Complete FL Real Estate Exam 88% Study Guide

What is on the written brokerage agreement for the leasing of commercial real estate?

Disclosure of lien must occur at the time the brokerage agreement is signed or prior to. Language must be substantially similar to 475.803(6), F.S. No later than 90 days from the time a tenant takes possession, the broker must record a lien notice in the county or counties where the real estate is located. The "lien notice" must be delivered to the owner within seven days. The lien is effective for two years. If a renewal commission is earned, the lien is effective for 10 years. Extension provisions exit. If the commission is not paid, the broker must foreclose the lien in a manner similar to a mortgage foreclosure. Reference: 475.800 - 475.813 F.S.

When must disclosures be given for a single agent notice?

Disclosures MUST be given before, or at the time of, entering into a listing agreement or before showing a property.

What are the five basic property rights in the bundle of rights?

Disposition, right to sell or convey Enjoyment, right to use and enjoy in legal manner Exclusion right to decide who may or may not access Possession, right to occupy in privacy Control, right of the owner to control use

A buyer received a loan for $250,000, which was 80% of the sale price. What was the sale price? $250,000 $275,000 $300,000 $312,500

Divide $250,000 by 80% = answer d $312,500

Paul sold the house for Joe. Paul earned a 7% commission and earned $5,600. What was the sale price?

Divide $5,600 by 7%. The result is $80,000.

What is the DRE?

Division of Real Estate

What are the areas of enforcement of the Department?

Division of professions, The division of regulations Bureau of Education and Testing

What are the 2 parties of an Appurtenant Easement?

Dominant: the property benefiting from the easement Serviant: the property burdened by the easement

What does the CAN SPAM act of 2003 (enforced by the FTC) require from email advertisers?

Don't use false or misleading header (TO: FROM:) information. Don't use deceptive subject lines. Identify the message as an ad. Tell recipients where you're located. Tell recipients how to opt out of receiving future email from you. Honor opt-out requests promptly. Monitor what others are doing on your behalf.

What is included in the other costs?

E. Taxes and other government fees F. Prepaids G. Initial escrow payment at closing H. Other I. The total of the costs of E, F, G, and H that the borrower will pay

What does other costs entail?

E. Taxes and other government fees F. Prepaids G. Initial escrow payment at closing H. Other costs not covered elsewhere on the disclosure I. The total of the costs of the 4 of those^^^^^

What is Credited to the Buyer?

Earnest money New loan Prorated taxes, advance rents Security deposits

Within these sections are also corrections for the what?

Earths Shape

Base lines run:

East and West

Where does the Tallahassee baseline run?

East and West

Equal Credit Opportunity Act (ECOA)

Enforced by consumer financial protection bureau Requires financial institutions engaged in extending credit to make credit available without discrimination on the basis of race, color, religion,national origin, sex, marital status,age , or receipt of public assistance

Who enforces restrictions?

Enforcement of restrictions is always done by a court of law

What are the types of leases?

Estate for Years Estate from Period to Period Estate or Tenancy at Will Estate or Tenancy at Sufferance

2.Economic Life

Estimated period where an improved property will bring a return OVER and ABOVE economic rent. In the case of an older structure, economic refers to the period during which the remaining improvements are DEPRECIATED for tax purposes. Economic life is the period which an improvement has value in excess of its salvage value. This is also called service life or useful life. The expected period of time during which an asset is useful to the average owner. The economic life of an asset could be different than the actual physical life of the asset. Estimating the economic life of an asset is important for businesses so that they can determine when it is worthwhile to invest in new equipment. In addition, businesses must plan so that they have sufficient funds to purchase replacements for expensive equipment once it has exceeded its useful life

What powers does the FREC have?

Executive power to enforce and regulate real estate license law Quasi-legislative Quasi-judicial

Characteristics of VALUE

" DUSTS" DEMAND - how much call is there for this property? UTILITY - how useful is the property in connection with the buyer's needs? SCARCITY- how hard to find is the property, how much of this type of property in this price range is there? TRANSFERABILITY: Can the seller provide a marketable title? Is the property free of encumbrances unless clearly stated? Will a lender be willing to loan on the property? SITUS: is the Latin word for location. In real estate, the term "Location, Location, Location is often used to describe the value of property. In this case, Situs is everything!

What granting words does a quit claim deed use?

"release, remit and quitclaim"

What are Ad Valorem Taxes?

"value added tax" but these are always real estate taxes, based on actual value of the home, assessed value of the home, and the year's tax rate per hundred dollars of assessed value.

What is the maximum the RER fund can have?

$1 million

What is the penalty for a first degree misdemeanor?

$1000 fine (for each offense) and/or not more than one year in jail.

What are the seller's total credits?

$112,000.00

What are the buyer's total debits?

$115,058.45

Each year you pay $12,000 in interest on your loan at 7.5% interest. Your loan amount is?

$12,000 _________________________ ?LOAN AMOUNT? | 7.5 %$ 12,000 : 7.5%=$160,000 loan

Each year you pay $12,000 in interest on your loan at 7.5% interest. Your loan amount is?

$12,000 divided by 7.5%=$160,000 loan

A new mortgage is taken for $120,000. What is the intangible tax?

$120,000 x .002= $240

What is the maximum that can be claimed per multiple transactions?

$150,000

The seller wanted to net $150,000 after paying an 8% commission and closing expenses of $1500. How much does the property have to sell for to net the seller $150,000.

$150,000 + $1500= $151,500 ________________________________ $? Sale Price | ?100%- 8%= 92% 151500 = 92% 1% = $1646,739 =100% =$164673,9

1) The buyers purchased the home for $112,000 and obtained an 80% loan with an interest rate of 10.5%. The lender charged the buyer a 2% loan discount fee. How much did they pay in points?

$1792.00

How much will the buyer bring in a cashier check to closing?

$18,335.16

John paid $10,000 for a lot. He sold it for $8,000. How much is percent of loss?

$2000 loss _____________________________ $10,000 | % of gain or loss $2000 loss divided by $10,000 original price = 20% loss.

John paid $10,000 for a lot. He sold it for $8,000. How much is percent of loss?

$2000 loss divided by $10,000 original price = 20% loss

The seller is set to close on November 27. The taxes are $3200 per year and they are in arrears. How much will the seller be charged? The taxes are prorated on midnight the day before closing. Using the 365 method

$3200/365 = $8.76712329 (do not round) Jan-31, Feb-28, Mar-31, Apr-30, May-31, Jun-30, Jul -31, Aug-31, Sep-30, Oct 31, Nov-26=330 days X $8.76712329 = $2,893.15 (rounded to cents) Here we would debit the seller: $2893.15 and credit the buyer $2893.15

2) The seller's loan balance after the Oct 1 payment was $51,500.00. The interest rate on the loan was 9% and the payment was $950.00 a month principal and interest. The closing occurred on November 25. The sellers paid off the existing loan balance at that time. The lender has indicated that they will not be able to post the loan until the end of the month so they are demanding interest through the month of settlement. Use the 360 days' in a year Method to figure out the answer to this question. The seller's interest at loan payoff was

$382.02

What dollar amount can a fine not exceed?

$5,000 per violation

Paul sold the house for Joe. Paul earned a 7% commission and earned $5,600. What was the sale price?

$5,600 _________________________ Sale Price? | 7% Divide $5,600 by 7%. The result is $80,000.

What is the maximum that can be claimed per single transaction?

$50,000

The sellers told their real estate agent they wanted to net $50,000.00 after paying a 6% commission. How much did the property have to sell for to net the seller $50,000.00?

$50,000 Seller's Net ? ________________________________________sale price? | 100% - the 6% of commission= 94% The way the formula now reads is that $50,000 is 94% of what whole number? $50,000 ÷ by 94%= answer is $53,191.49

The seller has owned a property for 20 years and owes the lender $50,000 on the day of closing. The lender is charging a 1% prepayment penalty.

$50,000 X 1% = $500. Debit the seller ONLY. The buyer is not involved in this charge.

The seller has owned a property for 20 years and owes the lender $50,000 on the day of closing. The lender is charging a 1% prepayment penalty. What is the cost of the penalty?

$50,000 X 1% = $500. Debit the seller only. The buyer is not involved in this charge.

If a closing takes place on June 30th and the interest on the loan was 7%, the seller would owe the bank the loan balance $50,000, plus one month's interest. What is the 1 month interest?

$50,000 X 7% = $3,500 a year ÷ 365 = $9.59 per day x 30 =$287.67

2A) The lender is charging a 1 point prepayment penalty. How much is the prepayment penalty?

$515.00

2B) What are the seller's total debits (charges)?

$62,744.42

The seller told his real estate agent to list his house for $75,000.00 and that he wanted to net $69,750.00. If the property sold for that price, and there were no additional expenses, to what did the seller agree?

$69,750 ______________________________________ $75,000 | ?100%- 93% = 7% COMMISON $69750: $75000 = 0,93 = 93%

The seller told his real estate agent to list his house for $75,000.00 and that he wanted to net $69,750.00. If the property sold for that price, and there were no additional expenses, to what did the seller agree? a) a net listing which is discouraged by the regulatory authorities in Florida. b) a 7% commission c) a bad deal d) can't tell without more information

$69,750/$75,000=.93 100-93=7 7%

Paul sold the house for Joe for $80,000. Paul earned a 7% commission. What was the amount of the commission?

$80,000 x 7% = $5,600.

What are the buyer's total credits?

$96,723.29

What are points?

- A point is a fee equal to 1% of the loan amount. - A 30-year, $150,000 mortgage might have a rate of 7% but come with a charge of 1 point, or $1,500. A lender can charge 1, 2 or more points. There are 2 kinds of points: -Discount points. -Origination points.

Florida has THREE license types for appraisers:

- Registered Trainee Appraiser - Certified Residential Appraiser - Certified General Appraiser

There many TYPES OF VALUE as it relates to real estate. These are

- Tax values used for property taxation - Insurance values for homeowner's policies - Value in use is the history of income for a commercial property - Liquidation value is the value of the property if it required a fast sale - Investment value is the importance to an investor

The work of TAF is completed by THREE distinct boards:

- The Appraiser Qualifications Board (AQB) -The Appraisal Standards Board (ASB) - The Appraisal Practices Board (APB)

Assumptions of Market Value

- The seller can provide a marketable title; - Both buyer and seller are well informed and not related to each other; - Neither buyer or seller are under duress, menace or undue influence; - Market value refers to a specific date; - The property is on the open market and exposed for a reasonable time; The terms are cash or its equivalent.

What is MIP?

- an insurance policy used in FHA loans if your down payment is less than 20%. - The FHA assesses either an "upfront" MIP (UFMIP) at the time of closing, - or an annual MIP that is calculated every year and paid in 12 installments. -1.35% of base loan - calculated yearly but paid monthly

To create a CMA, certain facts must be obtained. These are:

- comparable homes (active, pending, sold, and expired) (hopefully, in the same subdivision!) with the same - number of bedrooms, baths, garages - comparable homes should be close to same age sold comparables data should not be more than one year old - comparable currently on the market should not be distressed homes- in disrepair, a desperate seller etc. Number of days on market for pending and sold properties provides an indication of how long the seller's home might take to sell.

Standardized FAR/BAR Real Estate Forms

- form greatly simplifies the Florida real estate purchase and sale agreement by making it easy to read and review by people who are familiar with the standard provisions. - simply fill in the blanks. - If one or more non-standard clauses are needed for a particular transaction, the preparer may attach an addendum containing custom clauses. - standardized addenda available to cover some common situations. For example, a condominium addendum may provide disclosures required for the purchase of a condominium. A lead-based paint addendum may be used to disclose knowledge of lead-based paint in a property. The Far/Bar forms may be utilized by the general public (you are not required to be a member, attorney or a realtor).

Discount points

- prepaid interest on the mortgage loan. - The more points you pay, the lower the interest rate on the loan

What are FAR/ BAR Contracts

- refers to the form issued by the joint committee of Florida Realtors (formerly known as Florida Association of Realtors) and The Florida Bar that develops real estate forms approved by both organizations. -This is an officially licensed form that may be used by real estate brokers, attorneys, investors or buyers and sellers of real estate. -has many commonly used provisions in standard real estate contracts, such as clauses for financing contingencies, property inspection, evidence of title and closing procedures.

Kickbacks

- unearned fee paid to licensee associated w/ real estate transaction for non real estate services (referrals) -Prior to payment & receipt kickback,buyer/seller must be informed facts regarding kickback -Must not violate RESPA -Not allowed for title and casualty insurance transactions and other settlement service providers -Person receiving kickback must be properly licensed if a license is required to perform service(fl licensee must be licensed as mortgage loan originator to be legally paid a fee for referring prospects to mortgage lender) -Licensees are prohibited from sharing w/ an unlicensed person(exception with buyer/seller in transaction)

What is a funding fee?

-2.15% of loan -no down payment for 1st time users -may be added to max. loan amount and financed over loan

What is borrower's total monthly obligation max?

-41% of monthly gross income

What is timeline for mortgagee canceling the mortgage?

-60 days

Brokerage Offices

-Active brokers are required to have an office & register with DBPR -Must have at least 1 enclosed room in building of stationary construction -brokers books,records, & R.E. transaction files must be kept in the office -Not required to have phone,desk,business checking acct, or an escrow acct. -May be in residence must display entrance sign local zoning permits in residence -Sales assoc must be registered to brokers office /branch office and not their own office

Advertisements containing triggering terms must disclose

-Amount or percentage of down payment -Terms of repayment -Annual percentage rate

How are properties qualified to become homesteds

-As of January 1 of the tx year in question you must be the beneficial or legal title holder. -Must be permanent residence of yourself or a natural dependent. -Must be classified as owner occupied residential property. -Only one exemption per tax pyer or married couple is permitted.

Liens on residential real property

-Broker must be authorized in contract to place lien on residential property for nonpayment of commission -Brokers license may be suspended / revoked for unauthorized lis pendens (written notice pending legal action/lawsuit) / lien that affects the title of res prop

Title Company & Attorney Escrow Accounts

-Broker required deliver deposit same time frame (0,1,2,3) -Licensee prepared sales contract must include title co. (or attorney's) name ,address, ph # -No later than 10 business days after deposit broker must make written request to escrow holder for written verification of deposit receipt -No later than 10 business days after the date the broker made the written request for verification of the deposit, the broker must provide seller with copy -If deposit is made by title company /attorney nominated by seller /sellers agent verification waived -If title co /attorney fail to provide verification must tell seller's broker w/in 10 business days

Acceptable Depositories

-Brokers escrow accts are maintained by FL commercial,banks,savings associations, & credit unions -Alternatively attorneys & title companies with trust powers may hold funds, not in stock/bond brokerage house

May not register as brokerage

-Corporation Sole (churches think Soul) -Joint Venture (temporary arrangement to participate 1 or more transactions) -If 2 parties form a joint venture to provide R.E. services for compensation both parties must be lic brokers -Business Trust (ie Real Estate Investment Trust REIT) -Cooperative association( group owned and operated for the benefit of those using its services (co-op farmers)) -Unincorporated association (group org for a common purpose, members are not partners) - ostensible partenerships

Branch Office

-Each branch office must be registered (2 yr period) -Branch office registrations are not transferable -Broker may reopen same location during same 2 yr license period by requesting reissuing of license -Temporary Shelter for protection of customers/sales associates in a subdivision being sold by broker is NOT branch office. No business records or sales assoc can be assigned or site must be registered as branch office

Requesting (EDO) Escrow Disbursement Order

-FREC makes determination who is entitled to funds -only if held in brokers escrow acct -broker must notify FREC w/in 10 days if the dispute is settled or goes to court before EDO is issued

Trade Name

-Fictitious name refers to name registered w/ Dept. of State -Broker/Brokerage entity may use trade name after registered with DBPR -Must comply w/ florida fictitious name act -Brokerage can't register/ operate under more than trade name -Sales Assoc / broker assoc may not use trade name -Sales Assoc /Broker Assoc may form professional corp.llc,pll, for income tax purposes

Broker may not pay commission / referral fee to unlicensed person

-Finders fee exception--apartments /prop manager pay >$50 finders fee who is tenant -Broker may pay licensed foreign broker fee so long as current/valid license & doesn't violate fl law -All deposits & other funds must be collected in name broker employer w/ express consent of broker/employer -Closing agent may give sales assoc check at closing as long as broker gives written authorization & instructions for specific amount commission paid for each transaction

Mortgage lenders

-Full service mortgage companies that make mortgage loans or services mortgage loans for others -Sells mortgage loans in secondary mortgage markets -Not a depository institution -Originates loans, packages loans together, and then sells the package -Primarily makes FHA and VA loans & sells them on the secondary mortgage market -Mortgage loan originators (MLO's) employed by a mortgage lender must be registered with the NMLS -MLO's employed by a mortgage lender must be state licensed if the mortgage lender is not federall agency regulated institution

FHA qualifying ratios

-Housing expense ratio (HER) can't exceed 31% -Total obligations ratio (TOR) can't exceed 43%

Consumer Credit Protection Act (Truth in Lending Act)

-Implemented by Federal Reserve Regulation Z -Requires lenders to disclose the annual percentage rate(APR) and all costs associated with credit -Disclosure of loan costs in 4 forms (1) finance charge (2) amount financed (3) total payments; and (4) APR

Rental Information / list information must be current and for properties that exist are available and NOT described in a false or misleading manner. Furthermore what disclosure must a receipt for rental lists include?

-List must include receipt to prospective tenant containing refund disclosure -If rental information error 100% refund -If unable find rental 75% refund -Demand refund w/in 30 days of purchase (-Viol 1st deg misdemeanor penalty= $1000 and up to 1yr in prison)

Licensee selling their own property "by owner"

-May place a classified -Not required to indicate in ad licensee status -Should disclose to prospective buyers prior to serious negotiations that they are licensed

Escrow / trust accounts

-Money associated with leasing prop must be held in escrow acct -Brokers not req, but recommended keep earnest money in separate from rental deposits -Brokers must be signatory on escrow acct -Broker must review,sign,& date monthly reconciliation -Broker accountable reviewing brokerage escrow accounting procedures compliance w/ fl laws

In order to apply for a real estate license what qualifications must a person have?

-Must be 18 years or older -A valid SSN# -Have a high school diploma, or its equivalency -have completed pre-licensure course -Candidate must also submit fingerprints with application and appropriate fee Must be honest, truthful, trustworthy, of good character, and have a good reputation for fair dealings

Unauthorized use of association names

-Must be current member -False advertising if not entitled to represent oneself as a member

Sales Associates Commission

-Must be paid to sales associate by their employer and not directly by buyers/sellers -Sales associate can't contract directly with clients -Details for commission agreements in brokers policy manual. - can only sue their broker for unpaid commission not clients

Internet site

-Must include point of contact -Include brokerage firms name above, below, or adjacent to any point of contact

What 3 steps must a broker take after being notified by a licensee of Conflicting demands or good faith doubt in escrow disbursement?

-Must notify FREC w/in 15 business days -try all avenues of communication incld a certified notice of disbursement of fuds -Broker then as the authority to release funds to the demanding party or req 1 of 4 settlement procedures w/in 30 business days of conflict or doubt

Postdated checks & Insufficient funds

-Must obtain sellers approval before accepting postdated -Broker not held responsible for the nonpayment of escrow check if deposited on time

Corporations

-Must register w/ DBPR under Corp. name -At least 1 officer/director active broker -Active broker,inactive broker, & unlic may serve as officers/directors -Officers/Directors deal with public lic brokers -All officers/directors not licensed register DBPR -Sales Assoc/Broker assoc can't be officer/director, but May be Shareholders

Limited Partnerships

-Must register with DBPR under limited partnership name -General partners deal w/ public active brokers -All others register w/ DBPR id purposes -Sales Assoc / Broker Assoc may not be general partners -May be limited partners though -Limited partners(like shareholders) are NOT / to register w/ DBPR

What is purchase money mortgage?

-PMM -a mortgage given as part of buyer's consideration for purchase of real property -A purchase-money mortgage is a mortgage issued to the borrower by the seller of a home as part of the purchase transaction. - Also known a seller or owner financing, - usually done in situations where the buyer cannot qualify for a mortgage through traditional lending channels.

Secondary market is where existing mortgages are purchased & sold

-Portfolio lenders hold mortgage loans in its portfolio & service the loans -Most lenders sell the loans in the secondary mortgage market

General Partnership

-Register under partnership name DBPR -At least 1 partner licensed broker -Partners deal w/ public licensed active brokers -All partners not licensed register DBPR id purposes -Sales Assoc / Broker Assoc not partners -If 1 active broker partner dies,leaves, etc 14 days to replace -Responsibility of every active broker partner make sure all staff have current license /appropriate registration

Earnest Money Deposits

-Sales assoc deliver by end of next business day to broker -Broker must deposit by end of 3rd business day -Date buyer gives funds to brokerage NOT included in brokers days (0,1,2,3) -Brokers 3 days always starts on day after check given to brokerage

FHA government insured mortgage loan

-Section 203(b) FHA program insures fixed rate loans 1 - 4 family residences -Insures mortgages made by approved lenders -FHA approved lenders make FHA loans to borrowers -Lenders may charge discount points -Borrowers make down payment at least 3.5% -FHA sets loan limits on amount that can be borrowed -Borrower pays up front mortgage insurance premi (UFMIP) @ closing -Borrower is charged an annual mortgage insurance premium(MIP) paid monthly as part of the monthly mortgage payment -FHA mortgages are assumbable (no due on sale clause) -Interest rate is negotiable between lender & borrower -FHA approved appraiser must appraise home & confirm the property meets HUD's minimum property standards

SAFE mortgage licensing act

-Sets a minimum standard for licensing & registering mortgage loan originators -Requires employee of financial institutions regulated by a federal banking agency who engage in residential mortgage loan origination to register with the Nationwide Mortgage Licensing System (NMLS) -MLOs who are not employed by agency regulated institutions are licensed by the state

Office Entrance Sign

-Trade name if one used -name of broker -words Licensed/Lic Real Estate Broker -If included names of sales associates must be separate from broker and identified as sales associate/broker assoc

What does the Junk Fax Prevention Act of 2005 stipulate?

-Unlawful to send unsolicited ads/ commercial messages to residential & business fax

What is loan limit on VA loans?

-VA does not set limits -buyer pays fee and then seller released from loan

What is another name for Veterans Affairs mortgage?

-VA or GI loans

VA loan guarantee program

-Veteran's, unremarried surviving spouse of veterans, & active military are eligible to apply for a VA loan -Eligibility requirements are based on period of active duty or the period of continuous service -Eligible to purchase,refinance, or construct 1-4 unit properties provided the veteran resides in 1 of the units -Max loan term 30 yrs -Lender sets interest rate,discount points,& closing costs -VA establishes loan guarantee limits called the VA loan guarantee or maximum entitlement (guarantee) -VA partially guarantees the loan -Veteran's entitlement is maximum amount government guarantees the lender will be paid if borrower defaults -Certificate of eligibility states the amount of entitlement available to the veteran borrower -VA doesn't set loan limits; amount veteran may borrow depends on the value of the real estate & the veteran's income -VA allows 1% loan origination fee to be charged to veteran borrower -Borrower pays a funding fee / users fee to VA -Down payment are not required on loans of $417,000 or less -Veteran may not be charged for termite report (unless refinance) , nor commission(broker fees) -No due on sale clause; they are assumable(even by nonveterans) -No prepayment penalty clause

What does amortized mean?

-a mortgage that is gradually and systematically billed by equal periodic payments

What is an estoppel certificate?

-a payoff letter of the mortgage

What is the calculated interest rate?

-adding index to margin -index + margin = calculated interest reate

Advertising

-advertising real estate services is broker activity -Must be in name of brokerage & under supervision of broker -sales assoc may not advertise in their own names - must include the name of the area or subdivision where property is actually located if listed as "in the vicinity of" -may not incite panic selling

What are reverse mortgages?

-age 62 and older -can borrow against equity in home -lenders receive payments when home sold

What is a receivership clause?

-allows receiver to be appointed for income property

What is a prepayment clause?

-allows the borrower to pay off part or all of the debt without penalty before maturity

What is the due-on-sale clause?

-allows the mortgagee to call due the loan balance and interste -requires debt be paid in full when property sold

What is equity of redemption?

-allows the mortgagor to prevent foreclosure by paying the mortgagee the principal and interest due plus any fees

What is biweekly mortgage?

-amortized same way as other loans except payments made every 2 weeks -borrower makes an extra payment each year

What is the mortgage?

-an instrument that pledges the property as security for a debt

What is down payment on FHA loan?

-at least 3.5% of sale price or appraisal price (whichever is lower) -closing costs not counted toward down payment

What is the acceleration clause?

-authorizes the mortgagee to accelerate the due date of the entire unpaid balance of mortgage if mortgagor fails to fulfill contract

land development loans

-blanket mortgage -partial release clause

What is the taxes-lien clause?

-borrower agrees to pay all taxes, assessments and fines with superiority over mortgage instrument

What is occupancy clause?

-borrower agrees to use property as principal residence for at least 1 year unless otherwise agreed

What is timeline for notice of acceleration?

-borrower gives 30 days from date of notice of acceleration to pay all sums

What is a promise to repay clause?

-borrower promises to pay principal AND interest, prepayment charges and late fees, if applicable

what is title theory?

-borrower retains equitable title -lender keeps the title

What is the explain and request technique?

-brief summary of financial options -explains the need to ask some general questions

What is partially amortized mortgage?

-buyer makes regular payments smaller than what required to completely pay off loan -a single large final payment

What is CRV?

-certificate of reasonable value -based on value set by VA appraiser

2 objectives of a secondary mortgage

-circulates the mortgage money supply -standardized loan requirements

VA loan closing costs

-costs may not be included in loan

What is a blanket mortgage?

-covers a number of parcels -developers use proceeds for sale of individual lots to pay off blanket mortgages

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

Loan application process

-credit evaluation & credit scoring -qualifying ratios: (1) FHA 31% HER and 43% TOR; (2) VA 41% TOR; and (3) conventional 36% TOR -qualifying the property -preapproval & prequalification

What is defeasance clause?

-defeats the prior action when mortgagor has made final payment on loan -ending, final clause - A mortgage provision indicating that the borrower will be given the title to the property once all mortgage terms are met.

What is guaranteed amount of VA loan?

-depends on amount - max is 50% -0-$45000 50% -$45,001 - 144,000 min. is $22,500 or 40% up to 36,000 -more than $144,000 up to $104,250 or 25%

3 business day right to rescission

-doesn't apply to 1st mortgages -applies to most consumer loans, including home equity lines of credit, second mortgages, and refinance loans

What is a foreclosure?

-enforcement of the mortgage lien

Real Estate Settlement Procedures Act (RESPA)

-ensures buyers are informed regarding the amount & type of charges they will pay at closing -closing disclosure least 3 business days prior loan closing -information booklet concerning settlement costs no later 3rd business day after application -loan estimate no later 3rd business day after loan applic -affiliated business relationship disclosure required before closing -prohibits seller from requiring the buyer to use a particular title insurance company as condition of sale -limits amount lenders can require borrowers to place in escrow for property taxes & hazard insurance -kickbacks,fee splitting, & unearned fees are illegal under RESPA

What is the wraparound mortgage?

-envelops an existing mortgage and is subordinate -3 requirements: 1. no due-on-sale clause 2. interest rate less than wraparound 3. owner must have sufficient equity

What is another name for shared-appreciation mortgage?

-equity participation loan

Subject to the mortgage purchase of mortgaged property

-ex. PPM or wraparound -only when no due-on-sale clause -seller still responsible for debt

secondary market participants

-fannie mae buys conventional , FHA, and VA loans -freddie mac buys conventional mortgage loans -ginnie mae is government corporation under HUD and a guarantor on pools of FHA and VA mortgage loans

What is contract for deed?

-financial devise used when buyer does not have sufficient cash for down payment -buyer makes small down payment and takes possession -seller finances the rest -titel remains with seller

Adjustable Rate Mortgage (ARM)

-fluctuating interest rate over term of loan based on index

What is the guarantee on an FHA loan?

-full amount

What is the right to reinstate?

-gives mortgagor right to have foreclosure proceedings stopped provided the mortgagor pays all the sums that would be due if no acceleration had taken place -based on equity of redemption

What are non-conventional loans?

-govt. provides some risk protection -typically requires smaller down payment -FHA, VA

What is HER?

-housing expense ratio -take monthly housing expenses for PITI and divide by monthly gross income -PITI / monthly gross income = HER

Personal Information

-if licensee include personal name in an advertisement , they MUST use LAST name registered w/ DBPR -FREC doesn't require ph # & address of brokerage in ads -Yards signs,classified ads, & promotional advertising must include brokerage firm

What is package mortgage?

-includes both real and personal property

TILA-RESPA

-integrated disclosure rule -loan estimate form 3rd business day after receiving loan application -closing disclosure form at least 3 business days prior to closing -initial escrow statement required at closing -annual escrow statement required from the loan servicer once a year

What is the adjustment period?

-interest rate adjusts periodically base on the terms of loan -ex. 5 or 7 years

What is a shared appreciation mortgage?

-lender gives the borrower a lower interest rate in exchange for future increased in property's value

What is prepayment penalty clause?

-lender may goose to charge prepayment for early payments -limited to 1st 3 years

What is payment cap?

-limits the amount of the monthly payments can increase during any year

Periodic Rate Cap?

-limits the amount the rate may increase at any one time

What is lifetime cap?

-limits the total amount the interest may increase over life of loan

What's the LTV ratio that requires PMI?

-loans for more than 80%

Interest bearing escrow accounts

-may be interest / non interest. Must get written consent from all parties for authorization of who is entitled to interest. -The account must be insured and maintained in Florida. -According to DBPR principal balance of funds must be transferred into a non-interest bearing account before disbursement can be made.

What is TOR (total obligations ratio) & HER (Housing Expense ratio) based on?

-monthly gross income

What is another name for open-end clause?

-mortgage for future advances

Cash purchase of mortgage property

-mortgage paid in full from sale proceeds, -satisfaction of mortgage recorded -property delivered free and clear of lien

What is maintenance and covenant of good repair?

-mortgagor promises to keep the property in good condition

What is property insurance clause?

-mortgagor promises to keep the property insured against loss

What is Section 203(b) loan program?

-most popular home mortgage program

What is lien theory?

-most states, including Florida -borrower retains the title to the property -lender holds the lien

What is deed in lieu of foreclosure?

-nonjudicial procedure -borrower gives title to lender

What is credit score?

-not ability to pay but willingness to pay

what is statutory redemption period?

-not in Florida -allows mortgagor to redeem a foreclosure after sale

Assumption of existing mortgage

-obligates buyer to assume liability for debt -both buyer and seller equally liable in defualt

What is a buy down?

-occurs when a party pays an up-front fee to the lender -interest rate reduced for 1-3 years

What is a conventional loan?

-one that is not insured or guaranteed by govt. agency

What is an escalator clause?

-permits lender to increase interest rate

What are 2 instruments in a mortgage loan?

-promissory note -the mortgage

what is a subordination clause?

-provides the lender will voluntarily permit a subsequent mortgage take priority over superior mortgage

What is growing equity mortgage?

-rapidly increases the equity in a property by increasing the monthly payment by certain percentage and added to principal

What is a rate cap?

-rate caps limit how much interest rate may change

Who can be a gift donor for down payment for FHA?

-relative of borrower -labor union -charitable -cannot be someone who will benefit financially

What is another name for satisfaction of mortgage?

-release of mortgage

VA loans do not ...

-require MIP -have prepayment penalty -have a required down payment

What is the exculpatory clause?

-requires the lender waive the right to a deficiency judgment -relieves borrower of personal liability

what are FHA loans?

-residential only -FHA insures the loan

Primary mortgage market consists of lenders who originate new mortgages; 3 major depository lenders originate loans

-savings associations -commercial banks -credit unions

What are home equity loans?

-secured by borrower's residence -loan is tax deductible -usually a second mortgage -interest rate usually adjustable -limit of both loans combined LTV is typically 80%

What is novation?

-seller is released from liability of note -substitute of new debtor

Another name for equity-appreciation loan?

-shared appreciation mortgage

Mortgage fraud

-straw buyer -no documentation loans -red flags

What is the promissory note?

-the actual promise to pay -legal instrument that represents evidence of debt -promise to pay that makes the borrower responsible -signed by borrower but no recorded

Who pays the mortgage insurance on the FHQ loan?

-the borrower

What is balloon payment?

-the final large payment of partially amortized mortgage

What is margin?

-the percentage added to the index -the lender's cost of doing business -constant over life of loan

What is hypothecation?

-the pledge of property as security for payment of a loan -must be in writing -mortgage is recorded

What are loan limits on FHA loans?

-to ensure the programs serve low and moderate income households -sets limits based on area

What is TOR?

-total obligations ratio -measure by borrower total installments divided by monthly gross income -includes expenses on credit report -PITI + expenses / monthly gross income = TOR

Personal Assitants

-unlicensed assistants may not perform any real estate service or paid commission or on a transaction basis -Licensed assistants may perform real estate services, must be registered with broker of licensee -employing broker must pay licensed assistants for all activities that require a license -licensees may pay licensed & unlicensed assistants for activities that do not require a license (NO:open houses, showings, explaining listing info to clients, soliciting business directly, or receiving commission)

What is UFMIP?

-up front mortgage insurance premium -based on type or term -borrower pays -paid at closing -can be financed

What is partial release clause?

-used in blanket mortgages -provides for release of individual parcels from mortgage

Telemarketing/ phone solicitation

-violators federal Telephone Consumer Protection Act fined up 11k per call -violators FL Telemarketing Act up to 10k per call -FL maintains no sale solicitation calls list -Fl telemarketing allows licensees to call FOR SALE BY OWNER /EXPIRED LISTINGS (not on Natl call list) -Business using telemarketing must develop & adhere to written procedures regarding firms calling policies

What is negative amortization?

-when mortgage payments not large enough to cover interest expense -unpaid principal increases

What is an assignment of a mortgage?

-when ownership of mortgage transferred from 1 company to another

What is satisfaction of the mortgage?

-when the mortgagor pays the debt in full

VA loans do not have due-on-sale clauses therefore ...

...VA loans are assumable

So what is the INTANGIBLE - BUYER - NEW MORTGAGES ONLY?

.002 PER $1

So what is the NOTE - BUYER - BOTH ASSUMED AND NEW tax?

.35 per $100, or fraction thereof

What is the taxation on a new promissory note?

.35 per $100.00 also rounded up to the nearest $100

So what is the DEED - SELLER tax?

.70 per $100, or fraction thereof

Each section of a township is how many square miles?

1

In the commission how many members are sales or brokers associates?

1 and they must have held a license for 2 years

Up front mortgage insurance premium (UFMIP)

1 time mortgage insurance fee paid at closing on FHA mortgage loans

The timeshare contract shall be voidable at the option of the purchaser for a period of ______ after the date of closing.

1 year

A property valued at $250,000 nets $875.00 a month (NOI). What is the annual rate of return? (Capitalization Rate)

1) Always find the "ANNUAL" net income - $875 X 12 =$10,500.00 2) Pick from one of the 3 value formulas, depending on what you want to solve for. If you are using the income approach to solve for value, always divide NOI by the Capitalization rate, or Cap rate, which is equation (a) below: NOI / Cap Rate = Value Value x Cap rate = NOI NOI / Value = Cap rate Remember the formula I/RV 3)Plug in the two values you are given, and solve for the third variable. For example, if you are asked to solve for Value, you will be given a question with the percent of return, (Capitalization Rate, or, commonly, Cap Rate) and the net operating income (NOI). You will solve for Value by dividing NOI by the Cap rate, as in equation (a) above. Thus, $10,500.00/ 4.2%, or .042, = $250,000. If you are asked to solve for NOI, you will be given the Value ($250,000) and the Cap rate (4.2%). You will solve for NOI by multiplying the Value times the Cap rate (equation (b) above. Thus, NOI = $250,000 x 4.2% = $10,500. Finally, if you are asked to solve for the Cap rate, use equation (c), NOI / Value = Cap rate, or $10,500 / $250,000 = 4.2%.

What pages on Closing Disclosure could look different?

1, 4 and 5

Calculate total interest paid on a mortgage loan over an extended period of time monthly mortgage payments of $365.49 have been paid for 10 yrs. The original amount borrowed was $40,000. After 10 yrs 35% of the loan has been paid

1. Calculate # of payments paid to date 2. Calculate the total amount paid to date 3. Amount borrowed X percent paid off = principal paid to date 4.Total paid to date - principal repaid = total interest paid to date 10 yrs X 12 payments a yr = 120 payments to date $365.49 X 120 = $43,858.80 total paid to date $40,000 X .35 = $14,000 principal paid to date $43,858.80 - $14,000 = $29,858.80 interest paid to date

What are the 8 basic steps of a complaint?

1. Complaint 2. Investigation 3. Probable Cause 4. Formal Complaint 5. Informal Hearing 6. Formal Hearing 7. Final Order 8. Judicial Review

What is the priority of liens in foreclosure?

1. Cost of the sale (paid to the county for advertising, legal fees etc.) 2. Property taxes (These do not have to be recorded.) Ad Valorem Taxes Special Assessment Taxes 3. First mortgage or Deed of Trust 4. All other mortgages and other types of liens recorded with priority established by date of recording including mechanic and materialman's liens.

Steps Involved:

1. Estimate ANNUAL " P" (potential gross income). 2. Subtract an appropriate allowance for vacancy and collection losses to arrive at an "E" (effective gross income) 3. Deduct "O " (operating expense) Operating expenses are those items that contribute directly to the operation of the business. (These do NOT include debt service or mortgage payments). This is Net Operating Income "NOI" If you are given the monthly income and no other information in a problem you must assume that it is the net income. The first step is to multiply by 12 (unless you are given the annual numbers) to find the annual net income, and then finish the problem

Steps involved in the COST APPROACH:

1. Estimate the value of the land alone as if vacant. 2. Determine either the replacement or reproduction cost of the building, 3. Deduct all accrued depreciation from the replacement cost. 4. Add the estimated land value to the depreciated replacement or reproduction cost.

Principles of value

1. Highest and Best Use 2. Substitution 3. The Law of Supply and Demand 4. Conformity 5. Regression and Progression 6. Anticipation 7. Contribution 8. Assemblage 9. Competition 10. Change

If you have mutual recognition what exam must you take to get a non resident license?

1. Pass 40 question exam with 75% or higher 2. Fulfill post licensing requirements 3. Continuing Education

Appraiser's Ground Rules

1. Payment must be in cash or its equivalent - the appraiser assumes the buyer is either paying cash for the property or is in the process of obtaining a loan. 2. Buyer and seller must be UNRELATED and acting without undue influence, menace or duress. - The transaction is "Arms Length" meaning there is no relationship between the buyer and seller. Also, the appraiser must assume that no one has been forced into a contract to purchase the property. 3.The property must be marketed for a reasonable time in an open and free-flowing market. 4. Both buyer and seller must be well-informed consumers.

Cost approach VALUE

1. Physical life 2. Economic life 3. Economic rent

Three Approaches to Value

1. Sales Comparison Approach (also called Market Data Approach) 2.Cost approach (also called summation approach) 3. Quantify survey method

Cost can be determined by one of three methods which are:

1. Square foot cost 2.Unit in place 3. Quantity survey method

The appraisal process is:

1. State the problem 2. Gather, record and verify the necessary data 3. Analyze and Interpret - Neighborhood analysis - Site Analysis 4. Estimate Land Value 5. Estimate the value to the property - Market date - Cost - Income 6. Reconcile estimated values for the final value estimates 7. Report final value estimates

What are the 4 elements of misrepresentation.

1. a lie= false statement or representation of material fact 2. The fact that the falsity was known by the perpetrator to be false. 3. Reasonable reliance on that lie by another. 4 . Harm to the person who relied on the lie. (a material fact in this instance is one that would cause a reasonable person to either not take an action that was otherwise taken or take an action that was otherwise not taken.)

What are steps to foreclosure?

1. acceleration 2. filing a lawsuit to foreclose 3. sale is advertised 4. property sold at public auction 5. clerk of court files certificate of sale 6. court reviews for fair price 7. sale is confirmed

5 Subcategories of amortized loans

1. amortized 2. biweekly 3. partially amortized 4. package 5. purchase money

What are 4 ways a buyer may purchase mortgage property?

1. cash 2. subject to the existing mortgage 3. assumption of existing mortgage 4. novation

What are 2 general categories of mortgage loans?

1. conventional 2. non-conventional

What are 7 ways an offer is terminated?

1. counteroffer 2. acceptance 3. rejection 4. withdrawal of offer 5. lapse of time 6. death or insanity 7. destruction of property

What are 2 processes of qualifying a buyer?

1. determining the buyer's real property needs 2. determining the buyer's economic ability

What are 4 very important clauses in a mortgage?

1. due on sale clause 2. acceleration clause 3. right to reinstate 4. defeasance clause

2 General Types of Financing

1. fixed rate 2. adjustable rate

What are 2 remedies of mortgagee if default of mortgage?

1. initiate suit on promissory note 2. initiate foreclosure proceeding

What are the 2 legal theories of mortgage?

1. lien theory 2. title theory

What 7 disclosures are required in Florida?

1. material defects 2. radon gas 3. lead-based paint 4. energy efficiency brochure 5. HOA 6. property tax 7. building code violation

Who are the 2 parties to a mortgage?

1. mortgagor 2. mortgagee

What are 5 types of listings?

1. open listing 2. exclusive-agency listing 3. exclusive right of sale listing 4. net listing 5. multiple list

What are 6 ways a contract is terminated?

1. performance 2. mutual rescission 3. impossibility of performance 4. lapse of time 5. bankruptcy 6. breach

Calculate a mortgage amortization what is the principal balance on a $100k mortgage at 4% interest after 2 monthly payments of $477.40 (round to dollars and cents)

1. principal balance X annual interest + 12 = 1st month's interest 2. monthly mortgage payment - 1st months interest = principal payment 3. beginning loan balance - principal paid = new principal balance month 1 $100,000 x .04 + 12 = $333.33 1st months interest $477.40-$333.33 = $144.07 principal paid 1st month $100,000 - $144.07 = $99,855.93 new principal bal after pay month 2 $99855.93 X .04 + 12 = 332.85 477.40 - 332.85 = $144.55 $99855.93-144.07 = 99,711.38

4 Reasons for qualifying the buyer

1. saves time 2. increases confidence in sales associate 3. fits buyer to properties 4. retains buyers

What are the 4 legal remedies for breach of contract?

1. specific performance 2. liquidated damages 3. rescission 4. compensatory damages

What is UFMPIP on 30 year mortgage?

1.75% of loan amount

What are 3 additional features of FHA loan?

1.fully assumable 2. no prepayment penalty 3. minimum property standards

How long is all the information obtained considered confidential until after probable cause is found?

10 days

How many days do you have to cancel a timeshare agreement?

10 days

When there is a change of address, the commission must be notified no later than:

10 days

What must a licensee do to switch brokerages. Can the licensee practice during said change?

10 days of the change to the department. The current license will expire during the change (assoc may not practice until the new brokerage is registered as assocs employer. Only a broker may hve multiple licenses in FL (registration w/ more than one brokerage)

How many times may you be absent in the post license course?

10% or less

The sellers told their real estate agent they wanted to net $50,000.00 after paying a 6% commission. How much did the property have to sell for to net the seller $50,000.00? a) $50,000.00 b) $51,500.00 c) $53,000.00 d) $53,191.49

100% - the 6% of commission= 94% By dividing $50,000 ÷ by 94%= answer is $53,191.49

How many hours of continuing education are required?

14 hours

How many days does each party have to file exceptions to the hearing officer's order in a formal hearing?

15 days

How many days does the DBPR allow for compliance to a notice of noncompliance?

15 days

How may days does Licensee have to file an exception to Recommended Order?

15 days

If an owner does not pay his or her taxes, and those taxes are sold through certificates, that owner is not only responsible for paying those taxes to remove the lien on their property, but also for up to _____ interest to be paid to those who bought their tax certificates for any year

18%

How many consumers are part of the commission?

2

What pages look the same on the Closing Disclosure?

2 and 3

What is the Summaries of Transaction divided into?

2 columns left column summarizes the borrower's transaction right column summarizes the seller's transaction

How many terms may a commission member serve?

2 consecutive but they can serve different sets of terms

What is the rate of a new mortgage?

2 mills or two tenths of a cent per dollar multiplied by .002

The buyer wants to get a new loan of $60,000 at 6% interest. His lender wants 2 points to do the loan. What is the total in discount points the buyer must pay?

2 points @ 1 %=( 2%) $60,000 x 2%= $1,200

How long can a licensee be involuntary inactive before the license is cancelled?

2 years

How long do you have to take the examination before the application expires?

2 years

How many days does it take for rules to become effective?

20

A 20 unit office building was sold and the closing took place on May 20. The seller collected $1250.00 rent from each of the tenants on May 1st. How much would the rent proration be, and how would it appear on a full settlement statement?

20 apartments x $1250 =$25,000 x12 = $300,000 : 365 = $821.92 x 12 days= $9,863.04

How many days does a licensee have to file an answer if a formal or "administrative" complaint is filed?

20 days

How many days does an applicant have to request a hearing with an Administrative Hearing Judge?

21

How many days does an applicant have to request a hearing for a denied application?

21 days from the date the denial was received

Correction lines running east and west are located every ____ miles north and south more or less of the base line

24

To correct for the curvature of the earth, guide meridians are drawn every ____ miles east and west of the principal meridians and offset the principal meridian by ____ feet m/l

24 50

A passing score on the license exam in 75pts. How long must you wait before you can reschedule a re-examination for the license exam?

24 hours

How long must you wait to retake and reschedule the brokers final exam?

24 hours

How many cubic feet are in a cubic yard?

27

False Advertising is what level of crime?

2nd degree misdemeanor

E 1/2 of the NW1/4 of the NE 1/4 of the SW1/4 of Sec. 36 is?

2x4x4x4 = 128 640/128 = 5 acres

How many areas of enforcement does the department have?

3

What should you round to in real estate?

3 decimal places

How much time do you have to take the sales associates exam at the Pearson VUE test site?

3 hours

A lender charged a borrower 3 discount points on a $50,000 loan. How much would be the charge for the discount points?

3 points 3% $50,000 x 3%= $1500

How many days does the DBPR have to notify an applicant if the application contains errors or omissions?

30

How long does the probable cause panel have to act?

30 days

How long must you wait if you have failed the end of course examination?

30 days

How many days does a licensee have to pay a citation or request a hearing?

30 days

How many days does the licensee have to appeal

30 days

How many days may the Licensee appeal to District Court of Appeal for relief?

30 days to file an appeal

Maximum Term for VA loan

30 years

Housing Expense Ratio for FHA?

31%

A township is how many square miles?

36

A township is then divided into how many sections?

36

How many sets of principal meridians are there in the United States?

36

TOR for conventional?

36%

How many degrees are used in a measurement of metes and bounds?

360

What is the Statutory Month Method?

360 day year rather than a 365 day year divide the item to be paid by 12, and then by 30 days to determine the daily rate

What method is usually used when Prorating expenses?

365 day method one party will be debited for an amount owed and the other party credited for that amount, like double entry bookkeeping

the NW ¼ of the SW ¼ of the NE ¼ and the NW ¼ of the NW ¼ of the SW ½ of section ____, Township ___ Range ___

4 X 4 X 4 =64; 640/64 = 10 acres and 4 X 4 X 2 = 32; 640/32 = 20 acres 10 + 20 = 30 acres

In the commission how many members must be licensed brokers?

4 and they must be licensed for 5 years

How long are commission terms?

4 years

TOR for VA?

41%

TOR for FHA loans?

43%

Total Obligation Ratio for all 3 mortgage types?

43% FHA 41% VA 36% conventional

How many square feet are in an acre?

43,560

How long is the required post license course (which must be completed prior to the first renewal period) for a sales associate?

45 hours

Real Estate Professionals and Appraisals

475, Florida Statute allows sales associates to appraise real property for any NON-FEDERALLY related real estate transactions. However, any real estate professional who provides an appraisal for a non-federally related transaction must comply with the most current USPAP requirements. Estimates of value are not an exact science. Valuing a property requires experience and knowledge of the market as the person estimating the property will be using "subjective" (based upon opinion) interpretation.

How many Executive directors are there in the division of professions?

5

How many year does the Department have to file the complaint?

5

How long must a broker keep a copy of all books, accounts, and records, including disclosure documents?

5 years plus 2 years after any legal proceeding even if the 5 year statute has expired.

How many feet are in a mile?

5,280

What is minimum credit score for FHA?

580

How many programs is the division of regulation divided into?

6

How many days does a resident who becomes a non-resident have to notify the FREC?

60 days

Any resident licensee who becomes a nonresident must notify the commission of the change in residency within:

60 days and comply with non resident requirements

At least one commission member must be how old?

60 or older

How many acres are in 1 square mile?

640

How many acres are in a section?

640

Alternate Formula to find the number of acres in a tract.

640 acres / and divide by the bottom number of each fraction in the legal description. ex. 640/4/4/4/4= If the word AND is used. Do the math then add the two answers together.

How many people are in the FREC?

7

What score must you get on the end of course examination after completing the 63 hr sales associate pre-licensure course?

70%

What score must you get on the post license exam?

75%

How many steps are taken when there has been a complaint filed?

8

How many square feet are in a square yard?

9

How many days does the DBPR have to approve or deny a properly completed application?

90

How many days does FREC (except Probable Cause Panel) have to review and issue a Final Order?

90 days

How many days does the FREC have to submit a final order after receiving a recommended order?

90 days

Sale price is $97,500 What is paid for Taxes?

97500/100 x.70= $682.50

A lender charged a borrower 3 discount points on a $50,000 loan. How much would be the charge for the discount points?

? $ ______________________ ? $50,000 | 3 % $50,000 x 3%= $1500

The buyer wants to get a new loan of $60,000 at 6% interest. His lender wants 2 points to do the loan. What is the total in discount points the buyer must pay?

?Dollars? ______________________________________ $60,000 | 2 points @ 1 %=( 2%) $60,000 x 2%= $1,200

What 3 things do you need to create an agency relationship?

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

What is the most common type of real estate representation?

A Special Agent

What agency relationship are licensees assumed to be operating as?

A Transaction Broker unless a single agent or no brokerage relationship is established, in writing, with a customer

If a brokers pays a finders fee of over 50 what can happen?

A broker can be fined up to $1000 and have a suspended license for 5 years if he pays an unlicensed person anything

Is it permissible to keep extra funds in one's escrow account? (answer from DBPR website)

A broker may place and maintain up to $5,000 of personal or brokerage funds in the broker's property management escrow account And up to $1,000 of personal or brokerage funds in the broker's sales escrow account. However, when preparing the monthly reconciliation statement, you must specifically mention the overage amount and purpose. (if these two types of accounts are combined the max allowed is 5k)

if the right to lein is not disclosed as part of the orig contract what alternative does the broker have to collect unpaid commission?

A broker who fails to disclose the right to lien must file a legal action against the client to restore the right to lien. Then the broker may take legal action to lien.

Each contract entered into for the resale of a residential unit shall contain in conspicuous type either:

A clause which states: THE BUYER HEREBY ACKNOWLEDGES THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE DECLARATION OF CONDOMINIUM, ARTICLES OF INCORPORATION OF THE ASSOCIATION, BYLAWS AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT MORE THAN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO EXECUTION OF THIS CONTRACT; or A clause which states: THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE DECLARATION OF CONDOMINIUM, ARTICLES OF INCORPORATION, BYLAWS AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT IF SO REQUESTED IN WRITING. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE BUYER RECEIVES THE DECLARATION, ARTICLES OF INCORPORATION, BYLAWS AND RULES OF THE ASSOCIATION, AND A COPY OF THE MOST RECENT YEAR-END FINANCIAL INFORMATION AND FREQUENTLY ASKED QUESTIONS AND ANSWERS DOCUMENT IF REQUESTED IN WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING.

What must a complaint be to be investigated?

A complaint must be Legally Sufficient

What is the 8th step of closing a sale?

A conditional loan approval is obtained

What are 4 examples of encroachments?

A fence placed on the wrong place on a property line Tree limbs hanging over a property line A roof of a garage over the neighbor's lot line A concrete driveway placed on or over the neighbor's lot line.

a)Neighborhood Analysis

A gathering of facts about a neighborhood to determine the appeal to the buyer. These facts include - employment stability - convenience to employment - convenience to shopping - adequacy of public transportation - recreation facilities - adequacy of utilities - property compatibility - protection from detrimental conditions, police and fire protection - general appearance of properties - appeal to the market - zoning ordinances - topography - building codes. The analysis may also include a description of the neighborhood's status vis a vis growth, stability, equilibrium, or decline.

In addition to shielding from displacement what other protections does a homestead provide?

A homesteder cn exempt $25,000 of assesed value for properties valued at $50,000 or less. Further they can exempt $50,000 of assesed value for properties valued over 50k. Also this property is protected from non governmental creditors liens that would seek to force a sale. (except for construction liens)

What is a condemnation of an easement?

A judicial or administrative proceeding to exercise the power of eminent domain

What is the way to determine the identity of a property?

A legal Description

What is a section the basis of?

A legal description

What is a license?

A license is permission to use the property of another for a specific purpose. It is not assignable. The person who gave the license has the right to revoke it at any time. Death of the parties terminates the license.

What happens when a license is voluntary inactive?

A licensee may choose this status if he does not want to practice real estate currently but may wish to reactivate the license later An inactive licensee holds a license but may not practice real estate while inactive. He may not collect any referrals, commissions or fees while at this status must be renewed, must pay the same fee as an active license and must complete continuing education as an active licensee

What is Actual Notice?

A party has actual notice when the party has actual knowledge of the fact in question. i.e. notice has been given to and rec'vd by the party.

What is a broker?

A person who provides real estate services for another, for compensation

What is a sales associate?

A person who provides real estate services for another, for compensation under the direction, control and management of a broker

What does the Confirm Receipt detail?

A place for the borrowers to sign confirming receipt of the Closing Disclosure document. Signing the document does not indicate acceptance of the loan.

Prepayment Penalty

A prepayment penalty is charged to a SELLER who is paying a loan off PRIOR THE MATURITY (30 years). The DEED OF TRUST may call for a prepayment when required by a prepayment clause. Each lender requires different amounts of prepayment, so it is necessary to read each question carefully.

What property managers, rental individuals and companies are exempt from Florida Real Estate Law?

A salaried employee of an owner or of a registered broker for an owner of an apartment community who works in an onsite rental office of the apartment community in a leasing capacity. Any salaried employee who is a manager of a condominium or cooperative apartment complex whose activities or duties include renting of individual units as long as the rental period is no greater than 1 year. Any property management firm or owner of an apartment complex providing a finder's fee or referral fee to an unlicensed person, who is a tenant in the apartment complex, PROVIDED THE VALUE OF THE FEE DOES NOT EXCEED $50 per transaction. A finder's fee or referral fee means a fee paid, credit toward rent, or any thing of value provided to a person for introducing or arranging the rental or lease of an apartment unit. It is illegal to pay a finder's fee to an unlicensed person under any other circumstance

What can a real estate school not do?

A school cannot guarantee that students will pass any examinations for licensure or that the permit issued is an endorsement of the school by the FREC can't make false, misleading, inaccurate or exaggerated statements in its advertising may not promise or guarantee employment

What is a single agency relationship?

A single agent is a broker who represents, as a fiduciary, either the buyer or seller but not both in the same transaction

What is a subpoena and who has this power?

A subpoena is a legal order requiring a person to appear before the courts to give testimony and the Department has this power

What is the 12th step of closing a sale?

A survey of the property is ordered

What is an Assignee?

A third party that takes the place of the first person in all parts and conditions of the contract and is required to perform accordingly.

Gathering Data

A thorough CMA requires collection from several sources to be effective. Many MLS systems provide CMA information and a report generation program. These are helpful in putting together one set of information. However, FSBO's, foreclosure sales, auctions, and any sales listed outside the local MLS may BE MISSED, so information from any sales recorded in the property appraisers office and with the clerk of courts is also important in creating a solid CMA.

What is included in the loan costs?

A. Origination charges B. Services the borrower did not shop for C. Services the borrower did shop for D. The total loan costs: Totaled above

What is included in the loan costs?

A. Origination charges B. Services the borrower did not shop for C. Services the borrower did shop for D. The total of the costs of the 3 of those^^^^^

What is stated on the Homeowner Association Disclosure summary?

AS A PURCHASER OF PROPERTY IN THIS COMMUNITY, YOU WILL BE OBLIGATED TO BE A MEMBER OF A HOMEOWNERS' ASSOCIATION. THERE HAVE BEEN OR WILL BE RECORDED RESTRICTIVE COVENANTS GOVERNING THE USE AND OCCUPANCY OF PROPERTIES IN THIS COMMUNITY. YOU WILL BE OBLIGATED TO PAY ASSESSMENTS TO THE ASSOCIATION. ASSESSMENTS MAY BE SUBJECT TO PERIODIC CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER . YOU WILL ALSO BE OBLIGATED TO PAY ANY SPECIAL ASSESSMENTS IMPOSED BY THE ASSOCIATION. SUCH SPECIAL ASSESSMENTS MAY BE SUBJECT TO CHANGE. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER. YOU MAY BE OBLIGATED TO PAY SPECIAL ASSESSMENTS TO THE RESPECTIVE MUNICIPALITY, COUNTY, OR SPECIAL DISTRICT. ALL ASSESSMENTS ARE SUBJECT TO PERIODIC CHANGE. YOUR FAILURE TO PAY SPECIAL ASSESSMENTS OR ASSESSMENTS LEVIED BY A MANDATORY HOMEOWNERS' ASSOCIATION COULD RESULT IN A LIEN ON YOUR PROPERTY. THERE MAY BE AN OBLIGATION TO PAY RENT OR LAND USE FEES FOR RECREATIONAL OR OTHER COMMONLY USED FACILITIES AS AN OBLIGATION OF MEMBERSHIP IN THE HOMEOWNERS' ASSOCIATION. IF APPLICABLE, THE CURRENT AMOUNT IS $ PER . THE DEVELOPER MAY HAVE THE RIGHT TO AMEND THE RESTRICTIVE COVENANTS WITHOUT THE APPROVAL OF THE ASSOCIATION MEMBERSHIP OR THE APPROVAL OF THE PARCEL OWNERS. THE STATEMENTS CONTAINED IN THIS DISCLOSURE FORM ARE ONLY SUMMARY IN NATURE, AND, AS A PROSPECTIVE PURCHASER, YOU SHOULD REFER TO THE COVENANTS AND THE ASSOCIATION GOVERNING DOCUMENTS BEFORE PURCHASING PROPERTY. THESE DOCUMENTS ARE EITHER MATTERS OF PUBLIC RECORD AND CAN BE OBTAINED FROM THE RECORD OFFICE IN THE COUNTY WHERE THE PROPERTY IS LOCATED, OR ARE NOT RECORDED AND CAN BE OBTAINED FROM THE DEVELOPER.

When a file is created for a title company it's called an:

Abstract

What is Moral Turpitude?

Acts or behaviors that gravely violate moral sentiment or accepted moral standards of society and are present in some criminal offenses and not in others. individuals who have committed acts of Moral turpitude* will not be granted a license

Chronological Age:

Actual age in years of the building, based on building date. The "Chronological Age" of a building cannot be changed. If the building is 20 years old, the "Chronological Age" is 20 years.

1. Physical Life:

Actual age or life of a structure that is considered habitable as opposed to economic life. Example: A building sitting vacant without a tenant has a "Physical Life" but there is NO "economic life" because there is NO income.

What are considered legal ways to transfer a property?

Actual and Constructive notice

What activities are considered Real Estate Services and require a license?

Advertises or represents self as an individual involved in the real estate business, through either oral or written representation Buys (Procures sellers, purchasers, lessors, business enterprises or business opportunities) Appraises (in the case of nongovernmental properties) Rents (including providing rental information or lists) Sells (Negotiates a sale) Auctions Leases Exchanges ANY transaction which results in or is calculated to result in a sale or exchange AND who expects to receive ANY compensation or valuable consideration

When does a sales license become null and void?

After becoming involuntarily inactive followed by not renewing their continuing education for more than 2 years. this results in the assoc. having to retake the pre-license course and state exam again.

When does a ratification of agency happen?

After the fact

When one person is empowered by another to represent him in any transaction, it is called an:

Agency Relationship

Market Allocation

Agreement between brokers to split up competitive market areas among themselves & not compete in each others areas

Who must sign to sell the property in a life estate?

All persons on the deed, life tenant and remainderman

What is the soil deposited by an Alluvial Plain?

Alluvion

2.Economic Rent

Also called "market rent", this is the amount of rental income a property CAN GENERATE in an open, free market at any given time, compared to contract rent which is the rent agreed to by the parties.

What is Joint Tenancy?

Also called Unity of Ownership Time: all owners must take title at the same time Title: one deed transferred property from the grantor (seller) to the grantees (buyers). Interest: each person must have equal interest. There cannot be unequal interest in a joint tenancy. Possession: undivided interest in the whole property.

What is Due Care?

Also called due diligence and is the care a reasonable person exercises to avoid harm to another or his property. It also means persistent and vigilant care. This is the opposite of carelessness or negligent.

State Licensed and Certified Appraisers

Although real estate professionals are empowered to perform appraisals, they cannot perform an appraisal for any federally related real estate transaction. Valuation required for mortgage approval and underwriting must be provided by a non-biased third party with no interest in the actual deal.

Paul sold the house for Joe for $80,000. Paul earned a 7% commission. What was the amount of the commission?

Amount of the Commission? _______________________________________ $80,000 | 7% $80,000 x 7% = $5,600.

What are the 2 types of conventional life estates?

An Estate in Reversion An Estate in Remainder

Who is in charge of the division?

An Executive Director

What is a Transaction Broker?

An agent who provides limited representation to a buyer, a seller or both, in a real estate transaction but does not represent either in a fiduciary capacity

What is a Single Agent Broker?

An agent who represents either the buyer or the seller in the transaction but not both

Group Boycotts

An agreement to boycott a competitors product or service

What is the 7th step of closing a sale?

An appraisal is done by a certified appraiser

4. Conformity

An appraisal principle of value based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the value. (The more the properties are alike, the more they retain value.) Example: A million dollar home in a neighborhood of one hundred thousand dollar homes will not usually return the investment. Conversely, a one hundred thousand dollar home in a neighborhood of million dollar homes may benefit because of the value of the million dollar homes.

What is a necessity of an easement?

An easement created by a court of law in cases of justice and if necessity dictates it, especially in a case of landlocked property

What is an example of a Specific Lien?

An example of a specific lien is a property tax lien on 123 Mulberry Lane

What is an example of annexation?

An example of this is when a tree is planted; the tree is annexed to the property so it becomes part of the real property

What is an example of Severance?

An example of this is when the tree is cut down and cut into firewood. The logs from the tree are considered personal property

What 6 things are stated in Tenants in Common?

An individual interest in group ownership. It is presumed by law unless otherwise stated. Interests may be unequal or equal. One person can own a larger share of the property than another. There is an undivided interest in the property. All the owners have an interest in the whole property. (Can't divide up the house!) One owner can sell one's interest without getting the approval of other owners. Do not need the permission of other owners to sell an individual interest in the property. The interest of each owner is inheritable. It passes to heirs, not other partners. One owner can force the others to either buy him out or file a Partition Law Suit in which the courts sell either the person's shares or the whole property.

Who doesn't need a license?

An owner selling his/her own property Anyone acting as an Attorney in Fact. An employee of a public utility, rural electric cooperative, a railroad or state or local government A full-time graduate student enrolled in a FREC-approved degree program, appraising at a college or university. however Any appraisal report must be issued in the name of the supervising individual Any person, partnership or corporation which for another for (non-commission) salaried compensation rents or advertises for rent transient occupancy; or any public lodging establishment

What disclosure is stated on the Resale Purchase agreement of a timeshare?

An owner who acquires a timeshare interest for her or his own use and occupancy and later offers it for resale, or any agent of such person, must utilize a resale purchase agreement which complies with the provisions of subsection (2) to effectuate any resale of the timeshare interest. Any resale purchase agreement must contain all of the following: The name and address of the timeshare plan and of the managing entity of the timeshare plan The current year's assessment for common expenses allocable to the timeshare interest you are purchasing is $_____. This assessment, which may be increased from time to time by the managing entity of the timeshare plan, is payable in full each year on or before __________. This assessment (includes/does not include) yearly ad valorem real estate taxes, which (are/are not) billed and collected separately. (If ad valorem real property taxes are not included in the current year's assessment for common expenses, the following statement must be included: The most recent annual assessment for ad valorem real estate taxes for the timeshare interest you are purchasing is $_____.) (If there are any delinquent assessments for common expenses or ad valorem taxes outstanding with respect to the timeshare interest in question, the following statement must be included: A delinquency in the amount of $_____ for unpaid common expenses or ad valorem taxes currently exists with respect to the timeshare interest you are purchasing, together with a per diem charge of $_____ for interest and late charges.) For the purpose of ad valorem assessment, taxation, and special assessments, the managing entity will be considered the taxpayer as your agent pursuant to section 192.037, Florida Statutes. Each owner is personally liable for the payment of her or his assessments for common expenses, and failure to timely pay these assessments may result in restriction or loss of your use and/or ownership rights.

Chattels real are ________ to real estate, whereas chattels personal are ________

Annexed Moveable

What is the 11th step of closing a sale?

Any repairs required by the contract are made

What are Unenforceable Deed Restrictions?

Any restriction that violates public policy (state or Federal law) or is discriminatory Any restriction that limits the new owner's right to sell at a future date. Restrictions that have not been enforced in a timely manner. (Neighbor put up a fence years ago in violation of the restrictions and no one complained.) The courts may say the Statute of Limitations would not allow enforcement now. Any restriction that limits the protected classes under Federal Fair Housing.

Who can file a complaint with the Department against a licensee?

Anyone

Who can bring an action asking for enforcement of a restriction?

Anyone who is under the same restrictions who feels there has been a violation.

What can happen if you have performed, or attempted to perform real estate acts, or held himself out to be a real estate professional within one year prior to application, or while application is pending, or prior to the issuance of a valid license?

Application may be denied

Another word for a fixture is an:

Appurtenance

What are the 4 types of easements?

Appurtenant In gross Necessity Prescription

When do taxes become delinquent?

April

What are some Formulas to Remember?

Area is always expressed in square feet or square yards Area of a rectangle is Area = length x width Area of a triangle is Area = 1/2 base x height Volume is always expressed in cubic feet or cubic yards Volume of a rectangle is Volume = length x width x depth Volume of a triangular prism is Volume = 1/2 base x height x depth

Florida Document Taxes Due at Closing

As states need revenue to run, the State of Florida also requires payment. The collection of document taxes is one of the ways that the state collects for managing its affairs. In home sales, the state collects taxes on BOTH the seller's and buyer's documents. DEED - SELLER - .70 per $100, or fraction thereof. NOTE - BUYER - BOTH ASSUMED AND NEW - .35 per $100, or fraction thereof. INTANGIBLE - BUYER - NEW MORTGAGES ONLY - .002 PER $1

Adjusting for Differences

As used with the sales approach to value, adjustments should be made if not enough comparable data is available. For example, if a comparable has a different number of bedrooms, baths, etc. Adjust for the value difference using known differences in the market.

What happens if probable cause is found?

Asks Department (DBPR) to File a FORMAL COMPLAINT

What are the 7 things under Loan Disclosures?

Assumption Demand feature Late payment Negative amortization Partial payments Security interest Escrow account

How many commission members must be there for a meeting to happen?

At least 4

Each party involved in the case has the right to an:

Attorney

What is the second step of the complaint procedure?

DBPR determines if it is "legally sufficient" A Summary Suspension is ordered if the public good is endangered.

What 2 things could come from the second step of the complaint procedure?

DBPR may issue Notice of Noncompliance or a Citation for lesser cases or DBPR Investigates: may issue subpoenas call witnesses, documents, records

If probable cause isn't found what can the DBPR still do?

DBPR may override the Probable Cause Panel and submit to the full FREC within 10 day

What forms must a military applicant submit in order to get exemptions?

DD-214 or NGB-22 form as proof of honorable discharge Military Veteran Fee Waiver Request

1. State the problem

DETERMINE PROBLEM! "Why am I doing this appraisal? Is the purpose of this appraisal for market value, insurance value, salvage value, or tax value?"

What are the duties of a Transaction Broker?

Deal honestly and fairly Account for all funds entrusted to the broker Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer Present all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing Use skill, due care and diligence in the transaction Maintain limited confidentiality, Any additional services that are mutually agreed to

What duties does a broker owe to others when acting as in a No Brokerage Relationship? These are also on the No brokerage Relationship Notice:

Deal with all parties honestly and fairly; Disclose all known facts that materially affect the value of residential property which are not readily observable to the buyer (such as change in zoning); Account for all funds entrusted to the licensee (such as earnest money deposits etc.)

What must be on the form to transition to transaction broker?

Dealing honestly and fairly: Accounting for all funds; Disclosing all known facts that materially affect the value of residential real property and are not readily observable to the buyer; Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise to the buyer; Using skill, care, and diligence in the transaction; Maintain Limited confidentiality, Any additional duties that are mutually agreed to with a party

How can Tenancy by the Entireties be terminated?

Death of either spouse-survivor becomes owner in severalty Divorce (parties then become tenants in common) Mutual agreement,to sell the property Foreclosure

What are some examples of Encumbrances?

Deed Restrictions Easements Leases Liens Encroachments Licenses

If there is not enough money for all the liens to be paid, the court may issue a what against a borrower?

Deficiency Judgement

What would be an example of a metes and bounds system?

Beginning at the old red barn, proceeding in a northwesterly direction for 200 feet at a reading of 85°until reaching the stately old pine; thence in a northeasterly direction for 500 ft at 210° to the middle of the old stone fence; thence in a southeasterly direction 300' at a reading of 240° until reaching the old Dutch mill; thence in a southwestern direction 200 ' at 360° until reaching the Point of Beginning. (POB)

The person receiving the bequest is a what?

Beneficiary

Chattels are transferred by a what?

Bill of sale

Blind Advertisments

Blind ads fail to comply with 61J2-10.025(1) and (2), in the FL Admin Code by omitting: -the licensed name of the brokerage firm, -if the licensee's personal name is used, at the very least that person's last name must appear as it is registered w/ FREC -All advertising must be in a manner in which reasonable persons would know they are dealing with a real estate licensee and may not be false, misleading, fraudulent or deceptive.

What are Buyers referred to on a closing disclosure?

Borrowers

What does the Escrow Account part of the loan disclosures indicate?

Breaks down what is and what is not included in the escrow account

What is the 16th step of closing a sale?

Broker alerts closing agent of the earnest money deposit

What is the 3rd step of closing a sale?

Broker collects any additional monies if called for by the contract,

What is the 2nd step of closing a sale?

Broker deposits earnest money in accordance with law,

Commingle

Brokers may not commingle escrow deposits w/ business funds/personal funds

What is the 6th step of closing a sale?

Buyer and seller work to clear any "contingencies" (conditions) written into the contract,

What is the 5th step of closing a sale?

Buyer applies for the loan in time according to contract,

What is the 17th step of closing a sale?

Buyer does a final walk through inspection

Buyer's New Loan

Buyer's New Loan is not the same as the purchase price because usually buyers put money down in earnest money and down payment. loan balance ________________________________________ Sale Price | LTV - Loan to value ratio The buyer's loan is entirely different from the seller's loan unless it is a loan assumption. Figure them separately. If a BUYERS GET A NEW LOAN interest must be paid UP TO the end of the month. For example, closing on the 15th, the buyer would owe interest for 16 days (include the day of closing).

What is the 15th step of closing a sale?

Buyer's agent gets final amount due from the closer so that buyer can obtain a certified check for closing

What is the 14th step of closing a sale?

Buyer, seller, closing agent and real estate professionals set closing appointment

Discount Points and Loan Origination Points

Buyers and sellers frequently pay discount or loan origination points to obtain the loan. To determine how much a discount point is, remember that one point (either discount or loan origination) is 1% of the loan balance. $ of points ________________________________________LOAN AMOUNT | number of points at 1%

Freddie Mac

Buys conventional mortgage loans

Fannie Mae

Buys conventional, FHA-insured, VA-guaranteed loans Largest secondary mortgage GSE Issues mortgage-back securities (MBS) to investors

How was real estate conducted in the past?

By Caveat emptor: "Let the buyer beware.

How are encroachments discovered?

By physical inspection (actual notice) A survey (constructive notice)

How is implied agency created?

By the Act of the Act of the Parties

What is the DBPR?

Department of Business and Professional Regulation

What does the loan calculation detail?

Details the total amount of all payments on the loan, the dollar amount of the finance charges over the life of the loan, the amount financed, the annual percentage rate (APR), and the total interest percentage (TIP)

What is the Allodial System?

Came about in the 17th century individuals were entitled to own property without the proprietary control of the king/government. The allodial system and the right for individuals to own property is one of the foundations upon which the United States was built. All property in the United States is under the allodial system.

Capitalization (Cap) Rate

Cap rate can also be considered the RISK FACTOR in buying a property. The higher the risk (cap rate), the lower the sale price should be. Estimate the price a typical investor would pay for the income produced by this particular class and type of property. This is accomplished by estimating the RATE OF RETURN that an investor would DEMAND for this investment. Net Operating Income / Capitalization Rate = Value Net Operating Income ________________________________________Sale Price or Value | Capitalization Rate

What happens if probable cause isn't found?

Case is • dismissed and/or • Letter of Guidance Issued

Prorating Expenses

Certain items such as taxes, rent, and sometimes insurance do not stop simply because the property changes hands. It is necessary to PRORATE SPLIT for the time the property is in possession of the owner's. In prorations, either the buyer owes the seller or the seller owes the buyer. In Florida, it is customary to have EVERYTHING PRORATED as of MIDNIGHT "BEFORE"CLOSING. The BUYER is normally RESPONSIBLE for the DAY OF CLOSING as the buyer would OWN the property as of 12:01 the day of closing. A 365 day method is usually used. When calculating prorations as explained before, one party will be debited for an amount owed and the other party credited for that amount, like double entry bookkeeping

What is Personal property sometimes referred to?

Chattels which is also called personalty

Each 24x24 square created by these guide meridians and correction lines is called a what?

Check

Guilt in Antitrust cases is established on the face of the evidence (per se). What are penalties for violations?

Citizen Complaint Center @ DOJ receives complaints. Penalties incld jail time, restitution and fines up to 1 mil for individual offenders or 100 mil for a business. damages can be up to 3x the amount of the inflicted damages.

What is shown on page 1 of a Closing Disclosure?

Closing information Transaction information Loan information Loan Terms Projected Payments Costs at closing

What is the 18th step of closing a sale?

Closing occurs

What are Two items that will cause a Suit to quiet the title suit?

Color/ clouded of Title a break in the Chain of Title

What are included on the 4 columns of the Closing Disclosure in the Settlement amounts?

Column 1 - Description of the costs Column 2 - Costs paid by the borrower - designated as being paid either "at closing" or "before closing" Column 3 - Costs paid by the seller - designated as being paid either "at closing" or "before closing" Column 4 - Costs paid by others

Who has trade fixtures?

Commercial Tenants

Who is present in an informal hearing?

Commission members who did not serve on the probable-hearing panel

What is the formula for Determining Sales Assoc Commission?

Commission rate x Sales price i.e. 3% x $250,000 =$7,500

What are the numbers in degrees based on a 360 degree cirlce?

Compass Headings

What is the first step of the complaint procedure?

Complaint given to DBPR or DBPR initiates complaint Has 5 years to file complaint

What is the 1st step of closing a sale?

Contract is signed by all parties "Time is of the Essence"

What are accounting terms used to show placement of money?

Credit Debit

Double Entry

Credit and Debit are accounting terms used to show placement of money. If a "credit" is given for a specific amount, an equal amount may be "debited" for that item. This is called a Double Entry; system. Not all credits and debits have an equal offset. For example, the buyer receives a credit for EMD on the HUD, and this is not offset on the seller's side.

The closing took place on November 25. The taxes for the year were $1250 and are paid in arrears. What is the amount of prorated taxes and how did they show up on the closing statement?

Credit the buyers $1123.29, and debit the sellers $1123.29

List of Charges Commonly Used in Closing BUYER

Credited to the Buyer: -Earnest money -New loan -Prorated taxes, advance rents -Security deposit Debited to the Buyer: - Sale price - Title insurance -lender (mortgagees) - Preparation of mortgages and deed - Recording of deed - Recording of mortgage - Documentary tax on Note - Intangible tax on mortgage - Attorney fees - Interest Adjustment

List of Charges Commonly Used in Closing SELLER

Credited to the seller: - Sale Price - Prorations such as rent or water Debited to the Seller: - Loan(s) to be paid -Interest on loan -Commission -Prorated taxes -Security deposits or prepaid rents -Title insurance for the owner -Preparation of the deed -State transfer tax on the deed -Attorney's fees

If the loan is $115,000 at 10% interest for 30 years and the payment is $1009.21 per month (P &I), what is the principal balance after one payment? Determine the annual amount of interest paid, based on the loan balance.

Determine the annual amount of interest paid, based on the loan balance. $115,000 x 10%= $11,500 interest per year. Divide by 12 to get monthly interest $11,500 ÷ 12= $958.33 per month interest. Subtract $958.33 from the total monthly payment of $1009.21= $50.88 is the amount of the first monthly principal payment.

DEEP C

D Disposition E Enjoyment E Exclusion P Possession C Control

What 8 things are the main basis for a denial of a license?

Did not file an application in the proper form or pay the correct fee, Did not correct an error or omission on an application, Did not take the examination within two years from date of application, Did not pass the state exam or cheated on the exam, Did not prove qualifications for licensure, Has a reputation for bad business dealings or incompetence, Is being investigated by another state for an act that would be a violation of Florida law, Has committed an act in the previous year that could have resulted in discipline had the applicant been licensed at the time.

What 5 things may be cause the refusal to renew a license?

Did not file the proper paperwork in a timely fashion, Did not pay the appropriate fee, Did not take the continuing education or post-license courses, Is being investigated in another state for an act that would be a violation of Florida law, Has committed an act while licensed which resulted in discipline

Effective Age

Differs from the ACTUAL age (chronological age) by such variable factors as depreciation, quality of maintenance, and the like. Remodeling can extend the economic life of a structure by reducing or mitigating the impact of actual age and increasing the structures life expectancy. Example: If a person maintains a building keeping it in good repair, the "Effective Age" is reduced.

What type of transaction do all parties have the right to disclosure of material facts when in an agency or no relationship transaction?

a residential transaction

What is a General lien?

a result of losing a judgment case A general lien is against all the assets of the person who lost the law suit and effects all real and personal property. (car, boat, house, or business)

In Tenancy by the entireties what right is excluded?

a right to Partition

What is an appurtenance?

a right, privilege, or improvement that belongs to and passes with the transfer of property.

What are 3 types of easements?

a scenic easement a light and air easement

What is a chain of title?

a series of owners in a row that have owned the property in the past for a prescribed amount of time

What is a Designated Sales Associate?

a special case for non-residential transactions where two licensees under the direction of one broker act as single agents. One represents the buyer and one the seller. In this case both buyer and seller must verify assets of more than $1 million

Which individuals are not eligible for compensation from the Fund?

a spouse of the judgment debtor a licensed broker or sales associate who acted as a single agent or transaction broker in the transaction a person whose claim is based on a real estate transaction where the licensee was an owner or controlled the property involved in the transaction or when the licensee was not acting as a broker or sales associate, a person whose claim in a transaction in which the broker or sales associate did not have a valid, current active license, a real estate brokerage corporation, partnership, limited liability company or limited liability partnership.

What 2 things may a license agree to?

a stipulation Voluntary Relinquishment for Permanent Revocation

What is a suspension given for?

a suspension is the penalty for an illegal act which was less serious in its violation than a revocation of license would demand

What is the Owners Policy?

a title policy made out for the price of the property at the time of closing

What is an arms length transaction?

a transaction where the seller is informed and knowledgeable about what he is selling and the buyer is informed and knowledgeable about what he is buying The buyer and seller are not related to each other, but because of their independent knowledge are on equal footing Each is acting in his own self interest

What is a stipulation?

a voluntary agreement between the Division of Real Estate and the licensee, which will then end the case

What is an example of an elective share?

a wife omitted from her husband's will may still claim an elective share of his estate.

What is a will?

a written instrument (paper) that describes how the testator (will maker) wishes to have his world goods- real and personal property disbursed It is considered by the court to be the testator's final wishes for distribution.

3. Analyze and Interpret

a)Neighborhood Analysis b)Site analysis

monetary policy

actions undertaken by the Fed to influence the availability & cost of money & credit

What does Duress mean?

actual harm

What subjects are covered in the post license course?

agency law, property management, appraisal, real estate finance and economics of real estate management, plan development, practical skills marketing and tech.

What is a Condemnor?

agency taking the property

Contracts (in general)

agreement between two or more parties to do or not to do certain things -valid -contains all valid essentials -void - lacks one essential -voidable - maybe valid or void by one of the parties -enforceable - courts will enforce -unenforceable - courts cannot enforce

mutual recission

agreement from both parties to terminate the contract

option contract (4 types of contract)

agreement to keep an offer open for specified period of time an offer to sell or lease real property. advised to tell buyer or seller to have attorney draw up an options contract.

What must the licensee still complete even while suspended?

all education requirements and renewals during his or her period of suspension.

What happens to licensees when a brokers license is suspended, inactive, or is revoked?

all licensees under that broker become involuntarily inactive

What violations can lead to second degree misdemeanors?

all other licensee violations (Chapter 475)

What is Real Property?

all the land, appurtenances, rights and privileges connected together

Title insurance is issued in states which do what?

allow it to protect either the buyer or the lender or both for time previous to the closing date.

What is an open-end clause?

allows borrower to increase the loan amount as long as not more than original loan

informal contract

also 'PAROL contract' usually an oral contract rather than written.

What are emblements?

also known as fructus industriales and are Annual crops such as wheat, corn and vegetables considered personal property

What is the Closing Disclosure?

also referred to as a closing statement or a settlement form the official settlement statement used by settlement agents and title companies to itemize all charges for a borrower and seller gives a picture of the closing transaction, and provides each party with a complete list of incoming and outgoing funds. "Buyers" are referred to as "borrowers" on this form even if no loan is involved used for cash transactions by many settlement to show how the closing costs were calculated

What is a Rate?

always a percentage

What is an Equitable Lien?

always either a judgment lien or a mortgage lien and is based on a doctrine of fairness and a written contract.

What is a whole?

always the complete unit such as sale price or market value.

reserve requirements

amount of funds that an institution must hold in reserves against deposit liabilities as determined by the Fed -Reserve requirement increased - money supply decreases & interest rates increase -Reserve requirement decreased - money supply increases & interest rates decrease

If a licensee asks for a formal hearing who is it in front of?

an Administrative Law Judge

What will the license be issued to explain the hearing process?

an Election of Rights form

What is a burden on the property?

an Encumbrance

What type are new mortgages taxed?

an Intangible tax not applicable to assumed mortgages

Each partner who provides real estate services to the public either directly or indirectly must hold:

an active broker's license, a sales associate or broker associate cannot be a partner in a real estate brokerage partnership

Who is a formal hearing in front of?

an administrative law judge

Reduction of Principal on a Loan Balance of an Amortized Loan

an amortizing loan is a loan where the principal of the loan is paid down over the life of the loan (that is, amortized) according to an amortization schedule, typically through equal payments.

What does The Division provide for homeowners' associations, under Chapter 720, F.S.?

an arbitration program

What is an Easement by Prescription?

an easement by adverse possession claimant has used the property for the time period set by law. (Under Florida Law it is 20 years). If the time element has been fulfilled, the claimant can go to court to get the right to use the land forever.

What is a summary suspension?

an emergency suspension order

listing contracts

an employment agreement between property owner and real estate broker. written oral or implied. longer than one year must be in writing to be enforceable. chapter 475 requireswritten contracts to include: expiration date desciption of the property listing price and terms brokers compensation signatures of all owners copy of contract be given to owners within 24 hours

What does Possession stand for in terms of a Prescriptive Easement?

an individual must be in possession of the property or have used the property for the prescribed time period required by the state where the property is located.

The Notice of Noncompliance can only be issued for what?

an initial offense

If the licensee does not comply with the Notice in the time allowed, it will result in:

an issuance of a citation or regular discipline.

When is a disclosure not needed?

an open house or meeting a customer during a normal conversation

The seller owes $50,000 on a loan on JUNE 1st, and the closing takes place on June 30th If a closing takes place on June 30th and the interest on the loan was 7%, the seller would owe the bank the LOAN BALANCE $50,000, PLUS one month's interest. How much interest he OWE?

annual interest ____________________________________ loan balance $50,000 | 7% interest $50,000 X 7% = $3,500 a year ÷ 365 = $9.59 per day x 30 =$287.67 If the loan closes on a day in the middle of the month, take the RATE times the number of days, INCLUDING THE DATE OF CLOSING. The exact day of the month is what is used to calculate. Watch out for a question that says, "The closing took place on June 15th, but the lender demanded interest THRUGH THE MONTS OF SETERLMETN In this case interest would be charged to the seller for the ENTIRE month. Interest on the seller's loan is a debit to the seller only, unless it is a loan assumption. If the buyer assumes the loan then both the loan and the interest would be a debit to the seller and a credit to the buyer.

Interest Calculation: The seller owes interest on his loan that he is going to pay off at the closing on June 10th. The amount of the loan is $150,345.00. His interest rate is 6%. How much interest will the seller owe on his loan?

annual interest _______________________________________ loan balance $150,345 | interest rate 6% Multiple the loan balance times the interest rate and get the annual interest. This is $9,020.70 annual interest. Divide the annual by 365 days. This makes the cost per day $24.71 Because it is interest, and not prorations, count all the days to closing = 10 x $24.71= $247.10. Using a time chart to determine the days is also helpful in determining amounts Jun 9| Jun 10 Seller | Buyer

The seller owes interest on his loan that he is going to pay off at the closing on June 10th. The amount of the loan is $150,345.00. His interest rate is 6%. How much interest will the seller owe on his loan?

annualize whatever math you are working with. The seller owes $150,345.00 on his loan. The interest rate is 6%. The closing date is June 10th. How much interest does he owe? 150,345*.06=$9,020.70 annual interest. Divide the annual by 365 days. This makes the cost per day $24.71 Because it is interest, and not prorations, count all the days to closing = 10 x $24.71= $247.10

Whenever the 365 method is used, the number it is divided into must be a what?

annualized number

What is real property or real estate defined as?

any interest or estate in land and any interest in the enterprises or business opportunities, including any assignment, leasehold, sub-leasehold or mineral right; however, the term does not include any cemetery lot or right of burial in any cemetery; nor does the term include the renting of a mobile home lot or recreational vehicle in a mobile home park or travel park

What does real property or real estate mean?

any interest or estate in land, or enterprise or business opportunity, including any assignment, leasehold, sub-leasehold or mineral rights

What is compensation?

anything of value, paid, received, or expected to be paid or received or remuneration for services rendered.

unenforceable contract

appears to have all essential elements but cannot be enforced? why? example: because its not in writing or is vague

Is an applicant considered active or inactive when licensing requirements are met?

applicant is licensed as an inactive sales associate with a voluntary inactive status.

Who appoints the members of the FREC?

appointed by the Governor

Who appoints the secretary of the department?

appointed by the Governor, subject to confirmation by the Senate

1. SALES COMPARISON APPROACH Market Data Approach

appraising residential property or vacant land. This approach COMPARES the subject property to SIMILAR PROPERTIES and makes adjustments on the basis of the date of the sale, the location, the physical features and/or amenities. Example, the appraiser finds a property which has sold located in the same neighborhood, and wants to use it as a comparable sale. The comparable has more bedrooms than the subject, one less bath, and one less garage. The appraiser will have to subtract the extra bedrooms, from the comparable sold price, add a bathroom to the comparable sold price, and add a garage to the comparable sold price to make the properties equal.

PRORATIONS

are CALCULATED TO MIDNIGHT the day "BEFORE" CLOSING.

What are building codes used for?

are designed to provide minimum standards The goal is to safeguard the health, safety, and welfare of the public by regulating and controlling the design, construction, quality, use and occupancy, location and maintenance of all buildings and structures.

What is a Fractional Government Lot?

are irregularly shaped parcels of land, usually fronting on water, which could not be divided practically into sections under the government survey system areas which would not be divided practically using the method above and may be supplemented with a "metes and bounds"

What are Environmental Protection Laws?

are set up by the federal EPA and state departments of health to regulate air, water, and noise pollution, as well as other environmental conditions, including the cleanup of hazardous substances.

What are Special Assessment Taxes?

are used for a "one-time" fee for something that affects one piece of property at a time

What is a legal description used for?

as a form of identification, is used on legal papers like contracts, deeds and title insurance policies for a particular property

If the seller has a loan it must be paid off when?

at closing

How long must the first license period be?

at least 18 months and will not exceed 24 months

Where does the survey end?

at the place it started- the Point of Beginning or POB

How are legal life estates created?

automatically by law

A corporation is not dissolved because of:

bankruptcy

What are special purpose deed similar to?

bargain and sale deed

What is a Statutory Lien?

based on state, local and federal written laws and is a lien that cannot be automatically discharged through bankruptcy. It can be based upon taxes, rent, maintenance services, construction, a mortgage, or usage.

Why is the Cash to Seller important?

because it shows how much cash the borrower needs to bring to closing and how much cash the seller will receive at closing

Why is the Buyer's New Loan is not the same as the purchase price?

because usually buyers put money down in earnest money and down payment.

executed contract

becomes an executed contract at signing. all parties have performed promises stated in contract.

When must disclosures be presented?

before negotiating the listing or sale of a property

When must a disclosure form be given?

before, at the time of, entering into a listing agreement or an agreement for representation or before the showing of property, whichever occurs first

teaser rate

below market interest rate usually offered for the 1st yr on some adjustable rate mortgages

What is the definition of the Bundle of Rights?

beneficial interests associated with real property.

bilateral contract

both parties to perform in accordance to terms of contract. both parties promise to do something.

package mortgage

both real & personal property as security for the debt the personal property and furniture is included in the purchase price of the house.

spouses signature

both spouses must sign real estate sale contract. buyers side and sellers. only one spouse signs, then only one is accountable.

Where are closing costs calculated?

bottom of page 2

Where is the Cash to Close shown?

bottom of the left column under Summaries of Transactions the bottom of page 1 under the heading "Costs at Closing - Cash to Close

power to bind seller

broker can't sign for buyer or seller. power of attorney is a legal document designating some other person or attorney in fact to act on behalf of the principal in all matters.

Title company /attorney as escrow agent

broker not required to report escrow dispute or institute settlement procedure

What is a timeshare?

buy the right to occupy the premises for a short time period, rather than a long lease. A specific time period is purchased

property tax disclosure

buyers presented disclosure concerning ad valorem taxes ( according to value) . essentially letting buyers know that current home property taxes are subject to change if value increases

How should Personal Property always be transferred?

by a Bill of Sale

How are new restrictions placed on a property?

by a vote of trustee in a new subdivision and that restriction would be enforceable.

How is a notice of noncompliance delivered?

by certified or registered mail

How is Transfer of one unit to another conducted in condos?

by deed

What are the two ways to voluntarily transfer real property?

by deed or by will

5. Estimate the value of the property

by each of the three approaches to value - Market Data (sales comparison) - Cost (or Summation) - Income

What can't create joint tenancy?

by operation of law, nor can it be created after the fact

When is a Specific liens most often found?

by sales associates when listing or selling a property

How are the members of the commission appointed?

by the Governor, subject to confirmation by the Senate

Who pays Property taxes in a cooperative?

by the corporation

How are building codes enforced?

by the issuing of building permits and certificates of occupancy, and by inspections, with fines being imposed on violators

How does the state of Florida establish who the heirs will be in an intestate case?

by the probate courts establishing the line of descent and distribution In other words, the courts determine who will inherit and in what order

net listing

can be all of the above. assumes the sellers lowest agreeable amount and broker keeps anything in excess plus commission.

What can happen in a cooperative if a corporation Fails to pay a monthly fee?

can cause the corporation to issue a lien that may result in foreclosure

Why are Encroachments important?

can lead to a color or cloud on the title and a possible adverse possession suit if it is left for the statutory time period.

If the disclosure is not given, the purchaser may:

cancel the contract at any time before closing.

What does stock ownership bring in a cooperative?

carries with it the right of occupancy (called a proprietary lease) owner of the share in the Coop is also considered a unit owner for that portion of ownership.

Federal Reserve System

central bank of U.S. charged w/ maintaining the stability of the financial system using 3 economic tools

What is Annexation?

changes personal property to real property.

What is Severance?

changes the real property to personal property

partial release clause

clause in a blanket mortgage allowing for release from the mortgage of certain individual parcels upon payment of a specified amount

What does the formal complaint define?

clearly defines all of the charges against the licensee

When is the Conditional Loan approval changed?

closing

acceptance

communication of the acceptance creates a new contract

Price Fixing

competing brokers conspire to establish a standard service price rather than let the rate be set by open market.

valid contract

complies with provisions of contract law. contains 4 essential elements -contractual capacity of the parties -offer and acceptance -legality of object -consideration

implied contract

conditions not stated in contract but implied by the acts of parties. person walks into diner and orders lunch, implied contract is created.

What is Interval Ownership?

consists of fee simple ownership and is recorded and conveyed by deed for a specific time period. The owner may sell, lease or rent the property for the time period he owns it just as he could any other property, subject to the Time Share Act of Florida Law

When a deed is recorded it is considered to be a:

constructive notice

special information booklet

contains consumer info regarding closing services for which the borrower may be charged at closing

What is contained on a probation order?

contains specific instructions to take a class or grant an audit which must be completed in a 90 day period unless the licensee asks and is granted an extension of time

sale and purchase contract (4 types of contract)

contract between buyer and seller. if licensee is agent and facilitator for one or both parties licensee may prepare sale and purchase contract

What must be stated in each contract for the initial sale of a parcel of real property and each contract for the initial sale of a residential unit within the district?

contract for the signature of the purchaser, the following disclosure statement in boldfaced and conspicuous type which is larger than the type in the remaining text of the contract "THE (Name of District) COMMUNITY DEVELOPMENT DISTRICT MAY IMPOSE AND LEVY TAXES OR ASSESSMENTS, OR BOTH TAXES AND ASSESSMENTS, ON THIS PROPERTY. THESE TAXES AND ASSESSMENTS PAY THE CONSTRUCTION, OPERATION, AND MAINTENANCE COSTS OF CERTAIN PUBLIC FACILITIES AND SERVICES OF THE DISTRICT AND ARE SET ANNUALLY BY THE GOVERNING BOARD OF THE DISTRICT. THESE TAXES AND ASSESSMENTS ARE IN ADDITION TO COUNTY AND OTHER LOCAL GOVERNMENTAL TAXES AND ASSESSMENTS AND ALL OTHER TAXES AND ASSESSMENTS PROVIDED FOR BY LAW."

executory contract

contract formed between two parties, but something still remains UNFULFILLED. real estate sale contract between signing and closing the deal is an executory contract

performance

contract terminated through completion or fulfillment

What is an Estate for years?

conveys (transfers) property for a definite period of time It has a definite beginning and a definite ending date Both tenant and landlord know in advance when payment is due and when the lease terminates..

What things are included in the calculation of cash the borrower will need at closing?

costs paid before closing, down payment, deposits, seller credits, adjustments, and other credits.

Who gives Special purpose deeds out?

court, trustees, or the sheriff

What is a sublease?

created when the lessee grants a portion of time or a portion of space to another

The earnest money would appear on the settlement statement as:

credit to the buyer

Fines on a corporation are:

criminal, not administrative.

If the buyer assumes the loan then both the loan and the interest would be a _____ to the seller and a ______ to the buyer.

debit credit

If a "credit" is given for a specific amount, an equal amount may be _____ for that item

debited This is called a Double Entry; system

What is a condo owner given?

deed and undivided interest in common areas which may include a percentage based upon individual unit ownership, square footage, or an amount based upon maintenance requirements anticipated for the unit a copy of the FAQ's, Declaration, financials, Rules and Regulations, and By Laws

Transfer of ownership (of title) is done by:

deed or operation of law

What discipline is the FREC entitled to enforce?

deny a license refuse to renew a license suspend a license revoke a license issue citations impose fines impose probation issue Notice of Noncompliance

If a licensee fails to provide disclosure FREC may impose what penalties?

deny an application for licensure, registration, permit or renewal place the licensee, registrant or permitee on probation, suspend a licensee, registration or permit, impose an administrative fine not to exceed $1,000 for each count, issue a reprimand, do any or all of the above

A limited liability brokerage partnership may register with the:

department and operate as brokerage partnership under the same requirements s a general partnership

destruction of property

destruction of property, such as sinkhole terminates any offers

Real property given in a will is a ______ and personal property in a will is a ________

devise bequest

When the courts hear the case, the appeal will be based on what?

disputed issues of procedure, findings of fact and rulings of law

What does the term Metes refer to?

distance

The principle characteristic of a partnership is that:

each partner is personally liable for the partnership business and, therefore may be sued individually general partners are jointly and severally liable

What is used to aid in the assessment of property for tax collection?

each piece (parcel) of land is given a Parcel Number

What is an Appurtenant Easement?

easements for adjacent properties run with the land and can't be sold separately

How do township lines run?

east and west linearly (a horizontal line)

Who elects the Chairperson and Vice Chairperson on the commission?

elected annually by members

buyer brokerage agreement (4 types of contract)

employment contract with buyer

buyer broker agreements

employment contract with buyer, presumed to be employed as transaction broker. if single agent or no brokerage, broker must provide written disclosure. agreements include: -parties to and terms of agreement -characteristics of property (type of property, price, location) -brokers obligations -buyers obligations -retainer and compensation ($ amnt or % of purchase price) -protection period -early termination of agreement and dispute resolution (agree to mediate first) -authorized brokerage relationship

When is the license renewal period?

every 2 years with the exception of the first license period

When must a licensee renew their real estate licenses after the initial license period?

every two years

When is the current license renewal period?

every two years, with the exception of the first license period

What is prima facie?

evidence good and sufficient on its face. Such evidence is sufficient to establish a given fact and the license is considered prima facie

nonconforming loans

exceed fannie mae loan amount

What are Violations which will lead to a First Degree misdemeanor?

failing to provide accurate and current rental information for a fee

Intermediation

financial institutions serve as intermediaries between depositors & borrowers -occurs when thrift institutions accept depositors' savings -thrift institutions are financial institutions that hold savings deposits. They serve as intermediaries -Intermediation results in the availability of mortgage money

Amortized mortgage

financing technique in which the debt is gradually & systematically killed / extinguished by equal regular period payments; the entire loan is paid off at the end of the loan term Constant (level) monthly payment or principal & interest 30 yr & 15 yr terms

A broker listed a home for $195,000 and sold it for 90% of the list price. If the home was listed at 7.5% selling commission and the split was 55% to the listing broker and 45% to the selling broker, how much did the selling broker receive?

first determine what the actual selling price is. Take$195,000 times 90% to get the sales price. $195,000 x 90%= $175,500 sale price. Total commission? ______________________________ $175,500 | 7.5% $175,500 x 7.5%= $13,162.50 total commission Part of the commission? ___________________________ $13,162.50 | 45% $13,162.50 x 45%=$5,923.13

When will a notice of noncompliance be issued?

for an initial offense of a listed minor violation

reverse mortgages

for elderly homeowners to borrow against the equity in their homes so they can receive monthly payments needed to help meet living expenses AKA Home Equity Conversion Mortgage (HECM)

How are extensions granted?

for illness or unavailability of a required course

When is a citation issued?

for minor violations of the law when public welfare is not threatened

How long will All purchasers and lessors receive copies of documents according to the Condo act?

for more than 5 years

What does Continuous stand for in terms of a Prescriptive Easement?

for the statutory time period

What are Cooperatives?

form of ownership differs from that of a contemporary estate in that the entire property is owned by a corporation

loan estimate

form that contains info about the lender, property, loan terms, projected payments, and total estimated cost at closing

closing disclosure

form that replaced the HUD-1 statement and must be provided to the borrower at least 3 days prior to closing

What are Special Assessment Taxes based on?

frontage foot basis, rather than by value

b) Site Analysis

gathering of facts about a particular location These include: - estimate of highest and best use - identification of key features - identification of possible legal or physical problems.

What do easements do?

give someone else (dominant estate) the right to USE a part of the property while the owner(servient estate) retains the ownership rights

exclusive rght of sale listing

gives broker the greatest degree of protection. even if owner sells during contract period, broker is entitled to a commission

exclusive agency listing

gives exclusive rights to one broker. if seller sells house then broker takes no commission unless broker introduced buyer.

What is a Ground Lease?

gives the tenant the right to build or use the land for a specific time period, up to 99 years.

What is Section J of the Closing Disclosure?

gives the total closing costs to the borrower This is the total you see at the bottom of page 1 under the heading "Costs at Closing - Closing Costs."

What is a Devisor?

gives to a Devisee a Devise

What is private home ownership subject to?

government interference called P.E.T.E.

There are different types of deeds and the difference is primarily in the promises made by the ______.

grantor

Homestead

grants protections of the family, homestead, tax exemption, size limited, personal property.

What are 7 types of commercial leases?

gross lease net lease percentage lease ground lease index lease or variable index lease graduated lease a sale subject to lease

Gross Rent Multiplier

gross rent multiplier (for residential) and gross income multiplier (for commercial). At best, this system is an educated guess because it is very difficult to: a.) find matching properties b.) find properties whose owners price the rent correctly. Formula to solve for the Gross Rent Multiplier: Sale price ÷ monthly rent = GRM House A Sale price $180.000,- rent per month $1650,- $180,000 price ÷ $1,650 rent = 109.09 GRM House B Sale price $210,000,- rent per month $1950,- $210,000 price ÷ $1,950 rent = 107.69 GRM

What is a special agent?

handles one transaction for one seller of one property

What is a Graduated lease?

has gradual increases built in so that the lessee has increased rent payment as time progresses.

What exemption does a Military person have from Licensee Renewal?

has his licensee fees and educational requirements waived during the period of service and for 6 months following return to civilian life The spouse of military personnel can also have fees and educational requirements waived during the period of enlistment and for 6 months after returning to civilian life Both may practice real estate for those six months but must complete those requirements within that six month window

Who may buy an owner's policy?

home seller or the home buyer

The T lines are:

horizontal - divide line

What is an example of a reservation of an easement?

if a grantor deeded 40 acres, but retained the right to cross the land to get to a family cemetery

How does a licensee go involuntary?

if he fails to renew an active license fails to pay the required renewal fee fails to complete required continuing education works under a broker whose license is no longer in effect

When can a broker have multiple broker licenses?

if he manages more than one brokerage firm

When is a violation considered minor?

if it does not result in economic or physical harm to a person or adversely affect the public health, safety, or welfare or create a significant threat of such harm

specific performence (remedies for breach)

if money doesnt provide relief, the wronged may sue to have the other party do as contract states

What is an example of Special Assessment Taxes?

if new curbs and gutters are installed by the city in front of a home, the owner will be assessed a special assessment tax to pay for these improvements

How can a licensee be released early from probation?

if the terms of the probation are completed and the required information being submitted to the Division of Real Estate Legal Section.

What is an implication of an easement?

implication from the acts of conducts of the parties

impossibility of performance

impossible to carry on duties, such as death of buyer or seller

When did Florida pass its first Real Estate Law regulating licensure of brokers and sales associates?

in 1923 in order to protect consumers. In 1926 FREC was established to enforce the law

How are interest rates expressed?

in Annual Rates

How do corporation take title?

in Severalty

How is the U.S. Rectangular Government Survey arranged?

in a series of grids with lines going north and south and other lines going east and west

Where is each plat map recorded?

in the county where the property is located so that anyone wishing to find the full legal description can refer to that plat.

Escrow disbursement exemptions

in the resale of a residential condominium where a potential buyer is allowed a three-day rescission period when a sales contract is subject to financing or appraisal, and the broker is acting as an escrow agent, the broker may refund the deposit to the buyer without notification to the Commission if the buyer contracts to purchase a property from HUD

What does Hostile stand for in terms of a Prescriptive Easement?

in violation of the owner's legal description by using the owner's property and claiming as one's own.

triggering terms

include certain credit terms or specific financing info in an ad

What is Paid already by or on behalf of the borrower at closing?

includes the deposit, loan amount, seller credit of $2,500, a $750 rebate from the title company, and an adjustment for city taxes unpaid by the seller

Annual percentage rate (APR)

includes the interest rate & other loan costs & represents the true yearly cost of credit

counteroffer

indicates a willingness to contract however on different terms that originally presented

What is a bargain and sale deed?

indicates the grantor has ownership of the property - and that's all. No other covenants are made.

What shall be stated on the Condo Act FAQs sheet?

inform prospective purchasers regarding their voting rights and unit use restrictions, including restrictions on the leasing of a unit; shall indicate whether and in what amount the unit owners or the association is obligated to pay rent or land use fees for recreational or other commonly used facilities; shall contain a statement identifying that amount of assessment would be levied upon each unit type, exclusive of any special assessments, and which shall further identify the basis upon which assessments are levied, whether monthly, quarterly, or otherwise; shall state and identify any court cases in which the association is currently a party of record in which the association may face liability in excess of $100,000; and shall further state whether membership in a recreational facilities association is mandatory, and if so, shall identify the fees currently charged per unit type.

mortgage fraud

intent to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have been obtained if the lender or borrower had true facts

An easement is said to be an ______ on the property, but not an ______.

interest (claim) estate

INTEREST

interest for the buyer and seller is figured ON THE DAY of CLOSING unless otherwise stated in the problem.

discount rate

interest rate charged member banks for borrowing money from the Fed -Discount rate increased - money supply decreases -Discount rate decreased - money supply increases

Air Rights

involve the space above a tract, extending up to a height established by law.

2. Functional Obsolescence

is a LOOS of VALUE of an IMPROVEMENT due to FUNCTIONAL INADEQUACIES, often caused by AGE or POOR DESIGHN. Outmoded plumbing fixtures, inadequate closet space, poor floor plan, excessively high or low ceilings, or antiquated architecture are all examples of functional obsolescence. Functional obsolescence may be: A) curable such as putting in a new electric stove instead of wood burning stove B) incurable, as in the case of wide columns in a building that cannot be removed.

1. physical deterioration

is a REDUCTION IN UTILITY, USEFULNESS or VALUE resulting from physical condition. The deterioration can be divided into: A) curable (painting/routine maintenance) B) incurable types (installing siding on a building which also needs major interior repairs) This form of depreciation is caused by the action of the physical ELEMENTS, such as wind or snow, or just ordinary wear and tear.

What is an Income Tax Lien?

is a general lien because income tax is initially based on a person Happens If that person does not pay his taxes, the IRS sues to get a judgment; then the court awards a judgment against all the assets of the individual including his property.

What is a homestead?

is a legal life estate created under Florida law the homeowner's principal residence is protected from certain creditors but is not protected from property taxes or from a mortgage for purchase or cost of improvements.

What is a disciplinary guideline?

is a list of violations that clearly defines the usual punishment for each count is during a formal or informal hearing

What is an elective share?

is a minimum share of a deceased spouse's estate, which a surviving spouse may claim in lieu of any amount specified in the deceased spouse's will

A Broker's Price Opinion

is a property valuation provided to a lending institution for distressed properties on the market. These opinions became valuable in determining short sale approval prices and, in some cases, foreclosure sale prices during the housing crisis from 2008-2012. Since these valuations were not considered appraisals, no USPAP standards are required.

What is the Right to Use Ownership?

is a temporary rental use with a lease of 20-40 years in duration. This is a leasehold interest rather than the freehold interest of interval ownership. After the lease expires, the interest goes back to the original owner.

What is a holographic will?

is a will that is written, dated and signed in the testator's own handwriting but not witnessed. Holographic wills are not valid in Florida

How is the transfer of property done in a cooperative?

is accomplished by the Sale of Stock

Anti-trust

is an agreement to restrict trade or lower competitiveness in a marketplace. (hint no agreement no violation)

A corporation for profit

is an artificial person created by law

The Real Estate Appraisal

is an estimate or opinion of value. The goal of the appraiser is to determine: - the market value - insurance value - salvage value - and/or the tax value of a property

What is Reliction?

is an increase in land due to the RECEDING of WATER (such as the increase of land at the Great Salt Lake).

What is a Tenancy by the entireties?

is an ownership by marriage only Owners must be husband and wife. There is a right of survivorship. Each has an equal and undivided interest. The property is inheritable by the other partner upon death.

What is Personal Property?

is anything that is not real property. Personal property is the opposite of real property readily movable from one location to another

Who appoints the director of the division of real estate?

is appointed by the Secretary of the DBPR subject to confirmation of FREC members

listing agreement (4 types of contract)

is brokers employment contract with seller. typically sales associate that obtains listing

What is a Prepayment Penalty?

is charged to a seller who is paying a loan off prior to the maturity date (30 years)

Who is in a final order panel?

is convened of all the members of FREC except those that sat on the Probable Cause Panel in the same action

What is a fixture?

is defined as something that once was personal property but has been affixed or installed to real property. Therefore it becomes real property.

What is a trade fixture?

is defined as the property of a commercial tenant that is installed but is necessary for business personal property and can be removed by the tenant at any time before the end of the lease

Specific (or product) advertising

is designed to sell a particular product or service, an ad that features a particular home for sales is an example of such advertising

What is The Covenant of Further Assurance?

is given by the Grantor to assure the grantee that should further paperwork or legal work need to be done to correct the title, the grantor will provide

MARKET VALUE

is looking for WHAT THE SALE PRICE would most likely BRING in an open market if the following conditions were met, if certain condition were met. The most important value for a real estate professional is market value. This is the definition used in all loans using federal money, i.e. for any loans sold on the secondary market to Fannie Mae, Freddie Mac or Ginnie Mae. Market value is the most probable price a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.

What is a Voluntary Lien?

is one that the owner was willing to place on the property such as a mortgage lien or to secure building upon a property.

What is An Involuntary lien?

is one that was placed on the property without the owner's consent or willingness

What is a subagent?

is one who assists in some or all of the duties as assigned by the Agent to do a job for a Principal

What is a Revocation of a real estate license?

is permanent taking of a license and as such it is a very serious punishment

What is Constructive Notice?

is public record by operation of law- such as the abstract of title, any judgments against the property, any liens against the property etc

What is Avulsion?

is the "SUDDEN" loss of land by an ACT of nature such a hurricane or typhoon (like the loss of beach)

What is Accretion?

is the ACCUMULATION increase of land created by (alluvion) deposits of soil by the natural action of water

1. Highest and Best Use

is the POSSIBLE USE of a property that would PRODUCE the GREATEST NET INCOME and thereby develop the highest value. Example: An area of the municipality has developed into commercial office buildings. If there is a vacant piece of land or a single family home in the area one could assume that the highest and best use for this property at that time would be for an office building. The appraiser must look at the property as if it were vacant and as it now sits as improved property. Sometimes the best use of property is to destroy existing buildings and rebuild new ones.

8. Assemblage

is the combining of two or more adjoining lots into one larger tract to increase their total value. Example, an investor wants to buy property in an area because he/she believes that it will have a future value. He/she purchases one building after another until all the property desired is "assembled". Individually the properties had a lower value, but once it is all "assembled" into one piece, it should be worth more money. "POTTAGE" value is the increased value resulting from the combining of adjacent lots into one larger lot.

What is Condemnation?

is the court action used when the right of eminent domain is exercised

What is Erosion?

is the decrease of land by the gradual EATING away that is caused by flowing water.

What is an Alluvial Plain?

is the delta area where the soil deposits from the river

What are Metes and Bounds?

is the oldest of all the measuring systems used in the United States. It relies on monuments and point of beginning. It includes compass readings in degrees, minutes and seconds. Surveyors use specific equipment to measure the direction and angles.

What is a life tenant in An Estate in Reversion?

is the person, upon whose life the property relies. At the death of the life tenant, the property goes back to the grantor or his heirs

What is Police Power?

is the right of the local, state and federal government to make laws for the good of all

What disclosures must be made by an applicant?

is under investigation, has ever been convicted of a crime or if any judgment or decree has ever been rendered against the applicant for fraud or dishonest dealing has ever entered a plea of Nolo contendere* or if adjudication has been withheld. is currently a patient of mental health facility has ever been called by or done business under any other name (A/K/A) has ever had a license revoked, suspended, surrendered, or otherwise acted against or had an application for licensure denied by any licensing agency of another state, territory or country has ever been denied license or registration to practice a regulated profession has been found guilty of any conduct or practice that would have been grounds for suspension or revocation under Florida real estate laws Have a social security number**

Income Approach

is used for income generating properties such as apartments, retail centers, multi-tenant office buildings, etc.

9. Competition

is when one business attracts another business of similar type; together they may make more money than they would have singularly. Shopping areas in large cities attract shoppers every day because they draw the consumer to the area. Too little shopping does not draw consumers; too much competition is ruinous.

Determining Value of a Property

it is important to the buyer in buying the property. Property taxes require a notice of value and so does property insurance.

What must happen when a broker or real estate school changes business address?

it must file a notice of change and the names of the licensees no longer associated with the firm

What is the Statue of Frauds?

it requires that all contracts be in writing, and signed by all the parties to be charged

What happens when the property returns to the remainderman in An Estate in Remainder?

it returns to Fee Simple Absolute without conditions

What happens when the property returns to the grantor in An Estate in Reversion?

it returns to Fee Simple Absolute without conditions and is inheritable.

Why is the last line on page 3 important?

it shows how much cash the borrower needs to bring to closing and how much cash the seller will receive at closing.

What is the Division of real estate an arm of?

it's an administrative arm of the FREC

option contract

keep open for a specified period of time an offer to sell real property. must be in writing and signed because they fall under statute of frauds.

void contract

lacks one or more required elements of valid contract. example: using a forged name on contract was never a legal contract

What is a plat map?

laid out with a complete legal description by section, number, etc

What are Natural Rights?

land gain or loss due to water

Who would use a Special Warranty Deed?

large corporations in business real estate or banks that have foreclosed on a property.

What happens when the conditions on the sale contract have been met?

legal title passes to the buyer in what is known as closing.

enforceable contract

legally binding contract that Florida court will recognize

What are the 2 parties of a lease?

lessor (landlord) and the lessee (tenant)

misrepresentation

licensee made a misstatement or material fact. licensee either knew or should have known.

What is the education requirement if a licensee becomes involuntary inactive for 12 months or less?

licensee must satisfactorily complete a 14-hour Commission-prescribed continuing education course

The owner of the property, who grants the lien, is referred to as the _____ and the person who has the benefit of the lien is referred to as the _____ or lien holder.

lienee lienor

What are Specific Liens?

liens applied to a specific piece of property and affect only that piece of property

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

Lifetime caps

limit the total amount the interest rate can increase over time life of the loan

Professional service corporations, professional limited liability companies, or individuals, all of which are licensed and authorized to render the same professional service, can form a:

limited liability company (LLC) for profit

What is a Special Warranty Deed?

limits the time frame of the covenants to the time that the seller actually owned the property Any color or Cloud of Title previous to the grantor's ownership is up to the grantee to settle

What are range lines?

lines drawn north and south; east and west

Default by the buyer usually requires the deposit to be forfeited in favor of the seller to compensate for having removed the property from the market, this is called:

liquidated damages

The buyer's loan is entirely different from the seller's loan unless it is a what?

loan assumption

The purchase price on a property was $95,000. If the buyer acquired an 80% loan-to-value ratio mortgage, what is the buyer's new first mortgage amount?

loan balance ________________________________________sale price $95,000 | 80% LTV - Loan to value ratio Take the sale price of $95,000 times the 80% LTV= the loan balance. The earnest money does not make a difference at this point since it is part of the down payment.

A buyer received a loan for $250,000, which was 80% of the sale price. What was the sale price?

loan balance $250,000 ________________________________________sale price ? | 80% LTV - Loan to value ratio Divide $250,000 by 80% = answer d $312,500

home equity loans

loans secured by the borrowers residence to finance consumer purchases, consolidate existing credit card debt, and pay for other expenses

conforming loans

loans that meet Fannie Mae guidelines regarding size & type of loan

Depreciations

loss in value due to any cause; any condition that adversely affects the value of an improvement. For appraisal purposes, DEPRECIATION IN DIVIDED into 3 classes according to its cause: 1. physical deterioration 2. functional obsolescence 3. external / economic obsolescence.

commercial banks

make conventional , FHA, VA mortgage loans, construction loans, home equity loans Chartered by either a state or the federal government National or NA in the name if federally chartered Deposits insured by FDIC up to $250k

primary market

market where securities are created

Entitlement

maximum amount for an individual veteran that the government will guarantee for a VA loan

What are punishments for third degree felonies?

may be punished with a fine of not more than $5,000 and/or up to 5 years in jail.

lapse of time (termination of contracts)

may expire based on statute of limitations.

What are Common Elements?

may include walls, courtyards, patios, walkways, doors, windows, and any other elements defined within the "Declaration of Condominium

withdrawal by offeror

may revoke the offer at anytime before the agent or offeree gives acceptance.

What is Common Law?

meaning procedures that have set by precedent of cases that have gone before so things that happened from previous cases where similar things happened

What is a Conditional Loan approval?

meaning the lender has agreed to lend the money but certain conditions remain to be completed such as the sale of the previous house, or the taxes being brought up to date

What is Nolo Contendre?

means "I will not contest," a plea in a criminal case in which the defendant does not admit or deny charges.

What is a transaction broker?

means 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. Must: -Deal honestly and fairly - Present all offers with timeliness -Account for all funds -Use skill care and due diligence -Disclose all known material facts -Maintain limited Confidentiality

What is disclosed dual agency?

means both the seller and buyer are aware of the agency relationship and both agree to be represented equally and with all the requirements of agency all at the same time

What is an assignment?

means either the lessor or lessee may have the right to transfer the interest each has to another, should they chose to do so.

What is undisclosed dual agency?

means one of the parties (either the buyer or seller) is unaware that a dual agency exists. This situation may lead to the unfair disclosure of information that one party does not want the other party to know

What is dual agency?

means representing both buyer and seller at the same time with the same commitment and dedication to both.

What is a Condominium?

means that form of ownership of real property comprised entirely of units that may be owned by one or more persons, and in which there is, appurtenant to each unit, an undivided share in common elements

What is The Covenant of quiet enjoyment?

means that the grantee can live in peace without any other claims on his property disturbing him

What is Involuntary alienation?

means the grantor (owner of the property) did not have a choice; that the law determined that the property would be transferred as in eminent domain or other government interferences

What is Voluntary alienation?

means the grantor (owner of the property) had a choice and made the decision to transfer his property to someone else

What is Eminent domain?

means the taking of private property for public good, such as the taking of a home so a new highway could be built

What is a Color or cloud on a title?

means there is a claim against the title- such as Adverse Possession. This must be cleared by the courts before the property can be transferred

What is a break in the Chain of Title?

means there is an unexplained gap, or break in the ownership of the property Most of the time, it is a name change on the part of a married woman but whatever the change, it must be corrected by a Suit to Quiet the Title before the property can be transferred.

What is Severalty?

means to take title to real estate alone, as one person also called a "sole ownership" or an "estate in severalty."

When are Prorations calculated?

midnight the day before closing

valuable consideration

money or promise that can be measured in terms of money

Level-payment plan

mortgage in which the monthly payments are a fixed amount (payment does not change) but the amount applied to principal increases each month & the amount applied to interest decreases each month

Biweekly mortgage

mortgage loan amortized the same way as other loans with monthly payments, except that the borrower makes a payment every 2 weeks 26 biweekly payments equals 1 extra months payment a yr

negative amortization

mortgage payments are not large enough to cover the interest expense. increase in the principal balance of a loan caused by making payments that fail to cover the interest due. The remaining amount of interest owed is added to the loan's principal, which ultimately causes the borrower to owe more money.

Where will section J be placed?

moved to the bottom of page 1 under the heading "Costs at Closing - Closing Costs."

How do you determine the acreage in a section?

multiplying the denominators (lower number) of the fractions in a legal description and divide that number into 640 acres in a section of land.

What must developers record to declare a condo?

must record a Prospectus, Declaration, Bylaws, and Rules and Regulations with the local Clerk of Court for the county in which the Condo is being built

Purchase money mortgage (PPM)

new mortgage accepted by the seller as part of the purchase price taken back by seller in lieu of purchase money mortgage issued to the borrower by the seller of a home as part of the purchase transaction. Also known a seller or owner financing, this is usually done in situations where the buyer cannot qualify for a mortgage through traditional lending channels.

If you take the post license course do you have to take continued education during the first renewal period?

no you do not have to take the 14 hour continuing education

contractual capacity of the parties (4 essentials of contract)

not everyone can make a valid contract, they must be COMPETENT (no legal mental defects or insanity and be of legal age)

What is a scenic easement?

nothing can be built in the view of another

unilateral contract

obligates only one party to agreement. one party makes obligation without without receiving performance or promise from other party. ex: broker promises $1,000 bonus to associate pulling in highest amnt of listings. broker promised to pay bonus, however associate under no obligation to acquire new listings.

What is an example of a condemnation of an easement?

obtaining owner access to a street entrance when the county builds a highway.

What is a sale subject to lease?

occurs when a buyer purchases a property that is currently leased The lessee retains his rights to the property until the end of his lease regardless of who owns the property. The lessor will change with the owner and all deposits and rents will be transferred to the new owner, but the lease will remain until its expiration.

What are Ad Valorem taxes based of?

on the city and/or county needs for services such as fire, water and police protection as well as schools, libraries and ambulance districts

Interest for the buyer and seller is figured:

on the day of closing unless otherwise stated in the problem

Where is Range 1E?

on the east of the Tallahassee Principal Meridian

Where are all restrictions placed?

on the public record

Where is the Summary of Transactions Located?

on the second section of page 3

What happens in a trust?

one person may own the legal title, such as the trustees Another may own the equitable title such as the beneficiary

What is 1 discount point equal to?

one point (either discount or loan origination) is 1% of the loan balance

conventional loans

one that is not insured or guaranteed by a government agency & require lender to assume the full risk of defualt

What type of real estate does the Brokers' Relationship Disclosure Act apply to?

only residential sales

What is the purpose of the Department?

operate as a consumer protection agency

transfer of real property

oral real estate contract doesn't make it ILLEGAL but are difficult to prove. there are exceptions, such as buyer seller verbally agree. buyer pays part of purchase price and takes possession, court will recognize contract.

open listing

owner can list with any number of brokers. first broker ready to sell wins contract commission. these are considered unilateral

In the "T" formation, the what is always put into the calculator first?

part

Commercial Real Estate Commission Lien Act

part III of ch 475 give brokers lien rights commercial property for earned commission Lien against owners net proceeds from sale

Commercial Real Estate Leasing Commission Lien Act

part IV of ch 475 give broker lien rights for commission associated brokerage agreement to lease commercial real estate If landlord ; broker attaches to landlords interest If tenant; attaches to tenants leasehold estate

offer and acceptance (4 essentials of contract)

parties must come to: -MEETING OF THE MINDS - parties must reach agreement on all terms in contract offeror makes offer and offeree accepts

What is a Lis Pendens?

pending litigation This tells the buyer and the world that there is a law suit going on with the property and for the buyer to beware

Margin

percentage that is added to the index to calculate each interest rate change in an adjustable rate mortgage; it covers the lender's expenses plus profit

mortgage broker

person / business entity who conducts loan originator activities through 1 or more licensed mortgage loan originators Does not make loans Does not service loans

procuring cause

person who efforts cause the parties to enter into a contract is considered procuring cause. usually goes to broker who brings the buyer.

What is a Condemnee?

person whose property is being taken

Mortgage loan originators (MLOs)

persons who solicit mortgage loans, accept mortgage loan applications, negotiate the terms of new & existing mortgage loans on behalf of a borrower or lender, process mortgage loan applications, or negotiate the sale of existing mortgage loans to non institutional investors for compensation Loan originator license required If loan application approved MLO earns loan origination fee

What is a Part?

piece of something such as a commission is always part of the sales price.

When the active broker's license is revoked, all sales associates and broker associates licenses are what?

placed in involuntarily inactive status

What is the starting point of a surveyor called?

point of beginning (POB)

What does quasi-legislative mean?

power to enact rules or make rules

lead based paint disclosure

pre-1978 housing, hazard reduction act requires -disclose to buyers and sellers the presence of known lead based paints in redidential property. -sale contracts and leases include a disclosure about lead based paint. seller allows home buyer a 10 day period to conduct inspection for lead paint

mortgage insurance premium (MIP)

premium for mortgage insurance on FHA mortgages to protect the lender from loss in the event of a default

The sale price on a property was $100,000. The seller's loan balance on the day of closing was $85,350.25. The seller's lender is charging a 2% prepayment penalty. How much does the seller owe the bank for the pre-payment penalty?

prepayment penalty ______________________________________ loan balance $85,350.25 | 2% penalty Multiple $85,350.25 x 2% = $1,707.01

What is a licensee entitled to?

present his case and he may have legal counsel present

What can the certificate be used as?

prima facie evidence* in civil suits

good consideration

promise that cannot be measured by money; such as love and affection

What is the Owners Policy for?

protection against claims of others which may not have surfaced prior to closing (For example, a mechanic's lien shows up.)

CMA Comparative Market Analysis

provides an insight as to properties currently on the market, pending, sold and the listed prices of expired properties on the market. It may NOT BE REFERRED as an appraisal as its PURPOSE is to provide the seller of a property a range of prices to list a property for sale, and provide the buyer a range of prices to use in giving an offer to purchase. A CMA may also provide information to a seller on market ABSORTION (absorption analysis) providing average days on the market for homes in a specific price range, homes currently on the market, and anticipated time frame for sale of the sellers' property if market conditions remain the same.

What is a Preliminary Closing Statement?

provides an overview of the costs for the seller and buyer to close on a property

legality of object (4 essentials of contract)

provisions spelled out in contract must be for legal purpose. example: if contract states that assistant will take commission, its UNENFORCEABLE because this is illegal.

open market operations

purchase & sale of U.S. treasury & federal agency securities -Fed purchases securities - money supply increases & interest rates decrease -Fed sells securities - money supply decreases & interest rates increase

3. Quantity survey method:

quantity and quality of all materials (such as lumber, brick, and plaster) and the labor are estimated on a UNIT cost basis. These factors are added to INDIRECT costs (for example, building permit, survey, payroll, taxes and builders profit) to arrive at the total cost of the structure. Because of the detail and the time consumed, this method is usually used only in appraising historical properties. It is, however, the most accurate method of appraising new construction.

What other individuals don't need a license?

radio, television or cable enterprise which is licensed by the Federal Communications Act of 1934. However, if the sale or purchase involves land, buildings, fixtures and other improvements to the land a broker must be retained for the portion of the transaction which involves the land, buildings, fixtures and all other improvements to the land. Any individual, corporation, partnership, trust, joint venture or other entity involved in selling, exchanging, or leasing its' own property. However, if an agent, employee or independent contractor is paid a commission or other compensation based upon those sales, exchanges, or leases (not salary), he will need a license An owner of one or part of one or more timeshares for the owner's own use who later offers one or more such periods for resale A person selling or exchanging cemetery plots Unlicensed partners performing real estate services in connection with property owned by the partnerships, if the profits are distributed in proportion to the ownership interests of the partners

radon gas disclosure

radon disclosure statement required on real estate sale and lease contracts at time or before sale or rental agreement. only states what radon is, doesnt require testing before sale or lease.

Index

rate to which an adjustable-rate loan is tied; at set adjustment periods, the borrower's interest rate moves up or down as the index rate changes

10. Change

real property is constantly changing- expanded, stabilizing, declining or rebirth. A subdivision is built, ages, decays and is reborn with renovation. Shopping areas lose appeal popularity; they revitalize and come back to life again. Housing expands, decays, renews, and expands again.

receivership clause

receiver to be appointed to collect income from the property to ensure it is used to make mortgage payments in the event of default

What are some main services of the division?

recordkeeping services examination services legal services investigative services

saving associations

referred to a savings banks chartered by state or federal government federal SA's are members of federal home loan mortgage bank system (FHLBS) primarily make conventional loans

What is eminent Domain?

refers to the inherent right of the government to acquire private property for a public use, while making an offer to fairly compensate the property owner for the land in question. And extending the right of due process to the property owner to accept the offer or take legal action.

rejection

rejection must be communicated by offeree to offeror

After the line of descent and distribution is established, the courts will then do what?

release the property to the heirs, usually with some type of deed with no promises of ownership to the heirs

Disintermediation

removal of intermediaries; buyers bypass the middlemen occurs when funds are withdrawn from intermediary financial institutions & invested in instruments yielding a higher return - process of bypassing intermediary financial institutions for example by investing directly in the securities market rather than through a bank.

Term Mortgage

require payment of interest only, until the full term of the mortgage has expired. Mortgage loan payments made in regular installments of interest only with the full principal amount plus accrued interest paid at one time at the end of the loan period describes

What is a gross lease?

requires a tenant to pay only rent, usually on a square foot basis while the landlord pays all of the other expenses like taxes, insurance etc

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

energy efficiency disclosure

requires buyers before signing contract, to receive pamphlet about energy efficiency of the building. depending on the rating, purchaser may qualify for energy saving mortgage

statute of frauds

requires that contracts conveying an interest in real property and contracts not to be performed within one year of date created must be in WRITING and SIGNED to be enforceable. contracts covered by Florida's statute of frauds include: -purchase and sale contracts -options contracts -deeds and mortgage instruments -lease agreements longer than a year -listing agreements longer than a year

What is a Percentage lease?

requires the tenant to pay rent based on a percentage of his gross profits and is usually used in start-up business. The rent will increase as the business has more sales

What is a net lease?

requires the tenant to pay rent plus a portion or all of other expenses such as taxes and insurance. and is Often referred to as a net net, net net net, or a triple net lease depending on the amount of expenses paid by the lessee

What is considered a Florida Resident?

resided in Florida continuously for a period of 4 calendar months or more in the preceding year or, anyone who presently resides in Florida with the intention to reside continuously in Florida for a period of 4 months or more, beginning on the date that the person began the current period of residence in Florida.

What does the division of professions do?

responsible for the licensing of over 396,000 professionals

3. Economic, Environmental, or External Obsolescence

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

An unincorporated association

results if individuals group together for some purposes without creating one of the previously discussed organizations homeowners associations or community improvement associations may not register as a real estate brokerage corporation

What right does joint tenancy create?

right of survivorship

What are appurtenances?

rights, privileges and improvements that belong to and pass with the transfer of real property.

What is the best way to ensure no surprises are encountered at time of closing?

sales associates should make it a point to have a "preliminary title search" on a property that they list to ensure no liens exist on the property

The buyer debits are computed as follows:

sales pr. $112,000 title insurance $475 recording deed $9.50 recording mtg. $9.50 doc stamps on note @ .0035 = $313.60 ($89,600 x .0035) intangible tax on mortgage @ .002 = $179.20 ($89,600 x .002) 2 discount points = $1,792 interest for Nov 25 - 30 = $154.65 ($89,600 x .105 = $9,408 annual interest divided by 365 days = $25.775 per day for six days - count the 25th and the 30th) survey is $125

What is a Quit Claim Deed?

says that the grantor "quits" or releases any interest that he may have had in the property,if he had an interest. There are no covenants made in this deed.

What is the list of actions of the bundle of rights?

sell use lease encumber (borrow upon) exclude (No trespassing!) will occupy cultivate exchange explore share mortgage trade license (means to give permission to others to use the property) dedicate (means to give private property for public use, such as streets or parks)

building code violation

seller with building code violation must disclose to buyer existence of violation and that buyer is now responsible. liability costs should be addressed in the contract. seller must forward new owner info to code enforcement agency

If a material error is found on the part of the FREC, what will the court do?

sends it back to the FREC for corrective action

How is Property Tax levied on condos?

separately on each unit

multiple listing service

service provided by brokers for exclusive-right-of-sale and exclusive-agency listing agreements

What is the mission statement of the commission?

shall foster the education of brokers, broker associates, sales associates and instructors concerning the ethical, legal and business principles which govern their conduct

An earnest money deposit

shows good faith on the part of the buyer usually accompanies an offer

What is on the top of page 3 of the closing disclosure?

shows how the final costs of the loan compare to the Loan Estimate the lender originally provided to the borrower and then calculates the amount of cash the borrower will need at closing

What is on the top of page 3 on the Closing Disclosure?

shows how the final costs of the loan compare to the Loan Estimate the lender originally provided to the borrower and then calculates the amount of cash the borrower will need at closing

What is on the right hand column of Section J under Closing Cost Subtotals?

shows what the seller will be paying at closing

Florida requires disclosure of important Homeowner's Association, ( HOA) information prior to what?

signing a contract for sale

What does Actual stand for in terms of a Prescriptive Easement?

similar to actual notice, the person must be in possession use of the property for the prescribed time for everyone to see

death or insanity

simply put, death or insanity terminates an offer. offer does not become assignable (transferable) to new party.

Balloon Payment

single large final payment , including accrued interest & all unpaid principal due at maturity of a partially amortized mortgage

Why is disclosure important?

so that the relationship between the parties can be clearly understood by all parties so that they can negotiate fairly

What is Fee Simple Defeasible?

sometimes called a "conditional fee" because it is based on an occurrence or a non-occurrence of a specified event It states that it is an estate "on the condition that..." and an estate that provides the "right to re-enter..." is unusual and cannot be written by real estate professionals- it will require the services of an attorney.

brokers compensation

specified in listing or buyer broker agreement, computed as flat fee, hourly rate, or percentage of sales price. closing agent can prepare a check for the sales associate. may be given at closing. payment could also come from a referral

What does PETE stand for?

stands for the government limitations on private ownership. It stands for police power, eminent domain, taxation and escheat.

What is an Opinion of Title?

stating that the title meets all ownership needs and has no questions in its history

While the case is under appeal, the licensee does not receive a:

stay enforcement (stop enforcement) against the FREC

Who does Caveat Emptor still apply to?

still applies to buyers and sellers who conduct their own real estate business without the aid of a professional

What is a light and air easement?

stops a building from blocking the light of another.

Once the plat has a complete legal description, smaller areas in the plat are referred to as what for example?

subdivision A

What do typical Restrictive Covenants deal with?

subdivision requirements and may limit housing to certain types and sizes; may prohibit above ground pools; may limit the number of pets or parked cars, etc

What may be issued for the attendance of witnesses?

subpoenas

What is the Calculation at the bottom of the right column for Summaries of Transactions?

subtracts the total due from the seller from the total due to the seller and results in the Cash to Seller which is the amount the seller will receive from the borrower at closing.

What is the calculation at the bottom of the right column under Summaries of Transaction?

subtracts the total due from the seller from the total due to the seller and results in the Cash to Seller, which is the amount the seller will receive from the borrower at closing

What is the calculation at the bottom of the left column for Summaries of Transactions?

subtracts the totals already paid by the borrower from the total due from the borrower and results in the Cash to Close due from the borrower at closing

What is the calculation at the bottom of the left column on the Summaries of Transactions?

subtracts the totals already paid by the borrower from the total due from the borrower and results in the Cash to Close due from the borrower at closing same figure that you see on the bottom of page 1 under the heading "Costs at Closing - Cash to Close

What happens when the RERF reaches $1 million?

surcharges on licenses are suspended until the fund drops to $500,000 when the charge will again be levied. The surcharges are $3.50 per year for both the new and renewing license for brokers and $1.50 for the new and renewing sales associates' license

How do you keep a license active as a sales associate?

take a POST LICENSE course prior to renewal for 45 hours, and then after the first renewal take 14 hours of continuing education 11 hours of specialty education and three (3) hours of core law

How do you keep a license active as a broker?

take two (2) thirty-hour POST LICENSE courses, each requiring a written school exam and then after the first renewal take 14 hours of continuing education 11 hours of specialty education and three (3) hours of core law

What does taxes in arrears mean?

taxes have not been paid

What items don't stop simply because the property changes hands?

taxes, rent, and sometimes insurance

The maker of a will is a _______. Although not used as much in modern law, a female maker of a will is called a _____

testator testatrix

What does seisen mean?

that belonging to the property

What do most closure in Florida use?

the 365 day method of calculating expenses to go on the closing statements

What is the final order called after it's been signed?

the Certificate

Who appoints the probable cause panel?

the Chairperson

Who must sign a final order?

the Chairperson, Vice Chairperson or Director of the Division of Real Estate

What laws does Time- Share ownership fall under?

the Condominium Act as well as the Time Share Act of 721

Who issues criminal punishments to licensees?

the Courts

If the complaint is in writing and signed by the complainant who is charged with the responsibility of investigation?

the DBPR

Who adds its recommendation and forwards to the FREC Probable Cause Panel?

the DBPR

Who hires and pays the Division Employees?

the DBPR

Who issues the Notice of Noncompliance?

the DBPR

Who renews Real Estate Licenses?

the DBPR, only, on March 31st and September 30th

Who issues citations?

the DRE

Who places the certificate on record?

the DRE

If the probable cause panel doesn't make a decision in time who will make a decision?

the Department

If the panel does not believe probable cause exists:

the Department has ten days to override the decision and file its own charges. The Department may also refer the case to the FREC and the FREC may obtain its own independent counsel and continue the investigation. If the panel does not believe probable cause exists, the panel may dismiss the case or it may issue a letter of guidance about the matter to the person charged

What department is the division of real estate part of?

the Department of Business and Professional Regulation

Who is a complaint filed with?

the Department of Business and Professional Regulation

Who is the DRE under?

the Department of Business and Professional Regulation

Who does the licensee appeal to?

the District Court of Appeals

What branch of Government is the DBPR under?

the Executive branch of Florida State Government

When the investigation is complete, it is the responsibility of who to determine the guilt or innocence of a licensee or potential licensee?

the FREC

Who is an informal meeting infront of?

the FREC

Who will the informal hearing be held in front of?

the FREC

Who maintains certain rights and restrictions for air travel and defense?

the Federal Government

Where does citation money go to?

the Florida Real Estate Recovery Fund

What is the owner's policy also called?

the Mortgagor's policy

Where does fine money paid go to?

the Real Estate Recovery Fund

What does the final order panel receive?

the Recommended Order from the administrative law judge order along with exceptions

Who administers the Department?

the Secretary of the Department

What is on the right column of page 3 for Summaries of Transactions?

the Sellers Transactions

Who is the complaint given to if the complaint is found to be criminal?

the State Attorney's Office

If damage is caused by removal of a trade fixture who must repair it?

the Tenant

The Florida Time share act was created to protect consumers. How does it do this?

the Time share act Requires that consumers begiven a written disclosure stating that they may cancel their purchase contract within 10 calendar days of signing or receipt of public offering statement, whichever comes later.

What system does most of the country use to determine where a property is located?

the U.S. Rectangular Government Survey or a combination of both metes and bounds and U.S. Rectangular Government Survey

Where is R1W?

the West side of the Principal Meridian

What happens If there is a break in the chain of title?

the abstractors send it, with a notation, to the attorney who is reviewing the file.

What is abandonment?

the act of voluntarily surrendering or relinquishing possession of real property without vesting this interest in any other person

What will happen If the court finds for the FREC?

the actions of the FREC will stand

What does the Closing Disclosure show?

the actual closing costs for buyers and sellers

What are air rights restricted to?

the air that owners can reasonably use by law

what may a VA loan not exceed?

the amount stated in the certificate of reasonable value

If the injured party is awarded a judgment what assets are first used to satisfy the judgment?

the assets of the Licensee

What is Reciprocity?

the authority to have a license within one state and practice real estate in another state

Who is the mortgagor?

the borrower who promises to pay

What three things must have been in place at the time of the RERF transaction:

the broker or sales associate must have held a valid, active real estate license at that time, the broker or sales associate was neither the seller, buyer, landlord or tenant in the transaction; nor an officer or member of a corporation or partnership, a member of a limited liability company or a member of a limited liability partnership, the broker or sales associate was acting solely in the capacity of a real estate licensee in the transaction.

When a seller of a property finances for the buyer, an equitable title may also be granted until when?

the buyer pays the seller in full

How to you obtain a unit within a building or community in a cooperative?

the buyer purchases stock in the corporation

When there is a dispute or disagreement on the facts:

the case will be sent to an administrative law judge for a formal hearing to hear the case.

What does the word Title refer to?

the collection of rights that a person has in the ownership of real property.

If the sale price were $97, 501 what are the taxes?

the cost would be 976 x.70 =$683.20 Skipped a step

What is a Partition Law suit?

the court can dissolve the ownership

What is an example of a Deed Restriction?

the covenant may say that no alcohol can be served in the public spaces of a community, or that only certain types of homes can be built

What must be included on a notice to all the parties charged?

the date, time and place of the hearing the jurisdiction and legal authority under which the hearing is to be held a list of the rules purported to be broken a short summary of the case

When must a license renewal be received?

the day before the current license expires

What documents should you review prior to assisting a buyer in purchasing a timeshare interest?

the declaration or covenants and restrictions; the association articles and bylaws; the current year's operating and reserve budgets; and any rules and regulations affecting the use of timeshare plan accommodations and facilities

When the claim is based on earnest money disbursement, the Commission shall pay who?

the defendant's reasonable attorney's fees and court costs and if the plaintiff wins in court, the plaintiff's reasonable attorney's fees and court costs.

What is an estate in land?

the degree and quality of ownership one holds in the land

Who provides office functions of the commission?

the division of Real Estate

What is a deed?

the document (instrument) which transfers ownership from the grantor to the grantee

What does the division of regulation do?

the enforcement authority for the professional boards and programs It monitors those professions and related businesses to ensure that the laws, rules and standards set by the Legislature and professional boards are followed

What does the FREC do?

the enforcer of real estate rules and discipline

When there is an agreement of the facts, or a stipulation or the issue is resolved between the FREC and the licensee?

the findings are put in writing and are recorded

What happens if there are three joint tenants and one sells his interest to a fourth party?

the fourth party becomes a tenant in common with the remaining two joint tenants

What would an example of The Covenant against Encumbrances?

the grantor assures the grantee that he (the grantor) has not sold the water rights or given an unknown right away that is not listed in the written public record

What is The Covenant of Warranty Forever?

the grantor will defend and protect the title for any defects that were created during the grantor's ownership of the property or before

What does The term DESCENT mean?

the hereditary succession of the property by operation of law

In the exception cases of permanent revocation what will happen?

the individual cannot apply for a sales associate's license for a period of five years after the filing of the Final Order revoking the license unless the Commission specifies a lesser period of time in the Final Order

What is required if a licensee becomes involuntary inactive for more than 12 months but less than 24 months?

the individual is required to complete a 28 hour reactivation course

What does Open stand for in terms of a Prescriptive Easement?

the individual must make "open use" that is, everyone must be able to see what the person is doing. (No underground tunnels etc.)

What is a Testator?

the individual who makes a will gives to a Beneficiary a Bequest

The corporate veil protects:

the individuals from personal liability the corporate veil can be pierced to allow action against individual officers, directors, and stockholders in cases, which involve fraud or civil wrong doings - called torts

When will a renewal notice will be sent out?

the last known address of the licensee 90 days prior to the expiration date, either March 31 or September 30

Who is the mortgagee?

the lender

What is Revocation without Prejudice?

the lesser period of time based upon mitigating factors presented by the individual

What is a Datum?

the level plain which is used by the bench mark to determine elevation and from which surveyors measuring begins

If you fail to complete continuing education in the prescribed time what will happen?

the licensee becomes involuntarily inactive

What does the the first section of the Settlements amount deal with?

the loan costs

Who do violations of ethics fall under?

the local association of REALTORS®

2. Substitution

the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property. (Comparison shopping- basis for market data approach.) Example: this is the principle used when determining value based on the Market Data or Sales Comparison approach to value. This principle is based on the fact that similar properties will bring similar values. (substituting one property for another)

The vertical line in a T equation is:

the multiply line

What is contained in each record of the DRE for registration?

the name and address of each licensed broker and sales associate the name and business address of each sales associate's employer the sales associate's and broker's license status (active or inactive) the person's involvement as an officer, director, or partner of a real estate business.

The sign of a brokerage partnership or corporation must contain:

the name of the partnership or corporation the name of at least one broker the words "licensed (Lic.) real estate broker" the names of other brokers or sales associates can be placed on signs but they must be placed beneath and clearly separated from the required text. license status of each person must be included.

The buyer is closing his loan on April 10. He has a loan balance of $175,000 and an interest rate of 8%. What will be his interest adjustment and how will it be recorded on the closing statement?

the number of days- include April 10-April 30th = 21 days Interest _______________________________________ $175,000 loan balance | 8% interest rate $175,000 x 8% = $14,000 interest per year. Divide by 365 days= a daily rate of $38.36 per day. 21 x $38.36= $805.48. The next payment will not be due until June 1st. Interest adjustment will be charged to the buyer. It does not affect the seller.

What does probate mean?

the official proving of a will

Who retains liability in a sublease?

the original Lessee to the lessor for payment of rent

What States use the metes and bounds system?

the original thirteen colonies, plus Hawaii, Kentucky, Maine, Texas, Tennessee, Vermont, West Virginia, and parts of Ohio

Who does not attend probable cause meetings?

the other members of the FREC the public

If the panel believes there is probable cause:

the panel tells the Department to file a formal complaint against the licensee. The licensee (with his legal counsel) is entitled to a formal or informal hearing

What is a Grantor?

the person or entity who gives to the Grantee a Deed

What powers does the FREC have after receiving the Recommended Order?

the power to accept, reject, reduce, or modify the Recommended Order

What does quasi-judicial mean?

the power to impose disciplinary actions

What is PETE?

the powers of the government

The promissory note is taxes

the promissory note is taxed when a new loan is created, or if a loan is assumed. These are paid by the BUYER at closing. //////The taxation amount is .35 per $100.00. //// As with the taxes on the deed, these are rounded up to the nearest $100. For example if the new note was for $70,001, we would calculate 70,001/100 =701 x .35 = $245.35

What will the quality of the ownership will depend on?

the quality of the deed

What are the tax maps indicating these parcel numbers based on?

the recorded plat maps as well as other land recorded in the county.

2.Unit in place

the replacement cost of a structure is estimated based on the construction cost per unit of measure of individual building components, including material, labor, overhead and builder's profit. Most components are measured in square feet, although items such as plumbing fixtures are estimated by cost. The SUM of the components is the COST of the new structure.

What are the Subsurface rights of real property?

the right of the owner to mine, dig or profit from any type of subsoil product such as minerals, oil, gas, gold etc

What can the owner do with subsurface rights?

the right to keep these products or to sell those rights to someone else- such as selling the oil rights to a petroleum company without selling them the actual land.

What does the term Equitable title stand for?

the right to obtain full ownership of property, where another maintains legal title to the property

What is on the disclosure developed by the DBPR?

the rights and responsibilities of condominium boards and unit owners, voting rights, meeting notices and other governance matters

What are surface rights?

the rights to anything on the land or water

What is the definition of a residential sale?

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

Who provides legal council?

the state attorney general (Department of Legal Affairs)

What is an example of a timeshare?

the third week in August, and the purchaser receives an undivided interest in the property for 1/52 of a year.

What is included on Section J?

the total closing costs to the borrower (D + I from above)

What happens If the transfer occurs after the death of the grantor?

the transfer is made by will

In order for a deed to be valid:

the transfer must occur during the grantor's lifetime

What are Monuments?

they are fixed objects that are used to establish this point of beginning

Do commission members earn salary or are they paid per diem?

they are paid a per diem and expenses for all days spent on Commission activity

HOA disclosure

they are responsible for operation of a community or mobile home subdivision. voting membership made up of parcel owners. they may impose liens if unpaid memberships or fines. can even foreclose home. -buyer shouldnt sign contract without reviewing HOA disclosure summary -if disclosure summary not provided to buyer before executing contract, contract is voidable -if buyer decides to void, they have 3 days from disclosure summary or before closing, whichever occurs first. after closing the right to void expires.

What does the probable cause panel do?

they determine if they believe there is a law violation- not guilt or innocence They recommend whether to take further action or dismiss the case to the DBPR

What is a notice of non compliance issued for?

things that are considered minor violations

What are Limiting Restrictions?

things you can never do (No fences, no dog runs etc.)

What are Affirmative Restrictions?

things you must do or abide by. (Set back requirements, minimum square footage, front of house must be brick etc

Unlicensed real estate activity, and falsifying an application are what?

third degree felonies

What does the phrase By Operation of Law mean?

this is a term that means something has happened as a natural consequence of the law being followed and executed properly.

What is a life estate?

this is classified as a Freehold Estate, this type is not an inheritable type of Freehold as are the other types. has all the other rights under the bundle of rights except the right to inherit The property cannot be inherited by the life tenant's heirs

What does Freehold mean?

this term indicates ownership, and an indefinite period of time

What does leasehold mean?

this term indicates renting or leasing for a fixed term

What does Menace mean?

threat of violence or bodily harm

How can air rights be sold or transferred?

through easements

How is the Real Estate Recovery Fund Financed?

through money received from administrative fines and a surcharge on each new and renewing license

How would The Covenant of quiet enjoyment be guaranteed?

through the purchase of owners' title insurance

statute of limitations

time during which terms of contract may be enforced. protects people from being sued after a period of time has expired -written is 5 years -oral (PAROL contracts) is 4 years

What are Abstractors?

title searchers who search the record to find the chain of title

What are the 4 purposes of a closing statement?

to account for all monies expended by the buyer and seller to show how much the buyer owes to show how much the seller will receive from the sale to "prorate" how much buyer and seller owe each other

recission (remedies for breach)

to cancel or annul contract, to go back before as though the contract never even existed

What does sever mean?

to cut off everyone else's interests

What are compass directions used for?

to describe the direction of boundary lines using a circle (360 degrees)

What is the Mission of the Department?

to ensure that professions and businesses provide quality services for the health, safety and welfare of citizens and visitors in the great state of Florida

What is the word thence used for?

to indicate a change in direction

What is the purpose of homestead?

to protect the family against eviction by general creditors, and to protect each spouse individually by requiring that both husband and wife join in executing any deed conveying the homestead property.

What is a lender (Mortgagee's) policy?

to protect the lender as a condition of obtaining the loan

What is the commissions purpose?

to protect the public

Replacement cost:

to replace with current materials and methods with utility and function similar to original. Example - If a modern house burned, it would be rebuilt using current materials and methods of construction

Reproduction cost:

to replace with the same materials as original construction (much more expensive!) Example -Historical building would usually be restored using the original materials as much as possible.

Where does a civil suit go?

to the civil courts of any competent civil jurisdiction in the state

Where is cash to close calculated?

top of page 3

VA qualifying ratio

total obligation ratio (TOR) can't exceed 41%

assignment and novation

transfer of persons rights and duties under contract to another person. contracts are assignable unless specified in that contract. novation is used to substitute a new party for an original one, releasing the original party from their obligations.

What does Alienation mean?

transfer when used as a real estate term

How long do you have to take your examination?

two years of the completion of the pre-license course The application expires two years from the date received by the DRE

How long can a suspension last?

up to 10 years

How many hours of instruction are you allowed to miss for pre-license course?

up to 8

What are taxes rounded to?

up to the nearest $100.00

How are taxes prorated in a cooperative?

upon the shares of stock that accompany unit ownership

What do Zoning laws Regulate?

use of land lot sizes types of structures permitted building heights setback lines (how far from the street an improvement can be built) density (how much land to improvement ratio or people per acre) types of animals that are permitted

1. Square foot cost

using OUTSIDE measurement, how many square feet times a cost for either replacement or reproduction.

What does Undue Influence mean?

using power or influence unfairly over another

liquidated damages (remedies for breach)

usually parties stipulate amount of money in contract to be paid, usually earnest money deposit, in case buyer defaults

compensatory damages (remedies for breach)

usually party suffered, brings amount equal to extent of losses suffered

breach

violation of contract or when one party fails to perform their promise and law doesn't recognize the failure

A Cooperative contract that does not conform to the requirements of Disclosure is _________ at the option of the purchaser prior to closing

voidable

What is The Uniform Community Development District Act of 1980?

was designed to manage and finance basic community development services.

What is the Real Estate Recovery Fund?

was designed to serve as consumer protection for those consumers who were harmed in a real estate transaction and who seek compensatory (compensation) damages

The Appraisal Foundation (TAF)

was founded in 1987 as a source for advancing professional standards for appraisers. The Foundation is a private, not-for-profit corporation, responsible for establishing, improving and promoting minimum uniform appraisal standards and appraiser qualifications criteria"

New note was made for $70,001, what is tax?

we would calculate 70,001/100 =701 x .35 = $245.35

What should Listing and Sale contracts clearly define?

what is real and personal property in the agreements

consideration (4 essentials of contract)

whatever is given in exchange for something else -earnest money deposit is NOT the consideration -deposit is made to show seller, buyer is serious- seller promises to sell and convey, buyer promises to pay 2 types of CONSIDERATION -valuable consideration -good consideration

What are the only exceptions to permanent revocation?

when a licensee filed for renewal without completing his continuing education or post-licensure course by the expiration date or if he filed an application which contained fraudulent or false information

When is a promissory note taxed?

when a new loan is created, or if a loan is assumed paid by the buyer at closing.

When can a licensee practice real estate?

when his or her license is placed with an employing broker and a license number issued

When is a license considered void?

when it ceases to exist due to non-renewal, nonpayment of fees

When is a license effective?

when it is current and in force when the licensee is properly notified in writing that he has successfully passed the state examination

lapse of time

when offer is made a time limit is specified. offer terminates after time expiration. if no time specified, offeree is considered to have a reasonable length of time.

What does right of survivorship mean?

when one partner dies, the other co-owners will inherit rather than the heirs This is to avoid probate

express contract

when parties state terms and show intentions in words either orally or written. real estate listings and sale contracts are express contracts

What is the only exception to the licensee being suspended for a claim on the Recovery Fund?

when the broker followed an Escrow Disbursement Order of the Commission and the order was overturned by the courts in this case the broker was exposed to civil damages and those damages can be paid by the Fund without the broker's license being suspended.

When does Legal Transfer take place?

when the deed is voluntarily accepted by the grantee

What is an Express Agreement of an easement?

when the parties state the terms and show their intentions in words can either be oral or written

When does a grantor transfer his property by deed?

when the property is sold or when the grantor wishes to give a gift of property to another

What is an agency coupled with an interest?

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

When do Subordination Agreements usually arise?

when there are two existing mortgages, a first mortgage and a second mortgage and the mortgagor intends to refinance the first mortgage

What is a Certificate of Title?

which indicates that all problems have been cleared and the title company can issue title insurance

As a life tenant, the life tenant cannot:

will waste

What is limited confidentiality in terms of a transaction brokerage relationship? *Unless this is waived in writing by a party*

will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, or the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or any other information requested by a party to remain confidential.

What is an Easement by Necessity?

would be granted to a landlocked property to provide egress sometimes referred to as "easement by necessity" or "easement by implication" and are created by a court of law

The FREC or the courts may issue a _______ if the situation warrants or if the public is not endangered

writ of supersedeas (stop the suspension or revocation)

If a contract does not conform to the requirements of disclosure is it voidable?

yes, it's voidable at the option of the purchaser prior to closing.

If a licensee asks for an in formal hearing who is it in front of?

FREC -all commissioners except Probable Cause

What comes after the DBPR investigation?

FREC creates a Probable Cause Panel- works as a Grand Jury! NOT Guilt or Innocence 2 members -Panel must review in 30 days after receiving from DBPR

What is an example of a citation?

Failed to maintain the required office entrance sign. The penalty is: $100.00

How does a license become involuntary inactive?

Failure to complete the required 14 hours of CE, re-apply online, or pay the fee prior to expiration

What is the basis for denial of a license?

Failure to file the correct application in proper form Failure to pay the appropriate fee Failure to correct the application within the allotted time period Failure to provide a fingerprint card Failure to take the state examination within two years of application Failure to pass the state examination Being investigated and found guilty of a violation that would violate Florida License Laws Having a poor reputation for fair dealing, evidence of bad character or incompetence in dealing fairly and safely with the public

Truth in Lending Act (TILA)

Fed law that is part of the consumer credit protection act & implemented by the fed reserve boards regulation Z. The act ensures that borrowers & consumers of consumer credit are given info regarding the cost of credit so that consumers can compare credit terms available

What is FHA?

Federal Housing Administration

Ginnie Mae

Federal agency that is part of the Dept of housing & urban developement

Each homeowner in a condominium owns their unit in:

Fee Simple

What are the 2 types of freehold?

Fee Simple Absolute Fee Simple Defeasible Life Estate (exceptions)

What are the 2 types of ownership of land?

Feudal System Allodial System

Adjustable-rate mortgage (ARM)

Financing technique in which the lender can raise or lower the interest rate according to a predetermined index Index is an economic indicator used to adjust interest rate. Margin represents lender's cost of doing business + profit Calculated interest rate is the index plus margin. Adjustment interval is how often interest rate adjusts. Interest rate caps limit how much interest rate may change per adjustment.

A corporation is an entity rather than a person so only the corporation can be:

Fined

The Pickets are purchasing a home for $78,000 and the lender is giving them a 90% loan at 10% interest, plus a 2% loan origination fee. How much is the loan origination fee? a. $1,404 b. $1,560 c. $1,650 d. $7,020

First determine loan balance. Take $78,000 (purchase price) x 90%= $70,200 loan balance. Then fill in the formula. 70,200*2%=1,404

The home is closing on March 22. The taxes, $2400, are in arrears* and need to be paid by the seller. All prorations should be figured by midnight the day before closing. What should be debited (charged) to the seller? Using the Statutory Month Method

First determine the time period the seller owes. He will owe for 2 months and 21 days (all of January and all of February and part of March. In this method all months have thirty days Taxes debited to the seller 2 months and 21 days = 200 monthly x2=$400 + 6.67 daily x 21= $140. $400 + $140 = $540 will be charged to the seller. Many closers use this method since it is faster and easier to do than 365.

The home is closing on March 22. The taxes, $2400, are in arrears* and need to be paid by the seller. All prorations should be figured by midnight the day before closing. What should be debited (charged) to the seller? Use Statutory Month Method.

First determine the time period the seller owes: He will owe for 2 months and 21 days $2400 by 12 = $200 per month times 2 months= $400 $200÷30= $6.67 per day. 2 months and 21 days = 200 monthly x2=$400 + 6.67 daily x 21= $140. $400 + $140 = $540

A lot contained 600 square yards and had a frontage of 40 feet. If the lot was rectangular in shape, what would be the length of the lot measure? 15 feet 135 feet 185 feet 217 feet

First, convert square yards into square feet 600 x 9 = 5400 square feet. Area = length x width so if area is known then the formula becomes area ÷ width = length or 5400 ÷ 40 = 135 feet.

If the interest on a loan at 9% for 8 months was $5,400, then what was the amount of the loan? a. $67,500 b. $72,900 c. $81,000 d. $90,000

First, determine how much the interest is annually by dividing $5400 by 8= $675 per month x 12= $8,100. Then put into the formula. $8,100/9%=$90,000

Margaret sold a lot for $10,000. She bought the lot for $8,000. What is the percentage of gain?

First: subtract the original price from the new sales price. $10,000- $8,000. This means Margaret made in dollars $2,000. $2000 divided by $8000 results in a 25% gain.

What is the FREC?

Florida Real Estate Commission

Does Florida offer Reciprocity with any other state?

Florida does not have a reciprocity agreement with any other state. However Florida does have mutual recognition agreement with the following 8 states: 1. Alabama 2. Arkansas 3. Connecticut 4. Georgia 5. Illinois 6. Mississippi 7. Nebraska 8. Oklahoma.

4. Estimate Land Value

For appraisal purposes, land never depreciates in value.

What are the four ways that property is transferred by involuntary alienation?

Foreclosure Escheat Eminent Domain Adverse possession

How long do Restrictive Covenants last?

Forever unless some legal remedy is sought to remove them

What are the 2 types of estates?

Freehold Leasehold

What shall each buyer shall be furnished on a separate page according to the Condo Act?

Frequently Asked Questions and Answers

Who can commission splits be paid to?

From broker to broker Brokers only pay other brokers. They can NEVER pay another broker's salespeople

What relationship do many people switch from?

From single agent to transaction broker.

Compute the value of a property where the monthly rent is $1,800 and the multiplier is 108

GRM: Rent X GRM = Value Solution: $1,800 x 108 = $194,400

What are the 4 Basic Types of deeds?

General Warranty Deed Special Warranty Deed Bargain and Sale Deed Quit Claim Deed

What does the Contact Information give?

Gives firm names, addresses, license numbers, contact names, email addresses, and phone numbers for persons involved in the transaction

What is included in Loan Terms?

Gives the exact figures for the loan amount, interest rate, and monthly principal and interest payment, and indicates whether any of those amounts can increase after closing

What are the actions of the commission?

Has a corporate seal Makes rules Publishes books and newsletters Educates Investigates complaints Imposes disciplinary actions Creates Certificates Reports Holds regular meetings Has the power to inspect and audit Obtains a cease and desist order Investigates any time with or without a written complaint: however, if the Commission receives a written, sworn (notarized) complaint from any member of the public, they MUST investigate Informs the Division of Florida Condominiums, Time Shares and Mobile Homes when disciplinary action is taken by the FREC against any of its licensees

What state has a lot of ground leases?

Hawaii

What is adaptability?

How does the item fit in its environment? A water heater "fits' in the house, next to the furnace but the portable dishwasher may not "fit" in the kitchen.

What is method or degree of attachment?

How is the item attached? If it is permanently attached such as a central air conditioning unit (fixture) as opposed to a temporarily attached window unit (personal), the item has become a fixture.

What is damage?

How much damage will the removal of this item cause? The removal of a wall-to-floor bookshelf may cause a great deal of damage to a wall if the owner has to remove a lot of nails to get it free. If the parties agree that it is personal and there is damage, the owner must repair the damage

What does Livery of Seisen mean?

I own it and I have the right to sell it.

What would an example of Fee Simple Defeasible be?

I will sell my property to you with the condition that alcohol is never served on the premises. If you have a wine and cheese party, then I will have the right to take back the property. or After the oil crises of the 1970's, some service station chains began to sell some of their prime corner locations. Some of them were sold to convenience stores, but had the condition that no gas could be sold at this location.

Each contract entered into for the sale of property governed by covenants subject to disclosure required by this section must contain in conspicuous type a clause that states:

IF THE DISCLOSURE SUMMARY REQUIRED BY SECTION 720.401, FLORIDA STATUTES, HAS NOT BEEN PROVIDED TO THE PROSPECTIVE PURCHASER BEFORE EXECUTING THIS CONTRACT FOR SALE, THIS CONTRACT IS VOIDABLE BY BUYER BY DELIVERING TO SELLER OR SELLER'S AGENT OR REPRESENTATIVE WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS AFTER RECEIPT OF THE DISCLOSURE SUMMARY OR PRIOR TO CLOSING, WHICHEVER OCCURS FIRST. ANY PURPORTED WAIVER OF THIS VOIDABILITY RIGHT HAS NO EFFECT. BUYER'S RIGHT TO VOID THIS CONTRACT SHALL TERMINATE AT CLOSING.

What is Escheat?

If property owners die without a Will and with no heirs their property "Escheats" or belongs to the state.

Seller's INTEREST DUE on Loan at Closing

If the seller has a loan it must be paid off at closing. If the seller owes $50,000 on a loan on JUNE 1st, and the closing takes place on June 30th, the loan balance remains the SAME for the entire month of June because INTEREST ON MORTGAGE IS PAID IN ARREAS. This means that on the 1st of JULY the seller should make a payment which will include the INTEREST for the month of JUNE.

How is an easment created?

Implication Reservation Necessity Condemnation Express Agreement

Title officially changes hands with the recording of the deed. The public recording of conveyance serves as constructive notice (notice is required for conveyance (or any other interest) to be valid). What is implied notice and how does it relate to caveat emptor.

Implied notice places the burden on the the opposing party to seek proof of notice. In effect let the buyer beware

When are things Prorated in Florida?

In Florida, it is customary to have everything prorated as of midnight the night before closing.

What is a designated sales associate?

In any real estate transaction other than a residential sale where the buyer and seller have assets of $1 million or more, the broker may honor the request of the parties and designate sales associates to act as single agents for different customers in the same transaction

When is interest on a mortgage paid?

In arrears

What happens if the license or registration of at least one active broker member is not in force?

In ths instance the registration of the corp, LLC, LLP, or partnership is cancelled automatically during that period of time.

nonconventional loans

Include FHA insured and VA guaranteed loans & typically require a smaller down payment compared w/ conventional loans The government provides some risk protection to the lender

What is included in Closing Information?

Includes date issued, closing date, disbursement date, settlement agent, file number, property address, and sale price

What is included in Transaction Information?

Includes names and addresses for both the borrowers and sellers and the lender's name

What is included in Loan Information?

Includes the loan term, purpose of the loan, product type, loan type and loan ID number

What does the Assumption part of the loan disclosures indicate?

Indicates whether or not the lender will allow a loan assumption on a future sale or transfer

What does the Partial Payments part of the loan disclosures indicate?

Indicates whether or not the lender would accept partial payments on the loan

What does the Demand feature part of the loan disclosures indicate?

Indicates whether or not the loan has a demand feature, which would allow the lender to require early repayment

What does the Negative Amortization part of the loan disclosures indicate?

Indicates whether or not the loan has a negative amortization feature, which could result in the loan amount becoming larger than the original loan amount, resulting in a decrease of the equity the borrower has in the property

Easements are non-possessory rights, just the right of _______ (enter) and ______ (exit).

Ingress Egress

A written brokerage agreement for the leasing of commercial real estate will attach a lien to the owner's ______ in the commercial real estate.

Interest

Conventional mortgage loan features

Interest rate is negotiated between lender & borrower. Assumption not allowed (due on sale clause) Prepayment clause allows borrowers to prepay principal Down payment & loan to value ratio

2 Litigation Court Procedures

Interpleader - Broker has no claim to funds and deposits monies into court registry. Declaratory judgement - broker believes self to be entitled to portion of funds.

If a person dies without a will he/she dies

Intestate

When a person dies without a will they die:

Intestate

How would land be transferred in adverse possession?

Involuntary Alienation to the claimant

Tie- in's

Involves two separate products or services and an agreement to sell one product on the condition that the buyer also buys another product.

What is a broker associate?

Is a licensed broker who chooses to work as a sales associate under the direction of another broker

What is not included in real estate or real property?

It does not include a cemetery lot or right of burial in any cemetery; nor does it include the renting of a mobile home lot or recreational vehicle mobile home park or travel park

Profit and percent of gain or loss

It is essential to determine the amount of gain or loss in order to work the problem. amount of gain (or loss) _______________________________________ original purchase price | % of gain or loss

Who and why would someone issue a summary suspension?

It is issued by the Secretary of the DBPR when the public is in immediate danger from the actions of the licensee and action will be followed by the FREC

What is Transfer by descent?

It means when a person dies without a will, the state has determined (a relative) who will inherit the property

What are Origination Charges?

Items such as points, application fee, and underwriting fee

What are the actual days with this method?

Jan has 31 days, June has 30 days etc

In Florida, property taxes become a lien on a property in what month of the tax year after they are due?

January

What 2 things are on the left column of the Summaries of Transactions?

K. Due from the borrower at closing L. Paid already by or on behalf of borrower at closing

What 3 things does real estate include?

Land plus appurtenances Air rights, gas rights, solar rights, light and sound rights, mineral rights, and surface rights. Each of these can be sold separately Water rights

Example - Cost Approach to Value

Land valuation Size 70 X 70 @ $600.00 per front foot: $42,000.00 Plus site improvements: Driveway, walks, landscaping etc: $9,000.00 Total Land Valuation $51,000.00 Building Valuation Replacement cost 2100 sq. ft. @ $75.00 per sq. ft. = $157,500.00 Less Depreciation: Physical depreciation, curable (deferred maintenance items) paint outside $5000.00 tuck pointing $1000.00 new roof $2500.00 incurable (structural)$4000.00 Functional obsolescence: (insulation not adequate) $2500.00 External-Economic obsolescence: $0 Less Total Depreciation: -$15,000.00 Total Depreciated Value of Building $142,500.00 Total Land Valuation $51,000.00 Depreciated Value of Building +$142,500.00 TOTAL: Value of Property Cost Approach $193,500.00 Steps involved in the COST APPROACH: 1.Estimate the value of the land alone as if vacant. 2.Determine either the replacement or reproduction cost of the building. 3.Deduct all accrued depreciation from the replacement cost. 4.Add the estimated land value to the depreciated replacement or reproduction

What is Statutory Law?

Laws that are currently on record in the country

What are Estates less than Freehold?

Leasehold

When is a licensee notified of probable cause?

Licensee is notified ten days after Probable Cause is found

What happens after the DBPR files a formal complaint?

Licensee receives Formal Complaint- has 20 days to answer: May have an informal or formal hearing

Authority of real estate licensees to prepare contracts

Licensees may not draw lease agreements but fill in blanks on lease instruments on lease periods that dont exceed one year that are preapproved by florida supreme court. Allowed to assist buyers and sellers fill in blanks on four types of standardized contracts drafted by attorney and made available through local realtor boards and associations : -listing agreement -buyer brokerage agreement -sale and purchase contract -option contract

Do licensees pay assistants or do brokers?

Licensees may pay their assistants. However, if the assistant is licensed and is paid a commission or for any real estate services he or she performs, they must be paid by the employing broker.

What are the 2 types of Restrictions?

Limiting restrictions Affirmative restrictions Easement

What does the Security interest part of the loan disclosures indicate?

Lists the address of the property securing the loan

When the entire bundle of rights is sold, it is known as what?

Livery of Seisen

What is on Page 5 of the Closing Disclosure form?

Loan Calculations Other Disclosures Contract Information Confirm Receipt

What does page 4 of the Closing Disclosure detail?

Loan Disclosures

What is Debited to the Seller?

Loan(s) to be paid Interest on loan Commission Prorated taxes Security deposits or prepaid rents Title insurance for the owner Preparation of the deed State transfer tax on the deed Attorney's fees

What is included in the Sellers Transactions?

M. Due to seller at closing N. Due from seller at closing

If the interest on a loan at 9% for 8 months was $5,400, then what was the amount of the loan?

MAKE SURE THAT INTEREST IN ANNUALIZED!!! Determine how much the interest is annually by dividing $5400 by 8= $675 per month x 12= $8,100 $8100 _______________________ ?LOAN AMOUNT? | 9 % The answer is $90,000.

What are the (fiduciary) duties of a single agent? These are included in the Single Agent Notice:

Maintain CONFIDENTIALITY Maintain OBEDIENCE to the Principal's instruction unless in violation of law, Be LOYAL, DISCLOSE all known facts that materially affect the value of residential real property that are not readily observable, DEAL honestly and fairly, ACCOUNT for all funds entrusted to the broker, use skill, care and due DILIGENCE in the transaction, PRESENT all offers in a timely manner, Provide full DISCLOSURE to all parties, Provide the single agent disclosure before, or at the time of, entering a listing agreement, or an agreement for representation, at the time of or before showing a property, whichever occurs first, Provide the required information on the required format.

What are the 2 types of appurtenance?

Man-made appurtenances like houses, fences, barns, swimming pools (in other words, items that are added to the property) Natural appurtenances like trees, creeks and streams.

Seller's NET

Many times the seller will want to make sure he will "NET ENOUGH" on the sale of his home to provide for all expenses plus possibly buy a new home. Note: be sure to notice which % is used! Follow these steps: Step 1: Use the "T" formula - anytime you see the words "Seller wants to net" or "After paying": this is an indicator of this type of math problem. Step 2: The amount the seller wants to net goes on top. This is the "part". Step 3: The sale price goes on the bottom left side. If the seller has some expenses, ADD the expenses to the NET BEFORE dividing by 100%-commission %.

If a license was obtained in May of 2007, that license would renew by?

March 31st, 2009 September of 2009 would exceed the two-year time frame

7. Contribution

Means the value of any component may or may not give value to the whole. For example: a fully remodeled kitchen or bathroom adds to the value of a property. If a kitchen or bathroom has not been remodeled, it would subtract from value. While a finished basement that is below grade is nice to have, the seller may not realize full cost of the improvement when he sells the home. Appraisers may not give full value to the improvement if it does not have a walkout from that level. These types of components either add or subtract from value.

4 settlement procedures MALE

Mediation- is non-binding and requires the writ consent of all parties. (if mediation fails after 90 days, alternative resolution must be found) Arbitration- is binding and requires the writ consent of all parties. Litigation Escrow Disbursement Order

How are commission members paid?

Members are paid $50 a day as well as mileage

What are the 3 methods for creating a legal description?

Metes and bounds Rectangular Government survey Lot and Block number on a plat map

What are the 4 ways to tell if an item has become a fixture?

Method or Degree of Attachment Adaptability Intent or Agreement of the Parties Damage

Calculate the housing expense ratio (HER) and total obligation ratio (TOR) A borrower has a monthly gross income of $5k , monthly housing expense of $1,250, and total monthly obligations of 2K. calculate the HER and TOR for this borrower

Monthly housing expense (PITI) + monthly gross income = HER Monthly total obligations + monthly gross income = TOR $1,250 + $5,000 = .25 or 25% HER $2,000 + $5,000 =.40 or 40% TOR

What are Concurrent Owners or Co-Owners?

More than one person can take title to the property at one time

The Calculation Process Using the 365 Day Method of Calculating

Most closers in Florida use the 365 day method of calculating expenses to go on the closing statements. Use actual days with this method- Jan has 31 days, June has 30 days etc. A rule of memory for the 365 day method and months would be the "30 days has September, April, June and November." Another is the "knuckle method". Using the knuckles on your hands placed in front of you, the knuckles would represent months with 31 days:

The sale price on a property was $100,000. The seller's loan balance on the day of closing was $85,350.25. The seller's lender is charging a 2% prepayment penalty. How much does the seller owe the bank for the pre-payment penalty?

Multiply $85,350.25 x 2% = $1,707.01

What do you need to become a broker?

Must have been a sales-associate actively licensed under a broker for at least 24 months prior to taking the broker course and have completed the sales associate's post-license course. The 24 month experience requirement must be an active license within the past five years or Must have held a current, active, valid real estate broker's license for at least 24 months during the preceding 5 years in any other state, territory or jurisdiction of the United States or in any foreign national jurisdiction. In addition, non-resident brokers may need to complete a 60 hour post-license course which requires a written school exam and Is required to successfully complete a FREC approved pre-license course for brokers. This course is called FREC II. The course is 72 classroom hours of 50 minutes each. The content includes fundamentals of real estate appraisal, finance, brokerage management operations and closing statements. A passing score is a minimum of 70% and is required to submit a completed application, electronic fingerprints and pay the FREC approved fee

A Township is formed by the forming of a?

N/S E/W tier

Are customers responsible for the acts of a transaction broker?

NO

Are punitive damages ever awarded?

NO

Can a a licensee who is on probation conduct any real estate business during probation?

NO

Can a broker be licensed as either a sales associate or a broker associate at the same time he holds a broker's license?

NO

Can a sales or broker associate be listed as an officer or director or partner of a brokerage firm?

NO

If a person moves out of the country, but continues to pay taxes are they considered to have abandoned their property?

NO

In a transaction brokerage relationship will licensees work for one party to the detriment of the other?

NO

Is dual agency allowed in Florida?

NO

While resolving replacement of the broker, can real estate business be conducted?

NO

Is a title company required to close a sale on a property?

NO Closings may be conducted by attorneys or through the simple transfer of money between the buyer and seller and a signed deed

Is the Date required on a deed?

NO Date is not required but is frequently in place if the deed is recorded in the county where the property is located.

Does The Department and the FREC issue criminal prison sentences?

NO They only respond

Can a Sales Associate or Broker give an opinion of Title?

NO this would be considered as "unauthorized practice of law".

In general, is it better to include personal property in the sale contract between the buyer and seller?

NO it is better NOT to include personal property in the sale contract between the buyer and seller since each personal item will need a value for lending purposes separate from the property.

Can a promise to pay compensation determine an agency or transaction brokerage relationship?

NO it can not

If the buyer receives a credit for EMD on the HUD is the an offset on the sellers side?

NO its not

What is an Easement in Gross?

NOT tied to any land, but are instead owned by a person or company usually commercial in nature and can be sold to others considered a personal interest A utility easement is an example of an easement in gross.

What is the Premises?

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

A listing agreement for the sale of commercial real estate will entitle the broker to a lien on the what from the sale?

Net Proceeds

Intangible tax

New mortgages are taxed an" intangible tax" at a rate of ////2 mills or two tenths of a cent per dollar/// The amount of any NEW MORTGAGE is multiplied by .002. This is not applicable to assumed mortgages. For example, a new mortgage is taken for $120,000 comes out to: $120,000 x .002= $240.

Does recovery fund does pay for legal fees or for punitive damages against the licensee?

No

What are the 4 types of agency relationships?

No Brokerage Relationship Single agent broker Transaction broker Designated Sales Associate

Is the Executive Director of the Division a member of the FREC?

No and they have no vote on any FREC actions

Can a licensee act in a real estate capacity with a suspended license?

No not until the suspension is lifted

Are monuments considered reliable?

No they are considered the least reliable part of the measurement since monuments sometimes disappear over time.

If you have attended a 4 year real estate institution do you need to take a post license course?

No you are exempt

Do you need post license education requirements if you have received a 4-year degree in real estate from an accredited institution of higher education?

No you don't

When do disclosure rules not apply?

Non residential transactions The rental or leasing of real property, unless an option to purchase all or a portion of the property improved with four or fewer residential units is given Auctions Appraisals Dispositions of any interest in business enterprises or business opportunities, except for property with four or fewer residential units.

credit unions

Nonprofit cooperative organizations that maintain savings & demand deposit accounts for members Deposits insured to $250k Makes conventional , FHA, and VA loans

Principal Meridians run:

North and South

Where does the Tallahassee Principal Meridian run?

North and South

The broker does not have to cease operations with a what?

Notice, but must comply with it immediately

The seller is set to close on November 27. The taxes are $3200 per year and they are in arrears. How much will the seller be charged? The taxes are prorated on midnight the day before closing. Use Statutory Month Method

Nov 26 | Nov 27 10 monts, 26 days seller $3200 ÷ 12= $266.67 per month x 10 = $2,666.67 plus 26 days. $266.67÷ 30= $8.89 per day x 26 = $231.11. Add the two numbers together. Since taxes are paid in arrears (at the end of the year), we will debit the seller $2897.78 and credit the buyer $2897.78 debit the seller $2897.78 and credit the buyer $2897.78

The seller is set to close on November 27. The taxes are $3200 per year and they are in arrears. How much will the seller be charged? The taxes are prorated on midnight the day before closing. Use the 365 Day Method

Nov 26 | Nov 27 330 days seller $320o : 365 = $8.76712329 330 days X $8.76712329 = $2,893.15 debit the seller: $2893.15 and credit the buyer $2893.15

If you fail to complete a post license course your license becomes:

Null and Void

What must be in place for adverse possession to happen?(think OPATCH)

O- The claim must be OPEN for all to see not hidden P- POSSESSION must be exclusively in the hands of the claimant A- The claim must be ACTUAL, claimant must be exercising control over the property T- The claimant must have paid TAXES for the time of possession. (no taxes no possesion) C- The claim must be CONTINUOUS for the statutory period of time. In Florida, the minimum is 7 years. H- The claim must be HOSTILE to the owner's title- meaning that another person has encroached within the boundary of the owner; contrary to the legal description of the owner.

What is testimony given under?

Oath

An example of a Monument would be a(n):

Old Dutch Mill, the Stone Fence, the stately old pine

What 4 things are included on the Summaries of Transaction?

On the Left: Due from the borrower at closing Paid already by or on behalf of borrower at closing On the Right: Due to seller at closing Due from seller at closing

How can joint tenancy be terminated?

One partner sells his/her interest in the property. Partition Law suit Bankruptcy of any of the joint tenants Foreclosure of the property.

What is included on the second section of the Closing Disclosure in Settlement costs?

Other Costs

Order of the stack is important when solving income equations:

P - V = E E - O = N

Where do settlement amounts start on the Closing Disclosure?

Page 2 of the Form

What helps determine the amount of tax money available to each taxing entity?

Parcel Number

Know the "STACK"

Pick Violets Every Other Night P- Potential Gross Income V - Vacancy and Collection Losses E - Effective Gross Income O - Operating Expenses N - Net Operating Income

What are CDD's?

Planned Unit Developments (PUDs) with mixed uses

What does PETE stand for?

Police power Eminent Domain Taxation Escheat

What are the requirements to create Prescriptive Easements?

Possession Open Actual Continuous Hostile

The Higher The Cap Rate, The Lower The Sale Price

Potential Gross Annual Income $60,000 Additional Income (Vending, Parking,etc.) Less Vacancy and Collection Loss (4%) $-2,424 = Effective Gross Annual Income $57,576 Less Operating Expenses Real Estate Taxes $9,000 Insurance $1,000 Heat $2,800 Maintenance $6,400 Utilities $800 Repairs $1,200 Decorating $1,400 Legal and Accounting$600 Management $3,000 Total Expenses: $24,800 = Net Operating Income (NOI) $32,776 Capitalization Rate = 10% Value = ? $327,760

What are the 3 parts of a deed?

Premises, Habendum and Testimonium.

Borrowers of VA loans are not exempt from paying...

Principal Interest Taxes Insurance

What is PITI?

Principal Interest Taxes Insurance

Who must sign the transition to transaction broker form?

Principal/Client

Steps to Closing a Sale

Prior to the actual closing of the sale between the buyer and the seller certain preliminary steps must be taken. Keep in mind that the contract between the parties will have the final determination of what will be done. The following is a general list of what may happen: - Contract is signed by all parties "Time is of the Essence" - Broker deposits earnest money in accordance with law - Broker collects any additional monies if called for by the contract - The home inspection is ordered according to the terms of the contract - Buyer applies for the loan in time according to contract - Buyer and seller work to clear any "contingencies" (conditions) written into the contract - An appraisal is done by a certified appraiser, - A conditional loan approval is obtained - Title insurance on the property is obtained by the mortgagor for the mortgagee and the mortgagor - Termite inspection, building inspection and radon inspection is done according to the contract - Any repairs required by the contract are made, A survey of the property is ordered - The buyer obtains hazard insurance and gets a copy of the policy to the closing agent. - Flood insurance must be obtained if necessary. - Buyer, seller, closing agent and real estate professionals set closing appointment - Buyer's agent gets final amount due from the closer so that buyer can obtain a certified check for closing, - Broker alerts closing agent of the earnest money deposit, - Buyer does a final walk through inspection - Closing occurs.

What is needed for Eminent Domain?

Process is called Judicial Condemnation Owner must be compensated Must be for public good Owner must have due process

6. Anticipation

Property can increase or decrease in value in expectation of something in the future such as appreciation or rezoning. Examples: If a person discovers that an airport is going to be built in an area and buys the land in "anticipation" of a future value. Another example would be if a person has knowledge that a zoning change is about to take place which will make the property more valuable and buys the property in "anticipation" of a future value increase.

What is the Division Responsible for?

Protects the public by regulating real estate and appraisal licensees examination, licensing and regulation verify the integrity of real estate salespersons and brokers by providing investigation and support to areas of complaints by consumers and other professionals as needed

Laws governing the Real Estate industry in Florida can be found where?

R.E. laws can be found in the Florida Administrative code and the Florida Statues.

Who requires the Closing Disclosure for all federally-related mortgage loans?

RESPA

When an item (personal property) becomes "affixed" or attached to real property, the personal property becomes:

Real

What is the Habendum?

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

5. Regression and Progression:

Regression and progression occurs between dissimilar properties. This means the value of the better quality property is affected adversely by the presence of the lesser quality property and a lesser house will benefit from a larger house.

What are some examples of Environmental Protection Laws?

Regulation of asbestos, lead based paint and other lead hazards, radon, formaldehyde, mold, carbon monoxide, electromagnetic fields, groundwater contamination, underground storage tanks, and waste disposal sites.

Real Estate Math INTEREST

Remember that interest rates are expressed in: "ANNUAL RATES" INTEREST ____________________________________ LOAN AMOUNT $ | INTEREST RATE %

What does prima facie mean?

Requiring no further proof; acceptable on the face

What are Most of the deed restrictions called?

Restrictive Covenants

What is the intent of the Brokers' Relationship Disclosure Act?

Revocation of dual agency as an authorized form of representation. Disclosure of requirements for real estate licensees relating to authorized forms of broker representation are established Single agency is limited to either a buyer or a seller, but not both, in a real estate transaction and Transaction brokers provide a limited form of non-fiduciary representation to a buyer, a seller or both in a real estate transaction.

Sections for a township are numbered from front upper ____ to _____ and across a township in a back and forth movement

Right Left

What are the types of water rights?

Riparian (rivers and streams) Littoral (lakes and oceans to the high water mark)

Sales comparison Memory Tools:

SBA: If the subject property is better, add value to the comparable. CBS: If the comparable property is better, subtract value from the comparable. Example: the comparable has a fireplace and the subject property does not, subtract the fireplace (value) from the comparable. The subject property has a fireplace and the comparable does not, add the fireplace (value) to the comparable. Adding and subtracting is always done to the comparable sold price, never the subject property.

Suppose you want a 2 1/2 acre lot in Section 36. What is the legal description?

SW 1/4 of the NE 1/4 of the SE 1/4 of the NW 1/4 of Section 36

What is the deed of the property tax based upon?

Sale Price

What is Credited to the seller?

Sale Price Prorations such as rent or water

What is Debited to the Buyer?

Sale price Title insurance -lender (mortgagees) Preparation of mortgages and deed Recording of deed Recording of mortgage Documentary tax on Note Intangible tax on mortgage Attorney fees Interest Adjustment

What are the 3 categories of real estate licenses?

Sales associate Broker Broker Associate

The Preliminary Closing Statement

Sales associates may be asked by their brokers to provide an estimate of closing costs to sellers at the time of listing and an update when a sale contract is received. They may also be asked to provide buyers with anticipated costs for closing. THIS provides an overview of the costs for the seller and buyer to close on a property. Statements may be calculated using a spreadsheet or by a worksheet.

HUD - 1 Good Faith Estimate (GFE)

Section 800 shows all items related to the loan. These should be compared to the Good Faith Estimate (GFE) with the buyer or seller (if the seller has taken out a loan for the buyer). Any other charges which are involved in the loan MUST be shown and an explanation provided for any items which were NOT on the GFE

The HUD 1 / real estate broker fees. I

Settlement amounts start on page two of the form. The first section, 700 shows the real estate broker fees. It provides a space for commissions to be carried for the seller (who normally pays the commission), or buyer's broker. These numbers should be checked against the listing agreement for total commission and shared commission by the seller's broker, or the buyer's broker against the buyer's brokerage agreement. Borrower's (or buyer's) charges are in the left column, Seller's charges on the right.

The HUD-1

Settlement statement is used for determining closing costs for buyers and sellers. This form is required for all Federally related closing transactions but is more commonly used today for non-federally related sales. is the official SETTLEMENT STATEMENT used by settlement agents/title companies A form used by a settlement or closing agent, which itemizes ALL charges for a borrower and seller. This form gives a picture of the closing transaction, and provides each party with a complete list of incoming and outgoing funds. "Buyers" are referred to as "borrowers" on this form even if no loan is involved. This form is also referred to as a closing statement or a settlement form. The HUD-1 is required by RESPA for all FEDERALLY related mortgage loans. This form is also used for cash transactions by many settlement companies as its ease of use makes it simple to show how the closing costs were calculated. The first part of the fill in form describes the type of loan, the mortgage loan file, number, insurance case number. It further identifies the buyer and seller as well as their current addresses, the Lender, property location and where, when, and who settled the closing.

What are the 4 ways ownership can be held?

Severalty Tenancy in common Joint tenancy with the right of survivorship Tenancy by the entireties

Antitrust laws are state/federal laws designated to maintain /preserve business competition. Name 2 such Laws

Sherman act of 1890 the first law to prohibit "trusts", a combination that was in restraint of trade or commerce Clayton act of 1914 is an amendment which provides futher substance and clarification to the sherman act. it adds provisions targeting price discrimination and fixing and unfair business practices

What is included in Projected Payments?

Shows the actual payments the borrower will make for principal & interest and mortgage insurance, an estimated amount for the escrow payment, and the total estimated monthly mortgage payment

What is included in Costs at Closing?

Shows the borrowers' total closing costs and the total amount of cash the buyers need to bring to closing

What is the Testimonium?

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

What is Regulatory Taking?

Similar to the idea of eminent domain, regulatory takings occur when the government literally regulates a piece of property out of the hands of its private owner without actually changing the titled ownership. A situation in which a government regulation limits the uses of private property to such a degree that the regulation effectively deprives the property owners of economically reasonable use or value of their property to such an extent that it deprives them of utility or value of that property although they still hold title to it.

Types of business entities that may register as brokerage

Sole Proprietorship General Partnership Limited Partnership Limited Liability Partnership Corporation Limited Liability Company

What types of businesses are considered real estate brokerages?

Sole proprietor Corporation for profit Corporation for non profit Limited Liability Company General Partnership Limited partnership Limited Liability Partnership Professional Limited Liability Company DBA - or artificial name

Statutory Month Method

Sometimes the closing problem will ask for a 360 day year rather than a 365 day year. In this method, divide the item to be paid by 12, and then by 30 days to determine the daily rate. Be sure when using the Statutory method, to note the months that have been completed and the one that is in progress

What are the 2 types of taxation?

Special Assessment and Ad Valorem

What taxes taxes take priority in the sale of a home?

Special Assessment and Ad Valorem

What does prorate mean?

Split It is necessary to prorate split for the time the property is in possession of the owner's

Who disburse the RERF?

State Treasurer The FREC authorizes the funds to be disbursed by the State Treasurer

What does the other disclosures state?

States other important information for the borrower to know including whether or not the borrower would have any protection from liability for the unpaid balance in the event of a foreclosure

What does the late payment part of the loan disclosures indicate?

States what late fee the lender will charge

What does estate equal?

Status

What 2 things govern agency relationship?

Statutory law Common law

What is the monthly balance after the second payment? To get the second month's interest payment, from example above.

Subtract the first month's principal payment. $115,000- $50.88 which leaves a loan balance at the beginning of the second month of $114,949.12. Take $114,949.12 x 10%=11,494.91. Divide by 12 to get monthly interest = $957.91 Subtract $957.91 from P&I payment of $1009.21= 51.30 Subtract $51.30 from the balance of $114,949.12=$114,897.82 This is the way to amortize a loan.

Margaret sold a lot for $10,000. She bought the lot for $8,000. What is the percentage of gain?

Subtract the original price from the new sales price. $10,000- $8,000. This means Margaret made in DOLLARS $2,000. $2000 gain ________________________________________$8,000 | % of gain or loss $2000 divided by $8000 results in a 25% gain.

If the attorney for the title company feels that there is a break in the chain of title or there is a question about the title (a cloud), he files in a special court for a:

Suit to Quiet the Title, or a Quitclaim

What is an example of when it would be a good idea to switch from single agent to transaction Broker?

Suppose that a single agent represents the seller in the transaction. That single agent finds the buyer for the property. In order to treat both parties fairly, he asks the seller's permission to switch to a transaction broker. The seller agrees and then the broker must file the correct paperwork

Once a payment has been made from the Real Estate Recovery Fund, the licensee's license is automatically ____ until full repayment to the fund has been made.

Suspended

What may be on a final order?

Suspension Revocation Probation Fines

What is stated on a cooperative disclosure?

THE BUYER HEREBY ACKNOWLEDGES THAT BUYER HAS BEEN PROVIDED A CURRENT COPY OF THE ARTICLES OF INCORPORATION OF THE ASSOCIATION, BYLAWS, RULES OF THE ASSOCIATION, AND THE QUESTION AND ANSWER SHEET MORE THAN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, PRIOR TO EXECUTION OF THIS CONTRACT; or THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER AND RECEIPT BY BUYER OF A CURRENT COPY OF THE ARTICLES OF INCORPORATION, BYLAWS, AND RULES OF THE ASSOCIATION, AND QUESTION AND ANSWER SHEET, IF SO REQUESTED IN WRITING. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 3 DAYS, EXCLUDING SATURDAYS, SUNDAYS, AND LEGAL HOLIDAYS, AFTER THE BUYER RECEIVES THE ARTICLES OF INCORPORATION, BYLAWS, RULES, AND QUESTION AND ANSWER SHEET, IF REQUESTED IN WRITING. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING.

What disclosure is on the Timeshare Listing Agreement?

THERE IS NO GUARANTEE THAT YOUR TIME-SHARE PERIOD CAN BE SOLD AT ANY PARTICULAR PRICE OR WITHIN ANY PARTICULAR PERIOD OF TIME

What should be on Any contract for the sale of a residential unit or a lease thereof for an unexpired term of more than 5 years?

THIS AGREEMENT IS VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF EXECUTION OF THIS AGREEMENT BY THE BUYER, AND RECEIPT BY BUYER OF ALL OF THE ITEMS REQUIRED TO BE DELIVERED TO HIM OR HER BY THE DEVELOPER UNDER SECTION 718.503, FLORIDA STATUTES. THIS AGREEMENT IS ALSO VOIDABLE BY BUYER BY DELIVERING WRITTEN NOTICE OF THE BUYER'S INTENTION TO CANCEL WITHIN 15 DAYS AFTER THE DATE OF RECEIPT FROM THE DEVELOPER OF ANY AMENDMENT WHICH MATERIALLY ALTERS OR MODIFIES THE OFFERING IN A MANNER THAT IS ADVERSE TO THE BUYER. ANY PURPORTED WAIVER OF THESE VOIDABILITY RIGHTS SHALL BE OF NO EFFECT. BUYER MAY EXTEND THE TIME FOR CLOSING FOR A PERIOD OF NOT MORE THAN 15 DAYS AFTER THE BUYER HAS RECEIVED ALL OF THE ITEMS REQUIRED. BUYER'S RIGHT TO VOID THIS AGREEMENT SHALL TERMINATE AT CLOSING. Contain the following caveat in conspicuous type on the first page of the contract: ORAL REPRESENTATIONS CANNOT BE RELIED UPON AS CORRECTLY STATING THE REPRESENTATIONS OF THE DEVELOPER. FOR CORRECT REPRESENTATIONS, REFERENCE SHOULD BE MADE TO THIS CONTRACT AND THE DOCUMENTS REQUIRED BY SECTION 718.503, FLORIDA STATUTES, TO BE FURNISHED BY A DEVELOPER TO A BUYER OR LESSEE.

What is a good acronym for the unities of Joint Tenancy?

TTIP

The Pickets are purchasing a home for $78,000 and the lender is giving them a 90% loan at 10% interest, plus a 2% loan origination fee. How much is the loan origination fee?

Take $78,000 (purchase price) x 90%= $70,200 loan balance. $1404 point money ________________________________________ $70,200 loan balance | 2 % points charged 1,404

A property was sold and the closing took place on November 15. This property contained ten apartments with rentals due the first of each month for each unit of $750.00. The seller collected the rent for the month on November 1st. How much would the rent proration be, and how would it appear on the settlement statement? Do not round off any of your answers until the end of the problem if it is necessary.

Take 10 apartments x $750= $7,500.00 x 12= 90,000 per year Divide the number by 365 days to get the daily rate. $90,000 ÷ 365 days = $246.58 per day x 16 days = $3,945.21 will debit (charge) the seller and credit the buyer for the remaining days of the month, including the 15th and the 30th.

A property was sold and the closing took place on November 15. This property contained ten apartments with rentals due the first of each month for each unit of $750.00. The seller collected the rent for the month on November 1st. How much would the rent proration be, and how would it appear on the settlement statement? Do not round off any of your answers until the end of the problem if it is necessary. $7,500.00 debit the seller and credit the buyer $7,500.00 debit the buyer and credit the seller $4,191.86 debit the seller and credit the buyer $3,945.21 credit the buyer and debit the seller

Take 10 apartments x $750= $7,500.00 x 12= 90,000 per year. Divide the number by 365 days to get the daily rate. $90,000 ÷ 365 days = $246.58 per day x 16 days = $3,945.21. Notice that in order to use 365 days, the rent must be annualized! The answer is d- since you will debit (charge) the seller and credit the buyer for the remaining days of the month, including the 15th and the 30th.

A 20 unit office building was sold and the closing took place on May 20. The seller collected $1250.00 rent from each of the tenants on May 1st. How much would the rent proration be, and how would it appear on a full settlement statement? Do not round off your answers in this or any other math question until the end of the entire problem. $16, 438.40 debit the seller and credit the buyer $ 9,863.01 debit the seller and credit the buyer $ 833.33 debit the seller and credit the buyer $ 416.66 debit the seller and credit the buyer

Take 20 apartments x $1250 =$25,000 x12 = $300,000. Divide by 365 = $821.92 x 12 days= $9,863.04. Make sure you charge the seller only for the days remaining in the month. The seller has collected the rent at the first of the month. The buyer will be paid rent from the owner for the days he owns the property.

How many acres of land are there in the S 1/2 of the N 1/2 of the SW 1/4? 10 acres 20 acres 40 acres 160 acres

Take 2x2x4=16. Divide 640 by 16= 40 acres.

The purchase price on a property was $95,000. If the buyer acquired an 80% loan-to-value ratio mortgage, what is the buyer's new first mortgage amount? $56,000 $71,000 $76,000 $95,000

Take the sale price of $95,000 times the 80% LTV= the loan balance. The earnest money does not make a difference at this point since it is part of the down payment. The answer is c= $76,000.

Florida's measurement begins where?

Tallahassee

What is Taxation?

Taxation is the right the government has to collect funds to pay for public services

Taxes in ARREAS

Taxes in arrears means the taxes have not been paid.

What are the three types of Co-ownership?

Tenancy in common; joint tenancy; tenancy by the entireties

What is the 10th step of closing a sale?

Termite inspection, building inspection and radon inspection is done according to the contract

If a person dies with a will he/she dies:

Testate

What is the person making the will called when a grantor conveys (transfers) his property to another through a will?

Testator the person receiving the property is called the devisee

Who determines a brokerage relationship?

The BROKER sales associates may not create an agency relationship without the express permission of his or her employing broker

Who is in charge of the licensing exams?

The Bureau of Education and Testing

The CMA

The Competitive Market Analysis is a tool used by real estate professionals to obtain a list price. It is NOT an appraisal and should NOT be advertised as such

Who issues the license?

The DBPR

Which agency are the licenses renewed by?

The DBPR in March or September

Who handles the actual licensing?

The Department of Business and Professional Regulation

Who has the authority to regulate Homeowner's Association?

The Division of Florida Land Sales, Condominiums and Mobile Homes

Who accepts the application?

The Division of Real Estate

Who is charged with the responsibility of investigating real estate complaints?

The Division of Real Estate

Who certifies the applicant once the requirements are met?

The FREC

Who has certified to the Department that an individual is qualified before the license is issued?

The FREC

Who may deny an application, suspend 10 years, revoke, may impose an administrative fine not to exceed $5,000 for each count of obtaining a license by fraud may establish fees?

The FREC

What law defines agency relationships?

The Law of agency

What power does a universal agent have?

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

What is the buyer or seller who has hired the agent called?

The Principal

If you want to buy 1/4 of a section how much land is that?

The amount of land would be 1/4 of 640 acres= 160 acres.

An Appraiser never averages comparable sales to obtain a final value

The appraiser evaluates all three methods of appraising property, market data (sales comparison), cost, income, and determines which would be best to use for the property in question. Lastly, the appraiser may apply the income approach if the property is income producing. Usually, this is not the case in a residential property.

How does an associate become active?

The associate becomes active by finding a broker-employer or an owner-developer

What are the Requirements for placing the lien in a Commercial Real Estate Sales Commission Lien Act (Sales act)?

The broker must disclose before or at the time of executions of the agreement the broker's lien right using language prescribed in chapter 475. F.S. The broker must deliver a commission notice to the owner and closing agent within 30 days of the time a commission is earned. The delivery must also be one day before the closing. If there is no dispute from the owner within five days of closing, the owner confirms the commission and the closing agents will pay the broker from the owner's net proceeds. Note: This lien does NOT attach to any interest in real estate

Is the buyer required to sign a disclosure?

The buyer is NOT required to sign the disclosure under Florida law, but if he refuses to sign, the broker should include a copy of the disclosure along with a note that the buyer refused to sign and include it in the buyer's file

What is the 13th step of closing a sale?

The buyer obtains hazard insurance and gets a copy of the policy to the closing agent. Flood insurance must be obtained if necessary

The buyer is set to close on his home June 15th. His loan balance is $63,000 and his interest rate is 7%. How much is the interest adjustment on this loan?

The buyer owes from June 15- June 30. INCLUDE BOTH June 15 and June 30 = 16 days. Interest _______________________________________ $63,000 loan balance | 7% interest rate $63,000 x 7% to get annual interest = $4410.00. Divide by 365= 12.08 dollars per day $12.08 interest per day x 16 days = $193.32 interest due.

When do commission members meet?

The commission meets monthly on the second Tuesday and Wednesday

What is Police Power?

The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare.

What is a reservation of an easement?

The creation of a new right or requirement retained by the grantor after the property transfer.

The deed of the property is taxed

The deed of the property is taxed based upon the sale price. This is NOT an "Ad Valorem" tax, calculated earlier in the chapter. /////// The taxation amount is .70 per $100.////// Sale price is $97,500. =97500/100 x.70= $682.50. Taxes are rounded up to the nearest $100.00. If the sale price were $97, 501, the cost would be 976 x.70 =$683.20

Who performs the services of the FREC?

The division

What benefits do military veteran applicants get during the application process?

The following fees are waived -the initial licensing fee -the initial application fee -the initial unlicensed activity fee - furthermore a spouse may also be issued a temporary license for 6 months

When is agency terminated?

The fulfillment of the purpose of agency is completed (the transaction is completed). The time limit has expired as stated in the agreement. (The listing agreement expires or a buyer's agreement expires), Breach or cancellation by one of the parties is given: renunciation by the broker ("I quit") or revocation by the principal ("You're fired"). Mutual consent is given. (Both agree that it is mutually acceptable that it is in the best interest of all the parties to terminate the agreement.), Death or incapacitation of either party occurs. (Seller or broker dies) Destruction of the property or a change in the property is caused by outside forces. ( A change in zoning or condemnation etc,), Bankruptcy of either party or foreclosure of the property occurs.

What is An Estate in Remainder?

The grantor (original owner) gives a life tenant possession of the property during the lifetime of the life tenant. The grantor names a third party (called the Remainderman) at the time the property possession is given. At the death of the life tenant, the property is given to the remainderman, rather than the original owner.

What is An Estate in Reversion?

The grantor (owner of the estate) gives his interest to another party called a life tenant to be reclaimed upon the death of the life tenant.

So what is a Covenant against Encumbrances?

The grantor assures the grantee that there are no encumbrances against the property unless they are spelled out in the deed

What must be in place for a deed to be valid?

The grantor must be of sound mind and of legal age Consideration Words of conveyance A complete and accurate legal description The grantor must acknowledge the deed In Florida, two witnesses are required to validate the signing of the deed. Delivery and Acceptance takes place.

What is a general Warranty deed?

The highest and best deed. This is the type most often used in residential transactions Promises The Covenant of Seisen and The Covenant against Encumbrances The Covenant of quiet enjoyment The Covenant of Further Assurance The Covenant of Warranty Forever

What is the 4th step of closing a sale?

The home inspection is ordered according to the terms of the contract

What is the Feudal System?

The king owned all the land and the individuals who lived and worked the land were merely tenants who had the right to occupy and use the land. This system does not exist in the United States.

If a licensee doesn't get a rule by the FREC in there favor what may they do?

The licensee may appeal to the courts

What can a life tenant NOT do in An Estate in Reversion?

The life tenant cannot will the property nor can the life tenant's heirs inherit the property

What is contained of a Florida real estate license?

The name of the Governor The Seal of the State of Florida The name of the Secretary of the Department The effective date and expiration date of the license The license number and status The licensee's name The approved name that the licensee (if a broker) operates under

3 facts needed to calculate a mortgage amortization

The outstanding amount of the debt (principle) The rate of interest The amount of payment (principal & interest only /"PI")

How many acres are in a piece of property measuring 620' x 430'? 5 6.12 7.25 8.36

The problem asks for the area in acres; 620' x 430' = 266,600 square feet. Divide the square footage of the area given by the amount of square feet in an acre 43,560. 266,600/43,560 = 6.12

What three things must take place to take property from an owner?

The property owner must be paid "just" compensation for the property. The property must be for the public good* The owner must have due process in the courts.

The Closing Statement

The purpose of a closing statement is: - to account for all monies expended by the buyer and seller - to show how much the buyer owes - to show how much the seller will receive from the sale to "prorate" how much buyer and seller owe each other

How can an easement by terminated?

The purpose of the easement no longer exists. (a new road is built, etc.) The holder of the easement abandons it for the statutory time period. A merger of the properties occurs so an easement is not needed. Destruction of the property or the easement (such as being at the bottom of a new dam filled with water.) The owner of the easement issues a Quit Claim deed back to the property owner that granted the easement. Excessive use occurs as determined by the courts.

What is the purpose for having to disclose of a social security number by an applicant?

The purpose of the social security number is to comply with child support payment laws

What is Eminent Domain?

The right of the government (both federal and state), public corporations, (school districts, sanitation districts),public utilities and public service corporations (railroads, power companies)to take private property for a necessary public use, with just compensation paid to the owner

What is Taxation?

The right of the government to collect taxes on properties to support the cost of public services.

If a broker assumes the role of agent what do role all the sales associates take?

The role of sub agent

Gross Income Multiplier

The same technique is used for income-producing properties such a convenience store, grocery store etc. Great care must be used to accurately determine the gross income PER YEAR. When using the gross income multiplier, the gross ANNUAL income is used, instead of monthly. Because of the variables such as location, owner differences etc., this is a highly speculative method of determining value and should only be used as a confirming method, not as a primary method.

The seller is set to close on November 27. The taxes are $3200 per year and they are in arrears. How much will the seller be charged? The taxes are prorated on midnight the day before closing. Using the Statutory Month Method

The seller owes for 10 months and 26 days. $3200 ÷ 12= $266.67 per month x 10 = $2,666.67 plus 26 days. $266.67÷ 30= $8.89 per day x 26 = $231.11. Add the two numbers together. Since taxes are paid in arrears (at the end of the year), we will debit the seller $2897.78 and credit the buyer $2897.78

What is needed to release homestead rights?

The signatures of both spouses (even if one is not on the deed) are needed on contracts and mortgages

What is a lot and block system?

The system utilizes a map referred to as a plat map

What is the Taxation on the Deed of the Property?

The taxation amount is .70 per $100.

What must be included in a valid will?

The testator must be of legal age. (18 or older) The testator must be of sound mind. The will must have the proper wording. There can be no undue influence, menace or duress from others on the testator. There must be the correct number of witnesses as determined by the state.

3. The Law of Supply and Demand:

The value of a property increases when the supply is limited and decreases when there is too much property available. Similarly, the value increases when the supply is short, and decrease when there is little demand. Demand and supply are opposites: the lower the supply, the higher the demand: the higher the supply, the lower the demand. Example: when a property is placed on the market in an area where few properties are sold from year to year, the property will usually sell quickly. Conversely, when there are many properties to choose from, the market for an individual property will be less. If a large employer in an area closes, the likely effect on the area's real estate values will reflect the principle of supply and demand.

Automated Valuation Models

There are online sources which provide automated values to the public. These sources are often not reliable as they miss the local understanding involved in valuing for neighborhoods, local changes in zoning, and recent changes in the market, and specific areas which are understood by real estate professionals. Although these models may not be reliable, many customers will refer to their information as a basis for their understanding of a value. Sales associates should review these sources as well before they commence a CMA in preparation for answering any questions that these models may have provided.

What are Services the borrower did shop for?

These are items the borrower can get on his own, such as pest inspections, survey fees, and title insurance.

What are Services the borrower did not shop for?

These are items the lender requires for the loan, such as appraisals and credit reports.

30 days has September, April, June and November

These months have 30 days Besides February the rest have 31

What does a universal agent do?

They handle all delegated business of the Principal

What does a general agent do?

They handle multiple transactions of a principal/client

2. COST APPROACH also called Summation Approach

This approach is used on buildings which DO NOT HAVE MARKET DATA because they are unusual properties (school, post office, library, etc. or a building WITHOUT income). - Reproduction cost - Replacement cost

When would you use a quit claim deed?

This deed is commonly used to correct spelling of a grantor's or grantee's name or other mistakes made in another deed.

What is an example of when a no brokerage form would be used?

This form may be used when working with For Sale By Owner, when the buyer wants to purchase such a property

What is Fee Simple Absolute?

This form of ownership is always clearly stated on the transfer papers (the deed) to the property it means the highest and best form of ownership it has the largest bundle of rights possible unlimited duration and it is inheritable subject only to government powers. (P.E.T.E.)

What is included on the Paid already by or on behalf of borrower at closing part of the Summary of Transactions on the left side?

This includes deposit, loan amount, loan assumptions, seller credits, other credits, and adjustments for items unpaid by the seller

What is included in the Due to seller at closing portion?

This includes the sale price of the property and an adjustment of $80 for HOA dues paid by the seller in advance

What is included on the Due from the borrower at closing part of the Summary of Transactions on the left side?

This includes the sale price of the property and any adjustments for items paid by the seller in advance.

What is included on the Due to Seller at closing part of the Summary of Transactions on the right side?

This includes the sale price of the property and any adjustments for items paid by the seller in advance.

What is Due from the borrower at closing?

This includes the sale price of the property, the closing costs paid at closing, and the adjustments for HOA dues paid by the seller in advance

What is an Estate from Period to Period?

This is a lease which is considered as "a month to month" or periodic tenancy It is a lease which began with a definite beginning but did not end so it is automatically renewed for the same period as the original lease Notice is needed to terminate This lease has a definite beginning, an indefinite end and needs notice to cancel.

What is an Estate or Tenancy at Will?

This is a type of lease which is very vague. It has a definite beginning, an indefinite end and can be terminated by either party at any time.

Origination points

This is charged by the lender to cover the costs of making the loan.

What is an Estate or Tenancy at Sufferance?

This is not a lease at all, but it is tenant occupancy of the property without the consent of the landlord. This is usually part of an eviction process. The landlord "suffers" in this relationship

6. Reconcile estimated values for the final value estimates

This is the FINAL step in the appraisal process, in which the appraiser reconciles the estimates of value received from the sales comparison, cost and income approaches to arrive at a final estimate of market value for the subject property. An Appraiser never averages comparable sales to obtain a final value

What is the Brokers' Relationship Disclosure Act?

This law provides certain provisions in order to clarify the relationship of brokers to sellers, and buyers

A No brokerage Relationship must be established in writing as this is not the default relationship status. What is the definition of this type of relationship?

This means that the buyer or seller have no representation in the transaction but the broker will help them both complete the transaction. There is no loyalty involved in this transaction, nor any fiduciary responsibility for the side not represented.

What does Legally Sufficent mean?

This means that the complaint must allege that a violation of Florida Statute, DBPR rule or FREC rule has occurred

The seller wanted to net $150,000 after paying an 8% commission and closing expenses of $1500. How much does the property have to sell for to net the seller $150,000. a) $138,000.68 b) $163,043.48 c) $164,673.91 d) $170,000.00

This one doesn't come out right $150,000 + $1500= $151,500 151500*.08=12120 12120+151500=163,620

What is The Covenant of Seisen?

This promises that the seller owns the property and has the right to convey it to another

What is included on the Due From Seller at closing part of the Summary of Transactions on the right side?

This section includes closing costs the seller will pay, payoff of any first or second mortgages, seller credit, and adjustments for items unpaid by the seller

What is included in the Due from seller at closing portion?

This section includes closing costs the seller will pay, payoff of the first mortgage, seller credit of $2,500, and the adjustment for the city taxes unpaid by the seller

What is a Conventional Life Estate?

This type of Freehold Life Estate is based on a person's life but upon death of that person, the estate will go to one of two types of situations.

Who would use a bargain and sale deed?

This type of deed is given for properties which have been auctioned. Trustees, fiduciaries and officers of the court often use this deed.

Where did the word chattel come from?

This word evolved from the word "cattle" one of man's earliest important possessions

What are 3 examples of licenses?

Tickets to sporting events, Hunting and fishing licenses, Permission to use the property of another temporarily such as letting a neighbor go through the yard to put in a pool.

A title company in Florida cannot conduct a closing on a property unless they are providing what?

Title Insurance

What is the 9th step of closing a sale?

Title insurance on the property is obtained by the mortgagor for the mortgagee and the mortgagor

A broker listed a home for $195,000 and sold it for 90% of the list price. If the home was listed at 7.5% selling commission and the split was 55% to the listing broker and 45% to the selling broker, how much did the selling broker receive? a) $14,625.00 b) $13,162.50 c) $5,923.13 d) $7,239.38

To do this problem, first determine what the actual selling price is. Take$195,000 times 90% to get the sales price. $195,000 x 90%= $175,500 sale price. Commission is paid only on sale price. $175,500 x 7.5%= $13,162.50 total commission To determine the selling agent's portion, put the numbers back into the formula. $13,162.50 x 45%=$5,923.13 (answer c)

What 7 questions determine the estate?

To what extent do you own or lease your property? To what degree do you own it? What is the nature of your ownership? Do you own the entire bundle of rights? Have you sold any of your rights? Are you leasing the property? Do you have a mortgage on the property?

Where are the loan costs on the Closing Disclosure?

Top of page 2

Qualifying for a conventional mortgage

Total obligations ration (TOR) must not exceed 36% TOR calculation

What are fructus naturales?

Trees, perennial bushes and grasses that do not require annual cultivation and is considered real property however If a tree is cut down and sold as firewood, the firewood becomes personal property.

Who is appointed to the probable cause panel?

Two members of the FREC Only one of the FREC can be a lay member (one of the non-licensed members of the Commission) the two and it may include the Chairperson or Vice Chairperson The panel could also include former commissioners, with one of the panel being current.

What is required post license for a broker?

Two post-license courses are required during the first licensure period as a broker. These courses consist of two, thirty hour courses, which require a written school exam if you don't complete this broker license becomes null and void

7. Report final value estimates

Types of Appraisal Reports: a) Letter: A short business letter stating all essential data but not including supporting data. b) Short or Form: Contains all basics of a regular appraisal and is used primarily for homes. c)Narrative: The most comprehensive of all appraisal reports. Used for commercial and investors

Real Estate COMMISSION Math

Typically commissions are a percentage of the sale price. Commission ________________________________ Sale Price | Commission %

What are the 4 types of agency?

Universal agent General Agent Agency coupled with an interest Special Agent

What does A violation of a zoning requirement makes a title?

Unmarketable

How long can a license be suspended for?

Up to 10 years

What is a bench mark?

Used o speed up the surveying process, surveyors use a short cut a permanent brass plate, placed in the ground and it notates the feet above sea level at that location. The surveyor can then start at the bench mark in order to determine elevation (feet above sea level.)

2. Gather, record and verify the necessary data

Using all of the tools available the appraiser uses the THREE appraisal processes - market data or sales comparison approach - cost approach - income approaches

The differences between value, price and cost

VALUE is the amount brought in an open market under the above assumptions. PRICE is the amount the buyer will actually pay, sometimes with unusual circumstances. COST is how much cash it takes to build and improve property. Cost may also be historical - for example, what one paid for something is not necessarily what the item is worth today.

What are the 2 types of Liens?

Voluntary Involuntary

What are the two types of inactive status?

Voluntary and Involuntary

Do volunteers or state employees make up the FREC?

Volunteers

What is the Intent or agreement of the parties?

What do the buyer and seller agree upon? The martin bird house tower may become personal property if the buyer and seller agree in the contract, even if the bird house has been cemented in the ground.

What is Unauthorized Practice of Law?

When Licensees, who choose to give an opinion of title, interpret a contract, provide advice as to the proper actions for a buyer or seller to take in the execution of items outside what is written in the contract

Rent Proration

When a seller owns rental property, rent is prepaid for the month. The seller will OWE the buyer for the days that the buyer owns the property- FROM MIDNIGHT midnight the day before closing until the LAST of the month. Use the 365 day method and prorate at midnight the day before the closing.

When would a fiduciary relationship be created?

When an agent represents the seller as a principal

When is registration rather than individual licensing given?

When real estate is practiced as a business entity rather than as an individual

Buyer's Interest Adjustment

When the buyer initially takes out a new loan, most of the time he will pay what is known as interest adjustment. Lenders do this to bring the interest payment up the first of the next month so that all house payments are due on the first of the month. The BUEYR signs the papers, and becomes the owner of the property on June 15th. The LENDER will charge the buyer interest from June 15 to June 30th at closing. The BUYERS's first principal and interest payment on his new loan will not be due until August 1st, because mortgage payments on home mortgages are generally paid in arrears. On August 1st the borrower will be paying his first full mortgage payment of principal and interest in arrears for the month of July. On September 1st the borrower will pay the principal and interest for the month of August in arrears Interest Adjustment can amount to a large amount of cash that a buyer must bring to closing. Interest is figured on the 365 day method. Interest ______________________________ loan balance | interest rate

Which Relationship uses the Statue of Frauds?

Written or Expressed Agency

What are the 3 ways an agency relationship is created?

Written or Expressed Agency Implied Agency Ratification of Agency

Can Air rights be sold separately from the land?

YES

Can a net lease be charged on a residential property?

YES

Is personal property subject to state sales tax from the buyer?

YES

Can a non citizen become licensed?

Yes

Would a fixture remain with the property when it sold?

Yes

Is a pro-rated amount tax deductible?

Yes as is mortgage interest

Are fructus industriales considered personal property?

Yes as long as the annual crop is growing

Can students review a recent exam?

Yes within two years of the date of the examination and they will have 1 hour to review

Can a married couple take title any other way than tenancy by the Entireties?

Yes, many times couples for personal reasons will take title as tenants in common or as joint tenants.

A marketable or clear title is free of encumbrances. Is it possible for a title company to insure a clouded title?

Yes, the title co. can insure around the cloud. So if later an issue arises unrelated to the cloud on the title the home owner would be covered, however issues related to the cloud would not be covered by the title insurance policy.

What are 3 examples of Police Power?

Zoning Laws Building Codes Envionrmental Protection Laws

What is a Mechanic Lien?

a *Statutory Lien that governs construction liens, more commonly referred to as mechanic's liens The purpose of this lien is to protect contractors, subcontractors, suppliers and homeowners Its purpose is to provide a method to assure full payment to a contractor who builds on a property

What must brokers get on there post license exam?

a 75% or higher

If the violation is not corrected or the licensee does not comply in a timely manner what will happen?

a Citation is issued with a fine

All liens except which are involuntary?

a Mortgage lien

In some cases for a minor violation the Department may issue:

a Notice of Noncompliance for a first time offense, providing that this offense does not endanger the public

What does every property have?

a Parcel Number assessed value of the land and structures owner's name and address of record

Who is the answer by the licensee give to after a complaint?

a Probable Cause Panel

What can a Quit Claim Deed result in?

a Quiet Suit to title

What does an administrative law judge issue?

a Recommended Order

What does an administrative law judge prepare?

a Recommended Order

What is a restriction?

a Use Encumbrance

When does a license cease to be in force?

a broker fails to notify the FREC timely changes to her or his business address a real estate school fails to notify the FREC timely changes to its business address A sales associate working for a broker or an instructor working for a real estate school changes employer until that license is registered under another employer.

What is an Encumbrance?

a burden on the property such a lien or a tax

To obtain the RERF what must must be filed against a broker or sales associate claiming a violation of Chapter 475?

a civil suit

What documents are Each prospective purchaser who has entered into a contract for the purchase of a condominium unit entitled to?

a current copy of the declaration of condominium, articles of incorporation of the association, bylaws and rules of the association, financial information required by s. 718.111, and the document entitled "Frequently Asked Questions and Answers disclosure developed by the Florida Department of Business and Professional Regulation (DBPR)

What is a lien?

a debt or charge against the property a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation

What does the term Bounds refer to?

a direction

What is an example of an Easement by Necessity?

a farmer sells 80 acres of ground between his barns and the road. The court would say that the farmer has the right to an easement by necessity to get feed to his animals from the main road.

What punishment does a second degree misdemeanor bring?

a fine up to $500 and imprisonment for a period of not more than 60 days

What 2 hearing choices does a licensee have?

a formal or informal hearing

What does Probate mean?

a formal court hearing to establish the validity of a will after the death of the individual

If probable cause is found what is filed against the licensee involved?

a formal or "administrative" complaint

What do the 2 members of the probable cause panel act as?

a grand jury

What is an index lease or variable index lease?

a lease that goes up or down, based on a specific index such as the Federal Reserve's cost of funds, as agreed to by the parties

What is A Subordination agreement?

a legal document used to make the claim of one party junior to (or inferior to) a claim in favor of another It is generally used to allow first lien status to a lienholder who would otherwise be secondary to another party, with the approval of the party that would otherwise have first lien.

What would be an example of ratification of agency?

a licensee who shows a property without a current listing agreement and then the seller agrees to work with the person (creating an agency) to sell the property

Within one year of the original end of course examination how many times may you retest?

a maximum of one time Otherwise, students failing the end-of-the-course examination must repeat the course prior to being eligible to take the end-of-the-course examination again.

What is the definition of a customer?

a member of the public who is or may be a buyer or seller of real property and may or may not be represented by a real estate licensee. Either buyer or seller is a "customer" when he chooses a limited representation under Transaction broker status

voidable contract

a minors contract is voidable but an adult is bound to honor said contract if the minor chooses to go through with the transaction

formal contract

a negotiable written instrument such as a promissory note.

What is probation?

a penalty for a period of 90 days starting within 30 days after the filing of the Final Order

What is an example of an implication of an easement?

a person acquiring mineral rights on a property also acquires an implied easement to enter the property for the purposes of removing minerals.

What is an agent?

a person who is empowered by contract (or action) to represent the interest of someone (you) called a Principal or client

What are Encroachments?

a physical thing which is an unauthorized intrusion of the owner's legal title. In other words, the tree hangs over into the owner's space, as defined by his legal description of the property.

What is a lease?

a possessory, non-freehold, interest in land, created without ownership

What does a legal description identify?

a property's location, measurements, and all necessary location information to identify a plot of land