Unit 1 Flashcards
absentee owner
A property owner who relies on property manager to supervise investment.
What are some job roles that a real estate transaction may require?
Real estate transactions can require the real estate associates, appraisers, attorneys, bankers, title insurance agents, architects, surveyors and accountants.
A real estate associate should know the economic and legal intricacies associated with:
transfer of title
property taxes
financing
local zoning ordinances
What are some things that can effect market valuation of a property?
income tax laws, building moratoriums, and fluctuations in supply and demand.
Real estate brokerage is the business of bringing together: __ & __ and __& __, and completing of:
buyers and sellers
owners and renters
real estate transactions
Sales and leasing involves real estate license–related activities performed ________.
under the authority of a real estate broker.
The broker acts as an _____ or an _______ between two or more people in the negotiation of the sale, purchase, or rental of real estate.
agent or an intermediary
Residential sales requires expertise in:
- _______ and _______ taxes
- ______ contracts on home
- estimated ______ utility costs
- property and homestead taxes
- restrictive contracts on the home
- estimated utility costs
Commercial sales requires expertise in ______.
- income-producing properties
- investment analysis
- how to increase after-tax cash flow.
You do NOT need a “commercial license” for commercial sales.
Industrial sales requires expertise in _______.
- needs of different industries
- transportation requirements
- industrial construction methods
- local land-use restrictions affecting industrial properties
Agricultural (sales of farms and agricultural land) requires expertise in:
- operation of farms
- the economic problems associated with different types of farming.
- the federal programs affecting operations
Real estate licensees who engage in the sale, purchase, or lease of businesses are called
business brokers.
A _________ involves the sale or lease of an existing business, including the sale of ____.
business opportunity
tangible and intangible assets.
The land and the buildings ON it. Including leaseholds, subleaseholds, businesses, and mineral rights.
Real property
In most states, if ________ is an asset of the business, a real estate broker’s license is required to sell the business.
real property
There is a presumption in Florida law that businesses will have some sort of real property involved, either land with physical improvements (such as a building) or a long-term lease. For this reason, in Florida, ________.
an active current real estate license is required to sell or lease business opportunities.
farm area / farming
A selected geographical area or a group of people from which to solicit real estate business and to which a real estate licensee devotes special attention and study.
Farming involves maintaining data on:
each\_\_\_\_\_ when \_\_\_\_\_ the \_\_\_\_\_ history typical \_\_\_\_\_\_\_ time assessed \_\_\_\_\_\_ amount of \_\_\_\_\_\_ taxes
property it was built sale marketing time assessed value amount of property taxes
follow up
What a sales associate does after a sale to maintain customer contact and goodwill.
___________ is a professional service conducted by a person or company hired to maintain and manage property on behalf of property owners. The scope of the work the _______ performs is detailed in the management agreement.
Property management
property manager
Property management typically involves _____, _____, _____, and _____ of property.
leasing, managing, marketing, and maintenance of property.
A _____ is the property owner’s local representative, and they are responsible for _________.
property manager
- maintaining the property and managing the expenses
- protect the owner’s investment
- maximize the owner’s return on the investment
- collect rent
- manage tenant relations
- advertising and merchandising the space
A person who, for a fee, acts as an intermediary between a person seeking to lease a housing accommodation and a property owner seeking to acquire a lease for a housing accommodation.
Rental agents
Rental agents who are paid on a transaction basis must be __________.
licensed real estate agents.
Salaried employees who work in an onsite rental office in a leasing capacity are exempt from a real estate license, provided they are not _____.
paid on a transactional basis.
______ (or leasing agents) act as intermediaries between a potential tenant and the property owner seeking to acquire a tenant.
Rental agents
______ continue to manage the rental property once a tenant is secured.
Property managers
Effective Gross Income (EGI)
The resulting amount when vacancy losses and collection losses are subtracted from potential gross income.
A property manager who is paid _____ or on a _____ basis must be licensed as an active ______, unless they are paid a salary.
by commission or on a transactional basis
real estate broker.
Sales associates work under the direction of their _____; licensed sales associates cannot work independently as _________ managers.
broker
property managers.
Community Association Manager (CAM)
someone with a CAM license
they can manage communities with more than 10 units and associations with budgets over $100,000
Some examples of community association management:
\_\_\_\_\_ parks planned \_\_\_\_\_\_\_ \_\_\_\_\_\_ associations \_\_\_\_\_\_\_ \_\_\_\_-shares \_\_\_\_\_\_\_
- mobile home parks
- planned unit developments
- homeowners associations
- cooperatives
- time-shares
- condominiums, and other residential units
A CAM license is not required to manage:
- apartment buildings
- commercial property
- single family dwellings
The process of developing and communicating an estimate of a property’s value.
appraisal
Lenders most often require the property to be appraised before _____.
approving a mortgage loan.
Appraisers help with:
____ assessments
determining ____ of property taken by force by gov (eminent domain)
_____ adjusting for insurance companies
obtaining ____ before investors invest
tax
value
insurance
value
appraiser
One who is registered, licensed, or certified by the DBPR and provides an estimate of value.
Only a state-certified or licensed appraiser can prepare an appraisal that involves:
a federally related transaction
Appraisers charge a fee based on the time and difficulty of the appraisal assignment. Appraisers are not _____ to reduce the possibility of:
paid a commission
a conflict of interest.
The USPAP is:
a set of guidelines (standards of practice) to follow when providing appraisal services
What two valuation types are not required to abide by the USPAP or require Certified or Licensed Appraiser?
Broker’s price opinion (BPO)
Comparative market analysis (CMA)
(They’re both only opinions and CMA is a market tool)
comparative market analysis (CMA) is an:
it is used to ___ and ___.
informal estimate of market value by the agent
to get a good listing price for seller
to get a good offer price for buyer
How do you develop a CMA?
1.
2.
3.
4.
- collecting info on real estate activity in area
- including sales of similar properties
- current for-sale properties
- recently expired listings
How can a licensed appraiser be compensated for preparing a CMA?
- charging a fee
- as part of or in addition to normal sale commission
- no compensation (free)
If a sales associate or broker associate charges for a CMA, to who does the compensation go to?
must be paid to the employing broker and NOT the sales associate or broker associate who prepared CMA
A written opinion of the value of real property. Florida real estate licensees are allowed to prepare and charge for these (do not need broker license), provided its not called an appraisal. These are often requested by relocation companies and lenders involved in short sales of distressed properties.
broker’s price opinion (BPO)
A sale of secured real property that produces less money than is owed the lender. The lender releases its mortgage so that the property can be sold free and clear to the new purchaser.
a short sale
A ______ or ______ must conduct an appraisal when the valuation assignment involves originating a federally related mortgage loan.
licensed or certified appraiser
Appraisal not federally related =
Appraisal federally related =
conform to USPAP, no need for Certified or Licensed Appraiser
conform to USPAP AND must be certified or licensed appraiser.
One who finds a lender for a potential borrower, and vice versa. Anyone who takes residential mortgage loan applications or offers to negotiate the terms of residential mortgage loan applications for compensation.
mortgage loan originator (MLO)
What two things can a real estate agent NOT do without also having a mortgage loan originator license?
- they cannot operate as a mortgage loan originator
- they cannot accept referral fees from lenders
The service of analyzing existing or potential projects, and then giving advice about the purchase and use of the investment.
Counseling
What are the three general phases of real estate development?
Land acquisition
Subdividing and development
Recording the subdivision plat map
A plan of a tract of land subdivided into lots and showing required or planned amenities. Required by most local governments and reviewed by the applicable government planning board (Commission).
Subdivision Plat Map
What happens during land acquisition?
1.
2.
3.
4.
- Developers and builders acquire raw land
- They study the zoning and also permissible developments
- Developer seeks approval from local municipality
- Developer pays for engineering plans, attorney fees, surveys and application fees
The process of converting parcels of land into smaller units or lots.
subdividing
The process of improving raw land so that it can be put to productive use.
development
What is the developer responsible for in regards to the land?
Improving the raw land with paved streets, curbs, storm drains, and so forth. Then these can be dedicated to gov.
Typically, the _______ improvements are dedicated to the local city or county.
streets
curbs
other public area
An offer of land for some public use, by an owner, together with acceptance by or on behalf of the public.
When a private owner gives to the public (the government) a piece of land for them to use.
dedication
The two pieces needed to make a valid dedication:
an offer to dedicate (donate) the land
an acceptance by the municipality by approving the plat and recording it in public records
The developer typically indicates on the ______ that the streets, sidewalks, park areas, and other improvements will not:
This obligates the government to:
plat map
be sold to private individuals and instead dedicated to the local municipality.
maintain them
When subdividing (converting parcels of land into smaller units or lots), the engineer includes:
- size and location of individual building lots
- streets and public utilities
- water and sewer lines
The 3 categories of Residential home construction and what they mean:
Speculative (spec) homes - (no preemptive buyer)
Custom homes - home is under contract with a buyer, and they use building plans made by architects or the buyers themselves.
Tract homes - a type of speculative home. When the buyer selects the lot and the floor plan out of several model homes. Used by new subdivisions.
How does the local government impact real estate?
- property taxation
- occupational licensing
- business tax receipts
- building permits
- building moratoriums
- zoning
- building codes
How does the state government impact real estate?
- they own and manage a large amount of land
- they identify coastal regions and other areas that are protected from development.
- state documentary taxes on documents that transfer real property
When is a state documentary tax required?
when ownership to real property is transferred or pledged as collateral for a mortgage.
How does the federal government impact real estate?
through its fiscal and monetary policies
Which government agencies impact real estate?
HUD: FHA: VA: EPA: ITS :
HUD - Dept. of Housing and Urban dev.
FHA - Federal Housing Administration
VA - Dept. of Veterans Affairs
EPA - Environmental Protection Agency
ITS - Internal Revenue Service
The largest trade organization in the world for agents:
They created the:
The Code emphasizes fair dealings in three major areas:
National Association of REALTORS® (NAR)
REALTOR® Code of Ethics and Standards of Practice
with clients
with other real estate brokers
with the general public
A ______ is a real estate licensee who is a member of the NAR.
REALTOR®
The Florida Realtors® and NAR are ______ professional organizations.
They set their own:
privately run
rules, fees, or membership requirements
Used by real estate licensees. An arrangement among members of a real estate board or exchange that allows each member broker to share listings with other members so that greater exposure is obtained and a greater chance of sale will result.
Multiple Listing Service (MLS)
The MLS is not a _____ of NAR. Anyone can create an MLS, so brokers can be part of several.
copyrighted trademark
To participate in an MLS, brokers agree to cooperate with each other in a ___________ between the _____ and ______. The terms for division of commission can vary from broker to broker.
sharing of the commission
listing and selling brokers
Real estate professionals provide expert knowledge of:
property transfer
market conditions
how to market
The five major sales specialties are:
(1) residential, (2) commercial, (3) industrial, (4) agricultural, and (5) businesses.
