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PIMA COMMUNITY COLLEGE
Classification: Occupational
RLS101
Initiator:
Campus:
Date:
Effective Term: 201030
Principles of Real Estate I/License Preparation
R. .Rosen
Downtown
7/4/2010
Credit Hours: 3.00
Lecture Periods: 3.00
Lab Periods:
Description:
Combined with RLS 102, RLS 101 is an in-depth and comprehensive study of the principles and laws
that govern real estate. Includes, but is not limited to: the discussion of ethics and the real estate
profession; characteristics of real property; general brokerage and listing agreements; contracts and
contract law; ownership of real property; legal descriptions of real property; land development and
construction; financing; acquisitions and transfer of title; property insurance and warranties; property
valuation and the appraisal process; real estate math: licensing and the activities of Arizona licensees;
and Arizona specific real estate law.
Information: The Arizona Department of Real Estate recognizes and accepts RLS101 as satisfaction
of meeting forty-five (45) of the mandatory ninety (90) hours of pre-licensing educational requirements
for salespersons. RLS 101 and 102 together constitute RLS 105.
Performance Objectives:
Upon successful completion of this course, the student will be able to:
1.
Discuss ethics and the real estate profession, including a licensee’s relationship to the real
estate industry, professional responsibilities to clients and industry associations, and federal,
state, and city/county fair housing requirements.
2.
Define real property and its characteristics.
3.
Identify the major sections of real estate listings, buyer/agency agreements, and listing
procedures.
4.
Define freehold and leasehold estates, and describe the different types of property ownership:
severalty; co-ownership, including, tenants in common, joint tenancy with right of survivorship,
community property, and tenancy by the entirety; and other forms of real estate ownership such
as trusts, syndications, partnerships, corporations and other forms of legal entities,
condominiums, cooperatives, time shares and interval ownerships.
5.
Describe legal descriptions of real property.
6.
Describe property development, federal and state laws and restrictions on real estate
subdivisions, zoning and land-use planning ordinances and regulations, and the Federal
Interstate Land Sales Disclosure Act.
7.
List the types of property insurance policies and describe the purpose and warranties of each,
including national flood insurance.
8.
Describe appraisal principles, practices, and the various methods used to determine the
appraised value of real property.
9.
Explain the law and general concepts of contracts, and compose real estate contracts.
10. Discuss and interpret the practices and principles of real estate financing, including: terms and
provisions of finance instruments; types of real estate loans; mortgage clauses; payment
structures; assumptions, assignments and novations; foreclosures and forfeitures; and the
Uniform Commercial Code.
11. Apply mathematical principles relative to real estate matters, including, without limitation:
percentages, costs of selling and buying real property, appreciation and depreciation, net
12.
13.
proceeds, and sales commissions, area, acreage, distance and volume measurements, loan
interest, and capitalization and ratios.
Discuss the transfer of title of real property, deeds, acknowledgments, constructive notice,
adverse possession, title insurance, and probate.
Describe Arizona real estate licensing requirements, issuance, suspension, and revocation of
licenses, the Real Estate Recovery Fund, and powers and duties of the Real Estate
Commissioner.
Outline:
I.
Real Estate Profession and Ethics
A. Professional boards and associations
B. Multiple Listing Service (MLS)
C. Practice of brokerage
D. Related careers
E. Professional ethics
1. Public and fiduciary responsibility
2. Unlawful practice of law
3. Record keeping and document handling
F. Federal requirements for real estate activities
1. Fair housing laws and regulations
2. Americans with Disabilities Act
3. Equal Opportunity Credit Act
4. Potential conflicts between licensee and agent/broker
G. Disclosures and consumer protection
1. Megan’s Law
2. Stigmatized property
3. Flood zones and maps
4. Miscellaneous disclosure issues
II.
Property Characteristics
A. Distinction between land, real estate and real property
B. Interpreting physical and economic characteristics of property
C. Real and personal property
III. Listing Agreements
A. Types of listings
B. Listing procedures
1. Evaluating property
2. Disclosure of property conditions
3. Legal requirements
4. Fiduciary duties and representations
5. Termination of listing agreement
IV. Contracts and Contract Law
A. Contract essentials and terminology
1. Types of contracts
2. Elements of a contract
3. Valid, void, voidable, and unenforceable contracts
4. Statute of Frauds
B. Offer and counteroffers
1. Purpose of offer and counteroffer
2. Valid methods of communicating offers
C. Reasonableness; bona fide purchaser
D. Purpose, scope and elements of real estate sales contracts
E. Purchase contract concerns; earnest money
F. Assignment and novation
G. Options and right of first refusal
H. Completion, termination, and breach of contract
V.
Ownership of Real Property
A. Types of ownership
1. Sole Ownership (in severalty)
2. Tenancy in common
3. Joint tenancy with right of survivorship
4. Community property
5. Tenancy by the entirety
B. Syndications, cooperatives, condominiums, time-shares and other forms of interval
ownership
C. Legal entities and trusts
VI. Legal Description
A. Metes and bounds
B. Government [Rectangular] survey system
C. Lot and block [Recorded plat]
VII. Land Development and Construction
A. Development and construction fundamentals
B. Zoning and land-use planning
1. Terminology
2. Zoning issues
a. Non-conforming uses
b. Variances
c. Grandfathered rights
C. Environmental concerns: impact studies and audits
D. Interstate land sales
VIII. Real Estate Financing – Practices and Principles
A. Essentials of financing
1. Primary lenders and the secondary mortgage market
2. Federal Reserve Bank
3. Promissory notes, mortgages, deeds of trust, and land contracts
4. Financing theories
B. Qualification of purchaser for financing
1. Pre-qualifying considerations
2. Types of loans
a. Residential financing
i. FHA, VA, conventional loan programs, their benefits and requirements
ii. Types of repayment plans
b. Commercial financing
i. Financial analysis
ii. Uniform Commercial Code (UCC), Secretary of State, and Corporations
Commission
C. Foreclosure and alternatives
1. Foreclosure of mortgage
2. Foreclosure of deed of trust
3. Deed in lieu of foreclosure
4. Foreclosure proceeds, lien priorities
5. Post-foreclosure remedies
6. Forfeiture of agreement for sale (aka land contract)
D. Pertinent laws and regulations
1. Truth-in-Lending Act and Regulation Z
2. Equal Credit Opportunity Act
3. Fair Credit Reporting Act
IX.
X.
XI.
XII.
4. Real Estate Settlement Procedures Act (RESPA)
5. The Financial Institutions Reform Recovery and Enforcement Act of 1989 (FIRREA)
E. Bankruptcy
1. Types of bankruptcy
2. Impact on real estate contracts
Acquisition and Transfer of Title
A. Terminology
B. Methods of transfer
C. Types of deeds and warranties
D. Notice
E. Adverse possession
1. Title
2. Easement
F. Probate
G. Title insurance
1. Types of policies
2. Commitment for title insurance
3. Endorsements
Property Insurance and Warranties
A. Terminology
B. Types of policies
C. Indemnification and warranties
D. National flood insurance program
E. Claims history (CLUE report)
Property Valuation and the Appraisal Process
A. Terminology
1. Appraiser and appraisal
a. Purpose and use of appraisal
b. Role of appraiser
c. Role of licensee in property valuation
d. Appraiser licensing and certification in Arizona
2. Value
3. Types of value
B. Appraisal concepts and principles of valuation
1. Highest and best use
2. Supply and demand
3. Depreciation
4. Substitution
5. Contribution
6. Anticipation
7. Competition
C. Appraisal process
1. Direct sales comparison (market data) approach
2. Cost approach
3. Income approach
4. Reconciliation/correlation
Real Estate Math
A. Percentage and proration calculations
B. Appreciation and depreciation
C. Ratios
D. Net proceeds calculations
E. Loan interest calculations
F. Commissions
G. Area and volume calculations
XIII. Licensing
A. Activities requiring a license
B. Licensing exemptions
C. Licensing requirements
1. Salesperson
2. Broker
3. Costs and fees
4. Continuing education
5. Licensing renewal
6. Denial, suspension, or revocation of license
7. Consent orders, cease and desist, fines and penalties
8. Miscellaneous licensing issues
a. Temporary licenses
b. Designations
c. Cemetery and time-share licenses
d. Selling a business
D. Arizona Real Estate Statutes – Title 32 Chapter 20
1. Arizona Real Estate Department
a. Commissioner
b. Advisory Board
2. Real Estate Recovery Fund
a. Definition
b. Funding of fund
c. Broker responsibilities
d. Payout from fund