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Real Estate > The Real Estate Business > Flashcards

The Real Estate Business Flashcards

0
Q

What is a farm area ?

A

A selected and limited geographical area a sales associate devotes special attention and study

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1
Q

Five major real estate sales specialties

A
  1. Residential : 4 or less res. units or agriculture 10 or less acres
  2. Commercial : income producing properties
  3. Industrial : sites in indust. Parks
  4. Agriculture : more then 10 acres
  5. Business : sale, purchase, or lease of businesses
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2
Q

What is a property manager .

A

A person who manages properties for others. Primary duties are to secure and keep tenants, provide financial records and accounts, provide upkeep and maintenance of the property

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3
Q

What is the USPAP ?

A

Uniform Standards of Professional Appraisal Practice sets guidelines real estate brokers and sales associates must follow when conducting appraisals of real property

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4
Q

What is FREAB ?

A

Florida real estate appraisal board

Regulates state certified, licensed, and registered appraisers

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5
Q

How are appraisers paid ?

A

Fee based, never commission

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6
Q

What is a CMA ?

A

Informal estimate of market value performed by a real estate licensee for the seller, to assist in arriving at an appropriate listing price, or help the buyer figure out an appropriate offering price

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7
Q

Can realtors due appraisals ?

A

Yes, but must be a cash deal and they must follow USPAP standards

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8
Q

What is a BPO ?

A

Broker price opinion. Written opinion of the value of property. Licensees can charge for BPOs provided it is not referred to as an appraisal. Often requested by relocation companies and lenders involved in short sales

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9
Q

Services of Real estate : A bar sale

A

Advertising Buy, Appraise,Rent. Sell,Auction,Lease,Exchange

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10
Q

Your license is VOID if it is…. REC

A

Revoked
Expired
Cancelled

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11
Q

Single agent :COLD PAC

A

Care, Obedience , Loyalty, Disclosure
,
Present all offers, Accountability , Condidentiality

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12
Q

Transaction broker

CD. PAC

A

Care, Disclosure (full)

Present all offers, Accountability, Confidentiality

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13
Q 
No brokerage relationship
C
D
P
A
A

Care
Disclosure
Present all offers
Accountability

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14
Q 
Four settlement procedures for conflicting demands on escrow:
M
A
L
E
A

Mediation
Arbitration
Litigation
Escrow disbursement order

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15
Q

1968 civil rights act, 7 protected classes
F R E S H
C O R N

A

F: family status, R: race, E: Equal, S: sex, H: handicap

C: Corn, O: opportunity, R: religion, N: nationality

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16
Q 
Bundle of rights : 
D
U
P
E
A

D: disposition ( sell or give away )
U: use ( control )
P: possession ( occupy )
E: exclusion ( quiet enjoyment )

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17
Q 
Test courts use to determine of something is a fixture 
I 
R
M
A
A

I: intent of parties
R: relationship between parties
M: method of annexation
A: adaptation of the article

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18
Q 
Four unities of joint tenancy: 
P
I
T
T
A

P: possession
I: interest
T: title
T: time

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19
Q

Conditions for alienation by adverse possession
HOT
CAN

A

H: hostile possession of property ( without owners permission )
O: open possession with no attempt to conceal occupancy
T: taxes paid on property by adverse possessor
C: claim of title
A: adverse possession must continue for 7 or more years
N: notorious and flagrant public possession of the property

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20
Q

Elements of a deed

C E D D I N G

A

C: consideration ( valuable or good )
E: execution ( signed by a competent grantor & 2 witnesses
D: description of property
D: delivery and acceptance ( voluntary )
I : interest or estate being conveyed ( habendum clause )
N: names of grantee and grantor
G: granting and other appropriate clauses

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21
Q 
Private limitations on ownership of real property:
D
E
L
L
A

D:deed restrictions
E: easements
L: leases
L: liens

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22
Q

Elements of a valid and enforceable real estate contract

C O L I C

A 
C: competent parties
O : offer and acceptance ( meeting of the minds )
L: legal purpose
I: in writing
C: consideration ( valuable or good )
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23
Q

Ways an offer is terminated:
W I L D
C A R D

A

W: withdrawal by offerer. C: counteroffer
I: insanity. A: acceptance
L: lapse of time. R: rejection
D: death. D: destruction of the property

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24
Q 
Characteristics of value 
D
U
S
T
A

D: demand
U: utility
S: scarcity
T: transferability

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25
Q

USPAP’s ethic’s rule for appraisers

A

Unethical to accept compensation contingent on the value of the property

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26
Q

How is compensation paid for broker price opinions ( BPO ) ?

A

Compensation must be paid to the broker and not directly to the sales associate or broker associate who prepared the BPO

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27
Q

Three categories of residential construction

A
  1. Speculative: purchasing one or more lots and constructing a home without a buyer in advance of construction
  2. Custom homes : constructed under contract with buyer, often using building plans from architects
  3. Tract homes: type do speculative building, Typically has model homes where buyers selects a floor plan in subdivision
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28
Q

Role of local government in real estate

A

Impacts real estate through property taxation and regulatory activities ( building permits, zoning, building codes, building moratoriums )

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29
Q

What is role of state government in real estate ?

A

State government owns and manages a large amount of property and identifies areas protected from development. State documentary and intangible taxes are required when property is transferred

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30
Q

What is the role of federal government in real estate

A

Federal government impacts real estate through its fiscal and monetary policy. Various fed. agencies that impact real estate are: HUD, FHA, va, EPA, and IRS.

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31
Q

Commercial real estate lien act

A

Part 3 of chapter 475, applies only to commercial property, not residential property. Lien is only on owners net proceeds ( personal property ) and does not attach to the commercial property

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32
Q

Mutual recognition applicant must

A

Pass a written florida specific real estate law license exam. Exam consists of 40 questions worth 1 point each. A grade of 30 points ( 75 %) or higher is required to pass exam. After demonstrating knowledge of Florida license law, applicant is issued a Florida real estate license.

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33
Q

Broker experience requirements

A

Applicant can fulfill experience requirements if they held an active broker license in another state or in any foreign jurisdiction for at least 24 months during the five-year period preceding application to become a florida real estate broker.

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34
Q

Example of a person Chapter 475 of the florida statutes gives exemption to holding a real estate license

A

Court appointed individuals acting within the limitations of their dutie

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35
Q

Florida real estate commission compensation

A

Commission members do not receive a salary. However, in lieu of salary, they are paid $50 per day for each day they attend an official meeting and for each day they participate in other commission business

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36
Q

Real estate licensing fees for veterans

A

Fee waiver for military veterans. The initial application fee, biennial license fee, and unlicensed activity fee are waived for military veterans who apply for a real estate license within 24 months after honorable discharge from the armed services. The fee waiver applies to all licenses issued by the DBPR.

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37
Q

One way a license becomes ineffective is :

A

Suspended: if the result of a disciplinary proceeding is to suspend a license, the licensee is prevented from working for a period of time. The license is ineffective during the period of suspension.

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38
Q

What is a group license ?

A

A group license is sometimes issued to sales or broker associates who are registered under an owner-developer. Owner/developer may own properties in the names of various entities.

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39
Q

Residential sale

A

The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of ten or fewer acres.

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40
Q

Two of the seven duties of a transaction broker

A
  1. Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
  2. Exercise limited confidentiality, unless waived in writing by a party. Prevents disclosure that the seller will accept a price less than the asking or listing, or that the buyer will pay price greater than the price submitted in a written offer
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41
Q

One of the nine duties of a single agent to a buyer or seller

A

Full disclosure. It is a broker-agents duty to keep the principal fully informed at all times of all the facts or information that might affect the transaction or the value of the property

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42
Q

a broker may open a branch office in the same location during the same license period with out paying a fee by

A

Requesting FREC to reissue the branch office license

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43
Q

Active brokers must display an official sign on either the exterior or interior of the entrance of their pro ciao office. It must contain the following information

A
  • Trade name ( if one is used )
  • brokers name
  • the words, “ licensed real estate broker “ or “ lic. Real estate broker “
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44
Q

Blind advertisements

A

Advertisements that fail to disclose the license name of the brokerage firm

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45
Q

Exception to the federal do not call law for real estate sales associates

A

Associates may contact individuals with whom the associate has had an established business relationship, even if those customers numbers are on the national registry. A company that previously listed a property may contact the former customer to solicit new business for up to 18 months after the transaction has concluded

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46
Q

When must a broker place trust funds into an escrow account ?

A

immediately, which means no later than the end of the third business day after their sales associate has received it. The three business day time period coincides with the day that the sales associate must turn over the deposit to the broker

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47
Q

When a deposit is placed with a title company or attorney what is one of the procedures that must be used .

A

No later then 10 business days after each deposit is due under the terms of the sale contract, the licensee’s broker must request a written verification of receipt of the deposit

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48
Q

Brokers must institute one of the 4 settlement procedures within 30 days from the time the broker received the conflicting demands. If a broker waits 10 business days to report the conflicting demands, the broker has how many days remaining to implement a settlement procedure ?

A

20 days

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49
Q

One conflicting demand settlement procedure

A

Arbitration: arbitration is a process whereby, with the prior written consent of all disputing parties, the matter is submitted to a disinterested third party. Each side presents it’s case to the third party, who in turn makes a binding judgement in favor of one side or the other. Parties agree in advance to abide by the decision

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50
Q

What is law regarding rental information

A

If information provided under this contract is not current or accurate in any material aspect, you may demand with in 30 days of this contract date a return of your full paid fee. If you do not obtain a rental you are entitled to receive a return of 75% of the fee paid, if you make demand within 30 days of contract date

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51
Q

One type of business entity that may not register as a real estate broker

A

Corporations sole ( church organization )

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52
Q

In Florida, the legal bases for investigations and hearings are:

A 
Chapter 120, FS
Chapter 455, FS
Chapter 475, FS
Chapter 28, sections 101-110
Chapter 61J2
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53
Q

What is a stipulation ?

A

An agreement as to the facts of the case and the penalty reached between the attorneys for the DRE and the licensee or the licensee’s attorney

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54
Q

What is a subpoena ?

A

A command to appear at a certain time and place to give testimony or to produce records.

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55
Q

The administrative law judge prepares and submits the the DBPR and all other parties a Recommended Order, which..

A

Includes the judges findings and conclusions and the recommended penalty, if any, in accordance with the commissions range of penalties set forth in rule

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56
Q

Suspension of an individual’s license is a temporary penalty. What happens if an individual receives a second suspension for the same or different violation ?

A

May result in revocation ( permanent ) of the license, registration, certification, or permit

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57
Q

What is a notice of non compliance ?

A

Issued by the DBPR/DRE as a first response to a minor violation by a licensee.

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58
Q

The One violation of real estate that is a first degree misdemeanor

A

Failing to provide accurate and current rental information for a fee. The penalty is a fine of up to but not more then $1000, and/ or up to one year in jail

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59
Q

Type of damages not covered by the real estate recovery fund

A

Punitive damages and interest

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60
Q

Conversion

A

Brokers may not use earnest money funds for their personal use. A licensee’s personal use or misuse of client ( or customer ) monies

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61
Q

Civil rights act of 1866

A

Prohibits any type of discrimination based on race in any real estate transaction

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62
Q

Civil rights act of 1968

A

The fair housing act

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63
Q

Redlining

A

Deny loans or insurance coverage by a lender or insurer that presents different terms or conditions for homes in certain neighborhoods

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64
Q

Violation of fair housing law

A

Answering an inquiry concerning race

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65
Q

Triggering terms

A

The truth and lending act requires creditors to disclose certain information if certain credit terms, called triggering terms, are included in the advertisement. Triggering terms include the amount or percentage downpayment, number of payments, period of repayment, amount of repayment, and the amount of any finance charges

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66
Q

Real estate settlement procedures ( RESPA ). When borrowers apply for a mortgage loan, they must be given disclosures…

A

At time of loan application or within three business days

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67
Q

Good faith estimate

A

Disclosure RESPA requires to borrowers listing the charges the buyer is likely to pay at closing.

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68
Q

One way a landlord is obligated to account for security deposits or advanced rents

A

Hold the money in a separate non interest baring account and not commingle, hypothecate, that is, pledge as security for a debt, or use any such funds until due to tenant

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69
Q

Reliction

A

Gradual receding of water, uncovering additional land ( the new land usually belongs to the landowner of the area that was previously covered by water

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70
Q

Method of annexation

A

The manner in which an article is attached to real property generally indicates whether it is a fixture or personal property

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71
Q

Freehold estate

A

Is and ownership interest for an indefinite period

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72
Q

Life estate

A

Type of free hold estate. the owner has considerably fewer rights than the owner of a fee simple estate. The life estate owner owns the property for only the period of the lifetime of an individual ( the owner or other designated person )

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73
Q

Sole ownership

A

Estate In severalty, title held by one person

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74
Q

Types of concurrent ownership with right of survivorship

A

Joint tenancy

Tenancy by entireties

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75
Q

When Sally and Kathy die, their interest in the property will descend to their heirs. On Sally’s death, for example, her two thirds interest I the property will descend to her legal heirs ( or as instructed in her will )

A

Tenancy in common

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76
Q

Stipulation when a joint tenant wants to sell his share of the property

A

The person who buys that share cannot be a joint tenant with the other original owners, but instead will be a tenant in com I without the right to receive any property on the death of one of the original joint tenants. The tenant in commons share can be disposed of by will, descent, or other arrangement

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77
Q

One of the protections and benefits for declaring ones residence as a homestead is : Protection of the homestead, it means

A

The homestead property is protected from forced sale for debts owing to personal loans, credit card debt, ect. However, the protection does not prevent foreclosure for nonpayment of property taxes, mortgages, ect

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78
Q

One of the protections and benefits for declaring ones residence as a homestead is: protection of the family, and it means:

A

If a married person dies and the family homestead was titled in that deceased persons name only, the surviving spouse receives a life estate and the children receive a remainder estate

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79
Q

What is a proprietary lease ?

A

A written agreement between the owner-corporation and the tenant-stockholder in a cooperative apartment

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80
Q

Eminent domain

A

Governments right to take land from an owner through a legal process referred to as condemnation, as long as the taking is for public purpose

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81
Q

In order for a deed to be valid, it must ….

A

Must be signed by a competent ( of sound mind and legal age ) grantor ( owner giving title ) and witnessed by two people to be valid. The grantee ( new owner ) need not be competent nor sign the deed.

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82
Q

Habendum clause

A

” to have and to hold “ provision in a deed to real property that stipulates the estate or interest the grantee is to receive and the type of title conveyed

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83
Q

Bargain and sale deed

A

Consists of the granting clause, habendum clause, and covenant of seisen.

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84
Q

When is transfer of title effective ?

A

When the conveyance instrument ( deed ) is delivered and accepted by the grantee ( new owner )

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85
Q

Variable lease

A

Type of lease agreement where rent will change. Is graduated at set times and tied to an index ( usual consumer price index )

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86
Q

Figuring out rent increases based on increase in index. Rent is $12/sq.ft. With index of 1.5. Index increases to 1.8. What is the adjusted rare ?

A
  1. Calculate how much the rent increased 1.8-1.5 = .3 difference
    .3 divided by 1.5 = .20 or 20 percent increase
  2. Multiply percentage increase by the beginning rent per sq.ft. Then add this amt. to the beginning rent per sq. ft.
    .20x$12= $2.40. $2.40+ $12 = $ 14.40 adjusted rental rate
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87
Q

Florida residential landlord and tenant act

A

Says that when a residential rental property is sold the tenants security deposits and advance rents must be transferred to the new owner

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88
Q

Venders lien

A

If a buyer of a property ( vendee ) us unable to make the full down payment required, a seller ( vender ) frequently will allow a purchase money mortgage to make up the amount of money the buyer is unable to produce. Actually, any portion of the sale price remaining unpaid to the vender creates vendors lien

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89
Q

How are township tiers numbered .

A

They are numbered at the baseline ( BL ). The first horizontal ( east/west ) strip of land above ( north of ) the base line is numbered Township 1North, or more concisely, T1N. The township numbers increase by one moving farther from the BL

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90
Q

Government lot

A

Fractional pieces of land less then a full quarter section located along the banks of lakes and streams. Government lots were identified by a specific lot number, which became the legal description of that parcel.

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91
Q

To find the number of acres in a tract

A

Take 640 ( the number of acres in one section ) and divide by the bottom number ( the denominator ) of each fraction in the legal description.

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92
Q

Survey measure, acre

A

43,560 square feet

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93
Q

Survey measure, bench mark

A

Te permanent reference mark ( PRM ) affixed to an iron post or brass marker that is embedded in the sidewalk or street, used to establish elevations and altitudes above sea level on survey. Parcels

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94
Q

Survey measurement, mile

A

5,280 feet

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95
Q

Unenforceable contracts

A

Contract that cannot be proven or will not be recognized by a court. May not be in writing, statute of limitations has passed, or the property has been destroyed

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96
Q

Four essential elements of a valid contract

A
  1. Competent parties
  2. Offer and acceptance ( mutual assent )
  3. Legal purpose
  4. Consideration
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97
Q

Statute of frauds

A

An act that requires that certain real estate instruments and contracts affecting the title to real property be in writing in order to be enforceable

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98
Q

Statute of limitations for written contracts

A

Five years

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99
Q

When a counter offer is made

A

It kills the original offer and substitutes a new offer in it’s place

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100
Q

Presence of Lead- based paint must be disclosed to prospective buyers and tenants in residential property built before when?

A

1978

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101
Q

Buyers must be given an energy efficiency brochure but the sell doesn’t have to ?

A

Perform an energy inspection

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102
Q

Lien theory

A

The borrower retains title to the property. The lender is protected with a lien on the real property to secure the payment of the mortgage debt. If the borrower defaults on the mortgage debt, the lender will foreclose to recover the money owed

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103
Q

Hypothecation

A

Refers to the pledging of property as security for payment of a loan without surrendering possession of the property

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104
Q

Assignment of mortgage

A

When ownership of mortgage is transferred from one company or individual to another

105
Q

Acceleration clause

A

Clause in a mortgage that authorizes the mortgagee ( lender ) to accelerate or advance the due date of the entire unpaid balance if the mortgagor ( borrower ) fails to fulfill any promises stated in the mortgage instrument

106
Q

Acceleration

A

Upon default, accelerates the entire debt due and payable

107
Q

UFMIP : up front mortgage insurance premium

A

FHA charges on loans based on the type ( new or refinanced ) and the term ( 15 or 30 year ). On a new 30 yr. the UFMIP isn1.75 % of the loan amount. The UFMIP is paid at closing and can be financed into the mortgage amount. Loans to finance condos do not require UFMIP

108
Q

VA or GI loan

A

1944 passed to help ww2 vets. The act gives the department of veterans affairs ( VA ) the authority to partially guarantee mortgage loans made to veterans by private lenders.

109
Q

Assumability of VA loans

A

Because they do not have do-on-sale clauses, VA loans are assumable ( even by non veterans )

110
Q

Expenses with FHA-insured mortgage loans

A

Monthly mortgage principle and interest payments, property taxes, hazard insurance, and FHA mortgage insurance. FHA requirements currently allow up to 31 % for the HER ( housing expense ratio ) and up to 43 % for the TOR ( total obligations ratio )

111
Q

Federal reserves duties

A
  1. Conduct the nations monetary policy
  2. Supervising and regulating banking institutions and protecting credit rights of consumers
  3. Maintaining the stability of the financial system
112
Q

Monetary policy

A

Refers to the actions undertaken by the Fed to influence the availability and cost of money and credit to promote national economic goals

113
Q

Fed uses three tools to influence money supply

A
  1. Open market operations: purchase and sale of us treasuries
  2. Discount rate : interest rate charged to banks from Fed
  3. Reserve requirements
114
Q

Reserve requirements

A

The amount of funds that an institution must hold in reserve against deposit liabilities. Institutions must hold reserves in the form of vault cash or deposits with the Federal Reserve Banks

115
Q

Ginnie Mae

A

Provides liquidity to the mortgage market by guaranteeing mortgage backed securities. 2/3 s of all residential mortgage loans originated in the US are now sold in the secondary mortgage market and used as collateral for the issuance of mortgage backed securities

116
Q

Each discount point paid to the lender, increases the lenders yield how much ?

A

1/8 of 1 percent ( .00125 )

117
Q

Profit formula

A

Amount made on sale -/- total cost = percent profit

118
Q

Loss formula

A

Amount lost on sale -/- total cost = percent lost

119
Q

Amortizing a mortgage

A
  1. Principal balance x annual interest -/- 12 = first months interest
  2. Monthly mortgage payment - first months interest = payment on principal
  3. Beginning principal balance - principal payment =’new principal balance
120
Q

Prepaid rent

A

Any rental income collected in advance belongs to the new owner as of the date of closing, therefore, the unused portion of advance rent belongs to the buyer

121
Q

County and or city taxes on closing statement

A

Are prorated on the bases of 365 day year, and paid in rears

122
Q

State documentary tax on a deed

A

.70 take price -/- by $100 and then x by .70

123
Q

State documentary tax on notes

A

.35 on new money

124
Q

On closing statement, earnest money is :

A

Credited to the buyer

125
Q

4 traits possessed to have value. DUST

A
  1. Demand
  2. Utility
  3. Scarcity
  4. Transferability
126
Q

CBS vs CIA

A

Comp.
Better
Subtract

Comp
Inferior
Add

127
Q

Market conditions

A

Property may sell for more, or less, today, even though the property has not changed. Adjustments for market conditions are whether the price paid for a comparable property, if that property sold today, would differ from price paid during some other period

128
Q

Reconciliation

A

The process of weighting the estimates of value derived from the sales comparison, cost, and income approaches to arrive at a final estimate of market value

129
Q

Functional obsolescence

A

Anything that is inferior due to operational inadequacies, poor design, or changing tastes and preferences. Examples
Poor traffic pattern, too few bathrooms, or inadequate amount of insulation. An over improvement is also considered to be functional obsolescence

130
Q

Effective gross income ( EGI )

A

The resulting amount when vacancy and collection losses are subtracted from the potential gross income

131
Q

Direct capitalization formula ( IRV )

A 
I = net operating income ( NOI) = rate x value ) 
R= capitalization rate = income -/- value 
V= value ( or sale price ) = income -/- rate
132
Q

Situs

A

Peoples preferences, both physical and economic, for a certain are owing to factors such as weAther, job opportunities, and transportation facilities

133
Q

Plottage

A

The added value as a result of combining two or more properties into one parcel

134
Q

Assemblage

A

Combining 2 or more adjoining properties to one tract of land, consolidating properties

135
Q

Progression

A

The value of an inferior property is enhanced by its association with superior properties

136
Q

Regression

A

Value of a superior property is adversely affected by its association with an inferior property of the same type

137
Q

T-intersection

A

Interior lots that suffer from their location at the end of a t intersection. Less desirable because of car headlights shining into home and a possible danger from speeding runaway cars

138
Q

Hip roof

A

Roofs that peak at the center ridge but extend downward on four opposite sides. Have overhang protection and are architecturally pleasing. Trusses are more expensive because of special engineering required

139
Q

Wattage

A

How much energy something consumes

140
Q

Casement window

A

One or more sashes hinged at the side like a door, swinging out horizontally out or in, usually with the aid of a crank

141
Q

Investment

A

Outlay of an investors money in anticipation of income or profit. Investors use some of their own money, called equity and borrowed funds

142
Q

Static risk

A

Risk that can be transferred to an insurer such as risk of vandalism, fire, and so forth

143
Q

Similarities of Business broker vs real estate broker

A

Real property involved

Long term liabilities

144
Q

Capital

A

Net worth of business. The amount the assets exceed liabilities

145
Q

Assets

A

The entire resources of a business, including tangibles and intangibles

146
Q

Liabilities

A

All of the debt of a business

147
Q

Equity

A

Current market value minus mortgage debt

148
Q

Cash flow

A

The amount of money generated from an investment after expenses have been paid

149
Q

Tax year begins

A

Jan. 1

150
Q

Tax exemption filing period ends

A

March 1, can not get tax discount after March 1

151
Q

Property taxes from previous year become delinquent

A

April 1

152
Q

Property tax protest procedure

A
  1. Complain to county property appraiser
  2. Go before adjustment board
  3. Go to court
153
Q

Properties exempt from property taxes

A

Churches, nonprofits, they are subject to taxation but the owner is released from obligation

154
Q

Increments of assessed value

A 
0-25,000. = base 25,000
25,000-50,000= 25,000 deduction 
50,000-75,000 = 50,000, no school deduction on second 25,000
155
Q

Purchase of real property from foreign sellers. To prevent foreign sellers from avoiding the payment of taxes due on the sale of real property the IRS requires that buyers withhold

A

withhold 10 per cent of the gross sale price (including cash paid and any debt assume by the buyer)

156
Q

Investment Property

Depreciation components.

A

Straight line method. Depreciation is calculated using the straight line method. An equal amount of depreciation is taken annually over the useful life of the asset. The IRS has currently established useful asset life as 27.5 years for residential rental property and 39 years for nonresidential income producing property.

157
Q

Variables that influence Supply

A

Availability of skilled labor
Availability of construction loans and financing.
Availability of land
Availability of materials.

158
Q

Variables that influence Demand

A 
Price of Real estate
Population numbers and household composition
Income of consumers
Available of mortgage credit.
Consumer taste or preference.
159
Q

Price of real estate.

A

There is an inverse relationship between price and the demand for real estate when prices rise, demand goes down. When prices decrease demand goes up

160
Q

Interpreting Market Conditions

A

Buyers market excess supply

Sellers market excess demand

161
Q

Vacancy rates. A 5 percent vacancy rate =

A

95 per cent occupancy rate.

162
Q

Three areas of responsibility for which city planning commissions are commonly delegated final authority are:.

A

(1) subdivision plat approval, (2) site plan approval and (3) sign control

163
Q

Economic Base Studies

A

. Base Industries are those industries that attract outside money to the area such as film making, fertilizer plants and the citrus industry

164
Q

Service industries

A

are local

165
Q

Residential zoning regulates density meaning

A

the number of units (homes) per acre.

166
Q

Buffer zone

A

A strip of land separate one land from another use.

167
Q

Appeals and Adjustments

A

-Zoning Board of Adjustment

168
Q

Legally nonconforming use.

A

If a property’s use was lawfully established but no longer confirms to the use regulations of the zone in which it is located because of the enactment of a new zoning ordinance the use is allowed to continue as a non conforming use

169
Q

A suspended license is…

A

Ineffective

170
Q

A group license

A

Issued to Sales associates working with a owner developer because the developer may own properties in the names of various entities

171
Q

Plat map

A

Required by government to protect the public, has lots recorded and goes to planning commission

172
Q

Dedication

A

Gift of land for public use

173
Q

Residential sale

A

4 or fewer units or agricultural property under 10 acres

174
Q

License is ineffective if

A

It’s inactive

Or suspended

175
Q

License is VOID if it is

A 
REC.
Revoked
Expired
Cancelled
Avoid a wreck
176
Q

Brokers can have multiple licenses but sales associates only have

A

Group licenses

177
Q

Ostensible partnership

A

Quasi partnership, is not intentionally created.is fraudulent

178
Q

LLC

A

Limited liability companies, best features of a corporation and a partnership.

179
Q

Corporation sole

A

Not for profit, can not be real estate brokerages

180
Q

Stipulation

A

An agreement of facts and penalty between DRE attorneys and licensee attorney

181
Q

Recommended order

A

Administrative law judge submits to the DBPR it includes judges findings and conclusions

182
Q

A license will be revoked or canceled if it was ….

A

Issued by mistake

183
Q

Two suspensions for the same or different violation may result in

A

Revocation

184
Q

Notice of non compliance

A

Warning for a minor violation that allow a licensee 15 days to correct the problem

185
Q

Revocation of a license is

A

Permanent

186
Q

Recovery fund does not cover

A

Punitive damages

187
Q

FREC pays civil judgements, not

A

Punitive damage

188
Q

How much is paid to fund per 2 year renewal period by
Realtor ?
Broker ?

A

$3

$7

189
Q

Conversion

A

Using earnest $$ for personal use

190
Q

Fair housing act

A

1968

191
Q

Civil rights act

A

1866, 1964

192
Q

Redlining

A

Deny loans or insurance coverage or present different term to people in a certain neighborhood

193
Q

To answer a question regarding race, violates

A

Fair housing law

194
Q

Americans with disabilities act

A

(ADA) 1990 statute to protect handicapped people

195
Q

Purpose of TILA or regulation Z

A

Inform borrowers of the true cost of a loan

196
Q

Oldest survey method

A

Meets and bounds, most important part is point of beginnin

197
Q

A Township is

A

6 mi x 6 mi

198
Q

How many sections in a township

A

36, each 1mi x1 mi

199
Q

How big is a section

A

640 acres

200
Q

Largest measurement by government

A

Check, 24mi. By 24 mi.

201
Q

What surveyors use to mark property

A

Monument

202
Q

Clause in deed that gives seller the right to a sell property

A

Seizen

203
Q

An acre is how many feet ?

A

43560

204
Q

Valid deed must be _______

A

Signed and witnessed

205
Q

Are witnesses required on a legal contract ?

A

No

206
Q

Title to real property passes to the grantee when the deed is

A

Delivered and accepted

207
Q

FHA

A

Insures

208
Q

Most common method of federal reserve board to control supply of money is

A

Open market operations

209
Q

What is deducted from income taxes but not deducted when calculating net operating income ?

A

Interest and depreciation

210
Q

If capitalization rate increases, the value

A

Decreases

211
Q

Plottage is ?

A

In increase in value of individual parcels when joined with other parcels

212
Q

Considering a buyers attitude and willingness to pay, the lender considers what ?

A

Credit rating

213
Q

What kind of depreciation is usually found in external obsolescence ?

A

Incurable

214
Q

Who changes depreciation rules ?

A

IRS

215
Q

Under the income approach, value equals ?

A

Income divided by rate

216
Q

Lien theory means that the mortgage

A

Is a lien on the property, but title is vested with the mortgagor

217
Q

Mortgagor

A

Home owner, borrower

218
Q

Final step after an appraiser has utilized all three approaches to value is ?

A

Reconciliation

219
Q

The passage of rules requires

A

A quorum vote of the commission

220
Q

If a sales associate chooses not to renew his license at the appropriate time, his license will be ?

A

Involuntary inactive

221
Q

Practicing real estate without a license is a

A

Third degree felony

222
Q

Commercial agents may also

A

Have no brokerage status, be single agents, or transaction brokers

223
Q

All realtors must be members of

A

NAR.

224
Q

A single agent who wishes to remain loyal to the principal yet be involved in both sides of the transaction must

A

Work with the other party in a “ no brokerage relationship “ role

225
Q

Permission to use another’s property that may be withdrawn at will is

A

A license

226
Q

Easement by prescription

A

Securing an easement through an unapproved use over a period of time 20 years

227
Q

Partially amortized mortgage

A

Has a balloon payment

228
Q

What percent occupancy rate is a good indicator of when to build, or supply balanced with demand ?

A

95%

229
Q

Local planning commissions are usually comprised of

A

Lay members representing a cross section of the community

230
Q

Part 1of 475

A

Deals with real estate brokerage

231
Q

FREC part 2

A

Real estate appraisers

232
Q

FREC 3

A

Commercial only broker lien rights

233
Q

FREC 4

A

Commercial real estate leasing

234
Q

Freehold estate

A

Must be immobile ( land ) and be owned for an undetermined amount of time

235
Q

Fee simple ownership

A

Highest ownership one can have in land the types are :
Estate in severalty- one person
Estate by the entireties - husband and wife ( right of survivorship )
Joint tenancy - two or more people ( right of survivorship )
Tenancy in common- two or more people ( is willed to heirs )

236
Q

What are Life estates

A

Not fee simple estates but are freehold ( land and no set time )
Ownership who’s duration is limited to the life of some person, then they automatically go to another ( way to avoid probate ) types are:
Estate in reversion - goes back to original owner
Remainder estate - goes to third party ( remainder man ( vested, specifically named ; contingent, not named )

237
Q

Non freehold estates are basically

A

Leases

238
Q

Types of leaseholds ( non freehold estates )

A

Estate for years - standard lease written with specific start and end
Tenancy at will- written or oral agreement that is open ended ( month to month lease )
Tenancy at sufferance - no lease , no agreement

239
Q

HER equation

A

Principal+interest + taxes + insurance = PITI

PITI -/- monthly gross income ( MGI ) = HER

Convential loan = 28 %. FHA = 31 %

240
Q

TOR equation

A

Total obligations ( all monies owed per month ) -/- monthly gross income = TOR

Conventional = 36%, FHA = 43%’ VA = 41%

241
Q

FHA requirements

A

3.5% down
Downpayment cannot be financed into loan
Seller may contribute 6% of closing costs including the down payment
Requires mortgage insurance premium of 1.75 % financed into loan and .55% of loan amount -/- 12 months to be paid monthly
100,000 x 1.75 % = 1750 in loan
100,000 x .55% = 550 -/- 12 = 45.83 pay monthly

242
Q

VA loans requirements

A

Funding costs 2.15 % of loan amount must be financed into loan if it is a first time loan.
If it is the second time, it’s 3.3%

243
Q

HUD federal housing rule, you can not get an FHA loan if the seller has owned the property for less then _______

A

6 months

244
Q

GRM ( gross rent multiplier ) formula

A

Sales price -/- monthly rent = GRM

248,000 -/- 1200 = 206.67

245
Q

Gross income multiplier ( GIM ) formula

A

Sales price -/- gross annual income

400,000 -/- 50,000 income = 8.0 GIM

246
Q

Formula To find property value with GRM

A

Rental income x GRM = market value

560 x 171.4 GRM = 95,984

247
Q

Limited partnerships

A

Limited partners must make investment of cash or property, but not of service

248
Q

Failure to account

A

Failing to pay money to a person

249
Q

Jones vs Mayer case that upheld civil rights act of

A

1866

250
Q

Real estate protected by homestead must be what size?

A

160 acres outside a city, or 1/2 acre in town

251
Q

Premises section of a deed

A

Names the parties and date

252
Q

Habendum clause in a deed _______

A

Indicates the type of estate being conveyed

253
Q

Seisin clause in a deed

A

A promise that the grantor has the legal right to convey title

254
Q

Plat map shows what ?

A

Engineers plan for land use showing the lot divisions and street locations

255
Q

How long does oral agreement last

A

4 years

256
Q

Executory contract

A

Agreement that has some act or conditions hat remains to be completed

257
Q

Express contract

A

Terms are specifically stated

258
Q

Unilateral contract

A

Only one person promises to preform without promise to reciprocate from other party

259
Q

Liquidated damages

A

Earnest money deposit paid in default

Real Estate (2 decks)

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