Chabot College
Fall 2007
Course Outline for Real Estate 83
REAL ESTATE FINANCE
Catalog Description:
83 – Real Estate Finance
3 units
Financing transactions in the real estate business and in lending institutions; analysis of money
markets, interest rates and real estate financing. Financing procedures, residential and commercial
financing. Prerequisite: Real Estate 80. 3 hours.
Prerequisite Skills:
Before entering this course, the student should be able to:
1. identify each of the steps and stages in a typical residential home sale;
2. list the services that a real estate agent provides to home buyers;
3. distinguish between real property and personal property;
4. list the three major methods used to describe land in legal documents.
5. describe the methods of holding title;
6. define the term “easement”;
7. list the different types of categories into which zoning ordinances divide a community;
8. define the term “eminent domain”;
9. explain the statute of frauds;
10. define the term “listing agreement”;
11. describe the agency relationship;
12. recall the four essential elements of value;
13. recognize the purpose and importance of an MAI appraisal;
14. differentiate between a “Seller’s” market and a “Buyer’s” market;
15. compare the advantages of renting to the advantages of buying;
16. solve capitalization problems using the capitalization approach to value.
Expected Outcomes for Students:
Upon completion of this course, the student should be able to:
1. explain investments and return, types of investments, investment risk, and interest rates;
2. identify the primary and secondary mortgage markets and the secondary market agencies;
3. identify the types of mortgage lenders, government intervention in mortgage lending, and industry
trends;
4. recognize fiscal and monetary policies and changes in monetary policies;
5. discuss promissory notes, security instruments, land contracts, and finance instrument provisions;
6. explain amortization, repayment periods, loan-to-value ratios, mortgage insurance, secondary
financing, fixed and adjustable interest rates, and financing options;
7. review the process of shopping for a loan, applying for a loan, processing the loan application,
and closing the loan;
8. express an understanding of the underwriting process, and analyzing the borrower’s income, net
worth, and credit history;
9. recall appraisal standards, the appraisal process, the three appraisal methods, and dealing with
low appraisals;
10. list conventional loan characteristics, qualifying standards, and special programs and payment
plans;
11. discuss the FHA insurance plan, characteristics of FHA loans and loan programs, and FHA
qualifying standards;
12. identify of eligibility for VA loans, the VA guaranty, VA loan amounts, and VA underwriting
guidelines;
13. explain how seller financing works, seller seconds, seller primary financing, alternatives to seller
financing, and agent responsibilities in seller-financed transactions;
14. describe fair lending laws, consumer protection laws, and predatory lending.
Chabot College
Course Outline for Real Estate 83, Page 2
Fall 2007
Course Content:
1.
2.
3.
4.
5.
6.
7.
Terminology used in real estate finance
Sources of funds
Mathematics of real estate finance
Financing procedures
Appraisal for financing purposes
Residential financing
Commercial financing
Methods of Presentation:
1. Typical Assignments
a. Research four different types of loans presently being used to finance residential single family
real estate in your market. Of these four types of loan products categorize the advantages
and disadvantages of each.
b. Define the term “Reverse Mortgage” and describe a scenario in which this product may be
the prudent choice for a consumer. What characteristics would this consumer have?
c. Interview a Mortgage Loan Broker and interview a loan consultant at a local financial
institution engaged in the primary mortgage market. Compare and contrast the two roles
these individuals play in the financial markets.
2. Methods of Evaluating Student Progress
a. Examinations
b. Assignments
c. Final Examination
Textbook(s) (Typical):
1. Financing Residential Real Estate, 13th Edition Dorsey, Rockwell, Rockwell Publishing, 2005
Special Student Materials:
None
JM/Sept2006
Revised 10/12/06, 11/3/06
RE83