math formulas, Sample questions, chapter 11 -19, chapter 11 -16, REAL ESTATE CHAPTER 1-5, chapter 6-10
building inspections
Conducted by county officials during construction to confirm that the workmanship conforms to the building code.
arms length
Conducting negotiations on one's own behalf without being subject to the other party's control or influence.
Special Information Booklet
Contains consumer information regarding closing services for which the borrower may be charged at closing.
An individual who has earned a four year degree or higher in real estate is not exempt from which education requirement?
Continuing education
A seller sold his home and agreed to a June 16,20xx closing date. The last day for which interest was paid on the $105,500 remaining balance of the 8% 30 year conventional mortgage was april 30 20xx. If the total monthly mortgage payment was $744.14 what amount of prorated mortgage interest would appear on the closing statement as a debit to the seller? ( use 365 day method of proration and charge the day of closing to the buyer)
$1,063.52
The closing date is sept 10. Day of closing belongs to the seller. Property taxes for the year are $1,700. Calculate the proration using the 365 day method
$1,178.36 debit seller credit buyer
A home has been assessed by the county property appraiser at $116,000. The property is homesteaded. The city county and school board district each charge 10 mills for a total millage rate of 30 mills. How much is saved by the homestead exemption?
$1,250
An investor is considering the purchase of an office building. The building has four rentable offices. The operating expenses are $30,000 per year. The investor $150,000 to invest that she wants to receive a 20% return. What monthly rent must she charge per office to get the desired return?
$1,250
A lot is 180' x 225'. The city is assessing all lot owners on the street based on $24 per foot for paving. The city has agreed to pay 30% of the paving cost. What is the paving assessment for this lot?
$1,512
The county property appraiser has assigned an assessed value of $117,500. The property is homesteaded. The county charges the following millage rates; city 10 mills county 10 mills and school district 6 mills. Calculate the property taxes?
$1,905
The seller wants to net $100,000. If the broker wants to earn 6% commission and the sellers closing costs are estimated at $5,000 ( not including commission ) for what price must the property sell?
$111,702
The documentary stamp tax charged for a property is $825.30. Calculate the purchase price?
$117,900
The broker agreed to pay his sales associate 45% of the total commission. The property sold for $320,000 and the commission rate was 7%. The property was sold in house. What was the brokers share of the commission?
$12,320
An office that measures 20' x 40' rents for $840 per month. The annual rent per square foot is?
$12.60
A single family residence is available for listing. A comparable home recently sold for $140,000. Compared with the subject property the comparable has a superior location ($12,500) is smaller ($8,000) and is three years older ($5,000). What is the subject propertys value based solely on the information given?
$140,500
A land lord owns an 1,800 sq ft rental house that rents for $.70 per sq ft per month. If the GRM (monthly) for that property is 120, What is the market value of the property?
$151,200
What is the net operating income for a propery that produces a potential gross income of $26,750 has fixed operating expenses of $8,350 has a mortgage payment of $11,100 and has a reserve for replacements of $450?
$17,950
What is the net operating income of a building if the operating expenses are $8,350 the effective gross income is $26,750 and the mortgage payment is $11,100?
$18,400
A seller listed a home for $200,000 and agreed to pay 5% commission rate. The mls stated that the commission would be shared between the listing office and the selling office on a 50-50 basis. The home was sold 4 weeks later for 90% of the list price. The listing broker paid the listing sales associate 50% of the listing offices commission. The selling broker paid the selling associate 60% of the selling offices commission. How much commission did the selling sales associate receive?
$2,700
An investor owns a business property with a value of $1,500,000. The market capitalization rate is 8%. Operating expenses total 30% of potential gross income. The investment is leveraged with a $1,250,000 mortgage. What is the investors equity?
$250,000
A real estate broker followed the instructions of an escrow disbursement order. The seller sued the broker and obtained a judgement against the broker for $15,000 in damages plus $10,000 in attorney fees and court costs. The broker incurred $3,000 in attorney fees. The commission is authorized to pay?
$28,000
A homesteaded property is located in Jacksnville Florida, in Duval county. The city tax rate is 8.1 mills the county tax rate is 8.9 mills and the school district tax rate is 5 mills. The homeowner is a blind widow and has qualified for homestead exemption. The home has been assessed at $199,000. What are the property taxes owned on this property?
$3,381
A homesteaded property is located in Jupiter, Florida, in Palm Beach County. The property has been assessed at $185,000. The city tax rate is 8.8 mills, the county tax rate is 9.3 mills, and the school board levy is 6.5 mills. The owner is a widow and has qualified for and received homestead tax exemption. How much will the owner pay in property taxes?
$3,471.20
A court awarded a judgement against a broker for $30,000 actual damages and for $45,000 punitive damages regarding a real estate brokerage transaction. What is the claim avaible from the real estate recovery fund?
$30,000
An appraiser has assigned the following weights to three adjusted sale prices c1) $322,500 40% weight c2) $319,000 35% weight c3) $312,000 25% weight What is the estimated market value of the subject property?
$318,650
The loan to value ratio offered by a local financial institution is 75%. If a buyer wishes to acquire a lot selling for $129,500 the buyer will need to make a down payment of?
$32,375
If a parcel described as the S 1/2 of the SW 1/4 of section 21 sold for $4,000 per acre, its sale price was?
$320,000
An appraiser has assigned the following weights to 3 adjusted sale prices comparable 1: $333,500- 45% weight comparable 2: $327,500- 35% weight comparable 3: $317,900- 20% weight What is the reconciled estimated market value of the subject property?
$328,730
Based on the following what is the estimated market value of a lot 100' x 110' in the cove hill subdivision? comparable sales date sale 1 ) lot 100' x 120' adjacent to subject lot sold one week ago for $36,720 sale 2) lot 100' x 100' located four blocks away, sold 3 months ago for $29,800 sale 3) lot 110' x 110' located on same street four lots removed sold two weeks ago for $ 36,800 sale 4) lot 90' x 110' across the street sold one month ago for $ 29,700?
$33,220
A homeowner originally purchased a new home for $244,900. During the period of ownership, the homeowner spent $27,000 in capital improvements. The homeowner sold the home 16 years later for $329,900. The homeowner paid a brokerage fee of 6% of the sale price and paid other closing costs totaling $2,750. What was the homeowner's capital gain from the sale?
$35,456
A lender quotes a mortgage loan of $265,000 at 4.5% interest. The monthly payment is $1,342.72. How much of the second monthly payment will apply to the principal reduction?
$350.28
A lender quotes a mortgage loan of $260,000 at 4% interest. The monthly payment is $1,241.27. How much of the second monthly payment will apply to the principal reduction?
$375.85
A lender quotes a mortgage loan of $325,000 at 5% interest. The monthly payment is $1,744.67. How much of the second monthly payment will apply to the principal reduction?
$392.13
A buyer applied for a 30 year fixed rate $105,000 mortgage. The lender will grant the loan if the buyer will pay interest at the rate of 4.5% plus 3 points and a 1% loan origination fee. What are the total loan charges if the buyer decides to take the loan offer?
$4,200
An investor bought half of a quarter section of land for $160,000. She plans to develop the property into a residential subdivision. Local zoning will require all lots in the community to be not less then 100' x 120' in size and the engineering firm employed by the investor has informed her that approximately 484,800 sq ft of the tract will be required for parks streets storm sewers and other development purposes. The engineering firm has also estimated that total development costs and associated expenses will amount to five times the raw land costs. The investor wants to make a profit of 10% based on total costs. How much must the investor average per lot to accomplish her profit objective?
$4,224
A homesteaded property is located in Duval county fl. The city tax rate is 8.2 mills the county tax rate is 9.0 mills and the school tax rate is 7.3 mills. The homeowner has qualified for homestead exemption. The home has an assessed value of $230,000 what does the homeowner owe for property taxes?
$4,592.50
While working for a broker a sales associate acquired a listing for $294,900 at a 6% commission rate. A second sales associate who works for another brokerage office found the buyer for the property. The listing and selling brokers agree to a 50-50 split between the two selling broker kept 45% of the commission received by the selling office. How much did the selling offices sales associate receive?
$4,768.50
A developer sold a lot for $36,000. This represented a loss of 10%. What was the cost of the lot?
$40,000
A buyer is purchasing a home from the seller for $190,000. The buyer gets a first mortgage loan with a loan to value ratio of 60%. The seller takes back a purchase money mortgage for 43% of the balance. How much money does the buyer need for a down payment?
$43,320
A 10 year old structure has an effective age of 8 years. Total economic life is estimated to be 55 years. Reproduction cost new of the structure is $300,000 what is the accrued depreciation for this structure?
$43,500
A married couple purchased a home for $287,500 made a down payment of 25% and secured a new conventional mortgage loan for the balance. Calculate the intangible taxes due.
$431.25
An apartment building has 10 apartment that rent for $220 per month and 6 apartments that rent for $185 per month. The building also has 4 apartments that rent $35 per week. What is the annual gross rental income?
$47,000
A buyer has made an earnest money deposit of $10,150on a house selling for $94,500. A local lender has agreed to lend 85% of the selling price at 4 1/2 % interest for 30 years. If the buyers closing costs amount to $1,575 how much more cash must the buyer produce at closing?
$5,600
A homesteaded property is assessed at $275,500. The millage is 7 mills for county schools and 18 mills for all non- school taxing authorities. What are the property taxes owned on this property?
$5,787.50
Three claimants are requesting relief from the real estate recovery fund. All 3 claimants were named in a single judgement (same transaction) What is the maximum payment from the recovery fund for this claim?
$50,000
The maximum save our home benefit that may be transferred to a new homestead is?
$500,000
A licensee has been asked to determine the current market value of a 6 year old building with a reproduction cost of $480,000. When new the economic life of the structure was estimated to be 40 years. If the site value is known to be $100,000 what is the current market value of the entire property?
$508,000
A 66 year widow is totally disabled due to a serious heart condition. The assessed value of her homesteaded property is $189,500. How much is her homestead exemption for city and county taxes( non school taxes)?
$51,000
A women has homesteaded her residence. Her home has an assessed value of $279,000. She is a nonveteran who is totally and permanently disabled as a result of a serious car accident. She is also legally blind. What is her cumulative county tax exemption on her homesteaded residence?
$51,000
What is the maximum allowable homestead exemption for a 65 year old widower who is legally blind?
$51,000
An investor owns a five unit apartment building. Over a period of time the investor has found that the expenses to operate the apartment building have averaged 55% of the gross income. If one apartment rents for $920 per month another for $940 per month and the remaining 3 apartments rent for $900 per month each what are the annual gross and net incomes for the investors apartment building?
$54,720 gross income ; $24,624 net income
A married couple sign a contract to purchase a $280,000 home and make an earnest money deposit of $5,000. The seller has agreed to pay a 7% commission to the listing broker. The buyers will receive a credit of $2,734 for the sellers portion of the ad valorem taxes. If the buyers obtain an 80% conventional loan at 5% interest with 3 points to be paid by them how much will be due from the buyers at closing?
$54,986
If a $5,600 sale commission is split 60/40 between the listing broker and the selling broker and each broker splits his share of the commission 50/50 with respective listing and selling sales associate how much more will the listing broker earn from the sale then the selling broker?
$560
Monthly mortgage payments of $450 have been paid for 15years. The original mortgage amount was $45,000. After 15 years 50% of the loan has been paid. What is the total amount of interest paid to date?
$58,500
An office building produces an effective gross income of $96,400. Building operating expenses total $36,600, and the monthly mortgage payment is $2,240. what is the buildings net operating income?
$59,800
A multifamily residential investment property is appraised at $235,000. Land value is 20% of the total appraised value. Calculate the annual depreciation deduction? ( round to the nearest dollar)
$6,836
The scheduled date for closing a duplex is june 15th. Rent collected on the first of each month is 600 per unit. Day of closing belongs to the buyer. How will the proration be entered on the closing disclosure?
$640 debit seller $640 credit buyer
What is the cost per acre of a tract of land that sold for $1,306,800 and measures 4,000 feet 2,000 feet?
$7,116 per acre
A house cost $ 89,500 to build. When new the building was estimated to have a 50 year useful life. Using straight line depreciation what is the accumulated depreciation after 4 years?
$7,160
If a capitalization rate of 10.5% is used what is the market value of an investment property assuming a net income of $8,424?
$80,228.57
A corporation purchase 1,600 acres of Florida ranch land from a foreign seller for $5,600,000. Current law requires the buyer to with hold form the seller and pay to the IRS approximately?
$840,000
A building was sold for $90,000. The buyer paid 10% cash and obtained a loan for the balance. The lending institution charged a 1% loan origination fee. The total cash used by the buyer for this purchase was?
$9,810
A property owner asks a licensee to estimate the value of his office building prior to listing it for sale. The building is 7 years old and it would cost $90,000 to reproduce the structure new. The economic life of the structure is estimated at 40 years. The land is valued at $20,000. The owner paid $70,000 for the building and land 5 years ago. What is the estimated value of the property?
$94,250
DRE
-Division of Real Estate -provides support serves to FREC
Ostensible Partnership / Quasi partnership
-created 2 or more create appearance of partnership -Fraudulent & deceitful if public tricked into thinking exists -Parties may be liable for each others debts / torts -Licensee may be subject to license suspension -Brokers in same office building must have own office sign,ph #'s, register their own business name, indicate brokerage name on separate letterhead & business cards
The section number located due west of section 6 is?
1
To compare the dollar value of a loan discount each discount point is equal to?
1% of the amount loaned
Examination of documentary stamps on recently recorded deeds provided the following sale prices. Data obtained from property managers produced the income figures. Use the information given to determine the correct overall capitalization rate for the comparable apartment properties. comparable properties NOI sale prices apt project 1 $39,4000 $345,000 apt project 2 $45,680 $464,000 apt project 3 $36,800 $386,000 apt project 4 $43,790 $ 424,000
10.25%
Three tracts are 2 3/4 acres 3 5/12 acres and 4 5/6 acres in size. Together they represent?
11 acres
How many acres are contained in a parcel described as the SE 1/4 of the NW 1/4 and the S 1/2 of the NE 1/4 of a certain section?
120
A rental house produces $875 per month in gross income. The house costs $113,750. What is the monthly gross rent multiplier?
130
A licensee has been issued an administrative complaint. The licensee has signed the election of rights indication that he does not dispute the allegations of fact and he requests an informal hearing. How much prior notice of a hearing MUST be given to the licensee-respondent?
14 days
Developers of new cooperative units must give buyers a disclosure which informs buyers that they may cancel within how many days of signing the contract?
15 calendar days
How many days notice is required to terminate a month to month tenancy at will?
15 days
A broker representing a newly formed syndicate of investors arranged the purchase of 1,800 acres of ranch land for $1,650,000 from a citizen of Venezeula. The seller demanded all cash with the buyers to arrange their own financing. The broker helped the investors arrange finacing . further the broker recommended that the buyers without what percent of the selling price in order to comply with an IRS regulation?
15%
A real estate office sold 180 homes this year. This was 20% more sales then last year. How many home did the office sell last year?
150
An investor purchased two adjoining lots each measuring 150 across the front and 180 in depth. He paid $7,500 for each lot. The investor divided the property into 3 equal lots and sold eac one for $125 per front foot. What percent of profit did the investor make on the original investment?
150%
Some years ago a couple built their home for $70,000 on a lot that cost them $30,000. If building costs have double and lot prices have increase 300% how much has their original investment of $100,000 appreciated?
160%
A sales associate applicant failed the state license exam. If the applicant desires to review the exam the request must be received by the division of real estate with in what period of time?
21 days
A developer purchased 3 oceanfront lots each measuring 75 by 110 ft for $20 per sq ft. The developer later sold the lots for $200,000 each. What was the developers percentage of profit on the sale of the 3 lots?
21%
If a property owners request to the county property appraiser for a tax adjustment is rejected. The property owner may appeal to the value adjust board with in what period of time after the TRIM noticed is mailed?
25 days
A developer purchase five lots each measuring 110' x 150'. The lots cost $325 per front foot. The developer subdivided the lots into eight lots and then sold them for $28,000 each. How much profit did the developer earn?
25%
A $43,560 sq ft lot is to be subdivided. One-fourth of the lot is made up of a retaining pond and one eighth of the lot will be used for a road. How many sq ft of usable area are left?
27,225 sq ft
A contractor builds a two story warehouse measuring 120 ft x 150 ft. Ten percent of the space is allocated to elevators and landings. The contractor plans to store bins of construction material that each measure 10 ft x 12 ft. How many bins will the building accommodate?
270
What is the FHA housing expense ratio for a borrower with monthly housing expenses of $696, total monthly gross income of $2,400 and total monthly obligations of $960?
29%
On july 1 a broker received conflicting demands from a buyer and seller regarding a good faith deposit. 12 business days later, the broker is unable to resolve the conflict between the parties and notifies the FREC. How many days does this broker have remaining to implement a settlement procedure?
30 business days
A sales associate was issued a citation. How many days does the licensee have to either pay the citation or file an objection to the alleged violation?
30 days
If a tenant vacates rented premises at the end of a lease, how many days does the landlord have by law to notify the tenant if the landlord intends to claim a part of the tenants security deposit?
30 days
Within what period of time must landlords of five or more units notify tenants in writing of the method used to hold security deposit?
30 days
The N 1/2 of a standard section contains?
320 acres
A buyer bought a new home for $230,000. The lender agreed to loan the buyer $200,000 at 3 1/2% interest with 6 points discount. What approximate yield will this provide the lender?
4.25%
A buyer obtains a mortgage of $200,000. The lender makes the loan at 4% interest plus 2 discount points. What is the approximate yield on the mortgage loan?
4.25%
A buyer obtains a mortgage loan of $340,000 and the lender agrees to make the loan at 4% interest with the buyer to pay 3 points at closing. What is the lenders effective yield on the loan?
4.375%
acre
43,560 square feet
A residential zoning category requires at least 15,000 sq ft per lot. The developer is reserving 25% of the land to streets sidewalks and a community center. The tract of land for development consists of 200 acres. How many residential lots are available for development?
435
If a building has an estimated economic life of 20 years the percentage loss of economic life per year is?
5%
mile
5,280 ft in length
The maximum payment from the real estate recovery fund for a judgement issued in connection with a single real estate transaction is?
50,000
A lot that measures 140' by 160' contains what percentage of an acre?
51.4%
A real estate broke maintains an escrow account for sales transaction and a separate property management escrow account. The broker is allowed to deposit his own funds in the two accounts up to a maximum of?
6,000
The Florida residential landlord and tenant act requires landlords to approve or deny the rental application of an active service member within how many days?
7 days
Title by adverse possession must continue for at least how many consecutive years without owners consent?
7 years
The buyers paid cash down payment of $55,000 and applied for a $145,000 loan. What is the LTV ratio?
72.5%
A residential zone requires at least 7,500 sq ft per lot. The developer is reserving 25% of the land for streets sidewalks and a community center. The tract of land for the development consists of 175 acres. How many residential lots are available for development?
762
The sale price on a home is $180,000. The buyer secured a $140,000 loan and paid $3,200 in closing costs and prepaid expenses. What is the loan to value ratio?
78%
Transaction Broker
A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.
good-faith doubt
A broker's uncertainty as to which party should receive the escrowed property.
Comparative Market Analysis (CMA)
A comparison of the prices of recently sold homes that are similar to a listing seller's home in terms of location, style, and amenities.
legally sufficient
A complaint that contains facts indicating that a violation of a Florida statute, a DBPR rule, or a FREC rule has occurred.
Active License
A current, valid license registered with the DBPR. The status required to actively engage in the real estate business.
custom homes
A custom builder constructs homes under contract with a buyer, often using building plans provided by architects or buyers.
automated valuation model (avm)
A data analysis compiled from a computer database of closed sales used by lenders when an appraisal is not warranted.
Escrow disbursement order (EDO)
A determination by the FREC of who is entitled to disputed funds.
Preclosing inspection
A final walk-through with the sales associate to verify that repairs have been completed and that the property is left in good condition.
long term capital gain
A gain on a capital asset that has been held for more than one year, resulting in a more favorable capital gains tax rate.
professional association
A group of individuals who share a common profession and are often organized for common political purposes related to that profession.
Foreclosure
A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note.
Interpleader
A legal proceeding whereby the broker, having no financial interest in the disputed funds, deposits with the court the disputed escrow deposit so that the court can determine the rightful claimant.
Mortgagee
A lender who holds a mortgage on specific property as security for the money loaned to the borrower.
sales associate
A licensed individual who, for compensation, is employed by a broker or owner-developer.
exclusive right of sale listing
A listing given to one broker who is assured of a commission no matter who sells the property.
home acquisition loan
A loan used to buy, construct, or improve a residence.
Metes and Bounds
A method of land description which involves identifying distances and directions and makes use of both the physical boundaries and measurements of the land.
biweekly mortgage
A mortgage loan amortized the same way as other loans with monthly payments, except that the borrower makes a payment every two weeks.
condominiums
A multiunit projects consisting of individual ownership of the dwelling unit in undivided ownership of common areas
Assessor's Parcel Number
A numerical ID assigned to each parcel of land within a tax district used to prepare tax maps.
limited partnership
A partnership with one or more general partners and one or more limited partners.
Property Manager
A person or company hired to maintain and manage property on behalf of the property owner
Broker Associate
A person who holds a broker's license but chooses to register and work in real estate under the direction of another broker.
subdivision plat map
A plan of a tract of land subdivided into lots and showing required or planned amenities.
Warranty forever
A promise in a general warranty deed guaranteeing that the grantor will forever warrant and defend the grantee's title against all unlawful claims.
Good Consideration
A promise that cannot be measured in terms of money, such as love and affection.
Handicap status
A protected class as defined in the Fair Housing Act and the Americans with Disabilities Act consisting of a physical or mental impairment that substantially limits one or more major life activities.
concurrency
A provision in Florida's Growth Policy Act that requires water and waste treatment facilities needed to support additional population to be in place before new development is allowed.
REALTOR®
A real estate agent, broker or an associate who holds active membership in a local real estate board that is affiliated with the National Association of Realtors.
Declaration of Condominium
A recorded document that creates the condominium.
residential sale
A residential property up to four (4) units, a vacant parcel zoned for residential up to four (4) units, or agricultural property of 10 acres or less
Freddie mac
A secondary mortgage market institution that buys and sells conventional, FHA, and VA loans.
FARM AREA
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.
Legal Description
A series of boundary lines on the earth's surface.
Condominium documents
A set of papers describing the condominium and the association.
Dual Agency
A situation in which a person or firm has an agency and fiduciary relationship to both parties—seller and buyer—of a transaction. illegal in fl
Township
A square tract of land measuring six miles on each side and including 36 sections (formed by the crossing of range and township lines).
Mutual recognition agreement
A transactional agreement between Florida and another state that provides for the two states to recognize each other's real estate license education.
Government Survey System
A type of land description, developed by the federal government for subdividing lands utilizing surveying lines.
Lot and Block
A type of legal description of land.
Tract homes
A type of speculative building; A new subdivision will typically feature several model homes. Buyers select a floor plan from the models and a lot on which to build in the new subdivision
consent to transition
A written agreement to gain the principal's permission to a change in brokerage relationship.
prepayment penalty
Allows an extra charge if any amount of the loan is paid off early
Equity of Redemption
Allows the mortgagor to prevent foreclosure from occurring by paying to the mortgagee the principal and interest due plus any expenses the lender has incurred in attempting to collect the debt.
escrow account
An account for the deposit of money held by a third party in trust for another for safekeeping.
recommended order
An administrative law judge's findings, conclusions, and recommended penalty.
Blind advertisement
An advertisement that does not include the name and address of the person placing the ad; an ad that lists only a phone number or post office box address
market allocation
An agreement between brokers to split up competitive market areas among themselves and not compete in each other's areas.
Ground Lease
An agreement for the tenant to lease the land only and erect a building on the land.
Variable Lease
An agreement for the tenant to pay specified rent increases based on a predetermined index (CPI) at set future dates.
General Partnership
An association of two or more persons for the purpose of jointly conducting a business, each being responsible for all the debts incurred in the conducting of that business.
tier
An east-west row of townships (as used in the government survey method of land description).
appraisal
An estimate of the current value of the property.
formal administrative complaint
An outline of the charges against a licensee that must be answered within the statutory time limit.
Owner-developer
An unlicensed entity that sells, exchanges, or leases its own property.
Point of contact information
Any means by which to contact the brokerage firm or individual licensee including mailing address(es), physical street address(es), e-mail address(es), telephone number(s), or facsimile telephone number(s).
compensation
Anything of value or a valuable consideration, directly or indirectly paid, promised, or expected to be paid or received.
Which valuation must conform to the USPAP?
Appraisal for an FHA loan
Acceleration Clause
Authorizes the mortgagee to accelerate or advance the due date of the entire unpaid balance and call the entire debt due and payable if the mortgagor defaults.
DBPR
Department of Business and Professional Regulation
nonconforming loans
Exceed the Fannie Mae loan amount.
Which type of mortgage loan is a nonconventional mortgage loan?
FHA insured
Which type of mortgage requires a total obligations ratio and a housing expense ratio?
FHA insured
Which statement is TRUE regarding FHA loans?
FHA insures mortgage loans
A brokers license was involuntary inactive for two years and one month. To operate again as an active licensee the broker must complete?
FREC course 1 and pass the sales associate licensing exam
breach of trust
Failure to do or perform what has been promised.
citations
Fines for violations that have been specified in the citation rule for which there is no substantial threat to the public health, safety, and welfare.
FREC
Florida Real Estate Commission
Florida resident
For application and licensing purposes, a person who has resided in Florida continuously for four calendar months or more within the preceding year.
BUSINESS OPPERORTUNITY
INVOVLES SALES OR LEASES OR TANGIABLE OR INTANGIABLE ASSESTS OF BUSINESS
Base Line
Imaginary lines running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the government survey system.
Mortgagor
Is the borrower who pledges property through a mortgage to secure a debt.
commingle
Is the illegal practice of mixing a buyer's, seller's, tenant's, or landlord's funds with the broker's own money or of mixing escrow money with the broker's personal funds or brokerage funds.
Net Operating Income (NOI)
Is the income remaining after subtracting all relevant operating expenses from EGI.
General Warranty Deed
Is the most common type of deed for conveying real estate, and it contains all the covenants and warranties available to give the most complete protection. Contains covenants in which the grantor formally guarantees that good and marketable title is being conveyed. Highest deed - 5 covenants.
A licensed real estate broker and his wife jointly owned a two person corporation for profit registered with the DBPR as an active real estate brokerage firm. The wife was a registered officer of the corporation but had never qualified to be licensed. The broker and his wife mutually agreed to a divorce and the court awarded the wife the profitable real estate brokerage corporation as part of the property settlement. The wife retained her married name and the husband organized a new firm which is correct?
It is illegal for the wife to continue operating the firm
In Florida real property is assessed on Jan 1 of each year and property taxes become a lien on the property on?
Jan 1 the same year
Which estate includes the right of survivorship?
Joint tenancy
loan to value ratio
LTV ratio=laon/price(value) loan=LTV ratio x price (value) price (value)=loan/ltv ratio examples a borrower can get a 265,600 loan on a 332,000 home what is her LTV ratio? LTV ratio=265,600/332,000=80% a borrower can get an 80% loan on a 332,000 home what is the loan amount? loan= 332,000 x .80=265,600 a borrow obtained an 80% loan for 265,600 what was the price of the home? price value=265,600/.80=332,000
Multiple licenses
Licenses held by a broker in two or more real estate brokerage firms.
township lines
Lines running east and west, parallel to the base line and six miles apart. (subbaseline)
monument
Man-made or natural object used to establish boundaries of land
The VA loan guarantee is referred to as the?
Maximum Entitlement
decimals and percents
Move the decimal two places to the right decimal number x 100= percentage number example .022x100=2.2%
Which statement is FALSE regarding mutual recognition agreements?
Mutual recognition applicants may be Florida residents or nonresidents
Which description is MOST nearly due north?
N 0 degrees 30' W
net income
NOI= potential rent-vacancy loss+ other income- operating expenses Note: NOI does not include debt payments! example a building has 10 office suites generating annual potential rent of 10,000 each vacancy =10% and annual expenses are 35,000 vending machines yield 5,000 what is the NOI? 100,000 rent-10,000 vacancy +5,000 other income -35,000 expenses =60,000 NOI
An active broker accompanies her husband when he goes on active military duty in Ohio for 5 years. She is not active in real estate in Ohio. to obtain a current Florida broker's license with in two years of her husband's discharge she?
Need not complete any continuing education or reactivation education for those 5 years
customer
ONE WHOM THE BROKER OR SALES ASSOCIATE HOPES TO BE SUCCESSFUL IN ACCOMPLISHING THE PURPOSE OF EMPLOYMENT PER SECTION 475.01 FS A MEMBER OF THE PUBLIC WHO IS OR MAYNOT BE REPRESENTED BY A REAL ESTATE LICENSEE IN AN AUTHORIZED BROKERAGE RELATIONSHIP
Overimprovement
Occurs when an owner invests more money in a structure than the owner can reasonably expect to recapture
Real Estate Investment Trust (REIT)
Offers investors the opportunity to invest in a pool of income-producing properties under professional management.
group licenses
One license is issued to a sales associate or broker/sales employed by owner-employers. More than one person working on multiple properties registers as a group employer.
Satisfaction of Mortgage
Or release of mortgage is a recordable instrument provided by the lender within 60 days of payoff as evidence the mortgage debt is paid in full.
Concurrent Ownership
Ownership by two or more persons at the same time.
single agent
Per Section 475.01, F.S., a broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction.
Blanket Mortgage
Pledges a number of parcels, usually building lots as security for the loan.
quasi-judicial
Powers delegated to the FREC include the power to grant or deny applications, to determine license law violations, and to administer penalties.
quasi-legislative
Powers delegated to the FREC to enact rules and regulations, decide questions of practice, and validate records (imprint with FREC's seal).
Which of the criteria listed below is NOT required to hold a Florida real estate license?
Proof of citizenship
Escheat
Provides for the State of Florida to take the property of an owner who dies intestate and without any known heirs.
return on equity
ROE= cash flow/ equity example an investment property generates a cash flow of 100,000 the owner has 500,000 equity in the property what is the owners return on equity? ROE= 100,000/500,00=20%
return on investment
ROI= NOI/ price example an investment property generates a cash flow of 100,000 and appraises for 1,500,000 what is the owners return on investment? ROI= 100,000/1,500,000=6.67%
The truth in lending act is implemented by?
Regulation Z
prima facie evidence
Requiring no further proof; acceptable on the face of.
Which parcel contains 2 1/2 acres of land?
SW 1/4 of the NE1/4 of the NW 1/4 of the NE 1/4
Which statement is TRUE regarding a sales associate forming a professional association?
Sales associates may form a professional association in their legal name only
antitrust laws
State and federal laws designed to maintain and preserve business competition.
The commission is obligated to report any criminal violation of chapter 475 FS when knowledgeable of such violations to the?
States attorney having jurisdiction
Subdividing and development
Subdividing is the process of converting parcels of land into smaller units or lots. Development is the process of improving raw land so that it can be put to productive use.
If you have located a township numbered T2S, R4E, the township due south of that township is
T3S R4E
assessment limitation (SOH benefit)
The accumulated difference between the assessed value and the market value of a homesteaded property due to limit on increases in the assessed value.
Failure to account for and deliver
The act of failing to pay money to a person entitled to receive it.
Administrative Law
The body of law created by administrative agencies (in the form of rules, regulations, orders, and decisions) in order to carry out their duties and responsibilities.
Which statement is FALSE regarding advertising?
The brokerage firm's address is required in all advertising
Ministerial duties
The duties of the Division of Real Estate that involve recordkeeping.
Telephone solicitation
The initiation of a telephone call for the purpose of encouraging the purchase of, or investment in, property, goods, or services.
Involuntary inactive
The license status that results when a license is not renewed at the end of the license period.
Principal Meridian
The main imaginary line running north and south and crossing a base line at a definite point; used by surveyors for reference in locating and describing land under the rectangular (government) survey system of legal description.
vacancy rate
The percentage of rental units that are not occupied.
subject property
The property being appraised
Point of beginning (POB)
The starting (and ending) place in a land survey using the metes-and-bounds method of property description.
Trust liability
The sum total of all deposits received, pending, and being held by the broker at a point in time.
A sales associate receives a good faith deposit on Monday morning. The broker is in the office that day, so he gives the deposit to his broker the same day. By the end of business on what day must the broker deposit the funds into the escrow account?
Thursday ( 3 day grace period) start of 3 days would begin the next day which is Tuesday in this case
commingle
To mix the money of a buyer or a seller with a broker's own money.
limited representation
Transaction brokers provide a limited form of non-fiduciary representation to a buyer, a seller, or both in a real estate transaction.
A member of the US armed forces is transferred to active duty in Jacksonville Fl. The service member's spouse holds a valid New York real estate license. The service member's spouse desires a Florida license. Which statement is true?
Upon application for a license the DBPR must issue the spouse a Florida real estate license.
Which pair of terms does not belong together?
VA- minimum cash investment
Cease to be in force
When certain events occur, such as a broker changes business address, the licensee cannot conduct business until the DBPR receives notification of the change.
conflicting demands
When the buyer and the seller make demands regarding the disbursing of escrowed property that are inconsistent and cannot be resolved.
A member of the Armed services died while on active duty. The surviving spouse is entitled to a homestead deduction of?
a 100% tax exemption
The TILA-RESPA rule does NOT require that?
a closing disclosure be used for a loan tp purchase a mobile home
If the fed decides to sell securities through open-market bulk trading, the result will be?
a decrease of money in circulation
nolo contendere
a defendant's plea to criminal charges that does not admit guilt but also does not contest the charges
prospectus
a developer is required to provide purchasers a prospectus if the condominium consists of more then 20 residential units or is part of a group of residential condominiums that will be served by property to be used in common by unit owners of more than 20 units. The prospectus summarizes some of the major points detailed in the condominium documents
In which situation is the broker NOT exempt from the notice requirements regarding conflicting demands?
a dispute over escrow funds related to a property inspection
Limited Liability Company (LLC)
a form of business ownership that offers both limited liability to its owners and flexible tax treatment
A sales associate who is employed by an owner developer who owns properties in the name of various entities may be issued?
a group license
A financing device that grants a buyer "equitable title" without a deed from grantor to grantee is called?
a land contract
A mortgage must include?
a legal description
Expungement
a legal process that results in the removal of a conviction from official records
Voluntary Alienation
a legal term used to indicate the transfer of title is accomplished with the owner's control and consent
Designated Sales Agent
a licensed real estate salesperson or associate broker, working under the supervision of a real estate broker, who has been assigned to represent a client when a different client is also represented by such real estate broker in the same transaction.
A recorded legal document that gives construction notice that action affects title to a parcel of real property is called?
a lis pendes
A buyer assumed an existing recorded $82,000 mortgage as part of a real estate purchase. This action will necessitate?
a new promissory note
up-front mortgage insurance premium (UFMIP)
a one-time mortgage insurance fee paid at closing on FHA mortgage loans
A mortgage in which changes in the interest rate may cause changes in the monthly payment amount is called?
a partially amortized mortgage
BROKER
a person for another and for compensation or in other consideration for another person performs real estate
Fiduciary
a person who holds assets in trust for a beneficiary
Which individual must hold an active real estate license?
a person who sells time share periods for customers
A sublease will result in a lease of?
a portion of the leased rights and interests
The legal document that allows a purchaser of a cooperative to occupy a particular unit is referred to as?
a proprietary lease
For application and licensing purposes a Florida resident is a person who has resided in Florida continuously in?
a recreational vehicle for 4 months
General Agent (GA)
a representative authorized by the principle to perform acts only related to business or employment of a certain nature( property manager)
A licensed real estate sales associate and broker desire to open a new real estate brokerage firm as general partners. Which statement applies to this situation?
a sales associate may not be a general partner in a real estate brokerage partnership
check
a square measuring 24 miles on each side and representing the largest unit of measure in the government survey system
A lender promises to make a loan to an owner of a new apartment building once construction of the building is complete this is called?
a takeout commitment
If I lease my lake front property to you for an indefinite period of time, your interest in real property would be?
a tenancy at will
A 17 year old high school student has entered into a contract to purchase an adults car. This is?
a voidable contract
The phrase "time is of the essence" means
actions are required by dates set forth in the agreement
fractions
adding and subtracting same denominator example 1/2+1/2= 1+1/2=2/2 =1
A person must hold an active real estate license if for express or implied compensation the person?
advertise a list of available rental properties
The civil rights act of 1968 made discrimination illegal if based on any of these criteria EXCEPT?
age
Which statement is true?
all liens are encumbrances
Which statement is FALSE regarding a corporation for profit that is doing business as a real estate broker?
all stockholders must be registered with the FREC as inactive brokers
Like-Kind Exchange
allow investors to defer paying taxes by exchanging real property
variances
allow property owners to vary from strict compliance with all or part of a zoning code because to comply would force an undue hardship on the property owner.
probation
allows a licensee to work in real estate under the guidance of the frec for a period of time while completing certain conditions
Receivership clause
allows a receiver to be appointed to collect income from a property and use the income to make mortgage payments
Voidable Contract
allows one party to avoid contractual duties such as when one party is a minor or a party is mentally incompetent
Prepayment Clause
allows the borrower to pay off part or all of the mortgage debt, without penalty or other fees, prior to maturity.
due on sale clause
allows the holder of the mortgage to accelerate the balance due if any interest in the land is sold
A seller has listed his property with a real estate company. The seller has informed the sales associate that he will not sell his condo to college students. Which statement is true regarding this situation?
although this may be a poor business decision it is not a violation of the fair housing act
Who is required to obtain a florida mortgage loan originators (MLO) license?
an agent of a state regulated mortgage lender who takes loan applications from consumers
complaint
an alleged violation of a law or rule
Which element is NOT essential in a valid real estate contract?
an earnest money deposit
A mother deeded a beachfront villa to her son who suffered from a terminal illness. The deed specified that the property was to return to the mother or her heirs when the son died. The estate owned by the mother or her heirs is?
an estate reversion
A buyer makes a written offer on a sellers property. The seller makes a counteroffer which the buyer accepts. The listing broker conveys the buyers written acceptance to the seller. aat this point the offer becomes?
an express contract
An escrow account may not be in?
an insurance company located in florida
Necessary parts of a lease do NOT include?
an option of purchase
Parol contract
an oral agreement
A property owner falls behind in paying his debt. He owns homesteaded property. The homesteaded property is protected from which debt?
an overdue installment loan to purchase furniture for his principal residence
Failure to comply with the statute of frauds will result in?
an unenforceable contract
depreciation
annual depreciation= beginning depreciable basis/depreciation term( number of years) depreciable basis =( initial property value+ any capital improvements - land value) example property value=500,000 land value=110,000 depreciation term= 39 years 500,000-110,000=390,000 depreciable basis 390,000/39=10,000 annual depreciation
depreciation
annual depreciation=beginning depreciable basis/deprecation term( number of years) depreciable basis=(initial property value+any capital improvements-land value) example property value =500,000 land value 110,000 depreciation term 39 years step 1) (500,000-110,000)=390,000 depreciable basis step 2) 390,000/39=10,000 annual depreciation
The key difference between police power and eminent domain is whether?
any compensation was paid to an affected owner
specific liens
apply only to a certain specified property
A specific garage parking space conveys with the title transfer of a condo. The parking space is what type of property?
appurtenance
Deed Restrictions
are a part of the deed and affect a particular property's future use.
informal hearings
are an expedited way of resolving disciplinary cases provided the licensee does not dispute the alleged facts stated in the complaint.
Discount Points
are an extra up front fee charged by lenders to increase the real yield or the APR
riparian rights
are associated with land abutting the banks of a river stream or other watercourse
littoral rights
are associated with land abutting tidal bodies of water, such as an ocean, sea, or lake
mortgage lenders
are business entities that orginate, sell, & service mortgage loans. They are not depository intituitons. The originate loans and then pack the loans together & sell the entire package.
impact fees
are charged by local governments to fund major off site improvements
Partial Release Clause
are commonly used in blanket mortgages and provide for the release of individual parcels from the blanket mortgage upon payment of a specified amount
Public Accommodations
are facilities open to the public, including sales and rental establishments, hotels and shopping centers.
potentially responsible persons
are liable for the cost to clean up a contaminated site including past and present owners and operators of the site creators of the hazardous material and transporters of the hazardous material to the site
home equity loan
are loans secured by the borrows residence to finance consumer purchases consolidate existing credit card debt and pay for other expenses
Conforming Loan
are loans that meet frannie mae guidelines regarding size and type of loan
Special Flood Hazard Area (SFHA)
are located in a 100 year flood plain
One result of the current tax law is that homeowners?
are not required to reinvest the sale proceeds in a new residence to claim the exclusion
fixtures
are objects that were personal property but have been permanently attached to or made part of real property by attachment
special assessment
are one-time taxes levied on properties to help pay for some public improvement that benefits the property.
appraisals
are opinions of value based on supportable evidence and approved methods
bundle of legal rights
are real property ownership rights consisting of the rights of disposition enjoyment exclusion possession and control
Restrictive Covenants
are recorded by the developer along with the subdivision plat to maintain specific standards in the subdivision such as requiring certain architectural specifications
Escrow (impound) account
are required by most lenders to set aside funds to cover future payments for taxes assessments private mortgage insurance and hazard insurance
homeowners association
are responsible for the operation of a community in which the voting membership is made up of parcel owners membership is a mandatory condition of parcel ownership and the association is authorized to impose assessments that if unpaid may become a lien on the parcel
Mechanic's Lien
are statutory liens created in favor of materialman and mechanics to secure payment for materials supplies and services rendered in the improvement repair or maintenance of real property also known as construction liens
reserve requirement
are the amount of funds that an institution must hold in reserve against deposit liabilities
final orders
are the commissions final decisions as to innocence or guilt and the determination of the appropriate penalty.
formal hearings
are used if the licensee-respondent either requests a formal hearing or if the licensee-respondent disputes the allegations.
area measurement
area= width x depth (horizontal) or width x height (vertical)
wetlands
areas with groundwater levels at or near surface for much of the year or areas that have aquatic vegetation
adverse possession
arises when the true owner of record fails to maintain possession and the property is seized by another
A married man purchased an investment property in his name only. If he later divorces how will the investment property be treated?
as a marital asset
A lawsuit against a farmer is pending. The court rules that her vegetable farm be seized and held as security in case of a judgement against the farmer. This legal actions is called?
attachment
Zoning Ordinance
authorize the segmentation (dividing) of a community into districts or zones in keeping with the character of the land and structures and with their sutiability for particular uses to protect the property owners from undesirable land uses on neighboring property.
Title to real property is technically conveyed when the deed is
availability of construction loans
Easement Appurtenant
benefits an adjacent parcel of land
Easement in Gross
benefits an individual or business entity and is not related to a specific adjacent parcel, for example, utility easement
A partial release clause is unique to which type of mortgage?
blanket mortgage
A Georgia broker has a prospective buyer who wants to buy some land in florida for the purpose of building between 100-150 luxury condos. The Georgia broker contacts a florida broker to help locate some suitable tracts for the prospect to consider. Together they work with the buyer and show her 5 separate tracts. Their cooperation pays off when the buyer purchases a 60 acre tract for $558,000 and they evenly divide a 10% commission. Whis is most correct?
both brokers have violated chapter 475 fs
A broker receives a $100 referral fee from a title company for every transaction that closes through the title company. Because of this the broker has inserted a sentence into his standard contract for sale and purchase requiring the buyer to use that particular title company. What statement applies?
both the broker and the title company have violated the real estate settlement procedures act
A sales associate works for ABC realty company in Naples Florida. While the sales associate is visiting a friend in st Petersburg she sees a waterfront lot listed by XYZ realty. The sales associate sells the lot to her friend and XYZ realty pay the sales associate a 10% commission.
both the sales associate and the broker of XYZ have violated Floridas real estate license law
The appropriate type of brokerage relationship is determined by the?
broker
A valuation product used by lenders involved in short sales of distressed property is called a?
brokers price opinion
Which valuation assignment is exempt from USPAP requirements?
brokers price opinion prepared for a lender concerning a short sale
Government regulations that establish construction requirements are termed?
building codes
Sole Proprietorship
business owned and operated by one person
Which type of risk is the probability that projected income will NOT be adequate to meet operating expenses?
business risk
When the Fed wants to ease a tight money supply, it may
buy treasury securities
Which requirement does not apply regarding dwellings built prior to 1978?
buyers must have the property inspected for lead based paint
In which document will a condominium owner find the rules and regulations?
bylaws of the association
Gross Income Multiplier
can include income from sources other then rental income (based on annual income) it is the ratio between a propertys gross annual income and its selling price
If an investment property is considered to lack liquidity, this means that the property?
can not be sold quickly at full value
basis adjusted basis and capital gain
capital gain= amount realized- adjusted basis where amount realized= sale price - selling costs adjusted basis= beginning basis= capital improvements-total depreciation total depreciation=beginning depreciable basis/depreciation term x years depreciated depreciable basis= initial property value+capital improvements-land value TIP work example backs from last formula to first formula example an apartment building was purchased for 500,000 with the land value estimated to be 100,000 the owner added a 100,000 parking lot the property was depreciated on a 40 year schedule 3 years later the property sold for 700,000 and selling costs were 50,000 what was the capital gain? depreciable basis=500,000 purchase price +100,000 parking lot- 100,000land=500,000 total depreciation= 500,000/40x3=37,500 adjusted basis=500,000 purchase price+100,00 parking lot-37,500 total depreciation =562,500 amount realized =700,000 sale price- 50,000 selling costs=650,000 capital gain=650,000 amount realized 562,500 adjusted basis=87,500
A joint venture usually is created to?
carry out a single project
cash flow
cash flow= net operating income- debt service where debt service is PI payment example a building generates 100,000 NOI after expenses and has a debt payment of 40,000 what is its cash flow? cash flow=100,000-40,000=60,000
trust funds
cash, checks, money orders, or other items that can be converted to cash, which are held by a third party in connection with a real estate transaction.
Which Florida statute governs the executive branch of Florida government?
chapter 20 FS
Which Florida statute governs the DBPR and the professions under the DBPR?
chapter 455 FS
junior liens
characterized by priority based on the date of recording in the public records
Which statement describes a planned unit development?
clustering homes together on smaller lots to allow for open green spaces
Which offense is a misdemeanor of the first degree?
collecting a fee for inaccurate and out of date rental information
Lucy lives in Tall towers condos. She enjoys swimming in the condos pool each morning before going to work. The pool is referred to as?
common elements
Which statement is TRUE regarding the provisions of the USPAP?
comparative market analyses are exempt from compliance with the USPAP
A sales associate's license expired 20 months ago. What MUST this sales associate do to again to work as a real estate sales associate?
complete a 28 hour commission prescribed education course
A nonresident who holds a Florida real estate license must?
complete all required post licensing and continuing education requirements
A broker listed a commercial lot for $98,000. Later the broker learned that a firm that owned the building adjoining the sellers lot was going to need the lot for expansion and would be willing to pay up to $130,000 for the lot. The broker told the seller that she wanted to terminate her brokerage relationship and buy the lot herself for $96,000 cash. The seller agreed to the offer and sold the lot to the broker who then sold the lot to the neighboring firm. This is an example of?
concealment
The requirement that the infrastructure for sanitary sewers potable water and waste treatment facilities be in place before new development is allowed is the?
concurrency provision
The process by which private property is acquired through judicial process to build a police station is called?
condemnation
vacancy and collection losses
consist of the expected income loss that will result from occasional turnover oftenants & periodic vacancies, as well as the likelihood that not all of the rental income will be collected.
With which government agency do developers of subdivisions with 100 or more lots have to register?
consumer financial protection bureau
subdivision regulations
control the size and location of streets sidewalks water and sewer lines mandated drainage facilities and the location of parks and open spaces
Which business structure is designed to protect personal assets?
corporation
Which entity may NOT be registered as real estate brokerage?
corporation sole
Which entity may not register as a real estate broker?
corporation sole
Characteristics of real estate value do NOT include?
cost
The amount of dollars spent to create an improvement is called?
cost
Land value is obtained separately when using which approach to estimating value?
cost approach
A written disclosure form is not required regarding which brokerage relationship?
create a transaction broker relationship
fair housing act
created protected classes of people and prohibits discrimination when selling or renting certain residential property.
income received in advance (rent)
credit buyer and debit seller for buyers share seller receives 1,000 rent the month is 3/4 over buyers share is 1,000x25%=250 credit buyer/debit seller 250
expenses paid in arrears (tax)
credit buyer and debit sellers for the share buyer will pay 1,000 taxes the year is 3/4 over buyers share is 1,000 x25%=250 credit buyer/ debit seller 750
Which information is the best indicator of a loan applicants willingness to repay debt?
credit score
365 day method
daily amount= annual amount/365 or monthly amount/ length of month proration= daily amount multiplied by the # days example an annual tax bill is 1800 closing is april 10 what is the sellers share of the taxes? daily amount= 1800/365=4.93 jan 1 thru april 10 = 31+28+31+10 day or 100 days proration= 4.93 x 100= 493 selles share
Multiple Listing Service (MLS)
database that allows real estate brokers representing sellers under a listing contract to share information about properties with real estate brokers who may represent potential buyers
A property closes on June 10 with the day of closing charged to the buyer. The buyer is assuming the sellers mortgage loan with its principal balance of $227,500 at 4.5% interest. Which entry will appear on the closing disclosure?
debit to the seller and credit to the buyer of $252.43
Which disclosure must be given to the buyer of both new and resale residential condominium units?
declaration
An acknowledgement is a?
declaration by the signer that the signing is of her own free will
When the supply of apartment units increases relative to demand rents?
decrease
Income tax benefits to homeowners are available only if?
deductions are itemized annually
Which method of settling a default involves a conveyance of the title to the lender?
deed in lieu of foreclosure
A previous owner has stipulated that future owner of a tract of land may not operate any type of business on the property that produces a toxic substance of any kind and might potentially harm a natural spring on the property. Where would a real estate licensee interested in listing this property find this info?
deed restrictions
The clause in a mortgage that ensures that the mortgage can not be foreclosed so long as all payments are current and other conditions are fulfilled is the?
defeasance clause
converting mill rates
definition 1 mill=.001 a mill rate per 1,000 =.1% a 1% tax rate = 10 mills tax=taxable value/1,000 x mill rate example a tax rate on a house with a 200,000 taxable value is 7 mills per thousand dollars of assessed valueation what is the tax? tax=200,000/1,000 x 7 mills= 1,400
points
definition 1 point= 1% of the loan amount or .01x loan amount points=fee paid/loan amount fee paid=loan amount x points example a borrower pays 500 for a 10,000 loan how many points are paid? 500/10,000=.05 = 5 points a borrower pays 5 points on a 10,000 loan what is the fee paid? 10,000 x.05 =500 a borrower pays 500 as 5 points on a loan what it the loan amount? 500/.05=10,000 rules of thumb 1 point charged raises lenders yield by .125% 8 points charged raises lenders yield by 1% example a lender wants to yield 7% on a 6.5% loan how many points must he or she charge? (7%-6.5%)=.5% .5%/.125%= 4 points
A broker received an offer and an earnest money deposit on thurday july 10 at 9:30 am. The owner of the property will not be in town until wed july 16 to consider the offer. The brokers next normal banking day will be Monday july 14 however he has a large safe built into the wall of his office. FREC rules require te broker to?
deposit the earnest money in his escrow account by the close of business on Tuesday july 15
earnest money deposit calculation
deposit=offering price x required or market accepted percentage example a seller requires a 2% deposit on a property listed for 320,000 the required deposit (assuming a full price offer) is 320,000 x 2%=6,400
Tax advantages of home ownership include all except?
depreciation allowance
Habendum Clause
describes the type of estate being conveyed and starts with the words "to have and to hold"
Which statement applies to designated sales associates?
designated sales associates have the duties of a single agent
Statute of Limitations
designates the period of time during which the terms of a contract may be enforced.
land aquisition
developers and builders acquire raw land and prepare site for construction must study zoning and land use plans to determine what type of development is permissible during this phase the developer seeks appraisal for the project from the local government and developer incurs cost
Income Approach
develops an estimated market value based on the present worth of future income from the subject property
A nephew inherits his uncles 1,150 acre cattle ranch. The legal term for the nephew in this situation is?
devisee
When a broker is unable to convince a property owner that the current market value is the price at which the property should be listed the broke should?
diplomatically decline to accept the listing
property reports
disclosure documents required under the federal Interstate Land Sales Full Disclosure Act
The ownership right that permits an owner of real property to sell mortgage dedicate or otherwise dispose of all or any portion of the property is referred to as the right of?
disposition
Which government entity must be informed when the FREC takes disciplinary action against a real estate licensee?
division of florida condominiums timeshares and mobile homes
Void Contract
does not meet all of the required elements of a valid contract and has no legal effect
Intestate
dying without a will
A range is numbered to the?
east or west of a principal meridian
The period of time through which a property gives benefits to its owner is best described as its?
economic life
A railroad company may use which method to acquire land?
eminent domain
Industrial zoning is used to control?
emissions and effluents
reserve mortgage
enable elderly homeowners to borrow against the equity in their homes so they can receive monthly payments needed to help meet living expenses
The interest that a buyer receives upon executing a contract for purchase and prior to the closing is?
equitable title
which term describes the beneficial interest in real estate that implies that an individual will receive legal title at a future date?
equitable title
equity
equity= current market value- current loan balance example a home that was purchased for 150,000 with a 100,000 loan is now worth 300,000 the current loan balance is 80,000 what is the homeowners equity? equity=300,000-80,000 debt= 220,000
Which pair does NOT belong together?
escheat- testate
Which estate is an example of a nonfreehold estate?
estate for years
Which disclosure document is required for the sale of condominiums from a developer of more then 20 residential units?
estimated operating budget
cost approach
estimates value by taking cost minus depreciation plus site value based on the theory that a knowledgeable purchaser will pay no more for the property then the cost of acquiring a similar site and constructing an acceptable substitute structure
tenancy at sufferance
exists when the tenant after rightfully being in possession of the rented property continues possession after the tenants right has ended a hold over tenant
The income approach to value requires collection of data pertaining to?
expected future expenses
When the parties to a contract state the terms of the contract and show their intentions in words either orally or in writing what type of contract classification has been created?
express
The neighbor of a real estate broker referred his sister to the broker. The sister purchased a home costing $250,000. To show his appreciation the broker may?
express his thanks to the neighbor
You have just learned that the nearby airport has obtained government approvals to redirect the flight path of planes over your subdivision. The effect on your subdivision is called?
external obsolescence
Which statement is TRUE concerning loss in value due to depreciation?
extra large load bearing columns in a large but old one floor store represent incurable functional obsolescence
All nationally chartered commercial banks must be members of the?
federal reserve system
Declaratory Judgment
filed with the judge in a court of law if brokers believe that they are entitled to a portion of the disputed escrow funds
Land development loans
finance the installation of the on-site and off-site improvements
Intermediation
financial institutions serve as intermediaries between depositors and borrowers
calculating area from the legal description
first multiply all the denominators of the fractions in the legal description then divide 640 by the resulting product example how many acres are in the northern 1/2 of the southwestern 1/4 of section 6? 640=640 2x4=8 =80
Over which factor of depreciation does a property owner have the least control?
forces outside the property boundaries
A licensee makes a statement that is material to the transaction as thought it were a fact when the licensee does not know whether the statement is true or false and the buyer relies on the statement. As a result of the statement made by the licensee the buyer suffers damages this situation constitutes?
fraud
A widower who owns a condominium unit holds a?
freehold estate
When the estimate of value is adjusted because of an outdated kitchen it is called?
functional obsolescence
The covenant in a general warranty deed that promises that the grantor will obtain and deliver any legal instrument that might be required to make the title good in the future is covenant of?
further assurance
Which business entity would obligate all principals as personally liable for organization incurred debts?
general partnership
dedication
gift of land by an owner to a government body for public use
The purpose of recording documents relating to real property is to?
give constructive notice to future purchasers and creditors
Which action is NOT a requirement under TILA-RESPA?
give mortgage applicant a list of competing lenders that the consumer can comparison shop for the best rate
The broker and the seller agree to single agency representation. The broker MUST?
give the seller the single agent notice
The purpose of recording a deed is to?
give the world constructive notice of ownership
eminent domain
gives government the power to take land for a public use from an owner through a legal process known as condemnation
The intangible advantage a business enjoys over its competitors is known as?
goodwill
The clause in a deed that contains the words "bargains and sells" or similar words is the?
granting clause
curable functional obsolescence results in a change in value that is ?
greater then the cost to cure the defect
The factor by which annual rent from a commercial property is multiplied to obtain an estimate of the propertys value is called the?
gross income multiplier
gross income multiplier
gross income multiplier= sales price/annual income sales price=annual income x GIM annual income=sales price/ GIM example what is the value of a commercial property with an annual income of 33,600 and a GIM of 9.3? 33,600x9.3=312,480 what is the GIM of a commercial property with annual income of 33,600 and a value of 312,480? 313600/33600=9.3 GIM
owner exemptions
group that includes individuals and business entities that are exempt from licensure since they are selling their own property
A seller transfers title to a buyer with a general warranty deed. In which clause of the deed does the seller define the quality of ownership interest conveyed to the buyer?
habendum
The clause in a deed that specifies the type of estate being transferred is the?
habendum clause
In a valid option contract to purchase real estate the optionee?
has no obligation to purchase the property
demand
has to do with the desire and ability to purchase or rent goods and services
nonfreehold estate
have a known duration and do not involve an ownership interest
For a limited partnership to register as a real estate broker with the dbpr the limited partnership must?
have all general partners who will deal with the public licensed as active brokers
For real property to be depreciated it must?
have improvements
A prospective tenant was recently transferred to Jacksonville. He was not familiar with the city so he purchased a rental list for $100 from a local estate company. The prospective tenant referred to the list while looking for an apartment but was unable to locate a suitable unit. He has requested a refund of his $100. Which applies?
he is entitled to a refund of $75 if requested either verbally or in writing with in 30 days.
The market value of a site is determined by its?
highest and best use
immediately
how soon a trust should be deposited into an escrow account according to chapter 475
The day of closing?
if belonging to the seller, means that the seller is charged one extra day.
Which statement is TRUE regarding listing agreements?
if required to effect a sale the commission is earned only if the buyer closes on the property
If a property has been cited as being in violation of building code, the seller must provide a disclosure to the buyer. Which statement is TRUE regarding the disclosure?
if the seller does not clear the violation before closing it becomes the buyers responsibility to clear the violation
A broker chooses not to maintain an escrow account. Which statement is true regarding this situation ?
if the title company is handling closing the title company may hold the earnest money deposit in escrow
A railroad track easement is which type of easement?
in gross
range
in the government survey system of land description a vertical strip of land 6 miles wide located between 2 consecutive sub meridians or range lines
A real estate licensee is interested in obtaining an option on property as the true optionee. Which statement is FALSE regarding a real estate licensees obligations?
in the option contract the licensee must pledge a nominal consideration
Defeasance Clause
in title theory states, requires the lender to convey legal title to the borrower once the debt is repaid; in lien theory states, the clause requires the lender to release the mortgage lien when the debt is repaid.
Development of regional impact (DRI)
include any development that because of its character magnitude or location could have substantial effect on the health safety and welfare of citizens of more then one county
Triggering Terms
include certain credit terms or specific financing information in an adverstisement. Include amount or % of down payment, period (term) of repayment, amount of any payment & the amount of any finance charges.
real property
includes all real estate plus the legal bundle of rights inherent in the ownership for real estate
Package Mortgage
includes personal and real property as security for the debt
exempt property
includes property belonging to churches and nonprofit organizations
Annual Percentage Rate (APR)
includes the interest rate and other loan costs and represents the true yearly cost of credit
financial qualification
income ratio qualification monthly principal & interest (PI) payment= income ratio x monthly gross income example a lender uses a 28% income fatio for the PI payment a borrower grosses 30,000 per year what monthly PI payment can the borrower afford? monthly PI payment= 30,000/12 x.28=700 how much can the borrower borrow if the loan constant is 6.3207? loan amount= 700/6.3207 x1000=110,747.22 debt ration qualification debt ratio= housing expenses + other debt payments/ monthly gross income housing expenses=(monthly gross income x debt ratio)- other debt payments example a lender uses a 36% debt ratio a borrower earns 30,000/ year and has a monthly non housing debt payments of 500 what is the housing payment she can afford? housing expenses=30,000/12 x .36-500=900 -500= 400
Which tax does NOT create a superior lien?
income tax
Which lien is NOT a specific lien?
income tax lien
Plottage can best be described as the?
increase in value that results from combining contiguous lots so that the value of the combined properties is greater then the sum of the individual lot values
The purpose of a TRIM notice is to?
inform property owners of the tax bill they can expect in November
A home sold for $108,400. The buyers paid $18,400 down assumed a recorded mortgage of $72,000 and gave the sellers a new second mortgage in the amount of $18,000. How much will the buyers pay for state taxes resulting from these financial arrangements?
intangible tax$ 36; documentary stamp tax$315
The bundle of legal right associated with real property ownership does not include the right of?
intent
total interest interest rate and loan term
interest only loan: total interest= loan amount x ratex term in years amortized loan: total interest= (monthly pi payments x12x term)-loan amount example a borrower obtains a 10 year interest only loan of 50,000 @6% how much interest will he or she pay? (50,000 x.06x10)=30,000 a borrower obtains a 10 yr amortized loan of 50,000@ 6% with monthly payments of 555.10 how much interest will they pay? (555.10 x 12 x10) -50,000=16,612
The discount rate is best defined as the?
interest rate charged banks for borrowing money from the federal reserve
interest rate principal and payment
interest rates in mortgage financing apply to the annual interest payment and exclude principal payment. Remember to convert annual payments to monthly or vice versa as the question requires and to exclude principal payments from your calculations payment= principal x rate principal=payment/rate rate=payment/principal examples 1) a borrower has a 100,000 loan @6% interest what are the annual and monthly payments? annual payment =100,000 x.06%-=6,000 monthly payments =6,000/12=500 2) a borrower has a 500 monthly payment on a 6% loan what is the loan principal ? principal=(500x12)/6%=6,000/.06%=100,000 3) a borrower has a 500 monthly payment on a 100,000 loan what is the loan rate? rate=(500 x12)/100,000=(6,000/100,00)=.06 =6%
A contract for the sale and purchase of a property fails to close. Both the buyer and seller make demands that they are entitled to receive the earnest money deposit. The matter is to be resolved in a court of law. The broker isnot making a claim to receive any of the funds. Which court procedure is appropriate in this situation?
interpleader
The licensee status that results when a license is not renewed at the end of the license period is referred to as?
involuntary inactive
open market operations
involve the purchase and sale of us treasury and federal agency securities
Short Sale
involves a real estate transaction where the net proceeds at closing will not satisfy the payoff amount of mortgages and other liens on the property
Speculative Homes
involves purchasing one or more lots and constructing a home (or homes) without a buyer in advance of construction
teaser rate
is a below market interest rate usually offered for the first year on some adjustable rate mortgages
Granting Clause
is a clause in a deed that contains the premises or the words of conveyance.
takeout commitment
is a commitment by a permanent lender to "take out" the interim lender by paying off the construction loan leaving the developer with a permanent long term loan once the project is complete
moral turpitdue
is a conduct contrary to honesty good morals justice and accepted custom
nonconforming use
is a continuing use that was legal before a zoning ordinance was passed but that no longer complies with current zoning regulation
Title Insurance
is a contract that protects the policyholder from losses arising from defects in the title
building permit
is a document issued after local government has review of the architectural and engineering drawings and the energy calculations
ginnie mae
is a federal agency that is part of the Department of Housing and Urban Development
Truth in Lending Act
is a federal law that is part of the consumer credit protection act and implemented by the federal reserve boards regulation Z the act ensures cost of credit so that consumers can compare credit terms available
Loan Origination Fee
is a finance fee charged by a lender for making a mortgage
contract for deed (land contract)
is a financing method in which the title to the real property remains with the seller until the loan is repaid.
amortized mortgage
is a financing technique in which the debt is gradually and systematically killed or extinguished by equal regular period payments the entire loan is paid off at the end of the loan term
adjustable rate mortgage (ARM)
is a financing technique in which the lender can raise or lower the interest rate according to a predetermined index
Loan Estimate
is a form that contains information about the lender property loan terms projected payment and total estimated cost at closing
Closing Disclosure
is a form that replaced the HUD-1 statement and must be provided to the borrower at least three business days prior to closing
life estate
is a freehold estate that ends with the death of a named person; ownership for an individual's natural life span
Deed in Lieu of Foreclosure
is a friendly foreclosure (a nonjudicial procedure) in which the mortgagor gives title to the mortgagee
condemnation
is a judicial proceeding to exercise the power of eminent domain
Sublease
is a lease given by the leasee for a portion of the leasehold interest while the leasee retains some reversionary interest the sublease may be for all or part of the premises for the whole term or part of it as long as the lessor retains some interest in the property
tenancy at will
is a leasehold in which the tenant holds possession of the premises with the owners permission but without a fixed term
title
is a legal concept signifying ownership of a collection of rights to real property
Assignment of Mortgage
is a legal instrument that states that the mortgagee assigns (transfers) the mortgage and promissory note to the purchaser
enforceable contract
is a legally binding contract that the law will recognize
asbestos
is a mineral fiber used until 1978 in a variety of building construction materials for insulation and as a fire retardant
quick ratio
is a more conservative measure compared with the current ratio of the business's ability to meet short term obligations because it does not include inventory in current assets divide current assets by current liabilities
Level-payment plan
is a mortage in which the monthly payment are a fixed amount (payment does not change) but the amount applied to principal increases each month and the amount applied to interest decreases each month.
Junior Mortgage
is a mortgage that is behind (in priority) to the first mortgage
cooperative
is a multiunit dwelling owned by a corporation; owners purchase shares in the corporation and receive a proprietary lease
Purchase Money Mortgage (PMM)
is a new mortgage accepted by the seller as part of the purchase price
Laissez-faire
is a noninterference by government in trade industry and individual action
Lis Pendens
is a notice of pending legal action; it is filed before initiating a lawsuit.
Mortgage Broker
is a person or business entity who conducts loan originator activities through one or more licensed mortgage loan originators
Attorney-in-fact
is a person who is authorized to perform certain acts for another under a power of attorney
Mortgage Loan Originator (MLO)
is a person who solicits mortgage loans accepts mortgage loan applications negotiates the terms of new and existing mortgage loans on behalf of borrower or lender processes mortgage loan applications or negotiates the sale of existing mortgage loans to noninstitutional investors for compensation
material fact
is a piece of information that affects the value of the real property and is relevant to a person making a decision about the property.
Mortgage Insurance Premium (MIP)
is a premium for mortgage insurance on FHA mortgages to protect the lender from loss in the event of a default
Reconciliation
is a process of weighted averaging used in the sales comparison approach to bring the adjusted value of several comparable properties into a single estimate of value
Quiet Enjoyment
is a promise in a general warranty deed that guarantees peaceful possession undisturbed by claim of title.
Further assurance
is a promise in a general warranty deed that guarantees the grantor will sign & deliver any legal instrument that might be required.
appurtenance
is a right or privilege associated with the property such as a parking space in a multiunit building
mortgage
is a security instrument signed by the mortgagor to voluntarily pledge the property as collateral for the debt
Planned Unit Development (PUD)
is a self-contained development planned under special zoning ordinances that allow maximum use of open space by reducing lot sizes and street sizes.
Uniform Standards of Professional Appraisal Practice (USPAP)
is a set of guidelines (standards of practice) to follow when conducting appraisal services
Balloon Payment
is a single large final payment, including accrued interest and all unpaid principal due at maturity of a partially amortized mortgage.
construction lien
is a statutory right of material suppliers or laborers to place a lien on property that has been improved by their supplies and/or labor.
buffer zone
is a strip of land separating one land use from another (for example, a landscaped park can be used to screen a residential area from nonresidential areas).
Option Contract
is a unilateral contract (only optionor must perform) to keep open for a specified period of time an offer to sell or lease real property.
installment sale method
is a way to report gain for income tax purposes as the gain is from the sale of investment property
Buydown
is a way to temporarily lower the interest rate on a mortgage
lien
is a written document that states that a person is owed money and establishes that the party may foreclose on the property if the debt is not satisfies the right to have property sold to satisfy the debt
deed
is a written instrument used to convey title to real property through sale or gift that must be in writing signed by a competent grantor and two witnesses and voluntarily accepted by the grantee
estate for years
is a written lease with a definite termination date.
construction notice
is accomplished by recording the information in the public records
boot
is additional capital or personal property included in a like kind exchange
contract
is an agreement between two or more parties to do a legal act for a consideration which creates certain rights and obligations
Net Lease
is an agreement for the teant to pay fixed rent plus property costs such as taxes, insurance & utilities
Gross Lease
is an agreement for the tenant to pay a fixed (base) rent and for the landlord to pay all of the expenses associated with the property.
Percentage Lease
is an agreement for the tenant to pay rent based on the gross sales received by doing business on the leased property
inventory turnover ratio
is an analysis of a business's management of inventory and is calculated by dividing the of goods sold by the ending inventory
Corporation
is an artificial person or legal entity created by law and consists of one or more persons that is formed by filing articles f incorpration.
Buyer Brokerage Agreement
is an employment contract with a buyer
tenancy by the entireties
is an estate created by a married couple who take title together at the same time
loan servicing
is an extra source of income for lenders earned b handling the loan payment collection and record keeping for the mortgages it originates
appreciation
is an increase in worth or value or property
community development district (CDD)
is an independent special district created by law to service the long term needs of its community
fannie mae
is an institution in the secondary mortgage market that buys and sells mortgages
leasehold estate (tenancy)
is an interest in real property that a tenant possesses (measured in calendar time).
undivided interest
is an interest in the entire property rather then ownership of a particular part of the property
tax shelter
is an investment that shields income from payment of income taxes
discounted cash flow analysis
is an investment valuation technique that considers anticipated changes in cash flow over years projects the current value of net proceeds from the sale of the property in the future and accounts for the time value of money
Secondary Mortgage Market
is an investor market that buys & sells already existing securities.
basis
is an investors initial cost of property
trade fixture
is an item of personal property attached to real property that is owned by a tenant and used in a business that is legally removable by the tenant
Certificate of Occupancy
is an occupancy permit issued by the local government after construction is completed and the final inspection is approved.
summary(emergency)suspension
is an order that must be issued by the DBPR secretary or the secretarys designee
Joint Tenancy
is an ownership interest between two or more persons with right of survivorship
Freehold Estate
is an ownership interest for an indefinite period of time.
misrepresentation
is an untrue statement of fact or an incorrect or false representation of the facts
Misrepresentation
is an untrue statement of fact or the concealment of a material fact
household
is any person or group of persons occupying a separate housing space
federally related transaction
is any real estate-related financial transaction that a federal fianancial institutions regulatory agency has either contracted for, or regulates, and requires the services of an appraiser.
asset
is anything of value
valid contract
is binding on both parties and legally enforceable
steering
is channeling protected-class homeseekers away from areas that are not mixed with that class into areas that are
immune property
is city county state and federal government property
Easement by Prescription
is created through a court of law after longtime uninterrupted use.
Easement by necessity
is created through a court of law if a property is landlocked.
Net Listing
is created when a seller agrees to sell a property for a stated acceptable minimum amount.
Actual Notice
is direct knowledge acquired in the course of a transaction, such as having actually seen the deed instrument or heard that there is a lien on the property. It is the information a person has actually learned by reading, seeing, or hearing
opinion of title
is executed by an attorney after studying the abstract of title.
Culpable negligence
is failing to use the care a reasonable person would exercise.
Exclusive Agency Listing
is given to one broker, but the seller reserves the right to sell the property without paying a commission.
profit
is how much one makes over and above cost
passive income
is income derived from rental properties or other trades or businesses in whch a tax payer does not materially participate
Depreciation
is loss in value caused by things such as wear and tear poor design or the structures surroundings
mixed land use
is more then one type of zoning such as a condominium that has residential and commercial units
separate property
is nonmarital assets
General Lien
is not restricted to one property but may affect all properties of a debtor.
mill
is one one-thousandth of a dollar or one-tenth of cent
Conventional Loan
is one that is not insured or guaranteed by a government agency.
Special Exception
is permission to build or to use property in apparent conflict with existing zoning ordinances.
short term capital gain
is profit from the sale of a property that is owned for 12 months or less taxed at the owners marginal tax rate
capital gain
is profit from the sale of property
familial status
is protected class of people under the fair housing act consisting of families with children younger the 18 and pregnant women
Meeting of the minds
is reaching an agreement on all terms in a contract.
Estoppel Certificate
is signed by the borrower verifying the amount of the unpaid balance, the rate of interest, and the date to which the interest has been paid prior toassignment; also, often requested by a closing agent to verify the payoff amount for the seller prior to conveying a property.
Alienation
is the act of transferring ownership title or an interest in real property
Plottage
is the added value as a result of assembling (combining) 2 or more properties into one large parcel.
effective age
is the age indicated by a structure's condition & utility.
stipulation
is the agreement as to the penalty reached between the attorneys for the DRE and the licensee or licensees attorney
supply
is the amount ad type of real estate available for sale or rent at differing price levels in a given real estate market
taxable income
is the amount of income that remains after all applicable deductions and adjustments are applied
debt service
is the amount of money needed to meet the periodic payment of principal and interest on a loan that is being amortized
Reproduction Cost
is the amount of money required to build an exact duplicate of the structure.
Replacement Cost
is the amount of money required to replace a structure having the same use and functional utility as the subject property using modern available or updated materials
Liquidated Damages
is the amount specified in the contract (usually the earnest money deposit) to be paid to the seller in case of default by the buyer
cost
is the amount to produce or acquire something
Equitable Title
is the beneficial interest in real estate that implies that an individual will receive legal title at a future date.
Vendee
is the buyer
Procuring Cause
is the chain of events that results in a sale
risk
is the chance of losing all or part of an investment
Seisin
is the clause in a deed that is a promise that the grantor has the right to convey title (a statement of ownership)
assemblage
is the combining of two or more adjoining properties into one tract; the process of consolidating properties
Subpeona
is the command to appear at a certain time and place to give testimony
Chain of Title
is the complete successive record of a property's ownership
intensity
is the concentration of pedestrian traffic and vehicular traffic used as a means of designation land for commercial zones
title closing
is the consummation of a real estate transaction, when the seller delivers title to the buyer in exchange for payment for the buyer of the purchase price.
interest
is the cost for the use of borrowed funds
capital gain (loss)
is the difference between the adjusted basis of property and its net selling price
Internal Rate of Return (IRR)
is the discount rate at which present values of future cash flows equal the down payment
Proprietary Lease
is the document that entitles a shareholder in a cooperative to possession of a unit.
division of administrative hearings(DOAH)
is the entity that employs administrative law judges (ALJs) to conduct formal hearings of administrative complaints against licensees
just value
is the fair and reasonable value based on objective valuation methods for property tax purposes.
First Mortgage
is the first mortgage loan to be executed and recorded
acknowledgment
is the formal declaration before a notary public by the grantor that the grantors signing is a free act
goodwill
is the intangible asset attributed to a business's reputation and the expectation of continued customer loyalty
Mortgage Fraud
is the intent to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan then would have been obtained if the lender or the borrower had the true facts
fraud
is the intent to misrepresent a material fact or to deceive in order to gain an unfair advantage or to harm another person
fruad
is the intentional deceit and reliance on the deception for the purpose of inducing another person to rely on the deceitful information and as a consequence be harmed by the deceit
discount rate
is the interest rate charged banks for borrowing money from the fed
depreciation
is the key deduction when calculating taxable income from investment property because it reduces taxable income without requiring a cash outlay
note
is the legal instrument that represents the evidence of a debt and a promise to repay the debt
voluntary inactive
is the license status that results when a licensee has applied to the DBPR to be placed on inactive status.
primary market
is the market where securities are created
entitlement
is the maximum amount for an individual veteran that the government will guarantee for a VA loan
current ratio
is the measure of the business's ability to meet short term obligations and is calculated by dividing the business's current assets by its current liabilities
Sales Comparison Approach
is the method for estimating value by comparing similar properties with the subject property based on the theory that a knowledgeable purchaser will pay no more for a property then the cost of acquiring an equally acceptable substitute property
tax rate
is the millage rate multiplied by taxable value to determine the annual property taxes due
Equity
is the monetary interest the owner has in property over and above the mortgage indebtedness
Valuable Consideration
is the money or a promise of something that can be measured in terms of money.
PITI
is the monthly principal, interest, taxes, and insurance payment charged on a mortgage loan
right to reinstate
is the mortgagor's right to reinstate the original repayment terms in the note after the lender initiated the acceleration clause
Fee Simple Estate
is the most common type of ownership; it is the most comprehensive collection of property rights and may be inherited.
tenants in common
is the most frequently used form of co ownership except for ownership by a married couple
market value
is the most probable price a property should bring in a competitive and open market with the buyer and seller each acting prudently and knowledgeably assuming the price is not affected by undue stimulus
Highest and Best Use
is the most profitable legal way that a property can be used
taxable value
is the nonexempt assessed value that is determined by subtracting the applicable exemptions from the assessed value.
density
is the number of homes or lots per acre
registration
is the official placement of real estate business or individual into the dbpr records
adjusted basis
is the owner's original cost plus buying expenses and capital improvements.
price
is the paid for something
margin
is the percentage that is added to the index to calculate each interest rate change in an adjustable rate mortgage it covers lenders expenses plus profit
Grantor
is the person giving title to property in a deed
Grantee
is the person(s) receiving title to property in a deed
Net Present Value (NPV)
is the present value of future cash flow minus the investors down payment
regression
is the principal that states the value of a superior property is negatively affected by its association with an inferior property of the same type
progression
is the principle that states the value of an inferior property is enhanced by its association with superior properties of the same type
environmental due diligence
is the process by which a purchaser evaluates the likelihood of site contamination. it is normally accomplished by employing an environmental consultant to conduct an environmental site assessment
equity
is the property's value minus debt
Gross Rent Multiplier (GRM)
is the ratio between a property's gross monthly rental income and its selling price.
situs
is the relationship and influence created by location of a property that affect value
Loan-to-Value Ratio (LTV)
is the relationship between the amount borrowed and the appraised value (or sometimes purchase price)
Disintermediation
is the removal of intermediaries buyers bypass the middleman
Effective Gross Income (EGI)
is the result of deducting vacancy and collection losses from annual potential gross income plus adding any income from miscellaneous sources.
Easement
is the right to enter and use a portion of an owners land for a specific use
vendor
is the seller
Gross Living Area (GLA)
is the square footage calculated by taking the exterior dimensions of a house and then subtracting the garage square ft and any other sq ft that is not heated
Novation
is the substitution of a new debtor (buyer) and release of a former debtor (seller) for an existing debt by mutual agreement and with approval of the mortgagee
Novation
is the substitution of a new party for the original one
deposit
is the sum of money or its equivalent delivered to a licensee as earnest payment or partial payment in connection to a real estate transaction
remainderman
is the third party to whom a property is transferred at the end of a life estate ( vested if named; contingent if not named)
cash flow
is the total amount of money generated from an investment after expenses have been paid
encroachment
is the unauthorized use of another persons property created when an improvement crosses over a boundary line
principal
is the unpaid balance of the debt
leverage
is the use of borrowed funds to finance the purchase of an asset
liquidation analysis
is the valuation method used for a business that is going out-of-business
assessed value
is the value of a property for property tax purpases
investment value
is the value of a property to a particular investor based on the investor's desired rate of return & risk tolerance.
going concern value
is the value of an established business property compared with the value of just the physical assets of a business not yet established.
The going concern value of a business?
is the worth of an established business property
value
is the worth of something
Lender's Policy
is title insurance issued for the amount of mortgage debt to protect the lender (motgagee).
Owner's Policy
is title insurance issued for the total purchase price of the property to protect the new owner (mortgagor)
Redlining
is to deny loans or insurance coverage by a lender or insurer or presenting different terms or conditions for homes in certain neighborhoods
purpose of appraisals
is to determine the problem to be solved and the type of value to be estimated
blockbusting
is to use entry or rumor of entry of a protected class into a neighborhood to persuade owners to sell
Potential Gross Income (PGI)
is total annual income a proerty would produce if it were fully rented and no collection losses were incurred.
Property taxes become a lien on real property on the first of which month?
january
Three persons were co-owners of a parcel of real property. One owner died and his owner ship passed to the two remaining co owners. He was a?
joint tenant
common law
judge made law
Statutory Law
law created by legislative bodies in contrast to law generated by judicial opinions (case law) and administrative bodies
homestead
law provides certain types of protection and benefits to homeowners regarding their permanent residence.
A real estate licensee is NOT authorized to draw which contract?
lease
A type of contractual agreement having all essential elements of a contract plus a property description and a definite term of tenancy specified creates which type of interest in real property?
leasehold
For income tax purposes the term adjusted sale price means the sale price of a home?
less allowable fix up and selling expenses
A shorter loan term results in?
less total interest paid during the loan term
caveat emptor
let the buyer beware
conversion
licensees personal use or misuse of a clients monies
The total amount the interest rate may increase over the life of an adjustable rate mortgage loan is the?
lifetime cap
periodic caps
limit the amount the interest rate may increase at any one time, usually a year
payment caps
limit the amount the monthly payments can increase during any adjustment
The purpose of the save our home amendment is to?
limit the increase in the assessed value of homesteaded property
lifetime caps
limit the total amount the interest rate can increase over life of the loan
In case of breach by the buyer most real estate sale contracts include a provision that the earnest money be regarded as?
liquidated damages to the seller
Which type of value best describes the amount of dollars a property will bring in a foreclosure sale?
liquidation
The owner of a hardware store has filed bankruptcy and the real estate is up for sale. The money that the property will bring at auction is BEST described as which type of value?
liquidation value
Open Listing
listing given to any number of brokers( least preferred by brokers)
A transaction broker does not have which duty?
loyalty
comprehensive plans
master plans for the future physical development of a city, county, or region
A man owned two farms and a home when he died intestate. The court appointed a personal representative to dispose of any portions of the decedent's estate that might be subject to estate taxes and debts of the deceased. The personal representative?
may advertise negotiate and sell the property and be compensated for his work without being registered with the DBPR
Notice of noncompliance
may be issued for a first-time minor violation (licensee has 15 days to correct minor infraction)
The owner of an office building has signed an exclusive listing agreement with a broker. The listing agreement contains information about the brokers lien rights in accordance with part III of 475 fs if the owner sells the property without paying the broker a commission the broker?
may place a lien against the sellers net proceeds from the sale
Unenforceable Contract
means a contract would not stand up in a court of law because it does not meet the requirements of the statute of frauds or it runs beyond the statute of limitations
arrears
means paid at eh end of the period for which payment is due
ad valorem
means taxed according to value.
Principle of Substitution
means that a prudent buyer or investor will pay no more for a property then the cost of acquiring an equally desirable substitute property
right of survivorship
means that when a co owner dies that co owners share goes to the surviving co owners and not to the deceased tenants heirs
debit
means to be charged for an expense
credit
means to be reimbursed for an expense
Proration
means to divide various debits (charges) and credits between buyer and seller; a proration is a shared expense between buyer and seller
The following are paired relationships except?
meridian- east west
earnest money deposit
money pledged by a buyer to show good faith when making an offer to buy a home
amortization calculation
month 1: principal paid=monthly payment - loan amount x rate / 12 month 2: new loan amount=(previous month principal - principal paid) principal paid= monthly payment -(new loan amount x rate /12) example a borrower obtains a 30year 100,000 amortized loan @7% with a 665.31 monthly payment what is the principal paid in the second month? month 1: principal paid=665.31-(100,000x7%/12)=665.31 - 583.33 interest paid= 81.98 month 2: new loan amount =100,000 previous month beginning loan amount -81.98 principal= 99,918.02 principal paid= 665.31 - 99,918.02x7%/12=665.31-582.86 interest paid = 82.45
30 day 12 month method
monthly amount= annual amount/ 12 daily amount= monthly amount/30 proration= monthly amount multiplied by the #months + daily amount multiplied by the # days example an annual tax bill is 1,800 closing is on april 10 what is the sellers share of the taxes? monthly amount=1800/12=150 no of mounts=3 daily amount= 150/30=5.00 no of days =10 proration=150 x3 +5 x 10=450 +50=500 sellers share
condominium assessment calculation
monthly assessment=total annual building budget x condo unit%of value/ 12 example assume a condo complex with a300,00udget and a unit that comprises 1.48% of the total value of the complex. monthly assessment? 300,000x.0148/12=370 monthly assessment
loan constants
monthly payment=loan amount/1000 x loan constant loan amount =monthly payment/loan constant x 1000 loan constant= monthly payment/loan amount x 1000 example a borrower obtains a loan for 100,000 with a 6.3207 constant what is the monthly payment? monthly payment= 100,000/1,000x6.3207=632.07 a borrower has a monthly payment of 632.07 on a loan with a monthly constant of 6.3207 what is the loan amount? loan amount= 632.07/6.3207x1000=100,000 a borrower obtains a loan for 100,000 with a monthly payment of 632.07 what is the constant? loan constant = 632.07/100,000 x 1000= 6.3207
percentage lease rent calculation
monthly percentage rent=sales times %sales charged example a store generates 50,000 a month the lease calls for 1.5% rent monthly rent amount? 50,000x.015=750 a month
When using the metes and bounds method of legal description the fixed objects used to identify the corners of a parcel are called?
monuments
The florida vacation plan and timesharing act applies to timeshare plans consisting of?
more then 7 timeshare periods over at least a 3 year period
Which entity is a primary mortgage lender that does NOT accept demand deposits?
mortgage lenders
Which parties constitute an arms length transaction?
mr perez to miss root ( not related)
Business brokers?
must be licensed as real estate licensees
Reciprocity
mutual exchange of privileges some states have agreements to recognize and granting licensee to be licensed from another state
A protected class under the fair housing act is?
national origin
Which term refers to a situation where during the early years of the loan the principal balance increases?
negative amortization
If the interest paid for borrowed funds is greater then the overall rate of return to an investor this is an example of?
negative leverage
mediation
negotiation to resolve differences conducted by some impartial party
A commercial tenant pays a pro rata share of the property taxes hazard insurance and utilities. The tenant has what type of lease?
net lease
adjusting comparables
never adjust the subject!!! if theomparable is superior to the subject subtract value from the comparable if the comparable is inferior to the subject add value to the comparable example the subject has 10,000 pool and no porch a comparable that sold 250,000 has porch (5,000) and extra bathroom (6,000) and no pool adjustments to comparable 250,000(+10,000-5,000-6,000)= 249,000 indicated value of subject
Which reason would NOT make a valid contract to purchase and sell real estate unenforceable?
no earnest money was pledged
null and void
no longer existing
A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new home so the sales associate takes him 3 model centers listed by 3 competing real estate companies. The sales associate must give a written no brokerage relationship notice to?
no one
A customer obtained a judgement against a real estate licensee for negligent conduct involving a real estate brokerage transaction. The licensee had an inactive license at the time that the negligence occurred. If the customer is unable to collect on the judgement can the customer be reimbursed from the real estate recovery fund?
no the license must have been active during time of incident
net operating income
noi= potential rent-vacancy loss+other income-operating expenses note- NOI does not include debt payments! example a building has 10 office suites generating annual potential rent of 10,000 each vacancy =10% and annual expenses are 35,000 vending machines yield 5,000 what is the NOI? 100,000 rent-10,000 vacancy +5,000 other income -35,000 expenses=60,000 NOI
A licensed real estate broker may?
not appraise property that involves a federally related transaction unless the broker is also a licensed or state certified appraiser
A buyer is assuming the seller's existing mortgage. Which agreement relieves the seller of liability for the assumed mortgage?
novation
Each of these is method of acquiring legal title to real property EXCEPT?
novation
When a new lending agreement releases the seller and substitutes the buyer as the party liable for the mortgage debt this act is called?
novation
Bilateral Contract
obligates both parties to perform in accordance with the terms of the contract
Unilateral Contract
obligates only one party to perform
default
occurs when a borrower fails to make payments as specified by the loan or bond contract
curable depreciation
occurs when a building component has been added or repaired and the owners are able to get their money back in added value.
incurable depreciation
occurs when a building component has been added or repaired but the owners are unable to get their money back in added value.
Subject to the mortgage
occurs when a buyer makes regular periodic payments on the mortgage but does not assume responsibility for the mortgage note.
voluntary relinquishment for permanent revocation
occurs when a licensee-respondent chooses to avoid a disciplinary hearing by relinquishing the real estate license, permanently putting the licensee out of the real estate business.
Involuntary Alienation
occurs when a person dies intestate and the property either descends o the decedent's heirs or the property transfers to the state through escheat
voluntary relinquish
occurs when a person no longer wants to engage in the real estate business, provided there is no investigation or discipline pending against the licensee
price fixing
occurs when competing brokers conspire to establish a standard commission
Negative Amortization
occurs when the mortgage payments are not large enough to cover the interest expense
Buyer's Market
occurs when the supply & demand is upset by excell supply; more supply available than buyers
Seller's Market
occurs when the supply and demand equilibrium is upset with excess demand; more buyers competing for limited supply.
Estate in severalty
occurs when title to property is held by one person.
assignment
of a lease occurs when a lessee (tenant) assigns to another person all of the leased property for the remainder of the lease
assumption
of an existing mortgage obligates the buyer to assume liability for the debt
Special Agent
one authorized by the principal to execute specific acts
Which statement is false regarding florida real estate commissioners?
one of the commissioners must be a consumer (unlicensed or lay) member who has ever held a florida real estate license
section
one of the primary units of measurements in the government survey system of land description as a section if one mile square and contains 640 acres
litigation
one of the settlements procedures that provides for the matter to be resolved in the court of law when there are disputing parties regarding escrow funds
principal
one who delegates authority to another
The term 'procuring cause' is most significant in which type of listing?
open
economic life
or Useful life is the total estimated time in years that an improvement will add value. Profitability.
Personal Property
or chattel is any tangible item that is not real property and that is movable
Fannie Mae does not?
originate federal loans.
time share
ownership involves an undivided interest in a living unit according to the number of weeks purchased
legal title
ownership of a freehold estate
A buyer who obtains a mortgage loan that covers the purchase of a condominium plus furniture appliances and other personal property such as kitchen utensils and towels has a?
package mortgage on investment property
competent
parties have the legal capacity to contact no mental defects and are of legal age to contract
percentage of listing price calculation
percentage of listing price=offer/listing price example a property listed for 150,000 receives an offer for 120,000 the offers percentage of the listing price is 120,000/150,000=80%
agent
person who accepts authority responsibilities duties obligations is the entrusted person for anothers business
A buyer is purchasing a property that is part of a decedents estate. Which type of deed will the buyer receive?
personal representatives deed
Which survey term is associated with the metes and bounds description?
point of beginning
Which written instrument authorizes a person to act for and on the behalf of another person?
power of attorney
One mortgage clause NOT normally found in?
prepayment penalty clause
The most relevant approach to appraising an apartment complex would focus on?
present value of future income
When the value of a business's tangible assets is subtracted from its purchase price the amount remaining represents the?
price paid for goodwill
A loan amortization schedule shows monthly payments of?
principal and interest
If a legally sufficient complaint has been filed and investigated and found valid the next step in the complaint process is?
probable cause determination
A smaller well maintained home in a subdivision of larger homes will tend to benefit from its proximity to the larger homes. Which principle of value applies?
progression
civil rights act of 1866
prohibits any type of discrimination based on race in all real estate transactions (sale or rental) without exception
Which characteristic might be classified as functional obsolescence?
property has a one car garage
Absentee Owner
property owner who does not reside on the property & who often relies on a professional property manager to manage the investment
An example of an ad valorem tax is?
property tax
When a city or county government in florida must collect delinquent taxes on a property it issues a?
property tax certificate
Which expense associated with a principal residence is deductible for income tax purposes?
property taxes
Which condo document is required to be given to prospective buyers only for new residential construction of more then 20 units?
prospectus
building codes
protect the public health and safety from inferior construction practices.
limited liability partnership(LLP)
protection from personal liability in much the same way as limited partners in a partnership
subordination agreement
provides that the lender voluntarily will allow a subsequent mortgage to take priority over the lenders otherwise superior mortgage ( the act of yielding priority)
Which item is entered on the closing disclosure as a credit to the seller?
purchase price
When a buyer stipulates that he will agree to make each monthly mortgage payment on the house he is buying but take no responsibility for the note he is?
purchasing the subject to the mortgage
The commissions authority to adopt administrative rules is an exercise of which power?
quasi legislative
Which type of statutory deed is typically used to clear clouds on the title?
quitclaim
A type of deed that contains the words "remise and release" or similar words is the?
quitclaim deed
Which type of deed will provide the grantor the best assurance of no future liability ?
quitclaim deed
Which pair is most appropriate in estimating value?
raw land- sales comparison approach
The statement that land is nonhomogeneous refers to which characteristic of the real estate market?
real estate is unique
A real estate licensee who is representing a tenant in a commercial rental wants to share part of her commission with the tenant. Which statement is true regarding this situation?
real estate licensee may share their commission with a party a lease agreement provided it is disclosed to all interested parties
Which individual is exempt from the continuing education requirement?
real estate licensee who is also a Florida licensed attorney
Which statement is FALSE regarding unearned fees?
real estate licensees are prohibited from sharing part of their commission with the buyer or seller in a real estate contract unless the buyer or seller is a real estate licensee
The Federal law that prohibits a seller from requiring the homebuyer to use a particular title insurance company as a condition of sale is the?
real estate settlement procedures act
probable cause
reasonable grounds(sufficient facts and evidence) to warrant prosecution
Which clause is typically found in a mortgage loan to finance income producing property?
receivership clause
Essential elements of a real estate contract include all EXCEPT?
recordation
A condo is created by?
recording a declaration in the public records
recovery with co insurance clauses
recovery=damage claim x % replacement cost covered/minimum coverage requirement example an owner insures a home for 100,000 replacement cost is 150,000 a co insurance clause requires coverage of 80% of replacement cost to avoid penalty fire destroys the house what can the owner recover from the insurer? claim recovery=150,000 x67% cost covered/80% required=125,625
special purpose property
refers to a combination of land and improvements with only one economically feasible use because of some special design
assignment
refers to a transfer of rights and duties under a contract
liquidity
refers to the ability to sell an investment quickly without loss of ones investment
monetary policy
refers to the actions undertaken by the fed to influence the availability and cost of money and credit
R-vaule
refers to the effectiveness of insulation and is measured by its resistance to heat flow
real estate
refers to the land and all improvements permanently attached to land
Hypothecation
refers to the pledging of property as security for payment of a loan without surrendering possession of the property
index
refers to the rate to which an adjustable rate loan is tied at set adjustment period the borrows interest rate moves up or down as the index rate changes
land
refers to the surface of the earth and to everything attached to it by nature
Which description fulfills the experience requirement to become licensed as a real estate broker?
registered for the last 24 months as an active new York sales associate
an individual does not intend to engage in real estate activity. However he does plan to be an officer of a real estate brokerage corporation. which status BEST describes this situation?Z
registered with the DBPR
health ordinance
regulate maintenance and sanitation of public spaces
Quitclaim Deed
releases the grantor of any rights in the property that the grantor may have and is used to clear clouds on the title and to cure title defects
Which term is associated with additional land resulting from the gradual receding of water that now belongs to the property owner?
reliction
For tax purposes the installment sale method?
relieves the seller of paying tax on a capital gain before it is received.
A man owns a farm in fee simple. He deeds the farm to a friend until the friend dies at which time a women will acquire a fee simple title to the farm. The womens interest in the farm is a ?
reminder estate
An individual who acts as an intermediary between potential tenants and the property owner is referred to as?
rental agent
police power
represents the broadest power of the government to limit or regulate the rights of property owners in order to protect the health safety and welfare of the public
A broker wishes to be issued several broker licenses for business reasons. She may?
request multiple licenses
Partially Amortized Mortgage
requires buyer to make regular payments smaller than what is required to completely pay off the loan. On the loan's maturity date, a balloon payment is due
Statute of Frauds
requires that certain contracts must be in writing and signed to be enforceable (contracts conveying an interest in real property)
Which deductions from gross income is not allowed when calculating the taxable income on investment property?
reserve for replacements
A sales associate finds a buyer for another brokerage firms listing. The buyer gives the sales associate the earnest money deposit check made payable to the sales associate personally. What should the sales associate do?
return the check to the buyer and request that the buyer make out a new check payable to the escrow account of the sales associates broker
A home equity conversion mortgage is also called a?
reverse mortgage
Which real estate loan transaction is exempt from the provisions of TILA-RESPA?
reverse mortgage loan
Which characteristic applies to both real estate brokerage and business brokerage?
sale of real property or an assignment of a long term lease
price to net an amount
sale price= desired net + closing costs + loan payoff / 1- commission rate example a home seller wants to net 50,000 the commission is 7% the loan payoff is 150,000 and closing costs are 4,000 what must the price be? sale price=50,000+4,000+150,000/.93=219,355
gross rent multiplier
sales price=monthly rental income x GRM monthly rental income = sales price/gross rent multipler example what is the value of a fourplex with monthly rent of 2,800 and a GRM of 112? 2,800 x 112=313,600 what is the GRM of a fourplex with monthly rent of 2,800 and a value of 313,600? 313,600/2,800=112
False advertising concerning real estate information is what type of penalty?
second degree misdemeanor
Which statement is TRUE about the sections in a township?
section 13 lies to the north of section 24
Buyer and seller are discussing the type of deed that is to be conveyed. The buyers are requiring a guarantee that the seller owns the property and has a legal right to sell. This guarantee is part of which clause in the deed?
seisin
An item that is credited to the seller is the?
seller prepaid items
sellers net
sellers net= sale price-(sale price x commission)-other closing costs - loan balance example a home sells for 260,000 and has a loan balance of 200,000 at closing the commission is 7% and other closing costs are 2,000 what is the sellers net? sellers net= 260,000-260,000 x .07-2,000-200,000=39,800
The mandatory distance between lot lines and building improvements is known as?
setback
Arbitration
settling a dispute by agreeing to accept the decision of an impartial outsider
Real property can be converted into personal property by
severance
An example of a granted variance could be a ?
shopping center that has fewer then the number of parking spaces required per square foot of rentable space
balance sheet
shows the company's financial position at a stated moment in time
Requirements of a valid deed do not include?
signature of a competent grantee.
The mortgagor is the person who?
signs the note
appreciation calculations
simple appreciation total appreciation=current value- original price total appreciation rate= total appreciation/ original price average annual appreciation rate= total appreciation rate/number of years one year appreciation rate= annual appreciation amount/ value at beginning of year example 1) a home purchased for 200,000 5 years ago is now worth 300,000 what are the total appreciation amount total appreciation rate and average appreciation rate? total appreciation =300,000 -200,000 or 100,000 total appreciation rate=100,000/200,000 or 50% average annual appreciation rate=50%/5 years=10% 2) a home costing 250,000 is worth 268,000 one year later what is the one year appreciation rate? one year appreciation rate=18,000/250,000=7.2% compounded appreciation appreciated value= beginning value x 1+ annual rate x 1+ annual rate for the number of years in question example a 100,000 property is expected to appreciate 5% each year for the next 3 years what will be its appreciated value at the end of this period? appreciated value=100,000 x1.05 x1.05 x1.05=115,762.50
Zone R-1A typically refers to?
single family dwellings
Economic characteristics of real estate include?
situs
business broker
someone who is licensed to sell businesses
personal assistant (PA)
someone who works in an office, writing letters, making phone calls, etc. assistant may need to be licensed
In relation to section 1 of a township section 12 is due?
south
special assessments
special assessment= total special assessment cost x homeowners share example a homeowner owns 100' of an 800' seawell that must be repaired the total assessment will be 80,000 what is the homeowners assessment? homeowners share=100'/800'=.125 or 12.5% special assessment=80,000 x 12.5%=10,000
Lenders will often use what type of deed to convey property to a new buyer that has been taken back through a foreclosure proceeding?
special warranty deed
A real property tax is an example of a?
specific involuntary lien
A seller and a buyer enter into a real estate contract. The seller defaults. The buyer sues the seller to go through with the contract. This action is known as a suit for?
specific performance
Title Theory
states consider the mortgagee to have legal title to the mortgaged property, and the mortgagor has equitable title until the debt is repaid
Lien Theory
states treat a mortgage solely as a security interest in the secured real property with title retained by the mortgagor
A buyer and seller make an oral agreement regarding the sale of the sellers property. This contract normally would be unenforceable in a court of law based on the?
statute of fruads
A broker may not establish an escrow account in a florida?
stock brokerage account
with hold adjudication
stop the imposition of the sentence and place the defendant on probation must be disclosed
A first mortgage holder can agree to take a lower lien priority using which statement?
subordination agreement
The subject property is a 3 bedroom 2 bath home. A comparable property is a 3 bedroom 2.5 bathroom home. An appraiser has determined that the extra half bath is worth about $2,200. What adjustment should the appraiser make?
subtract $2200 from the comparable transaction price
In the cost depreciation approach to estimating value land value is commonly estimated by?
subtracting building value from total property value
common elements
such as roofs, elevators, and recreational facilities are legally attached to condominium units and are transferred with the units when they are sold
Environmental Impact Statement
summarize the effect that proposed development will have on the surroundings
Abstract of Title
summary report of what the title search found in the public record
Superior liens
take priority over all other liens. There are 3 superier liens: 1) real estate tax liens, 2) special assessment liens, and 3) federal estate tax liens.
tax base
tax base=assessed valuations-exemptions example a town has total assessed valuations of 20,000,000 and exemptions of 4,000,000 what is the tax base? 20,000,000-4,000,000= 16,000,000
investment property income tax liability
tax liability= NOI+ reserves-interest expense-depreciation x tax bracket example an office building has NOI of 200,000 an annual reserve expense of 20,000 interest expense of 130,000 and annual depreciation of 50,000 assuming a 28% tax bracket what is its income tax liability? tax liability= 200,000+20,000-130,000 -50,000 x 28%=11,200
tax rate base and requirement
tax rate= tax requirement/ tax base tax base=tax requirement/tax rate tax requirement= tax base x rate example a town has a tax base of 160,000,000 and a budget of 8,000,000 /160,000,000 = .05 or 5% or 50 mills
To determine the correct amount of property tax for property multiply the tax rate by the?
taxable value of the property
Three individuals purchase a property with nno right of survivorship. Their estate is referred to as a ?
tenancy in common
What is the legal term used to describe the deceased female creator of a will?
testatrix
A sales associate has become frustrated with buyers who use his time and expertise and then make an offer to purchase through another real estate company. To help tie prospective buyers to the sales associate he requires prospective buyers to deposit $500 with the real estate company to show intent to deal through the sales associate broker. If the buyer makes a purchase the $500 is applied to the earnest money deposit. However if the prospective buyer does not make a purchase the deposit is forfeited. Which statement is true regarding this arrangement?
the $500 is a trust fund and must be paid to his broker
The buyer was unable to obtain financing and therefore had to revoke the sale contract under the provisions of the financing contingency. The buyer requested the return of $6,000. The seller agreed with the buyers request and notified the broker to return the deposit. To the surprise of the buyer and seller the broker pointed out a clause in the small print of the sale contract giving the broker the deposit in the event the transaction did not close. Who is entitled to the $6,000?
the $6,000 must be returned to the buyer
Assume that a buyer is making fully amortized payments of $700 per month on a purchase money mortgage. Which applies?
the amount applying to interest decreases each month
The most important objectives of the federal truth in lending act are to ensure disclosure of finance charges and?
the annual percentage rate (APR)
Which variable influences supply?
the availability of labor
A broker purchased a list of FHA foreclosure properties from an employee of the FHA. The broker has promised to pay the FHA employee a percentage of all commissions earned by the brokerage company resulting from FHA foreclosure sales on the list?
the broker has violated chapter 475 fl by compensating an unlicensed person for performing services that require a license
A broker has an agreement with a local rental car agency. The agreement stipulates that the broker will pay a 25$ referral fee to the rental car agency for each prospective buyer referred to the broker. Which applies?
the broker is in violation of chapter 475 FS bc he has promised to compensate an unlicensed person for the referral of real estate business
A property owner and a broker decided to sell $20 lottery tickets to prospective customers for a chance to win the owners property. They announce that if 1,000 tickets are sold the winning ticket will get the property free and clear. however if less then 1,000 tickets are sold the winning ticket will get the property for a price of $20,000 minus the value of the tickets sold. Which statement is TRUE?
the broker may be charged with fraudulent and dishonest dealing by trick scheme or device
A broker obtained a judgement from a florida court against the seller for an unpaid commission. May the broker record the judgement?
the broker may record the judgement in the county where the debtor owns property
A buyer entered into a purchase and sale agreement to buy a sellers condo. Two days later the buyer canceled the contract and requested that the broker return the earnest money deposit. Which statement applies?
the broker may return the earnest money deposit because it is within the buyers 3 day rescission period
A broker of a large office hired a certified public accountant and a full time book keeper to manage the escrow account. Which statement is TRUE regarding this situation?
the broker must be a signatory on the escrow account
A broker receives conflicting demands from the buyer and seller. The broker properly notifies the FREC and requests an escrow disbursement order. However before the order is issued the buyer and seller sue one another. What must the broker do in this situation?
the broker must notify the FREC of the situation within 10 business days
A buyer made an offer to purchase and paid a $500 earnest money deposit. The seller accepted the offer. A few weeks later the transaction fell through. Neither the buyer nor the seller has made a claim on the escrowed deposit. Attempts to contact seller and buyer have been unsuccessful. What should the broker do with the earnest money deposit?
the broker must notify the FREC within 15 business days that the broker has a good faith doubt
A broker wants to relocate a branch offices location. What is required?
the broker must register the new location and pay the appropriate fee
Which task is not required when implementing designated sales associates?
the broker must retain the brokerage relationship disclosure documents for 10 years for all nonresidential transaction that close
Which statement is FALSE regarding buyer hazard insurance?
the buyer can save money by waiting until the closing to purchase hazard insurance
When a real estate sale contract has been signed by the purchaser and given to the sellers broker along with an earnest money check?
the buyer has given a written offer
A buyer signs a contract to purchase a property that is subject to a mandatory homeowners association. The buyer did not receive a disclosure concerning the association before signing the sale and purchase contract. Which statement is TRUE?
the buyer may cancel the sale contract with in 3 days after receiving the disclosure
A licensed real estate sales associate did NOT complete the post license education requirement 8 months ago. Which statement applies to this situation?
the commission has no legislative authority to extend the post licensing requirements beyond 6 months.
An owner sold her home to a married couple and gave them a warranty deed. The couple moved into the home but did not record the deed. Two days later the seller died and her heirs in another state sold the property without any knowledge of the previous sale. The heirs conveyed title to a single man who did record the deed. Who owns the property?
the couple
Which statement regarding the division of real estate (DRE) is FALSE?
the director of the DRE is appointed by the FREC chairperson
Which statement is TRUE with respect to closing statement entries?
the earnest money deposit is entered as a credit to the buyer
Which statement is TRUE with respect to the assignment of lease?
the entire leasehold is transferred
A Florida broker purchased some raw acreage and developed it into several hundred building lots. The Florida broker contacted a broker in Alabama and offered the Alabama broker $150 for every prospect he sent to florida who bought a lot from the fl broker. Which statement is correct?
the fl broker may pay a referral fee to the alabama broker
promulgate
the formal act of announcing a statue or administrative rule to publish and officially announce a new amended rule or statue
trade name
the full legal name of an organization
An 83 year old widow owned a popular restaurant business. Her business assets consisted of goodwill regular customers and all the restaurant equipment and the building housing the restaurant. The land was leased and had 54 years remaining on a 99 year lease. The widow told her headwaiter that she would like his help in selling the business for $200,000. The widow agreed to give the headwaiter $7,000 if he found a buyer for the business. The headwaiter approached one of the regular customers who agreed to buy the business if the headwaiter would contract to manage the business. An agreement was reached and the widow sold the business. When the widow learned that the headwaiter was going to take over as manager the widow refused to pay the promised $7,000? whch is most correct?
the headwaiter violated chapter 475 fs and can be fined or jailed
A homeowner was upset by the assessed value assigned to his home by the county property appraiser. He decided to protest the assessment and within prescribed time limits appealed to the value adjustment board. Why did the board refuse to hear the homeowners appeal?
the homeowner should have firs registered his protest with the county property appraiser
Which statement is FALSE regarding the junk fax prevention act concerning unsolicited advertisements to fax machines?
the junk fax regulates unsolicited advertisements to residential fax machines only
A tenant in a 50 unit apartment complex paid a $1,200 security deposit. The tenant received a receipt for the $1,200. Three weeks later, the landlord informed the tenant by phone the name of the bank where the tenants security deposit was being held. Why has the landlord violated fs 83?
the landlord failed to notify the tenant in writing of the bank name address ad other information concerning the $1,200 security deposit
A property management company represents a residential landlord who has obtained a writ of possession to evit a tenant. The writ has been executed by the sheriff. The tenants belongings are inside of the apartment. Which statement is true regarding this situation?
the landlord or the property manager may remove the personal belongings and place them on the property line
If a real estate sales associate fails to complete the 45 hour post licensing course prior to the expiration of the initial license what happens to the license?
the license becomes null and void by operation of lae
A real estate company is the exclusive representative of the developer of a new subdivision. The real estate companys sales staff will temporarily work out of a mobile home that developer has placed in the subdivision until the model home is completed. Transactions will be closed at the main office. Does the real estate company need to register the mobile home as a branch office?
the mobile home is a temporary shelter and is not considered to be a branch office
Normally the priority of a mortgage lien is determined by?
the order in which other liens are filed or recorded
which statement concerning a consumer complaint is FALSE?
the person named in a complaint must be a real estate licensee
Which statement does NOT describe an owners title insurance policy?
the policy is issued for an amount equal to the unpaid balance of the mortgage loan
Executive Power
the power to execute, enforce, and administer law
In determining market value the principle of substitution is the basis for which approach to value?
the principle of substitution is the basis for all 3 approaches
survey
the procedure used to measure and describe a specific tract of real property for the purpose of determining exact boundaries and the area contained there in
The broker of record for a real estate company is working with a buyer as a buyers single agent. The buyer has become interested in a property listed by the brokerage as a transaction broker. Which statement applies?
the real estate company cannot be a transaction broker for one party and a single agent for the other party
Which statement concerning characteristics of the real estate market is FASLE?
the real estate market is organized and controlled centrally
A sales associate has helped a buyer locate a home for which the buyer has made an offer to purchase. The buyer gives the sales associate an earnest money check of $2500 payable to a title company. Which applies?
the sales associate must indicate the name address and phone number of the title company on the purchase and sale agreement
A sales associate is employed by a developer to sell homes in a new subdivision. The developer is also building in two other subdivisions which are organized as affiliated companies. The developer wants to have the sales associate sell homes in the other subdivisions. Which statement applies?
the sales offices of the subdivisions are considered temporary shelters. therefore the sales associate doesn't need to do anything in order to work for the various affiliated entities
FOLLOW UP
the sales step in which a salesperson follows up after the sale to ensure customer satisfaction and repeat business
A buyer offered $150,000 for a home. The seller countered at $160,000. The buyer did not accept the sellers counter offer. The seller told her broker that she was revoking the counter offer and accepting the buyers original offer. Which statement is true regarding the situation?
the seller can not accept the original offer because it was extinguished by the counter offer
Which statement does not describe a purchase of money mortgage?
the seller retains legal title until the buyer has made all mortgage payments
If a licensee accepts a post dated check as an earnest money deposit on real property which applies?
the sellers approval must first be obtained
A son who is not licensed helps his father by finding buyers for his fathers lots. the son did not receive any money but his father agree to give the son a choice lot free and clear after the son found buyers for 5 lots. The son was offered a well paying job some distance from home after he had only found 3 buyers for the lots. The son took the job and did not earn his lot. Which statement is correct?
the son and father both violated chapter 475 fl due to intent
Two close friends own a nursery as joint tenants with right of survivorship. One owner died unexpectedly. Who owns the nursery ?
the surviving owner becomes sole owner of the nursery by operation of law
A married couple own homesteaded property in both their names. One spouse owns investment real estate in serveralty. That spouse dies testate. Which statement is true?
the surviving spouse owns the principal residence through right of survivorship and the investment property will be sevised according to the will
A prospective tenant wants install a ramp to the front door and handrails in the bathroom of a bungalow cottage. Which statement is true?
the tenant may make the modification at the tenants expense
A tenant rents a college apartment and pays rent on the tenth of every month. The tenant has a written agreement with the property owner; however there is no specified termination date. Which is true?
the tenant must be given at least 15 days notice to vacate prior tot he end of the monthly period
A widower is always looking for a safe investment for his money. He decides to bid on a bungalow home at a foreclosure sale. The widower feels that the fair market value of the home is approximately $84,000. There is a first mortgage lien of $68,000 held by the lender who has initiated the foreclosure action. The property is homesteaded by the current owner. Property taxes are two years in arrears. Which statement applies?
the widower will be responsible for the prior property lax liens
A broker mailed a signed purchase offer to a property owner. Instead of signing the purchase offer contract the owner sent the broker a telegram accepting the offer. Which is correct?
there is a valid contract between the buyer and seller
A buyer is considering making an offer to purchase a 50 unit beachfront time share development from the seller. The buyer and seller have requested that a licensed real estate sales associate act a single agent representative for each of them. Which statement applies to this situation?
this arrangement is a violation of chapter 475 fs
A florida broker is an active broker for brokerage company one as well as brokerage company two. A sales associate for brokerage company one has procured a listing agent to sell a condo. A sales associate for brokerage company two is a single agent of a buyer who has entered into a contract to purchase the condo. Which applies?
this is a legal arrangement because two separate real estate firms are involved
Buyer and seller have entered into a real estate contract. The broker neglected to include a closing date on the contract. Which statement is correct?
this is a valid and enforceable contract
A grandmother decided she wanted to leave her summer cottage to her granddaughter so she executed a general warranty deed tot he property and gave it to her granddaughter. The grandmother died a few weeks later prior to the recording of the deed. Which statement applies to this situation?
title to the property was conveyed tot he granddaughter when the grandmother executed and delivered the deed to her granddaughter
cancel
to become void without disciplinary action
Testate
to die with a valid will
A transaction broker of residential property has which duty(ies) and responsibility(ies)?
to disclose any latent defects to the buyer
A transaction broker may disclose without exception?
to the buyer the listed price and physical characteristics of the home
A sales associate or broker associate owes fiduciary duties?
to the principal as does the broker including those situations where the sales associate for tax purposes is an independent contractor
commissions
total commission= sale price x commission rate co brokerage split= total commission x co brokerage% agent split=co brokerage split x agent % broker split= co brokerage split- agent split example a 300,000 property sells at a 7% commission with a 50-50 co brokerage split and a 60% agent split with her broker what are total co brokerage agents and brokers commissions? total commission=300,000 x .07%=21,000 co brokerage splits= 300,000 x.07%x.50=10,500 agent split=10,500x.60= 6,300 agent brokers split= 10,500-6,300=4,200
The real taxable value of a Florida residents home will not be known until the?
total existing exemptions are subtracted from the current assessed value
The practice of using 5 or 6 model homes to sell houses in a subdivision is associated with?
tract building
The law requiring that the annual percentage rate be disclosed to consumers is the?
truth in lending act/regulation z
Florida statutes prohibit members from serving on the commission for more then?
two consecutive 4 year terms
the essential elements of a deed do NOT include?
under seal
Which statement is false regarding a new condo complex?
unit ownership requires the purchase of shares of stock in the association
home equity loan
usually a second mortgage allows the borrower to take out a lump sum or to access a line of credit
Two friends discuss the purchase and sale of a tract of land over a beet one Friday night. They jot down the sale price and other terms and conditions on a bar napkin and they put their signatures on the napkin. This is?
valid contract
income capitalization
value= annual net operating income/capitalization rate capitalization rate= annual net operating income/value annual net operating income= value x capitalization rate example a property generates 490,000 net income and sells for at a 7% cap rate what is its value? 490,000/7%=7,000,000 value a property has a net income of 490,000 and sells for 7,000,000 what is its cap rate? 490,000/7,000,000=.07 or 7% a propertys value is 7,000,000 and the cap rate is 7% what is the propertys net operating income? 7,000,000x.07=490,000
cost approach formula
value=land value+ (improvements+ capital additions-deprecation) land value=50,000 home replacement cost=150,000 new garage added @30,000 total depreciation=10,000 value=50,000+(150,000=30,000-10,000)=220,000
A properly executed contract that has as its purpose an illegal objective is?
void
volume measurement
volume=width x height x depth example what is the volume of a 40'x30'x20' house? 40x30x20=24000 cubic ft
green belt law
was designed to protect farmers from having taxes increased just because the land might be in the path of urban growth.
Kickbacks
when a broker receives money from someone other then the buy or seller for referring the to a certain vendor for services
rate of return investment value income
where income=net operating income rate=rate of return cap rate or percent yield and value= value price or investment amount rate=income/value value=income/rate income=value x rate example an office building has 200,000 net income and sold for 3,200,00 what was the rate of return? rate=200,000 noi/3,200,000 price=6.25% an office building has 200,000 net income and a cap rate of 6.25% what is its value? value=200,000/6.25%=3,200,000 an office building sells for 3,200,000 at a cap rate of 6.25% what is its NOI? income=3,200,000 x6.25%=200,000
A broker followed the instructions in an escrow disbursement order (EDO). The broker was later sued by a party to the real estate transaction. The lawsuit resulted in a civil judgement and a payment of $10,000 from the recovery fund. As a consequence the FREC?
will take no action against the broker
The seller instructs the listing broker not to show his home to members of a protected class. The broker informs the seller that this is a violation of fair housing laws but the seller is insistent. Which choice is the brokers best course of action under these circumstances?
withdraw from the listing agreement
concealment
withholding information
A broker must give a copy of the written listing agreement to the seller?
within 24 hours of execution
Listing agreements do not have which requirement?
written form
broker's price opinion (BPO)
written opinion of the value of real property, typically requested by relocation companies & lenders involved in short sales. Licensees may prepare & charge for, not allowed to be referred to as an appraisal.
A prospective tenant was previously evited for failure to pay rent. The prospective tenant has inspected another rental property and wishes to enter into a lease agreement with the landlord. May the landlord refuse to rent to the tenant?
yes based on the tenants poor credit history
A Presbyterian church owns a nursing home for its members. The church admits only members to the nursing facility. Is this legal?
yes the church is exempt under the fair housing act and may restrict the use of the facility to its members
Can a real estate licensee working in a no representative role with a seller provide the seller a CMA?
yes there is no restriction in chapter 475 fs to prevent a licensee from preparing a cma for a buyer or seller
The borrowers have a combined gross monthly income of $ 2,350. They have applied for an FHA loan that will require monthly housing expenses of $658. They have other credit obligations of $282 per month. Will they meet the established FHA standards/ratios for housing expenses and total obligations?
yes they meet the FHA standards for both ratios
A florida licensed broker wants to register an office located in new York city as her principal real estate office. May she do so?
yes, a brokers principal office may be located outside the state of florida as long as the brokers escrow account is maintained in a florida institution.
City planning commissions are usually NOT delegated which authority?
zoning change approval
