisors, put together an interesting study that was published in the North Texas Chapter of the Appraisal Institute's monthly newsletter (see http://www.ainorthtexas.org/newsletters/ (January issue) to see the full paper).

Mr. Coyle calculated the property tax, in dollars and as a percent of the house value ($250,000), for a $250,000 house in 12 metropolitan areas, including Dallas. See below:

Property Taxes for a $250,000 House

City Annual Tax Effective Tax Rate
Atlanta, Georgia $944.00 0.38%
Denver, Colorado $1332.27 0.53%
New York City, New York $2417.70 0.97%
Chicago, Illinois $2681.60 1.07%
Oklahoma City, Oklahoma $2750.00 1.10%
Little Rock, Arkansas $3165.00 1.27%
Albuquerque, New Mexico $3240.00 1.30%
St. Louis, Missouri $3320.39 1.33%
Miami, Florida $3699.66 1.48%
Los Angeles, California $3776.55 1.51%
Dallas, Texas $6139.44 2.46%

You can see that most major cities have a tax rate, as a percent, of around 1% and upto 1.51%, and Dallas is almost 2.5%.

What do you think about this? Is Dallas still an economical place to live and own a house?

Feel free to comment to this post.

Job Posting in Real Estate Program Blog

If anyone is interested in commercial brokerage as a career, check out the posting by SCM on http://realestateprogram.blogspot.com/.

We will be covering brokerage latter in the semester.

Is this a valid contract?

Instructions: Read the facts of the following (an actual, real life) case. Based on your knowledge of contracts from Chapter 6 take a position (either ‘yes’ it is a valid contract or ‘no’ it is not a contract). Indicate your position by commenting to this post, again either "yes a valid contract" or "no not a valid contract" and briefly explain your reasoning. Please, no hedging (yes or no only).

Question: Is this a valid contract?

Case: Jack and Joan Brown made it a habit to stop by the Dew Drop Inn every Friday night after work. Here they would meet their best friends, Sam and Shelly Simon, for an evening of dining, dancing, and libations. One Friday, Jack and Joan came stomping into the Dew Drop, having just received their tax assessment for a piece of bare ground they owned adjacent to their home. “I can’t believe this tax assessment,” moaned Jack. “The county is going to raise our property taxes $400 on that vacant lot because they say it’s worth $20,000! Boy, if we could get that kind of money for it, we’d sell it in a minute.”

Several beers later, Sam questioned, “Are you really serious about selling that lot, Jack? We’ve been wanting to build a new house, and being right next door to our best friends, well, I think we’d be interested in buying it.”

“Like I said,” remarked Jack, “if it’s worth $20,000, someone can have it!”

With that, Sam reached across the bar, grabbed several napkins, and scribbled out a makeshift agreement, containing the full names of the parties, the purchase price, and the legal description of the property, taken from Jack’s property assessment notice. Sam and Shelly both signed the napkin/contract, as did Jack and Joan. They toasted the occasion as Sam handed his check for $20,000 to Jack.

The next morning, Jack called Sam. “Hey, buddy, what shall I do with this check you gave me last night? Should I rip it up?”

Sam replied, “Of course not. We want the property. A deal’s a deal!”

A month later, Sam and Shelly were served with papers announcing that the Browns were suing them for coercing the sale of the property. Obviously, Jack and Joan didn’t believe that a sale had been made.