R.E. Applications Flashcards
State Exam Guide
1
Q
Real Estate professionals provide knowledge in what three areas?
A
Knowledge of property transfer
Knowledge of market conditions
Knowledge of how to market real estate & businesses
2
Q
Real Estate Brokerage - define
A
The business of bringing together buyers and sellers, owners and renters, and of completing real estate transactions. Also includes sales and leasing, property management, appraising, financing and counseling
3
Q
What is Target Marketing?
A
Involves expertise in locating prospects
4
Q
Who must get a CAM license?
A
Managing over 10 units or the association has an annual budget of over $100,000.
5
Q
Who is exempt from a CAM license?
A
Managing apartment buildings, commercial property or single-family dwellings
6
Q
Do CMAs or BPOs need to follow USPAP guidelines?
A
No. Commission or fee paid only to the broker and then distributed
7
Q
What are the three general phases of development and construction?
A
Land Acquisition
Subdividing and Development
Recording the Subdivision Plat Map
8
Q
What is the role of local government in real estate?
A
Property taxation, regulatory activities such as occupational licensing, business tax receipts, building permits, building moratoriums, zoning and codes
9
Q
What is the role of state government in real estate?
A
Owns and manages large amounts of land and identifies coastal regions and other areas that are protected from development. Intangible taxes are required when real property is transferred or pledged as collateral for a mortgage
10
Q
What is the role of federal government in real estate?
A
Through its fiscal and monetary policies. E.G. VA, HUD, FHA, IRS
11
Q
What are some details re the NAR?
A
It is the largest trade organization in the world. Began in 1913. Provides the MLS to brokerages. Anyone can create a MLS. To maintain a membership one must complete a 2 1/2 hour ethics every two years
12
Q
Why was FREC established in 1925?
A
To administer and enforce the real estate license laws that were established in 1923 by the Florida legislature
13
Q
How long does a licensee have to report they have been convicted of a crime or misdemeanor?
A
Thirty days
14
Q
How long to notify FREC if licensee moves out of town?
A
Sixty days
15
Q
Explain how a Mutual Recognition licensee can acquire a Florida real estate license
A
Must be from an approved mutual recognition state
Must pass a 40 question test with a score of 75%
Continues regular post-license continuing education
16
Q
What are the qualifications for a sales associate for Florida licensure?
A
18 Years or older High school diploma or equivalent SSN Be honest, truthful, good character Be competent and qualified to make RE transactions
17
Q
What is a Summary of Applicants
A
Applications from individuals with a criminal history and flagged by the FREC.
18
Q
What educational courses are not required to be taken by a 4-year or more real estate degree holder?
A
Pre-license Course I and II
Post license Exam
NOT Continuing Education
19
Q
What educational courses are not required of a Florida licensed attorney?
A
Pre-license Course I
Continuing Education
NOT Pre-license Course II and Post License Exam
20
Q
What happens if an applicant fails to pass the state exam within 2 years after pre-license completion date?
A
Must again complete the pre-license course
21
Q
New sales associates are required to do what in order to legally operate as a sales associate?
A
Change their license to active status
22
Q
What happens if a sales associate does not complete the initial 45 hour post license education exam before the first two years?
A
Must reapply for the pre-license course of 63 hours and retake and pass the state exam
23
Q
After completing the initial post-license education, active and inactive licensees must complete how many hours of education every two years? Core law? Specialty credit?
A
14
3
3
24
Q
Requirements for a licensee to acquire a broker’s license
A
At least 24 months being an active real estate license during the five-year period preceding application
Same, but as a sales associate of a governmental agency
Same, but as a broker that has held a license in another state or foreign jurisdiction
25
Prima Facie Evidence?
True according to the face value of a document
26
Real Estate Services - A BAR SALE
```
Advertise
Buy
Appraise
Rent
Sell
Auction
Lease
Exchange
```
27
Who is exempt from real estate licensure?
```
Owners of property
Partners in a business
Based on career
Attorneys, CPAs, State certified appraisers
Salaried employees
Apartment rentals
Managers of a condo or coop apartment complex
Owner-developer
Court and legally appointed persons
Renting lots in a mobile home park
Dealers registered with the SEC
Hotel and motel clerks
Tenants who may receive a fee up to $50 for a referral
```
28
How many Commission members must be present to have a quorum?
4
29
What dates are used as expiration for a RE license?
March 31, September 30 - not to exceed a 24 month period
30
When does a sales associate need to notify DBPR of a change of employer?
Ten Days
31
What is common law also referred to as?
Unwritten law
32
Statutory Law
Written statutes enacted by a legislature
33
Administrative Law
A body of law created by administrative agencies in the form of rules, regulation, orders and decisions
34
A fiduciary acts as a?
Position of trust
35
A Principal acts as a?
A person who delegates authority to another
36
An Agent acts as a?
One who is entrusted with another's business
37
A sales associate is what to a broker?
General agent
38
A Special Agent is?
Authorized by a principal to perform a specific act
39
Types of transactions that do not require brokerage relationship disclosures
Nonresidential transactions
Rent or lease agreements (unless option to purchase)
Business opportunities (unless for property with four or fewer residential units)
Auctions
Appraisals
40
Fraud
Intentional deceit
41
Misrepresentation
An untrue statement or action
42
What comprises a brokerage office?
Consists of one enclosed room in a building or stationary construction that will provide privacy and proper signage
43
Under Florida State Law - is anyone advertising that claims to be in the real estate business a broker?
Yes
44
What degree misdemeanor is false advertising?
Second degree
45
What times may a phone solicitation occur?
Between 8AM and 9PM
46
A sales associate may call a FSBO if?
The associate has an active buyer for the property
47
If a sales associate had been doing previous business with a client, how long can the SL call for solicitations?
18 months
48
How long can a sales associate solicit business if the client merely signed up on-line for questions or attended an open-house?
3 months
49
How long does a broker have to deposit an escrow check from a client?
Three business days
50
How long after a deposit of an escrow check must the broker provide a written request to verify the deposit?
10 Days
51
True or False: A broker needs to maintain the deposit funds in an interest bearing escrow account?
False....A non-interest bearing account is acceptable
52
If a broker places a escrow deposit into separate property management and sales escrow accounts, how much is the total he/she can keep?
$5,000 for property management
$1,000 for sales
Total = $6,000
Only one account for both = $5,000
53
Conflicting Demands happen when?
Buyer and seller make demands on the escrow account and are inconsistent with each other
54
Good faith doubt by a broker must notify FREC within how many days?
15
55
If a broker sells for a fee a rental list, what is the percentage that must be paid back to the client if they do not obtain a rental?
75%
56
What are two anti-trust violations of a broker's actions?
Price-fixing and Market allocation
57
How much can FREC impose on an Administrative fine?
$5,000
58
How long can FREC suspend a license?
10 Years
59
Real Estate Recover Fund is for?
As a last resort for a consumer to recover damages from a real estate transaction
60
Is a mandatory suspension given when a real estate recovery fund is paid?
Yes
61
Maximum payment from the real estate recovery fund?Aggregate against one licensee?
$50,000
| $150,000
62
A final order is affective after how many days?
30
63
What did the Fair Housing Act of 1968 do?
Act prohibits discrimination in sales, leasing, advertising sales or rentals and financing
64
What two additional groups are protected under the 1988 Fair Housing Amendments Act?
Familia Status and Handicapped persons
65
Under ILSA, if a developer has more than how many units for sale does he need to disclose all property information?
25 or more
| Buyers have seven days to back out if fully disclosed
66
How many days does a landlord have to return a security deposit?
15 Days
67
How many days does a landlord have to notify tenant of security deposit claim?
Thirty Days
68
What is accretion?
Land buildup due to water borne rock, sand and soil
69
Subsurface rights are also known as?
Mineral rights
70
Homestead law's purpose?
To protect the family and prevent family from being displaced from the homestead. It is not protected from foreclosure however
71
What is the tax exemption from assessed property value under a Homestead?
$50,000
72
Tenancy at will for month to month and week to week have what notices to terminate?
Month to month - 15 days
| Week to week - 7 days
73
Which tenancies have a right of survivorship?
Entireties and Joint
74
Which tenancies have a right of heirs inheriting?
Common
75
Who owns a cooperative?
A corporation
76
What do you buy when purchasing a coop?
Stock
77
An owner of a coop must give a cancellation period of how many days after disclosure?
15 days
78
What defines a condominium?
Has a board of directors and is usually run by a not for profit corporation
79
What four documents are given to potential buyers of condo units?
Declaration
Articles of incorporation
Bylaws
FAQs
80
What two additional disclosures are needed from a condo seller?
Prospectus
| Estimated operating budget
81
Resale condo sellers need to provide what additional three documents?
Most recent year-end financials
Rules of the association
Governance form
82
What is an important disclosure when purchasing a time-share?
Knowing what the annual assessments are (expenses)
83
What is the time period that a buyer can cancel a time-share contract
10 days from signing
84
What is voluntary alienation regarding titles?
Transfer of title with the owner's control and consent
85
What is a deed?
A written instrument used to convey and interest in real property - legal title
86
What is an involuntary alienation?
Title transferred without the consent of the owner
87
Title opinion is done by whom?
An experienced real estate attorney
88
What is the clause of the bundle of legal rights being conveyed in a title?
Habendum clause
89
What are Appurtenances?
Right or privilege associated with the property, such as parking lots, easements, improvements
90
What is a statutory deed?
Format is defined by state law
91
Which deed is most used in Florida?
General Warranty Deed
92
Which deed provides the least protection?
Quitclaim
93
What are the four Special Purpose Deeds?
Personal representative
Guardians deed
Committee's deed
Tax deed
94
What does PET mean?
Government Restrictions on Ownership
Police Power
Eminent Domain
Taxation of the property
95
How many witnesses need to sign a lease over a years length in time?
Two
96
Define easement
The use of another to use the land in a certain manner
97
What is a Restrictive Covenant
Limitations for the use on land in an entire subdivision
98
What are Deed Restrictions
Limitations for the use of a single owner for future use
99
What is the formula for a variable index lease
new index / original index X original rental rate = new rental rate
100
Specific liens refer to what?
Specific property of the owner
101
General liens refer to what?
All property of the owner
102
A legal description describes what?
Uniquely identifies that parcel
103
A survey is a ?
Drawing of a parcel showing its boundary lines
104
Metes refers to?
Distance
105
Bounds refers to?
Direction
106
The legal direction and distance to the first corner is?
Point of Beginning
107
What is the opposite of N 85o W
S 85o E
108
Real estate licensees can fill in the blanks on lease agreements that do not exceed?
One year
109
What four documents are real estate agents allowed to prepare for buyers and sellers?
Listing agreement - broker's agreement with seller
Buyer brokerage agreement - contract with buyer
Sale and purchase contract - contract between buyer and seller
Option contract - to keep open for a specified period of time to sell or lease real property
110
Statute of frauds requires?
That contracts conveying an interest in real property and contracts that are not to be performed within one-year of the date created must be in writing and signed to be enforceable
111
Written contracts are enforceable for how long?
Five years
112
Oral contracts are enforceable for how long?
Four years
113
Partly written and party oral contracts are enforceable for how long?
Five years
114
Are real estate contracts required to be witnessed or notarized?
No
115
Real estate listing agreements and sale contracts are what type of contract?
Express
116
Ways to terminate an offer?
Withdrawal
Insanity
Lapse of time
Death
Counteroffer
Acceptance
Rejection
Destruction of property
117
What is rescission of a contract?
Court orders the parties be placed back to their original positions
118
What is the term when a new party is substituted to replace the original party?
Novation
119
What are the three types of listings by a broker?
Open - commission only to broker who sells property
Exclusive Agency - commission to listing broker if not sold by the owner
Exclusive Right of Sale - commission only to listing broker no matter who sells
120
What is another name for a vendee
Buyer of a property
121
Is it a requirement in disclosure that radon gas has been tested and results are passed on?
No. A radon gas disclosure is simply what the exposure to the gas can have
122
What is the responsibility of a real estate licensee on lead-based paint?
If the property was built before 1978, the licensee must be sure the buyers are aware of the potential hazard in order for them to request a test of the paint
123
What brochure is required before signing, that a buyer should receive?
Energy Efficient Disclosure that states the buyer could be eligible for a energy efficient mortgage and other offerings
124
How long does a buyer have to cancel a contract after a Homeowner's association disclosure has been presented?
Three days
125
What statement should the disclosure of property tax include?
Do not rely on the current property tax assessment as the benchmark for future taxation amounts
126
Which title theory does Florida use?
Lein Theory....borrower holds the title and the lender is protected by a lien against the property
127
What is the term used when a property is pledged as security but the mortgagor is allowed to use the property?
Hypothecation
128
What type of note must accompany all mortgages in Florida?
Promissory note
129
What is the formula for LTV?
Loan amount / value (or financed amount) = LTV
130
How much do discount points add to a lender's yield?
1/8 or .0125 per point of interest yield
131
What two methods are used to mortgage a property when the property is encumbered by a loan?
Subject to mortgage: Seller is responsible for the mortgage even while the purchaser is making payments
Assumption of existing mortgage: Buyer assumes debt but seller is still liable in case of default. Both purchaser and seller can be sued by lender
132
What is a Take-Out Commitment by a bank?
Pledges secure financing after the construction phase and pays off the construction loans
133
Is a conventional loan guaranteed by a governmental agency?
NO. Non-conventional loans offer some risk protection
134
A package mortgage loan includes what?
Personal and real property
135
FHA functions as a?
An insurance company insuring mortgage loans from approved lenders
136
What is an acceptable HER percentage for FHA?
31% Monthly PITI + MIP = HER
137
What is an acceptable TOR percentage for FHA?
43%
138
What is a VA's loan guarantee and what is the down payment benefit?
VA guarantees $106,025 of the loan and a veteran does not need to make a down payment up to $424.100
139
What is the qualifying ratio on a VA loan?
41%
140
Are FHA and VA loans assumable?
Yes
141
What mortgage association is the largest that holds loans in the secondary market?
Fannie Mae
142
Ginnie Mae provides secondary mortgages for who?
VA and FHA loans
143
What are the three economic tools that the Federal Reserve uses to regulate monetary policy?
Open market - Selling or buying securities
Discount rate - Interest charged to banks for borrowing
Reserve requirements - Amount of funds institutions must hold in reserve against deposits
144
At closing, who delivers the escrow check to the closing agent?
The sales associate
145
What amount is the Stamp Tax based on?
The entire deed amount
146
When are property taxes due?
November 1
147
Prorations are calculated as of what time?
Midnight. The next day is the buyer's responsibility unless noted differently
148
Mortgage interest is paid in arrears - true or false?
True. Debit seller and credit buyer.
149
When prorating property taxes on the closing documents, what is the normal entry?
Debit seller and Credit buyer. Buyer is charged the day of the closing
150
Intangible tax is normally recorded as whose responsibility to pay for at closing?
Debit the buyer
151
What is your SITUS - means?
What is your real estate preferences
152
Formula for occupancy rates?
Divide the number of occupied units by the total number of units in the building
153
Formula for vacancy rates?
Divide the number of vacant units by the total number of units in the building
154
What act of the Federal government requires USPAP?
FIRREA (Financial Institution Reform and Recovery Enforcement Act)
155
What is the formula for Overall Capitalization Rate (OAR)?
Annual NOI/Value (sale price) = OAR
156
What is the formula for Gross Rent Multiplier (GRM)?
Sales price / Gross monthly rent = GRM
157
What is the formula for Gross Income Multiplier (GIM)?
Sales price / Gross annual rent = GIM
158
What three categories do CMA's cover?
Recently sold
Currently on the market
Expired listings
159
What is Purchasing-Power Risk in buying real estate?
The risk of being paid back with less valuable dollars
160
What is a business brokerage?
A real estate licensee that engages in the sale, purchase or lease of a business
161
Normally, what is the last date of the year to file a homestead exemption?
March 1st
162
What amounts are exempted from homestead properties for local and state tax purposes?
Assessed value of at least $25,000 = $25,000 exemption from city, county, and school board taxes
Assessed value over $75,000 = $25,000 exemption and additional $25,000 from city, county but NOT School Board Taxes
163
What comprises of the three $500 additional exemptions from property tax?
Widow, Blind person, disabled non-veteran
164
If a veteran is 10% disables, how much is the deduction from the assessed value?
$5,000
165
Under Federal Tax rules, what is the exclusion gain from the sale of a principal residence?
$250,000 for Single
| $500,000 for Married
166
Are members of a planning commission paid for their service?
No - all done voluntarily and appointed by the elected officials
167
What are the three areas of responsibility of city planning commissioners?
Subdivision Plat Approval
Site Plan Approval
Sign Control
168
Example of a Special Use Property?
City parks, courthouses, post office
169
What is a Special Exemption?
Permission to build or use in apparent conflict with existing zoning ordinances
170
What is Non-conforming Use?
Permission to continue to use in spite of enacted ordinances
171
Most common type of legal description for residential dwellings is?
Lot and Block Numbers
172
If a joint tenant sells, what type of tenancy must they sell under?
Tenant in Common - new owner does not have survivorship of other original tenants
173
Real World Formula?
NOI - DS = Cash Throw off Or BTCF
174
START Formula?
PGI - Vacancies - Collection Losses + AI (other income) = EGI
- FE - VE - OE - RES (reserve for replacement) =
NOI
175
Tax World Formula?
NOI + RES - INT - DEP = TI (taxable income)
