Ch 1. Introduction to real estate business

Question 1

Builder Kathy buys a lot in Regatta plantation Subdivision and build a single-family house according to plans and specifications she selected. After the house is completed, she sells it to someone who saw the For sale sign posted in the front yard. This type of development/construction is known as?

A. Custom
B. Tract
C. Speculative
D. Co-op

Answer 1

C. Speculative

Question 2

A local government requires ownership of streets and other infrastructure’s (e.g Storm sewers) And thereafter becomes responsible for maintenance of those acquired items through the process of?
A. Dedication
B. Police power
C. Eminent domain
D.Condemnation

Answer 2

A. Dedication

Question 3

Sales associate Tom decides to focus primarily on selling properties located in his own residential neighborhood. He constantly reviews current information about past sales, present homes for sale, and tries to get new clients by sending them direct mail information about availability of his services. Tom is developing sales and marketing skills through which type of procedure?

A. Farming
B. Exclusive right to sell
C. Mass media
D. Multiple listing service

Answer 3

A. Farming

Question 4

Prior to constructing a subdivision, a developer must submit which of the following for approval to the local government?

A. Subdivision plat map
B. Restrictive covenants
C. Topographical survey
D. Phase 1 soil test

Answer 4

A. Subdivision plat map

Question 5

All of the following are sources of funds available for a mortgage lending except?
A.Life insurance companies
B. Commercial banks
C. Credit unions
D. Federal reserve system

Answer 5

D. Federal reserve system

Question 6

It is permissible for a licensed sales associate to perform a CMA for a fee?

A. Yes, provided the sales associate calls it an appraisal
B. Yes, although it is usually performed as a marketing courtesy
C. No, the service must be done for free
D. No, only license appraisers can perform an appraisal for a fee

Answer 6

B. Yes, although it is usually performed as a marketing courtesy

Question 7

An individual that owns rental real estate in a location other than where they reside is known as

A. Prospect
B. Absentee owner
C. Property manager
D. Investor

Answer 7

B. Absentee owner

Question 8

If an appraiser was paid on a percentage basis for example, 1 % of the appraised value, how could this result in a conflict of interest?
A. The appraiser would only appraise properties that were very expensive
B. Payment on a percentage basis could lead to price fixing
C.The appraiser might be more inclined to inflate the value of the property to increase the appraisal fee
D. Paying an appraiser on a percentage basis is not a conflict of interest

Answer 8

C. The appraiser might be more inclined to inflate the value of the property to increase the appraisal fee

Question 9

The Florida state agency that is primarily involved with issues of real estate development on coastal land is?
A. Department of business and professional regulation’s DBPR
B.Florida real estate commission FREC
C. Secretary of State
D.Department of environmental protection DEP

Answer 9

D. Department of environmental protection DEP

Question 10

Uniform standards of professional appraisal practice US PAP must be adhered to win the appraiser prepares which of the following
A. Appraisal
B. Comparative market analysis CMA
C. Survey
D. Investment analysis

Answer 10

A. Appraisal

Question 11

Which type of government is responsible for enacting zoning laws?

A.Local
B. State
C. Federal
D.The United Nations

Answer 11

A. Local

Question 12

All of the following are major areas of sales specialization except

A. Industrial
B. Agricultural
C. Condominium
D. Residential

Answer 12

C. Condominium

Question 13

A supported, defended estimate of the value of property is known as

A. Comparative market analysis CMA
B. Dedication
C. Appraisal
D. Mortgage

Answer 13

C.Appraisal

Question 14

A real estate counselor
A. Is typically paid on a commission basis
B.Must have a college degree to be qualified
C. Acts as a consultant by performing research on the subject real property
D.Usually hold a brokers license

Answer 14

C.Acts as a consultant by performing research on the subject property

Question 15

Laws enacted to protect the public health, safety, or welfare are established through authority known as

A. Caveat emptor
B. Police powers
C. Rest judicata
D.Eminent domain

Answer 15

B. Police powers

Question 16

What does USPAP stand for?

Answer 16

Uniform Standard of Professional Appraisal Practice

Question 17

As a professional real estate licensee you should possess specialized knowledge in all of the following areas except?

A. Property transfer
B. Dedication
C. Market conditions
D. Sales and marketing

Answer 17

B. Dedication

Question 18

What is defined as facilities where people live and reside, also the majority of real estate licensees specialize in the sale and purchase of these. ex: single family homes, condominiums, duplexes, and apartment complexes.

Answer 18

Residential

Question 19

Practicing in this type of real estate requires expert knowledge in investment analysis and cash flows. ex: shopping centers, warehouse, and office buildings.

Answer 19

Commercial

Question 20

This type of real estate includes properties located in parks or properties otherwise zoned for industrial use such as manufacturing and distribution.

Answer 20

Industrial

Question 21

This type of real estate includes farms and other agricultural land such as citrus groves and timberland operations.

Answer 21

Agriculture

Question 22

This area specializes in the marketing and sales of up and running businesses. It requires an understanding of both tangible assets and intangible assets is required.

Answer 22

Business

Question 23

What are the 5 major areas of sales the a licensee may specialize in?

Answer 23

BRACI
Business
Residential
Agriculture
Commercial
Industrial

Question 24

How are appraisers paid and why?

Answer 24

A flat fee because they may be more inclined to inflate the value of the property to increase the appraisal fee

Question 25

What is the first step in the process of development and construction also know as locating and acquiring suitable land?

Answer 25

Land acquisition

Question 26

The step after land acquisition, which is preparing the land site for dividing the parcel into individual parcels. The developer may also instal infrastructure such as sewers, water, electrical, streets, ect…

Answer 26

Subdivision and development

Question 27

Prior to actual development and construction developers must submit a what of the proposed project to the applicable local government. This identifies where the streets and lots will be located

Answer 27

Subdivision plat map

Question 28

Name and describe the 3 types of construction?

Answer 28

Speculative- builder owns the land and constructs the home
Tract- builder owns the land and the buyer chooses from builder floor plans
Custome- Buyer owns the land and constructs the home

Question 29

Name and describe the 3 types of government

Answer 29

Local- (most important when dealing with real estate) implements zoning laws, building codes, ect. (establishes property taxes through authority “police powers”)
State- implements laws to protect the environment (DEP is the lead in this area)
Federal- agencies and regulations that influence real estate ownership