Electronic Signature Mortgage Deed Made Easy

Electronic signature mortgage deed

hi this is joe with prep agent and i'm here today with amber my best friend for the day right amber that's right okay so amber's getting ready take her test and before she takes her test she wanted to review some concepts with me which is awesome happy to do it the first one you want to go over was what was the first one you wanted to go over trustees mortgages and promissory notes yes so amber emailed me about knowing the difference between trust deeds mortgages and promissory notes i love that you asked me about this these people get this wrong or get it confused all the time including yourself right you got a little confused with this yes i mean i've read the definitions a hundred times and i still cannot understand it well when you're done you're magically gonna understand and everything's gonna be okay perfect it's gonna be great so let's start with this so let's start with the promissory note starts there now what's the thing i tell everybody in the webinars all the time keep it simple keyword simple don't make it more complicated than it needs to be so i have this thing the first promissory note in the world are you excited to see it i'm excited okay here we go the very first promissory note boom what are you looking at right now caveman etched a note in stone what does that note say i owe you stuff okay now that goes to my point that let's keep it as simple as possible because simply said this is a promissory note this is a promissory note why is this a promissory note i mean it's just a stone with a guy writing it in like a caveman stone writing i owe you stuff why is that a promissory note it's kind of like like an iou is promising like hey i owe you yes it's evidence that they owe you i owe you that's all it is and i want people to understand that when you go get a loan on a house you sign slam it says here's the evidence that i owe money that's all it is and the reason i use this cartoon is it literally the cartoon of the caveman no but hopefully it drives home the point it's that simple and don't complicate it more people make it complicated these very often promissory notes include certain things like duration debts you know percentages things that make it a little trickier but for your exam you have to know what it is at its core it's just something that says what you owe does that make sense yeah so i guess maybe i'm reading too much into the note part so is it actually just a piece of paper that when you go there and i guess i was thinking like a note like something that carries with you well let's first separate what actually happens when you get a loan from a bank versus what the definition is so you could pass your exam cool okay so it is just an iou now obviously when you get a loan from a bank is it as simple as writing something in stone no um but it is the evidence of the debt the borrower borrows money from a lender before the lender gives the borrower money the borrower will sign an iou which is called the note the note states the terms of the loan this is the most important proof of the loan it's those terms the loan is why people get confused uses a lot of numbers and information there that's very important when you get a loan however to pass your exam don't let that gray the pure definition of what it is it's an iou just like you said and that's why i made my little art with the napkin like we're eating dinner together and i and i lose my wallet and i'm like amber i'm such a i don't have my money like joe you did this again i'm so annoyed i paid for you last time you didn't pay me back what can we do is this a trick question no it's not your question we eat dinner you don't trust me i need you to pay for my dinner what can we do um give me a napkin i'll write amber i owe you 50 bucks right so just like another iou exactly that's a promissory note gotcha okay it's that simple no it's not your question um i'll pay you back for dinner if we every dinner together okay perfect after you sell a house correct that's right yes okay so the note states the terms the loan it would be like me right on that napkin amber i had a burrito and three margaritas and i totally owe you for that here it is boom i owe you okay awesome so now it gets a little trickier so that's the promissory note but now we get into this thing a mortgage we're gonna talk about mortgages and trust deeds can i ask you you've heard the term mortgage a lot are you a homeowner i'm not okay well don't worry about it but you you heard the term mortgage before correct yes what is it a mortgage is when you go to a lender it's money owed in the simplest term what do you think it is now i've also said if there's two ways you understand something he explained it in an elevator you know that five second rule and also could you explain it to a five-year-old could you simplify it so when you said what did you say on mortgages repeat that again money owed not exactly remember that's the promissory note okay what you owe so let's back up for a second and i love that we're having this conversation because what you're doing everybody does remember we started this by saying everybody has trouble with this so i love the fact that you brought this up today and i'm going to give you a little history today that will help everybody really nail this down you're a history buff right no well maybe it's time you start right okay okay so what is a mortgage a mortgage is not actually a loan it's not a loan people's use the word as if it's a loan the mortgage is a document that gives to the lender that creates a lien on the property what's a lien lean money lean money lean money right so it creates a lien on the property what does that mean it creates money owed on the property but a lien it does mean money you're absolutely right it means your money but also means that if you don't pay it what happens they'll come and take it exactly exactly so a mortgage creates a document that says if you don't pay the money then guess what we're taking your property okay and we said what is a lien so let's say it again what's a lien lean money lean money lean money money owed let's go on a little tangent for a second since we're reviewing stuff right what's the difference between a general lean and a specific lien so a specific lien is when they're coming after something specific a general lean is when they'll come and take all your stuff good good that's excellent so what specifically are we talking about when it's a specific lien um don't overthink it it's really obvious your house exactly perfect your house what's the difference between a voluntary lien and an involuntary lien i would say i i'm gonna break it up like how you tell me sometimes the well you don't tell me but in your webinars you say sometimes the answer is right in front of you okay it is that is true voluntary would mean you're volunteering to go out and get a lien why would you do that that sounds ridiculous because you have to get a lien on for your house is that mortgage voluntary do you have to get a mortgage well you don't have to it's voluntary that's a voluntary lien right so that mortgage would you say it's a voluntary specific lien yes it's voluntary because you're volunteering to go out and get it it's a specific because it's one thing and it's a lien because it's money owed yeah so example of a general lien would be something like um when you go to the court right like a judgment lien and they say you you lose you owe the money and if you don't pay it we're coming after everything that's involuntary in general so if you get sued and you lose and the court issues a judgment lien that would be an example of a general involuntary lien right okay yep but when you go to the bank that's a specific voluntary lien okay okay excellent good all right but we're talking about mortgages here let's let's get back to what we're talking about here in lean 30 states the real property is pledged is mortgaged lending institution which has a lien on the property any purchaser of that property takes it subject to that lien sounds very fancy that's kind of like the word you're going to see on your exam but hopefully you could break that down could you look at that sentence and know what i mean here yes okay so in lean theory states so they have title theory and lien theory states lien theory is used as mortgages for the most part that means you owe money the real property is pledged okay so it's collateral and it's pledged to that lending institution okay so what does it mean when you take property subject to that lien property subject to that lien when you take property subject to the lien i don't know basically all i'm training at is you're taking that property with the assumption that if you don't pay the money they'll take your house okay right simple simple simple simple what does subject to mean oh i know that she talked about this at the time subject to an assume so when you get a property right object two and assume assume subject two so you buy the property from me okay i have a loan excuse me i have a lien a debt that needs to be paid to the lender and you're buying that property from me typically now there's exceptions to everything but typically how are you getting this property subject to or assume subject to why if i'm buying the property from you yeah so you're correct in your answer you're correct i just want to know why what do you think i'm subject to the loan good yes you're warming up you're buying that property subject to the fact that i am going to take care of my my loan it's going to be terminated that you'll get your own loan on the property right assume means you would take over the loan correct okay ownership kind of thing right yes and there's situations that that makes sense but we're not gonna get into that right now okay but you just need to go subject to assume okay buyers liable subject to sellers liable all right banks insist on paid off before the property is sold this is known as a due on sales clause that's what i mean i have a due on sales clause when it's sold i have to pay off the loan and usually i pay it off with the proceeds from the sale of the house easy stuff right how are we doing so far so we brush it up on stuff you already know i think you're pretty good yes yes so i mean but you know it's always good to touch base this is great yeah i think you're going to do awesome thanks joe best friend yeah you go um okay but before i collect you too much we're gonna get into the murky waters yeah no this is what this is what i wanted to know you see you see we're warming up to the part that's like you're like where was he going with this you're starting to see where i'm going with this right okay there are two parties to a mortgage what are they mortgager and mortgagee mortgagee mortgage or mortgage or mortgagee oh and what question always comes up with this who is the mortgagor yes all the time and i'm going to answer that in a second i'm going to answer it and people who listen to this webinar will never question it again because this always gets messed up why is he the mortgage or why are they the mortgagee joe you said or give or ee receive blah blah blah i get that like every day i get that question okay i'm sure and just so people out there know when i read that question that's the voice i hear in my head i hear the that's what i hear isn't that terrible i probably shouldn't say that no it's okay this is a circle of trust total circle of trust with us and everybody in youtube land that's right okay so there are two parties to a mortgage and the reason i hear that voice is i'll get to that in a second because i get that question over and over again and so many people teach it wrong that's why i get annoyed with it so it's not the people asking it's the teachers they have that bother me before i do that what security does the lender have once they give money to the borrower what's their security the promissory note no okay hold on let me take some guesses no it's very obvious you'll be okay what happens if you don't pay they come and take it the lean take what the property yes the property that's the security that's the collateral right there okay once again don't overthink it that's your collateral okay the security knows the collateral is the property which is bought with the funds given to the borrower the borrower pledges the property okay so we're going to get this done once and for all so we're going to do some history here so mortgage literally means the roots death pledge if you go to the latin roots of it oh the borrower pledged to give the lender the property if the borrower cannot pay back loan a full this actually goes back to the days in old world france this word where i would get property but i would only own it if i work to you for you until the day i die so the poor people in france would have to work until the day i die if they want to own property so it actually literally means death pledge the reason i'm using this example is it'll stick in your head that the mortgage is not the note it's not the money you owe the mortgage is that lien it's that pledge that if you don't pay then they're gonna take your property that's what that mortgage is gotcha and that's why because i have a feeling you're gonna remember wow that's going to stick mortgage actually means death pledge you know it does you guys could google that in youtube land if you want and the reason i'm using that example is i think it's going to stick in your head i'll never get it again that the mortgage is not the money oh it's that pledge it says if you don't do what you're gonna do your property's gone right okay mortgage comes from the french mort gage literally death pledge the french presidents were working until they died for the privilege of owning a house this is one of those facts that you're totally going to remember for the next 10 years and when you're selling houses you're totally going to use that when conversation dulls you're like by the way did you know that this means death pledge okay joe can i stop you just for a second yes okay so just um just to break it down because i'm like a super keyword person so promissory note we're talking about iou yes mortgage we're talking about pledge yes gotcha okay perfect good good stoppage amber thank you okay here's my next question this question will not be on your real estate exam you should know it for life it'll help you pass your real estate exam what is a suffix do you know your english literature listen i i didn't study that word this is a trick question it is i'll help you it is tricky so i'll help you suffix a suffix is something added to the end of a word that conditions its usage or meaning and i'll tell you why i bring this up and it'll help you pass your exam because very often people hear the o-r-e-e rule okay right and they say lessor trust or grant door you know gives it to the lessee trustee grantee so on and so forth and then the teacher gets it and he says but the mortgage is an exception to that rule any teacher who says that leave the classroom immediately they don't know what they're talking about and the reason i set a suffix because it's not an exception to the rule that's basic english language a suffix is something that denotes an action okay so the suffix or denotes the person who performs an action the suffix ee is used to denote the recipient of that action so i do that witty thing you may remember it less or grant to our vendor option or give or proper tour for your pleasure let's see vendi grantee optionally give me property makes me happy right i do that fun little thing in some of the videos yes love it love it and what my issue is when they say mortgage is an exception is because they're not understanding what is being given and what is being received and this is the crux of why a lot of people get confused but there's no exception to the rule because it's a suffix it's basic english language the o r e e rule o r give or ee receives or as i wrote here to be more technical or denotes the perform person who performs an action ee denotes a recipient of that action that's the technical english language definition of it gotcha so here comes the crux of this issue since the buyer borrower is pledging the property and this is where this all kind of comes together everything we've been talking about they are mortgaging the property and thus they are known as the mortgage or the lender is the recipient of that pledge and therefore is the mortgage e does that make sense yeah absolutely and people always get it messed up because they're like wait a minute the borrower's receiving the money shouldn't they be the mortgagee and i stop them and i say what is it that's being given and what is it that's being received right and so the borrower is giving or pledging the property yes perfect that's why it's the mortgage and then the mortgage e the lender is saying hey well i'm going to give you some money since you're pledging it i got it right and and the reason i went and hopefully the way i went about this is good for you and everybody who's listening but i had to go about it this way because i wanted to get through that understanding of what it is that's being given and what's being received and that's why we started the promissory note that's about the iou money so the mortgage is really not about the money it is obviously but the literal the literal point of it it's the pledge of the property right and that's why the mortgagor is given that pledge and the mortgage e is receiving it so there's no exception to the english language when we're talking about a suffix of the o-r-e-e as long as you understand what is being given and what is being received sounds good right sounds great i hope you're a little more clear on that now yeah no i mean definitely good definition for sure okay and you're gonna remember forever that it means death pledge literally there's this other annoying thing that comes up trustees how annoying is that i know okay but it's actually very simple okay the trustees has three parties do you know who they are um they are here read it off here oh oh okay trustee beneficiary yes trustor trustee and beneficiary the reason this is different because it's a third party relationship the mortgage is a two-party relationship mortgage or mortgagee trustee has a three-party relationship right right okay trustor give board trustee receives beneficiary is gets the benefits they're they're they're the bank they're they're the money people gotcha okay so then the question becomes this for gets a little difficult here what is the trust or giving and what is the trustee giving and that's the crux of what's difficult about these things what are they giving and what is being received okay do you know um no here let's start here what's title ownership ownership excellent good what's equitable title what's legal title no i mean equitable i would think okay legal title is the right to sell equitable title is the right to use and possess gotcha okay yeah all right okay so you have the trustor trustee and beneficiary i have these four things here house my little legal title thing here an equitable title and a little money sign right okay so we start here with the trust door let's give him legal title here but he wants to borrow money he doesn't have any money so the money is over there okay what he's gonna do is call the beneficiary and say hey beneficiary i need money could you give me money please what's the beneficiary you're gonna say yes i'll give you money for title first they'll be like wait a minute i don't know you're gonna pay me back i mean i don't trust you at all i mean who knows what you're gonna do correct right i mean so then he'll say listen trust dor here's what i want you to do give legal title to my friend the trustee you do that i'll give you some money here okay and you could live in the property all right and we'll have equitable title because he has the right to use and possess make sense yes in my i guess that was the question that i always get confused on because like the definition of deed of trust that i have yes what do you have is that it's a guarantee of payment by the borrower in a pledge of the property as collateral for debt yeah that is true that is absolutely true that that has not changed okay see that's where i get confused like mortgage pledge deed of trust pledge here's the difference here's the difference i'm thrilled you asked that they both have to do with pledging the property okay the difference has to do with how they go about getting that property in case you don't pay them back okay basically foreclosure one's called a trustee sale one's just a judicial foreclosure okay i don't want to get too much into that just yet here's the difference in this one if they don't pay the beneficiary so the trust door doesn't pay the beneficiary okay the beneficiary will contact the trustee who has legal title and he will sell that property the collateral to compensate for that lack of money the trustee is a middle man i was just about to ask you where does t come and play in all this okay so the trustee's a middleman so the trust store doesn't pay the beneficiary beneficiary will go hey trustee remember that guy at trustor he didn't pay me get him the trustee will say okay and obviously there's a proper proceeding to that and the way it happens right and they will sell the property because they have legal title okay so they're both collateral just like you said either way you know that house is the collateral so in a mortgage that does the bank hold the title yeah well they go they go something like a court foreclosure and each date has different rules on that so i don't want to confuse you on this there's different reasons for going through it in different states okay and by the way for people who are listening it after you pass your exam there's people who make entire livings just off knowing the nuances of foreclosures gotcha yeah we don't want to get too confused with that right now but it's a whole another ball game okay so legal title is the right to sell equitable titles the right to use and possess okay and at the same time if the trust door pays back the beneficiary everything the trustee will issue that reconveyance deed which says the loan is paid off which says everything's done it'll issue back to the trust door so it works both ways in that situation so the trustee could take the property away and you could also say hey everything's done he's paid everything owes done reconvinced deed so it's supposed to be a third party in there all right okay and tell me one more time legal title is the right to sell the right to sell equitable title is the right to use and possess use and possess okay and when he pays off everything trust door will have both when everything's paid off perfect okay okay gotcha all right you don't use as much as in your estate other states do but they test you on both in your estate so you got to know the basics of both as you know i've i passed my state so i'm going to go all right here we go okay so you should be able to answer this question now okay what is equitable title is the right to possess and what is legal title the right to sell and just so we're clear that's a very simplified definition which i'm fine with right now but there's nuances to that as well if you guys study your books and see but that's a great start so understand the gist of the concept so you can pass your exam perfect okay you also asked me about contract for deed sounds very confusing and daunting doesn't it it's not but they should make this word a lot easier okay they should just call it giving the seller money for seller lender that's all they should call it do you know what a contract for deed is um it's i don't want to butcher it put your away okay i think it is sorry i'm looking at my notes here i have written down a contract for deed i don't know you know i'm better if like i see it and then i could tell you like that's it no worries so on the simplest level a contract for deed is this you want to buy my property okay right you don't have all the money so what can i do i want to buy your property but i don't have enough money to buy it so what can i do as a seller i want you to have it i think you're great i totally what can we work out i totally want you to get it you don't have enough right now what could i do like a lease to own too complicated i could be the the lender right okay good yes okay so i could just be the lender in that scenario based on what we just learned who has equitable title and who has legal title so the seller will have legal title now i'm remembering so the seller will have legal title until paid off yeah until the debts paid off and then um the buyer will have equitable title awesome it's all coming together you're doing great thanks there you go and that's what i said contra every detail is very complicated they should just call it like seller giving money to amber or something like that right i agree we need to talk to them about that yes all it is is i'm becoming the lender so i retain legal title and you have equitable titles if you don't pay me then i can sell it off right okay very simple stuff here seller provides financing for the person who's buying their property the seller loans the buyers funds and allows the person to live on the property the buyers obligated to make payments on the property that's simple yeah before we got on this call it was a lot more complicated in your head than it is now it it was i was needing you to explain because that way i could pick up keywords and know so when i see that i'm like okay the whole thing with the deed and the mortgage both of them contain like that pledge right you know something and that's what was confusing for me and by the way you bring a great point the reason it's good we're going over this in this way and people should do this either with a friend a teacher or something else people love doing multiple choice questions multiple choice multiple choice multiple choice at some point you got to understand the concepts otherwise you're just looking for words and not knowing exactly why they are there and the problem with that is if your actual exam does not simulate those words you're filling out those practice tests it won't work or even worse if they're just slightly different than your practice test you get confused right whereas if you understand the concept when it's a little different you're like all right i understand what they're getting at i okay i know what they mean here it's a little different because of this this and the other yeah so it's good we're going through this today to go over pledge deed title equitable title legal title all those different things exactly i agree yeah and so a lot of those questions are making a little more sense so today already did legal title equitable title pledge um lean a bunch of things here that are kind of working together and my feeling is that before you got on this call or for others they were functioning as separate concepts almost like just memorizing random words right and hopefully what i'm doing for you today and doing other people listening is saying they're not random words it all works together in a greater picture yes okay okay the next thing you asked me about was agency agency what's a fiduciary the rights or what do you want me to do so when you have a fiduciary duty or your fiduciary relationship what does that mean um it means what the relationship um that is owed to your client responsibility act truthfully good faith all those kind of good stuff basically put your client's interests above your own correct it's basically the legal term for be a good person and that's simply what it is like just being a good person right right right uh it says here in professional responsibility to act truthfully and with good faith and represented client do what your mother taught you to do that's the basic gist of it right it's the core of agency relationship so next we have general agency and a special agency relationship and we spoke about this before we got on this call so what's a general agency and special agency what do you know about those two words so a general agency is when um you do more than one thing for your for your client okay and then a special agency would be they want you to do that specific thing what's an example of that a specific agency um finding an able and willing buyer what's that like finding an able and willing buyer good great what's that called what's that contract called an employment contract being too fancy for me but i love you everything you're saying is correct a listing yeah it's a listing when you get hired to take a listing that's a specific agency a special agency because you're getting hired to do one thing like you said find that ready-willy-enabled buyer so it's excellent you've totally been studying okay read this out loud please awesome special agent a special agent is one who has limited authority granted to him or her through a principle the relationship with the principal is not expected to be continuous the listing contract creates a special agency relationship with the seller the authority is limited to the duties given in the listing contract and the relationship ends when the terms have been fulfilled exactly what you just said a second ago let's find that reading enabled buyer right you're you're you're you're hired to do one thing specifically or special so a special agent would be a real estate agent right well we were doing so well we just took a right at somewhere um no a real estate agent is a title for somebody who works somewhere a real estate agent could be hired by somebody and be a special agent for somebody else a general agent for somebody else depends on what they're contracted to do okay i got just so well that's good to know because that's in my book as like an example of a special agent so right we spoke before like as an agent could you be hired to be a property manager yeah absolutely sure but now your function is a general agent because you're being asked to do many things here read the definition of general agent a general agent is authorized by the principal to perform any and all acts associated with the ongoing operation of the job or business a real estate licensee acting in the capacity of a property manager is a general agent to the owner right so you can't say a real estate agent a specific agent a real estate agent is just a title it's a licensed person with a license right and they could go either way yeah it depends what you're being hired to do exactly because a property manager i use that example because it's a good one because it's not one act there's multiple things going on there whereas when you take a listing i'm hiring to find a buyer you do that done high five fist bump see you later gotcha what's an implied agency um an implied agency is by actions orally or written why do i have a picture with duck there there's a famous expression that really works for this have you used this before well i'm going to now you ever heard the term looks like a duck walks like a duck acts like a duck must be a duck right so what am i getting at with this with implied agency it's exactly what it says if you're acting as that you are that it's implied you are that person it occurs from actions of parties so if i'm showing you property quoting prices taking around doing up contracts with you i have just become your agent it's an applied agency and this is very scary for real estate agents because you can become legally responsible depending on the laws in your state but agents have to be careful about this because if you do enough if i tell you to sell your property over a certain amount and you start acting upon my advice it can get very tricky gray areas with the laws about that because their argument is you're acting as an agent you are the agent right it's an applied agency that's why many agents when they start getting asked advice they'll say hold on am i your real estate agent or not like what's going on here so they don't slip into that gray or being responsible for somebody they didn't really want to be responsible for right okay the laws on that worry about after you pass my point is the implied agency occurs from your actions much like an implied contract do you know what an implied contract is um the relationship between broker and seller oh no much simpler the actions same as supply agency are what dictates that you're contractually obligated to perform for example when you go to a restaurant do you have a bill no you don't get to pay yes you pay the bill um did you sign a contract saying you're gonna pay the bill when you sat down at that restaurant no no it's implied that when they give you the check at the end you're gonna pay it they serve you the food with the understanding that you're gonna pay at the end and you can't say when they serve you that food and they bring you the check at the end can you be like nope i never signed anything saying i'll pay for this it was delicious but i'm not paying for it can you do that no no because it's implied that when you sat down you were going to pay that that's when you said you said implied contract what's that you said implied contract that's implied contract but the concept is not that different from an applied agency they're both right and that the actions connotate what you are right okay okay no i got it earlier whenever you i thought you were like tricking me again asking me to like tell you implied agency so perfect implied contract got it right here my on my notes good okay read that out loud please real estate professional provides the type of guidance and advice that would be reserved for clients but that consumer relies upon that advice that could create an implied agency that situation right there okay okay sorry i was rereading it oh okay you can read it you want to read it out loud again real estate professional provides the type of guidance and advice that would be reserved for clients but the consumer relies but that consumer relies upon that advice yeah so basically you're acting as an agent and they're relying on it so they're treating you as their agent right and you're getting it about what i need to do and they tell me what i'm going to do and that ends up being what i do yeah that's an implied agency correct yeah my disclosure kicks in here that i'm not a lawyer but we get the concept here gotcha okay you also asked me something about appraisal which we'll finish up with today but before we do that what are the four essential elements of value um gosh i know this give me just a second okay and there's not this isn't um like a little you know how you do your little things to tell oh it is one of my little things for sure it is it's totally one of my little things okay hold on okay it's not maria no it's not it's not pete hold on you're not getting away with saying those words without saying what they mean okay maria is method um agreement adaptability uh sorry adaptability relationship intention and and agreement i thought oh okay when you said agreement sorry i don't see him in the exhibit my bad i should have done that terribly like oh crap okay um what are we testing for what's maria for oh for um uh personal property fixtures it's a test for a fixture pictures yes okay and what's pete pete is government powers great what are they uh police power um eminent domain taxation and um cheat good now back to this one before what are the four central elements of value okay you could use dust or stud you want me to help you with this one no no okay sorry hold on all right let's see here it is demand utility scarcity and transferability excellent demand utility scarcity transferability duh terrible spelling by me i'll forgive you since you gave me time yes that's dust d-u-s-t i've always hated that because dust is not valuable i always prefer scarcity transferability utility demand stud i've always preferred that doesn't just sound way better i agree but honestly dust stud or you use tizzada for all i care as long as you remember it tis it does not really work people okay so scarcity transferability utility demand demand utility scarcity transferability gotta know those those are easy ones to get right on your exam i agree what is depreciation um value loss of value on your property loss of value for any cause very simple definition gotcha okay there's three ways that your property could depreciate and this is leading up to the question you asked me about do you know what they are i do not know what did you do you asked me about one function i did tell me whisper it again look at the screen oh oh yeah yeah okay oh perfect that i didn't even know that so that's great you did you asked me about the first one before we got on the call i know i asked you because i didn't know all right well played good point okay what does the word functional mean um i think i can give you a definition of all these three kind of like how i remember them and tell me if i screwed it up okay let's do it okay so functional obsolence and i do i don't know if i'm saying that right that could be example of you have a home that has five bedrooms and one bathroom it's not very functional for a family to eat good okay economic obsolesce is anything that's going to happen like outside or around you is that good enough for me to give you yeah no it's absolutely spot on it's things that happen outside the property lines okay cool and then physical deterioration is going to be like um i mean basically like the the property you know it's what they consider wear and tear yeah it's falling apart you're probably falling i mean in the most simple terms of this functional it's not functional one bathroom five bedrooms economic like the economy is not have to do with your property it's outside the property lines and physical deterioration your property's deteriorating right okay so like the roofs falling apart physical deterioration if there's murder in your neighborhood which one would that be if there's murder in my neighborhood it's going to be outside it's economic good okay um so you got this pretty well which one's the hardest to cure um the hardest to fix yeah out of those three i would say i can't fix anything outside my home so economic yeah i mean you could say you'd have a neighborhood watch fix things but most people just simply move right right functional we could add another bathroom right you could convert one of those bedrooms to a bathroom physical tradition you get a repair guy economic you basically move you're like this is above me i gotta go right so we went over a lot of concepts here and it doesn't seem like a while but we've been doing this a little while now i hope you learned a bunch from this but we went over today did you all right and i i know you say a lot that you know like you can't just do multiple questions so i think i'm good you know i've watched all your webinars i've i've done all your tests i've done other tests i've studied books and now i'm going to go do some multiple test questions in the morning right and just you unders this is why i do the videos so people understand the concepts and they're just not blandly blindly answering questions right so that's a little point well all right amber well good luck tomorrow and this is joe from prep agent if you have any comments leave them below under the comments under the video and other than that till next time okay bye bye