Exam Prep Flashcards
1
Q
When a Florida applicant is upgrading from sales associate to broker, what course must they complete?
A
A 72-hour pre-licensing course.
2
Q
Vale can be estimated in the income approach by:
A
Dividing NOI by the Overall Cap Rate
3
Q
On what IRS form must details of closing be reported?
A
IRS 1099 S
4
Q
On what IRS form are brokers required to report commissions paid to salespersons?
A
IRS MISC
5
Q
Real estate term describing the process of converting real property into personal property
A
Severance
6
Q
To whom does a tenant or prospective tenant lodge a housing discrimination complaint?
A
Secretary of HUD
7
Q
Refers to a provision in the lease that gives the right to the tenant to extend the lease for a given amount of time
A
Renewal option
8
Q
By what process is a completely abandoned property returned to the county/state
A
Escheat
9
Q
Condition of a property owner who dies without a valid will
A
Intestate
10
Q
Condition of a property owner who dies with a valid will
A
Testate
11
Q
Right of the government to take private property and use it for the good of the public
A
Eminent domain
12
Q
Four powers of the government
A
PETE
Police Power
Eminent Domain
Taxation
Escheat
13
Q
Term that refers to a government’s use of their right to eminent domain
A
Condemnation
14
Q
When is a comparative market analysis most often used?
A
Setting the listing price
15
Q
If a buyer entered a contract with a seller, but wanted to not buy the property, what would happen to the earnest money?
A
It would go to the seller.
16
Q
Term for when the board of Zoning Appeals grants someone the ability to construct or improve a property that is not authorized by current zoning ordinance.
A
Variance
17
Q
How long do you have to file a complaint with HUD if you believe your rights have been violated under Fair Housing Laws?
A
1 Year
18
Q
Describe an exclusive right to sell listing
A
The listing belongs to the broker
19
Q
What disclosures does Regulation Z require?
A
Finance Charge
APR
Amount Financed
Total Payments
20
Q
What must a Florida deed have to be valid?
A
It must be signed and witnessed.
To be recorded in the court, it must be notarized
21
Q
When is does a contract begin to be enforcable?
A
When it is accepted and mailed back to the buyer
22
Q
In Florida, if a sales associate does not complete the 14 hours of continuing education requirements prior to the expiration date, what occurs?
A
The licensee is allowed up to 12 months after the expiration date to complete the 14 hours continuing education and pay the renewal fee.
23
Q
When will a warranty deed transfer title to a grantee?
A
When it is delivered and accepted
24
Q
What type of contract would show the intentions of the parties by their actions?
A
An implied contract
25
What type of contract would show the intention of the parties by the specific terms agreed upon in words? (Written or oral)
An expressed contract
26
What is an Executory contract?
A contract between a debtor and another party under which both sides still have important performance remaining (example: Real estate leases- tenant has to pay rent, landlord has to provide space.)
27
What is the primary purpose of acknowledgement when a deed is recorded?
To verify that the deed was signed without duress
28
What is the secondary purpose of acknowledgement when a deed is recorded?
To verify the identity of the party signing the contract
29
Until pay off, who would hold title when a purchase of a home is financed by means of a trust deed?
Trustee
30
Are special assessments prorated at closings?
No
31
What is one manner in which a husband and wife could NOT hold title to their home?
Tenants at will
32
Tenancy at will
An arrangement in which one party (the tenant) occupies real estate with the permission of the owner, for an unspecified period of time. This is NOT a form of ownership
33
Tenenacy in common
An estate owned by two or more persons, each of whom as an equal undivided interest (they do not need to be related)
34
Tenancy by entireties
Form of ownership between a married couple. (Joint tenancy for married people)
35
Usury
Term used when an interest rate charged is in excess of the maximum rate allowed by law
36
Subordination
When something is lower in rank and importance, such as the case with a subordination clause which makes other debts in collateral real estate secondary to the claim of the mortgage lender
37
Puffing
Best defined as non-factual or extravagant statements and opinions made to enhance the perceived desirability of a property
38
Hedging
Financial technique used in order to reduce or eliminate financial risk.
39
If a buyer offers to pay the full asking price for a property, but the seller then does not what to sell, is the owner forced to sell?
No, but the owner is liable to the broker for commission
40
Term for when a title insurance company obtains the policy owner's legal rights to defend a claim against the title
Subrogation
41
Assignment
Transfer of rights and interest in a mortgage, lease, etc.
42
Attachment
When someone's property is taken into legal custody by a judicial order
43
If a disabled tenant requests and receives permission from the landlord to make modifications to a rental unit to make it safe and comfortable to live in, is the landlord required to pay for improvements?
No
44
Can not paying property taxes or assessments result in the sale of property?
Yes
45
Term for a business that existed before the land was zoned residential by a new zoning ordinance
Nonconforming use
46
Describe a recorded restriction
Use, with limitations. A restriction is classified as an encumbrance.
47
What would a violation of a condition result in?
Loss of title, but not necessarily a violation of a restriction
48
If a person has no living relatives and dies without writing a will, what happens to their property?
It becomes property of the state under the State's law of Intestate Succession
49
If someone rents units in an apartment complex for an owner, what type of agent would they be considered?
General agent
50
When working with a federally-related transaction (FRT), an appraiser must be state licensed or certified if the loan amount is more than:
250,000
51
What is a Note?
A written agreement that gives evidence of a debt and also states the repayment terms
52
What is a special agent?
Someone who has authority to represent a principal in a specific transaction.
53
General Agency
Authorized for a series of transactions or acts of over a continuous period of time. (A good example would be a property manager)
54
Universal Agency
Power of attorney. Can act in all matters of real estate on behalf of the client
55
Alienation
Legal term for the transfer of title
56
Involuntary alienation
When transfer of the title is done without the owners consent or control.
57
What is the method by which a government can take private property?
Condemnation
58
Standing trees would legally be considered:
Real property
59
Crops that require annual planting are called:
Emblements
60
Is a restriction considered a lien?
No. They are considered non-money encumberances
61
Foreclosure
the legal process by which an owner's right to a property is terminated, usually due to default.
62
When is a contract void?
When it is not legally enforcable
63
FLorida has mutual recognition with how many states?
8 states
- Alabama
- Arkansas
- Connecticut
- Georgia
- Indiana
- Mississippi
- Nebraska
- Oklahoma
64
When one spouse solely owns a property, the ownership is:
Owned in severalty
65
What are homestead rights?
Refer to a property's protection from judgments for unsecured debts or forced sale by creditors of the homestead owner. Additionally, there may be restrictions on who may receive property in wills and trusts based upon relationship to the homestead owner
66
What is a trust?
A trust is a legal arrangement in which an individual (trustor) gives fiduciary control of property to a person or institution (trustee) for the benefit of beneficiaries
67
What is an easement?
the right to use the land of another for a specific purpose. It's use is limited to that purpose
68
What is an appurtenant easement?
Benefits the land and can only be used by that land
69
Deed recordation
Meaning that the recording of the deed provides notice that a conveyance has occurred
70
Blanket Mortgage
A mortgage which covers two or more pieces of real estate
71
Wrap Around Mortgage
when a second mortgage is wrapped around the first mortgage
72
Package Mortgage
Made for an individual property
73
Open end mortgage
allows for future fund advances by the lender to the borrower
74
Balloon Payment
associated with a partially amortized loan because it has unpaid amounts of principle left at the end of the term, where as a fully amortized loan has totally paid principle at the end of the mortgage term
75
Encroachment
When a permanent object from one property extends over onto another property illegally
76
Encumbrance
Anything that affects the title of a property or limits its use, such as mortgages, judgments, leases, easements, liens, or restrictions
77
Riparian Rights
rights associated with being located directly next to a flowing water source, like a river or stream
78
What is the usually penalty for failing to maintain an office and sign at the entrance of an office?
Suspension up to 90 days
79
When are utility easements created?
Usually at the time of new construction to allow utility companies to maintain cable television/internet/phone, gas, electric, water, sewer, etc.
80
How many days do credit companies have to let applicants know that they have been rejected?
30 days
81
Contribution
the principle that claims that an item is only worth what it contributes in value to the whole
82
Conformity
the proper melding of the uniqueness of the individual property with the character of the neighborhood and the desirability of the market
83
Substitution
the principle that a knowledgeable buyer will pay no more for one item than for a comparatively equivalent substitute
84
What is an installment or land contract?
A method of selling real estate whereby the purchaser takes possession and pays for the property in regular installments while the seller retains title until the property is paid for in full.
85
Condicil
A legal document that changes specific provisions of a Last Will and Testament, but leaves all of the other provisions unchanged
86
Life estate
an estate whose duration is limited to the life of an individual and a legal arrangement whereby the "life tenant" during his or her life retains use, possession of the property and costs of maintaining the property.
87
What is a common penalty for the violation of conditions in a deed
Property would return to its original owner
88
Mortgage
a method of using property (real or personal) as security for a loan
89
Deed
Is like a bill of sale. It transfers the title. Being like a bill of sale, it can only be used ONCE. A new deed is required every time the title is transferred
90
Title
A formal legal document that servers as evidence of ownership
91
A broker that violates the Sherman Anti-trust act could be punished by a maximum fine of:
$1 Million (and 10 years in prison)
92
Lease
Document that states all the rights of use and the occupancy of the property for a given period of time and given amount of rent
93
Quitclaim Deed
Provides the grantee the least amount of protection of any deed. There are no express or implied convenants or warranties
94
Bargain and Sale Deed
Provides the grantee with an implication that the grantor actually does hold title and possession. No other express warranties exist
95
Special Warranty Deed
Warrants that the grantor does hold title and the property was unencumbered during the time the grantor held title (except when otherwise noted in the deed)
96
General Warranty Deed
Offers the most protection to the buyer.
97
Defeasance Clause
gives the borrower the right to redeem title to the property upon payment to the lender of the complete debt obligation
98
Acceleration Clause
Allows the lender to demand the entire balance of the mortgage loan when the borrower fails to make some installment payments
99
Alienation Clause
Allows the lender to declare the entire unpaid balance immediately due and payable in the event of a sale or transfer or mortgage property
100
Escalation clause
allows the interest rate to adjust over the life of a loan
101
Subordination clause
makes other debts in collateral real estate secondary to the claim of the mortgage
102
Factors considered in the market or sales comparison approach
1. Location
2. Time
3. Physical characteristics
4. Terms of sale
103
Accretion
When land is actually increased because of water depositing additional soil gradually
104
Reliction
when the water line recedes and leaves exposed land permanently dry
105
Avulsion
Sudden loss of land or soil due to a sudden natural act (e.g. earthquake, sudden change in river flow, etc.)
106
Egress
Means to exit
107
Latent Defect
Defect that is not easily visible or detectable during a normal inspection
108
Patent Defect
Defect in which property that is obvious and easily visible
109
Erosion
The gradual loss of land
110
Net listing
Agreement where a broker receives as commission any amount above a predetermined minimum sales price(illegal in some states)
111
Subdivider
Term for someone who buys undeveloped land and divides it unto smaller lots for sale
112
Doctrine of prior appropriation
Used in areas where water is scares. Use of water is determined and controlled by the local government under doctrine that all water belongs to the public.
113
Equitable lien
Occurs when there is a claim on goods or property conferred by a court
114
General Lien
A lien against all property owned by the debtor
115
Specific lien
a lien against a particular property owned by the debtor
116
Can a Grant Deed be assigned?
No, a grant deed CAN NOT be assigned.
When there is a new buyer of property, a new grant deed would be drawn up.
117
Metes and Bounds
metes means distance, bounds means direction
118
Governmental survey
uses townships (6mi x 6mi).
There are 36 sections in one township and 640 acres in each section
119
Lot and Block
Method used in subdivisions (subdivided plat)
120
Would a lessor selling a property terminate a lease agreement?
Why?
No.
| When a lessor sells property, the buyer must abide by the existing lease.
121
When does a broker earn their commission?
When an offer is accepted by the seller
122
Warrants provided by a special warranty deed
Warrants that the grantor DOES hold title and the property was unencumbered during the time the grantor held title.
123
3 examples of encumberances
Liens
Easements
Restrictions
124
What is the ratio that compares the buyer's gross income to the proposed PITI?
Payment to Income
125
Hypothecation
Pledging an asset as collateral for a loan
126
Mortgage release
A release of a mortgage is a document issued by a mortgage lender once a borrower has repaid a loan. It indicates that the borrower now owns the home without any further obligation to the lender
127
Participation mortgage
mortgage in which a lender shares the income produced from the resale or rental income of the property
128
Buy down
A lump-sum payment to the lender that reduces the interest payments of the loan
129
Package mortgage
A mortgage that covers both the real and personal property
130
Inverse Condemnation
An act property owners may force to receive just compensation if government action has forced a significant loss in value or inability to use the proprety
131
Open End Mortgage
allows the mortgagor (borrower of the loan) to re-borrow against the principle that has been paid so far.
132
If a property owner leases space to a tenant, what is the owner's interest?
Lease fee
133
Are street addresses used in legal descriptions of real estate?
No.
Street address may change over time.
134
What does a tenant pay for in a net lease?
maintenance fees, taxes, insurance, etc.
135
Straight line method
Used when calculating depreciation
136
3 traditional cost approach methods
Comparative unit method
Unit in place method
Quantity Survey method
137
Recission
cancels the contract and returns all parties to the way they were before a contract was entered to
138
Novation
Replacing of something old for something new
139
Specific performance
a contract that must be fulfilled by parties involved.
140
Lis Pendens
Latin phrase meaning "suit pending" or "action pending"
141
Situs
The physical location of a property
142
Ex parte
means "one side only", in a legal setting this means that only one side is represented in the matter
143
Executory contract
A contract not fully performed (usually something remains to be completed by one or more parties)
144
When would flood insurance be required in order to obtain a loan?
When a property is located in a flood hazard zone
145
Equitable conversion
Refers to when, after parties have entered into a binding contract for the sale of land, the buyer becomes the "equitable owner" before the delivery of the deed
146
Perfecting the title
correcting issues with the title
147
Percentage lease
Has a base rent which is fixed and an excess rent which is commonly based on the percentage of sales
148
Et Ux
"and wife"
149
E & O insurance
Errors and Omissions Insurance is business liability insurance for professionals.
150
Marketable Title
Title that is found to be clear of liens and defects or any other reasonable objection
151
What percentage of a salesperson's income must be based on production for him/her to be considered for independent contractor status?
90%
152
Physical Characteristics of Land
Indestructible nature
Immobility
Non-homogeneity
153
Economic Characteristics of Land
Situs
Permanence
Scarcity
154
1968 court case that held up the Civil Rights Act of 1866
Jones v. Mayer
155
Maximum tax exemption from the homestead exemption
$50,000
| The first $25000 applies to all property taxes
156
How many days after pleading guilty or being convicted and found guilty of any felony must you notify the Florida Commission?
30 days
157
Once per renewal period, attendance of a FREC meeting will count for how many CE hours?
3 hour continuing education hours
158
Within what time must an inactive license become active without having to retake the exam in Florida?
2 years
159
Reconciliation
Provides an analysis of two or more residential property valuations to assist lenders and servicers in reconciling disparate values on specific nonperforming real estate assets
160
Who is regulation Z controlled by?
Federal Trade Commission
161
Constructive Notice
Legal presumption that anything recorded in a public record can known by anyone who wants to know it
162
Actual Notice
Direct knowledge that one has of the property, either by direct inspection, possession, or other means.
163
Inquiry Notice
information that should impel a reasonable person to make further inquiries about a property
164
Economic Obsolescence
Occurs when factors unrelated to the property itself and outside of the owner's control diminish the property
165
Obsolescence
process or condition of going out of date or being no longer in use
166
Functional obsolescence
Pertains to a property not complying with recognized utility; in other words, there are features that are not practical or desirable
167
External Obsolescence
caused by events outside of the owner's control make the building's current use nonconforming.
168
Statute of limitations
Certain limit of time allowed in which parties to a contract may bring a legal action to enforce their rights
169
How long is a FL broker required to maintain legible records of all transactions, financial records, etc.?
5 years
170
Rod
1 rod = 16.5 feet
| 320 rods = 1 mile
171
If a FL real estate company has more than one broker, who is responsible for the company?
All brokers in a real estate company are equally responsible
172
Covenant of seisin
The grantor owns the property and has the right to convey title to it. (Seisin means possession)
173
Unlicensed practice of real estate constitutes what?
A Felony of the Third Degree
174
Reproduction cost
Dollar amount required to construct an exact duplicate of the subject
175
Replacement cost
cost to create a building or other improvements which have the same utility as the original
176
Environmental impact statement
Detailed, full-disclosure report that identifies and analyzes the anticipated environmental impact of a proposed action and discusses how adverse effects will be mitigated.
177
Common stock ownership
Gives an interest as personal property (stock in a corporation is personal property)
178
Who funds and provides loans for the Department of Veterans Affairs?
Approved lenders
179
What is CERCLA? When was it passed?
CERCLA established prohibitions and requirements concerning closed and abandoned hazardous waste sites.
It was passed in 1980
180
What is RESPA
RESPA: Real Estate Settlement Procedures Act
Mandates certain disclosures in connection with the real estate settlement process AND prohibits certain unlawful practices by real estate settlement providers (like kick backs and referral fees)
181
Judgment Lien
Occurs when a court order puts a lien on personal and/or real property in order to pay a debt
182
Mechanics Lien
Specific lien placed by a contractor, laborer, etc when they performed work in the improving or repairing of a property
183
Statutory lien
Lien created by statute (law). Common example is a real estate tax lien.
184
Assemblage
Refers to the combining of two or more parcels into one ownership or use
185
Plottage
Refers to the value of the combined sites having a total value higher than that of each parcel
186
Formula for figuring the value using the Gross Rent Multiplier
Value = Market Rent x GRM
187
Compare a license to an easement
A license, unlike an easement, is having the permission of the owner to enter his land for a specific purpose.
Unlike an easement, the license can be rescinded at any time.
