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Federally Related Transaction (FRT):
A Federally Related Transaction (FRT) is when someone is buying, selling, or refinancing a property, and it involves a financial organization that the government regulates. In these cases, the government requires a professional appraiser to determine the property's value.
Imagine you're buying a house, and you need a mortgage loan from a bank. Since the bank is regulated by the government, this transaction becomes a Federally Related Transaction (FRT). As a result, you'll need to hire an appraiser to figure out the property's value, so the bank knows how much they can lend you.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In the land of real estate, there's a term,
Federally Related Transaction, you might learn.
When buying, selling, or refinancing a nest,
A government-regulated bank is part of the quest.
An appraiser is needed, oh yes indeed,
To determine the value, on which all parties agreed.
A house or a building, in need of a loan,
The appraiser's job is to make the value known.
So remember, young friend, when you're part of the deal,
A Federally Related Transaction has a certain appeal.
The government watches, as the appraiser does work,
Ensuring the value is fair, and no one tries to shirk.