Core Concepts Flashcards by Katie Greene

One judgement involving multiple licensees

$50K maximum from recovery fund per judgement

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An increasing or decreasing discount rate

The Fed’s least effective tool to control cost of credit

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In what instance could an agent appeal to District Court of Appeals

If license has been suspended or revoked

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What fund is sustained by fines and fees from licensees?

Real Estate Recovery Fund

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What world also means corporation for profit?

The word ‘Company’ must be in the business name

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What does a temporary incapacitation of license mean?

Mandatory Suspension

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What is Liquidation Value Appraisal?

Best used to determine value of a failing business

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What happens for unlicensed individuals violating R.E. law?

Cannot be fined monetarily by the FREC

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Real Estate Cooperative

Does not involve fee simple ownership

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After Probable Cause Panel (PCP) finds probable cause

A Formal Complaint is filed

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How are interest rates on conventional., FHA & VA loans determined?

Determined by borrower / lender negotiations

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What happens when a licensee terminates employment

Must get a reissue before performing services

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What is operating business risk?

Risk income or expenses miss expectations

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When would a licensee receive a notice of non-compliance or citations?

Issued for minor infractions of FREC rules

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What is charged by lender to increase yield (profit)?

Discount points are charged to make a loan

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Sales Associate Compensation

Can only be paid by their broker-employer

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Must have active broker’s license

To be an officer or director of a brokerage

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Registered name of brokerage

Must appear in all advertising

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What happens if Broker doubts disposition of escrow funds?

Must notify FREC in writing

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Which properties are exempt from execution of judgment liens?

Homestead property

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What must happen when a sales assoc. gets post-dated check as a deposit?

Deliver immediately to employing broker

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What is it called when recording deed in the public records?

Constructive Notice

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What happens if registration of a brokerage is suspended or revoked?

All sales associates are automatically inactive

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Availability of credit is directly related to

Demand for real estate in the market

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What is the Fed's strongest tool to regulate US economy?

Open Market (buying & selling high yielding Treasury Bills

What would happen if a broker failed to split commission as agreed

Can be charged with failure to account

What is it called/would happen if a licensee operated recklessly & carelessly?

Could be charged with culpable negligence

What is the relationship of sales assoc. to broker?

General agency

What does the OTS/Office of Thrift Supervision do?

Federal Agency regulating Savings & Loans

Apartment complex owners can employ

Unlicensed, salaried, on-site leasing agent

Quasi-legislative power of FREC

Allows FREC to adopt rules & regulations

State & Federal No Solicitation phone list

Disallows calls from 8AM to 9PM

What is residential zoning based on?

Density / Population

Real Estate Taxes

Become a lien January 1st of every year

Title Insurance is an expense entry

Never pro-rated on a closing statement

During a hearing a licensee can request what?

Administrative law judge to subpoena witness

What would qualify for cost recovery tax deductions (MACRS)?

Commercial and investment properties

Graduated payment mortgage

Scheduled increases in mortgage payments

What is the legal time to sue for contract enforcement called?

Statute of Limitations

What items can be deducted from Homeowners income tax return?

Mortgage interest & real estate taxes

9% annual Interest plus 6 discount points =

Effective yield 9.75

Executive power of FREC

Can be exercised by chairperson acting alone

What is combining two lots under one ownership called?

Assemblage

What is the Fed. Agency insuring deposit at commercial banks known as?

BIF - Bank Insurance Fund

What could result from failing to record deed?

Estoppel

CCPA/Consumer Credit Protection Act (Reg. Z)

Requires disclosure of true cost of credit with APR

Allodial System

System allowing individual ownership of real estate

How are construction loans are usually disbursed?

By draws as construction progresses

Who usually pays for the intangible taxes on a new mortgagee loan?

They buyer, not the seller

What is true of both VA & FHA 203(b) loans?

May be pre-paid without Penalty

What is unenforceable according to the Statute of Frauds?

Oral R.E. contracts

What is the first step in obtaining a VA loan?

Obtain a certificate of eligibility

What is not required to create a valid, enforceable contract?

Acknowledgement (Notarization)

Mortgage payments are not an Operating Expense is based on the following approach?

Income Capitalization Approach Appraisal

What is the basis for all 3 primary appraisal techniques

Substitution

What is an example of functional obsolescence?

A Florida house without central heat & air

Goodwill of a business

Example of an intangible asset with market value

ANY deposit received by a broker

Should immediately be placed in escrow

In appraising, the word “price” means

Amount of money RECEIVED in a transaction

Assignment allows

Transfer of rights from one to another

Real Estate can be described as

Local in nature

What is entered as a double entry on the closing statement?

Pro-rated real estate taxes

What may be a potential title problem?

Title held by a corporation sole

What is Prima facia evidence that holder is licensed?

Possession of a valid R.E. license

What is a REIT (Real Estate Investment Trust)?

Business trust

What items are all found in a promissory note?

Loan amount, Interest rate, term, payment plan

Economic Soundness (Risk)

Primary consideration of all investments

What is it called when individual ownership of a single unit?

Condominium

What happens when foreclosure funds are insufficient to pay all that is due on the loan?

Lien holder may apply for a deficiency judgment

Who is the mortgagor?

Title holder in lien theory state

What would be a Violation of Sherman-Clayton Anti-Trust Act?

Unaffiliated brokers discussing commission rates

What is a Deed of Trust?

Third party holding title for security

Estate by the Entireties

Terminated by divorce into tenancy in common

Limited partnership brokerage requires

1 or more general and 1 or more limited partners

Tenancy at will

Tenancy without stated termination rights

What is an example of Ostensible partners?

Brokers sharing office without separate signs

What is an easement?

Legal right to enter upon another’s property

What would happen if 1 broker's license was revoked in office of 4 active brokers?

Only licensee affected is broker who was revoked

What does title transfer require?

Delivery & Acceptance of the deed to & by grantee

General Warranty Deed / Warranty Deed

Defends title against any & all legal claims

What are unliquidated damages?

Damages not specified in the contract

What is an option contract?

Agreement for specified period of time

What is the warrant of quiet enjoyment?

Promise in a deed of no hostile claims

If customer refuses representation, give them

No Brokerage relationship notice before showing

What is the function of the secondary market?

Provides liquidity to primary market

What is required to perform license service after suspension ends?

A reissue is required

What is a clause that benefits the mortgagor?

Prepayment clause

What is hypothecation?

Borrower pledges property as security

Gross lease

Tenant pays rent only, landlord pays the rest

Implied Contract

Contract with terms & conditions inferred

An oral lease creates what kind of tenancy?

Tenancy at will

One broker must be an officer of the corporation

In a registered brokerage corporation

All 4 broker partners want to perform services

All 4 must be actively licensed

What are Highest and Best use appraisals for?

Land & improvements

What occurs if a broker were to close & reopen office in same lic. period?

Requires a reissue if office is in the same location