According to the Association of Real Estate License Law, or ARELLO, there is an estimated two million active real estate licenses in the United States. With so much competition in the industry today, realtors are under pressure to constantly strive to improve their understanding of real estate law, trends, and best practices.
One of the many areas of real estate that all agents must understand is finance. Homes are expensive, and the average homebuyer doesn’t have hundreds of thousands of dollars in cash just stashed away in the bank. For real estate agents that are assisting homebuyers in purchasing property, it’s crucial for them, the experts of all things real estate, to understand the various types of loans that are available, as well as their advantages and disadvantages.
While much of this knowledge will come with experience, practice, and patience, there are various online courses that can break down real estate finance on a very granular, understandable level. Follow along as we break down real estate finance, and discuss ways in which you can further your real estate education to break away from the growing industry competition and better serve your clients.
Defining Real Estate Finance
Real estate finance describes, explains, and encompasses the various methods in which individuals intend to purchase a home, plot of land, or other type of property. Unsurprisingly, the vast majority of Americans require loans when purchasing a home. These loans, and the terms that come with them, are often overwhelming and confusing for homebuyers. For that reason, they’ll more than likely turn to their agent for help.
Many things come in to play when it comes to when applying for loans, such as credit reports, asset and income verification, appraisals, and titles. With that said, it’s extremely likely that each client you do business with will have a different situation to work through. For that reason, it’s advised that agents enroll in education courses that review these circumstances and provide agents with the expertise to better serve their clients.
What Does Real Estate Finance Education Look Like?
You may be curious as to what a real estate finance course looks like. Well, for starters, real estate finance is usually included in most continuing education training packages. These packages will also likely include courses that dive deep into contracts, property management, and sale agreements. For the purpose of this blog, however, we’ll just be focusing on real estate finance.
Real estate finance encompasses a lot of various components, which is no surprise given the large financial investment and commitment that’s required when buying property.
With real estate finance education, agents get a full scope of the steps that individuals need to take to buy a home. A typical real estate finance course will include the following general topics are more:
- An introduction to loans
- Basics of real estate financing
- Calculating loan payments
- Identifying qualifying incomes and ratios
- Estimating property taxes
The goal of this real estate finance courses is to ensure that all agents that complete the training are more knowledgeable when it comes to the financial side of real estate. This is often an aspect of the industry that many shy away from due to its complexity. Agents that are experts in this field prove to be more helpful and effective when catering to their clients’ needs. Here are a few course objectives taken straight from the 360training Real Estate Finance course:
- Understand the basic concepts and key terms of real estate financing and the key terms
- Describe how to qualify a buyer for the most common types of loans
- Understand the use and function of escrow accounts
- Determine what a mortgage insurance premium is
- Understand the process of underwriting its guidelines
- Identify the three most common types of loans
- Distinguish how to use conventional qualifying ratios
- Describe VA eligibility and qualification periods
The Importance of Real Estate Continuing Education
Continuing Education, also known as CE, is essential for real estate agents to stay up to date on the latest law, policy, regulation, and best practice changes that impact their specific state. Since states are permitted to administer and oversee their own real estate commission, each state varies when it comes to CE requirements.
CE training packages also help agents expand on the knowledge that they learned throughout their prelicense training, and help clarify some confusing topics they may have encountered while practicing as an active real estate agent. In addition, some comprehensive CE programs also come with tips to help agents reach the next level, such as internet marketing strategy ideas.
For more information on 360training’s state-specific CE training packages that come included with a section on real estate finance, simply follow this link.