Florida Statues -

Question 1

FREC - Florida Real Estate Commission

Answer 1

commission 7 members appointed by the governor, subject to confirm by the senate
4 members licensed brokers(active license 5yrs)
1 member licensed broker or licensed sales associate active for 2 years
2 members - persons who are not, have never been brokers or sales associates
at lease on member 60 years age or older
Serve 4 year team

Question 2

statutory law

Answer 2

laws that are currently on record in the country

Question 3

Common law

Answer 3

procedures that have set by precedent of cases that have gone before.

Question 4

Create Agency relationships

Answer 4

A Principal/clients/s (or principals)
A task to be done
An Agent

Question 5

Universal agent:

Answer 5

Power of Attorney and is called an Attorney-in-Fact

Question 6

General Agent

Answer 6

handles multiple transactions of a principal/client

example - property management

Question 7

Agency coupled with an Interest:

Answer 7

real estate licensee is a partner in the ownership of the property as well as represents the partners in an agency relationship.

Question 8

Special Agent

Answer 8

handles one transaction for one seller of one property

broker can represent several sellers on one house each at one time but never the seller and buyer for a transaction.

Question 9

Written or Expressed Agency

Answer 9

s created when a written or oral contract is entered into where the parties state the intent of their relationship in a contract.contract is in writing with specific terms to comply with the Statute of Frauds* to prevent misunderstanding.

Question 10

Implied Agency

Answer 10

reated by the Act of the Parties. –acts or conduct of the parties involved indicate that they have a relationship. The clearest example of this type of agreement is when a person hails a taxi, gets in the taxi, tells the driver where he wants to go and the driver takes him there

Question 11

Ratification of Agency

Answer 11

always created after the fact -principal accepts the conduct of a person who acted without prior authorization as the principal’s agent, such as a licensee who shows a property without a current listing agreement and then the seller agrees to work with the person (creating an agency) to sell the property. This type of agency relationship is very difficult to prove, and may have other legal problems.

Question 12

Statute of Frauds

Answer 12

s an old English statute passed in 1677 which has been adopted in almost all of the United States . Its purpose is to prevent fraud among the parties by requiring that all contracts be in writing, and signed by all the parties to be charged. This will be covered more in contract law.

Question 13

Caveat Emptor

Answer 13

Knowledge is the key. Caveat emptor means: Let the Buyer Beware.
When an agent represents the seller as a principal, a fiduciary relationship is created.
A fiduciary relationship is one of utmost trust:
When an agency relationship is created the Principal (seller in this case) is called a Client. In this situation there is no relationship between the broker and the buyer.

Question 14

disclosed dual agency & undisclosed agency is

Answer 14

illegal in the state of florida

Question 15

Importance of disclosure

Answer 15

all parties in a residential transaction have the right to disclosure of material acts when in an agency or no relationship transaction

Question 16

Florida law describes residential sales as

Answer 16

the sale of improved resident property of 4 units or fewer, the sale of unimproved residential property intended for use of four units or fewer, or the sale of agricultural property of 10 acres of fewer.

Question 17

Florida disclosure rules do not apply to

Answer 17

• non residential transactions
  the rental or leasing of real property, unless an option to purchase or all of a portion of the property improved with four or fewer residential units is given
  auctions
  appraisals
  dispositions of any interest in business enterprises or business opportunities, except for property w/ four or fewer residential units.

Question 18

FOUR TYPES OF AGENCY

Answer 18

1. no brokerage relationship - agent represents one side or the other transaction but not the party who is given the form
2. Single agent broker - agent who represents either the buyer or the seller in the transaction but not both
3. transaction broker - an agent who provides limited representation to a buyer, a seller or both, in a real estate transaction but does not represent either at a fiduciary compact
4. designated sales associate - special case for non residential transactions 2 licensees under the direction of one broker act as single agents - both buyer and seller must verify assets of more than $1 million.

Question 19

presumption of transaction brokerage (STATE)

Answer 19

state - presumed that all licensees are operating as a transaction brokers unless a single agent or no broker relationship is established, in writing, with a customer.

Question 20

Transaction broker

Answer 20

provides limited confidentiality- unless waived in writing by a party - limited representation to a buyer or seller - florida law - customers are not responsible for the acts of a transaction broker and licensees wilt work for one party to the detriment of the other

Question 21

Record keeping State statues

Answer 21

broker shall preserve one legible copy all all books, accounts an rebreeds including disclosure docs for at least 5 years from the date of document.

documents must be kept for 2 years after any legal proceedings.

Question 22

Rentals Companies

Answer 22

475.453 Rental information; contract or receipt; refund; penalty.—
(1) Each broker or sales associate who furnishes a rental information list to a prospective tenant, for a fee paid by the prospective tenant, shall provide such prospective tenant with a contract or receipt, which contract or receipt contains a provision for the repayment of any amount over 25 percent of the fee to the prospective tenant if the prospective tenant does not obtain a rental. If the rental information list provided by the broker or sales associate to a prospective tenant is not current or accurate in any material respect, the full fee shall be repaid to the prospective tenant upon demand. A demand from the prospective tenant for the return of the fee, or any part thereof, shall be made within 30 days following the day on which the real estate broker or sales associate has contracted to perform services to the prospective tenant. The contract or receipt shall also conform to the guidelines adopted by the commission in order to effect disclosure of material information regarding the service to be provided to the prospective tenant.
(2) The commission may adopt a guideline for the form of the contract or receipt required to be provided by brokers or sales associates pursuant to the provisions of subsection (1).
(3)(a) Any person who violates any provision of subsection (1) is guilty of a misdemeanor of the first degree, punishable as provided in s. 775.082 or s. 775.083.
(b) In addition to the penalty prescribed in paragraph (a), the license of any broker or sales associate who participates in any rental information transaction which is in violation of the provisions of subsection (1) shall be subject to suspension or revocation by the commission in the manner prescribed by law.
The penalty for advertising obsolete or otherwise inaccurate rental lists is a fine up to $1,000 and/or up to one year in prison. This is a first degree misdemeanor.

Question 23

the Allodial system.

Answer 23

All property in the United States is under the allodial system.
Estate= Status
To what extent do you own or lease your property?
To what degree do you own it?
What is the nature of your ownership?
Do you own the entire bundle of rights?
Have you sold any of your rights?
Are you leasing the property?
Do you have a mortgage on the property?

Question 24

Grantor gives to the Grantee a Deed
Testator makes a will
Devisor gives to a Devisee a Devise
Testator gives to a Beneficiary a Bequest.

Answer 24

Grantor gives to the Grantee a Deed
Testator makes a will
Devisor gives to a Devisee a Devise
Testator gives to a Beneficiary a Bequest.

Question 25

3 parts of the deed

Premises:

Answer 25

Name of the grantor (correct legal name),
Name of the grantee ( correct legal name),
Accurate legal description of the property (legal description on record).

Question 26

3 parts of the deed

Habendum:

Answer 26

Recitation of consideration “for one dollar and other valuable consideration”,
Granting Clause - words of conveyance- these are the promises of the seller.
Habendum Clause - defines ownership taken by the grantee. The clause which clarifies the purpose of the deed with the phrase “to have and to hold”.
Designations of any limitations of ownership,
Exceptions and Reservations - references to any restrictions and covenants, etc., of a subdivision.
Appurtenances

Question 27

3 parts of the deed

Testimonium:

Answer 27

Signed wishes of the grantor (Acknowledgement) - where the grantor transfers the property of his own free will.
In Florida, signatures of two witnesses
Delivery by the grantor and acceptance by the grantee.

Question 28

Demand may be influenced by

Answer 28

the ability of the buyer to get a loan

Question 29

a seller’s market occurs when

Answer 29

not enough inventory is available for buyers

Question 30

a large factory closed in the area, many workers lost their jobs as a result. This will probably result in

Answer 30

a buyers market

Question 31

government interference influence the real estate market . which is NOT government interference

Answer 31

deeds

Question 32

Physical Deterioration

Answer 32

is a reduction in utility, usefulness or value resulting from physical condition. The deterioration can be divided into either curable (painting/routine maintenance) or incurable types (installing siding on a building which also needs major interior repairs). This form of depreciation is caused by the action of the physical elements, such as wind or snow, or just ordinary wear and tear

Question 33

Functional Obsolescence

Answer 33

is a loss of value of an improvement due to functional inadequacies, often caused by age or poor design. Outmoded plumbing fixtures, inadequate closet space, poor floor plan, excessively high or low ceilings, or antiquated architecture are all examples of functional obsolescence. Functional obsolescence may be curable such as putting in a new electric stove instead of wood burning stove. Functional obsolescence may be incurable, as in the case of wide columns in a building that cannot be removed.

Question 34

Economic, Environmental, or External Obsolescence

Answer 34

A loss of value (typically incurable) resulting from factors that exist outside of the property itself; a type of depreciation caused by environmental, social, or economic forces over which an owner has little or no control. This can also be called locational, economic or environmental obsolescence.
This type of obsolescence is almost always INCURABLE.

Question 35

Income Approach

Pick Violets Every Other Night

Answer 35

This approach is used for income generating properties such as apartments, retail centers, multi-tenant office buildings, etc.
Know the ”STACK” Pick Violets Every Other Night
P- Potential Gross Income
V – Vacancy and Collection Losses
E – Effective Gross Income
O – Operating Expenses
N - Net Operating Income
Order of the stack is important when solving income equations:
P – V = E
E – O = N