Exam Question Master 3

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Note, stamps on new and assumed notes

$.35 per $100

Stamps on Deed

$.70 per $100

If the closing is March 15, and last years taxes of $1127 were not paid; how is this shown on the settlement sheet? $1127 debit to the seller, credit to the broker $1127 debit to the seller, credit to the buyer $225 debit to the seller, credit to the broker $225 debit to the seller, credit to the buyer

$1127 debit to the seller, credit to the broker It will be shown on the settlement sheet as a debit to the seller and a credit to the broker. Remember, the broker represents the escrow account. The credit goes to the escrow account as the person in charge of it, represented by the broker, needs to write a check to the County to pay the seller's delinquent tax bill.

A farm, described as the "NW-1/4 of the SE-1/4 of Section 10, Township 4N, Range 4 W of the Gila and Salt River Base and Meridian" sold for $500 per acre. The sale price would be $10,000 $20,000 $25,000 $40,000

$20,000

Land sells for $1,200 per acre. What is the price of the E 1/2 of the NE 1/4 of the SW 1/4 of Section 7? $ 9,000 $12,000 $24,000 $48,000

$24,000

A tenant in an apartment complex may recieve up to ______ for refferal of a new tenant for the same complex.

$50

The criminal penalty for violation of F.S. 475 is typically a fine of up to _____ and/or imprisionment for no more than _______ days

$500, 60

In a buyer-agency situation, what responsibility does the agent have to the principal? To be vicariously liable for their actions To pay a commission To disclose psychologically impacting events surrounding a property To be an advocate of the buyer's best interests

To be an advocate of the buyer's best interests A buyer agency relationship establishes advocacy, of the buyer's best interest; (it is a fiduciary responsibility).

Proration

To divide or assess proportionate shares of changes and credits between the buyer and the seller according to their individual period of ownership.

A Corporation, LLC, Partnership must have E&O insurance for entity and employing broker. True False, only the employing broker requires E&O insurance False, only the legal entity requires E & O insurance False, only the individual licensee''s require E&O insurance

True Rule D-14 Errors and omissions (E&O) insurance Every active real estate licensee, including licensed real estate companies, shall have in effect a policy of errors and omissions insurance to cover all acts requiring a license.

Florida Real estate sales associates that desire to become brokers must wait _______ ________ before taking the state exam.

Two years

prohibited activities

advertise that housing is available only to people of a certain race, color, religion, national origin, handicap or familial status making false statements concerning the availability of housing

blind advertisements

advertisements that fail to disclose the license name of the brokerage firm are blind advertisements

acquiring legal title

alienation-the act of transfering ownership, title, or an interest in real property from one person to another alienation may be voluntary/involuntary

who does the DBPR employ

all DRE personnel to support FREC activities

Which monetary encumbrances should be listed by the seller when completing the Exclusive-Right-to-Sell Listing Contract? all encumbrances known to the seller all encumbrances the seller will not pay off only encumbrances of public record all encumbrances to be assumed by a buyer

all encumbrances known to the seller The seller should list all encumbrances known at the time of the listing. The status of these encumbrances after the property is sold would not be relevant (or known) at the time of the listing.

income tax (IRS) lien

all property owned by the taxpayer at the time of the filing as well as on all future property acquired by the taxpayer until the lien is satisfied

Which expense is subtracted to derive NOI?

Vacancy and collection losses Vacancy and collection (V&C) losses are subtracted from PGI to derive EGI. V&C loss is one of the items deducted in a reconstructed operating statement to calculate NOI.

All of the following are types of property descriptions except lot and block. allodial system. metes and bounds rectangular survey.

allodial system.

Which of the following is a true statement about Florida Telemarketing?

Violators may be fined $10,000 per call

When the grantor delivers a valid deed that is accepted by the grantee.

Voluntary Delivery and Acceptance

Mineral rights: If property is attached with mineral rights, you may be obligated to: charge a rate for entry refuse entry allow them to enter an use your property to gain access to the minerals call police

allow them to enter an use your property to gain access to the minerals Just as if your neighbor had no access to their property, the law may require you to grant the neighbor an easement to drive across your property, the mineral owner has a right to access their minerals. This does not mean that the mineral rights owner has unlimited right to impact or damage your property. The law may require the mineral owner to access their minerals, for example oil, by drilling underneath the property leaving the surface undisturbed. This is a complex and litigious area of the law.

personal property

also called chattel personality indicates personal property all personal property included in the sale should be identified in the contract for sale, or the seller is entitled to remove the property real property can become personal property through act of severance personal property can become real property by attachment

deposit

also called good faith deposits or binder deposits sum of money or its equivalent, delivered to a real estate licensee as earnest money or a payment, or partial payment in connection with a real estate transaction

When making a counter offer by using the approved Counterproposal form - how do you change dates? Add an addendum Mark through the old dates and enter new ones. Do nothing, a verbal notification is sufficient. Change only the dates that needed to be changed

Yes, if the out-of-state broker resides and maintains an office in the other state Commission Rule E-23 states that a Colorado broker who cooperates with a broker who is licensed in another state or country may pay such out-of-state broker a finder's fee or share of the commission if: (1) such broker resides and maintains an office in the other state or county, (2) all advertising, negotiations, contracting, and conveyancing done in Colorado is performed in the name of the Colorado broker, and (3) all money collected prior to the closing is deposited in the name of the Colorado broker.

Can a broker in Colorado give a referral fee to an out-of-state broker? Yes, if they have a Colorado trust account No Yes, if the out-of-state broker resides and maintains an office in the other state Yes, if they have a Colorado license in addition to their out-of-state license

When a property located in Colorado is sold, it may be subject to state income tax withholding. Which of the following situations would require state tax to be withheld? When the last known address at the time of closing was outside of the state of Colorado When the property is the principal residence of the seller When the sales price is less than $100,000 When the seller is a bank foreclosing on a loan which is in default

When the last known address at the time of closing was outside of the state of Colorado Only out of the state sellers selling property in excess of $100,000 are subject to Colorado tax withholding at the time of closing. Title Companies are generally required to withhold the lesser of (1) two percent of the sales price, or (2) the entire net proceeds, to cover any POTENTIAL tax liability on the sale of Colorado property when the seller has moved or will move out of state. In Simple-eze - the State is worried that they will not get their cut if someone lives out-of-state or is moving out-of-state as they may not file a Colorado Tax Return. Soooo, the State withholds some money from the closing to motivate the seller to file a Colorado Tax Return and settle a tax if any is owed.

Find the capitalization rate on a business that is worth $430,000 and rents for $1,500 a month. 0.0419 0.0519 0.0375 0.0525

0.0419 First multiply the monthly rent $1,500 by 12 = Annual rental income $18,000. Then divide this by the property value $430,000 = the cap rate 4.19% More on Cap Rate: Since Cap Rate uses income, it is only used for income producing properties, not for example, the home you are buying for yourself. First let's define cap rate AKA Capitalization Rate: Cap rate indicates how fast an investment will pay for itself. For example, a 10% Cap Rate means you will get 10% of your purchase price back each year. If a commercial apartment building is purchased for $5,000,000 and it generates $500,000 a year in net operating income (the dollars left over after operating costs are subtracted from your gross income), then: $500,000 / $5,000,000 = 10% cap rate This means 10% of the building's purchase price is paid each year by the proceeds. Another way of saying this - the property will pay for itself in 10 years. How do you use this tool? Way one; it allows investors a fairly easy and quick method of comparing investment properties. For example: take two properties as identical as the cute twins you flirted with in high school, with the same net operating income. One has a cap rate of 8% (same income, priced higher) and the other a cap rate of 15% (same income, priced lower). The 15% cap rate property MIGHT just be a heck of a deal or the 8% one overpriced. BUT you have to dig deeper, because it might be that the higher cap rate property is in a bad neighborhood and the owner has to discount the price to get it sold. Higher risk means you as a buyer get more bang for the buck with the 15% cap rate property, but you are going to have to work harder for it and your spouse is mad because you haven't been able to take a vacation in years because of that "dang" property you bought. The 8% cap rate property may be more expensive and have a longer payback period, but that is because there is less risk and more investors want to buy it. The rents just come in without grief and it could save your marriage. Way two: Cap Rate is also used in the Income Method of appraisals to value a property. Generally, investors could care less if a property is pretty; they want to know how much they are going to make off it. The Income Method allows an investor to value a property based on its income. If most like investment properties in an area have an average cap rate of 7%. You can divide the net operating income of the property your client is interested in (provided by the listing agent) by the average cap rate in the area (digging in sold comps of various MLS's) and it will give you the approximate market value of the property. For example: $225,000 net operating income / 7% = $3,214,285 market value. If the property is listed for $5,000,000 you might want to pass it by because it is overpriced for the neighborhood. If it is listed for $2,500,000 you call your client quick because you think you found a good deal.

A broker needs $5950 to pay her IRS tax lien. She has the opportunity to list a property at fair market value of $85000. What would her listing commission rate need to be in order to pay her debt assuming she will pay 2.8% to the selling broker? 0.07 0.0725 0.098 0.06

0.098 $5950 / $85000 = 7% + 2.8% = 9.8%

Three types of law that society looks to for guidance regarding agency relationships:

1. Common Law 2. Statutory Law 3. Administrative Law

The Executive powers of the FREC include?

1. Create and pass rules and regulations 2. Regulate professional practices

An applicant is evaluated to dertermine if they can repay a loan by using 3 Criteria

1. Credit History 2. Income 3. Other Assets ( real estate, cars, stocks, etc.)

3 exceptions to notice and settlement procedures

1. HUD-owned property are exempted from the notice and settlement procedures and chapter 475 FS 2. condomininium unit buyer 3. if a buyer of real property in good faith fails to satisfy the terms specified in the financing clause

Types of transactions that do not require brokerage relationship disclosures (5):

1. Nonresidential transactions 2. Rent or lease agreements (except when there is an option to purchase residential property); 3. Business opportunities (except for property with four of fewer units); 4. Auctions; and 5. Appraisals

Real estate sales associates involved in sales and leasing specialize in one of which 5 areas?

1. Residential 2. Commercial 3. Industrial 4. Agricultural 5. Businesses

a valid contract is one that complies with the provisions of contract law and contains 4 essential elements

1. contractual capacity of the parties (competent parties) 2. offer and acceptance (mutual assent) 3. legality of object (legal purpose) 4. consideration

calculating rent owed for a variable lease

1. divide the new index by the original index 2. multiply the number from step one by the original rent

2 ways to Own

1. fee simple (absolute) 2. Life estate (owned in lifetime)

exemptions of hair housing act

1. if a real estate licensee was not involved 2. there was no discriminatory advertising the seller owns 3 or fewer single family dwellings or rents the property seller was not living in the single family house and was not the most recent resident when the property was sold or rented rentals in multifamily dwellings with 4 or fewer family units as long as the owner lives in 1 of the units

Residential sale transactions are defined as (3):

1. improved residential property of four or fewer units; 2. Unimproved residential property zoned for four or fewer units; and 3. Agricultural property of 10 or fewer acres

steps in property tax protest procedure

1. seek an adjustment by contacting the county property appraiser or a representative of that office 2. if the property owner's request for adjustment is rejected, the owner may file an appeal with the value adjustment board. a property owner is allowed 25 days after the notice of proposed property taxes (TRIM notice) is mailed to file an assessment appeal 3. litigation in the courts. the taxpayer may pay the taxes under protest and file a suit (certiorari hearing; meaning review of matter by the courts)

The maximum time allowed for the sale of a residential property, through the Public Trustee's office after filing of the notice of election and demand (NED) to foreclose is: 45 days 90 days 125 days 230 days

125 days For residential properties, the public trustee schedules the sale 110-125 days ( 215-230 days for agricultural) after the initial foreclosure action was recorded. The notice of sale is published in a local newspaper for 5 weeks. The public trustee also mails a copy of the notice to the borrower. The public trustee typically conducts the sale at the courthouse. At the sale, the public trustee reads the written bid submitted by the lender, and any party may bid. If anyone other than the lender is the winning bidder, that person must deliver the bid amount in cash or cashier's check to the public trustee. The winning bidder is given a certificate of purchase.

$104,250 is the max amount of a verteran's entitlement of a VA guaranteed loan, and ____ days are required to be a Veteran.

181 peacetime 90 military conflict

tenancy in common

2 or more persons wish to share the ownership of a single property, they may choose to do so as tenants in common most frequently used form of co-ownership except for husband and wife relationship same or different times with an equal or unequal shares of ownership undivided interest

How long is a license valid on a real estate application?

2 years

license application expires after

2 years

time to file a claim

2 years

license application expires:

2 years after the date the DBPR receives the application

A lot with a depth of 80 feet and an area of 4,800 square feet was sold for $350 per front foot. What was the total sales price? 31800 28000 35000 21000

21000 4800sf / 80 = 60 front feet. 60 x 350 = 21,000 A front foot is the front length of a parcel - in this case 60 feet. Front feet are a big deal for commercial properties who rely on walk-in traffic. They want to have as must exposure to the traffic. Also, vacation properties along a lake. Everybody wants as much property as they can facing the lake.

Straight Line Method

27.5 years for residential and 39 years for non-residential (commercial)

Unless the lease states otherwise, how long does a property manager have to return a security deposit after a lease has expired? 30 days 60 days 45 days 6 months

30 days Colorado law mandates that a security deposit must be returned within 30 days with an accounting for all deductions unless the lease indicates a different time period. Under no circumstances can the period of time be greater than 60 days.

brokers must implement one of the settlement procedures within

30 days of receiving conflicting demands or of having a good faith doubt

time periods regarding tenant deposits

30 days. the landlord must notify the tenant in writing of which method is used to hold the tenants deposit in non interest bearing florida bank, interest bearing florida bank, or posted bond 15 days. landlord who does not intend to make a claim on the security deposit has 15 days to return 30 days. landlord who is making a claim on the deposit has 30 days to notify the tenant of the claim 15 days. after receiving written notification of landlords claim on deposit, the tenant has 15 days to object in writing to the claim

A township contains 36 square miles. 640 acres. 640 sections. more than 10,000 hectares.

36 square miles.

Parol Contracts, if a contract is entirely oral , action must be brought within _____ years.

If a quarter-section of land is divided into four equal parcels, each parcel will contain: 10 acres 30 acres 40 acres 60 acres

40 acres

A house is closed on October 15. The annual insurance payment is $578 for the fiscal year of July 1 to June 30. The buyers will assume the seller's policy. Since the policy has been paid, how much does the buyer owe the seller at closing? 167.86 410.14 408.56 169.44

410.14 $578 / 365 = $1.5836 per day. Seller paid for 259 days; he didn't own the policy (Oct. 15 through June 30) 259 x $1.5836 = $410.14

Licensees that are members of the armed forces have all fees, dues and other requirements waived during their military service and for _____ months after returning to civilian life

armed forces renewal exemption

6 months after discharge from active duty

When reconciling a 6 column worksheet for a closing - after totaling up the debits and credits, the closing agent needed to add a $30,000 Debit to the Seller Debit column to make it equal to the Seller Credit column. What does this Seller Debit represent? A $30,000 check the Seller must bring to the closing A $30,000 check the Seller will receive from this closing

A $30,000 check the Seller will receive from this closing This DEBIT represents the Seller's proceeds from the sale (what they are getting). More info: This is a common spot of confusion, so do not let it break your head. The situation occurs at the bottom of the 6 column worksheet when you are reconciling the columns. Let's assume for a moment you are looking at a Buyer's columns. You have applied all the debits and credits and all you have to do is reconcile the columns which have $100,000 in the Credit column (money the buyer has proven they have) and $125,000 in the Debit column (what the Buyer owes). Looks like this Buyer is a little short, but by how much? To determine this amount, you have to make both columns equal. This enables the Closing Agent to determine how much the Buyer is short; which is also how much of a check the Buyer needs to bring and be deposited into the escrow account. So you add $25,000 to the Buyer's Credit column to make both columns equal. Therefore this $25,000 CREDIT represents how much the Buyer is short, meaning this CREDIT does not represent how much they have, it represents how much they still OWE. This is how a CREDIT becomes something you OWE. We are not done reconciling yet. We have a $25,000 Credit, to balance it out we need a $25,000 Debit. That debit goes to the Broker account which represents the Escrow Account. Back to practical language - the Buyers needs to bring a $25,000 check to the closing so that they can make their Credit column (what they got) equal to the Debit column (what they owe) and the Broker (Closing Agent) needs to deposit it into the Escrow Account ($25,000 Debit). For extra points - the reverse is most common with the Seller. When a Sellers Debit column (what they owe) is lower than their Credit column (what they sold their property for), the amount added to the DEBIT column to make both columns equal represents money the Seller is receiving. The balancing CREDIT in the Broker column, reminds the Closing Agent to cut a check to the Seller out of the escrow account.

Which would need to be registered with the CREC (Colorado Real Estate Commission) for a subdivision? A membership-based campground with 75 campsites Bulk sale of 500 lots between two developers A development with15 residential units A 60 unit co-op building

A 60 unit co-op building The Subdivision Developer's Act affects the types of subdivisions that must be registered with the Commission. The following types of subdivisions within the State of Colorado, and subdivisions located outside the state if being offered for sale in Colorado, must be registered before offering, negotiating, or agreeing to sell, lease, or transfer any portion of the subdivision: * 1. Any division of real property into 20 or more interests for residential use; * 2. Subdivisions consisting of 20 or more time-share interests (a time share interest includes a fee simple interest, a leasehold, a contract to use, a membership agreement, or an interest in common); * 3. Subdivisions consisting of 20 or more residential units created by converting an existing structure (e.g., condominium conversions); and * 4. Subdivisions created by cooperative housing corporations with 20 or more shareholders with proprietary leases, whether the project is completed or not. * B. Exempt from Registration under the Subdivision Developer's Act: * 1. The selling of memberships in campgrounds; * 2. Bulk sales and transfers between developers; * 3. Property upon which there has been or upon which there will be erected residential buildings that have not been previously occupied and where the consideration paid by the purchaser for such property includes the cost of such buildings (this does not apply to conversions, time share, or cooperative housing projects); * 4. Lots that, at the time of closing of a sale or occupancy under a lease, are situated on a street or road and the street or road system is improved to standards at least equal to streets and roads maintained by the county, city, or town in which the lots are located; have a feasible plan to provide potable water and sewage disposal; and have telephone and electricity facilities and systems adequate to serve the lots, which facilities and systems are installed and in place on the lots or in a street, road, or easement adjacent to the lots and which facilities and systems comply with applicable state, county, municipal, or other local laws, rules, and regulations; or any subdivision that has been or is required to be approved after September 1, 1972 by a regional, county, or municipal planning authority pursuant to Article 28 of Title 30 or Article 23 of Title 31, C.R.S.; and * 5. Sales by public officials in the official conduct of their duties.

Homeowners Association (HOA)

A Florida corporation responsible for the operation of a community or a mobile home subdivision in which the voting membership is made up of parcel owners and membership in the HOA is a mandatory condition of parcel ownership. An HOA is authorized to impose assessments that, if unpaid, may become a lien on the parcel.

teaser rate

A below-market interest rate usually offered for the first year on some adjustable-rate mortgages.

Truth in Lending Act (TILA)

A body of federal law that is part of the Consumer Credit Protection Act and implemented by the Federal Reserve Board's Regulation Z. The main purpose of the act is to ensure that borrowers and customers of consumer credit are given meaningful information with respect to the cost of credit so that consumers can compare the various credit terms available.

Special Information Booklet

A booklet containing consumer information regarding closing costs the borrower may incur at closing. RESPA requires lenders to give the booklet to loan applicants.

mortgagor

A borrower who gives a mortgage on the borrower's property in order to obtain a loan from a lender.

Transaction Broker

A broker who provides limited representation to a buyer, a seller, or both in a real estate transaction, but does not represent either in a fiduciary capacity or as a single agent.

Single Agent

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

good-faith doubt

A broker's uncertainty as to which party should receive the escrowed property.

Broker Price Opinion (BPO)

A broker's written opinion of the value of a particular property that may not be used in connection with the originating a federally related loan; not an appraisal.

Which individual is NOT exempt from real estate licensure under F.S. 475?

A business broker who negotiates leases of business property

Professional Association (PA)

A business corporation consisting of one or more individuals engaged in a primary business that provides a professional service (e.g., lawyer, doctor).

Limited Partnership (LP)

A business entity consisting of one or more general partners and one or more limited partners

Mortgage Broker

A business entity that conducts loan originator activities. Mortgage brokers can employ mortgage loan originators. Mortgage brokers do not make loans or service loans—they arrange loans.

Mortgage Lender

A business entity that originates, sells, and then services mortgage loans. Mortgage lenders are not depository institutions. They originate loans and then package the loans together and sell the entire package.

subject to

A buyer makes regular periodic payments on the mortgage but does not assume responsibility for the mortgage.

Buydown

A financing technique in which points are paid to the lender by the seller or builder that lowers (buys down) the effective interest rate paid by the buyer/borrower, thus reducing the amount of the monthly payment for a set period of time.

Adjustable Rate Mortgage (ARM)

A financing technique in which the lender can raise or lower the interest rate according to a set index.

Contract for deed (land contract)

A financing technique wherein the seller agrees to deliver the deed at some future date and the buyer takes possession while paying the agreed amount. Also called an installment sale contract or agreement for deed.

Reverse Mortgage

A form of mortgage that enables elderly homeowners to borrow against the equity in their homes so they can receive monthly payments needed to help meet living expenses.

Tenants in Common

A form of ownership by two or more persons each having an equal or unequal interest and passing the interest to heirs, not to surviving tenants.

Closing Disclosure

A form that must be provided to the borrower at least three business days before closing; replaced the Settlement Statement (HUD-1).

Opinion of a title

A formal statement by an attorney regarding the status of a title after examination of the chain of title.

Deed in lieu of foreclosure

A friendly foreclosure (nonjudicial procedure) in which the mortgagor gives title to the mortgagee.

Customer

A member of the public who is or may be a buyer or a seller of real property and may or may not be represented by a real estate licensee in an authorized brokerage relationship.

Cost Approach

A method for estimating the market value of a property based on the cost to buy the site and to construct a new building on the site, less depreciation.

Income Approach

A method for estimating the market value of a property based on the present and future income the property can be expected to generate.

Sales Comparison Approach

A method for estimating the market value of a property by comparing similar properties to the subject property.

Discount Points

A method for increasing a lender's yield. (See also Point, Mortgage discount.)

Level-payment plan

A method of amortizing a mortgage whereby the borrower pays the same amount each month

Asbestos

A mineral fiber used until 1978 in a variety of building construction materials for insulation and as a fire retardant.

Right to reinstate

A mortgage clause based on the equity of redemption. The mortgagor's right to reinstate the original repayment terms in the note after the mortgagee has initiated the acceleration clause.

biweekly mortgage

A mortgage loan amortized the same way as other loans with monthly payments, except that the borrower makes a payment every two weeks.

first mortgage

A mortgage on property that is superior in right to any other mortgage.

junior mortgage

A mortgage, such as a second mortgage, that is subordinate in right or lien priority to an existing mortgage on the same real property.

Assessor's parcel number

A numerical ID assigned to each parcel of land within a tax district used to prepare tax maps.

lis pendens

A pending legal action.

Subagents

A person authorized to assist and represent the agent and whose duties are delegated by the original agent

Who is exempt from having Real Estate License?

A person who has been given POA

Broker Associate

A person who holds a broker's license but chooses to register and work in real estate under the direction of another broker.

Sales Associate

A person who performs real estate services for compensation but who does so under the direction, control, or management of a broker or an owner-developer.

Rental Agent

A person who, for a fee, acts as an intermediary between a person seeking to lease a housing accommodation and a property owner seeking to acquire a lease for a housing accommodation.

Broker

A person who, for another and for compensation or other consideration (or anticipation of compensation or other consideration), performs real estate services.

Material Fact

A piece of information that affects the value of real property and is relevant to a person making a decision about that property.

nolo contendere (no contest)

A pleading of no contest by a defendant; a plea in a criminal action not admitting guilt but subjecting the defendant to punishment as though it were a guilty plea.

Title Insurance

A policy of insurance that protects the holder from any loss resulting from defects in the title.

Absentee Owner

A property holder who does not reside on the property and who usually relies on a property manager to manage the investment.

Handicap status

A protected class as defined in the Fair Housing Act and the Americans with Disabilities Act consisting of a physical or mental impairment that substantially limits one or more major life activities.

Familial Status

A protected class as defined in the Fair Housing Act, consisting of one or more individuals under age 18 living with a parent or legal guardian and pregnant women.

Concurrency

A provision in Florida's Growth Policy Act that requires water and waste treatment facilities needed to support additional population to be in place before new development is allowed.

Quiet enjoyment

A provision in a deed guaranteeing that the buyer may enjoy possession of the property in peace and without disturbance by reason of other claims on the title by the seller or anyone else.

Habendum Clause

A provision in a deed to real property that stipulates the estate or interest the grantee is to receive and the type of title conveyed.

Prepayment Penalty

A provision in a mortgage loan contract that requires the borrower to pay a penalty if the mortgage is repaid in full within a certain period.

Prepayment Clause

A provision in a mortgage that allows the mortgagor to pay the mortgage debt ahead of schedule without penalty

Conventional Loan

A real estate loan that is neither FHA-insured nor VA-guaranteed.

fiduciary relationship

A relationship of trust and confidence, as between trustee and beneficiary, attorney and client, or principal and agent.

Nonconforming loan

A residential mortgage loan that exceeds the loan amount acceptable for sale to Fannie Mae.

Planned Unit Development (PUD)

A residential project with mixed land uses and high residential density.

Informal hearing

A respondent who does not dispute allegations of material fact in the administrative complaint may request an informal hearing before the FREC for final action on the complaint.

Easement by Prescription

A right acquired by an adverse user to use the land of another, created through a court of law after long and uninterrupted use.

Group license

A right granted a sales associate or broker associate to work various properties owned by affiliated entities under one owner developer.

Appurtenance

A right or privilege associated with the property, such as a parking space in a multiunit building.

Easement

A right, privilege, or interest in real property that one individual has in lands belonging to another; a legal right to trespass; right-of-way authorizing access to or over land.

Leasehold Estate

A tenancy in real property held under a lease arrangement for a definite number of years; nonfreehold.

Quitclaim Deed

A type of deed that will effectively convey any present interest, claim, or title to real property that the seller (grantor) may own.

Easement in Gross

A type of easement that benefits an individual or business entity and is not related to a specific adjacent parcel, for example, utility easements.

government survey system

A type of land description, developed by the federal government for subdividing lands utilizing surveying lines.

Lot and block

A type of legal description of land.

takeout commitment

A written commitment from a financial institution certifying that permanent financing will be provided when the project is completed.

A woman has homesteaded her residence. Her home has an assessed value of $279,000. She is a nonveteran who is totally and permanently disabled as a result of a serious car accident. She is also legally blind. What is her cumulative county tax exemption on her homesteaded residence? A) $51,000 B) $50,500 C) $55,000 D) $26,000

A) $51,000 homestead over 75k = -50k (does not apply to school board tax rate - only city and county) disabled nonvet = -500 blind = -500 if she was a totally disabled veteran, she would be 100% exempt /// also disabled veterans under 100% but over 10% = -5000 if she were a widow that would be another - 500 remember that the "tax exemption" is the exemptions added up, the "taxable value of a home" is the value minus all the exceptions, and the cost of property taxes is a different calculation all together involving mills and a separate equation for city/county plus school board (see next card)

A residential zone requires at least 7,500 square feet per lot. The developer is reserving 25 percent of the land for streets, sidewalks, and a community center. The tract of land for the development consists of 175 acres. How many residential lots are available for development? A) 762 B) 254 C) 813 D) 1,106

A) 762 acres to feet/lot min - green space 175x43560=7,623,000/7500=1016-25% 1016x.75=762

Which individual must hold an active real estate license? A) A person who sells time-share periods for customers B) A person employed by Meadow Hills Cemetery to sell cemetery lots C) A salaried employee of an oil company who buys and sells land on behalf of the company D) An executor of a will who is selling the real property of a deceased individual

A) A person who sells time-share periods for customers

Which statement is FALSE regarding a corporation for profit that is doing business as a real estate broker? A) All stockholders must be registered with the FREC as inactive brokers. B) There must be at least one officer who is an active real estate broker. C) The broker must file the articles of incorporation with the Florida Department of State. D) The corporation must be registered with the FREC.

A) All stockholders must be registered with the FREC as inactive brokers. A corporation is formed by filing articles of incorporation with the Florida Department of State. The owners of the corporation are the stockholders. At least one of the officers or directors must be licensed as an active broker (the principal broker or qualifying broker). I cant find anything about the brokerage needing to register with the FREC, perhaps that is assumed when they register with the DPBR or that they must register with FREC to become brokers?

A real estate license may be revoked without prejudice for which action? A) Issuance of a license by mistake of the Commission B) Culpable negligence C) Failure to account or deliver escrow funds D) Conversion

A) Issuance of a license by mistake of the Commission

Sales associate Terry Stoufer may have which information entered on his license, if applicable? A) Terry Stoufer, LLC B) Terry Stoufer Enterprises, LLC C) Best Homes, Inc. D) Terry's Real Estate Services

A) Terry Stoufer, LLC - A license may only contain the licensee's legal name plus LLC, PA, or PLLC

A licensed real estate broker has been hired by a lender to appraise a home for a buyer who has applied for an FHA loan. Which statement is TRUE regarding this situation? A) The broker is required to be a state-certified appraiser to perform this appraisal assignment. B) The broker may not accept this appraisal assignment because to do so is a conflict of interest. C) The broker may not charge for this assignment. D) The broker's license entitles him to appraise this property.

A) The broker is required to be a state-certified appraiser to perform this appraisal assignment. Real estate licensees may perform appraisals for compensation; however, the appraisal services must not involve federally related transactions such as an FHA loan. Real estate licensees who are not state-certified appraisers are cautioned to get a statement in writing from the client that the appraisal is not associated with a federally related transaction and does not require the services of a state-certified appraiser before accepting the assignment.

A man is a 72-year-old retired college professor. The local lender to whom the man applied for a 30-year mortgage denied the man's loan application, even though he has sufficient income from his pension plan and an excellent credit history. A) The lender's actions violate the Equal Credit Opportunity Act. B) The lender's actions are legal because it is unlikely that the man will survive the term of the loan. C) This is a violation of fair housing laws. D) This is an example of redlining.

A) The lender's actions violate the Equal Credit Opportunity Act. Financial institutions and firms engaged in extending credit must make credit available with fairness and without discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance programs

A real estate broker is accused of taking money from the company escrow account to pay personal expenses. The broker decides that she does not want to go through the hearing process so the broker turns over her real estate license to the DBPR. What term describes this situation? A) Voluntary relinquishment for permanent revocation B) Emergency suspension C) Suspension D) Revocation

A) Voluntary relinquishment for permanent revocation A licensee-respondent may choose to avoid a disciplinary hearing and relinquish the real estate license in lieu of discipline, permanently revoking the license.

The seller instructs the listing broker not to show his home to members of a protected class. The broker informs the seller that this is a violation of fair housing laws, but the seller is insistent. Which choice is the broker's best course of action under these circumstances? A) Withdraw from the listing agreement B) Report the incident to the Fair Housing Administration C) Follow the seller's instructions because to do otherwise would violate the broker's fiduciary duties to the seller D) Report the seller to the DBPR

A) Withdraw from the listing agreement bye Felicia

An example of an ad valorem tax is A) a property tax. B) a special assessment. C) an income tax. D) a zoning tax.

A) a property tax. ad valorem tax is based on the value of the property.

A developer who wants to develop a new subdivision must submit A) a subdivision plat map to the planning commission. B) a site plan to the zoning board of adjustment. C) an existing land-use study to the planning commission. D) a thoroughfare study to the Department of Transportation.

A) a subdivision plat map to the planning commission.

A comparable property has one more bedroom ($8,000) and is on a slightly larger lot ($2,000) than the subject property. The comparative market analysis requires a net adjustment of A) minus $10,000 to the comparable property. B) plus $2,000 to the subject property. C) minus $8,000 to the comparable property. D) plus $10,000 to the subject property.

A) minus $10,000 to the comparable property. all addition or subtraction is made to the comparable price with the goal of making the comparable as similar as possible to the subject. the subject price is unknown, so we must always calculate using the comparable. CBS or CIA comparable better, subtract Comparable inferior, add In this instance the comparable is better in two ways compared to the subject, so you would subtract that 10k from the comparable.

A man owns a farm in fee simple. He deeds the farm to a friend until the friend dies, at which time a woman will acquire a fee simple title to the farm. The woman's interest in the farm is a A) remainder estate. B) fee simple estate. C) life estate. D) reversion estate.

A) remainder estate. Life estate is measured by a natural life span ("for the life of"). Estate in reversion occurs when property returns to the grantor. Remainder estate occurs when property goes to a third party Fee simple (absolute) is the most comprehensive estate and it is inheritable.

Which disclosure must be given to the buyer of both new and resale residential condominium units? A) Declaration B) Governance form C) Prospectus D) Estimated operating budget

A) Declaration The declaration of condominium is an important condominium document because it is the document that creates the condominium. Creation of the condominium occurs when the declaration is recorded in the official records of the county where the property is located. the other 3 are Articles of incorporation, Bylaws and FAQ's. Estimated operating budget and Prospectus are specifically for new condos In addition to the four condominium documents previously discussed, unit owners of resale condominium units must give buyers three additional disclosures: Most recent year-end financial report Rules of the association Governance form

Which federal law made bait-and-switch advertising a federal offense? A) Truth in Lending Act (TILA) B) Federal Reserve System (FRS) C) Equal Credit Opportunity Act (ECOA) D) Real Estate Settlement Procedures Act (RESPA)

A) Truth in Lending Act (TILA) TILA makes bait-and-switch advertising a federal offense.

Which expense is subtracted to derive NOI? A) Vacancy and collection losses B) Mortgage payments C) Depreciation D) Income taxes

A) Vacancy and collection losses Income approach Potential Gross Income PGI - Vacancy & Collection Losses -V&C + Other non rental Income +OI = Effective Gross Income EGI - Operating Expenses -OE =Net Operating Income NOI Operating Expenses - Fixed Expenses - Variable Expense - Reserves for Replacements Operating Expenses do NOT include: Any business expense, depreciation*, mortgage payments* (debt service) or income taxes*. The best answer would be "operating expenses" however the options force you to pick vacancy and collection losses

Which type of appraisal technique is unique to business appraisal? A)Liquidation analysis B)Asset appreciation analysis C)Stock, bond, and debenture analysis D)Working capital analysis

A)Liquidation analysis "Asset appreciation analysis", "Working capital analysis" and "Stock, bond and debenture analysis" are not in the book. The methods of appraising a business are comparable sales analysis, reproduction or replacement cost, income analysis, and liquidation analysis.

real estate services

A: Advertise real estate B: Buy A: Appraise (non-federally related transactions) R: Rent or provide rental information or lists S: Sell A: Auction L: Lease E: Exchange

Owners that buy income properties as investments and depend on professionals to manage them

Absentee Owners

Property management has grown as a service of real estate primarily bc of an increase of _______ _________

Absentee Ownership

A licensee should advise a customer to obtain an_______ or an _______ _______ _______ from an attorney whenever a question of title arises.

Abstract, Attorney's title opinion

__________ clause allows the lender to Foreclose on you bc you haven't been making your payments.

Acceleration

ad valorem

According to the value; in proportion to worth.

Failure to account or deliver

Act of failing to pay money to a person entitled to receive it.

A BAR SALE (real estate services)

Advertise real estate services Buy Appraise (non-federally related transactions) Rent or provide rental info or lists Sell Auction Lease Exchange

__________ clause, A.K.A. due-on-sale clause, prevents a borower from transfering any interest in the morgaged property w/o permission of the lender.

Alienation

Which encumbrances does the Seller list on the Colorado Exclusive Right to Sell Listing Contract? All encumbrances to be assumed by a buyer Only encumbrances of public record All encumbrances known to Seller All encumbrances the Seller will not pay off

All encumbrances known to Seller

Statue of Frauds

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

Statue of limitations

An act that prescribes specific time restrictions for enforcement of rights by actions of law.

Overimprovement

An addition or change to property not in line with its highest and best use, or a betterment that exceeds that justified by local conditions.

loan servicing

An additional source of income for lenders. Servicing fees typically range from ⅜ to ¾ of 1% of the unpaid balance of loans serviced.

probation

An administrative penalty imposed by the FREC that allows the licensee to continue to practice real estate under the guidance of the FREC for a period of time while completing conditions specified by the FREC

Blind advertisement

An advertisement that provides only a telephone number, a post office box, and/or an address without the licensed name of the brokerage firm.

Stipulation

An agreement as to the penalty reached between attorneys for the DRE and the licensee or licensee's attorney.

market allocation

An agreement between brokers to split up competitive market areas among themselves and not compete in each other's areas.

Contract

An agreement between to or more competent parties to do or not to do, some legal act for a legal consideration

valid contract

An agreement binding on both parties and legally enforceable against all parties to the agreement.

Ground Lease

An agreement for the tenant to lease the land only and erect a building on the land.

Gross Lease

An agreement for the tenant to pay a fixed (base) rent with the landlord paying all the expenses associated with the property.

Net Lease

An agreement for the tenant to pay fixed rent plus property costs such as taxes, insurance, and utilities.

Percentage Lease

An agreement for the tenant to pay rent based on the gross sales received by doing business on the leased property.

Variable Lease

An agreement for the tenant to pay specified rent increases based on a predetermined index (CPI) at set future dates.

unilateral contract

An agreement in which only one party promises to perform without receiving a reciprocal promise to perform from the other party.

Net Listing

An agreement or contract to sell or rent a property for a specified minimum net amount for the owner.

Bilateral Contract

An agreement wherein both parties are legally obligated to each other to perform.

Limited Liability Company (LLC)

An alternative, hybrid business entity with the combined characteristics and benefits of both limited partnerships and S corporations.

liquidation analysis

An appraiser's methodology and estimate of the value of a business that is being liquidated. An assessment of such factors as the ability of the firm to pay off short-term obligations, the value of the inventory on hand, and the liquidation value of preferred stock.

trade fixture

An article that is attached by a commercial tenant as a necessary part of the tenant's business and is personal property.

General Partnership

An association of two or more persons for the purpose of jointly conducting a business, each being responsible for all the debts incurred in the conducting of that business.

Which element is NOT essential in a valid real estate sale contract?

An earnest money deposit

Easement by Necessity

An easement created by a court of law in cases where justice and necessity dictate it, such as when property is landlocked.

Tenancy by the entireties

An estate created by spouses jointly owning real property with instant and complete right of survivorship.

nonfreehold estate

An estate in real property in which ownership is for a determinable time period, as in a lease.

Tenancy as Sufferance

An estate lawfully acquired for a temporary period of time but retained after a period of lawful possession has expired; nonfreehold estate.

Joint Tenancy

An estate or interest owned by more than one person, each having equal rights to possession and enjoyment; the interest a deceased tenant conveys to surviving tenants by specific wording in the deed establishing the joint tenancy.

Like-Kind Exchange

An exchange of real property held for investment for another property held for investment that qualifies for deferment of takes from gain on the sale.

Blockbusting

An illegal practice of inducing homeowners to sell their property by making misrepresentations regarding the entry or prospective entry of minority persons in order to cause a turnover of properties in the neighborhood; discriminatory acts against sellers

commingle

An illegal practice of mixing a buyers, sellers, tenants, or landlords funds with the broker own money or mixing escrow money with the brokers personal funds or brokerage funds.

escrow

An impound account required by most lenders that require borrowers to pay in advance monthly installments for property taxes and hazard insurance. The monthly escrow payment is one-twelfth of the estimated annual expense for property taxes and the hazard insurance premium.

Community Development District (CDD)

An independent special district created pursuant to Florida law to service the long-term specific needs of its community. A CDD constructs, operates, and maintains communitywide infrastructure and services for the benefit of its residents. CDDs provide an alternative way to fund and construct capital infrastructure to service projected growth.

personal assistant

An individual hired by a licensee to perform administrative tasks associated with real estate transactions. Whether a personal assistant must be a real estate licensee is determined by the tasks the assistant performs.

time-share

An individual interest in a real property unit together with a right of exclusive use for a specified number of days or weeks per year.

License

An individual who has qualified for, and been registered as, a real estate broker, broker associate, or sales associate.

Comparative Market Analysis (CMA)

An informal estimate of market value performed by a real estate licensee for the seller to assist in arriving at an appropriate listing price, or if working with the buyer, an informal estimate of market value to assist the buyer in arriving at an appropriate offering price.

Mediation

An informal, non-adversarial process intended to reach a negotiated settlement.

Fannie Mae

An institution in the secondary mortgage market that buys and sells mortgages.

General Warranty Deed

An instrument of conveyance containing the strongest and most comprehensive promises of further assurance possible for a grantor (seller) to convey to a grantee (buyer).

Which entity may NOT be registered as a real estate brokerage? A) Sole proprietorship B) Corporation sole C) Partnership D) Corporation for profit

B) Corporation sole A corporation sole is an ecclesiastical or church organization, they cannot be registered as a real estate broker. Other entities that may not or need not be registered as a real estate brokerage are "joint Ventures", "Business Trust", "Cooperative Associations" or "Unincorporated Associations" Entities that MAY register as a brokerage: Corporations (foreign and domestic, for profit or not for profit) General Partnerships Limited Partnerships Limited Liability Companies Limited Liability Partnerships Sole Proprietorships

When the parties to a contract state the terms of the contract and show their intentions in words, either orally or in writing, what type of contract classification has been created? A) Executed B) Express C) Implied D) Parol

B) Express express contract - An agreement wherein the terms are specifically stated by the parties, either orally, in writing, or by a combination of the two. Implied contract An agreement wherein the terms are not stated but are inferred from the conduct of the parties executed contract - both parties have performed their obligations. parol contract - An agreement that is not in writing.

A transaction broker does NOT have which duty? A) Duty of accounting for all funds B) Full fiduciary duties to both the buyer and the seller C) Duty to disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer D) Duty of using skill, care, and diligence in the transaction

B) Full fiduciary duties to both the buyer and the seller only a singe-agent has a fiduciary responsibility. all the other options fully describe the transaction brokers duties.

Which statement concerning tenancy by the entireties is FALSE? A) The estate includes right of survivorship. B) The deed must specifically state intent to create such a tenancy. C) It is a form of concurrent ownership. D) The property must be owned by a wife and her husband.

B) The deed must specifically state intent to create such a tenancy. every other option perfectly sums up "tenancy by the entireties". It is not mandatory for the deed to reflect this, it is implied.

A sales associate received a $5,000 earnest money deposit from a buyer. She immediately delivered the deposit to her broker. The broker deposited the check on the third business day into his general operating account. A) This is the proper procedure, provided the broker uses a title company that has trust powers. B) This is an example of commingling of escrow funds. C) This is the proper procedure for handling earnest money deposits. D) The broker is guilty of dishonest dealing by trick, scheme, or devise.

B) This is an example of commingling of escrow funds. Commingling is the illegal practice of mixing a buyer's, seller's, tenant's, or landlord's funds with the broker's own money or mixing escrow money with the broker's personal funds or brokerage funds. Brokers are allowed to place up to $1,000 of personal or brokerage funds in a sales escrow account or up to $5,000 of personal or brokerage funds in a property management escrow account. Earnest money should go in an "escrow acct" whether that is held by the broker, title Co., or attorney's trust acct.

A person must hold an active real estate license if, for express or implied compensation, the person A) manages condominium rentals as a salaried manager for single-unit owners. B) advertises a list of available rental properties. C) manages an apartment building complex on site and for salary only. D) rents mobile home lots in a mobile home park.

B) advertises a list of available rental properties. advertising rental property requires a license. salaried jobs or renting mobile home lots does not.

A title theory state is one in which a mortgage A) creates only an encumbrance on title to a property. B) transfers title to the lender or escrow agent until the loan is paid. C) creates a joint tenancy for the lender until the loan is paid. D) creates a tenancy in common until the loan is paid.

B) transfers title to the lender or escrow agent until the loan is paid. Today, most states, including Florida, are lien theory states. The borrower retains title to the property. The lender is protected with a lien on the real property to secure the payment of the mortgage debt. If the borrower defaults on the mortgage debt, the lender will foreclose to recover the money owed.

Title to real property is technically conveyed when the deed is A) acknowledged. B) voluntarily delivered and voluntarily accepted. C) recorded in the public records. D) signed and witnessed.

B) voluntarily delivered and voluntarily accepted. Voluntary delivery and voluntary acceptance of the deed is the final step in the conveyance of deed, making this the best answer. signed and witnessed is a must but the other two are optional if they want it to be constructive and recorded publicly.

A homesteaded property is located in Jupiter, Florida, in Palm Beach County. The property has been assessed at $185,000. The city tax rate is 8.8 mills, the county tax rate is 9.3 mills, and the school board levy is 6.5 mills. The owner is a widow and has qualified for and received homestead tax exemption. How much will the owner pay in property taxes? A) $3,308.70 B) $3,471.20 C) $3,923.70 D) $3,483.50

B) $3,471.20 city and county: 185000-50000-500=134500 8.8+9.3=18.1/1000=.0181 134500x.0181=2,434.45 school board 185000-25000-500=159500 6.5/1000=.0065x159500=1,036.75 2434.45+1036.75=3,471.20

A prospective borrower is applying for a conventional fixed-rate loan. The borrower's monthly gross income is $6,500. The borrower's projected monthly PITI is $1,372, the PMI is $150, and, based on a credit report, the borrower has the following long-term obligations: Car payment: $400 Student loan: $390 Credit cards: $250 What is the borrower's total obligations ratio, and does it meet the lender's required threshold for a conventional mortgage loan? A) .3710 or 37.1% TOR is greater than the TOR threshold for a conventional loan B) .3941 or 39.4% TOR is greater than the TOR threshold for a conventional loan C) .2341 or 23.4% TOR is less than the TOR threshold for a conventional loan D) .3941 or 39.4% TOR is less than the TOR threshold for a conventional loan

B) .3941 or 39.4% TOR is greater than the TOR threshold for a conventional loan The max TOR for a conventional loan is 36%. (max HER is 28%) (PITI + PMI + LTO) ÷ monthly gross income = TOR (1372+150+400+390+250) ÷ 6500 = 0.3941 or 39.4% which is more than allowed for a conventional loan

Which of the following is correct according to the Colorado Real Estate Commission Position Statement regarding Rule F? Exculpatory language limiting a broker's liability may not appear in listings or buyer relationship agreements. Brokers may not add exculpatory language limiting their liability to any contract to which they are not a party such as the Contract to Buy and Sell. Exculpatory language limiting the broker's liability may be added to the Contract to Buy and Sell only in addenda, not in additional provisions. Brokers may not add exculpatory language to any commission-approved contract.

Brokers may not add exculpatory language limiting their liability to any contract to which they are not a party such as the Contract to Buy and Sell. Exculpatory provisions do not belong in the Contract since a broker is not a party to the Contract to Buy and Sell. If some form of confirmation is needed from the buyer or seller, the broker should prepare a separate disclosure for that purpose.

How is the relationship handled when a buyer wishes to work with a broker to locate property to purchase? Brokerage will be an agent for the buyer unless there is written agreement for another relationship. Buyer and broker must sign an exclusive representation agreement. Buyer will be a customer with no working relationship to the brokerage company. Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties

Buyer and broker may agree to a relationship which could include agency, transaction-brokerage, or no working relationship between the parties The buyer has many options: he or she can be a unrepresented "customer" after appropriate disclosure, can sign an agency representation agreement, or can hire the broker as a transaction-broker either in an exclusive arrangement, oral agreement, or by default.

Which entity is a primary mortgage lender that does NOT accept demand deposits? A) Commercial banks B) Credit unions C) Mortgage lenders D) Savings associations

C) Mortgage lenders this question answers itself. Mortgage lenders are non-depository primary lenders because they do not accept savings deposits and demand deposits.

Which term refers to a situation where, during the early years of a loan, the principal balance increases? A) Reverse annuity B) Positive leverage C) Negative amortization D) Graduated payments

C) Negative amortization If interest rates rise sharply but the payments do not because of a payment cap, the unpaid interest is added to the loan balance. Negative amortization occurs when the mortgage payments are not large enough to cover the interest expense. The result is the mortgage loan balance increases (instead of decreasing). Negative amortization can result in a mortgagor owing the mortgagee more than the house is worth. positive leverage - The benefits from borrowing funds exceed the costs of borrowing. the other two are made up

A man earned a $7,500 commission by selling a coin-operated laundry business, which has six more years before the expiration of its present lease. The man A) must be registered with the Florida Retail Commission as a business broker. B) must be registered with the Florida Real Estate Commission as a business broker. C) must be registered with the Florida Real Estate Commission as a real estate licensee. D) need not be registered with any state agency in the given situation.

C) must be registered with the Florida Real Estate Commission as a real estate licensee. needs a license to get commission of a sale.

A buyer who obtains a mortgage loan that covers the purchase of a condominium plus furniture, appliances, and other personal property, such as towels and kitchen utensils, has a A) chattel mortgage. B) blanket mortgage. C) package mortgage. D) wraparound mortgage.

C) package mortgage. a loan covering both real and personal property blanket mortgage pledges several parcels, usually building lots, as security for the loan. the other two are made up

Constructive notice is A) notarizing a conveyance. B) information advertised in the newspaper. C) provided by recording in the public records. D) information learned by reading, seeing, or hearing.

C) provided by recording in the public records.

In relation to section 1 of a township, section 12 is due A) west. B) east. C) south. D) north.

C) south. 6 5 4 3 2 1 7 8 9 10 11 12 18 17 16 15 14 13 19 20 21 22 23 24 30 29 28 27 26 25 31 32 33 34 35 36

A tenant signed a 10-year lease requiring a monthly base rent of $1,900, plus 2% of all monthly gross sales volume over $95,000. The tenant also must pay all property taxes, insurance, and other costs normally considered property owner's costs. This is a A) variable sale lease. B) fixed lease. C) net lease. D) gross lease.

C) net lease. (An agreement for the tenant to pay fixed rent plus property costs, such as taxes, insurance, and utilities.) Leases - Variable lease, the tenant pays specified rent increases at set future dates - tied to an index like CPI (inflation) - Fixed lease isn't really an option... its more of a characteristic of Gross or Net leases - Gross - Tenant pays a fixed rent; Landlord pay property expenses / Example: residential lease - Net - Tenant pays fixed rent plus property expenses / Example: Commercial Lease other kinds of leases: - Percentage Lease - Rent based on gross sales of tenant - Ground Lease - Long-term lease on the land, Tenant may erect a building

Which survey term is associated with a metes-and-bounds description? A)Section B)Township C)Point of beginning D)Range

C)Point of beginning the other three options are associated with the govt survey system legal description POB is unique to metes-and-bounds, the most accurate method of three methods to describe both regularly and irregularly shaped parcels. The method is based on distances (metes) and directions (bounds). Metes-and-bounds descriptions begin and end with a starting point called a point of beginning (POB). metes and bounds distance and directions

According to Commission Position 25 on Recording Contracts, should a listing broker decide her Seller client is attempting to cheat her out of a commission, the broker can: File a mechanics lien to ensure the brokers'' claim for the commission is honored Record the listing contract so that it would appear in any Title Commitment for the property File a lis pendens to warn any potential buyer that a legal action is pending Commence mediation, arbitration or a civil action

Commence mediation, arbitration or a civil action P-25 Commission Position on Recording Contracts Over the years the Commission has received many inquiries and complaints concerning the recording of listing contracts to protect claims for commissions. In addition, some licensees have attempted more "creative" ways of holding up a closing, such as filing mechanics liens or notices of lis pendens, as well as recording demand letters or purchase contracts. The end result is usually a cloud on the title and sometimes a slander of title action. Some states have passed statutes authorizing the filing of such liens. Colorado has not. Filings and recordings such as these are inappropriate and will result in Commission action. Here is a typical scenario: Broker lists a property at $125,000 for 120 days and actively markets it. No offers come in during the first 30 days. Broker advises her seller to lower the price by $5,000 to encourage some activity. The seller is adamant that the property is worth the list price and refuses. After another 15 days with no offers, the seller reluctantly lowers the price. He also tells the broker that he doesn't feel she is trying hard enough to sell the property and he's going to take it off the market if nothing happens. A week later an offer for $100,000 comes in from another company, which is presented and rejected. The seller is quite upset at the low offer and demands to be released from the listing. There is no further communication between the parties, but the listing is never formally terminated. Three weeks later the broker learns that the seller has entered into a contract with the same buyer for $110,000 and closing is set. The broker is very upset and wants to protect her commission. What can she do? 1. File a mechanics lien? ANS: No. Real estate licensees are not a protected class of lien claimant under the statute except as provided in C.R.S. 38-22.5 (Commercial Real Estate Brokers Commission Security Act). 2. File a lis pendens (notice of pending lawsuit)? ANS: No. A lis pendens relates to a title or ownership dispute involving the land itself. The broker has no legal interest in the real estate. 3. Record the listing contract? ANS: No. This will usually have the effect of clouding title to the property, which in turn affects the closing between buyer and seller. The broker should not interfere in the process of transferring title to property. 4. Escrow the disputed commission? ANS: Maybe. This is a touchy area. If the broker makes demand on the seller for the commission prior to closing and states her possible rights (mediation; arbitration; civil action) the parties may agree to an escrow pending settlement of the dispute. However, there is no legal requirement that the closing entity escrow funds absent an agreement. 5. Commence mediation, arbitration or civil action (as appropriate). ANS: Yes. Nothing prevents a licensee from asserting any legal claim against a principal. A commission dispute is an emotional issue. Sometimes a licensee has put in considerable time on a listing only to be faced with a seller who refuses to pay, attempts to renegotiate or is outright deceitful. On the other side, the Commission has witnessed instances in which the licensee had no legitimate right to a commission and was using superior knowledge and scare tactics to force payment. Clearly this is a time to consult a good real estate attorney and avoid the risk of a complaint based on a hasty decision.

What must appear in the title of a trust account? Company name Employing broker's name Company name and employing broker's name Responsible broker's name

Company name and employing broker's name

What must appear in the title of a trust account? Company name Employing broker's name Company name and employing broker's name Responsible broker's name

Company name and employing broker's name

On a new loan closing, the settlement worksheet entry for a tax reserve indicates that the new lender is Withholding this amount from loan proceeds to start the escrow account for the next tax payment Collecting this tax amount from the seller Contributing this amount toward the buyer's taxes for this year There is no such thing as a Tax Reserve

Withholding this amount from loan proceeds to start the escrow account for the next tax payment Lenders have the right to take sums of money from the buyer and place it into a Tax Reserve escrow account to ensure there is enough money availabe to make the next tax payment. Lenders are sensitive to this as unpaid taxes automatically become the most senior obligation should the buyer default on the loan.

RESPA requires the lender to provide a good faith estimate of the borrower's closing costs: One day prior to closing Before a loan origination fee may be charged Within three days of loan application If those numbers are different than the broker anticipated

Within three days of loan application The Real Estate Settlement Procedures Act requires a lender to provide a good faith estimate of the buyer's closing costs within three days of loan applications by the buyer.

The sales price of a property appears on a closing statement as a: Credit to the buyer Credit to the seller Credit to the broker Debit to the broker

Credit to the seller The seller gets a credit for the purchase price of the property.

How is the total purchase price entered?

Credit to the seller and Debit to the buyer

The category of construction that applies when a property owner employs a contractor to build on his or her lot is called________ ___________

Custom Building

The following taxes were paid at the closing of a new home: $1,540 state documentary stamp tax on the deed, $693 state documentary stamp tax on the note, and $396 state intangible tax on the mortgage. What was the purchase price of the home? A) $346,500 B) $440,000 C) $198,000 D) $220,000

D) $220,000 For this equation you will reverse the formula for finding the tax. look no further than the stamp tax on the deed because it is based on the purchase price. 1540/.7=2,200x100=220,000

Which variable does NOT influence demand? A) Availability of mortgage credit B) Consumer tastes and preferences C) Income of consumers D) Availability of construction loans

D) Availability of construction loans VARIABLES THAT INFLUENCE DEMAND Price of real estate Population numbers and household composition ■ Income of consumers ■ Availability of mortgage credit ■ Consumer taste or preferences VARIABLES THAT INFLUENCE SUPPLY Availability of skilled labor *Availability of construction loans and financing* Availability of land Availability of materials

Which valuation assignment is exempt from USPAP requirements? A) Appraisal report prepared by a certified appraiser B) Appraisal for the purpose of refinancing the first mortgage loan C) Appraisal assignment conducted by a real estate broker for the purpose of an estate sale D) Broker's price opinion prepared for a lender concerning a short sale

D) Broker's price opinion prepared for a lender concerning a short sale BPO's and CMA's do not need to conform to USPAP requirements. all appraisals must conform to USPAP, but only a state certified appraiser can be used for federally related loans.

A broker's license was involuntary inactive for two years and one month. To operate again as an active licensee, the broker must complete A) 60 hours of the broker's post-licensing education course, 28 hours of continuing education, and pass the broker's licensing exam. B) FREC Course II and pass the broker's licensing exam. C) 42 hours of continuing education and pass the continuing education course exam. D) FREC Course I and pass the sales associate's licensing exam.

D) FREC Course I and pass the sales associate's licensing exam. involuntary inactive status for over two years makes a license null and void, requiring a person to start from scratch.

Which statement is TRUE regarding the monthly payments on a 30-year, fully amortized loan? A) Level monthly payments means the same amount of principal is paid each month. B) Initially, interest is the smallest portion of the payment. C) Initially, principal and interest are approximately equal. D) Initially, interest is the larger portion of the payment.

D) Initially, interest is the larger portion of the payment.

What authority originates from the U.S. Constitution and relates to protection of health and welfare of citizens at local levels? A) Situs B) Community protection power C) Escheat D) Police power

D) Police power Police power - The authority of government to protect the property, life, health, and welfare of its citizens. Situs refers to prospective buyers' preference for a certain area. Escheat provides for a government, normally a state government, to take the property of an owner who dies intestate and who has no known heirs entitled to receive the property. The power of escheat is a practical solution to ensure that property is always owned by someone.

Which item is entered on the Closing Disclosure as a credit to the seller and as a debit to the buyer? A) Seller's mortgage paid off at closing B) Prorated property taxes that have not been paid prior to closing C) Prepaid rent on rental property D) Purchase price

D) Purchase price The total purchase price and any items the seller prepaid are credited to the seller.

You have been hired to appraise the local public library building. The approach that is likely to be the MOST relevant is the A) comparable sales approach. B) income approach. C) public land and property approach. D) cost approach.

D) cost approach. single-family homes / a vacant lot in an established neighborhood - sales comparison approach income-producing property - income approach special-purpose properties like hospitals, schools, or government buildings, newly constructed homes, cross-checking the other two approaches - cost approach

If a seller refuses to pay a broker her sales commission after the residential property is sold, the broker may A) refuse to permit the closing to occur. B) keep the binder deposit as just compensation. C) file a vendor's lien on the owner's property. D) file a suit in the courts for her commission.

D) file a suit in the courts for her commission. When a buyer or a seller refuses to pay a broker's commission after the commission has been earned, the broker must file a lawsuit and obtain a judgment for the commission owed.

In a deed, the warranty of quiet enjoyment pertains to A) property that is completely vacated. B) guaranteed satisfaction with the property. C) peace and tranquility on and around the property. D) peaceful possession undisturbed by others' claims of title.

D) peaceful possession undisturbed by others' claims of title. Quiet enjoyment A provision in a deed guaranteeing that the buyer may enjoy possession of the property in peace and without disturbance by reason of other claims on the title by the seller or anyone else.

Requirements of a valid deed do NOT include A) good or valuable consideration. B) voluntary delivery and acceptance. C) signature of two witnesses. D) signature of a competent grantee.

D) signature of a competent grantee. ■ In writing (statute of frauds) ■ Names of the grantor and the grantee ■ Grantor must be of legal capacity (competent and of legal age) ■ Consideration must be described ■ Granting clause (words of conveyance) ■ Legal description ■ Signed by the grantor and two witnesses (deeds do not have to be acknowledged, notarized, or recorded to be valid in Florida, but if the grantee wants to give constructive notice of ownership, the deed must be notarized before it can be recorded in public records) ■ Voluntary delivery and voluntary acceptance of the deed Important facts concerning the grantee include the following: ■ The grantee does not have to be competent. ■ The grantee does not sign the deed (there is no signature line for the grantee)

Three claimants are requesting relief from the Real Estate Recovery Fund. All three claimants were named in a single judgment (the same real estate transaction). What is the maximum payment from the Recovery Fund for this claim? A) $75,000 B) $1,000,000 C) $150,000 D) $50,000

D) $50,000 The maximum payment from the fund for a single transaction is $50,000

The DBPR may issue which penalty for an initial offense of a minor violation by a licensee? A) Subpoena to appear B) Final order C) Notice of assignment D) Notice of noncompliance

D) Notice of noncompliance The DBPR may issue a notice of noncompliance as a first response to a minor violation notice of assignment is not a thing, and the other two options pertain to formal complaints

Which information must be disclosed to all prospective buyers? A) A previous occupant was infected with HIV. B) The neighborhood residents are Hispanic. C) The seller's brother was murdered in the residence. D) The home is situated in a flood-prone area.

D) The home is situated in a flood-prone area. duh, duh, and never have to disclose deaths A cause of action will not arise against a property owner or a real estate licensee for failure to disclosure information regarding HIV, AIDS, or that the property was the site of a homicide, suicide, or death.

Failure to comply with the statute of frauds will result in A) a revocation of licensure. B) an illegal contract. C) a charge of fraud. D) an unenforceable contract.

D) an unenforceable contract. The statute of frauds requires that contracts conveying an interest in real property be *in writing* and signed to be enforceable. The statute of frauds applies to purchase-and-sale contracts, option contracts, and lease agreements and listing agreements of more than one year.

A broker received a $5,000 deposit from a buyer on Tuesday at 1:00 pm. The seller will not be available until Monday. The broker's normal banking day is Monday. The broker is required to deposit the $5,000 before the end of A) the next business day. B) business on Wednesday. C) business on Thursday. D) business on Friday.

D) business on Friday. ■ Sales associates (and broker associates) must deliver escrow deposits to their broker by the end of the next business day following receipt of the funds. ■ Brokers must deposit escrow funds by the end of the third business day following receipt of the funds. Day 0 - Associate receives deposit from buyer Day 1 - Associate gives deposit to broker by end of day Day 2 - Day 3 - Broker must deposit deposit by end of day When computing the deadline for the broker to deposit the funds, the day the buyer (or tenant) gives the funds to the brokerage is not counted in the broker's three business days. AKA when the buyer skips the associate, the broker has an extra day to deposit the funds.

A licensee makes a statement that is material to the transaction as though it were a fact when the licensee does not know whether the statement is true or false, and the buyer relies on the statement. As a result of the statement made by the licensee, the buyer suffers damages. This situation constitutes A)breach of trust. B)deceptive services. C)culpable negligence. D)fraud.

D)fraud. fraud is the intent to misrepresent a material fact or to deceive in order to gain an unfair advantage or to harm another person. Misrepresentation is the misstatement of fact or the omission or concealment of a factual matter. Misrepresentation can lead to fraud. The elements of a cause of action for fraud are that the (1) licensee made a misstatement or failed to disclose a material fact, (2) licensee either knew or should have known that the statement was not accurate or that the undisclosed information should have been disclosed, (3) party to whom the statement was made relied on the misstatement, and (4) party to whom the statement was made was damaged as a result. Culpable negligence involves negligent conduct that, while not intentional, involves a disregard of the consequences likely to result for one's actions. Brokers may be charged with culpable negligence if they do not give ordinary, careful attention to their brokerage and do not exercise reasonable control over the brokerage's agents. Breach of trust Failure to do or perform what has been promised. If a broker invites trust and then betrays that trust, the broker is guilty of breach of trust. The penalty for breach of trust for a first violation is a $1,000 to $2,500 administrative fine and a 30-day suspension to revocation "deceptive services" is not a term found in the book

Who employs all DRE personnel to support the FREC?

DBPR

military veteran and spouse waiver

DBPR has the authority to waive the initial application, license, and unlicensed activity fees for military vets and their spouses who apply for a real estate license within 60 months after honorable discharge

citations

DBPR investigator-auditors have the authority to issue during the investigation or audit fines range from $100-$500; could require edu course attendance licensees have 30 days to accept or reject the alleged violations

temporary license

DBPR may issue a temporary real estate license to the spouse of an active duty member of the armed forces who is assigned to duty in florida. the spouse must hold a valid real estate license in another state or foreign jurisdiction. a temporary license expires 6 months after the date of issue and is not renewable

cease to be in force (ceases to be in effect)

DBPR must be notified within 10 days when: 1. a broker or registered school changes business addresses 2. a sales associate or a real estate instructor changes employer

In a net loan proceeds settlement sheet, the net loan amount is shown as a: Debit seller, credit buyer Credit buyer single entry Debit broker single entry Debit broker, credit buyer

Debit broker single entry. most often seen with new loans (and always on the State Exam). Net Loan Proceeds is a situation when a lender is making a loan for x and part of that loan is covering expenses that the lender is owed. In short - the lender is lending money to the buyer to cover expenses that are going to be paid to the lender. The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer.

A loan origination fee appears on a settlement statement as a: Debit to the buyer Credit to the buyer Debit to the seller Credit to the seller

Debit to the buyer The loan origination fee is a lender charge for the purpose of securing their new loan and as such is the responsibility of the Buyer. Even if the Seller is making a concession to the Buyer and is providing the funds to cover an origination fee, the charge is still the Buyers (Debit Buyer). The Seller concession will appear on a different line in the settlement sheet as a Credit Buyer, Debit Seller.

Special Flood Hazard Area (SFHA)

Defined by FEMA as the area that will be inundated by the flood event having a 1% chance of being equaled or exceeded in any given year. The 1% annual chance flood is also called the base flood or 100-year flood.

Chapter 455, Business and Professional Regulation

Defines the general legal practice and procedure for the Dept. of Business & Professional Regulation (DBPR) and the licensees of all professions regulated by the DBPR, including real estate.

The range of penalties that may be imposed on a licensee by the commission for violation of law or rules includes

Denial, reprimand, fine probation, suspension and recovation......not imprisionment

Brokers in a nonresidential sale are not required to use _________ _________.

Written disclosure

Assignment

Written instrument that serves to transfer the rights or interests of one person to another.

All of the following must be disclosed to a tenant by a property manager EXCEPT: Disclose in writing that the property manager works for the landlord Disclose that the tenant is not "vicariously liable" for acts of the agent Disclose name and address of the landlord Disclose adverse material facts about the property known by the agent

Disclose name and address of the landlord From the Brokerage Disclosure to Tenant: Landlord's Agent: A landlord's agent works solely on behalf of the landlord to promote the interests of the landlord with the utmost good faith, loyalty and fidelity. The agent negotiates on behalf of and acts as an advocate for the landlord. The landlord's agent must disclose to potential tenants all adverse material facts actually known by the landlord's agent about the property. A separate written listing agreement is required which sets forth the duties and obligations of the broker and the landlord. Tenant understands that Tenant shall not be liable for Broker's acts or omissions that have not been approved, directed, or ratified by Tenant. (Jon...this is vicarious liability)

Steering

Discriminatory acts against buyers.

Redlining

Discriminatory financing by a lending institution.

How is LTV (Loan to Value) calculated? (#5)

Dividing the mortgage loan amount by the property's sale price

The Florida Real Estate Commission must notify which agency when it takes disciplinary action against any of the agency's licensees?

Division of Florida Condominiums, Timeshares, and Mobile Homes

executive

Duties related to the education of a licensee, the regulation of professional practices, and the publishing of materials.

Documentary Stamp Taxes on Notes

Each new or assumed loan amount / $100 = number of taxable increments (rounded up to whole number) Number of increments X $.35 = cost of documentary stamps on notes

Accrued Depreciation

Effective age / total economic life X reproduction cost new = estimated total accrued depreciation

Net Operating Income (NOI)

Effective gross income (EGI) - operation expenses = net operating income (NOI)

chapter 61J2

FREC (florida real estate commission) rules

Complaint that required refund of money. What cant they do?

FREC does not have the authority to order RESTITUTION

final order

FRECs final decision as to innocence or guilt and the determination of the appropriate penalty copy of final order is mailed to each party must notify the recipient of the appeal process licensee has the right to practice real estate during the complaint process and up until the final order becomes effective

Florida resident

For application and licensing purposes, a person who has resided in Florida continuously for four calendar months or more within the preceding year.

Freddie Mac

Formerly called the Federal Home Loan Mortgage Corporation (FHLMC). A secondary mortgage market institution that buys and sells conventional, FHA, and VA loans.

A transaction broker does NOT have which duty?

Full fiduciary duties to both the buyer and the seller

When poor traffic patterns, too few bathrooms and inadequate amount of insulation is done this is called?

Functional Obsolescence

When a sales associate receives an earnest money deposit what must he do?

Give to the broker w/n 24 hours and then the Broker has 3 business days to put into an escrow account

Commercial Real Estate Lien Act

Gives the broker lien rights for earned commission associated with a brokerage agreement to lease commercial real estate.

What happens with life estates end? (#13)

Goes to a third party called remainderman

What association does Ginnie Mae work with?

Government National Mortgage Association

Building Codes

Government ordinances regulating construction practices and materials.

Which of the following legal descriptions typically uses a principal meridian? Metes and bounds Lot and block Government survey All of the above

Government survey

The secretary of the DBPR is appointed by __________ and subject to confirmation by __________.

Governor; state senate

Florida Statue 20

Governs the exectuve branch of Florida's government

What type of income is needed in order to get the Gross Income Multiplier?

Gross Annual Income

When using the Gross Income Multiplier what is used to find the income? (#23)

Gross Annual Income

Taxable Income

Gross income minus tax deductions; net operating income plus reserve for replacements minus financing costs and allowable depreciation.

Testate

Having made and left a valid will.

Stan is a real estate broker in Colorado. He has identified a property for a fast food outlet and has asked four friends to contribute money to the purchase and gain partial ownership. Stan will manage the property and negotiate the lease for the fast food franchise. Which of the following is correct with regard to Stan's role as a broker in this arrangement? He must comply with state and federal securities laws in arranging this investment group. He will have no liability in the deal since he will not contribute money. He is not entitled to any commission on the purchase because he will be an owner. He can keep both the sales commission and the lease commission without specifically telling the others about the amounts involved.

He must comply with state and federal securities laws in arranging this investment group. The arrangement must comply with securities regulations regardless of how it is organized. Stan is a partner and must disclose his interest and any gains to the other owners.

What is it called when any person or group of persons occupying a separate housing space?

Household

A Lot and Block Legal Description 1) is the easiest and simplest method to describe real property. 2) uses street addresses. I only II only Both I and II Neither I nor

I only

Which statement is TRUE regarding the monthly payments on a 30-year, fully amortized loan?

Initially, interest is the larger portion of the payment.

When advertising, which is the correct way? Joseph Magnum, Associate Broker Joseph Magnum, Associate Broker, Hot Properties Real Estate Team Joseph Magnum, ABC Realty Inc. Joseph Magnum, Associate Broker, (303) 999-5555

Joseph Magnum, ABC Realty Inc. The minimum requirement for advertising is that the name of the brokerage firm is included in the ad. The law wants to make certain that the public knows which company for whom the broker represents. A Team is not a brokerage firm, but instead a group of agents working for a brokerage firm. For social media, a special rule applies, the name of the brokerage firm must be included in the first post of an agent discussing a licensed type of activity in a chat type of communication. If the name is long and does not fit into one entry, the FIRST CLICK rule applies. This rule says that if the firm's name does not fit, a link must be in the post which when clicked goes immediately to a webpage containing the firm's name is acceptable.

A fixture is an item that was once personal property but has been permanently attached to or made part of a real estate and is now considered real property. (#29)

Kitchen Cabinets are an example of a fixture

Real Estate

Land, including the air above and the earth below, plus any permanent improvements affecting the utility of the land; real property; property that is not personal property.

As a transaction broker in an exclusive right to sell listing contract, the listing broker must disclose: The motivation of seller if requested by buyer Material facts about the property known to the broker Facts about the seller known by the broker All facts known by the broker about the transaction

Material facts about the property known to the broker All licensees have a statutory duty to disclose material facts about a property that are known by the broker.

boot

Money or other property that is not like-kind, which is given to make up any difference in value or equity between exchanged properties.

After the Sellers columns on a Settlement sheet have been subtotaled, to balance the two debit and credit columns, a credit to the Seller and a debit to the broker would represent: Money due to the Buyer Money due to the Seller Money owed by the Seller Money owed by the Buyer

Money owed by the Seller When the Sellers credit column is less than the debit column you need to add a credit to make them both equal. This means the credit column (containing the sale price) is less than the debits (containing amoung items - money owed on the property). This Seller is "upside-down." This credit ends up representing money the Seller must bring to the Closing and give to the Broker to pay off debts. (A Broker Debit is a deposit into the escrow account and a check that has to be written). More info: That is a common spot of confusion, so do not let it break your head. The situation occurs at the bottom of the 6 column worksheet when you are reconciling the columns. Let's assume for a moment you are looking at a Buyer's columns. You have applied all the debits and credits and all you have to do is reconcile the columns which have $100,000 in the Credit column (money the buyer has proven they have) and $125,000 in the Debit column (what the Buyer owes). Looks like this Buyer is a little short, but by how much? To determine this amount, you have to make both columns equal. This enables the Closing Agent to determine how much the Buyer is short; which is also how much of a check the Buyer needs to bring and be deposited into the escrow account. So you add $25,000 to the Buyer's Credit column to make both columns equal. Therefore this $25,000 CREDIT represents how much the Buyer is short, meaning this CREDIT does not represent how much they have, it represents how much they still OWE. This is how a CREDIT becomes something you OWE. We are not done reconciling yet. We have a $25,000 Credit, to balance it out we need a $25,000 Debit. That debit goes to the Broker account which represents the Escrow Account. Back to practical language - the Buyers needs to bring a $25,000 check to the closing so that they can make their Credit column (what they got) equal to the Debit column (what they owe) and the Broker (Closing Agent) needs to deposit it into the Escrow Account ($25,000 Debit). For extra points - the reverse is most common with the Seller. When a Sellers Debit column (what they owe) is lower than their Credit column (what they sold their property for), the amount added to the DEBIT column to make both columns equal represents money the Seller is receiving. The balancing CREDIT in the Broker column, reminds the Closing Agent to cut a check to the Seller out of the escrow account.

mixed land use

More than one type of zoning, such as a condominium that has residential and commercial units.

Which of the are Junior Liens? (#74)

Mortgage Judgement Vendor's Income Tax (IRS)

Recording the subdivision plat map

Most local governments require that developers submit a subdivision plat map of a new development for review by the planning board.

What needs to be done when filing a complaint?

Must be in writing Must be legally sufficient

Trust Account journal and ledger documentation of disbursements from trust accounts need NOT include: Records verifying purpose of payment Amount paid and the resulting balance Date of payment and check number Name of the person who wrote the check out of the account

Name of the person who wrote the check out of the account Rule E-1 (p) Recordkeeping requirements A broker shall supervise and maintain, at the broker's licensed place of business, a record keeping system, subject to subsection (7) of this rule, consisting of at least the following elements for each required escrow or trust account: (1) A record called an "escrow or trust account journal" or an equivalent accounting system which records in chronological sequence all money belonging to others which is received or disbursed by the broker. For funds received, the records maintained in the system must include the date of receipt and deposit, the name of the person who is giving the money, the name of the person and property for which the money was received, the purpose of the receipt, the amount, and. a resulting cash balance for the account. For funds disbursed, the records maintained in the system must include the date of payment, the check number, the name of the payee, a reference to vendor documentation or other physical records verifying purpose for payment, the amount paid, and a resulting cash balance for the account.

If a broker shows a home for another broker who has it listed and a married couple comes in and he answers all questions the best he can and he promises to find out answers to the ones he doesn't know and get back to them. What type of relationship has been established? Implied agency No fiduciary relationship has been established Express agency Buyer agency

No fiduciary relationship has been established Just answering questions does not create an agency relationship. A fiduciary relationship is a buyer's agency or sellers's agency reltionahip. Transaction Broker is not a fiduciary relationship. Definition of Fiduciary relationship n: where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business.

A BPO (Broker Price Opinion) is an estimate of value most often requested by a lending institution of a real estate broker to determine the value of a foreclosed property. Can a BPO be used for financing? When there is a shortage of available appraisers. When you'd like to save your client money on appraisal fees. When your employing broker signs off on it. None of the above.

None of the above. Never, BPO's are an estimate of value for the purposes of marketing and not an appraisal. Only licensed appraisers can prepare an appraisal. Only appaisals can be used for financing purposes. E-42. Notice Required on CMA's or BPOs for Other Than Marketing. When a real estate broker prepares a competitive market analysis (CMA) or a broker's price opinion (BPO) for any reason other than the anticipated sale or purchase of the property, the licensee must include a notice stating: "This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing." Pursuant to 12-61-702(5)(b)(II), C.R.S, brokers are prohibited from completing CMA's or BPOs that are used for the purpose of obtaining financing.

In what corner of a township would you find Section #1? Northeast corner Northwest corner Southeast corner Southwest corner

Northeast corner

A broker has put together a team consisting of a title representative, a lender and an inspector to assist the broker in building her business. Each settlement service provider reimburses the broker monthly for the cost of lead generation. The reimbursement covers all the broker's cost for generating the leads. In this instance this practice is: not acceptable as a broker may not receive any money from a title company but acceptable for the other team members. Acceptable since the team members may also get a lead and the broker is not using just one settlement provider but three. Not acceptable as broker may not receive any fees for lead generation from any settlement service provider Acceptable as long as it is documented and the broker will accept other settlement providers on her team.

Not acceptable as broker may not receive any fees for lead generation from any settlement service provider

The DBPR may issue which penalty for an initial offense of a minor violation by a licensee?

Notice of noncompliance

Broker is allowed to facilitate safeguards for seller assisted financing by adherence to the following EXCEPT: Advise buyers and sellers to consult legal and tax counsel for advice Cooperate with appraisers as they perform their due diligence in asking questions about sales Advise seller as to the impact of any seller paid costs Notify Real Estate Commission of true selling price of home

Notify Real Estate Commission of true selling price of home The real estate commission does not track sale prices of homes. CP-30 State of Colorado Real Estate Commission and Board of Real Estate Appraisers Joint Position Statement The Colorado Real Estate Commission and the Colorado Board of Real Estate Appraisers have issued this Joint Position Statement to address mutual concerns pertaining to practices of real estate brokers and real estate appraisers with regard to residential sales transactions involving seller assisted down payments, seller concessions, personal property transferred with real property and other items of value included in the sale of residential real property. A residential real estate transaction has a life well beyond closing and possession of the property. Accurate sales data is crucial for appraisals and comparative market analysis (CMA) work products. Both appraisers and real estate brokers can effectively work together to maintain the safeguards that accurate sold data affords. A real estate broker can facilitate these safeguards by adherence to the following: • Note the amount of any seller paid costs (including a seller assisted down payment or fee paid to a charitable organization on behalf of the buyer) or other seller concession in the proper transaction documents, including the Buy/Sell Contract, Closing Statements, and Real Property Transfer Declaration. • Utilize all available fields in the multiple listing service to report sold information including all transaction terms and seller concessions. Sold information should be entered promptly following closing and be specific and detailed particularly when the sold price includes a seller assisted down payment or concessions. • Advise buyers and sellers to consult legal and tax counsel for advice on tax consequences of seller contributions and inducements to purchase. • Cooperate with appraisers as they perform their due diligence in asking questions about sales.

A buyer has a signed Contract to Buy/Sell Real Estate to purchase a property for $200,000. Prior to close, $25,000 worth of damage occured. May he/she terminate the agreement? Yes, When the damage exceeds 10% of the agreed upon purchase price Yes, When the damage exceeds 5 % of the agreed upon purchase price. No, this is not a cause for termination Yes, damage in any form or amount prior to close or possession allows the buyer to terminate

Yes, When the damage exceeds 10% of the agreed upon purchase price From the Purchase Contract: Causes of Loss, Insurance. In the event the Property or Inclusions are damaged by fire, other perils or causes of loss prior to Closing in an amount of not more than ten percent of the total Purchase Price (Property Damage), Seller shall be obligated to repair the same before Closing Date. Buyer has the Right to Terminate on or before Closing Date, if the Property Damage is not repaired before Closing Date or if the damage exceeds such sum.

Two or more brokers that share office space but do not maintain their separate status as independant brokers could be charged as being ________ ________

Obstensable Partners

Federal savings associations that are members of the Federal Home Loan Bank System are regulated by the

Office of Thrift Supervision. The Office of Thrift Supervision (OTS) regulates member federal savings associations.

Florida Statue Chapter 475

Often called the Real Estate Professional Practice Act. Chapter 475 was created by the Florida Legislature to establish the legal rights and responsibilities of real estate licensee and real estate appraisers. First set of laws passed by the legislature in Florida

The Sellers Agent at his option rebated part of his commission back to the Seller. Was this legal? No, it is illegal to pay a commission to anyone who is unlicensed Yes, as it was part of the negotiated commission in the listing contract

Yes, as it was part of the negotiated commission in the listing contract The Real Estate Commission has no problem with a licensee giving money to his/her client. The client does not need to be licensed as the rebate is considered a product of the commission negotiated by the licensee and his/her client in the Listing Agreement.

Prima Facie Evidence

Requiring no further proof; acceptable on the face of.

Brokers should provide safeguards on seller-assisted down payments on: Commercial transactions Land transactions Time share transactions Residential transactions

Residential transactions You answered this question incorrectly Brokers should provide safeguards on seller-assisted down payments on: Commercial transactions Land transactions Your Choice -> Time share transactions Correct -> Residential transactions Explanation As per Commission Position Statement 30 (CP-30) "The Colorado Real Estate Commission and the Colorado Board of Real Estate Appraisers have issued this Joint Position Statement to address mutual concerns pertaining to practices of real estate brokers and real estate appraisers with regard to residential sales transactions involving seller assisted down payments, seller concessions, personal property transferred with real property and other items of value included in the sale of residential real property. A residential real estate transaction has a life well beyond closing and possession of the property. Accurate sales data is crucial for appraisals and comparative market analysis (CMA) work products. Both appraisers and real estate brokers can effectively work together to maintain the safeguards that accurate sold data affords."

Gross Income Multiplier (GIM)

Sale price / gross annual income = gross income multiplier (GIM) Gross annual income / market GIM = value

Interest in arrears is charged to the: Buyer Seller Broker Lender

Seller The seller pays interest from the first day of the month until the day of closing (sellers loan balance times the interest rate divided by 365 to get the daily rate) on the loan the seller's paying off.

The fee to notarize a Warranty Deed is charged on the settlement statement to: the buyer the listing broker the seller the buyer and seller

Seller The seller(s) signs the warranty deed, not the buyer. The charge is debit seller. On the settlement sheet do not confuse "recording" the deed with "notarizing" the deed. Recording the deed is "debit buyer" as it is considered in the buyers best interest to have the deed recorded into the public record. For more info: THE WARRANTY DEED - Although title may be transferred by a number of types of deed such as a quit claim deed, the most common type of deed used in a closing to transfer title is the warranty deed. The seller signs the warranty deed, not the buyer. In addition, a notary public must notarize the deed and an unofficial witness who is not a party to the transaction must sign as well so the deed can be recorded. The notary and the witness are usually employees of the closing attorney, although sometimes the attorney may ask the licensee to be a witness. Once the seller, the notary, and the unofficial witness have signed the deed, and the seller or attorney hands (delivers) it to the buyer and the seller has officially transferred title. It is standard practice for the attorney to keep the original warranty deed at closing for recording at the courthouse. The original deed is then mailed to the buyer after the recording.

The Licensee Buyout Addendum contains the following verbiage EXCEPT: Seller is responsible for marketing and closing expenses Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. The Contract may be terminated at any time by Seller upon written notice to Buyer. Any termination of the Contract shall not affect the listing contract for the Property (Listing Contract).

Seller is responsible for marketing and closing expenses Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. The Contract may be terminated at any time by Seller upon written notice to Buyer. Any termination of the Contract shall not affect the listing contract for the Property (Listing Contract).

liens

a claim to have a debt or other obligations satisfied out of property belonging to another holder (lienor) and owner (lienee) recorded with the clerk of the circuit court encumbrance to a title, but not all encumbrances on property are liens

revoke without prejudice

a licensee may be revoked or canceled if it was issued through a mistake or inadvertence of the commission. such revocation or cancellation shall not prejudice any subsequent application for licensure filed by the person against whom such action was taken

settlement stipulation

a licensee-respondent and the licensees attorney will meet with the DRE attorney before a hearing to discuss a possible settlement and enter a stipulation stipulation- agreement as to the facts of the case and the penalty reached between the attorneys for the DRE and the licensee or licensees attorney must be approved by FREC

When a license law complaint is made to the Commission against a licensee, the licensee must: Pay a fine and give up license Appear before the Commission within 30 days Submit a written response to the Commission if requested Temporarily give up license

Submit a written response to the Commission if requested Rule E-21. Licensee must respond to complaint or audit notice in writing When a licensee has received written notification from the Commission that a complaint has been filed against the licensee, the licensee has been selected for an audit, or that an audit has identified record keeping or trust account deficiencies, such licensee shall submit a written answer to the Commission. Failure to submit a written answer within the time set by the Commission in its notification shall be grounds for disciplinary action unless the Commission has granted an extension of time for the answer in writing and regardless of the question of whether the underlying complaint warrants further investigation or subsequent action by the Commission. The licensee's written answer shall contain the following: (a) A complete and specific answer to the factual recitations, allegations or averments made in the complaint filed against the licensee, whether made by a member of the public, on the Commission's own motion or by an authorized representative of the Commission. (b) A complete and specific response to any additional questions, allegations or averments presented in the notification letter. (c) Any documents or records requested in the notification letter. (d) Any further information relative to the complaint that the licensee believes to be relevant or material to the matters addressed in the notification letter.

T / F - A real estate sale contract is an example of a bilateral contract.

T - A bilateral contract obligates both parties to perform in accordance with the terms of the contract. A sale contract is a bilateral contract because both the seller and the buyer are obligated to perform.

T / F - A buyer brokerage agreement is an employment contract between the brokerage and a buyer.

T - A buyer brokerage agreement is an employment contract with a buyer.

T / F - An electronic signature can be accepted as part of a real estate contract.

T - Letters and other written communications, including a signature, may be sent by electronic means or facsimile, and will be considered part of the contract.

T / F - An implied contract is one in which some or all of the obligations or conditions of a contract are NOT stated expressly.

T - With an implied contract, the obligations or conditions of the contract may be reasonably implied by the acts of the parties or by the nature of the transaction.

time share resale listing agreement disclosures

THERE IS NO GUARANTEE THAT YOUR TIME SHARE PERIOD CAN BE SOLD AT ANY PARTICULAR PRICE OR WITHIN ANY PARTICULAR PERIOD OF TIME

Personal Property

Tangible and movable property (transferred by the Bill of Sale); property not classified as real property. Also called personality or Chattel.

Special Assessment

Taxes levied against properties to pay for all, or part of, improvements that will benefit the properties being assessed.

Life Estate

Tenancies whose durations are limited to the life of some person; freehold.

What is a deed with two or more persons wishing to share ownership. (#32)

Tenancy in Common (Willable)

licensee as buyer or seller

a real estate licensee who was the buyer or seller (lessor or lessee) in a real estate transaction may make a claim against the fund, provided the licensee did not act in the capacity of a real estate agent

Triggering Terms

The Truth-in-Lending Act requires creditors to disclose certain information if certain credit terms, called triggering terms, are included in the advertisement. Triggering terms include the amount or percentage of down payment, number of payments, period (term) of repayment, amount of any payment, and the amount of any finance charges.

Plottage

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

escrow account

account for the deposit of money a disinterested 3rd party holds in trust. hence trust funds

continuing education

active and inactive licensees must complete 14 hours of cont. edu. every 2 year period after. 3 hours of core law are required in 2 year 14 hour renewal cycle.

fiduciary relataionships

acts in a position of trust and confidence for another

guardians deed

acts on behalf of a minor and is also a fiduciary

2 types of notice to legal title that have equal priority

actual notice and constructive notice

becoming a broker requires

additional education, experience, and passing the broker license exam

loan servicing

additional source of income for lenders service sees typically range from 3/8 to 3/4 of 1% of the unpaid balance of loans serviced

A couple has a combined monthly gross income of $6,737, a monthly mortgage payment of $1,420, a PMI premium of $96, and additional monthly obligations including the following: ■ Car payment: $460 ■ Student loan: $200 ■ Credit card: $150 a. What is the couple's housing expense ratio? b. What is the couple's total obligations ratio? c. Does the couple qualify for a conventional mortgage?

a. $1,420 PITI + $96 PMI = $1,516 total monthly housing expense $1,516 ÷ $6,737 monthly gross income = .2250 or 22.5% HER b. PITI + PMI + LTO = $1,516 + $460 car + $200 loan + $150 credit = $2,326 total monthly obligations $2,326 ÷ $6,737 monthly gross income = .3452 or 34.5% TOR c. To qualify for a conventional mortgage loan, the borrower must have an HER that does not exceed 28%. The borrower's HER is 22.5%. To qualify for a conventional mortgage loan, the borrower's TOR must not exceed 36%. The borrower's TOR is 34.5%, which is less than 36%. The borrower meets the TOR and HER ratio requirement for a conventional mortgage.

Taxable Value

The assessed value less allowable exemptions resulting in an amount to which the tax rate is applied to determine property taxes due.

Police Power

The authority of government to protect the property, life, health, and welfare of its citizens

An Exclusive Right to Buy and Sell contract may disclose which of the following in the Acknowledgments section? The broker is an agent of the buyer The broker is a transaction broker The broker is an agent of both the buyer and the seller The broker is either a Buyers' Agent or a Transaction Broker or a Seller's Agent

The broker is either a Buyers' Agent or a Transaction Broker or a Seller's Agent The Acknowledgements section of the Exclusive Right to Buy/Sell (AKA Purchase Contract) is the place where the brokers disclose their relationship to their clients. Here is a wiggle for you: the person writing an Exclusive Right to Buy and Sell agreement (Purchase Contract) for the buyer may be working either as a Transaction Broker for the buyer or seller, or as a buyers agent, or as a Sellers agent. How can the agent working with the buyer be a seller's agent? Ans. When the seller's agent is selling a property to a customer ie. an unrepresented buyer. As an example: the sellers agent sells the property to someone who does not have an agent, but who saw the property in an open house the agent was holding. In this case the agent discloses that he/she represents the seller and that the buyer is a customer. From the Acknowledgements section of the Contract to Buy and Sell Real Estate BROKER'S ACKNOWLEDGMENTS AND COMPENSATION DISCLOSURE. (To be completed by Broker working with Buyer)..... ...Broker is working with Buyer as a Buyer's Agent Seller's Agent Transaction-Broker in this transaction.

The buyer notifies the seller in writing of a termination of the contract under the Loan Objection Deadline. What happens to the earnest money? The broker splits the money with the seller The broker must immediately return the money to the buyer The broker holds the money until there is mutual agreement to return the money to the buyer The buyer and the seller will mediate any disagreement about the earnest money

The broker must immediately return the money to the buyer A buyer has until the Loan Objection Deadline to provide written notice s/he cannot receive a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money must be refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan. From the Contract to Buy/Sell Real Estate: Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer's sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate on or before Loan Objection Deadline, if the New Loan is not satisfactory to Buyer, in Buyer's sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER'S WRITTEN NOTICE TO TERMINATE, BUYER'S EARNEST MONEY WILL BE NONREFUNDABLE, except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey).

If an offer was made on a house in which the buyer intended to be have a a hair salon in the basement, but found out a few days prior to closing that the zoning wouldn't allow it, can they cancel the agreement without penalty? Yes No, the buyer must perform this due diligence prior to submitting an offer Yes, but only if they terminate in writing prior to the Record Title Objection Deadline Yes, as long as they file an objection in writing prior to Closing

Yes, but only if they terminate in writing prior to the Record Title Objection Deadline Zoning is a matter of Title. Buyers have the right to terminate the contact without penalty if any aspect of Title is unsatisfactory to them. However, they must due so in writing prior to either the Off-Record Title Objection Deadline or the Record Title Objection Deadline. From the Contract to Buy/Sell: Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, area, zoning, unrecorded easements and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental matters. The surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may give them rights to enter and use the Property. Such matters may be excluded from or not covered by the title insurance policy. Buyer is advised to timely consult legal counsel with respect to all such matters as there are strict time limits provided in this Contract [e.g., Record Title Objection Deadline (§ 3) and Off-Record Title Objection Deadline

Under the Commission-approved Contract to Buy and Sell, if the buyer diligently tried to get a loan, was unable to do so and notified the Seller of such before the Loan Objection Deadline had passed, what would happen to the earnest money deposit? The broker and owner would split the money The broker would release the money back to the buyer The buyer and broker would split the money 50/50 The seller is entitled to liquidated damages and other things of value

The broker would release the money back to the buyer A buyer has until the Loan Objection Deadline to provide written notice s/he cannot get a commitment for a satisfactory loan and wants to terminate the contract. If s/he does provide such notice, the earnest money is refunded to the buyer. If the buyer does not provide such notice, the contract continues, but the buyer's earnest money becomes nonrefundable should s/he not receive a loan. From the Contract to Buy/Sell Real Estate: Loan Objection. If Buyer is to pay all or part of the Purchase Price with a New Loan, this Contract is conditional upon Buyer determining, in Buyer's sole subjective discretion, whether the New Loan is satisfactory to Buyer, including its availability, payments, interest rate, terms, conditions, and cost of such New Loan. This condition is for the sole benefit of Buyer. Buyer has the Right to Terminate on or before Loan Objection Deadline, if the New Loan is not satisfactory to Buyer, in Buyer's sole subjective discretion. IF SELLER IS NOT IN DEFAULT AND DOES NOT TIMELY RECEIVE BUYER'S WRITTEN NOTICE TO TERMINATE, BUYER'S EARNEST MONEY WILL BE NONREFUNDABLE, except as otherwise provided in this Contract (e.g., Appraisal, Title, Survey).

Partially Amortized Mortgage

The buyer makes regular payments smaller than what is required to completely pay off the loan (payments do not fully amortize the loan) resulting in a larger balloon payment to pay off the remaining amount due.

Eminent Domain

The constitutional right given to a unit of government to take private property involuntarily, if taken for public use and a fair price is paid to the owner.

Title Closing

The consummation of a real estate transaction, when the seller delivers title to the buyer in exchange for payment from the buyer of the purchase price.

Which statement concerning tenancy by the entireties is FALSE?

The deed must specifically state intent to create such a tenancy. tenancy by the entireties is automatically created (without special wording) when title is taken in the names of the husband and wife.

A Georgia Auctioneer was asked by a local real estate broker to auction a small motel in Jacksonville. The auction did not result in a sale. The Florida broker paid the auctioneer for out-of-pocket expenses, but did not pay a commission. It would be correct to say that the: a. Georgia Autioneer violated the license law b. Florida Broker did not violate the license law c. Florida broker is not subject to discipline by the Florida real estate commision d. tranaction is perfectly within the license law

a. Georgia Autioneer violated the license law

basis

The initial cost of an investor's property.

Telephone solicitation

The initiation of a telephone call for the purpose of encouraging the purchase of, or investment in, property, goods, or services.

Fraud

The intent to misrepresent a material fact or to deceive in order to gain an unfair advantage or to harm another person

voluntary relinquish

The licensee requests that the DBPR cancel the license. The DBPR will accept a licensee's request to voluntarily relinquish a license, provided there is no investigation or discipline pending against the licensee. The licensee sends written communication to the DBPR indicating that the licensee is retiring or no longer desires to be licensed.

A licensee may accept compensation from: The licensee's employing broker only The seller or buyer Any licensed real estate broker Any service provider to the transaction

The licensee's employing broker only A licensee can only accept compensation from his employing broker.

The only broker for a firm had her license revoked. What action, if any, will be taken against the sales associates' licenses registered under the broker?

The licenses will be placed in involuntary inactive status.

You have a listing with a couple who hold title in joint tenancy. A broker brings you an offer and the couple indicates that they will probably accept the offer, but they want to think it over for a few hours. During those few hours they are involved in a traffic accident and one of them is killed. What would be the status of the listing? The listing agreement is enforceable against the surviving spouse The listing agreement is cancelled. The offer to purchase is void. The offer to purchase is still valid.

The listing agreement is enforceable against the surviving spouse If the listing agreement has been signed by both spouses and one spouse dies, the listing agreement is still enforceable against the surviving spouse. In joint tenancy the surviving member(s) immediately inherits the property upon the death of a member. Therefore the surviving member has full rights to sell the property and the listing contract is valid. If you chose either of the purchase contract answers please be careful to read the questions more closely. This question asked about the status of the listing contract. As the verbiage of this questions contained much info about the purchase contact it is easy to skim through and miss the real question.

Regression

The principle stating the value of a superior property is adversely affected by its association with an inferior property of the same type.

appraisal

The process of developing and communicating an opinion of a property's value based on supportable evidence and approved methods as of a certain date.

Reconciliation

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

Granting Clause

The provision in a deed that specifies the names of the parties involved, the words of conveyance, and a description of the property.

Vendor

The seller of real property in an agreement of sale

Uniform Standards of Professional Appraisal Practice (USPAP)

The set of standards that must be followed when performing appraisal services

An earnest money deposit held in escrow is reflected on the closing statement as a? a. credit to the buyer b. debit to the buyer c. credit to both the buyer and seller d. credit to the seller

a. credit to the buyer

Novation

The substitution of a new party

When prices go down:

The supply increase relative to demand

Buyer's Market

The supply of available properties exceeds the demand.

Land

The surface of the earth and everything attached to it by nature.

Condemnation

The taking of private real property for a public purpose under the right of eminent domain for a fair price.

The seller's property disclosure indicates the condition of all but which of the following? The appliances The title The heating and cooling system The electrical system

The title The title to the property is address in the Exclusive Right to Buy Sell Real Estate (AKA the Purchase Contract)

Leverage

The use of borrowed funds to finance the purchase of an asset; the use of another's money to make more money.

A real estate license expires a. on the date shown on the license b. every 2 years c. on the effective date d. at the end of 1 year

a. on the date shown on the license

What rights does a property owner have to the use of water flowing over or through his or her land? a. riparian b. littoral c. flowage d. aquifer

a. riparian

Which of the following is true about licensees filling in blanks on a standard commission-approved form? This is the practice of law and must be done by attorneys. This is not the practice of law. This is the practice of law but it is specifically permitted by Colorado law. This must be done entirely with preapproved standard clauses.

This is the practice of law but it is specifically permitted by Colorado law. The Colorado Supreme Court issued a decision that the practice of filling in blanks by real estate licensees is authorized, but that it still constitutes the practice of law.

Contract for Deed

Title remains w/ the seller. Seller finances the deal

In a transaction that is subject to a licensee buyout agreement, if the buyer defaults, the seller may: sue the buyer if the specific performance box has been checked always sue the buyer for specific performance only keep the buyer's earnest money as liquidated damages keep the buyer's earnest money as liquidated damages if the liquidated damages box has been checked

always sue the buyer for specific performance "Liquidated damages" is deleted, in a licensee buyout addendum to a contract to buy and sell real estate. More info: What Is a Licensee Buyout Addendum? by Maxwell Wallace, Demand Media A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients. History and Purpose The Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers. Situations Dictating Use Licensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers. Deleted Provisions under the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms. Profit and Loss Stipulations Colorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.

A counterproposal: is a rejection of a proposed contract to buy/sell amends the terms and conditions of a proposed contract to buy/sell use is mandatory to modify the terms and conditions of a contract to buy/sell is used to counter the purchase price only of a proposed contract to buy/sell

amends the terms and conditions of a proposed contract to buy/sell The key here is "supersede and replace." This is not merely a rejection of an offer, it is amending the original offer, not rejecting it entirely.

amends the terms and conditions of a proposed contract to buy/sell the key here is "supersede and replace." This is not merely a rejection of an offer, it is amending the original offer, not rejecting it entirely.

A contractual disagreement led to a seller's reducing the contract price by $1000. This agreement would be: unenforceable because of a lack of consideration an accord and satisfaction a novation a waiver

an accord and satisfaction This agreement would be an accord and satisfaction.

Escrow Amount

an account where money is held in trust until it can be delivered to a designated party

leases

an agreement between the landlord (lessor) and a renter (lessee) that grants lessee the right of possession and use of the property (not ownership) lease of more than 1 year be in writing signed by the lessor w 2 witnesses leases for 1 year or less are enforceable a property owner may not delegate the authority to draft a lease to a nonattorney

Corporation

an artificial or fictitious person formed to conduct specified types of business activities.

The License Buyout Addendum to the Contract to Buy and Sell is required for which of the following situations? a listing associate offers to purchase a property immediately after the listing expires an associate in the listing brokerage company wishes to purchase a property listed by another associate an associate is offering a guaranteed buyout arrangement as an inducement to list with his or her company a broker wishes to acquire one of his own listings as an investment

an associate is offering a guaranteed buyout arrangement as an inducement to list with his or her company "It is the Commission's position that Rule F-7 requires use of the Buyout Addendum under the following circumstances: 1. When a licensee enters into a contract to purchase a property concurrent with the listing of such property. 2. When a licensee enters into a contract to purchase a property as an inducement or to facilitate the property owner's purchase of another property, the purchase or sale of which will generate a commission or fee to the licensee. 3. When a licensee enters into a contract to purchase a property from an owner but continues to market that property on behalf of the owner under an existing listing contract." Having said this, the commission position goes on to say: "If the listing licensee or broker desires to acquire a listed property solely for personal use or future resale and not as an inducement to the owner, the licensee or broker is advised to (1) clearly sever their agency or listing relationship in writing; (2) renounce the right to any commission, fee or compensation in conjunction with acquisition of the listed property; and, (3) advise the owner to seek other assistance, representation or legal advice." In English, this second part says that although properties bought for true investment purposes do not require the use of the buyout addendum, the commission would prefer if you adopted some of the provisions of it and put some distance between you and the seller, such as not making a commission and severing the listing contract.

owner developer

an unlicensed entity that sells, exchanges, or leases its own property

life estate

another type of freehold estate period of the lifetime of an individual can be created by the person who holds title to real property called conventional life estates when the life estate ends, the property reverts to the original grantor (previous owner) or goes to a 3rd party, called a remainderman estate in reversion (reversion estate) if life estate goes to a remainderman, the remainderman owns a remainder estate while the life estate exists life estates can be created by law called legal life estates

A township is one mile square, 640 acres. 6 miles square, 640 acres. approximately 36 square miles. equal to one section.

approximately 36 square miles.

easement appurtment

appurtment=next to involves 2 or more parcels of property and continues from owner to owner

corporations

artificial person or legal entity created by law and consists of one or more persons. formed by filing articles of incorporation with the florida department of state both foreign and domestic stockholders elect board of directors must register with DBPR under corporations name at least one of the officers or directors must be licensed as an active broker (pertaining to the principal broker or qualifying broker) active/inactive florida brokers, and unlicensed people may serve as officers and directors of a real estate brokerage all officers and directors who are not licensed must register with DBPR *inactive brokers and unlicensed individuals may perform managerial functions sales/broker associates may not be an officer or director in a real estate brokerage corporation (will be issued citation) sales associates/broker associates may be shareholders 14 calendar days for a broker to be replaced

state documentary stamp tax on deeds

assessed at the rate of .70 for each $100 of the full purchase price or any fraction of $100 purchase price / $100 = number of taxable increments rounded up to a whole number number of increments x .70 = cost of documentary stamps on deeds on normal sales or exchanges, the documentary tax is shown as a debit to the seller on the closing statement

Which of the following is one of the primary reasons that the real estate commission has approved a broad variety of forms and made their use mandatory by licensees? allows the commission to discipline brokers for improper contracting protects the public by requiring the same forms for all real estate transactions in Colorado assists attorneys and the public in following commission rules when contracting assures the broker's compliance with the Conway-Bogue decision of the Colorado Supreme Court

assures the broker's compliance with the Conway-Bogue decision of the Colorado Supreme Court The Conway-Bogue decision gives real estate licensees the limited right to practice law by completing standard and approved forms, thus these numerous mandatory forms assist brokers in their compliance with this statute.

General Agent

authorized by the principal to perform acts associated with the continued operations of a particular job or a certain business of the principal

general agent

authorized by the principal to perform acts associated with the continued operations of a particular job or a certain business of the principal

which department issues real estate licenses? a. state b. Business and Professional Regulation c. Revenue d. Real Estate

b. Business and Professional Regulation

Discrimination based on religion is prohibited by the a. Civil Rights Act of 1866 b. Civil Rights Act of 1968 c. Civil Rights Act of 1964 d. Fair Housing Amendments of 1988

b. Civil Rights Act of 1968

A 5-year lease of a 10,000 sq ft warehouse prohibits assignment. After 2 yrs the tenant is unable to continue w/ the full rent payments and arranges w/ another tenant to take over one-half of the space and one-half of the rent for the remaining term. This arrangement is a. a violation of the terms of the lease b. a sublease c. in violation of Statute 83 d. illegal

b. a sublease

If the Federal Reserve Board descides to purchase government securitiesin the open market, the effect will be to: a. decrease the $ supply and cause interest rates to increase b. increase the $ supply and cause interest rates to decrease c. limit the amount of $ member banks may use for loan purposes, causing interest rates to increase d. create a "tight $" market

b. increase the $ supply and cause interest rates to decrease

The Federal Housing Administration a. originates loans b. insures loans c. guarantees loans d. certifies loans

b. insures loans

An Ostensible partnership a. is required to file documents w/ the Secretary of State b. is not a true partnership c. cannot be created by real estate brokers d. will not be treated as though the partisipants were partners

b. is not a true partnership

If a broker's actions pose an immediate serious danger to the safety and welfare of the public, what action might the Secretary of the department of Business and Professional Regulation take? a. suspended the license of the licensee for 10 years b. issue a summary suspension c. issue a cease and desist order d. place the licensee on probation

b. issue a summary suspension

The agreement the state of Florida has w/ some other states that recognises the similarity in education and experience required of licencees is called: a.reciprocity b. mutual recognition c. cooperative licensure d. intrastate licensing

b. mutual recognition

The Florida Real Estate Commission held a meeting for the purpose of passing a new rule. This is an exercise of which Commission power? a. executive b. quasi-legislative c. quasi-judicial d. ministerial

b. quasi-legislative

individual who wishes to actively engage in real estate industry must

be registered and licensed with DBPR

applicants who possess a Florida sales associate license must fulfill their sales associates post licensing edu

before the expiration of the initial sales associate license or before applying for a brokers license (whichever comes first)

equitable title

beneficial interest in real estate implying that an individual will receive legal title at a future date

interest bearing escrow account

broker must get written permission from all parties before placing the funds into this type of act

misappropriation of escrow funds

brokers cant intermingle or commingle (mix) escrow deposits with other types of funds

giving opinions to title

brokers must handle statements regarding title to property with extreme caution in the event a licensee knows that the title to a property in not marketable or that liens exist, the licensee is required to inform prospective buyers

A broker received a $5,000 deposit from a buyer on Tuesday at 1 P.M. The seller will NOT be available until Monday. The broker's normal banking day is Monday. The broker is required to deposit the $5,000 before the end of

business on Friday. The answer is BUSINESS ON FRIDAY. Brokers must deposit escrow funds no later than the end of the third business day following receipt of a deposit. The deposit was received on Tuesday, so the broker has Wednesday, Thursday and until the end of business on Friday.

When the Fed wants to ease a tight money supply, it may

buy Treasury securities. When an increase in economic activity seems needed, the Fed buys securities, thereby releasing money back into normal circulation and increasing loanable funds.

one or more sales associates, each titled "designated sale associate' may be designated to act as agents for the seller, and one or more may be designated to act as agents of the _________

buyer

partially amortized mortgage (balloon mortgage)

buyer makes regular payments smaller than what is required to completely pay off the loan by its date of termination

Advocacy of the principal is a benefit of which of the following relationships? Buyer-agency Seller-agency Transaction brokerage buyer or seller agency

buyer or seller agency Advocacy is one of the fiduciary duties an agent is required to perform in an agency relationship. There is no advocacy in a transaction broker relationship, you have to treat the buyer and seller equally.

A Purchase and Sale Contract may be prepared by: the broker's attorney the seller's attorney the buyer's attorney buyer or seller's attorney

buyer or seller's attorney The attorney of the buyer or the seller may prepare a purchase and sale contract; the broker's attorney may not.

in addition to HOA disclosure summary, the contract for sale and purchase must state: (4)

buyer should not sign (execute) the contract without first receiving the homeowners disclosure summary if the disclosure summary is not provided for the buyer before executing the contract for sale and purchase, the contract is voidable to void the contract, the buyer must give the sellers agent written notice of he buyers intention to cancel the contract within 3 calendar days after receipt of the disclosure summary or before closing whichever comes first the right to void the contract cannot be waived by the buyer (right terminates at closing)

property tax disclosure

buyers should not rely on the sellers current property taxes as the amount of property taxes the buyers may be obliged to pay in the year subsequent to purchase. a change in ownership or property improvements triggers reassessments of the property that could result in higher property taxes

Which statement about the brokers portion of the closing statement is true? a. all double-entry items must appear there b. total reciepts minus the binder deposit equals the grand total c. Reciepts and disbursements must equal d. total expenses less the brokerage fee equals the grand total

c. Reciepts and disbursements must equal

A plumber has been appointed by a court to appraise a small business. The plumber....... a. is in violation of F.S. 475 b. is allowed to charge a commission c. may do so and be paid a fee d. must first be licensed under F.S. 475, Part II

c. may do so and be paid a fee

If a commission dispute arises prior to closing, the broker a. may retain the entire amount of escrowed funds until the dispute is resolved b. must withdrawl the amount of the commission from the escrow account c. may retain the exact amount of the disputed commission in the escrow account until the dispute is settled d. must deliver the entire amount of the escrowed funds at closing

c. may retain the exact amount of the disputed commission in the escrow account until the dispute is settled

To be enforcable, a lease longer than 1 year a. can be oral if witnessed by 2 people b. does not have to conform to the Statute of Frauds c. must be in writing, signed by the landlord (no witness is required in Florida) d. Does not have to be witnessed

c. must be in writing, signed by the landlord (no witness is required in Florida)

A Broker a. can refuse offers on behalf of the principal b. can buy the listed property w/o consent of the principal c. must follow all legal instructions of the principal or withdrawl d. must ignore the instructions of a principal when the instructions are not in the best interests of the principal.

c. must follow all legal instructions of the principal or withdrawl

Which information supplied by an applicant is Public Record? a. financial Information b. test scores c. name and address d. medical information

c. name and address

The four unities required to create a joint tenancy are a. interest, survivorship, possesion and time b. possession, deed, title and time c. possession, interest, time and title d. person, use, interest and purpose

c. possession, interest, time and title

An unlicensed personal assistant would be permitted to do which of the following? host an open house while the licensed associate is showing another listing and try to negotiate an offer complete contract forms after the licensed associate has captured the important things like price and closing date show a property to a potential buyer when the licensed associate is busy and negotiate price and terms for their offer. complete a comparative market analysis for presentation by the licensed associate

complete a comparative market analysis for presentation by the licensed associate Unlicensed assistants cannot do licensed activities, such as negotiating, providing advise or signing contracts A license is not required for completion of a market analysis as the licensed agent is presenting it.. An unlicensed assistant can show a home. Their restrictions are simply to provide access to the property and confine real estate conversation to info on materials already published by the licensed agent. Which means they can answer a question on the price of the home (that is published on the MLS or in ads) but not answer a question related to "What do you think they will take?" (that answer is a licensed activity). In real life this is a very controversial topic as listing agents generally do not like the idea of unlicensed people taking strangers through their homes

An unlicensed personal assistant may: create and get signatures on contracts share commission with licensee conduct an open house distribute copies of sales literature they wrote

conduct an open house Licensed assistant may not perform licensed activities such as independently drafting legal documents, or distributing information on listed properties other than those prepared by a broker. They may not share commissions. On the other hand, they may: 1. Perform clerical duties for a broker which may include the gathering of information for a listing; 2. Provide access to a property and hand out preprinted, objective information, so long as no negotiating, offering, selling or contracting is involved 3. Distribute preprinted, objective information at an open house, so long as no negotiating, offering, selling or contracting is involved; 4. Distribute information on listed properties when such information is prepared by a broker; 5. Deliver paperwork to other brokers; 6. Deliver paperwork to sellers or purchasers, if such paperwork has already been reviewed by a broker; 7. Deliver paperwork requiring signatures in regard to financing documents that are prepared by lending institutions; and 8. Prepare market analyses for sellers or buyers on behalf of a broker, but disclosure of the name of the preparer must be given, and it must be submitted by the broker.

condominiums

consists of condominium units and common elements what makes the structures condominiums is how the developer organized the association deed to the unit may be held by one or more persons in any type of estate or tenancy

When a tenant abandons the leased premises because the landlord has not furnished hot water for two months, it is called what type of eviction. forced constructive cooperative absolute

constructive When a tenant early terminates a lease because they claim the property is not habitable, it is called a constructive eviction. There are strict rules and regulations regarding Constructive Evictions in Colorado. They are detailed under the State's Warranty of Habitability which outlines under what circumstances may a property be declared uninhabitable and what steps must be taken by the tenant to perform a constructive eviction to be legally released from a lease.

bargain and sale deed

contains no express warranty against encumbrances contains covenant of seisin grantor does not defend the title against any future claims or attacks on the title

easement by prescription

continually using another persons real property for the statutory period when such use is adverse to the owners interest

title insurance

contract that protects the policyholder from losses arising from defects in the title

business arrangements and entities that may not register as a brokerage

corporation sole, joint venture, business trust, cooperative association, unincorporated association, trade names

A type of value estimate approach, in which value equals the estimated land value plus reproduction costs of any improvements, after the depreciation costs have been subtracted, is called the: market approach cost approach substitution approach income approach

cost approach The cost approach is what is described here - it estimates the amount needed to reproduce or replace the property.

You have been hired to appraise the local public library building. The approach that is likely to be the MOST relevant is the

cost-depreciation approach. The cost-depreciation approach is particularly applicable for appraising special purpose properties.

involuntary lien

created by law to protect interests of persons who have valid monetary claims against the owner of real property

net listing

created when a seller agrees to sell a property for a stated acceptable minimum amount called the sellers net broker retains the proceeds in excess of the sellers net as commission

The Real Estate Commission approved Colorado Power of Attorney form creates a limited agency agreement is required in foreclosure sales creates a universal agency agreement may be used in place of a buyer agency agreement

creates a limited agency agreement The Colorado Real Estate Commission approved Power of Attorney form is designed to establish a limited agency agreement sufficient to designate someone to sign on behalf of another for a real estate transaction. It is not designed to establish broader legal authority to act outside this limited legal scope.

Interest on the loan assumed is shown as: debit to the buyer credit to the buyer credit to the broker credit to the seller

credit to the buyer Credit to the buyer a debit to the seller.

prorated expenses

credit- reimbursed, or debit-charged to either buyer or seller are prorated because the item applies to both closing day is allocated to either the buyer or the seller as determined in the sale contract have all prorated items determined as of midnight of the day before closing date. sellers responsibility ends at midnight the day before the closing occurs and that the buyer is responsible for costs incurred from the closing date going forward prorations are entered on the settlement statement as double entities (1 party credited, 1 party debited)

The division of Real Estate is an administrative part of the department of: a. State b. Commerce c. Banking d. Business and Professional Regulation

d. Business and Professional Regulation

which statement best describes a tenancy at sufferance? a. The tenant suffers from the landlord's failure to maintain the property b. the landlord suffers from the tenant's failure to pay rent c. The lease instrument is valid d. The tenant remained in possession after expiration of a lease

d. The tenant remained in possession after expiration of a lease

The full bundle of the rights in real property includes a. destruction, use and extinction b. destruction, use and enjoyment c. use, expatriation and enjoyment d. disposition, use exclusion

d. disposition, use exclusion

Construction loans are paid out in a. full at the begining of construction b. equal installments during the construction process c. full upon completion of constructions d. draws after specific stages of construction are complete

d. draws after specific stages of construction are complete

Which relationship is not adversarial? a. arms length b. buyer beware c. caveat emptor d. fiduciary

d. fiduciary

A sales associate failed to complete required postlicense education prior to expiration of the license period. What is the status of license? a. active b. voluntary inactive c. involuntary inactive d. null and void

d. null and void

A location would be required to register as a brokerage branch office if a. tables and chairs are provided for sales associates and customers b. the location is used as a shelter c. literature is handed out containing the broker's office address d. sales associates are permenently assigned to the location

d. sales associates are permenently assigned to the location

What is the debit/credit entry when a buyer assumes a loan from the seller? debit broker, credit buyer debit seller, credit buyer debit buyer, credit seller debit seller, credit broker

debit seller, credit buyer The seller still owes the amount that is assumed (debit seller). On an assumption, that the buyer will be making payments against the loan does not relieve the seller of the obligation that it be paid in full. The buyer will not be required to bring this amount to the closing (credit buyer)

Seller's proceeds are shown at the bottom of a six-column settlement worksheet as a: debit to the seller credit to the seller credit to seller, debit to the broker debit to the broker

debit to the seller Seller's proceeds are a shown as a debit on the worksheet. To fully understand this answer you need to have a good understanding of the six-column worksheet used in closings. Once all expense and credits have been applied you total up the Debit and Credit columns at the bottom. If the Seller is going to have proceeds, the debit column total should be less that the total of the credit column. For the sake of discussion lets assume the seller's debits are 125k and credits 200k. This means ultimately the seller is going to be getting a check from the escrow account for 75K, but how do you express this on the 6 column worksheet? After totaling the columns you need to make then equal, meaning you add 75K to the DEBIT column to make it equal to the credit column. This means the sellers proceeds are shown as a DEBIT on the worksheet. You still need to assign a corresponding CREDIT and that is to the BROKER CREDIT column. Remember the Broker CREDIT column tells the closing agent what checks they have to write out of the escrow account. The check they need to write in this case is for 75K to the Seller.

condominium documents

declaration of condominium-describes the unit boundaries, common elements, membership and voting rights in the association, covenants, and restrictions articles of incorporation of the association bylaws of the association FAQs estimated operating budget

Broker attends client closing. What must he/she do with signed closing documents? deliver to client within 2 business days deliver to title/closing company deliver immediately to Employing Broker deliver to Managing Broker within 3 business days

deliver immediately to Employing Broker Clients AND employing brokers are to recieve closing doucments immediately.

types of administrative penalties

denial of license application or failure to renew a license letter of reprimand is a letter that is placed in the licensees file describing a minor incidence of misconduct that resulted in no disciplinary action (letter of guidance) notice of noncompliance is a warning for a minor violation that allows a licensee 15 days to correct the minor infraction without consequence (nonresponse could result in disciplinary action) citation concerns a violation of no substantial threat to the public and involving a fine that ranges from $100-$500 probation allows the licensee to continue to practice real estate under the guidance of FREC for a period of time while completing conditions specified by FREC such as to complete edu courses, attend FREC meetings and satisfy all the terms of the penalty fine may be up to 5,000 for each violation of chapter 455 and chapter 475 suspension of a license (up to 10 yrs) revocation of license is permanent

redlining

deny loans or insurance coverage by a lender or an insurer that present different terms or conditions for homes in a certain neighborhoods

condominiums disclosures and cancelation period

developer is required to file the condominium documents with the division of florida condominiums, timeshares, and mobile homes developers of 20+ residential units must also prepare a prospectus and file it buyer of condo may cancel the contract within 15 calendar days 3 business days after the date of execution of the contract and receipt by the buyer of the condo docs if the buyer decides to cancel, the broker may return the escrowed binder deposit to the purchaser without first securing the sellers permission. buyer must notify broker in writing

interstate land sales full disclosure act (ILSA)

developers must register subdivisions of 100 or more lots with bureau developers of 25 or more lots must provide buyers with a property report prior to signing the sale contract. property reports contains important info about the property

subdivision plat map

developers submit for new development for review by the gov

The Definitions of Working Relationships form has the effect of: establishing an agency relationship disclosing the different types of relationships that are available complete disclosure of agency as required by Colorado statute disclosing only the types of relationships that the broker prefers to offer

disclosing the different types of relationships that are available The definitions form does not establish a specific relationship with a buyer or seller- only discloses the type of relationships that are available.

If items listed in the Inclusions and Exclusions Section of of the Contract to Buy and Sell Real Estate are not a part of the property, the broker should: do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out cross out the items to show they are not included if not crossed out the seller could be obligated to install the item check the appropriate box

do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out 3.1. Inclusions. The Purchase Price includes the following items (Inclusions): 3.1.1. Fixtures. If attached to the Property on the date of this Contract, lighting, heating, plumbing, ventilating, and air conditioning fixtures, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories), garage door openers including remote controls; and 3.1.2. Personal Property. The following are included if on the Property whether attached or not on the date of this Contract: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, and all keys. If checked, the following are included: Water Softeners Smoke/Fire Detectors Security Systems Satellite Systems (including satellite dishes).

do nothing, if the listing item is not on the property as of the date of the contract, it is not included nor necessary to cross it out The Inclusions section lists a number of items which may or may not be a part of the property. Just being in this list does not mean the item is a part of the property. These items are included "if on the Property whether attached or not on the date of this Contract". This means a listed item is only included if it was a part of the property on the date of the purchase agreement. From the Contract to Buy and Sell Real Estate: Please note that the paragraph numbers in the below clause may be different in the current contract. Although the numbers change periodically, the language essentially remains the same. Inclusions. The Purchase Price includes the following items (Inclusions): 32 2.5.1. Fixtures. If attached to the Property on the date of this Contract: lighting, heating, plumbing, ventilating and air conditioning fixtures, TV antennas, inside telephone, network and coaxial (cable) wiring and connecting blocks/jacks, plants, mirrors, floor coverings, intercom systems, built-in kitchen appliances, sprinkler systems and controls, built-in vacuum systems (including accessories), garage door openers including Other Fixtures: remote controls. If any fixtures are attached to the Property after the date of this Contract, such additional fixtures are also included in the Purchase Price. 41 2.5.2. Personal Property. If on the Property whether attached or not on the date of this Contract: storm windows, storm doors, window and porch shades, awnings, blinds, screens, window coverings, curtain rods, drapery rods, fireplace inserts, fireplace screens, fireplace grates, heating stoves, storage sheds, and all keys. If checked, the following are included: Water Softeners Smoke/Fire Detectors Security Systems Satellite Systems (including satellite dishes). Other Personal Property:

Redlining

don't lend in certain areas because of minorities

Which clause is included in a mortgage to prevent a subsequent buyer from assuming an existing mortgage loan? A) Acceleration clause B) Defeasance clause C) Due-on-sale clause D) Prepayment penalty clause

due-on-sale clause A provision in a conventional mortgage that entitles the lender to require the entire loan balance to be paid in full if the property is sold.

listings

duplication of records from a previous employer constitutes breach of trust. the removal of records from a previous employers office constitutes theft

summary suspension

during investigative process, the DBPR or the DRE may uncover something so serious that it cant allow the licensee to continue to endanger public welfare authority to issue summary (emergency) suspension order

documentary stamp on promissory notes

each new or assumed loan amount / $100 = number of taxable increments (rounded up to nearest whole number) number of increments x $.35 = cost of documentary stamps on notes

sections

each township is further divided into 36 sections. each section is one square mile or 640 acres numbered in an S pattern starting in the top right in writing a legal description of a section it is customary to show the section number, then the township number and direction, and last the range number and direction

land

earth and everything attached to it by nature

In the Government Rectangular Survey System, Section 12 is located: north of Section 1. south of Section 6. east of Section 11. west of Section 13.

east of Section 11.

corporation sole

ecclesiastical or church organization

post licensing education

effect of placing all initial licensees in a conditional (probationary) status because failure to complete post licensing edu requirement will cause license to become null and void.

net operating income and expenses that are deducted

effective gross income-operating expenses= net operating income all costs of mortgage expense, depreciation, income taxes, capital improvements, personal expenses, and business related expenses (such as payroll and advertising) that do not contribute to the actual operation of a property are business expenses, not operating expenses income remaining after subtracting all relevant operating expenses from effective gross income fixed, variable, and reserve

listing contracts

employment agreement between a property owner and a real estate broker authorizing the broker to find a buyer (or tenant) for a certain property may be written, oral, or implied longer than 1 year must be in writing chapter 475 f.s. requires that a copy of the listing contract be given to the owner within 24 hours of execution.

equal credit opportunity act (ECOA)

enforced by CFPB, protects discrimination on the basis of marital status, age, or receipt of income from public assistance programs

limited liability partnerships (LLPs)

enjoy protection from personal liability in much the same way as limited partners in a limited partnership

florida statute 20

executive branch of floridas government

informal hearing

expedited way of resolving the disciplinary case provided the licensee does not dispute the alleged facts stated in the complaint the licensee-respondent is given the opportunity to explain the details of the case with supporting evidence/witnesses if any party raises an issue of disputed fact during the informal hearing, the hearing is terminated and a formal hearing will be scheduled before an administrative law judge

The Colorado Real Estate Commission can decide on their own to investigate all of the following EXCEPT: a broker depositing salaries into her trust account failure to disclose stigmatizing property violating the Colorado Consumer Protection Act broker failing to disclose licensed status to seller while buying a property for personal use

failure to disclose stigmatizing property Colorado statute states that certain items that could psychologically impact (stigmatize) a property is not material to a real estate transaction. Therefore, these facts not being disclosed is not a violation.

3rd degree felony

falsifying a license application and unlicensed practice of a profession $5000 fine, 5 years in jail

many brokers and sales associates prefer to select one specific portion of a city and become an expert in that particular portion, called

farm area

real estate settlement procedues act (RESPA)

federal law administered by CFPB designed to ensure that borrowers are informed regarding the amount and type of charges they will pay at closing respa prohibits a seller from requiring the homebuyer to use a particular title insurance company as a condition of sale

If a seller refuses to pay a broker sales commission owed after the residential property is sold, the broker may

file a suit in the courts for the commission.

filing the complaint

filed in writing and is legally sufficient

FREC and what composes it

florida real estate commission. consists of 7 members. 4 active brokers-licensed for at least 5 years 1 active sales associate or broker- licensed for at least 2 years 2 consumer (unlicensed or lay) members-never been licensed governor appoints commission members to 4 year staggered terms paid 50$ per day

filing a complaint legally sufficient violation of any 3:

florida statute any existing, legally enacted DBPR rule any existing, legally enacted FREC rule

business trust

form of business entity that may be created to engage in transactions involving its own real property

limited liability corporations (LLCs)

form of business organization that offers the best features of a corporation and a partnership

A buyer and seller have written two contracts for one property: a higher contract to submit for a larger loan request and another with a lower actual purchase price because they know the seller is anxious to sell quickly. Which correctly describes this arrangement? risky but acceptable because the lender will have the right to appraise and inspect the property good business since the parties agree and the loan can only be made if the property appraises at the higher value fraudulent dual contracting acceptable for conventional loans, but not for VA or FHA loans

fraudulent dual contracting The buyer and seller are committing fraud and if a broker knew of the arrangement, he or she is also committing fraud and risks disciplinary action as well.

One section of land is established by staking the boundaries of any 640 acre tract. government survey. filing a plat with the county. grid coordinates.

government survey.

the DBPR is under the executive branch of the

governor

erosion

gradual loss of land due to natural forces

reliction

gradual receding of water, uncovering additional land

FREC quasi judicial powers

grant or deny applications for licensure suspend or revoke licenses and impose administrative fees make determinations of violations

According to the Colorado Licensing Law, in order for a non-resident to become a broker: he must meet Colorado licensing law only he must be involved in real estate in his home state he must be 21 and have been involved in real estate for two years he must be a broker from his home state and pass Colorado licensing laws, but need not open an office in Colorado

he must be a broker from his home state and pass Colorado licensing laws, but need not open an office in Colorado The minimum age requirement for a license in Colorado is 18. In order to obtain a non-residential license an applicant must be a broker in his own state and comply with Colorado licensing laws. It is not necessary to have an office in Colorado but a Colorado trust account is necessary.

personal assistants

hired by licensees to perform administrative tasks associated with real estate transactions whether a personal assistant must be a real estate licensee is determined by the tasks the assistant performs unlicensed personal assistants may not be paid commission or compensation on a transactional basis unlicensed assistant is NOT ALLOWED to show property a licensed personal assistant must be registered under the employing broker

for a broker to be paid a commission, the broker must (3)

hold current, active, real estate license at the time the listing or buyer broker agreement is entered into and real estate services are conducted be employed by the seller or buyer through a listing agreement or a buyer broker agreement be the procuring cause (payment could also result from a referral

homestead

homeowners (including single persons) in florida maay homestead their permanent (principal) residence florida constitution grants certain protection and benefits to homestead protection of the family- if a married person dies and the family homestead was titled in the deceased persons name only (in severalty) by operation of law the surviving spouse receives a legal life estate and the children receive a remainderman estate. purpose of homestead law is to protect the family and prevent the family from being displaced from the homestead protection of the homestead- protected from forced sale to satisfy judgement liens for debts owing to personal loans, credit card debt, etc tax exemption- up to 50,000 and deducted from the assessed value size of household- 1/2 acre within the city personal property- 1,000 of value

home equity conversion mortgage (hecm) or reverse mortgage

homeowners age 62+ who have paid off their mortgage or have a small balance remaining are eligible only available through FHA approved lender allows homeowners to borrow against the equity in their own homes homeowners can receive payments in a lumpsum, monthly basis, or occasional basis as a line of credit does not require payment as long as the borrower lives in the home lenders recover the principal and interest when the home is sold

tier/township

horizontal (east-west) township lines parallel to the base line every 6 miles. the grid pattern created by the intersection of two range lines and two township lines forms a 6 mile square called a township. townships contain 36 square miles ( 6 miles x 6 miles = 36 miles)

qualifying ratios (2)

housing expense ratios (HER)- monthly housing expenses principal, interest, property taxes and hazard insurance plus mortgage insurance premium (PITI+MIP) divided by monthly gross income= housing expense ratio total obligations ratio (TOR)- total monthly obligations (PITI divided by MIP+ LTO) divided by monthly gross income= housing expense ratio FHA loans do not have due on sale clause in the mortgage

easement by necessity

if a landowner subdivides land, conveying part of it in a way that causes a parcel to be landlocked, the court may authorize creation of an easement by necessity to allow property owners to enter an exit their landlocked property

involuntary inactive license status

if a licensee fails to renew an active or voluntary inactive license before the expiration date when a licensee has been involuntary inactive for: 1. 12 months of less, they must satisfy the eduction requirement by completing 14 hrs of FREC approved continuing edu 2. more than 12 months, but less than 24 months, they are required to complete 28 hours of a commission-prescribed education course

formal hearing

if licensee-respondent requests a formal hearing of disputes the allegations, the DBPR requests that the case be prosecuted under chapter 120 FS. conducted by division of administrative hearings (DOAH) administrative law judge prepares and submits to FREC a recommended order that includes judges findings and recommended penalty

formal complaint

if probable cause is found to exist formal administrative complaint-outline of all allegations of facts and charges against the licensee

brokerage relationship limitations

if the broker firm has a transaction broker relationship with the seller, the brokerage firm can also work with the buyer in the same transaction, as a transaction broker or in a non representation capacity if the brokerage firm is representing the seller as a single agent, the brokerage firm can work with the buyer, in the same transaction in a non representation capacity

According to the Licensee Buyout Addendum to the Contract to Buy and Sell, when does responsibility extend beyond the licensee to the brokerage firm? when the buyout date arrives when the buyout is for the personal use of the principal broker only if the listing associate is unable to perform the buyout if the employing broker signs at the bottom of the addendum

if the employing broker signs at the bottom of the addendum If the managing or employing broker signs the Licensee Buyout Addendum, then the brokerage company is responsible. According to the form, this is the only specification for responsibility. A is correct. A is the only verbiage listed NOT in the Licensee Buyout Addendum. What Is a Licensee Buyout Addendum? A licensee buyout addendum is a form used in certain real estate and property transactions in the state of Colorado. The LBA is used only in the purchase and sale of properties between licensed real estate professionals and their own clients. History and Purpose The Licensee Buy-Out Addendum to Contract to Buy and Sell Real Estate is intended to prevent improprieties and conflicts of interest in licensee/client transactions, as well as to make sellers contractually aware of the potential differences in selling to a licensed real estate professional as opposed to conventional buyers. Situations Dictating Use Licensed real estate agents are required to use an LBA when they enter into contracts to purchase properties concurrently with the initial listing of that property, when it immediately hits the market. Licensees also are required to use the LBA form when they are purchasing a property to facilitate its owner's purchase of another property, as well as when they continue to market that property to other potential buyers. Deleted Provisions Under the provisions of the licensee buyout addendum, several conventional provisions of standard real estate listing contracts reached under Colorado state law are deleted. Deleted provisions include a property's appraisal condition, liquidated damages or pre-assessed damages to the property, provisions related to the seller's financial default status and the broker's acknowledgments and compensation disclosure forms. Profit and Loss Stipulations Colorado's LBA also stands as contractual acknowledgment by a property seller that the buyer is a licensed real estate professional and any future profit or loss on a resale of the property is solely that of the buyer. Similarly, the LBA protects the property seller by acknowledging that any fees related to closing, holding and reselling the property are all absorbed by the buyer and not the property seller as the original or prior landowner.

When are faxed signatures acceptable on a Contract to Buy and Sell? never only during negotiation and not at closing as determined by the real estate commission if the parties agree and indicate this choice on the contract form

if the parties agree and indicate this choice on the contract form According to the contract, parties are permitted to approve faxed signatures and either party may request original signatures at closing or earlier.

Commission Position 6 on the release of earnest money deposits indicates: the broker cannot release earnest money funds from the trust account without written releases from all parties in the event of a dispute, the broker must decide to the "best of their ability" who is deserving of the earnest money and release it to that party if the transaction fails and there is no dispute over who is to receive the earnest money the broker should release the funds immediately since the Seller is the Listing Broker's client - the Seller gets to decide

if the transaction fails and there is no dispute over who is to receive the earnest money the broker should release the funds immediately Commission Position 6: " If there is no dispute, the broker should disburse to the appropriate party immediately."

The Commission Position on earnest money deposits indicates: the broker cannot release earnest money funds from the trust account without written releases from all parties in the event of a dispute, the broker must decide to the "best of their ability" who is deserving of the earnest money and release it to that party if the transaction fails and there is no dispute over who is to receive the earnest money the broker should release the funds immediately

commingle

illegal practice of mixing a buyers, sellers, tenants, or landlords funds with brokers own money or of mixing escrow money with a brokers personal funds or brokerage funds

exemptions from property taxes

immune properties are city, county, state, and federal government properties exempt properties include property belonging to churches and non profit organizations. exempt properties are subject to taxation, but the owner is released from the obligation

An employing broker may properly designate a broker: in writing by giving proper disclosure as a transaction-broker orally to the client with the independent contractor agreement

in writing

Proper disclosure of working relationships must be made: verbally personally by the employing broker in writing with witnesses

in writing You need to disclose your brokerage relationship in writing before engaging in any activity which requires a brokerage license. Commission rule E-35 states that "brokerage activities" occur when a broker elicits or accepts confidential information from a party concerning specific real estate needs, motivations, or financial qualifications. Activities such as open house, preliminary conversations, or small talk concerning price range, location, property styles, or responding to general factual questions about properties that have been advertised for sale or lease do not qualify as triggering brokerage activities.

If an agent forgets to renew her license and submits the application to renew 30 days late. The status of her license during this 30 day period is: active suspended expired inactive

inactive On the date a license expires, for the following 30 days it is placed into an "inactive" status and may be renewed by paying the regular renewal fee. After 30 days it is placed into an "expired" status. Renewing an expired license requires the payment of additional fees and satisfying additional educational requirements.

domestic corporation

incorporated in florida and doing business in florida

How long can an voluntary inactive licencee remain in that lisence status?

indefinately

components of adjustable-rate mortgage

index- economic indicator that is used to adjust the interest rate in the loan margin- or spread, is the percentage added to the index calculated rate index- adding the index to the lender margin index+margin=calculated rate index payment cap-limits the amount the monthly payments can increase during any adjustment negative amortization-occurs when the mortgage payments are not large enough to cover the interest expense teaser rate- lender will offer borrowers an initial below-market interest rate

key provisions of rule pertaining to title company and attorney escrow accounts

indicate the name, address, and telephone number of title company or attorney on the sale contract buyers broker must make a written request within 10 business days to the title company or attorney to provide written verification of the deposit (unless the deposit is held by a title company or an attorney nominated in writing by a seller or sellers agent) within 10 business days after the written request, buyers broker must provide sellers broker with either a copy of the verification or written notice that no verification was received.

Licensee gets asked by out-of-state party to manage 15 rental units. Broker should: put money in sales escrow account set up escrow account in own name inform employing broker to create Property Management Contract and set up proper escrow account inform employing broker and set up own escrow account

inform employing broker to create Property Management Contract and set up proper escrow account Section 12-61-103 (10) requires all business to be conducted only in the licensed name of the employing broker. Within a brokerage, only the employing broker or an attorney for the brokerage can create contracts from scratch.

mortgage

instrument that pledges the property a security (collateral) for a debt hypothecation-pledging of a property as security for repayment of a loan without surrendering possession of the property mortgage instrument must be in writing to be enforceable

fraud

intentional deceit

leasehold estates

interest in real property that a tenant possesses measured in calendar time

undivided interest

interest in the entire property, rather than ownership of a particular part of the property

In Colorado, who of the following is exempt from real estate license law? Property Manager renting single family home for a variety of owners Investor who owns 12 investment properties and sells one to an owner-occupant. Inactive licensee assisting a friend in filling out a purchase offer. Attorney at law collecting a five percent commission for helping

investor who owns 12 investment properties and sells one to an owner-occupant. rivate owners may always act for themselves and are not subject to real estate license laws. Attorneys are normally exempt from real estate license law while practicing law but must have a license to act as a broker. An inactive licensee is still bound by all rules of the commission, and the right-of-way specialist is exempt only for certain specific activities.

sale and purchase contracts

involves vendor (seller) and vendee (buyer) bilateral contract- both parties involved consideration in a sale contract is the promises the buyer and the seller make to eachother earnest money is not required to make the contract valid seller must convey clear and merchantable title broker does not have authority or power to sign a contract for buyer or seller

personal representatives deed

is an individual either appointed by will or by order of a court to settle the estate of a deceased person

Federal Fair Housing Act

is the expanded on the 1866 Act and makes discrimination in the showing , negotiation, sale, rental or financing of a dwelling prohibited when based on color, handicapp, family status

voluntary inactive

is the license status that results when a licensee has applied to the DBPR to be placed on inactive status.

criminal penalties

issued by criminal courts DBPR must refer criminal matters to the state attorney generals office

After a tenant gave notice and vacated an apartment, the landlord discovered substantial damage to the unit. No time was set in the lease specifying the length of time the landlord had to account or refund the security deposit after deductions. Which of the following is an appropriate action by the landlord? return the deposit immediately and bill the tenant for the repairs when completed if the damage is obviously more than the deposit, the landlord may keep the damage deposit without notice notify the tenant that his or her damage deposit is forfeited within 60 days itemize the damage in writing and return any excess deposit within one month

itemize the damage in writing and return any excess deposit within one month The maximum amount of time a landlord can specify in a lease that they will hold a security deposit after lease termination is 60 days. If no time was specified in the lease, the default maximum is 30 days.

vacating premises

landlord has 15 days to return the security deposit landlord has 30 days to notify the tenant of intentions to impose a claim on the deposit

termination of rental agreements by the landlord

landlord must give the tenant written notice demanding either payment of rent within 3 business days of possession of the premises. notice may be mailed, personally delivered, or attached to door of the dwelling tenant has 3 business days to either pay the rent or surrender the premises if the tenant vacates the premises, the landlord then is required to give the tenant written notice by certified mail of any claim on the tenants security deposit or advance rent held by the landlord

fee simple estate

largest bundle of legal rights fee, fee simple, fee simple absolute used to describe the estate highest type of real property interest recognized by law most title to property is held in fee

A Contract to Buy and Sell (Residential) does NOT require inclusion of which of the following? fireplace screens and grates leased security systems parking and storage facilities as described in a condominium community window coverings on the property on the date of the sales contract

leased security systems The Inclusions and Exclusions section of the Contract does not specify inclusion of items likely to be leased, such as security systems, water softeners, smoke/fire detectors and satellite systems. These are included only if the appropriate box is checked

IRMA

legal test for fixtures Intent of the parties Relationship or agreement of the parties Method or degree of attachment Adaption of the item

A seller providing financing may be exempt from attaining a lender's license if they have completed: a seller providing financing always needs a mortgage license less than 3 transactions in the past 12 months less than 5 transactions in the past 12 months less than 5 transactions is the past 15 months.

less than 3 transactions in the past 12 months (1) (b) With respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of no more than three properties in any twelve-month period to purchasers of such properties, each of which is owned by such person, estate, or trust and serves as security for the loan;

Which of the following is required before an owner of a 35-parcel of undeveloped land may drill a well for water only? nothing is required; a 35-acre site is entitled to an exempt well the owner must purchase water rights the owner must obtain a well permit from the state engineer if there is a stream on the property it must be diverted

less than 3 transactions in the past 12 months This section from the real estate manual outlines the exceptions to needing a mortgage license: § 12-61-904, C.R.S. Exemptions - rules. (1) (b) With respect to a residential mortgage loan, a person, estate, or trust that provides mortgage financing for the sale of no more than three properties in any twelve-month period to purchasers of such properties, each of which is owned by such person, estate, or trust and serves as security for the loan;

null and void

license no longer exists when a license has been involuntary inactive for more than 2 years, the license becomes null and void without any further action by the DBPR or FREC a license that has been revoked after a disciplinary proceeding becomes null and void. revocation of a license is a permanent penalty failure to complete post license education requirement within the expiration of the initial license will cause license to become null and void

voluntary inactive license status

licensee who has been qualified for a real estate license but who voluntarily chooses not to engage in the real estate business

judicial review (appeal)

licensee/respondent may challenge the final order within 30 days by filing an appeal with the district court licensee can request stay of enforcement to obtain a stay of the final order, the district court of appeals must issue a writ of supersedeas if the reviewing court finds that a material error in the procedure by FREC has affected the fairness of the hearing or the correctness of the action taken the case will be sent back to FREC for corrective action the respondents rights and privileges as a licensee will be restored if the final order is reversed

commerical real estate sales commission lien act

lien is only against the owners net proceeds (personal property) and does not apply to the commercial real property

financing

life blood of real estate. business of providing funds that make real estate transactions possible.

Anyone licensed or not can be a _________ _________ in a real estate brokerage limited partnership?

limited partner

type of value associated with rapid sale

liquidation value

real estate licensees are allowed to assist buyers and sellers with the drawing of 4 types of contracts:

listing agreement-brokers employment with the seller buyer brokerage agreement-employment sale and purchase contract-between buyer and seller option contract **real estate brokerage offices typically use standardized listing agreements**

characteristics of FHA mortgage loans

loan insurance- nonconventional insured by FHA up to certain limits, protect lenders in the event that borrowers default lending source-FHA approved lenders discount points downpayment- low as 3.5% loan limits insurance premium- upfront mortgage insurance premium (UFMIP) annual mortgage premiums qualifying ratios

biweekly mortgage

loan is amortized the same way as other loans with monthly payments, except the borrower makes a payment every 2 weeks

joint tenancy

major difference between joint tenancy and tenancy in common is joint tenancy is characterized by right of survivorship specific wording in the deed "as joint tenants with the right of survivorship and not as tenants in common" a joint tenant who wants to sell his/her property may do so however, a person who buys that share cannot be a joint tenant with the other original owners but instead will be a tenant in common

Broker Betty at an open house meets a young couple looking to purchase their first home. The couple asked if the Broker thought they had enough income to qualify for a loan to purchase the property. Realizing this information is of a confidential nature Broker Betty makes the agency disclosure that her office policy and State statute require. The buyers are very skeptical about making a commitment and have been coached by family members not to sign anything. They refuse to sign the signature block on the Brokerage Disclosure to Buyer form. Betty should: refuse to answer unless they sign answer the question, then ask them to sign once again call their attorney and make the disclosure to him make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion.

make a note of the date and time the disclosure was made and reference the fact that the buyers declined to sign the form - then have the discussion. Brokers are required to make agency disclosure. Buyers are not required to sign the disclosure. It is acceptable to note the date and time the disclosure was made, and indicate that the buyers declined to sign the form.

A broker is showing a property in which a heinous crime was committed. The broker is aware of the circumstances surrounding the crime as a result of media attention. As a transaction broker working with a buyer, he is obligated to: make no disclosure regarding psychologically impacted properties disclose every fact he knows about the property disclose the information only if the suspect has not been apprehended make a written request to the seller asking for permission to disclose

make no disclosure regarding psychologically impacted properties In Colorado psychologically impacting events may not be disclosed.

Rule E-35 of the Colorado Real Estate Commission requires brokers: make oral disclosure of brokerage relationship first, then followup with correct Commission form prior to closing make written disclosure of his/her brokerage relationship before eliciting or receiving confidential information make written disclosure of brokerage relationship using forms prepared by the managing broker make written disclosure of brokerage relationship prior to closing

make written disclosure of his/her brokerage relationship before eliciting or receiving confidential information Rule E-35 states that when a real estate broker elicits or accepts confidential information from a buyer or tenant concerning the buyer's or tenant's real estate needs, motivation, or financial qualifications, the real estate broker must provide a written brokerage relationship disclosure identifying his or her brokerage relationship with the buyer or seller.

method or degree of attachment

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

sale and purchase contracts disclosures

material defects disclosure- johnson vs davis radon gas disclosure lead based paint disclosure-pre 1978 housing, requires contractors who disturb paint in these properties be certified and follow specific work practices. to become certified, a renovator must successfully complete an 8 hour training course property tax disclosure building code violation disclosure community development disclosure timeshare resale listing agreement disclosure

fair housing poster

means equal housing opportunity house with = symbol inside

4 settlement procedures (MALE)

mediation arbitration litigation EDO (escrow disbursement order)

offer and acceptance

meeting of the minds contract is formed on the acceptance of the offer and communication of the acceptance

customer

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 in an authorized broker relationship. the seller (or the buyer) who chooses limited representation is a customer under the transaction broker relationship

subsurface rights

mineral rights

false advertising

misdemeanor 2nd degree. false or misleading info in means of radio, tv, or written matter for the purpose of inducing someone to buy, lease, rent, or acquire an interest in title to real property is illegal

The actions of the Board of Governors, called _____ _______, regulate the cost availability of credit in the US.

monetary policy

value

monetary value worth of something between many market participants assessed value, insurance value, investment value, liquidation value, going-concern value, salvage value

On what time basis must trust accounts be reconciled: daily weekly monthly annually

monthly From the real estate manual: The purpose of reconciliation is to verify that the records for the account are in balance per the escrow accounting equation. Rule E-1(p)(3) requires the ending bank statement cash balance to be reconciled with the office journal and ledger account cards during any month when there has been escrow account activity

purchase money mortgage

mortgage given as part of the buyers consideration for the purchase of real property is delivered when the deef is transferred as a simultaneous part of the transaction title passes to the buyer, and the seller retains a vendors lien right as security for the debt

The process of qualifying the applicant and the property is called _________ ___________, analysing risk.

mortgage underwriting

market value

most probable price a property should bring in a competitive open market under all conditions requisite to a fair sale under certain guidelines published by fannie mae and freddie mac

In order to be effective, a Commission-approved Counter Proposal: must be attached to each copy of the original offer signed by the buyer must be signed by the seller at the same time he signs the original offer after the original is signed by both parties the counterproposal must be signed by both parties. the original offer must only be signed by the seller but the counterproposal must be signed by both parties

must be attached to each copy of the original offer signed by the buyer This is stated as a note on the bottom of the counterproposal. The counterproposal changes the terms and conditions of the original offer. As such, it does not stand alone and must be combined with the original offer to create an updated full offer.

Which of the following is true with regard to the approved Earnest Money Promissory Note? should be accompanied by any of the three deed of trust forms allows the seller to sue for the earnest money in case the closing fails must be due early enough to assure good funds for closing should not be used because earnest money should be in good funds

must be due early enough to assure good funds for closing An Earnest Money Promissory Note allows a prospective buyer to present earnest money in form of a promise to pay. The note must be presented and paid before closing to assure that it represents good funds at closing.

limited partnerships

must be one or more general partners, and one or more limited partners limitd partners are not liable to be creditors of the partnership unless the limited partners names appear in the partnership name

A man earned a $7,500 commission by selling a coin-operated laundry business, which has six more years before the expiration of its present lease. The man

must be registered with the Florida Real Estate Commission as a real estate licensee.

When a licensee has been involuntary inactive for more than 12 months but less than 24 months =

must complete 28 hrs of a commission prescribed reactivation course

Community Association Manager (CAM)

must hold a CAM license when the community association consists of more than 10 units or has an annual budget in excess of $100,000.

real estate brokerage general partnerships

must register with DBPR under the partnership name at least one partner must be licensed as an active broker

real estate brokerage limited partnerships

must register with the DBPR under limited partnership name general partners who deal with the public and perform services of real estate must be licensed as active brokers at least 1 general partner must be licensed as an active broker all other general partners must register with the DBPR sales/broker associates may not be general partners in the real estate brokerage limited partnership; however, they may be limited partners (like stockholders in corporations) limited partners are not required to register with the DBPR

The Colorado Real Estate Commission Rule E-13 regarding sign-crossing allows an agent to: advise a seller in the cancellation of an active listing negotiate terms for a future listing or take a listing effective upon the expiration of a current listing so long as the owner initiates contact with the licensee contact a seller, who is dissatisfied with the services of the broker with whom they have a listing and wish to cancel negotiate terms for a current listing

negotiate terms for a future listing or take a listing effective upon the expiration of a current listing so long as the owner initiates contact with the licensee Sign crossing, going behind the sign (contacting the owner of a property that you know is already listed) is a violation, unless the owner contacted you.

A transaction broker owes a fiduciary responsibility to : the buyer the seller the buyer and the seller neither the buyer nor the seller

neither the buyer nor the sellerA transaction broker is a "neutral" party that owes no fiduciary responsibility to any party. A fiduciary relationship is created when a principal signs a listing or buyer's agency agreement with a Listing Agent or Buyers Agent. Note: a Transaction Broker as a neutral party is not a fiduciary relationship (the T broker owes no loyalty, only Care, Obedience, Accounting and Disclosure of non-confidential items and material facts). In real estate transactions, only the Sellers or Buyer's agency relationships are fiduciary relationships. This relationship implies a position of trust or confidence, wherein one person is usually entrusted to hold or manage property or money for another. In a fiduciary relationship, one person, in a position of vulnerability, justifiably vests confidence, good faith, reliance and trust in another whose aid, advice or protection is sought in some matter. In such a relation good conscience requires the fiduciary to act at all times for the sole benefit and interest of the one who trusts.

A requirement of RESPA is that: licensees be tipped for recommending a good title company no seller may require the buyer to purchase title insurance from a particular title company buyers are not required to purchase a mortgagee's title policy title insurance is always a requirement for all transactions

no seller may require the buyer to purchase title insurance from a particular title company RESPA eliminates kickbacks, and prevents sellers from requiring the use of a specific title company.

broker relationship disclose act does not apply to

non residential transactions rental or leasing of real property auctions appraisals dispositions, except for a property with 4 or fewer residential units

real estate investment trusts (REITs)

offer investors the opportunity to invest in income-producing real estate properties

concurrent ownership

ownership by 2 or more persons at the same time

annual mortgage insurance premium (MIP)

paid monthly, annual premium divided by 12 as part of the monthly mortgage payment

The main North and South line in a government survey from which townships are located is called a principal meridian. township line. monument. range line.

principal meridian.

junior liens

priority of most liens is the date and time that the lien was recorded in public records 4 kinds 1. mortgage liens 2. judgement liens 3. vendors liens 4. income tax (IRS) liens

florida statute 120

procedural process for all governmental entities authorized under the florida constitution.

background check and expungement

process by which the record of criminal conviction is destroyed or sealed after expiration of time.

subdividing

process of converting parcels of land into smaller units or lots.

accretion

process of land buildup from water borne-rock, sand, and soil

registration

process of submitting information to the DBPR that is entered into the dept records

property management

professional service conducted by a person or company hired to maintain and manage property on behalf of the property owners

chapter 455

professions regulated by DBPR (dept business and professional regulation). discipline a real estate licensee who failed to notify DBPR within 30 days of conviction, finding of guilt, plea, or adjudication of a crime

ostensible partnerships are

prohibited

Cival Rights Act of 1866

prohibits discrimination on the basis of race

time sharing

property first organized as condominium. each unit is divided into time intervals of ownership usually 52 weeks. size location, amenities, and time of year all affect the purchase price

sole ownership

property is held by one person it is called estate in severalty severed ownership

formula: unpaid property taxes

property taxes for year/ 365 days = daily tax rate daily tax rate x number of days seller owns property in year = proration amount (credit buyer, debit seller) taxes paid in arrears

The right to occupy specific space granted by a cooperative association is known as a _________ _________

proprietary lease

quitclaim deed

provides the grantee with the least protection of statutory deeds no covenants or warraranties convey what interest IF ANY the grantor may have when the deed is delivered useful for clearing existing or potential clouds on the title remise, release, quitclaim allows grantor to sign a deed transferring any and all interests without claiming ownership

The Commission's ability to impose disciplinary actions against licensees is known as ______ _________ power

quasi - judicial

The rule-making authority of the FREC is called ______ _________ power

quasi - legislative

broker property management

real estate brokers must abide by chapter 475 brokers may keep up to $5,000 of the brokers personal funds or business funds in a property management escrow account sales associates who collect rent from tenants do so for their employing broker it is illegal for a sales associate or a broker associate to independently perform property management services for a property owner

federally related transactions

real estate transaction involving the sale, lease, purchase, investment, or exchange in real property, or the refinancing of real property; or the use of real property as security for a loan; and the the appraisal is being performed for a federal financial regulatory agency

bundle of rights (DEEPC)

real property ownership rights, DEEPC Disposition, dispose Enjoyment, quiet enjoyment Exclusion, trespassing Possession Control

restrictive covenants

recorded by the developer, along with the subdivision plat to maintain specific standards in the subdivision, such as requiring certain architectural or design specifications not disciminate against race, color, religion, sex, national origin, families w children, handicap, or public policy impose limitations on the use of land in an entire subdivision

Lenders that refuse to make loans in certain geographic areas based on social or economics considerations are practicing __________.

redlining

division of florida condominiums, timeshares, and mobile homes

regulates condominiums, cooperatives, timeshares, and mobile home parks. also provides arbitration program to handle recall and election disputes for HOAs

FREAB (florida real estate appraisal board)

regulates state certified and licensed appraisers. federally related transaction

special exemptions under the act

religious organizations may restrict dwellings units they own or operate private clubs may restrict rental or occupancy of it units to its members

A man owns a farm in fee simple. He deeds the farm to a friend until the friend dies, at which time a woman will acquire a fee simple title to the farm. The woman's interest in the farm is a

remainder estate.

sales commission formula

sale price x commission rate= total commission total commission x percentage to listing brokerage = listing commission listing commission x listing sales associate percentage = listing sales associate commission total commission x percentage of selling brokerage = selling commission selling commission x buyers sales associate percentage = buyers sales associate commission

he Exclusive-Right-to-Buy Listing Contract calls for "reasonable efforts to locate property." Which of the following would most likely demonstrate such efforts? showing the buyer properties that meet the general description of the property as defined in the contract running a "Property Wanted" ad in local newspapers providing the buyer with descriptions of several properties recently listed with the brokerage providing the buyer with addresses of internet sites that list local properties

showing the buyer properties that meet the general description of the property as defined in the contract Reasonable efforts are demonstrated when the broker seeks to match properties to the buyer's needs and shows them, or attempts to show them, to the buyer

When using a Counterproposal form, the client submiting the counterproposal would: sign the original offer and check the "is countered" box sign only the counterproposal generate a new contract to purchase sign the original offer, check the "is countered" box and sign the counterproposal

sign only the counterproposal The client submitting the counterproposal would not sign the original purchase offer. The client would instead check the box at the bottom of the offer indicating that the offer is countered, initial same where indicated and sign only the Counterproposal.

remedies for breach of contract

specific performance- court orders the other party to perform according to the terms of the contract liquidated damages- amount of damages (usually earnest money deposit) stipulated in the contract. if the buyer reaches the contract, typically the seller claims the earnest money deposit as liquidated damages rescission- contract is canceled and the parties are restored to their original positions compensatory damages- involves a lawsuit to recover the actual amount of the monetary loss to either party (also called unliquidated damages)

brokers must deposit funds by the end of

the 3rd business day

According to the rules and regulations of the Colorado Real Estate Commission, a broker is REQUIRED to recommend that: the buyer have title review by legal counsel the buyer have an appraisal by a licensed appraiser the buyer have an inspection by a certified house inspector all of the above

the buyer have title review by legal counsel All are great ideas and good ideas, but of those listed, only the recommendation of title examination by legal counsel is required by Real Estate Commission rules. This occurs at the end of the Title Advisory section of the Contract to Buy and Sell Real Estate wherein the contract advises the use of Legal Counsel to review title. The others appear in the purchase contract, but do not get an actual recommendation. See Below: "Title Advisory. The Title Documents affect the title, ownership and use of the Property and should be reviewed carefully. Additionally, other matters not reflected in the Title Documents may affect the title, ownership and use of the Property, including, without limitation, boundary lines and encroachments, area, zoning, unrecorded easements and claims of easements, leases and other unrecorded agreements, and various laws and governmental regulations concerning land use, development and environmental matters. The surface estate may be owned separately from the underlying mineral estate, and transfer of the surface estate does not necessarily include transfer of the mineral rights or water rights. Third parties may hold interests in oil, gas, other minerals, geothermal energy or water on or under the Property, which interests may give them rights to enter and use the Property. Such matters may be excluded from or not covered by the title insurance policy. Buyer is advised to timely consult legal counsel with respect to all such matters as there are strict time limits provided in this Contract"

subordination agreement

the holder of a prior lien (lien with an earlier recording date) agrees to allow a junior lienholder's interest to move ahead of the prior lien

Follow-Up

the sales step in which a salesperson follows up after the sale to ensure customer satisfaction and repeat business

Regarding the Colorado Homestead Exemption, as indicated in the approved deed of trust forms, the buyer agrees that: the homestead exemption is not addressed in the deed of trust forms that the homestead exemption is not waived the trustor waives the right to the homestead exemption the trustee waives the right to the homestead exemption

the trustor waives the right to the homestead exemption Trustor = Borrower Trustee = Receives and records Deed Beneficiary = Lender The trustor (buyer) waives all rights to the homestead exemption in all Colorado approved deed of trust forms. The buyer is the "Trustor" because the buyer originates the Deed of Trust to provide security for a loan, the Public Trustee is the "Trustee" as he/she receives and holds the Deed of Trust, the lender is the "Beneficiary" because it is their loan that is being protected i.e the benefit. The Colorado Homestead Protection Exception provides a $60,000 (This number changes with time) exemption from any debt, contract or civil obigation entered into after July 1, 1975. This exemption is for the head of family householder. Elderly or disabled individuals recieve a $90,000 exemption. Generally, the exemption is waived as a requirement for getting a loan.

a competent licensed real estate professional must know the economic and legal intricacies associated with transfers of

title, property taxes, financing, and local zoning ordinances

The title company may be hired by the listing broker: to prepare legal documents and may charge the buyer and/or seller for the preparation of legal documents to act as scrivener for the transaction and has ultimate responsibility for the accuracy of legal documents

to act as scrivener for the transaction Preparation of Legal Documents Although buyers and sellers may be charged a fee for closing, no fee may be charged for preparation of legal documents, except by an attorney representing the buyer or seller. The Conway-Bogue decision granted real estate brokers the right to prepare certain legal documents, but prohibits licensees from charging a separate fee for such service. The companion Title Guaranty case specifically prohibits title companies from preparing legal documents. Today, title companies only fill in blanks on legal documents under explicit instructions from the broker responsible for the closing. The listing broker who is responsible for completing the deed, bill of sale, and any notes and deeds of trust called for in the contract uses the second section of the Closing Instructions form to hire the title company as scrivener to complete the legal forms. The listing broker will be responsible for paying for legal documents and for their accuracy. However, the listing broker is not responsible for the cost of legal documents prepared by the buyer or seller, or by attorneys hired by the buyer or seller.

Broker Price Opinions (BPO) are created by real estate licensees not appraisers. These "estimates of value" cannot be used: for tax purposes for court testimony to set a listing price to obtain financing

to obtain financing CP-24 Commission Position on Preparation of Market Analyses and Real Estate Evaluations Used for Loan Purposes The Colorado Real Estate Appraiser Licensing Act contains special provisions which allow licensed real estate brokers to perform certain real estate valuation related activities without being registered, licensed or certified as real estate appraisers. These provisions are found in Sections 12-61-702 and 12-61-718, C.R.S. The first of these allows a broker to prepare an "estimate of value" which is not represented as an appraisal and is not used to obtain financing. The position of the Commission is that this provision allows a broker to prepare a market analysis for use in the real estate brokerage process and to offer their estimate as to the value or market price of real estate for court testimony or tax purposes.

A broker acting as a transaction broker for a buyer, with no written agreement needs: nothing. This is the default representation in Colorado to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer. a signed Exclusive agreement in order to show the buyer property. a signed disclosure form from the Buyer.

to provide the buyer with a copy of the "Brokerage Disclosure to Buyer" with the broker's signature showing the date it was given to the Buyer. Even though the broker has no written agreement - the broker is still required to make a written disclosure as to their relationship. Absent a written agreement - the default relationship is transaction broker.

real estate recovery fund

to reimburse an individual or business entity judged by a florida court to have suffered monetary (compensatory) damages as a result of an act committed by a broker or sales associate who: was a holder of a current valid active real estate license under chapter 475 was not the seller, buyer, landlord, or tenant in the transaction was acting solely in the capacity of a real estate licensee in the transaction claim for recovery will not be considered unless a civil suit resulted in a final judgement against an individual licensee claimant must cause a writ of execution claimant must execute an affidavit showing the final judgement is not an appeal

cash flow

total amount of spendable income generated from an investment. it is the total amount of money remaining after all expenditures have been paid. can be positive or negative determined by 3 factors: income received, operating expenses, and method of debt repayment negative leverage occurs when borrowed funds cost more than they are producing

requirements for real estate office signs

trade name (if one is used) brokers name the words "licensed real estate broker" or "lic. real estate broker"

An licensee who represents both parties in a transaction but is not an advocate of either one, is a: general agent limited agent transaction broker dual agent

transaction broker

In Colorado in the absence of a written agency agreement, a broker is considered to be a: free agent transaction broker sub agent general agent

transaction broker Agency agreements are established only by a written contractual agreement. If no contractual agreement has been signed then the default relationship is transaction broker. Transaction broker can also be established by a written contractual agreement.

In Colorado in the event that an exclusive right-to-buy contract is not signed by a buyer, the default relationship is that of a: buyer-broker relationship dual agency relationship seller-agency relationship transaction broker relationship

transaction broker relationship In the absence of a contractual agreement, transaction brokerage is created.

transfer by voluntary alienation

transfer of title is accomplished with the owners control and consent deed- written instrument used to convey an interest in real property will-legal instrument used to convey title to real and personal property after a persons death to die testate-the decedent prepared a will before death testator (male) or tresatrix (female) gift of real property is a devise, recipient of gift is devisee gift of personal property is a bequest, recipient is beneficiary

If mineral rights are not listed in the deed, and not previously transferred, the rights are: retained by grantor not owned not transferred transferred to the grantee

transferred to the grantee In Colorado, all mineral rights except water are transferred with the property unless otherwise indicated in the deed or if the rights were transferred (ie sold or given away) by a previous deed. The Seller is the "Grantor" (the creator of the deed), the Buyer is the "Grantee" (receives the deed)

If mineral rights are not listed in the deed, and not previously transferred, the rights are: retained by grantor not owned not transferred transferred to the grantee

adverse possession

true owner of the record fails to maintain possession and the property is seized by another owner sleeps on his rights and does not use the legal means available to remove the hostile trespasser

state intangible tax on new mortgage

two mills ($.002) per dollar of debt new loan amount x $.002 = cost of intangible tax

civil rights act of 1964

type of real estate: public accommodations and public facilities protected class: race, color, religion, and national origin. ended racial segregation

fair housing act

type of real estate: sale or rental of a single family and multi family residential property, including advertising sales and rentals, financing, and brokerage systems protected class: race, color, religion, sex, national origin, familial status, and handicap status

civil rights act of 1866

type: all real estate (residential and commercial) protected class: race only

rental agents

typically find a tenant for property and collect a fee

conversion

unauthorized control or use of another persons personal property

florida residential landlord and tenant act

under deposits and advance rents: 1. hold the money in a seperate non interest bearing florida bank account for the benefit of the tenant. the landlord many not comingle 2. landlord must pay the tenant for 75% of the annualized average interest rate payable on the account of 5% per year 3. post a security bond with the clerk of circuit court in the county in which the rental property is located in the total amount of security deposits and advance rents or $50,000 whichever is less landlords must give tenants written notice of the advance rent or security deposit either in the lease agreement or within 30 days after receipt of advance rent or security deposit must state that the landlord has posted surety bond provided by law

USPAP

uniform standards of professional appraisal practice

3 types of agents

universal agent general agent special agent

civil penalties

unlicensed person performs real estate services or a licensee commits fraud

blockbusting

use the entry, or rumor of an entry of a protected class into a neighborhood to persuade owners to sell

2nd degree misdemeanor

violation of chapter 475 $500 fine, 60 days in jail

When must the "Change of Status" form be signed? before eliciting or receiving confidential information when changing brokerage relationship from transaction broker to agent when changing brokerage relationship from agent to transaction broker when taking a listing

when changing brokerage relationship from agent to transaction broker A broker may not represent one party as an agent and work as a transaction-broker with the other party in the same transaction unless the principal to the agency agreement has agreed to revert to transaction brokerage. To accommodate this change, the commission listing forms contains a selection by the client at the time of the listing and a "Change of Status" form to notify the client at the time the "double ended" situation develops.

lien priority

when there are 2 or more liens on a property, the priority of the lien determines the order in which the liens will be satisfied (paid off) if the property must be sold

exempt from real estate licensure are salaried employees who

who work in an onsite rental leasing office in a leasing capacity who does not receive commission managers of condos or coop apartments who rent individual units for periods no longer than one year and who are not paid a commission owner-developer who do not receive commission of a gov agency who perform real estate services for the state or local gov and do not receive commission business entities who negotiate the sale/purchase of radio, television, or cable enterprises (does not involve real property)

What does not need to be placed into an escrow account? withholding taxes security deposits short-term rental deposits earnest money

withholding taxes Withholding taxes are not under the jurisdiction of the Real Estate Commission. Applicable Commission Rules for escrowed deposits are are E-1 and Position Statement CP-5

A high level of supervision: is what an employing broker must provide for all licensed persons. would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation is an employing broker giving leads to new agents to help them get business is required to fully understand the Zen of real estate and the psychic Karma of computers as another level in transcendence

would include: review of documents in preparation for a closing, assistance in preparing contracts, monitoring of transactions from contracting to closing, attending closings, or making sure an experienced licensee attends the closing, being reasonably available for consultation Review of all new licensees activities is a requirement of a high level of supervision.

statute of limitations

written contracts-5 years oral contracts-4 years

the money you earn is

your brokers

7 duties of a transaction broker under chapter 475

1. deal honestly and fairly 2. account for all funds 3. use skill, care, and diligence in the transaction 4. disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer 5. present all offers in a timely manner 6. exercise limited confidentiality, unless waived in writing by a party 7. perform any additional duties that are mutually agreed to with a party

investigation

10 days after probable cause has been found to exist or subject of investigation waives the privilege of confidentiality

suspension

10 years must continue all renewal requirements during period of suspension

A parcel of land measuring 220 yards by 220 yards contains 1. 1 acres 5.0 acres 10.0 acres 302.5 acres

10.0 acres

Net Listing

100% - listing commission percentage = percentage for sellers net Total sellers net / percentage for sellers net = desired sale price

A lot is 275 feet deep and sits on 2/3 of an acre. What is the width of the lot? 158.4 105.6 106.5 112.4

105.6 Take an acre 43,560 and multiply by .6667 = 29,054.5 divide this by 275 = 105.6 ft the width of the property.

How many days must a licensee take action to correct a notice of compliance?

15 days

Qualifications for Reexamination in a foreign Language

15 or more translated into the native language

Mr. Thomas wanted to remodel his business, so he got a loan of $43,000 at a rate of 6% He paid the loan off in 8 months. How much did Mr. Thomas pay in interest. 211.5 1720 2580 3580

1720 The loan amount $43,000 times the interest rate 6% = The annual interest $2,580 divide by twelve to give you the monthly cost of interest $215 times 8 = $1,720.

How many acres are contained in the S 1/2 of the SE 1 /4 of the NE 1/4 of Section 20? 5 acres 12-1/2 acres 10 acres 20 acres

20 acres

Further Assurance

A provision in a deed containing a covenant or warranty to perform any further acts the grantee (buyer) might require to perfect title to the property.

Void contract

An agreement that does not meet all the required elements of a valid contract and has no legal effect.

Special Exception

An individual ruling in which a property owner is granted the right to a use otherwise contrary to law.

A single agent broker received an offer on a listed property at the seller's price and terms. Before informing the seller, the broker received a higher offer. The broker submitted only the first offer, and the seller, his principal, accepted it. The broker A) is guilty of conversion. B) has violated his fiduciary duty to his principal. C) has fulfilled his duty to the seller because the offer was for the seller's full price and terms. D) is not required to submit the second offer.

B) has violated his fiduciary duty to his principal.

Depreciation (cost recovery) A) does not include the mortgaged portion of an apartment building in the amount to be depreciated. B) is an allowable deduction on investment property that requires no current outlay of cash. C) includes the cost of land in the amount to be depreciated. D) may be taken on a principal residence.

B) is an allowable deduction on investment property that requires no current outlay of cash. Depreciation provides favorable tax relief as an allowable deduction that requires no current outlay of cash

The statute of limitations is the authority that outlines the A) remedies available in case of breach. B) period of time during which a contract may be enforced. C) requirement that real estate sale contracts be in writing. D) essential elements of a contract.

B) period of time during which a contract may be enforced. ■ Written contracts—five years ■ Oral contracts—four years ■ Partly written and partly oral—five years for the written portion and four years for the oral portion

The financial term applied to the use of borrowed funds to finance the purchase of an office building is A) disintermediation. B) intermediation. C) leverage. D) liquidity.

C) leverage. Leverage - use of borrowed funds to finance the purchase of an asset; the use of another's money to make more money. intermediation - The flow of funds into deposits held by primary lenders, increasing the mortgage money supply aka consumers put savings in the bank Disintermediation occurs when savers withdraw funds from intermediary financial institutions, bypassing them to invest elsewhere, thereby reducing the amount of funds available to the financial institutions aka consumers take money out of the bank Liquidity - sell investment quickly without lost capital.

Which governmental entity must be informed when the FREC takes disciplinary action against a real estate licensee? A) Florida Department of Administrative Law B) County courthouse where the licensee resides C) Division of Florida Condominiums, Timeshares, and Mobile Homes D) Division of Firearms and Tobacco

C) Division of Florida Condominiums, Timeshares, and Mobile Homes FREC must inform the Division of Florida Condominiums, Timeshares, and Mobile Homes when any disciplinary action is taken by the FREC against any of its licensees.

In Florida, real property is assessed on January 1 of each year, and property taxes become a lien on the property on A) December 31, the same year. B) April 1, the next year. C) January 1, the same year. D) November 1, the same year.

C) January 1, the same year.

Which property is NOT covered under the Fair Housing Act? A) Government-owned residential property B) Privately owned residential property listed by a broker C) Multifamily housing of five or more units D) Commercial property

D) Commercial property Fair Housing Act applies to only residential property; commercial property is not covered by the Act.

Which estate includes the right of survivorship? A) Fee simple estate B) Tenancy in common C) Tenancy for years D) Joint tenancy

D) Joint tenancy always, always, always

According to Commission Position 42 on Apartment Building or Complex Management, a duty an unlicensed on-site manager may NOT perform without a license is: Draw up a lease Sign and execute a lease with a Power of Attorney from the owner Collect and deposit rents and security deposits Obtain information necessary to qualify perspective tenants for a lease.

Draw up a lease CP-42 on on Apartment Building or Complex Management Pursuant to §12-61-101(2)(b)(XII), C.R.S., a regularly salaried employee of the owner of an apartment building or complex is permitted to perform customary duties for his or her employer without a real estate broker's license. The unlicensed, on-site manager must either report directly to the owner or to the real estate broker, if a real estate broker is engaged to manage the property. The Commission views the following to be customary duties of an unlicensed, on-site manager: 1. Performance of clerical duties, including gathering information about competing projects. 2. Obtain information necessary to qualify perspective tenants for a lease. This includes obtaining and verifying information regarding employment history, credit information, references and personal information as necessary. 3. Provide access to a property available for lease and distribute preprinted, objective information prepared by a broker as long as no negotiating, offering or contracting is involved. 4. Distribute preprinted, objective information at an on-site leasing office that is prepared by an owner or broker, as long as no negotiating, offering or contracting is involved. 5. Quote the rental price established by the owner or the owner's licensed broker. 6. Act as a scrivener to the owner or the broker for purposes of completing predetermined lease terms on preprinted forms as negotiated by the owner or broker. 7. Deliver paperwork to other brokers. 8. Deliver paperwork to landlords and tenants, if such paperwork has already been reviewed by the owner, or a broker or has been prepared in accordance with the supervising broker's instructions. 9. Collect and deposit rents and security deposits in accordance with the owner's lease agreement or the brokerage firm's written office policy. 10. Schedule property maintenance in accordance with the brokerage firm's management agreement or the owner's lease agreement. If the owner has executed a Power of Attorney form or a written delegation of authority that authorizes the unlicensed, on-site manager to sign and execute leases on behalf of the owner, the unlicensed, on-site manager may execute those without possessing a real estate broker's license. Brokers supervising unlicensed, on-site managers with this authority are expected to review the executed documents to ensure compliance with lease terms, management agreements, local, state and federal laws, including the real estate brokerage practice act and Commission rules.

Which class is protected under under Colorado Fair Housing and not the Federal Fair Housing? Marital Status Race Familial Status National Origin

Marital Status Marital Status is not a protected class under Federal Fair Housing

Unpaid Property Taxes

Property taxes for year / 365(days in year) = daily tax rate Daily tax rate X number of days seller owns property in year = proration amount (Credit buyer, debit seller)

Amortizing a Mortgage

Step 1: principal balance X annual interest / 12(months in year) = 1st months rent Step 2: monthly mortgage payment - first months interest = payment on principal Step 3: beginning principal balance - principal payment = new principal balance (Repeat following steps for 2nd month and so on)

T / F - A real estate contract that includes a radon gas contingency is a voidable contract.

T - A real estate contract that includes a radon contingency is voidable because if the contingency is not satisfied and released, the offer and acceptance element of an enforceable contract is not met.

T / F - Brokers and sales associates should NOT prepare deeds, mortgages, or promissory notes.

T - Unless they are also attorneys, brokers and sales associates who prepare such legal documents could jeopardize their real estate licenses.

Involuntary inactive

The license status that results when a license is not renewed at the end of the license period.

Intermediation

The process whereby financial middlemen consolidate many small savings accounts belonging to individual depositors and invest those funds in large, diversified projects.

capital gain (or loss)

The profit (or loss) from the sale of an asset, including real property.

equity of redemption

The right of a mortgage, before a foreclosure sale, to reclaim forfeited property by paying the entire indebtedness.

committees deed

appointed by the court

actual notice

direct knowledge acquired in the course of a transaction

claim resulting from an EDO

if a broker who complied with an escrow disbursement order is later required by a court of law to pay damages as a result of legal actions taken by the buyer or seller in the transaction, FREC is authorized to order reimbursement to the broker for the amount of the judgement against the broker up to $50,000

government survey system

logic that you can identify a parcel by reference to two intersecting points by dividing the land into squares process was to create a large grid with every square of the grid uniquely identified

mortgage lien

makes a loan using real estate as security are voluntary liens beause they are made with the owners consent. the date the mortgage is filed and recorded with the clerk of the circuit court establishes the priority of the lien against other claims on the property

depreciation in a structure can be attributed to three major causes

physical deterioration, functional obsolescence, external obsolescense

appraisal

process of developing and communicating an opinion about a property's value

lot and block numbers

the lot and block method can be used only where plat maps, or simply plats, have been recorded in public records

encroachment

unauthorized use of anothers property fence or garage located beyond a legitimate boundry implied easement

A property closes on June 10, with the day of closing charged to the buyer. The buyer is assuming the seller's mortgage loan with its principal balance of $227,500 at 4.5% interest. Which entry will appear on the Closing Disclosure? A) Debit to seller and credit to buyer in the amount of $252.43 B) Credit to seller and debit to buyer in the amount of $589.01 C) Debit to seller and credit to buyer in the amount of $589.01 D) Credit to seller and debit to buyer in the amount of $252.43

A) Debit to seller and credit to buyer in the amount of $252.43 although it doesn't explicitly state it, this involves the interest on assumed mortgage proration formula. balance x interest rate = annual interest / 365 = daily interest rate x number of days seller owns property in that given month so June 10 means seller lived there 9 days = proration amount (debit seller, credit buyer) 227500x.045=10,237.5/365=28.047945205479452054794520547945x9=252.43 debit seller because the seller lived there and therefore owes for that period, credit buyer.

Tax Rate

The percentage of value that is used to determine the amount of tax to be levied against each individual unit of property; ad valorem (according to value)

Economic Life

The period of time a property may be expected to be profitable or productive; useful life.

Agent

The person entrusted with anothers business. An agent is authorized to represent and act for the principal.

Progression

The principle that states that the value of an inferior property is enhanced by its association with superior properties of the same type.

Survey

The procedure used to measure and describe a specific tract of real property for the purpose of determining exact boundaries an the area contained therein.

Limited Representation

Transaction brokers provide a limited form of nonfiduciary representation to a buyer, a seller, or both in a real estate transaction.

anti trust laws

protect competition. local real estate boards and multiple listing services may not fix commission rates or splits between cooperating brokers

probable cause

FREC probable cause panel is composed of 2 individuals proceedings not open to the public panel serves as grand jury if panel finds probable cause does not exist they may dismiss the case with a letter of guidance

What is the maximum fine that the Real Estate Commission can impose for a violation of commission rules? $2,500 plus punitive damages 2500 No fine only license suspension or revocation $3,500 plus punitive damages

2500 The maximum administrative fine is $2,500

Recommended order

A determination by an administrative law judge that includes findings and conclusions as well as other information required by law or agency rule to be in a final order.

property report

A disclosure document required under the federal Interstate Land Sales Full Disclosure Act.

Environmental impact statement (EIS)

A document that summarizes the effect proposed development will have on the surroundings.

Due-on-sale clause

A provision in a conventional mortgage that entitles the lender to require the entire loan balance to be paid in full if the property is sold.

Warranty Forever

A provision in a deed guaranteeing that the seller will for all time defend the title and possession for the buyer.

Gross Rent Multiplier (GRM)

A rule of thumb for estimating the market value of income-producing residential property; the ratio to convert rental income into market value.

Freehold Estate

A tenancy in real property with no set termination date that can be measured by the lifetime of an individual or can be inherited by heirs.

Mill

A unit of money used to specify a property tax rate ($1 for each $1,000 of taxable value).

subpoena

A writ or order commanding the person named to appear and testify in legal proceedings

subordination agreement

A written agreement between holders of liens on a property that changes the priority of mortgage, judgment, and other liens under certain circumstances.

Proprietary Lease

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

mortgage

A written agreement that pledges property as security for payment of a debt.

estoppel certificate

A written statement that bars the signer from making a claim inconsistent with the instrument (commonly used with a mortgage assumption).

Tenancy at Will

An estate that may be terminated by either party at any time upon proper notice; nonfreehold estate.

Which information is confidential?

An examinee's grade on the state licensing examination Exam grades are considered confidential.

Variance

An exception to zoning regulations or ordinances granted to relieve a hardship.,

The maximum amount that can be paid from the Real Estate Recovery Fund based on the actions of a licensee is ___________

$150,000

How much personal money may a broker place in a property management escrow account?

$5,000

monetary limits of claims

$50,000-$150,000

calculating percentage of profit

% profit = money paid/ money made

Loan-to-Value Ratio

Loan amount / sale price(or value) = Loan-to-Value Ratio

A plat map is used in which type of legal description? Metes and bounds Lot and block Street and number Rectangular survey

Lot and block

The broker who successfully performs by locating a "willing , ready and able" buyer is said to be the "______ _______" of the sale and is the only broker entitled to a commission.

Procuring Cause

the ______ _______ of a sale is what entitles a broker to commission.

Procuring Cause

acceleration clause

Stipulation in a mortgage that the entire unpaid balance of the debt may become due and payable if a default of expressed conditions should occur.

A sales associate is a _________ of the brokers's principal.

SubAgent

Sales associate Terry Stoufer may have which information entered on her license, if applicable?

Terry Stoufer, LLC Sales associates may not use trade names.

Which information must be disclosed to all prospective buyers?

The home is situated in a flood-prone area.

tiggering terms

bait and switch- federal offense amount of percentage of any down payment number of payments period (term) of repayment amount of any finance charge

The primary survey line running East and West in the Rectangular Survey is a township line. base line. range line. principal meridian.

base line.

arbitration

binding judgement

A blanket Morgage that allows for the release of a single parcel upon payment of a specified sum contains which clause? a. defeasance b. acceleration c. satisfaction d. release

d. release

the federal government impacts the real estate business through

fiscal and monetary policies

revocation

most severe

price fixing

occurs when competing brokers conspire to establish a standard commission rate rather than letting the rate be set by the open market

market allocation

occurs when the brokers agree to split up the competitive market areas among themselves and not compete in each others areas

A normal size section in the Government Rectangular Survey System contains 160 acres. one square mile. six square miles. 36 square miles.

one square mile.

Life estate

only for the balance of a life time

federal reserve system economic tools to influence money supply

open market operations- money supply decreases and interest rates increase discount rate- more loans are made and money supply increases reserve requirement- money supply increases and interest rates decrease

sales associates and broker associates must complete their post license education before

the 1st renewal of their initial licenses

new licensees must not begin working until

the DBPR indicates the license has been changed to active status under the proper broker/brokerage entity

Liquidity

the ability to convert noncash assets into cash quickly ; refers to a firms cash position and its ability to meet obligations.

discount rate

the amount of interest that the Federal Reserve Charges to lend money to its eligible banks

price

the amount paid in a particular transaction, the contract price

cost

the amount to produce or acquire something

Equitable Title

the beneficial interest in real estate that implies that an individual will receive legal title at a future date.

all commissions and all listings are the property of

the broker

Title means Ownership..... True or False

True

Citation

Statements of alleged violations and the penalties to be imposed

Your seller owns a home appraised at $52,500. She still owes $32,760 on the first mortgage and $4,200 on a second mortgage. Your sales commission will be $3,640. What is your seller's equity in the home?

$15,540 The answer is $15,540. The solution is: $52,500 appraised value - $32,760 first mortgage - $4,200 second mortgage = $15,540 equity.

a student failing the end of course exam must wait

30 days before retaking

A Township contains how many sections?

Federal law governing telephone solicitations prohibits calls to residences after ______

9:00 pm

Special Purpose Property

A combination of land and improvements with only one economically feasible use because of some special design.

Legally sufficient

A complaint that contains facts indicating that a violation of a Florida statute, a DBPR rule, or a FREC rule has occurred.

Preclosing inspection

A final walk-through with the sales associate to verify that repairs have been completed and that the property is left in good condition.

voluntary relinquishment for permanent revocation

puts the real estate licensee out of the real estate business

litigation

A lawsuit; the act of carrying on a lawsuit; a case before a court of law.

Package Mortgage

A loan covering both real and personal property.

Principal

A person who delegates authority to anther

Subdividing

A separation of the land into smaller parcels

Reproduction Cost

Amount required to duplicate the property exactly.

moral turpitude

An act of corruption, vileness, or moral depravity; a disgraceful action or deed.

Goodwill

An intangible asset (value) of a business.

Formal (administrative) Complaint

An outline of the charges against a licensee that must be answered within the statutory time limit.

Bundle of Legal Rights

An ownership concept describing all the legal rights that attach to the ownership of real property, including disposition, enjoyment, exclusion, possession, and control.

Owner-developer

An unlicensed entity that sells, exchanges, or leases its own property.

Sale a used condo give buyer the docs. After they receive the docs how many days do they have to cancel? (Test Question #61)

Answer is 2 Days!!

trade name

Any adopted or fictitious name used to designate a business concern.

Development of regional impact (DRI)

Any development that because of its character, magnitude, or location could have a substantial effect on the health, safety, and welfare of citizens of more than one county.

Real Property

Any interest or estate in land, including leaseholds, subleaseholds, business opportunities and enterprises, and mineral rights; real estate.

Compensation

Anything of value or a valuable consideration, directly or indirectly paid, promised, or expected to be paid or received.

Debit

As a verb, to make an entry on the left or charge side of an account, a change or expense.

credit

As a verb, to make an entry on the right or credit side of an account; as a noun payment or value received.

What is the combing of two or more adjoining properties into one Tract called?

Assemblage

Which group of financial institutions traditionally preferred to make Short-term loans for construction?

Commercial Banks

Nonconforming use

Continuing land use that is not in compliance with zoning ordinances.

Sole Proprietorship

Dealing as an individual in a business

complaint

Formal allegation or charge.

How is the real estate business regulate or influenced by the federal governments?

Impacts through physical and monetary policies. HUD, FHA, EPA, VA

Range

In the government survey system of land description, a vertical strip of land six miles wide located between two consecutive submeridians or range lines.

Culpable negligence

Inadequate attention to duties and obligations by those who know, or should know, what is required of them.

Payment Cap

Limits the amount the monthly payments of an adjustable-rate loan can increase during any adjustment.

Lifetime Cap

Limits the total amount the interest rate may increase over the life of an adjustable-rate mortgage loan.

Business brokers and financial experts use this tool to analyze what a business is worth? (#71)

Liquidation Analysis

Housing Expense Ratio (HER)

Monthly housing expenses (PITI+MIP) / monthly gross income = housing expense ration (HER)

In a towhship subdivided into section 36 is always ______ of 1

North

Deed Restrictions

Provision placed in deeds to control future uses of the property.

DBPR office are in?

Tally

Florida Real Estate Commission (FREC)

The Florida Legislature created this organization to administer and enforce license law, authority to keep records, conduct investigations, and the power to grant, deny, suspend, and revoke licenses.

Which entity may NOT be registered as a real estate brokerage?

The answer is CORPORATION SOLE. A corporation sole is an artificial or fictitious person formed by an ecclesiastical body and may not register as a broker.

What happens in a non-residential real estate transaction where the buyer and the seller each have 1 million or more in assets?

The broker will assign two sales associates in such an arrangement and they are called designated sales associates

Seller's Market

The demand for available properties exceeds the supply.

When prices go up:

The demand increases relative to supply

Just Value

The fair market value

equity

The market value of a property less any debt against it; in a business entity, assets minus liabilities equals capital (owner's equity); a system of legal rules administered by a court of chancery.

Equity

The market value of a property less any debt against it; in a business entity, assets minus liabilities equals capital (owners equity); a system of legal rules administered by a court of chancery

Density

The number of homes or lots per acre.

Which statement concerning characteristics of the real estate market is FALSE?

The real estate market is organized and controlled centrally.

subject property

The real property under discussion or appraisal.

Tenancy at Sufferance

They're there without permission

This is an example of commingling of escrow funds.

A broker has a listing priced at $120,000. An uninformed buyer offers her $125,000. The broker buys the property for $120,000, then sells it for $125,000. Which statement is FALSE?

This is legal as long as the broker withdraws from the listing first. A secret profit or overage is considered to be fraud, misrepresentation, concealment, and/or dishonest dealing and could expose the licensee to liability to both seller and buyer for the full amount of the secret profit, and might further give rise to disciplinary proceedings against the licensee.

Owners Policy

Title insurance issued for the total purchase price of the property to protect the new owner against unexpected risks.

Lender's Policy

Title insurance issued for the unpaid mortgage amount to protect the lender against title defects.

The amount of mortgage insurance premium required on an insured FHA mortgage loan includes payment of both

Up-front mortgage insurance premium (UFMIP) and Annual Mortgage Insurane Premium (AMIP)

What loans can be assumed?

VA Loans

Involuntary Alienation

When a person dies intestate and the property either descends to the decedent's heirs or transfers to the state through escheat.

conflicting demands

When different parties each make claims that are inconsistent with one another.

curable

When the correction of a defect results in as much added value as the cost to correct the defect.

incurable

When the cost to correct a defect is greater than the value added by the cure.

Concurrent Ownership

When two or more persons own property at the same time, such as joint tenants, tenants by the entirety, or tenants in common.

What NOT deductible on taxes?

You can NOT deduct Insurance

survey

a drawing of a parcel of land showing its boundary lines

Fiduciary

a person who holds assets in trust for a beneficiary

REALTOR®

a real estate licensee who is a member of the National Association of REALTORS®.

fiduciary duties

after leaving a former employer, a sales associate who diverts a buyer or seller of the former employer from completion of a transaction may sustain liability for breach of fiduciary to the former employer and possibly to the party that hired the former employer because of the fiduciary relationships between sales associate and employer, the obligations of the sales associate do not end with termination of employment

housing for older persons

age 62+ at least 80% of the units occupied by persons 55 years old or older, and housing policies are published and followed that demonstrate an intent to be housing for persons 55 and older

appreciation

an increase in value

A developer contracts to build a home on a buyer's lot to the buyer's specifications. This is an example of which type of building: a. tract b. custom c. speculative d. subdivision

b. custom

Disintermediation occurs when a. deposits exceed the demand for loans b. depositors withdrawl their savings from depository institutions c. the IRS taxes earnings of investments d. the Federal reserve Board reduces the discount rate

b. depositors withdrawl their savings from depository institutions

The illegal practice of inducing homeowners to sell their properties by making representations about the prospective entry of persons of a certain race/national origin into the neighborhood is also called: redlining blockbusting commingling steering

blockbusting Think of "blockbusting" as "busting up a block" by trying in induce or force people to move out of their neighborhood to allow others who are "different" to move in. Blockbusting is also known as Panic Peddling

upfront mortgage insurance premium

borrowers are charged a one time mortgage insurance fee at closing

To qualify for a real estate broker's license, an applicant must have been employed for a minimum of: a. 6 months under one actively licensed broker b. 12 months under one actively licensed broker c. 24 months under 1 or more actively licensed brokers d. 6 months under 1 or more actively lisenced broker

c. 24 months under 1 or more actively licensed brokers

The signature or initials of a party is required by the Brokerage Relationship Disclosure Act on which Form? a. Single Agency Disclosure b. Transaction Broker Disclosure c. Consent to Transition to Transaction Broker d. Important Information Disclosure

c. Consent to Transition to Transaction Broker

Which statement best describes the sign requied for a brokerage office? a. only 1 sign per firm is required regardless of the number of offices b. each sales associate associated w/ the firm must have a separate sign c. Every active broker must maintain a sign at each brokerage office or branch office d.office signs are permitted but not required by law

c. Every active broker must maintain a sign at each brokerage office or branch office

What action may be taken if either the Florida Real Estate Commission or the licensee disagrees with a recommended order? a.seek adjudication b. submit the matter to mediation c. file extentions (10 days to file) d. request novations

c. file extentions (10 days to file)

moral turpitude

conduct contrary to honesty, good morals, justice, or accepted custom

The information a broker must keep about a deposit into an escrow account does not include: address of affected parties address of affected property confirmation of electronic transfer amount of deposit

confirmation of electronic transfer The broker's deposit slip or wire transfer must individually identify the respective parties, properties, and amounts deposited, and the appropriate escrow records must be established.

quarter sections

contain 160 acres

Which statute requires a purchase and sale contract to be in writing to be enforceable? a. Chapter 475 b. Chapter 120 c. Statute of Limitations d. Statute of Frauds

d. Statute of Frauds

Owner-employers of licensed real estate sales associates are allowed to pay them: a. on a salary basis only b. on a commision basis only c. a commission , but not a bonus d. a commission or salary

d. a commission or salary

The main north/south line used in the government survey method is the principal a. latitude b. longitude c. baseline d. meridian

d. meridian

estate tax lien

federal estate tax lien are imposed against a decedents taxable assets automatically upon death florida has no inheritance tax, it does have an estate tax designed to collect up the maximum allowable federal estate tax credit for state death taxes paid

Multiple Listing Service (MLS)

database that allows real estate brokers representing sellers under a listing contract to share information about properties with real estate brokers who may represent potential buyers

statutory deed

deed whose format is defined by state law

cooperatives disclosures and cancellation period

developer is required to include a disclosure stating that the buyer of a residential cooperative unit may cancel the contract within 15 calendar days contract for resale must include clause stating the buyer acknowledges receipt of the articles of incorporation of the association, bylaws Q and A answer sheet at least 3 days before signing contract buyer may cancel the contract within 3 business days

base line runs

east and west

the product that real estate licensees market is

information knowledge of property transfer, knowledge of market conditions, knowledge of how to market real estate or business

caveat emptor

let the buyer beware

property tax and special assessment lien

levy real property taxes and special tax assessments are ahead of private liens in priority and second only to real property tax liens

to be successful, licenses must know how to

market real estate and businesses

promissory note (simply note)

must accompany all mortgages in florida a legal instrument that serves as evidence of a debt a note is a promise to repay that makes the borrower personally liable for the obligation a note is usually not recorded

recordkeeping and retention of disclosure documents

must keep for 5 years

alluvion

new deposits of land as a result from accretion; deposits commonly occurring at the mouth of large rivers

informal/parol contract

oral

foreign corporation

organized under the laws of another state but doing business in florida

formula of effective gross income and what expenses are deducted

potential gross income (PGI)-vacancy and collection losses+ other income = effective gross income when vacancy and collection losses are are deducted from annual potential gross income and any income from other sources (laundry, vending machines, parking) is added the result is effective gross income

if you hold a 4 year real estate degree, you are exempt from

prelicense course 1, 2, and post license. NOT CONTINUING EDUCATION

if you are a florida licensed attorney you are exempt from

prelicensing course 1

The Florida Real Estate Commission is empowered by law to

reprimand, fine, or otherwise discipline licensees. Possible administrative penalties include denial of an application for a license; refusal to recertify a license for renewal; revocation of a license; suspension of a license; fine; probation; reprimand; citation; and notice of noncompliance.

active license

required to engage in real estate brokerage services. active status is achieved by finding an employer and registering with DBPR under your employing broker or owner/developer

satisfaction of mortgage (release of mortgage)

requires that a mortgagee cancel the mortgage and send the recorded satisfaction to the mortgagor within 60 days

list the types of depositories broker may establish escrow accounts

signatory on escrow account title company and attorney escrow account interest bearing escrow account money to maintain escrow account

florida statute chapter 475 part 4

the commercial real estate leasing commission lien act, gives broker lien rights for earned commission associated with brokerage agreement to lease commercial real estate

Intensity

the concentration of activity (pedestrian and vehicular traffic) used as a means of designating land for commercial zones.

no brokerage relationship

the seller (or the buyer) can choose not to be represented by a real estate broker 3 duties 1. account for all funds entrusted to the licensee 2. deal honestly and fairly 3. disclose all known facts that materially affect the value of the residential real property that are not readily observable to the buyer

right of survivorship

the share of a co owner who has died goes to the surviving co owners and not to the deceased tenants heirs

value

the worth of something

time share act

timesharing act, chapter 721

North and south boundaries of townships are created by township lines. range lines. metes and bounds description. plat numbers.

township lines.

rue/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. True False

true CP-40 Commission Position on Teams (4-5-2011) The Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.

counteroffer

willingness to contract, but on terms or conditions different from those contained in the original offer

some closing agents require that the buyers funds be sent to closing agent by

wire transfer

What is the formula for TOR?

(PITI + PMI + LTO) ÷ monthly gross income = TOR

Grantor

Party who signs and gives a deed; seller.

the Cilvil rights Act prohibits discrimination on the basis of ________

Race

debt service

The amount of money needed to meet the periodic payments of principle and interest on a loan that is being amortized.

How many days after notice of discrimination does someone have to file a complaint under Colorado Fair Housing Laws with the Colorado Civil Rights Commission? 30 days 60 days 6 months 1 year

1 year Filing a Timely Charge of Discrimination There is a legal requirement that a charge must be filed within a specific period of time (statute of limitations) from the date of notice of the last discriminatory act. After the statute of limitations has passed the Colorado Civil Rights Commission does not have jurisdiction. In Employment cases the statute of limitations is six months; in Housing cases the statute of limitations is one year. Employment filing deadline: six (6) months Housing filing deadline: one (1) year

Property Management

The leasing, managing, marketing, and overall maintenance of property for others.

The government survey method begins in Tallahassee by drawing a north/south line is called the _________ __________ _________

Tallahassee Principal Meridian

The DBPR must be notified within 10 days when the following occurs:

1. A broker changes business address; 2. A real estate school changes business address; 3. A sales associate changes employer 4. An instructor changes employer

conditions for alienation by adverse possession (HOTCAN)

HOTCAN Hostile possession of the property Open possession Taxes Claim on title Adverse possession Notorious and flagrant possession of property

Annual Percentage Rate (APR)

Total yearly cost of credit.

Real estate professionals provide expert information in which three areas?

1. Knowledge of property transfer 2. Knowledge of market conditions 3. Knowledge of how to market real estate and businesses

What are the three general phases of development and construction:

1. Land Acquisition 2. Subdivision and development 3. Recording the subdivision plat map

What are the three brokerage relationship options that a real estate broker or brokerage form will assume for buyers and sellers:

1. Nonrepresentation (no brokerage relationship) 2. Single agency 3. Transaction broker

A potential purchaser of a timeshare can cancel the contract without penalty within how many days?

Sales associate and broker associates must report any change of employer or address change to the DBPR within _____ days on a form prescribed for such use.

sales associate applicant must be (age)

A full township contains 640 acres. 5,280 acres. 23,040 acres. 43,560 acres.

23,040 acres.

A brokerage firm holding 4 earnest money deposits, and 15 security deposits for managed single-family residences must have a minimum of how many trust accounts? 19 1 2 3

3 Rule E-1 (h) A broker who manages less than 7 single-family residences may deposit rental receipts and security deposits and disburse money collected for such purposes in the "sales escrow" account" Elsewise, you need one escrow account for earnest money, one for rental receipts and one for rental deposits.

condominium

A multiunit project consisting of individual ownership of a dwelling unit and undivided ownership of common areas.

2 exemptions of prelicensing

4 year or higher real estate degree, licensed attorney

Purchase Money Mortgage (PNM) (Owner Financing)

A new mortgage taken as part of the purchase price of real property by the seller (AKA Owner Financing)

Square Feet in an Acre

43,560

An acre contains: 26,650 square feet 34,780 square feet 43,560 square feet 54,670 square feet

43,560 square feet

Satisfaction of mortgage

A certificate issued by the lender when the debt obligation is paid in full.

loan origination fee

A change by a lender for taking a mortgage in exchange for a loan.

up-front mortgage insurance premium (UFMIP)

A one-time mortgage insurance premium on FHA mortgage loans that is paid at closing.

Real Estate Brokerage

A part of the real estate business that is concerned with bringing together buyers and sellers and owners and renters and completing a real estate transaction.

federally related transaction

Any sale transaction that ultimately involves a federal agency in either the primary or secondary mortgage market. Under FIRREA, state-certified or state-licensed appraisers must be used for certain loans in federally related transactions.

Appraiser

Appraisers charge a fee based on the time and difficulty of the appraisal assignment and are not paid commission.

An individual who typically finds a tenant for property and collects a fee is referred to as A) an absentee owner. B) a rental agent. C) a community association manager. D) a property manager.

B) a rental agent.

When employing the income approach to value, the improvements and the land are valued: By comparing the sales of similar properties By determining the cost per square foot of reproducing improvements By capitalizing income Concurrently by more than one approach

By capitalizing income The income approach is based on the capitalization rate.

A standard section of land 1) is one mile wide. 2) contains 640 acres. I only II only Both I and II Neither I nor II

Both I and II

4 unique duties of a single agent

COLD confidentiality obedience loyality disclosure (full)

Brokers can not pay an unlicensed person a commission but can do what? (#20)

Can pay them no more the $50

Change only the dates that needed to be changed The only dates which are changed in the original Contract to Buy/Sell Real Estate are those specified as changed in the Counterproposal form. All other dates are assumed to not have been affected.

Demand Deposit

Checking accounts; payable on demand by holder.

Which of these helped stop racial discrimination in RE? (#37)

Civil Rights Act of 1866

A contractor is employed by an owner of land to build on that land to the owner's specifications

Custom Building

The bundle of legal rights associated with real property ownership does NOT include the right of A) disposition. B) control. C) possession. D) intent.

D) intent. DEEP C Disposition Enjoyment Exclusion Possession Control

What creates a condominium? (#36)

Declaration of condominium

With the Statue of Frauds what is a written contract? (#64)

Enforceable

acknowledgement

Formal declaration before an authorized official, by the person who executed the instrument, that it is a free act.

the local government impacts the real estate business through

property taxation and regulatory activities

Notice of noncompliance

Issued by the DBPR in the case of a minor rule violation that does not endanger the public health, safety, and welfare.

Common Law

Law based on usage, general acceptance, and custom (case law).

Lien Theory

Legal concept that regards a mortgage as a just claim on specific property pledged as security for a mortgage debt.

Comparative Market Analysis (CMA)

Marketing tool and may not be referred to or represented as an appraisal

Broker who qualifies as the broker for more than one business entity?

Multiple Licenses

A deed of trust held by someone other than the public trustee is NOT: Notice that a legal action is pending that may effect ownership Exempt from loan recission rules Foreclosed through the courts A conditional transfer of ownership from the Trustor to the Beneficiary

Notice that a legal action is pending that may effect ownership Regardless of who holds the Deed of Trust, the transfer of ownership is real and not a notice of pending legal action.

Dual Agency

Occurs when a brokerage firm represents as a fiduciary both the buyer and the seller in the same real estate transaction. It is illegal in FL for a real estate licensee to operate as a dual agent.

What authority originates from the U.S. Constitution and relates to protection of health and welfare of citizens at local levels?

Police power Police power is the authority of government to protect the property, life, health, and welfare of its citizens.

What is it called when competing brokers conspire to establish the same commission? (#76)

Price Fixing

_______ __ _______applies when a higher-priced property is constructed in an area of lower-priced properties. the higher priced property will REGRESS in value toward the level of less expensive properties in the area.

Principle of regression

Mutual recognition agreement

Recognizes the education and experience of individuals licensed in another state or nation when the other jurisdiction has education and experience requirement comparable to Florida requirements. The agreement applies exclusively to non residents who are licensed in another jurisdiction. The application requests mutual recognition on the license application and indicates from which mutual recognition is requested.

R-value

Resistance to heat flow. The measure of the energy-effectiveness of insulation.

The party who holds title to corporation sole property is called the _______ _______ ______

Sole Title Holder

Section 13 is _________ of Section 12

South

Vendee

The buyer or purchaser of real property under an agreement of sale.

Assemblage

The combining of two or more adjoining properties into one tract.

According to Real Estate Commission rules - who has responsibility for an accurate closing? The buyer and seller The title company and closer The lender The designated broker, the employing broker and any substitute broker

The designated broker, the employing broker and any substitute broker The Employing Broker has responsibility for all company closings. The Designated Broker is the broker appointed by the Employing Broker on behalf of the company to service the transaction. If the Designated Broker is unable to attend a closing, a stand-in broker would need to be appointed and would thus acquire responsibility. This scenario repeats for any company representing the Buyer and the Seller. The buyer and seller and title company have a vested interested in accuracy but are not subject to Commission rules and regulations as they are not licensed. Lenders are licensed but only contribute to the loan portion of the closing. Regardless, the real estate companies and agents have the highest level of responsibility according to law for a closing.

Market Value

The most probable price a property will bring from a fully informed buyer, willing but not compelled to buy, and the lowest price a fully informed seller will accept if not compelled to sell.

An agent can advertise a property under his or her name if: He/she is a member of a local real estate board He/she personally listed the property The name of his/her broker is also in the ad He/she personally paid for the ad

The name of his/her broker is also in the ad

What don't you have to put on an office sign?

The names of the sales and brokers associates are not required but the Trade name or Brokers name is required

Which is not true regarding the Counterproposal form: The purchase contract should not be signed by the person creating the counterproposal The date and deadlines table can be omitted if not used If a date or deadline is left blank it means "no change" The only changes allowed are purchase price and earnest money

The only changes allowed are purchase price and earnest money Whoever creates the counterproposal can make any change they want.

private owner of a single 20-acre parcel of land wishes to sell off ten acres and retain ten acres for her own use. Which statement is true for this owner? As the private owner, there are no restrictions or registration requirements. The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision. A private owner may not sell only part of a single parcel; only a registered subdivider may divide land. The private owner must comply with federal land sales rules.

The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision. The owner is not required to register with the real estate commission but must meet local and state requirements for this subdivision.

True/False - According to Commission Position 22 on Handling of Confidential Information, a designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. True False

True CP-22...A designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. Brokers may want to consult legal counsel regarding the necessity of securing the authorization of the party to whom the information is confidential before the designated broker shares that confidential information with the supervising broker. Such advice could include modifications to the listing agreement or buyer agreement that create such authorization. This is a Colorado twist on brokerage laws. Generally, everything you learned in the National side is consistent with Colorado. That all contracts are with the company not the licensee, that the Employing Broker is responsible for the actions of the licensees under him/her and so on. The twist is in how we deal with confidential information and how we resolve what in past years was considered a conflict of interest. All of this comes under the heading of "Designated Broker." Here is the problem as the real estate commission saw it; once upon a time, it was a conflict of interest if two agents from the same company were working opposite sides of the same transaction - even if it was a large company and the agents did not know each other. Fact is - earlier brokerage laws were written in a time when there were no large offices or super-sized brokerages. Most were ma and pa operations where everybody knew and talked to each other. Recognizing that times had changed, the real estate commission wanted two agents working for the same company on the same transaction, to be able to fully represent their clients in a Buyer or Seller Agency relationship and not be forced into some form of neutral relationship such as Transaction Broker or the predecessor to Transaction Brokerage, the now illegal and much hated Dual Agency relationship. The issue was - if everybody in a company reports to the Employing Broker then that person is a walking talking potential conflict-of-interest on any transaction that occurs in the office. So they declared that brokerage relationships only, would be confined to the licensee level and not rise to the Employing broker level. This way the Employing Broker does not have a conflict of interest with anybody. That left one more problem and this was "imputation of confidential information". In simpleze - it would be a bad thing if two agents working on opposite sides of a transaction, went to the same Employing Broker for advice and that Employing Broker blabbed confidential information between them To avoid that - the real estate commission issued rules that said in the event of two agents working on the same transaction for the same company, the Employing Broker would "Designate" another supervising broker for one of the agents. Tah Dah! No conflict of interest and no chance of one Employing Broker spilling secrets from one side to the other. Then to tie everything into a bow - they exempted one-man band brokerages from having to appoint another supervisor because... there is only one person in the company. One agent companies mostly become Transaction Brokers when double-ending a deal.

True/False - According to Commission Position 38 Disclosure of Affiliated Business Arrangements, a licensee is required to disclose any affiliated business arrangement in which the licensee has a 1% or more interest when an offer to purchase real property is fully executed. True False

True CP-38 Commission Position on Disclosure of Affiliated Business Arrangements and Conflicts of Interest (4-5-2011) This statement supplements Rule E-46 Affiliated Business Arrangements. §12-61-113.2, C.R.S. Affiliated Business Arrangements was enacted in Colorado to provide transparency, accountability, and consumer protection through disclosure and consistency concerning affiliated business arrangements. Affiliated business arrangements have also been regulated for many years by the Real Estate Settlement Procedures Act (RESPA). RESPA was precipitated by significant reforms identified by Congress as necessary to ensure that consumers did not pay disproportionately high settlement costs as the result of certain deleterious business practices by settlement service providers. RESPA is applicable to any residential mortgage transaction involving a federally related mortgage loan. However, Colorado law requires disclosure of affiliated business arrangements to consumers even if the transaction does not involve a federally related residential mortgage loan. Colorado law C.R.S. 12-61-113.2(1)(a) defines an "affiliated business arrangement" as an arrangement in which: "A provider of settlement services or an associate of a provider of settlement services has either an affiliate relationship with or a direct beneficial ownership interest of more than one percent in another provider of settlement services;" and the provider directly or indirectly refers business to the other provider or affirmatively influences the selection of another provider of settlement services. It is the Commission's position that real estate brokers must disclose affiliated business arrangements to consumers in all transactions intended to result in the transfer of title from one party to another. RESPA requires that affiliated business arrangements be disclosed before or at the time a referral is made to a provider of settlement services. Colorado law requires a licensee to disclose any affiliated business arrangement when an offer to purchase real property is fully executed. In Colorado, the disclosure is required to be in writing, must be given to both agents and transaction brokers, must comply with RESPA and Colorado law, and must be made using the Federal RESPA disclosure form. Colorado law requires real estate brokers to disclose their affiliated business arrangements to all parties to the real estate transaction and all parties are expected to sign the disclosure form. The Commission recommends that real estate brokers disclose their affiliated business arrangements to the party with whom they are working early in their relationship, i.e. at the time brokerage relationships are disclosed or when the listing contract or buyer broker agreement is negotiated. In those transactions where the broker does not deal with another party until the time of contracting written disclosure should be made to all parties at the time the purchase contract is fully executed. Additionally, real estate brokers are required to make certain disclosures to the Division of Real Estate regarding their affiliated business arrangements. Colorado law requires every licensee to disclose to the Commission when they enter into or change an affiliated business arrangement. All affiliated business arrangements to which the licensee is a party must be disclosed. Disclosure is required at the time of a new application for licensure or at the time of activation of an inactive license. The disclosure must include the physical location of the affiliated business. Employing brokers are required to disclose the names of all affiliated business arrangements to which the employing broker is a party on an annual basis, at the least. The disclosure must include the physical location of the affiliated businesses. The Commission has determined that these disclosures shall be made electronically through the Division of Real Estate's website at www.dora.state.co.us/pls/real/AFB_Web.Logon?p_div=REC. It is the Commission's position that Rule E-25 Continuing duty to disclose conflict of interest and license status, applies to all licensees including real estate brokers who perform licensed property management services and are affiliated with businesses or vendors that provide services applicable to lease transactions. For example, a real estate broker acting on behalf of a landlord is required to disclose to the landlord that the real estate broker has partial ownership of the maintenance company that the real estate broker utilizes for the landlord's property repairs. The Commission strongly recommends that this type of information be disclosed to the principal early in the business relationship, i.e. at the time brokerage relationships are disclosed or when the listing contract is negotiated. Additionally, this disclosure should be made in writing.

What form must a contract be to be enforceable?

Written and signed by 2 parties (good for 5 years)

A person must hold an active real estate license if, for express or for implied compensation, he or she

advertises a list of available rental properties. Advertising rental lists is one of the services of real estate that requires a real estate license.

exclusive listing

agent- one broker commission-to listing broker if not sold by owner

exclusive right of sale

agent-one broker commission- to listing broker no matter who sells

open listing

agent-one of more brokers commission- only to broker who sells property

option contract

agreement to keep open for a specified period of time an offer to sell or lease real property property owner (optionor) grants buyer (optionee) exclusive right to buy/lease the owners property for specified price and terms within certain period of time must be in writing

When an initial contract for sale of property is different than the contract forms approved by the Colorado Real Estate Commission, the contract should be prepared by: broker representing the seller a real estate attorney broker representing the buyer an attorney representing one of the parties to the contract

an attorney representing one of the parties to the contract An attorney of the buyer, the seller, or both, must prepare contract.

Easement Appurtenant

an easement that runs with the land and benefits an adjacent parcel of land.

estate and tenancies

an estate refers to the degree, quantity, nature, and extent of interest (ownership rights) a person can have in real property estate and tenancy are used interchangbly freehold estates and leasehold estates (nonfreehold estates)

separate property

any property held in one spouses name only, property the husband and wife owned separately prior to the marriage, and property acquired during the marriage by inheritance

real estate services

any real estate activity involving compensation for performing the service for another

asset

anything of value

compensation

anything of value or valuable consideration, directly or indirectly paid, promised, or expected to be paid or received

unenforceable contract

appears to have all essential elements, but it cannot be enforced in court

discount points

are an added loan fee often charged by lenders to increase the yield on a lower than market interest loan and to make the loan more competitive with higher interest loans

"Dual Contracts:" are legal in Colorado means one contract for two parcels are oral or written are written only

are oral or written Are oral or written and means two separate contracts for the same parcel. (REM 15-19)

specific liens

as specific do not affect all the debtors property, applying only to a certain specified property include property tax and special assessment lien, mortgage lien, vendors lien, construction lien

designated sales associates

assets of $1 million or more

CAM (community association manager)

association consists of 10+ units, or has budget higher than $100,000

administrative law

body of law created by governing administrative agencies in form of regulations, rules, orders, and decisions

culpable negligence

involves negligent conduct that while not intentional involves the disregard of the consequences likely to result from ones actions

lien theory

borrower retains title to the property. the lender is protected with a lien on the real property ex: my car

bilateral contract

both parties obligated

brokers compensation

broker earns the commission

key concept regarding escrow accounts

broker may open an escrow account in a florida bank, savings association, or credit union broker must be a signatory on the escrow account broker must review, sign and dat the monthly reconciliation statements broker must review the company's escrow accounting procedures if the broker does not maintain an escrow account, the funds may be held by a title company or in an attorneys trust account brokers must retain records of real estate transactions for 5 years, regardless of whether escrow funds were pledged (2 years after litigation if beyond the 5 yr period)

equity

property value - debt = equity example: property worth 500,000 has outstanding debt of 375,000. the investors equity is 125,000. 500,000 value - 375,000 debt = 125,000

trade names

business name other than the legal name of a person doing business individual broker or brokerage entity may use a trade name and applicable designation after that name is registered with DBPR sales associates and broker associates may not use a trade (ficticious) name for income tax purposes only

sole proprietorships

business owned by an individual

tax deed

convey title to property sold for nonpayment of taxes extreme caution should be taken when purchasing property at a tax sale

FREC quasi legislative powers

create and pass rules/regulations and regulate professional practices

demand

desire and ability to purchase or rent goods and services

EDO (escrow disbursement order)

determination who is entitled to the disputed funds

when in doubt, always

disclose

easement in gross

does not benefit another specific parcel of land, the easement benefits the company that owns it

A fence built over your property is

encroachment

appraiser qualification board

establishes minimum criteria for state certified appraisers and endorses uniform examinations for certification establishes guidelines for supervision of registered trainees

eminent domain

gives government power to take land from an owner through legal process called condemnation taking for just compensation

escheat to the state

government to take the property when the owner who does die intestate and who has no known heirs

nonfreehold estates

have a known duration and do not involve ownership interest nonfreehold or less-than-freehold estates grant the right to use and possess real property

Insulation is rated by its ability to resist

heat flow

A type of roof style that slopes from the ridge to four opposite sides and allows continuous eave venting around the entire house perimeter is the

hip.

development

improving raw land

express contract

in words

formal contract

in writing

A property described as "NW 1/4, SW 1/2, Sec. 7,WM" is a lot and block legal description. adequately described. a metes and bounds description. incompletely described.

incompletely described.

The statute of frauds applies to

instruments of conveyance of real property. The statute of frauds requires that certain real estate instruments and contracts affecting title to real property be in writing to be enforceable.

tenancy at will

lease agreement that has a beginning date but no fixed termination date, such as week to week or month to month agreement tenancy without specific term- may be written or oral agreements

Tests used by courts to determine whether an item is real or personal property include

intent, relationship of the parties, method of annexation, adaption

voidable contract

is a contract, but because of the manner or method in which it was brought about, one of the parties is permitted to avoid any contractual duties

void contract

lacks one or more of the required elements of a valid contract and has no legal effect

ripartarian rights

land abutting a flowing waterway

littoral rghts

land abutting tidal bodies of water ex gulf of mexico

lis pendens

legal document giving constructive notice of a pending legal action that involves real estate

constructive notice

legal notice, accomplished by recording a document in public records

licensee requirements-option contracts

licensees may draw option contracts, there is no case law indicating otherwise

change of address

licensees must notify the DBPR within 10 days

landlords obligation to maintain premises

maintain the rented dwelling unit in a condition that meets all building, housing, and health codes in a community provide exterminating services provide garbage receptacles and pickup provide working equipment for heat plus running hot water

administrative fine

maximum fine of $5000 per violation

The legal description method that uses angles, terminal points, and established lines is the government survey. metes and bounds description. lot and block description. rectangular survey.

metes and bounds description.

What is the formula for HER?

monthly PITI + PMI ÷ monthly gross income = HER

general lien

not restricted to one property but may affect all properties off a debtor attaches to all of the lienee (debtors) real property include judgement lies, income tax liens, and estate tax liens

executory contract

not yet fully performed

kickbacks and regulations

or rebate, is an unearned fee paid to a licensee associated with a real estate transaction for non-real estate services the parties to the transaction must be fully informed of the kickback the kickback must not be prohibited by other law. the real estate settlement and procedures act (RESPA) it is unlawful to share a commission with an unlicensed person other than the seller or the buyer in the transaction it is unlawful for a licensee to pay an unlicensed person for performing real estate services **($50 referral fee)**

grantor

owner giving title

cooperative association

permitted to conduct commercial business and to convey, sell, or buy its own property but it cannot be registered as a real estate broker

descent

person dies intestate (without leaving a will)

agent

person entrusted with another's business authorized to represent and act for the principal

examples of functional obsolescence

poor design, changing tastes

common elements of condominiums

portions of the condominium property that are not included in the units but are legally attached to each unit and are transferred with the unit when it is sold deed to a unit conveys the unit to the purchaser together with its proportionate ownership interest

The seal, when affixed to official documents, becomes___________ evidence that the document is authentic

prima facia

homeowners association disclosure

provide buyers with a disclosure summary regarding the association, existence of restrictive covenants, and any assessments that the association imposes

The column of townships running north and south is numbered according to its distance from the principal meridian and is referred to as checks. tracts. ranges. tiers.

ranges.

real property

real estate + bundle of rights

transfer of real property

real estate contracts are not required to be witnessed ot notarized

situs

refers to prospective buyer's preferance for certain area location, location, location

statutory law

refers to statutes

florida fair housing act

refuse to rent or sell housing falsely deny that housing is available for inspection, rental or sale refuse to make a mortgage loan impose different conditions or terms on a loan threaten, coerce, or intimidate any individual exercising a fair housing right refuse reasonable charges to a dwelling to accommodate a disability

group license

registered to sales associates who are registered under 1 owner/developer

Under federal law, a landlord may properly refuse to: rent to pregnant women allow visually handicapped tenants to keep guide dogs because pets are not allowed rent to anyone younger than age 55 because the units are intended for the elderly and 80 percent of the units have a tenant older than 55 years of age rent to persons having AIDS

rent to anyone younger than age 55 because the units are intended for the elderly and 80 percent of the units have a tenant older than 55 years of age The requirement is that 80% of the units are occupied by people 55 years of age or older, and the housing is specifically designed for elderly occupancy.

statute of frauds

requires that contracts conveying an interest in real property and contracts that are not to be performed within one year of the date created must be in writing and signed. enforceable contract-legally binding contract that the courts will recognize

single family houses

residential property that is not privately owned privately owned residential property if a real estate licensee is employed to sell or rent the property residential property owned by a person who owns 4+ residential units residential property when the owner, during the immediate past 2 year period sells 2 or more houses in which the owner was not a resident

5 sales specialties of real estate

residential, commercial, industrial, agricultural, business

litigation

resolving the matter in court of law 2 court procedures- interpleader and declaratory judgement

A security is a financial instrument backed by assets. They give the holder an interest or right in something else. Regulation under state or federal securities laws may apply to which of the following? speculative purchase of raw land by a doctor as part of a retirement plan condominium project that includes both residential and retail uses within one structure resort condominium project in which owners enter their units in a common rental pool to enhance their income

resort condominium project in which owners enter their units in a common rental pool to enhance their income he common rental pool arrangement for increasing income may qualify this offering as a security.

mutual rescission or....

reunciation

landlord access to premises

right to inspect make necessary and agreed on repairs, decorations, alterations, or improvements supply agreed on services exhibit or show the premises 12 hours of reasonable notice

easements

right to use the land of another for a specific and limited purpose

The _____ is the placement of the word seal or the letters "L.S.", locus sigilli, following the signatures of the parties.

seal

the chief administrator is the DBPR is also the

secretary of the DBPR, appointed by the governor, subjected to confirmation from the state senate

Essential elements of a deed do NOT include

signature of a competent grantee. The answer is SIGNATURE OF A COMPETENT GRANTEE. A competent grantor (not grantee) must sign the deed.

fair housing act covers 2 housing catagories

single family and multifamily

In relation to Section 1 of a township, Section 12 is due

south.

air rights

space above a tract, height established by law possible for the seller to retain 1 or 2 of the components if the buyer and seller agree

A license becomes ineffective when it is

suspended.

superior liens

take priority over all other liens 1. real estate liens 2. special assessment liens 3. federal estate tax lien

joint venture

temporary form of business arrangement if 2 parties from a joint venture to provide real estate services for compensation, both parties must be licensed real estate brokers

assignment of mortgage purpose

the mortgage and promissory note are the property of the mortgagee (lender) the mortgagee may choose to sell the negotiable instruments rather than continue to receive the monthly payments from the mortgagor a legal instrument stating that the mortgagee assigns (transfers) the mortgage and promissory note to the purchaser assignment of mortgage is signed by the assignor (mortgagee) assignee becomes the new owner of debt and security instrument individual/company purchasing the mortgage will receive an estoppel certification (letter) verifying the amount of the unpaid balance, the rate of interest, and the date to which the interest has been paid before the assignment

the broker experience cannot be earned by working for an owner/developer unless

the owner developer is a licensed broker who holds a current, valid, active real estate license

Demand

the quantity of a good or service that consumers are willing and able to buy

notice to legal title

to be recorded, a deed must first be acknowledged by the grantor and the acknowledgement must be witnessed and certified by a notary notary public declaring that signing the document is a voluntary act requirement for recording-signatures of 2 witnesses florida law does not require documents be recorded

preparation of contracts

to draft the wording of legal documents or legal instruments for others is considered practicing law

brokerage options relationships

transaction broker, single agent, no brokerage relationship

A developer that acquires a large that aquires a large tract of land and builds a model center from which sales may be made

tract building

misrepresentation

untrue statement of fact and an incorrect of false misrepresentation of facts

sale of real property subject to a lease

when a leased property is sold, the lease is binding on the new owner

A designated broker's responsibilities are delegated by: written statement by Managing Broker office manager legislative statute negotiated by buyer and seller

written statement by Managing Broker designated broker: a licensee designated in writing by an employing broker to serve as a single agent or transaction-broker for a seller, landlord, buyer or tenant in a real estate transaction; does not include a real estate brokerage firm that consists of only one licensed natural person. More info: CP-22...A designated broker is permitted to share confidential information with a supervising broker without changing or extending the brokerage relationship beyond the designated broker. Brokers may want to consult legal counsel regarding the necessity of securing the authorization of the party to whom the information is confidential before the designated broker shares that confidential information with the supervising broker. Such advice could include modifications to the listing agreement or buyer agreement that create such authorization. More info: This is a Colorado twist on brokerage laws. Generally, everything you learned in the National side is consistent with Colorado. That all contracts are with the company not the licensee, that the Employing Broker is responsible for the actions of the licensees under him/her and so on. The twist is in how we deal with confidential information and how we resolve what in past years was considered a conflict of interest. All of this comes under the heading of "Designated Broker." Here is the problem as the real estate commission saw it; once upon a time, it was a conflict of interest if two agents from the same company were working opposite sides of the same transaction - even if it was a large company and the agents did not know each other. Fact is - earlier brokerage laws were written in a time when there were no large offices or super-sized brokerages. Most were ma and pa operations where everybody knew and talked to each other. Recognizing that times had changed, the real estate commission wanted two agents working for the same company on the same transaction, to be able to fully represent their clients in a Buyer or Seller Agency relationship and not be forced into some form of neutral relationship such as Transaction Broker or the predecessor to Transaction Brokerage, the now illegal and much hated Dual Agency relationship. The issue was - if everybody in a company reports to the Employing Broker then that person is a walking talking potential conflict-of-interest on any transaction that occurs in the office. So they declared that brokerage relationships only, would be confined to the licensee level and not rise to the Employing broker level. This way the Employing Broker does not have a conflict of interest with anybody. That left one more problem and this was "imputation of confidential information". In simpleze - it would be a bad thing if two agents working on opposite sides of a transaction, went to the same Employing Broker for advice and that Employing Broker blabbed confidential information between them. To avoid that - the real estate commission issued rules that said in the event of two agents working on the same transaction for the same company, the Employing Broker would "Designate" another supervising broker for one of the agents. Tah Dah! No conflict of interest and no chance of one Employing Broker spilling secrets from one side to the other. Then to tie everything into a bow - they exempted one-man band brokerages from having to appoint another supervisor because... there is only one person in the company. One agent companies mostly become Transaction Brokers when double-ending a deal.

__________ rights allow a property owner whose property borders on a river or steam the use of the water

Riparian

If you have located a township numbered T2S, R4E, the township due south of that township is

T3S, R4E.

In a description of land based on the rectangular survey system, the SE 1/4 of the SE 1/4 of the SE 1/4 of Section 1 contains 10 acres. 20 acres. 30 acres. 40 acres.

10 acres.

With in how many days must a Broker notify the commission about an EDO?

10 business days

time share disclosures

10 calendar days of contract signing or receipt of pubic offering whichever is later sales personnel selling time share plans of any type must be licensed salespersons must be salaried employees who are not paid commission and who do not receive compensation on a transactional basis unlawful for real estate licensee to collect an advance fee for the listing of a timeshare unit

What is the maximum amount of interest a Seller can charge for a seller financed loan? 9% 12% 20% 35%

12% In Colorado the general usury rate for a consumer loan by an unsupervised (ie not licensed) lender is 12%,

The number of townships in an area 24 miles square is 4. 8. 16. 32.

16. 24 miles square is 24miles X24 miles =576 sq mi /36=16

Property that is exempt from execution of foreclosure to satisfy a personal debt of the head of the household can be up to one-half acre within a city or up to ______ acres outside a city.

160

Members of the Florida Real estate Commission may serve no more than _____ consecutive terms

Automated Valuation Model (AVM)

A data analysis compiled from a computer database of closed sales used by lenders when an appraisal is not warranted.

How many acres are contained in the following legal description, "The N 1/2 of the E 1/2 of the E 1/2 of the NW 1/4 of Section 4 and the W 1/2 of the NW 1/4 of the NE 1/4 of Section 5?" 20 acres 40 acres 50 acres 60 acres

40 acres Remember that "and" means that two separate parcels are included and must be added together to determine the whole. You always start with 640 acres and solve by dividing from right to left. "N 1/2 of the E 1/2 of the E 1/2 of the NW 1/4 of Section 4" is 640 ÷ 4 (NW¼) = 160, 160 ÷ 2 (E½) = 80, 80 ÷ 2 (E½) = 40, and then 40 ÷ 2 (N½) = 20 "W 1/2 of the NW 1/4 of the NE 1/4 of Section 5" is 640 ÷ 4 (NE¼) = 160, 160 ÷ 4 (NW¼) = 40, and then 40 ÷ 2 (W½) = 20 20 + 20 = 40 acres

The postlicense educational course for sales associate consists of ________ hours

How many acres are in the "W 1/2 and the NE 1/4 of Section 10?" 1 square mile 144 acres 240 acres 480 acres

480 acres "and" means you're dealing with more than one parcel. The W½ of Section 10 is 320 acres, and the NE¼ is 160 acres. 320 + 160 = 480 acres.

The E 1/2 of the E 1/2 of the E 1/2 of the SW 1/4 of the SW 1/4 of Section 32, T2N, R3E would contain how many acres? 5 20 40 80

passing score of license exam

What is required by Mutual Recognition applicants?

75% or higher required to pass exam

Mortgage Fraud

A crime in which the intent is to materially misrepresent or omit information on a mortgage loan application to obtain a loan or to obtain a larger loan than would have not been obtained had the lender or borrower known the truth.

Active License

A current, valid license registered with the DBPR. The status required to actively engage in the real estate business.

Construction Lien

A claim based on the principle of unjust enrichment"; favors parties who have performed labor or delivered materials or supplies for the repair or building of an improvement to real property."

Lien

A claim on property for payment of some obligation or debt.

General Lien

A claim that may affect all of the properties of a debtor.

final order

A decision rendered by the FREC.

vacancy and collection losses

A deduction from potential gross income for (1) current or expected future space not rented due to tenant turnover and (2) loss from uncollected rent due from delinquent tenants.

Loan Estimate

A disclosure form with good-faith estimates of credit costs and transactions terms that must the given to the borrower no later than the third business day after receiving the loan application.

Disintermediation

A disengagement process when depositors withdraw money from savings for direct investment in stocks, money market funds, and other securities.

Metes-and-bounds descriptions

A method of legal description that identifies a property by specifying the shape and boundary dimensions of the parcel. This description starts at the point of beginning and follows the boundaries of the land by compass direction and linear measurements and returns to the point of beginning.

Defeasance Clause

A provision in a mortgage that specifies the terms and conditions to be met in order to avoid default and thereby defeat the mortgage.

Receivership Clause

A provision in a mortgage, related to income-producing property, that is designed to require that income derived shall be used to make mortgage payments in the event the mortgagor (borrower) defaults.

Short sale

A sale of secured real property that produces less money than is owed the lender. The lender releases its mortgage so that the property can be sold free and clear to the new purchaser.

Deed

A type of conveyance; a written instrument to transfer title to real property from one party to another.

A real estate brokerage company is a transaction broker for a buyer. The buyer wants to purchase a new home so the sales associate takes him to three model centers listed by three competing real estate companies. The sales associate must give a written no brokerage relationship notice to A) no one. B) the model home employees at each model center. C) the buyer. D) the owner-developer of each new homes subdivision.

A) no one. no brokerage relationship notices are for nonrepresentation relationships only

The buyer will assume personal responsible responsibility for repayment of the balance due on the promissory note and acknowledge existance of the mortgage is

Assumption of the mortgage

Registration

Authorization by the state to place an applicant on the register (record) of officially recognized individuals and businesses.

Special Agent

Authorized by the principal to (broker or owner-developer) to handle a specific-business transaction or to perform a specific act.

The purchase price of a business minus the value of the tangible assets of that business equals the intangible assets of the business. This includes A) real property. B) goodwill. C) common stock. D) personal property.

B) goodwill. value of business-value of tangible assets=goodwill Goodwill is attributed to a business's reputation and the expectation of continued customer loyalty. Other intangible assets that add value include customer loyalty, licenses, franchises, copyrights, trademarks, and patents.

The Florida Real Estate Commission is empowered by law to A) impose prison sentences up to 60 days. B) fine or otherwise discipline licensees. C) levy fines up to, but not exceeding, $500. D) assess damages resulting from breach-of-contract suits.

B) fine or otherwise discipline licensees. The FREC ordinarily has no authority or jurisdiction over breach-of-contract actions. Nor are they empowered to levy or impose fines or imprisonment as penalties for certain crimes

A seller transfers title to a buyer with a general warranty deed. In which clause of the deed does the seller define the quality of ownership interest conveyed to the buyer? A) Covenant of further assurance B) Habendum C) Seisin D) Covenant of quiet enjoyment

B) Habendum habendum clause - A provision in a deed to real property that stipulates the estate or interest the grantee is to receive and the type of title conveyed. Covenant of seisin - Grantor owns the property and has the right to convey the property to the grantee Covenant of further assurance. The grantor promises to sign and deliver any legal instrument in the future that might be required to make the title good. Covenant of quiet enjoyment. The grantor guarantees peaceful possession undisturbed by hostile claims of title.

The formula to calculate the overall capitalization rate is A) NOI × value (or price). B) NOI ÷ value (or price). C) debt service × value (or price). D) NOI ÷ owner's equity.

B) NOI ÷ value (or price). This is the triangle with I over R x V - helps explain when to multiply and when to divide. Where: I = Net operating income (NOI) R = Capitalization rate V = Value (or Sale price) Rate × Value = Income Income ÷ Value = Rate Income ÷ Rate = Value

A seller listed a home for $200,000 and agreed to pay a commission rate of 5%. The listing contract required the listing office and the selling office to share the commission on a 50-50 basis. The home was sold four weeks later for 90% of the list price. The listing broker paid the listing sales associate 50% of the listing office's commission. The selling broker paid the selling associate 60% of the selling office's commission. How much commission did the selling sales associate receive? A) $4,500 B) $2,700 C) $3,000 D) $5,400

B) $2,700 200000x.9=180000x.05=9000x.5=4,500x.6=2700

A homeowner originally purchased a new home for $244,900. During the period of ownership, the homeowner spent $27,000 in capital improvements. The homeowner sold the home 16 years later for $329,900. The homeowner paid a brokerage fee of 6% of the sale price and paid other closing costs totaling $2,750. What was the homeowner's capital gain from the sale? A) $35,510 B) $35,456 C) $85,000 D) $62,456

B) $35,456 spent on the house 244900+27000=271900 figuring out brokerage fee 329900x.06=19,794 brokerage fee plus other closing costs 19794+2750=22,544 add all expenses 271900+22544=294,444 subtract from sale price 329900-294,444=35,456 in capital gain

In a township, there are 1) approximately 23,040 acres. 2) 36 sections. I only II only Both I and II Neither I nor II

Both I and II

A landlord can evict a delinquent tenant by: Giving him three days notice Giving him thirty days notice Calling the sheriff Bringing court action

Bringing court action A landlord must institute court action in order to evict a tenant which is called an unlawful detainer action.

Before showing a property, allowing a buyer to sign an offer to buy or seller to sign a leasing agreement, a licensee must provide the party with a written ________ _________ _______ notice.

Broker Relationship Form

Under Commission Rule F, all of the following are approved forms except: Contract to Exchange Real Estate Agreement to Amend/Extend Contract Business Opportunity Agreement Change of Status

Business Opportunity Agreement Because of the diverse and complex agreements associated with business opportunities, they must be prepared by an attorney.

Which statement is FALSE regarding advertising? A) Licensees may insert their personal names in ads provided they include their last name as registered. B) Advertising includes flyers and promotional materials. C) The brokerage firm's address is required in all advertising. D) All advertisements must include the name of the brokerage firm.

C) The brokerage firm's address is required in all advertising. There is no requirement to include the firm's address.

Which statement does NOT describe a planned unit development? A) A variety of types of housing may be used. B) The open space areas are maintained by a community association. C) Industrial parks are a welcomed offshoot of the PUD concept. D) Dwelling units are typically clustered, with planned green space areas between clusters.

C) Industrial parks are a welcomed offshoot of the PUD concept. process of elimination - we know a variety of housing types may be used, common areas are maintained by associations, clusters and green space between clusters - I mean that option literally doesn't describe a PUD nor is it true.

How should a buyer respond to a for-sale-by-owner?

Caveat Emptor ( buyer beware)

A widow owns a homestead that is assessed for $90,000. The city tax rate is 7.6 mills; the county rate is 8.2 mills; and the school board rate is 9.1 mills. What will the owner owe in property taxes?

City & County Taxes $90,000-25,000-25,000-500=$39,500 7.6 mills+8.2 mills=15.8 mills÷1000=.0158 39,500x.0158=$624.10 School Board $90,000-25,000-500=$64,500 9.1÷1000=.0091 64,500x.0091=$586.95 $624.10+$586.95=$1,211.05

Zoning Ordinance

Classification of real property for various purposes; the governmental power to control and supervise the use of privately owned real property (actually, the exercise of police powers).

elements of a valid and enforceable real estate sale contract (COLIC)

Competent parties Offer and acceptance Legal purpose In writing and signed (statute of frauds applies to real estate contracts) Consideration (valuable or good)

price-fixing

Competing brokers conspire to establish a standard commission rate rather than let the rate be set by the open market.

When the government has to Eminent Domain a Property what is it they do?

Condemnation (condemn your house)

Abstract of Life

Condensed history of title to real property consisting of a summary of the links in the "chain of title" extracted from documents bearing on the title status

Restrictive Covenants

Conditions placed by developers that affect how the land can be used in an entire subdivision.

A developer have more than 100 lots, which bureau does ILSA work with? (#81)

Consumer Financial Protection Bureau

A mortgage in which changes in the interest rate may cause changes in the monthly payment amount is called A) an escalator mortgage. B) a partially amortized mortgage. C) a graduated-payment mortgage. D) an adjustable-rate mortgage.

D) an adjustable-rate mortgage. partially amortized is the balloon payment one, the other two options are made up

The duties of a real estate licensee, owed to a buyer or a seller who engages the real estate licensee as a single agent, do NOT include A) loyalty. B) presenting all offers and counteroffers in a timely manner, unless previously directed otherwise in writing. C) dealing honestly and fairly. D) limited confidentiality, unless waived in writing by a party.

D) limited confidentiality, unless waived in writing by a party. Single agents abide by every duty except limited confidentiality and "additional duties that are mutually agreed to" dad, u pea cold Deal honestly and fairly Acct for all funds Disclose all known facts that materially affect value Use skill, care, diligence Present all offers and counteroffers in a timely manner Exercise limited confidentiality Additional duties mutually agreed Confidentiality Obedience Loyalty Disclosure (full)

A prospective tenant purchased a rental list from a broker and then rented a duplex that the list said included all utilities. The tenant discovered that only water was included in the rent and notified the broker within the legislated time limit. The tenant is entitled to A) 75% of the rental list fee. B) nothing unless the request for a refund is made in writing. C) no refund because the tenant agreed to rent the property. D) 100% of the fee paid.

D) 100% of the fee paid. ■ The receipt must state that a prospective tenant who does not obtain a rental is entitled to be repaid 75% of the fee paid if requested within 30 days of the contract/receipt date. ■ If the information provided to the prospective tenant is not current or is inaccurate in any material respect, the broker must repay 100% of the fee to the prospective tenant on demand.

private restrictions (DELL)

Deed restrictions Easements Leases Liens

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

Deliverd, Accepted

If a friend asks you to help manage a property for a fee, would you put the deposits into your escrow account or your employing brokers escrow account? Deposit them into your escrow account Deposit them into your employing brokers escrow account

Deposit them into your employing brokers escrow account You can have no escrow account. Only your employing broker can have one.

Who is exempt from civil liability while performing in their official capacity?

FREC

Claims resulting from an EDO what can NOT happen?

FREC CAN NOT PAY RE RECOVERY FUND PAYS

A broker's license was involuntary inactive for two years and one month. To operate again as an active licensee, the broker must complete

FREC Course I and pass the sales associate's licensing exam.

In the section on Purchase Price and Terms in a Residential Contract to Buy and Sell, which of the following is true concerning the entry for cash at closing? It represents the total amount the buyer should plan to bring to closing. It should match the good-faith estimate provided with the HUD-1 form. It represents the approximate amount the seller will receive at closing. It does not include the buyer's closing costs, such as loan fees.

It does not include the buyer's closing costs, such as loan fees. The line item of cash at closing is entered in order to complete the math showing the sources of funds that equal the total purchase price. The amount does not include closing costs or new loan fees and is not intended to represent final figures.

title theory

Legal concept that vests title to mortgaged property in the mortgagee (lender) or a third party.

note

Legal evidence of a debt that must accompany a mortgage in Florida; a legally executed pledge to pay a stipulated sum of money. (See also Promissory note.)

Margin

Lenders cost of doing business plus profit (Overhead cost - cost of doing business)

Grantee

Party who receives a deed or grant; buyer.

Which does NOT need to be disclosed for Background Check?

Parking, Speeding, inspections, or traffic signal violations

Oral contracts are also known as _________ contracts?

Parol Contracts

What refers to prospective buyers preference for a certain area?

Situs (considered the most important economic characteristic of real estate)

FREC gives suspension request what is it called?

Stay of enforcement

consumer credit protection act (truth in lending act)

TILA intended to inform borrowers of the true cost of obtaining a loan federal reserve regulation Z-most requirements under TILA are implemented by loan costs disclosed under the act- annual percentage rate- cost of credit as a yearly rate finance charge- dollar amount the credit will cost amount financed- amount of credit provided by the lender total of payments- amount the borrower will have paid after all payments as scheduled

Risk

The chance of losing all or part of an investment; the uncertainty of financial loss.

novation

The substitution of a new party and/or new terms to an existing obligation.

Straight Line Mehod

Total cost to acquire property - value of the land = depreciable basis Depreciable basis / useful life (27.5 or 39 years) = annual IRS depreciation deduction

Property Tax Savings

Total exemptions X tax rate = property tax savings

Statutory Law

Written statures enacted by the legislature

A buyer is concerned that new construction a mile away could have a negative environmental impact on the home they are considering purchasing. Can they make the Contract to Buy/Sell contingent on the result of an environmental impact report? No, it is impossible to determine the negative impact of construction a mile away Yes, you can make a contract contigent on anything

Yes, you can make a contract contigent on anything This is a matter of negotiation between the buyer and seller. The law has no jurisdiction on matters of negotiation between a buyer and seller.

The license laws of Colorado require a licensee to inform the seller that he has a real estate license if: the licensee is buying a home in which he will live the licensee is buying property for investment the licensee is selling a property which he owns all of the above

all of the above An active licensee must disclose in both advertising and the contract that he is licensed. An inactive licensee must disclose in the contract that he is licensed.

A licensee, who is guilty of an act that is grounds for disciplinary action, may: be subject to criminal prosecution have his/her license suspended or revoked be subject to civil prosecution all of the above

all of the above The real estate commission may suspend or revoke a license. Brokers may also be subjected to criminal prosecutions as a result of certain criminal acts.

Broker Green sold a home and the buyer gave him a $5,000 check as deposit. Green did the improper thing when he: endorsed it over to the seller upon financial acceptance of the offer held the check until all financing was completed in escrow cashed the check and gave the money to the seller when his acceptance was communicated to the buyer all of the above

all of the above Unless otherwise agreed by the buyer and seller, the earnest money must be deposited in the brokers trust account.

A real estate licensee is obligated to communicate to the seller

all oral and written offers, regardless of how worthy they may be in the broker's opinion.

Who can not prepare an addendum to the Contract to Buy and Sell Real Estate? buyer or seller employing broker's attorney attorney for buyer buyer''s broker

buyer''s broker Associate Brokers may only use forms prepared by the Real Estate Commission.

principal meridian runs

north and south

due on sale clause

if all or any part of the property or any interest in the property is sold or transferred without the lender's prior written consent, the lender may require immediate payment in full. allows the mortgagee to call due the outstanding loan balance plus accrued interest prevents another party from assuming the mortgage

If a Lead-Based Paint Disclosure form is not executed at the time of the sale of a dwelling built prior to 1978, the purchaser: may sue the seller for damages is not obligated under the terms of the contract is entitled to an inspection paid for by the seller may suffer damages as a result of caveat emptor

is not obligated under the terms of the contract Penalties for failure to comply with Federal Lead-Based Paint Disclosure Laws include treble damages, attorney fees, costs and a penalty up to $10,000 for each violation. A buyer is not obligated under the terms of a contract until the lead-based disclosure has been executed.

a property manager who is paid by commission or on a transactional basis must be

licensed as an active real estate broker

mandatory suspension

licensee has repaid the amount paid from the fund in full (plus interest)

intent of the parties

placing an article on or in real property is of primary insurance

Limited Liability Partnership (LLP)

A business entity that features protection from personal liability but with fewer legal restrictions compared with other business entities.

Prospectus

A document prepared by a developer of 20 or more new condominium units that summarizes some of the major points contained in the condominium documents.

Misrepresentation

A false or misleading statement of a material fact; concealment of a material fact.

broker license suspension or revocation

no disciplinary action is taken under against the sales associates and broker associates registered under that broker. they can no longer work for that broker, and DBPR places licenses under involuntary inactive status. sales associates and broker associates can seek new employment, and licenses will go back to active as soon as their new broker registers with DBPR

Sublease

A lessee leasing a property to a third party for a period of time less than the original lease (also referred to as subletting).

Cease to be in force

A licensee cannot perform real estate services because the associate is not authorized to perform real estate services that require a license, because the associate is not properly registered

voluntary relinquishment for permanent revocation

A licensee-respondent may choose to avoid a disciplinary hearing and relinquish the real estate license in lieu of discipline, permanently revoking the license.

Superior Lien

A lien that takes priority over all other liens.

Home Equity Loan

A mortgage secured by a personal residence. It provides a line of credit available for draws when needed by the homeowner. It is sometimes used as a home improvement loan.

Gross Income Multiplier (GIM)

A rule of thumb for estimating the market value of commercial and industrial properties; the ratio to convert annual income into market value.

construction lien

also called mechanics, materialmans, or laborers lien based on principle of law called unjust enrichment lien on property that has been improved by their supplies and or labor lien must be filed with clerk of circuit court no later than 90 days after the last supplies are delivered or the last labor is performed allows a construction lien filed after work is completed to become retroactive to the first delivery of material or first day of work effective for 1 year

A ______ _______ is defined as a contract that is wholly written and under seal (in writing and signed.

formal contract

telephone solicitation florida law

no solicitation calls registry calls restricted from 8am-9pm $10,000 fine per violation FSBO exception

mediation

non binding, informal, nonadversarial process intended to reach a negotiated settlement

conflicting demands

occur when the buyer and the seller make demands regarding the disbursing of escrowed property that are inconsistent and cannot be resolved broker must notify FREC within 15 business days demands were received

assignment

occurs when a lessee( tenant) assigns to another person all the leased property for the remainder of the lease

withdrawal by offeror

offeror may withdraw (revoke) the offer at any time until notice of the offeree's acceptance is received by the offeror or the offeror's designated agent

Sales associates can be stockholders in a brokerage corporation but may not be _________ or _________?

officers or directors

metes and bounds

oldest method of land description begins at an exact reference point called point of beginning (POB)

Under the rectangular survey system, the legal description of a particular land unit is based on one township line. one range. one meridian and one baseline. metes and bounds.

one meridian and one baseline.

A written office policy regarding brokerage relationships is a requirement of offices that are staffed by: six or more agents three or more agents two or more agents one or more agents

one or more agents Colorado statutes require all offices to have an office policy regarding agency.

unilateral contract

one party obligated

Farm Area

one specific portion of a city, where a broker and sales associate are experts in that particular portion

2 types of title insurance

owners policy lenders policy (mortgagee policy), transferable, assignable to new mortgagee

Periodic Cap

Limits the amount the interest rate of an adjustable-rate loan may increase at any one time (usually a year).

Health Ordinance

Local codes that regulate maintenance and sanitation of public spaces.

This approach is usually the most applicable method for appraising residential properties

Comparable sales approach

_________ has been defined to include anything or any service of Value paid, recieved or expected to be paid or recieved.

Compensation

7 protected classes

FRSH CRN familial status, race, sex, handicap status, color, religion, national origin NOT AGE

applicant who has been disbarred or guilty of offenses is not qualified for a real estate license unless

passage of time, good conduct and reputation, or other sufficient reasons cause the commission to believe granting the license will not endanger the interests and welfare of the general public.

In a deed, the warranty of quiet enjoyment pertains to

peaceful possession undisturbed by others' claims of title.

The price an ________ would pay, the the financial requirements and income tax situation? (#80)

Investor

material fact

piece of information that is relevant to a person making a decision that affects the value of the real property

deed restrictions

placed in a deed that affect the use of a parcel of real property restrictive covenants placed by an owner who has created a restriction on future owners of the parcel of real estate

Installment Sale

The seller receives the proceeds from the sale in periodic payments over time.

BPO

brokers price opinion. a written opinion of the value of real property

change of employer

10 days to notify the DBPR

Local government exercises its greatest effect on the real estate business by A) using zoning, taxation, and the planning process. B) providing financing where justified. C) creating tax shelters for those developing low-income housing. D) supervising contractors and their on-the-job performance.

A) using zoning, taxation, and the planning process.

A broker who changes the business address must notify the Commission of the address change within how many days? A)10 B)60 C)5 D)30

A)10

Which element is NOT essential in a valid real estate sale contract? A) A legal objective or purpose B) An earnest money deposit C) The vendor's signature D) Competent parties

B) An earnest money deposit Earnest money is not required to make the contract valid. However, it shows the buyer's intent to go through with the transaction.

contract for deed (land contract)

a financing device that is used when a buyer does not have sufficient cash to make a down payment that is acceptable to the seller the grantee is granted equitable title and takes possession of the property

Default

Failure to comply with the terms of an agreement or to meet an obligation when due.

Interstate

without a will

Intangible on new mortgages

$.002 per $1 of debt

sales associates and broker associates may only have

1 registered employer at any given time

A lease agreement has to be how long or its not enforceable?

1 year

Which of the following is not a Commission approved Deed of Trust: due on sale not due on sale/transfer creditworthy 1% increase

1% increase The ones the Commission has approved are: TD 72-8-10 Deed of Trust (Due on Transfer - Strict) TD73-8-10 Deed of Trust (Due on Transfer-Creditworthy) TD74-8-10 Deed of Trust (Assumable - Not due on transfer) The differences are principally what happens to the loan when the property is sold. "Due on Transfer - Strict" means the entire loan balance becomes due on sale. "Due on Transfer - Creditworthy" means the loan is assumable with lender approval. "Assumable - Not due on transfer" means the loan is assumable with no additional approvals required to another owner.

A "section" of land, as used in the government survey method, may be described as 56,340 square feet. 1,760 yards x l,760 yards. 160 square rods. 6 square miles.

1,760 yards x l,760 yards.

Broker Experience Requirements; A broker applicant can fulfill the experience requirement in one of three ways:

1. 24 months under a licensed real estate broker. 2. Held a sales associate license while working as a salaried employee of a governmental agencies performing the duties authorized in Chapter 475 for at least 24 months. 3. Held an active broker license in another state or foreign jurisdiction for at least 24 months.

A broker (and the broker's associates) working in a no brokerage relationship with the parties to a transaction, owe three duties to customers:

1. Account for all funds; 2. Deal honestly and fairly 3. Disclose all known facts that materially affect the value of residential real property and are not readily observable by the buyer.

What are single agent duties (9)?

1. Account for all funds; 2. Deal honestly and fairly; 3. Disclose all known facts that materially affect the value of residential real property and are not readily observable by the buyer; 4. Use all skill, care, and diligence; 5. Present all offers and counteroffers; 6. Confidentiality; 7. Obedience; 8. Loyalty; 9. Full disclosure

3 Components of Real Estate

1. Air 2. Surface 3. Subsurface

The powers and duties of the FREC fall into what three general categories?

1. Executive 2. Quasi-legislative 3. Quasi-judicial

Florida Real Estate Commission (FREC) member rules

1. Five professional licensed members - four licensed real estate brokers, active license for 5 years proceeding appointment - Broker or real estate associate who has an active license for two years proceeding appointment. 2. Two or are unlicensed or lay (consumer) 3. One must be 60+ 4. 4 year staggered terms, no more than 2 consecutive

The Executive powers of the FREC include?

1. Foster the education of applicants and licensees; 2. Adopt a seal; 3. Establish fees

The Executive powers of the FREC include?

1. Grant or deny applications for licensure; 2. Suspend or revoke licenses and impose administrative fines; 3. Makes determinations of violations.

A Florida Real Estate lisence is required when anyone performs a service is specified under F.S. 475 when all the following conditions are simultaneously present, unless that individual is otherwise exempt under the law:

1. Preforming a service of real estate 2. In the state of Florida 3. For another 4. For compensation

What are the key points of a transaction broker relationship (4)?

1. Presumed in all residential and nonresidential transactions 2. Limited representation to the buyer, a seller, or both the buyer and seller (in the same transaction within the same brokerage). 3. No fiduciary relationship with the buyer or seller 4. Parties are represented as customers

What are the four parts of Chapter 475?

1. Real estate brokerage 2. Real estate appraisers 3. Commercial Real Estate Lien Act 4. Commercial Real Estate Leasing Commission Lien Act

What are the three general categories of residential construction:

1. Speculative (spec) homes 2. Custom homes 3. Tract homes

What are the two important units under the Division of Service Operations?

1. The Customer Contact Center handles all incoming telephone, postal, and email inquiries from licensees and the general public. 2. The Central Intake Unit processes all the license applications and licensee fees as well as the issuance of all licenses and licensee renewal notifications for the DBPR.

The Legislature believes professions under the DBPR should be regulated when?

1. The regulated practice can harm the public, the potential harm is recognizable, and the danger outweighs any anti-competitive impact that might result from regulation; 2. The public is not adequately protected by other state statues, local ordinances, or federal laws; or 3. Less restrictive means of regulation are not available.

A member of the public may select from one of 3 options when working with a broker, which are?

1. Transaction broker 2. Single Agency 3. No Brokerage relationship

3 duties required in all brokerage relationships

1. account for all funds entrusted to the licensee 2. deal honestly and fairly 3. disclose all known facts that materially affect the value of the residential real property that are not readily observable to the buyer

9 duties a real estate licensee owes to a buyer/seller

1. deal fairly and honestly 2. loyalty 3. confidentiality 4. obedience 5. full disclosure 6. account for funds 7. skill, care, and diligence in the transaction 8. present all offers and counteroffers in a timely manner 9. disclose all known facts that materially affect the value of the real property and are not readily observable to the buyer

The Four methods used to legally describe property?

1. monuments method 2. metes & bouds methods 3. retangular method 4. plat method

election of rights

1. not dispute the allegations of fact and request informal hearing (FREC) 2. dispute the allegations of fact and request a formal hearing 3. not dispute the allegations of facts and waive the right to be heard

types of liens

1. property tax lien 2. special assessment lien 3. federal estate tax lien

exceptions to disclosure requirements

1. when the licensee knows that a single agent or transaction broker represents a prospective seller/buyer 2. at a bona fide open house that does not involve eliciting confidential info; the execution of contractual offer or an agreement, negotiations concerning price, terms, or conditions of a potential sale 3. during unanticipated casual encounter between licensee and prospective buyer/seller that do not involve eliciting info; the execution of a contractual offer or an agreement for representation or negotiations concerning price, terms, or conditions of a potential sale 4. when responding to general factual questions from a prospective seller/buyer concerning properties that have been advertised for sale 5. situations in which a licensee's communications with a prospective buyer/seller are limited to providing either written or oral communications that is genereal, factual info about the qualifications, background, and services of the licensee or the licensee's brokerage firm 6. when an owner is selling new residential units built by the owner and the circumstances or setting should reasonably inform the potential buyer that the owners employee or single agent is acting on behalf of the owner, whether because of the location of the sales office or because of office signage, signage or place cards or ID badges worn by the owners employee or single agent

A broker who changes business address must notify the Commission of the address change within how many days?

licensees must notify FREC with a change of mailing address within

10 days

A prospective tenant purchased a rental list from a broker and then rented a duplex that the list indicated included all utilities. The tenant discovered that only water was included in the rent and notified the broker within the legislated time limit. The tenant is entitled to

100 percent of the fee paid.

A rental agreement for less than how many months does not need to be in writing to be enforceable? 1 month 6 months 9 months 12 months

12 months The Statute of Frauds is the law that governs whether or not a real estate contract of any kind must be in writing. Although it is never advisable to enter into a real estate lease agreement with an oral contract, the law does specify that it is is enforceable if the agreement is for less than 12 months. Having said this, be aware that real estate brokers are also bound by real estate commission rules and as such are required to use commission approved forms, therefore we do not have the authority to comsumate an oral lease. The buyer and seller can, their attorneys can, the licensee cannot. More info about the Statute of Frauds: Statute of Frauds. To prevent fraud through perjury, the law requires that the parties' agreement evidencing their mutual assent be in writing in certain cases. As to real estate in Colorado, § 38-10-108, C.R.S., provides: Every contract for the leasing for a longer period than one year or for the sale of any lands or any interest in lands is void unless the contract or some note or memorandum thereof expressing the consideration is in writing and subscribed by the party by whom the lease or sale is to be made.

The continuing education requirement consists of ______ hours

The selling landlord has collected the September rents from all five tenants: two at $845 and three at $925. Determine the proration to be allowed the buyer when the sale is closed on September 19. 1965 1637 1786 1690

1786 2 x $845 = $1690 3 x $925 = $2775 $4465 total rent divided by 30 days = $148.8333 PER DAY x 12 (days the buyer owns the property) = $1786

How many acres are in the following description, "E 1/2 of SW 1/4 of NE 1/4 of Section 23?" 10 acres 20 acres 40 acres 160 acres

20 acres

How would the section directly south of section 16 be numbered? 15 17 21 22

A developer purchased three oceanfront lots, each measuring 75 by 110 feet, for $20 per square foot. The developer later sold the lots for $200,000 each. What was the developer's percentage of profit on the sale of the three lots? (Round to nearest percent.)

21 PERCENT The answer is 21 PERCENT. The solution is: 75 feet × 110 feet = 8,250 square feet; 8,250 × $20 per square foot = $165,000 cost per lot; $200,000 sale price - $165,000 = $35,000 amount made per lot; $35,000 ÷ $165,000 = .2121212 or 21 percent.

discount rate

2nd most commonly used method of controlling the supply of money is changing the discount rate. discount rate is the interest rate charged member banks for borrowing money from the Fed. if the rate is increased, member banks have to pay a higher interest rate for the money borrowed from their district bank

Borrowers are allowed a recission period (days to back out) which is ____ days, on the refinance (home Equity loan) of a principal residence.

A township contains 6 square miles. 18 sections. 36 sections. 640 acres.

36 sections.

Written Contracts, a contract wholly in writting may be enforcedif action is brought within _____ yrs

How many acres are contained in the S 1/2 of the SE 1/4 of the NW 1/4 of the NE 1/4 of Section 29? 5 acres 10 acres 12-1/2 acres 15 acres

5 acres

multifamily housing

5 or more units multifamily dwellings of 4 or fewer units if the owner does not reside in any of the units

How long must Brokers retain Disclosure Documents?

5 years in a secured location

What is the acreage in the parcel of land described as "SE 1/4 of NW 1/4 and N 1/2 of SW 1/4 of NE 1/4 of Section 24?" 50 acres 60 acres 70 acres 80 acres

60 acres

a florida real estate licensee who moves out of state and becomes a non florida resident must notify the commission within

60 days

How many hours of postlicense education are required to renew a brokers license?

60 hours

Acres in a Section

640

Which of the following contains the smallest parcel of land? 640 acres 9 square miles 1/2 of a township 36 sections

640 acres

voidable contract

A contract that because of the manner or method in which it was brought about, one of the parties is allowed to avoid contractual duties.

Unenforceable contract

A contract that was valid when made but either cannot be proved or will not be upheld by a court.

Declatory Judgement

A course of action declaring rights claimed under a contract or statue intended to prevent loss or to guide performance by the party or parties affected.

Escrow disbursement order (EDO)

A course of action for determining the disposition of a contested deposit.

Interpleader

A course of action when two contesting parties cannot reach an arbitrated agreement; A legal proceeding whereby the broker, having no financial interest in the disputed funds, deposits with the court the disputed escrow deposit so that the court can determine who is the rightful claimant.

Seisin

A covenant in a deed that warrants that the grantor (seller) holds the property by virtue of a fee simple title and has a complete right to dispose of same. Also called a seizin clause.

How is the prepaid rent entered?

A credit to the buyer and a debit to the seller.

Building Permit

A document issued after the local government has reviewed the architectural and engineering drawings and signed off on the energy calculations.

Ginnie Mae

A federal agency that is part of the Department of Housing and Urban Development (HUD). Ginnie Mae plays an important role in achieving the HUD's goal of providing low-cost mortgage credit to traditionally undeserved sectors of the housing market.

Negative Amortization

A financing arrangement whereby monthly mortgage payments are less than required to pay both interest and principal. The unpaid amount is added to the loan balance.

Right of Survivorship

A legal concept whereby the surviving owners of a joint interest in real property are entitled to the interest formerly owned by one or more deceased owners without the need for probate proceedings.

Assignment of mortgage

A legal instrument stating that the mortgagee assigns (transfers) the mortgage and promissory note to the purchaser.

foreclosure

A legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note or default of other terms in the note.

Enforceable Contract

A legally binding contract that the law will recognize.

mortgagee

A lender who holds a mortgage on specific property as security for the money loaned to the borrower.

Amortized mortgage

A loan characterized by payment of a debt by regular installment payments.

Depreciation

A loss in value for any reason, a deduction for tax purposes.

Depreciation

A loss in value for any reason; a deduction for tax purposes.

Highest and Best Use

A principle of value that focuses on the most profitable legal use to which a property can be put.

Building Inspection

A procedure conducted during construction to check that workmanship conforms to building code.

Expungement

A process by which the record of a criminal conviction is destroyed or sealed after expiration of time. Expungement is not automatic. Attorneys charge extra for this process, and applicants should confirm that the matter no longer apears on ones criminal history.

Good Consideration

A promise that cannot be measured in terms of money, such as love and affection.

legal description

A series of boundary lines on the earth's surface.

Formal Hearing

A session in which testimony and arguments are presented, especially before an official.

Condominium documents

A set of papers describing the condominium and the association.

Balloon Payment

A single, large payment made at maturity of a partially amortized mortgage to pay off the debt in full.

Secondary Mortgage Market

A source for the purchase and sale of existing mortgages.

Primary Mortgage Market

A source for the purchase of a mortgage loan by a borrower.

check

A square measuring 24 miles on each side and representing the largest unit of measure in the government survey system

Township

A square tract of land measuring six miles on each side and including 36 sections (formed by the crossing of range and township lines).

Comprehensive Plan

A statement of policies for the future physical development of an area (e.g., city, county, region). Also called a master plan.

Buffer Zone

A strip of land separating one land use from another.

Chain of Title

A successive listing of all previous holders of title (owners) back to an acceptable starting point.

deposit

A sum of money placed or kept in a bank account, usually to gain interest.

Earnest Money

A type of money that a broker may handle for others in the ordinary course of business; also called a good-faith deposit or binder deposit.

consent to transition

A written agreement to gain the principal's permission to a change in brokerage relationship.

Which of the following can terminate an agency relationship? Mutual rescission Incapacity of either party Expiration of subject matter All of the above

All of the above An agency relationship may be terminated by mutual agreement; revocation by principal; renunciation by agent; expiration of its term; extinction of its subject matter; death or incapacity of either principal or agent.

Which does the buyer have to disclose to the seller when using the Licensee Buyout Addendum? That the Buyer stands to make a profit That the Buyer is exposed to possible losses and expenses That the property may be immediately sold by the Buyer All of the above are required disclosures

All of the above are required disclosures RESALE, PROFIT/LOSS, EXPENSES. Seller acknowledges that in entering into the Contract, Buyer is exposed to possible losses and expenses. Seller acknowledges that following Closing, the Property may be held by Buyer for a period of time or may be resold immediately, and any profit or loss shall be solely that of Buyer. Seller further acknowledges that there is a chance for profit to Buyer and that certain expenses may accrue to Buyer. Such expenses include costs and expenses of Closing, holding, and reselling the Property. Buyer may incur additional expenses, or some anticipated expenses may vary, or may not be incurred. In any event, after Closing, Buyer will absorb the loss or receive the profit from any sale and ownership of the Property.

Which statement is FALSE regarding a corporation for profit that is doing business as a real estate broker?

All stockholders must be registered with the DBPR as inactive brokers. Stockholders are not required to register with the Commission.

Laissez-faire

Allow to act; noninterference by government in trade, industry, and individual action generally.

An Exclusive Agency Addendum to the Exclusive Right-To-Sell Listing Contract: Engages the licensee as the Exclusive Agent for the property Engages the licensee as the Exclusive Agent who will receive a commission upon any sale of the property Allows a second broker to represent the seller under dual agency Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer

Allows the seller to not pay a commission to the listing broker if the seller should procure a buyer Exclusive Agency is an addendum you add to a listing contract. In it, the seller reserves the right to not to pay a commission to an agent if the seller finds the buyer. Exclusive agency weakens the desire of any agent to list a home. Its acceptance by any agent varies greatly. Many agents will find it acceptable if you have a particular buyer in mind and the property is desirable. They will sign the listing, with the seller's understanding that they will but not market the property until the situation with the specific buyer resolves itself. The idea is to lock up the listing and hope the buyer falls through. Not too many agents who are savvy will accept an Exclusive Agency if the seller does not have a buyer in mind and simply wants to market the property in competition with their own agent in the hopes of avoiding a commission.

Fair Housing Act

An act contained in Title VIII of the Civil Rights Act of 1968 that created protected classes of people and prohibits discrimination when selling or renting residential property when based on race, color, religion, sex, national origin, familial status, or handicap status.

Parol Contract

An agreement that is not in writing.

Tier

An east-west row of townships (as used in the government survey method of land description).

Principle of Substitution

An economic law of value: no prudent buyer will pay more for a property than the cost of an equally desirable replacement property.

Open Listing

An employment contract given to any number of brokers who work simultaneously to sell the owner's property.

Exclusive-right-of-sale listing

An employment contract given to one real estate broker as the sole agent for the sale of an owner's property, with the commission going to that broker regardless of who actually sells the property during the employment contract period.

Buyer Brokerage Agreement

An employment contract with a purchaser.

Undivided Interest

An interest in the entire property, rather than ownership of a particular part of the property.

Tax Shelter

An investment that shields items of income or gain from payment of income taxes; a term used to describe some tax advantages of owning real property (or other investments), including postponement or even elimination of certain taxes.

Fixture

An object that was once considered personal property but has become real property because of attachment to, or use in, improvements to real property.

A contract was terminated when the buyer and seller were unable to resolve inspection issues. The buyer had included the buyer's inspection report as part of the inspection notice, which included information about a number of small material items. The seller of the property has what if any obligation for disclosing the issues noted in the report? No obligation to disclose because the contract was terminated An obligation to disclose only those items which are not latent defects No obligation to disclose if the total amount of items is less than $5,000 An obligation to fully disclose all material items the buyer found which the seller now has knowledge of

An obligation to fully disclose all material items the buyer found which the seller now has knowledge of

Certificate of Occupancy

An occupancy permit issued by the local government after construction is completed and the final inspection is approved.

Point of contact information

Any means by which to contact the brokerage firm or individual licensee including mailing address(es), physical street address(es), e-mail address(es), telephone number(s), or facsimile telephone number(s).

Mortgage Loan Originator (MLO)

Anyone who takes residential mortgage loan applications or offers to negotiate the terms of residential mortgage loan applications for compensation must be licensed as an MLO

Fee Waiver for Military Personnel and Their Spouses

Applies to all types of professional licenses issued by the DBPR. Waives the initial licensing fee. Applicants may also be charged the Unlicensed Activity Fee and Real Estate Recovery Fund fee. Fee waiver does not include examination fee and fingerprinting processing fee.

The owner decides to make 1 payment for an entire years property taxes. That payment must be made by: within 30 days of receiving the tax bill March 1 April 30 June 30

April 30

In a new loan closing, sometimes a lender may make some of the payouts, such as recording fees, survey and reserve taxes before the closing. When these amounts are taken out of the loan, the remaining balance is the amount sent to the closing table and is called the Net Loan Proceeds. The Net Loan Proceeds are entered on the settlement worksheet: As a debit to the broker, single entry As a credit to the broker, single entry As a debit to the buyer, credit to the broker As a credit to the buyer, debit to the broker

As a debit to the broker, single entry Net Loan Proceeds: Debit broker single entry. Here is the play: most often seen with new loans (and always on the State Exam). Net Loan Proceeds is a situation when a lender is making a loan for x and part of that loan is covering expenses that the lender is owed. In short - the lender is lending money to the buyer to cover expenses that are going to be paid to the lender. The lender does not want to send the entire loan amount to the closing and wait for a check back to cover the money they are owed, they instead take their money out of the loan up front and send the remaining balance called Net Loan Proceeds to the closer. To show this on a settlement sheet, the closer enters a series of single entries i.e. there not a debit/credit on every line. Instead there is one big credit all by itself on a line showing the total loan amount the buyer is getting and then two or more debits all by themselves on other lines adding up to the total loan amount. Example - a lender is making a loan for $100,000 and they are taking their 1% origination fee ($1,000) out of the loan. They send the net loan proceeds $99,000 (remember they are keeping their $1000) to the closing agent. First up let's handle the credit, enter the entire loan amount on the sheet (put a Credit Buyer $100,000 all by itself on the loan line). Then you need to show the deposit of $99,000 into the escrow account (Single entry all by itself on line Net Loan Proceeds, Debit Broker $99,000). Lastly we need to account as a debit the $1,000 the lender held back (single entry all by itself on the Origination Fee line, Debit Buyer $1000). Tah Dah! You have $100,000 of Debits and $100,000 of credits and everything is in balance. For more info and examples of this check out the new loan examples in the chapter of the real estate manual on Closings

Taxable Value

Assessed value - homestead exemptions = taxable value

You are appraising a five-year-old, single-family home. The livable area is 60 feet by 50 feet. The garage is 24 feet by 20 feet. According to figures obtained from a cost-estimating service, the base construction cost per square foot of livable area is $103 and $92 per square foot for the garage. Calculate the reproduction cost new of the structure. A) $303,720 B) $353,160 C) $358,440 D) $345,440

B) $353,160 Reproduction - duplicate Replacement - same function / different materials 60x50=3000x103=309000 24x20=480x92=44160 309000+44160=353160

How much personal money may a broker place in a property management escrow account? A) $1,000 B) $5,000 C) None D) $200

B) $5,000 A broker is allowed to place in a sales escrow account up to $1,000 of personal or brokerage funds and up to $5,000 in a property management escrow account. Sales escrow - $1000 Property Management escrow acct - $5000 Combo - $5000

Eligible homestead owners may transfer up to what amount of their Save Our Homes (SOH) benefit from their previous homestead to a new homestead? A) $225,000 B) $500,000 C) $100,000 D) $50,000

B) $500,000 To be eligible, the homeowner must establish a homestead exemption for the new home within 2 tax years of January 1 of the last qualified homestead exemption (not two years after the sale). In effect, only one tax year with no homestead exemption is allowed to transfer the SOH benefit.

Within what period of time must landlords of five or more units notify tenants in writing of the method used to hold security deposits? A) 15 days B) 30 days C) 21 days D) 3 business days

B) 30 days Landlords of five or more units must notify the tenant in writing within 30 days telling them which method is used to hold the tenant's deposit: (1) non-interest-bearing Florida bank, (2) interest-bearing Florida bank, or (3) posted bond.

For application and licensing purposes, a Florida resident is a person who has resided in Florida continuously in A) a Florida residence for two months. B) a recreational vehicle for four months. C) a Florida hotel for six weeks. D) an apartment in Florida for four weeks.

B) a recreational vehicle for four months. - the rule is 4 months or more in the state regardless of how temporary the living situation was.

Individuals who solicit mortgage loans, accept applications for mortgage loans, and negotiate the terms of new mortgage loans on behalf of a borrower are called mortgage A) agents. B) loan originators. C) finders. D) lenders.

B) loan originators. mortgage loan originator (MLO) is a person who holds a state MLO license for the purpose of soliciting mortgage loans, accepting mortgage loan applications, and negotiating the terms or conditions of new or existing mortgage loans on behalf of a borrower or a lender. MLOs process mortgage loan applications and negotiate the sale of existing mortgage loans to noninstitutional investors for compensation.

Which action is NOT a requirement under the TILA-RESPA Integrated Disclosure Rule (TRID)? A) Give mortgage applicants the loan estimate within three business days of receiving the loan application B) Give mortgage applicants a list of competing lenders so they can comparison shop for the best rate C) Require that mortgage applicants receive the information booklet, Your Home Loan Toolkit, within three business days of loan application D) Give mortgage applicants the Closing Disclosure at least three business days before closing

B) Give mortgage applicants a list of competing lenders so they can comparison shop for the best rate loan estimate and "your home loan tool kit" booklet within three days of loan application, and the closing disclosure at least three days before closing are 3 of the biggest factors of TRID 3 - 3 - 3

The owner of a hardware store has filed for bankruptcy and the real estate is up for sale. The money that the property will bring at auction is BEST described as which type of value? A) Salvage value B) Liquidation value C) Going-concern value D) Investment value

B) Liquidation value Liquidation value is the value associated with a rapid sale. (foreclosure sale or bankruptcy auction) salvage value is the estimated amount for which improvements can be sold at the end of a structure's useful life (scrap value) Going-concern value is the value of an income-producing property or business characterized by a significant operating history. (involves goodwill and tangible assets of company) Investment value is the price an investor would pay, given the investor's own financing requirements and income tax situation. This type of value is personal to a particular investor. other types of value: - Assessed value is the value used as a basis for property taxation. - Insurance value - estimate of the amount of money required to replace a structure in the event of some catastrophic event such as fire. - 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 under certain guidelines published by Fannie Mae and Freddie Mac

B)21% money spent: 75ftx110ft=8250ftx3lots=24750ftx20$=495000 profit from sale 200000x3=600000-495000=105000 profit 105000/495000=.212121 = 21%

If you have located a township numbered T2S, R4E, the township due south of that township is A) T2S, R3E. B) T3S, R4E. C) T2N, R1E. D) T2S, R5E.

B)T3S, R4E. draw it out - range is n&s, townships are e&w, T2S is 2nd block down (south) from the T base, met by r4E is left (east) of center on the 4th block. one skip south from there brings you to T3S, R4E

If someone advertises a home for sale for a certain price and when you arrive to look at the property and its not what they advertised this is called?

Bait and Switch

If a mortgage loan payment consists of interest only, the final payment the final payment which includes the full amount borrowed is called a?

Ballon Payment

A neighbor who starts rumors about a neighborhood to persuade owners to sell is? (#52)

Blockbusting

Which of the following is the ONLY section which must be a office policy manual? Human Resource Benefits Commission Plan Backup Contracts Brokerage Relationships Offered to Public

Brokerage Relationships Offered to Public here are only three sections which are mandatory, whereas there are a number that are suggested. The mandatory ones are: written brokerage relationship policy, a policy to protect confidential information and designation brokerage relationships. The suggested ones are the long list below. From the real estate manual: Office Policy Manuals Commission Rules E-29 through E-32 require brokers to demonstrate reasonable supervision over all licensees and non-licensed employees, including but not limited to secretaries, bookkeepers, and personal assistants of licensed employees. To comply with these supervision Rules, brokers who employ others are required to establish an office policy manual. This is in addition to the requirements for a written brokerage relationship policy (Rule E-39), a policy to protect confidential information (Rule E-39), and designation brokerage relationships (Rule E-38), whether performing sales or management activities. The following topical guidelines (as applicable) are suggested for office policy manuals. Sales Transactions • Parties responsible for delegated duties/agreements; • Preparation and review of contracts prior to closing; • Handling earnest money deposits, disputes, and releases; • Backup contracts; • Closing documents and closing instructions for the broker's agent; • Maintenance/custody of contract files; • Escrow records and written procedures for handling business operations; • Fair housing/affirmative action marketing; • Staff training - dissemination of information, staff meetings; • Use of personal assistants; • Guaranteed buyouts; • Investor purchases; • Non-qualifying assumptions and owner financing; • Licensee's purchase and sale of property; • Listing procedures and release of listings; • Rental occupancy before closing; • Computer system - data control, backup, and physical security; and • Internal audit and supervisory reviews of business operations. Management Activity • Operating policies and required disclosures; • Use of unlicensed on-site managers; • Administration of rentals and leasing activity; • Items under "Sales" above, where applicable; • Supervision of accounting services, records, and reporting to others; • Cash handling, collection of delinquent rents and deposits; • Ownership/management of rental properties by agents; • Administration and policies for in-house services; • Maintenance of records and business reports by any outside service; • Advances of funds on behalf of clients/customers; • Cancellation of agreements and termination of sevices; • Related services performed by affiliated entities; • Backup and disaster recovery plan for loss of business records; • Eviction and legal action; and • Return of security and advance deposits.

According to the Rule E-48, brokers are allowed to file a lien, a lis pendens or record a listing contract to secure payment of a commission under what circumstances? Only with the written permission of the seller. Only if the amount is under $2,000, and then must file in Small Claims court. Only if there is a mechanic's lien already recorded, since that lien has already clouded title. Brokers may never cause the title to become clouded if they are not principals in the transaction

Brokers may never cause the title to become clouded if they are not principals in the transaction.

Immediately

Brokers must place trust funds no later than the end of the third business day following the receipt (by the broker or an agent of the broker) of the item to be deposited.

The furnace breaks down before closing, but after the buyer has taken possession. Who is responsible for the cost of replacement? Seller Buyer depends on how the appropriate box is checked in the Contract to Buy and Sell not addressed by the Contract to Buy and Sell

Buyer The buyer is responsible for such costs after possession, even if possession is before closing. BTW it is really common for students with contract questions to hunt throughout the courses for an answer. Whereas the answer is as far away as looking at the contract itself. Also, it is always a bad idea to let a buyer move into a property prior to close. Savvy agents avoid this at all costs. Nothing good ever happens when this situation occurs. First up, there is a really good chance the buyer will notice something about the house they do not like, which can throw a monkey wrench into the closing process. Lastly, what happens if the buyer moves in and then does not qualify for a loan? You could have an eviction proceeding on your hands. From the Contract to Buy and Sell Real Estate: Damage, Inclusions and Services. Should any Inclusion or service (including utilities and communication services), system, component or fixture of the Property (collectively Service), e.g., heating or plumbing, fail or be damaged between the date of this Contract and Closing or possession, whichever is earlier, then Seller is liable for the repair or replacement of such Inclusion or Service with a unit of similar size, age and quality, or an equivalent credit, but only to the extent that the maintenance or replacement of such Inclusion or Service is not the responsibility of the Association, if any, less any insurance proceeds received by Buyer covering such repair or replacement. If the failed or damaged Inclusion or Service is not repaired or replaced on or before Closing or possession, whichever is earlier, Buyer has the Right to Terminate under § on or before Closing Date (§) , or, at the option of Buyer, Buyer is entitled to a credit at Closing for the repair or replacement of such Inclusion or Service. Such credit must not exceed the Purchase Price. If Buyer receives such a credit, Seller's right for any claim against the Association, if any, will survive Closing. Seller and Buyer are aware of the existence of pre-owned home warranty programs that may be purchased and may cover the repair or replacement of such Inclusions.

What is a strip of land separating one land use from another?

Buffer Zone

Who pays the Colorado Use Tax on the transfer of furniture, personal property, equipment: Buyer Seller Split equally between buyer and seller Seller''s broker

Buyer The Colorado Use Tax, (39-26-Part 2, C.R.S.) is a form of sales tax, payable on the transfer of furniture, equipment, etc. The buyer is obligated to pay this tax by statute. The broker has the duty to inform the buyer of this obligation.

According to the Contract to Buy and Sell Real Estate earnest money is held on behalf of: Seller Buyer Buyer and Seller Seller and Broker

Buyer and Seller As per the contract to buy and sell real estate: Earnest Money. The Earnest Money set forth in this section, in the form of _________________________________, is part payment of the Purchase Price and shall be payable to and held by _________________________________________________ (Earnest Money Holder), in its trust account, on behalf of both Seller and Buyer.

An agent and buyer enter into an Exclusive Right to Buy Contract, the Broker must be a buyer's agent Buyer may have agreements with several brokers The broker is bound to work with one buyer at a time Buyer is bound to work with only one broker during the term of the contract

Buyer is bound to work with only one broker during the term of the contract The buyer agrees to only work with one broker with the Exclusive Right to Buy Contract

John Bargas of Buywell Realty wants to place a listing in the phone book. At a minimum he must list: John Bargas, Buywell Realty John Bargas Buywell Realty John Bargas, Buywell Realty, Each Branch Independently Owned and Operated

Buywell Realty e minimum is the employing broker's name (the firm, not the person) Chapter 2 - CREC Manual Rule E-8. Advertising "A real estate licensee who performs any act requiring a license, including advertising services or advertising property belonging to another, shall do so in the name of the employing broker;...."

Which individual is exempt from the continuing education requirement? A) Out-of-state Florida licensee B) Real estate licensee who holds a voluntary inactive license C) Real estate licensee who is also a Florida-licensed attorney D) Real estate licensee who earned a four-year degree or higher in real estate

C) Real estate licensee who is also a Florida-licensed attorney Pre-license Course I Pre-license Course II Post License Continuing Education 4-year or higher real estate degree - Exempt, Exempt Exempt, Not exempt RE BA+ is exempt from all coursework and post license, but still must pass exams and do continuing edu. Florida-licensed attorney - Exempt, Not exempt, Not exempt, Exempt Lawyer exempt from course 1 and the continuing edu, but must be active FL Bar, and pass all exams.

Which statement concerning characteristics of the real estate market is FALSE? A) Land is indestructible. B) Real estate is immobile. C) The real estate market is organized and controlled centrally. D) The market is slow to respond to changes in supply and demand.

C) The real estate market is organized and controlled centrally. Land IS indestructible. Real estate IS immobile. The market IS slow to respond to changes in supply and demand. Government controls influence the real estate market through zoning, building codes, taxes, etc.

A real estate company represents a motel owner who wishes to list one of his motels for sale. The owner has told the listing agent that he does not want to sell the motel to any racial minorities. Which statement is TRUE? A) Because this is not a sale of a residential dwelling under the Fair Housing Act, the listing agent may honor the owner's instructions. B) The listing agent may not refuse to show or sell the motel to a minority buyer; however, the owner may refuse to sell to certain individuals if he sells the property "for sale by owner." C) To refuse to sell or lease any real property based on a party's race is a violation of the federal Civil Rights Act of 1866. D) It is a violation of the Fair Housing Act to abide by the owner's wishes.

C) To refuse to sell or lease any real property based on a party's race is a violation of the federal Civil Rights Act of 1866. The Civil Rights Act of 1866 prohibits all racial discrimination all the time.

A sales associate who is employed by an owner-developer who owns properties in the name of various entities may be issued A) multiple licenses. B) a commercial license. C) a group license. D) a branch office license.

C) a group license. group license is a right granted a sales associate or broker associate to work various properties owned by affiliated entities under one owner developer. Multiple licenses are issued to a broker who qualifies as the broker for more than one business entity. Sales associates and broker associates may not hold multiple licenses. commercial license is not in the book, and branch office license is associated with registering a branch office.

A provision in all mortgages that allows the delinquent mortgagor to avoid foreclosure by paying all the back mortgage payments, late penalties, and costs of collection up until the time of foreclosure sale is the A) due-on-sale clause. B) acceleration clause. C) equity of redemption. D) defeasance clause.

C) equity of redemption due-on-sale - Upon sale (alienation) of property by the borrower, loan is due immediately and payable to lender Acceleration - Upon default by the borrower, accelerates the entire debt due and payable to lender Defeasance - title theory, requires lender to convey legal title to borrower once debt is repaid; lien theory, requires lender to release mortgage lien when the debt is repaid (Borrower defeats the mortgage)

A buyer or seller must be given a brokerage relationship disclosure for which transaction? A) Purchaser of 15 acres of land zoned for 15 residential homes B) Purchaser of an auctioned residential property C) Purchaser of a single-family home working with a single agent buyer's broker D) Owner who lists a 10-unit town house property

C) Purchaser of a single-family home working with a single agent buyer's broker written disclosures are required only for residential sale transactions when the brokerage firm acts in the capacity of a single agent or in a no brokerage relationship. Written disclosures are not required when the brokerage firm acts in the capacity of transaction broker because this relationship is presumed under Florida law. Residential sale transactions are defined as: ■ improved residential property of four or fewer units; ■ unimproved residential property zoned for four or fewer units; and ■ agricultural property of 10 or fewer acres. Brokerage relationship disclosure requirements do not apply to transactions involving nonresidential real estate, business opportunities, and lease agreements (see the following text box). Furthermore, brokerage relationship disclosure documents are not required for the auction or appraisal of real estate. TYPES OF TRANSACTIONS THAT DO NOT REQUIRE BROKERAGE RELATIONSHIP DISCLOSURES ■ Nonresidential transactions ■ Rent or lease agreements (except when there is an option to purchase residential property) ■ Business opportunities (except for property with four or fewer residential units) ■ Auctions ■ Appraisals

An investor wanted to build a motel. A broker showed him three choice sites zoned hotel-motel. The investor promised to decide on a site in three weeks, so the broker took a two-week vacation. When the broker returned, the investor bought one of these sites. The broker sold the site, not knowing that the zoning on that site had been changed to industrial. Which is correct? A)The property owner is guilty of fraud. B)The broker is guilty of fraud. C)The broker is guilty of culpable negligence. D)The broker is not guilty of wrongdoing.

C)The broker is guilty of culpable negligence. Culpable negligence involves negligent conduct that, while not intentional, involves a disregard of the consequences likely to result for one's actions. Brokers may be charged with culpable negligence if they do not give ordinary, careful attention to their brokerage and do not exercise reasonable control over the brokerage's agents.

The original law requiring that the annual percentage rate (APR) be disclosed to consumers was the A) Florida "Little FTC Act." B) Equal Credit Opportunity Act. C) Truth in Lending Act. D) Real Estate Settlement Procedures Act.

C. Truth in Lending Act (TILA)

A Real Estate appraiser's fee for professional service is based on: a. a percentage of the property's gross income b. a percentage of the fair market value c. the time and difficulty of the appraisal d. a percentage of property's sales

C. the time and difficulty of the appraisal

a Value estimated based on resent sales of similar properties in the same neighborhood, not an appraisal

CMA -Comparative Market Analysis...

trust funds

Cash, checks, money orders, and items that can be converted into cash, such as deeds and personal property, that a person (broker) holds in trust for another person.

Specific Lien

Claims that affect only the property designated in the lien instruments or agreements.

Which statement does NOT describe a planned unit development?

Clustering homes on smaller lots results in higher overall density of dwelling units compared with conventional development. Clustering results in the same overall density as in a conventional development. The other three descriptions apply to planned unit developments.

Which does NOT fall under Rule F? Contract to Buy/Sell (Commercial) Contract to Buy/Sell (Land) Deed of Trust Contract to purchase newly constructed home with warranties.

Contract to purchase newly constructed home with warranties. This is an actual question from the licensing exam. Rule F is the rule under which all approved contracts and the rules governing their use fall. To answer this question requires a knowledge of the contracts that are approved and those which are not. They are listed in the Printout section of our website. The non-approved contract in this list is the "contract to purchase newly constructed homes with warranties". New home builders are exempt from the rules established under the Conway-Bogues court decision. As such they are not required to use approved contracts and generally choose to use purchase contracts they create. Some students may wish to point out that some small new builders may choose to use the the approved purchase contract and add warranty info. This is true. However, please read the first sentence of this explanation again. We want you to be prepared to answer this question should you see it on the State exam.

What are the max TOR and HER ratios for Conventional, FHA, and VA loans?

Conventional - 28% HER; 36% TOR FHA - 31% HER; 43% TOR VA - 41% TOR; no HER

What does not need to register as an Real Estate Broker? (#84)

Corporation Sole (church)

How much will the Real Estate Recovery Fund pay out?

Cover all court costs up to $50,000

The documentary fee appears on a closing statement as a: Credit to the broker Credit to the seller Credit to the buyer Debit to the broker

Credit to the broker The documentary fee is collected from the buyer by the Title Company (broker) and is sent to the county assessor to assist in determining the true value of the property. Debit Buyer Credit Broker "On all documents granting or conveying title to real property (CRS. 39-13-102) $0.01 per $100 consideration if consideration is greater than $500" This answer to this question refers to the 6 column worksheet which pre-personal computer days was used to calculate the numbers for a closing. The broker engages the title company to act as scrivener and conduct the closing which includes deposits and withdraws into and out of the closing escrow account. Although the escrow account used for closings is managed by the title company closer, legally the listing broker is still responsible for it. Therefore, on the 6 column settlement worksheet the columns pertaining to the closing escrow account are labeled "Broker Credit" and "Broker Debit." Deposits into the closing escrow account are placed into the Broker Debit Column and withdrawals are listed in the Broker Credit column. Wait a minute! How can a deposit be a debit? Unfortunately that is how it works. The 6 column settlement worksheet twists slightly the traditional rules of accounting so that the person responsible for the closing escrow account knows what checks to write and deposits to make. S/he does this by dedicating the "Broker Debit" column to deposits and the "Broker Credit" column to withdrawals. This way, for example, if the seller owes the County Treasurer for back taxes, the closer can take the money from the Seller by indicating Debit Seller and have a reminder to write a check to the County Treasurer by placing the corresponding credit into the Broker Credit column. When all is said and done accounting gods are happy as all debits and credits are in balance.

Which secondary market participant is a guarantor of government-insured and government-guaranteed loans? A) Fannie Mae B) Freddie Mac C) HUD D) Ginnie Mae

D) Ginnie Mae Ginnie Mae exists to solely guarantee the security of federally insured loans and federally guaranteed loans.

An appraiser has assigned the following weights to three adjusted sale prices: Comparable 1: $322,500, 40% weight Comparable 2: $319,000, 35% weight Comparable 3: $312,000, 25% weight What is the estimated market value of the subject property? A)$317,425 B)$286,225 C)$270,275 D)$318,650

D)$318,650 multiply the prices by the decimal of their weight $322,500x.4=129000 $319,000x.35=111650 $312,000x.25=78000 129000+111650+78000=318650

Fee Waiver for Low-Income Applicants

DBPR waives initial licensing fee for certain low income applicants. Applicants must pay the application fee. Applicants may also be charged the Unlicensed Activity Fee and Real Estate Recovery Fund fee. Fee waiver does not include examination fee and fingerprinting processing fee.

characteristics of value (DUST)

DUST Demand Utility Scarcity Transferability

A brokerage relationship b/w a principal (or a customer) and a broker may be terminated by: (Is a NOT Question on Test)

Death of a sellers broker or the seller before the broker finds a ready, willing and able buyer. Death of the buyers brokers or the buyer before the broker finds a suitable property for the buyer Destruction of the property Bankruptcy of the principal or the customer

For a VA loan - how will the Buyer's Loan Processing Fee be shown on a settlement sheet Debit Buyer Debit Seller Debit Broker Not indicated on settlement sheet

Debit Seller The VA assigns this expense to the Seller. The Buyer can not pay it.

The Seller holds security deposits in the amount of $1,000 from each of six tenants. On the settlement sheet: Credit Seller & Debit Broker $6,000 Debit Seller & Credit Buyer $6,000 Credit Seller & Debit Buyer $6,000. Prorate the deposits between the Buyer and Seller based on the closing date

Debit Seller & Credit Buyer $6,000

In a net loan proceeds settlement sheet, the net loan amount is shown as a: Debit seller, credit buyer Credit buyer single entry Debit broker single entry Debit broker, credit buyer

Debit broker single entry Net Loan Proceeds: Debit broker single entry. Net Loan Proceeds Decription: When preparing a settlement sheet we normally think "for every debit there is a credit". This assumes that the closing agent receives and disburses all funds. However, most lenders pay off items they feel will affect the loan (ex credit reports, survey) and title and then send the balance of the loan (Net Proceeds) to the closing agent. The settlement worksheet must show all the debits paid in advance by the lender. These debits will not have a credit on the worksheet (single entry) as the closing agent did not receive the funds. The Net Proceeds amount itself will show as a DEBIT BROKER.

Earnest money checks received by a broker in connection with a real estate transaction must be: placed in the broker's trust account before the seller approves the offer payable to the selling broker given directly to the seller Deposited within three days of receipt by listing broker

Deposited within three days of receipt by listing broker Earnest money checks are made payable to the listing broker or their designated title company and deposited within three days into an escrow account upon receipt by listing broker.

A licensee assigned by a broker to act as a single agent of a buyer or seller in a nonresidential transaction is titled a ________ _________ ________.

Designated Sales Associate

Land Acquisitions

Developers and builders require raw land and then prepare the site for construction.

What is the term for the recipient of the will?

Devisee

Interest goes up sales go down

Discount Rate

summary (emergency) suspension order

Emergency or immediate action taken by the secretary of the DBPR against a license to protect the public.

Exclusive Agency Listing

Employment contract given to one real estate broker as the sole agent for the sale of an owner's property.

Property value of a house minus the debt owed is what?

Equity

If you rent something where do you put the deposit? (#89)

Escrow Account

Title

Evidence of ownership of real property, such as a deed

When the seller reserves the right to sell the property w/o paying a commission to the broker what is this called?

Exclusive Agency Listing

What a buyer has a contract with the seller for upgrades needing to be done and it hasn't been completed what is this called?

Executory Contract

An owner that does not use the service of a broker and does not discriminate in advertising is _________ from the Civil Rights Act of 1968

Exempt

An _______ contract can be oral or written.

Express

T / F - A counteroffer will extend an offer.

F - A counteroffer kills the original offer.

T / F - A signed sale contract between the time of signing and the time of title closing is an executed contract.

F - A sale contract between the time of signing and the time the title is conveyed from the grantor to the grantee is an executory contract.

T / F - Love and affection is an example of valuable consideration.

F - Love and affection is an example of good consideration because it cannot be measured in terms of money.

T / F - The person making an offer is the offeree.

F - The offeree is the person receiving the offer. makes offer - offeror receives offer - offeree

T / F - The statute of limitations for an oral contract is five years.

F - The statute of limitations for an oral contract is four years.

What paperwork does condominiums have to give to buyers?

FAQ

A broker's license may be suspended or revoked for which of the following causes? Over-charging sales commission Conviction of a motor vehicle violation Failure to pay a money judgement entered by a clerk of courts Failure to account for or remit funds belonging to others

Failure to account for or remit funds belonging to others Failing to account for funds of others, conversions and commingling are grounds for disciplinary action.

breach of trust

Failure to do or perform what has been promised.

True or false Morgage brokers "make" loans?

False..... They arrange loans by taking mortgage applications and searching for lowest inerest rates and easiest borrower qualifications

Mortgage Insurance Premium (MIP)

Fee paid by FHA borrowers to obtain a loan (up-front and annual).

land development loan

Financing instrument for the installation of on- and offsite improvements to the land, including sewers, streets, and utilities.

________ expenses do not change w/ occupancy levels, examples property taxes and hazard insurance.

Fixed

Chapter 61J2, Florida Administrative Code

Florida Real Estate Commission rules

Unless modified, the powers granted in a Colorado statutory power of attorney for property are: Not applicable to property management A conflict of interest for a designated broker General in scope Limited to signing papers at closing

General in scope Power of Attorney, unless modified, are general in scope. Usually they are modified by stating exactly what is allowed for a licensee to sign in the name of the client.

If a client asks whether it would be beneficial to add a second bathroom to increase profit on the sale of the home, what would be the appropriate response? yes, an additional bathroom will always add more value than it costs to add it in no, the additional bathroom will never add more value than it costs to put in I cannot answer this. I am a real estate broker not a construction expert and as I do not have the expertise to answer this question I cannot answer it. I would be happy to do some research or analysis and speak to a construction expert on costs to determine if it''s worth it

I would be happy to do some research or analysis and speak to a construction expert on costs to determine if it''s worth it Agents are experts on real estate values and transactions but not on construction costs. The best approach is to get a construction experts opinion on the cost of adding a bathroom and then perform additional resaerch to determine if the value increase would justify the expenditure. This takes the agent out of being the expert on construction costs and places the agent in the correct role of recommending soliciting expert advise when the topic is outside the agent's expertise.

base line

Imaginary lines running east and west and crossing a principal meridian at a definite point; used by surveyors for reference in locating and describing land under the government survey system.

Principal meridian

Imaginary lines running running north and south and crossing a base line at a definite point; used by surveyors for reference in locating and describing land under the government survey system.

How is the real estate business regulate or influenced by the local government?

Impacts the real estate business through property taxation and regulatory activities such as occupational licensing, business tax receipts, building permits, building moratoriums, zoning, and building codes

Income Approach - Suppose your client is considering construction of a 10-unit apartment building. You are estimating the value of the vacant property zoned for apartments. Your survey of other apartment projects of similar size and quality in the market area reveals that each of the proposed new apartments could be competitive if rented at $665 per month. The survey also discloses that an annual vacancy and collection loss rate of 10% is typical for the area. By using normal costs of operation, a pro forma statement can be developed to indicate the probable annual NOI. Begin by estimating the potential gross income ($665 rent × 10 units × 12 months = PGI).

Income approach - PGI-V&CL+OI=EGI /// EGI-OE=NOI Potential annual gross income $79,800 Vacancy and collection losses (10%) - 7,980 Effective annual gross income $71,820 Expenses (per year): Taxes $5,494 Insurance 996 Management 24,600 Repairs and maintenance 4,100 Reserve for replacements + 1,800 Total annual operating expenses $36,990 Effective annual gross income $71,820 Total annual operating expenses - 36,990 NOI $34,830

Calculated Interest Rate

Index + margin = calculated interest rate

current status

Indicates a licensee is up to date with respect to the DBPR's licensure requirements.

When creating the listing agreement, the sellers informs you that they will not be filling out a Seller's Property Disclosure form. What is your best response: Inform the sellers that most buyers want the form Inform the sellers that you will fill out the form for them Decline the listing Inform the sellers as the form is optional there are no repercussions to not filling it out

Inform the sellers that most buyers want the form The listing agreement does not require the sellers to fill out the form, however the purchase contract requires one be filled out and the buyers expect to receive one. Once a purchase contract is received, the sellers will have to counter the offer. If the sellers are reluctant to fill out because they have no knowledge of the property (for example in an estate situation whereby they inherited the property) sometimes the best strategy is to fill out the form indicating they have no knowledge of the property.

Property Manager

Involves the leasing, managing, marketing, and maintenance of property

A Buyers right to a specific performance remedy in the event of a Seller default in the Contract to Buy and Sell Real Estate: Is the default remedy and as such need not be selected Buyer default remedy is liquidated damages Not addressed in the contract Depends on which box is checked

Is the default remedy and as such need not be selected Should the Seller default in the contract - the only remedy for the Buyer is Specific Performance. The Seller did not put up earnest money and thus cannot offer liquidated damages.

A real estate license may be revoked or canceled without prejudice for which action?

Issuance of a license by mistake by the Commission A license may be revoked without prejudice if it was issued through the mistake or inadvertence of the Commission.

In Florida real property is assessed on January 1 of each year, and property taxes become a lien on the property on

January 1, the same year. Property taxes become a lien on all real estate on January 1 each year.

What exists when four unities of possession, interest, title and time are present? (#44)

Joint Tenancy (right of survivorship)

Which estate includes the right of survivorship?

Joint tenancy

As the buyers agent is filling out a Contract to Buy and Sell, the agent asks the young married buyers how they want to take title. The buyers are not sure. The buyer's agent should Advise them to take titles as joint tenants since that is appropriate for a married couple. Leave the choice blank since the title insurance company will know what to do. Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later. Explain the differences in the various modes and suggest the one that the licensee knows to be correct.

Leave the choice blank and advise the couple to seek legal counsel and inform the agent of their choice later. When your buyers ask how they should take title, if you tell them that would be giving legal advice and is strictly forbidden.

Littoral Rights

Legal rights related to land abutting an ocean, sea, or lake, usually extending to the high-water mark.

When a property's use was lawfully established but no longer conforms to the use regulations it becomes?

Legally Nonconforming Uses

Green Belt Law

Legislation that authorizes county property appraisers to assess land used for agricultural purposes according to its current value as agricultural land.

Amortized Mortgage (#35)

Less interest = more principal

Multiple licenses

Licenses held by a broker in two or more real estate brokerage firms.

A real estate broker who is a single agent of a buyer or a seller does NOT have which duty to the principal?

Limited confidentiality, unless waived in writing by a party Limited confidentiality is a duty associated with a transaction broker relationship.

monument

Man-made or natural object used to establish boundaries of land

How is the real estate business regulate or influenced by the state governments?

Manages a large amount of land and identifies coastal regions and other areas that are protected from development. State documentary and intangible taxes are required when ownership to real property is transferred or pledged as collateral for a mortgage

License Renewal Period

March 31st or September 30th

In addition to Federal law the Colorado Fair Housing Act added as a protected class: Marital status Sexual orientation Both sexual orientation and marital status Students

Marital status The Colorado statute covers the same protected classes as in the Federal Fair Housing Act, except that it uses the word "disability" rather than "handicap" in the Federal Fair Housing Act. The Colorado statute also adds three more protected classes: ancestry, marital status and creed, for a total of ten protected classes, as compared to the seven under the Federal Fair Housing Act. Under the Colorado Anti-Discrimination Act ("CADA"), sexual orientation and gender identity have been a protected class in employment since August 3, 2007. On May 29, 2008, the Colorado General Assembly amended CADA and made sexual orientation and gender identity a protected class in housing, public accommodation, and advertising. Therefore if you get a question asking if sexual orientation is protected under Colorado Fair Housing laws - the answer is yes. Under the Colorado Fair Housing Act - no.

A tenant signed a lease for ten years requiring a monthly base rent of $1,900, plus 2 percent of all monthly gross sales volume over $95,000. The tenant also must pay all property taxes, insurance, and other costs normally considered property owner's costs. This is a

NET LEASE. A net lease requires that the tenant (lessee) pay all property costs, including those usually regarded as owner expenses (taxes, insurance, mortgage interest, etc.).

Intangible Tax on New Mortgages

NEW loan amount x $.002 = cost of intangible tax

The formula to calculate the overall capitalization rate is

NOI ÷ Value (or price).

Which term refers to a situation where during the early years of a loan the principal balance increases?

Negative amortization Negative amortization is a financing arrangement whereby monthly mortgage payments are less than required to pay both interest and principal. The unpaid amount is added to the loan balance

In an Exclusive Right-to-Buy contract, who is responsible for paying the commission to the broker? Buyer does not have to pay Buyer Negotiable between buyer and seller Split 50/50 between buyer and seller

Negotiable between buyer and seller In the standard buyer agency contract, the buyer may pay but can say they are not going to pay, or allow for the broker to collect their commission from the seller or some other source.

Overall Capitalization Rate (OAR)

Net operating income (NOI) / value (sale price) = overall capitalization rate (OAR)

Lots Per Acre

Number of acres in development X 43,560 sq ft per acre = square footage of development 100% - percentage for streets, sidewalks, and green space = percentage that can be developed Square footage of development X percentage that can be developed = buildable sales ft Buildable sq ft / minimum lot size = number of buildable lots

A real estate brokerage corporation must have at least ____ active broker serving as an ______.

One Officer

Blanket Mortgage

One debt instrument covering two or more parcels.

Household

One individual, or a group of individuals, living in one dwelling unit.

Section

One of the primary units of measurement in a government survey system of land description. A section one mile square and contains 640 acres.

Ostensible Partnership

One or more parties cause a third party to be deceived into believing that a business relationship exists when no such arrangement exists.

Mortgage Loan Originator (MLO)

One who finds a lender for a potential borrower, and vice versa.

Attorney-in-fact

One who is authorized to perform certain acts for another under a power of attorney.

Select the correct statement about a lease in Colorado: Every lease contains an implied warrant of habitability and quiet enjoyment Only residential leases have an implied warrant of habitability Every lease contains an implied warrant of habitability

Only residential leases have an implied warrant of habitability Property Mangement and Leases - Duties and Liabilities of the Parties, All residential leases have an implied Warranty of Habitability. This means they must meet a minimal set of standards for housing established by the State. "Implied" means the Warranty of Habitability standards do not have to be physically listed in a lease to be effective as they are State law. Commercial leases do not have a Warranty of Habitability. As to responsibility of making repairs - neither a landlord or tenant is required to make a repair unless stated in the lease. However the Landlord on residential properties is required to provide a habitable home that satisfies the conditions of the Warranty of Habitability. If the home is deemed not habitable, the Landlord cannot be compelled to make a repair, but the Tenant cannot be compelled to stay. When a tenant files a legal action to break a lease due to an unhabitable situation - this is called "constructive eviction."

Where are the DRE offices located?

Orlando, FL

Estate in severalty

Ownership of property vested in one person alone, also called sole ownership.

4 unities of joint tenancy (PITT)

PITT 1. Possession-joint tenants have the same rights as undivided possession 2. Interest- joint tenants have equal ownership interest 3. Title- joint tenants acquire title on the same instrument (deed) 4. Time- joint tenants acquire their interests in the property at the same time

kickback

Payment of money from someone other than the buyer or seller associated with real estate business.

When wear and tear caused by use and lack of maintenance this is called?

Physical Deterioration

Properties located in subdivided areas are usually described using the _______ Method

Plat (Lot & Block system)

Hypothecation

Pledging of property as security for repayment of a loan w/o surrendering possession of the property

Zoning is an example of which government limitation over private property rights?

Police Power

government restrictions (PET)

Police power Eminent domain Taxation

________ ________ education must be completed during the initial sales associates's license period.

Post Licensing

Effective Gross Income (EGI)

Potential gross income (PGI) - vacancy and collection losses / other income = effective gross income (EGI)

What is the added value as a result of combing two or more properties into one large parcel?

Pottage

Written legal document designating some other person as a attorney-in-fact

Power of Attorney (POA)

Quasi-judicial

Powers delegated to the FREC to discipline real estate licensees for violations of real estate license law and FREC administrative rules.

Quasi-legislative

Powers delegated to the FREC to enact rules and regulations, decide questions of practice, and validate records (imprint with FREC's seal).

Reciprocity

Practice of mutual exchanges of privileges. To qualify for a reciprocal real estate license, the elidgiable military applicant, spouse, or surviving spouse must currently hold a valid real estate license issued in another state, US territory.

PITI

Principle, Interest, Taxes, and Insurance payment on a mortgage loan

Junior Lien

Priority is based on the date of recording in the public records.

Public accommodations

Private entities that own, lease, lease to, or operate facilities such as restaurants, retail stores, hotels, movie theaters, private schools, convention centers, doctors' offices, homeless shelters, transportation depots, zoos, funeral homes, day care centers, and recreation facilities, including sports stadiums and fitness clubs.

Riparian Rights

Private ownership rights extending to the normal high-water mark along a river or stream and including access rights to water, boating, bathing, and dockage in accordance with state and federal statutes.

Exempt properties

Properties that have been decreed to be excluded from taxation or claim by others.

Publishing a foreclosure notice of sale in a newspaper is the duty of the: County Treasurer Public Trustee Lender County Assessor

Public Trustee Sale date published for 5 consecutive weeks prior to sale More info: A residential foreclosure sale must be within 110 to 125 days of the recording of the Notice of Election and Demand. For agricultural properties the window is 215-230 days.

Documentary Stamp Taxes on Deeds

Purchase price / $100 = number of taxable increments (rounded up to whole number) Number of increments X $.70 = cost of documentary stamps taxes on deed

What power does FREC have? (#31)

Quasi-Judical

What is location of the tier East of T3N and R2W? Question #54!!

R1W is answer!

real estate services

Real estate activities involving compensation for performing the activities for another.

Business Broker

Real estate licensees who engage in the sale, purchase, or lease of businesses.

seperate property

Real property owned by a spouse before the marriage with the spouse having no present rights in such property; property owned individually.

In which of the following would you be least likely to find a full legal description of the property? Preliminary title report Policy of title insurance Deed Real property tax statement

Real property tax statement

Immune Properties

Real property that is owned by a unit of government and is not subject to taxation.

probable cause

Reasonable grounds or justification for prosecuting

_________ clause is used in mortgages on income-producing real estate.

Receivership

Florida Real Estate Appraisal Board (FREAB)

Regulates state certified and licensed appraisers

loan-to-value-ratio (LTV)

Relationship between amount borrowed and appraised value (or sale price) of a property.

Situs

Relationships and influences created by location of a property that affect value (e.g., accessibility, personal preference).

Prepaid Rent

Rent payed for the closing month / number of days in closing month = daily rental rate Daily rental rate X number of days buyer owns property in closing month = proration amount (Credit buyer, debit seller)

Estimated Market Value

Rental income X market area GRM = estimated market value

Cost Depreciation Approach

Reproduction cost of structure - accrued depreciation = depreciation value of the structure / estimated value of the site = indicated value of the property

Alternate Accrued Depreciation

Reproduction value new / total economic life = annual depreciation X effective age = estimated total accrued depreciation

Rules pertaining to non-resident licensees

Required to notify the commission within 60 days of the change in residency.

Escheat

Reversion of property to the state when an owner dies without leaving a will or any known heir

Which rights does an owner have with land abutting a flowing waterway like banks of a river or stream? (#77)

Riparian Rights

Gross Rent Multiplayer (GRM)

Sale price / gross monthly rent = gross rent multiplayer (GRM)

Sales Commission

Sale price X commission rate = total commission Total commission X percentage to listing broker = listing commission Listing commission X listing sales associate percentage = listing sales associate commission

Which is NOT a category of real estate licenses question? These 3 are

Sales Associate; Broker; Broker Associate

What fee will ALWAYS show as a credit on the sellers closing statement? Recording the Warranty Deed Documentary Fee New Loan Amount Sales Price

Sales Price The seller, not the buyer, recieves the sales price of the property, hence it is always Seller Credit.

Sales Commissions

Sales Price x Rate = Total Commission, Then total commission x split = sales associates commission

Who is the director of the DRE appointed by?

Secretary of the FREC

What is the first step with dealing with a protest procedure on tax problems?

Seek and adjustment by contacting the county property appraiser

In the absense of any agreement between the parties, the state documentary stamp tax on the deed is paid by the?

Seller

The _______ normally pays for the documentary stamp tax on the deed.

Seller

Prorated Expenses

Seller is responsible for the taxes up to the day before closing. (Annual Property Taxes divided by 365= Daily Rate, then Daily Rate x Number of Days = Taxes Owed

For a broker to legally be paid a kickback or rebate, he or she must have performed a _______, held an appropriate _______, and all parties must _________ of the payment

Service, License, Approve

Ownership of _______ ________ _______ distinguishes ownership in a cooperative association

Shares Or Stocks

What federal law that makes illegal the discussion or establishment of a uniform price or fee for services in any industry? No fixed fees

Sherman-Clayton Anti-trust Act

The only brokerage that includes fiduciary duties is the __________ __________.

Single Agency

Duplex owned by wife and husband. Joint tenancy. Husband dies. Husband had a will and left all assets or to son from previous marriage. What does the son receive? Son now owns the property Son does not get the property Son owns half of property with wife Son owns one of the duplex units

Son does not get the property All parties under joint tenancy have a right of survivorship. This means that the wife became the sole owner of the proeprty automatically upon the death of her husband. This right supercedes the will. More about Joint Tenancy and Other Forms of co-ownership from the FreeDictionary.com : In estate law, joint tenancy is a special form of ownership by two or more persons of the same property. The individuals, who are called joint tenants, share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Joint tenancy creates a Right of Survivorship. This right provides that if any one of the joint tenants dies, the remainder of the property is transferred to the survivors. Descended from common-law tradition, joint tenancy is closely related to two other forms of concurrent property ownership: Tenancy in Common, a less restrictive form of ownership that sometimes results when joint tenancies cease to exist, and Tenancy by the Entirety, a special form of joint tenancy for married couples. Joint tenants usually share ownership of land, but the property may instead be money or other items. Four main features mark this type of ownership: (1) The joint tenants own an undivided interest in the property as a whole; each share is equal, and no one joint tenant can ever have a larger share. (2) The estates of the joint tenants are vested (meaning fixed and unalterable by any condition) for exactly the same period of time—in this case, the tenants' lifetime. (3) The joint tenants hold their property under the same title. (4) The joint tenants all enjoy the same rights until one of them dies. Under the right of survivorship, the death of one joint tenant automatically transfers the remainder of the property in equal parts to the survivors. When only one joint tenant is left alive, he or she receives the entire estate. If the joint tenants mutually agree to sell the property, they must equally divide the proceeds of the sale. Because disagreement over the disposition of property is common, courts sometimes intervene to divide the property equally among the owners. If one joint tenant decides to convey her or his interest in the property to a new owner, the joint tenancy is broken and the new owner has a tenancy in common. Tenancy in common is a form of concurrent ownership that can be created by deed, will, or operation of law. Several features distinguish it from joint tenancy: A tenant in common may have a larger share of property than the other tenants. The tenant is also free to dispose of his or her share without the restrictive conditions placed on a joint tenancy. Unlike joint tenancy, tenancy in common has no right of survivorship. Thus, no other tenant in common is entitled to receive a share of the property upon a tenant in common's death; instead, the property goes to the deceased's heirs. Tenancy by the entirety is a form of joint tenancy that is available only to a Husband and Wife. It can be created only by will or by deed. As a form of joint tenancy that also creates a right of survivorship, it allows the property to pass automatically to the surviving spouse when a spouse dies. In addition, tenancy by the entirety protects a spouse's interest in the property from the other spouse's creditors. It differs from joint tenancy in one major respect: neither party can voluntarily dispose of her or his interest in the property. In the event of Divorce, the tenancy by the entirety becomes a tenancy in common, and the right of survivorship is lost.

When a contractor builds on his own land with the hope of locating a purchaser after construction has been completed

Speculative building

The DBPR may issue a temporary real estate license to which? (#25)

Spouse of active duty who transfers to Florida expires after 6 months and is NOT Renewable

SIN

Stamps on deed $.70 per $100 Intangible on new mortgages $.002 per $1 of debt Note, stamps on new and assumed notes $.35 per $100

SIN

Stamps on deed $.70 per $100 Intangible tax on new mortgage $.002 per $1 of debt Stamps on new or assumed notes $.35 per $100

The most likely source of information for what water rights exist for a property with a well would be: An attorney County Clerk and Recorder County Planning Department State Engineer - Colorado Department of Natural Resources

State Engineer - Colorado Department of Natural Resources

antitrust laws

State and federal laws designed to maintain and preserve business competition.

Uniform Standards of Professional Appraisal Practice (USPAP)

States that it is unethical for an appraiser to accept compensation that is contingent on the value of the property.

____________ of ___________ provides time limits within which parties are allowed to bring legal action to enforse their rights under a contract.

Statue of Limitations

Sealed

Statutes in some states permit a person's criminal record to be sealed, and thereafter such records cannot be examined except by order of the court or by designated officials.

partial release clause

Stipulates the conditions under which the mortgagee will grant freeing building lots from a mortgage lien upon payment of a certain amount of money.

Division of Real Estate (DRE)

Supports the Commission (FREC). under the Dept. of Business & Professional Regulation (DBPR)

a licensee that has had a payment made from the real estate recovery fund as a result of his or her actions will have his licensee _______ until the money is _______ plus __________

Suspended, Repaid, Interest

Homestead

Term used to describe three separate but related situations: (1) a tax exemption, (2) a tract of land limited in size, and (3) a statutory condition designed to protect the interests of a spouse and lineal descendants.

Florida Statue 120

The Administrative Procedural Act defines the procedural process by which regulatory agencies decide and implement agency action.

assessment limitation (SOH benefit)

The accumulated difference between the assessed value and the market value of a homesteaded property due to limit on increases in the assessed value.

Arbitration

The act of having a third party render a binding decision in a dispute between two parties.

Concealment

The act of keeping from sight or keeping secret.

Alienation

The act of transferring ownership, title, or an interest or estate in real property.

Monetary Policy

The actions undertaken by the Fed to influence the availability and cost of money and credit.

Effective Age

The age indicated by a structure's condition and utility.

reserve requirement

The amount of funds that an institution must hold in reserve against deposit liabilities

Liquidated Damages

The amount of valuable consideration specified in an agreement as a penalty for default.

profit

The amount one makes over and above one's cost

price

The amount paid for something

Leasehold estates do NOT include

The answer is A REMAINDER ESTATE. The other choices all concern lease estates. A remainder estate is associated with a life estate.

What would be the total required taxes for the loans on a $47,500 tract that sold with $10,000 cash down, a new second mortgage of $15,500, and an assumed mortgage of $22,000 that was previously recorded?

The answer is $162.25. The solution is: Doc stamps on new note: $15,500 ÷ $100 increments × $.35 rate = $54.25; Doc stamps on assumed note: $22,000 ÷ $100 increments × $.35 rate = $77.00; Intangible tax on new mortgage: $15,500 × $.002 = $31.00; $54.25 + $77.00 + $31.00 = $162.25 taxes for the mortgage loans.

The answer is $220,000. The solution is: Part ÷ Rate = Value; $1,540 doc stamps on deed ÷ $.70 rate = 22,000 tax increments; 22,000 × $100 = $220,000 purchase price.

A property has been assessed at $40,000. The city tax rate is 10 mills, the county tax rate is 9 mills, and the school board levy is 8 mills. The owner has qualified for and received homestead tax exemption. How much will the owner save from his county taxes as a result of the homestead tax exemption?

The answer is $225. The solution is: $25,000 homestead exemption × .009 county rate = $225.

Homeowners who have homestead exemption on their current home in either of the two preceding years can transfer up to what amount of their Save Our Home benefit to a new home?

The answer is $500,000. A homesteaded property owner can transfer up to $500,000 of Save Our Home benefit to a new homestead

A woman has homesteaded her residence. Her home has an assessed value of $279,000. She is a nonveteran who is totally and permanently disabled due to a serious car accident. She is also legally blind. What is the cumulative tax exemption on her homesteaded residence?

The answer is $51,000. $25,000 base homestead exemption + $25,000 additional homestead exemption + $500 disability + $500 blind = $51,000.

A sales associate receives 45 percent of sales commissions earned as a result of his sales efforts. The broker lists a property for $248,000, with a 7 percent sales commission agreed to by the owner. The sales associate sells the property at the listed sale price. What is the broker's share of the commission?

The answer is $9,548. The solution is: $248,000 sale price × .07 rate = $17,360 total commission; $17,360 × .55 broker rate = $9,548 broker's share of commission.

The government survey method of legal description

The answer is HAS AS A BASIS A PRINCIPAL MERIDIAN AND A BASE LINE. The federal government selected certain north-south longitudes as principal meridians and certain east-west latitudes as base lines.

The financial term applied to the use of borrowed funds to finance the purchase of an office building is

The answer is LEVERAGE. Leverage is the use of borrowed funds to finance the purchase of an asset.

The answer is NO ONE. Effective July 1, 2008, real estate licensees are no longer required to give customers the transaction broker notice. Licensees are also not required to give a disclosure notice at model centers.

Administrative Law

The body of law created by administrative agencies (in the form of rules, regulations, orders, and decisions) in order to carry out their duties and responsibilities.

Regarding the broker/seller relationship under the terms of an Exclusive Right-to-Sell listing contract, which of the following statements are true? The broker may be the seller's agent and a transaction broker for the buyer The broker can take the listing without being an agent of the seller The listing must have at least a 60 day holdover period The listing has to be for at least thirty days

The broker can take the listing without being an agent of the seller A broker may list a property as either a Seller's Agent or Transaction Broker. Only a Seller's Agent is considered to be an "agency relationship." Transaction Broker is considered to be a "working relationship." In an agency relationship you are an advocate for the client and owe the client your loyalty. In a working relationship you are a neutral party, advocating for neither the buyer or the seller but are instead just a facilitator for the transaction. Under NO CIRCUMSTANCES can you be an agent for one party and a transaction broker for the other in the same transaction. That would have the effect of you telling one party you are working for them (Buyer or Sellers Agency) and the other that you are a neutral party (Transaction Broker). That would be dishonest.

A buyer is assuming a loan and the loan balance has turned out to be less than the assumption balance provided by the seller. How would this be handled according to the Residential Contract to Buy and Sell ? The seller must reduce the price of the property to compensate for the difference. The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. The contract is automatically terminated by the seller's misrepresentation. Depending on how the form is completed, either the buyer may terminate the contract or the seller could reduce the price to make up for the difference.

The buyer may terminate the contract by written notice if the difference causes the buyer's cash at closing to increase by a stated amount. The buyer has the option of terminating the contract if the terms are unacceptable.

Assumption

The buyer of real property that is already mortgaged assumes liability for the mortgage payments of the original loan that remains on the property.

Ministerial duties

The duties of the Division of Real Estate that involve recordkeeping.

Township Line

The east-west survey lines located every six miles north and south of the primary base line. Also called a subbaseline.

Replacement Cost

The expenditure of constructing a building with current materials and techniques that has the same functional utility as the structure being appraised.

Property taxes become a lein on January 1 for the previous year. When may taxes be paid without receiving a penalty: The first half payment by the last day of February, the second half payment no later than June 15 All payments no later than Dec 31 All payments by October 15 half payment by April 1, second half payment by July 1

The first half payment by the last day of February, the second half payment no later than June 15 The first half payment by the last day of February, the second half payment no later than June 15

Margin

The fixed component that is added to the index to calculate the interest rate in an adjustable rate mortgage

Promulgates

The formal act of announcing a statute or an administrative rule. To publish and officially announce a new or amended rule or statute. The FREC may promulgate rules and regulations.

Delication

The gift of land by an owner, in this case developer, to a government body for public use. A valid dedication of land from the owner to the municipality requires both an offer to dedicate (donate) the land and an acceptance by the municipality.

Division of Administrative Hearings (DOAH)

The governmental entity that hears all formal hearings resulting from an administrative complaint against a licensee.

An interest bearing trust account The seller gets the interest The interest may be donated to a qualified affordable housing program The buyer gets the interest The broker gets the interest

The interest may be donated to a qualified affordable housing program In Colorado most earnest money interest is donated to CARHOF. ( Colorado Association of Realtors Housing Opportunity Fund)

When dealing with Vacating Premies on a rental what happens?

The landlord has 15 days to return the security deposit and any accrued interest The landlord has 30 days to notify the tenant of intentions to impose a claim on the deposit

valuable consideration

The money or a promise of something that can be measured in terms of money.

If the annual interest rate on a loan is 8% and the monthly interest payment is $120, the principal amount of the loan is: $8,000. $14,000. $18,000. $24,000.

The monthly interest is $120, so multiply that by 12 to determine the annual interest paid ($120 × 12 = $1,440). Then divide the annual interest by the annual rate to determine the overall loan amount. .08 × X = $1,440 X = $1,440 ÷ .08 X = $18,000

Any excess funds above those required to pay off encumbrances realized at a foreclosure sale belong to: The State General Fund The mortgagee The mortgagor The Lender

The mortgagor The Mortgagor is the owner of the property. The owner placed the voluntary lein on the property which the mortgage represents to secure a loan for the property. Excess funds means the encumbrabces have been satisfied and represents equity belonging to the owner.

Fee Simple Estate

The most comprehensive and complete interest one can hold in real property; freehold estate. Also called fee or fee simple absolute.

adjusted basis

The owner's original cost plus buying expenses plus capital improvements.

Common Elements

The parts of a multiple-ownership property not included in the units; those parts in which each unit owner holds an undivided interest.

Remainderman

The party designated to receive an estate at the end of a life estate.

Principal

The party employing the services of a real estate broker; amount of money borrowed in a mortgage loan, excluding interest and other changes.

vacancy rate

The percentage of rental units that are not occupied

Procuring Cause

The person whose efforts are the cause of an executed sale contract, regardless of who actually writes the contract.

Meeting of the Minds

The point when two people, thinking of the same thing, reach an agreement through an offer and acceptance.

entitlement

The portion of a VA-guaranteed loan that protects the lender if the borrower defaults

interest

The price paid for the use of borrowed money; estate.

Appraisal

The process of developing and communicating an estimate of a property's

Development

The process of improving raw land so that it can be put to productive use

supply

The quantity of goods or services offered for sale to consumers.

he approved Contract to Buy and Sell, "Property" includes: The real property plus fixtures, improvements, and appurtenances The real property and all rights such as water rights The real property plus fixtures, improvements, appurtenances, plus inclusions, minus exclusions The real property and everything now attached

The real property plus fixtures, improvements, and appurtenances Property as described in the Contract to Buy and Sell includes appurtenances, improvements, and fixtures From the Contract to Buy and Sell: Property. The Property is the following legally described real estate in the County of Arapahoe, Colorado: Legal Description Here known as No. ,999 Maple Street Aurora Co 80999 together with the interests, easements, rights, benefits, improvements and attached fixtures appurtenant thereto, and all interest of Seller in vacated streets and alleys adjacent thereto, except as herein excluded (Property).

Water Rights: Who owns the water rights to a property? The property owner owns the water rights The recorded owner of the water rights, not necessarily the owner of the property The State of Colorado The local water district

The recorded owner of the water rights, not necessarily the owner of the property Water rights transfer with their very own deed separate from the deed which transferred ownership of the property. Therefore the person owning the surface rights may not have water rights. This is very common in subdivisions served by a community water system.

Constructive Notice

The recording of a document or an instrument in the public records designed to give adequate notice to all.

Current mailing address

The residential address a licensee uses to receive mail through the U.S. Postal Service.

Net Operating Income (NOI)

The resulting amount when all operating expenses are subtracted from effective gross income.

cash flow

The resulting amount when annual debt service, tax liability, and capital improvement costs are subtracted from net operating income.

Effective Gross Income (EGI)

The resulting amount when vacancy and collection losses are subtracted from potential gross income. (See also Vacancy and collection losses.)

Business Opportunity

The sale or lease of an existing business, including the sale of tangible and intangible assets

Which of the following is true with regard to the Seller's Property Disclosure form that is mentioned in an Exclusive-Right-to-Sell listing form? The seller is required by law to provide this form to every buyer. The seller may check the "as is" box, making the buyer responsible to find any defects. The seller may decline to provide the disclosure but still must disclose latent material defects. The seller may refuse to provide the disclosure and avoid disclosure of material defects.

The seller may decline to provide the disclosure but still must disclose latent material defects. The seller has the choice whether to provide the disclosure form, but is nevertheless responsible for disclosure of hidden material defects

Point of beginning (POB)

The starting (and ending) place in a land survey using the metes-and-bounds method of property description.

Life insurance companies are regulated by?

The state in which they operate

Arrears

The state of being behind in the discharge of an obligation; paid at the end of the period for which something is due (the opposite of in advance)

Section 455.10 of Chapter 455

The statue provides that an individual cannot be disqualified from practicing an occupation or profession regulated by the State of Florida solely because the person is not a US citizen.

Potential Gross Income (PGI)

The total annual income a property would produce with 100% occupancy and no collection or vacancy losses.

Voluntary Alienation

The transfer of title is accomplished with the owner's control and consent.

Index

The variable component that is added to the margin to calculate the interest rate in an adjustable-rate mortgage.

Going Concern Value

The worth of a business, including real estate, goodwill, and earning capacity.

Investment Value

The worth of a property to a particular investor based on the investor's desired state of return, risk tolerance, etc.

When a licensee has been involuntary inactive for 12 months or less =

They may satisfy the requirement by completing 14 hrs of continuing education

What recourse do the buyers have if they determine that property they have contracted to purchase is within a special taxing district? They may demand that the seller pay the indebtedness of such a district. They may petition to be excluded from the district. They may terminate the contract automatically on the Off-Record Matters date. They may terminate the contract by written notice to the seller.

They may terminate the contract by written notice to the seller. Termination requires written notice of intent to terminate and the buyers must provide written notice to the seller no later than the Off-Record Matters date

A Broker Price Opinion (BOP) and Competitive Market Analysis (CMA) are estimates of value created by real estate licensees for marketing purposes. Since they were not prepared by a licensed appraiser, the follow words must appear at their bottom: This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing. This appraisal was prepared by a licensed real estate broker. This evaluation was prepared by a licensed appraiser. This evaluation was prepared by a licensed real estate broker. It may be used to obtain financing only with full disclosure and the signatures of all parties to the associated Contract to Buy/Sell Real Estate.

This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing. What in the heck are BPO's? BPO's are "Broker Price Opinions". They and CMA's are "estimates of value" prepared by real estate licensees for marketing purposes. BOP's are most commonly requested by lending institutions to ascertain the market value of a REO ("Real Estate Owned" i.e. foreclosed) property. In simpleze: when banks need to get a market value of a property they are getting ready to sell, they would much rather pay a pittance to a real estate licensee hungry for the listing, than real money to a licensed appraiser. They also can be used as testimony in a court case, or for tax purposes, or to set a listing price on a home. There are four facts you need to know about BPO's for the State test: 1) BPO stands for "Broker Price Opinion" 2) They are "estimates of value" NOT an appraisal. Only licensed appraisers can prepare appraisals. 3) They can be used only for marketing purposes (valuing a property for sale), NOT for financing (valuing a property for a loan) 4) Whenever you create a BPO (for a bank) or a CMA ("Competitive Market Analysis" for a client), you need to include these words in the report "This evaluation was prepared by a licensed real estate broker and is not an appraisal. This evaluation cannot be used for the purposes of obtaining financing."

Civil Rights Act of 1964

This act made racial, religious, and sex discrimination by employers illegal and gave the government the power to enforce all laws governing civil rights, including desegregation of schools and public places.

Commingle

To mix together money or a deposit with personal funds; combine; intermingle.

hypothecation

To pledge real or personal property as security for a debt or obligation without giving up possession of the property.

A real estate company represents a motel owner who wishes to list one of his motels for sale. The owner has told the listing agent that he does NOT want to sell the motel to any racial minorities.

To refuse to sell or lease any real property based on one's race is a violation of the federal Civil Rights Act of 1866.

Total Obligations Ratio

Total monthly obligations (PITI+PMI+LTO) / Monthly gross income = Total Obligations Ratio (TOR)

True/False - According to Commission Position 40 on Teams, Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. True False

Truehe Commission recognizes that there are benefits to both real estate brokers and consumers in the usage of real estate broker teams. Teams may be formed within a licensed brokerage firm with the approval of the employing broker. Real estate brokers operating as teams need to ensure that they are compliant with Commission rules regarding advertising, name usage and supervision. Advertising and name usage: While there is no prohibition of teams, real estate brokers need to ensure that they do not advertise in a manner that misleads the public as to the identity of the brokers' licensed brokerage. Real estate brokers that function as teams should not advertise teams using the terms "realty", "real estate", "company", "corporation", "corp.", "inc.", "LLC" or other similar language that would indicate a company other than the employing brokerage firm. Advertising includes, but is not limited to, websites, signage, property flyers, mailings, business cards, letterhead and contracts. The advertising of team names should never give the impression that the team is an entity separate from the licensed real estate brokerage. If the identity of the employing broker or the brokerage firm is difficult for the public or the Commission to ascertain, the team may be in violation of Rule E-8 Advertising. Supervision: In addition to the supervision requirements set forth in Rules E-31 and E-32, Rule E-30 Employing broker responsibilities requires that the broker designated to act as the broker for any partnership, limited liability company or corporation, i.e. the employing broker, fulfill the following duties: 1) Maintain all trust accounts and trust account records; 2) Maintain all transaction records; 3) Develop an office policy manual and periodically review office policies with all employees; 4) Provide for a high level of supervision for newly licensed persons pursuant to Rule-32; 5) Provide for a reasonable level of supervision for experienced licensees pursuant to Rule E-31; 6) Take reasonable steps to ensure that violations of statutes, rules and office policies do not occur or reoccur; 7) Provide for adequate supervision of all offices operated by the broker, whether managed by licensed or unlicensed persons. Pursuant to §12-61-118, C.R.S. and Rule E-29, employing brokers are also responsible for providing supervision over such activities with reference to the licensing statutes and Commission rules for all brokerage employees, including but not limited to administrative assistants, bookkeepers and personal assistants of licensed employees. Thus, employing brokers are responsible for the actions of unlicensed persons who perform functions within the real estate broker team. Employing brokers need to ensure that any unlicensed person acting within the team is not engaged in practices that require a real estate broker's license. Employing brokers also need to establish that the compensation paid to an unlicensed person for services provided is not in the form of a commission. Compensation paid to an unlicensed person is not required to to be paid solely by the employing broker. However, §12-61-117, C.R.S. requires that all licensee compensation or valuable consideration for the performance of any acts requiring a broker's license is paid solely by the employing broker.

You can not sue a buyer or seller only your broker? True or False

True

Your allowed Compensation from your Broker True or False

True

A person who no longer wants to engage in the real estate business can voluntarily relinquish or cancel the license, provided there is no investigation or disciplinary proceeding pending against the license (#79)

True Statement

The law that requires that the annual percentage rate be disclosed to consumers is the

Truth-in-Lending Act. requires that lenders disclosure the annual percentage rate (APR) of interest and finance charges imposed on consumers.

Designated Sales Associates

Two real estate licensees designated to represent the buyer and the seller as single agents in a nonresidential transaction. The buyer and seller must have assets of $1 million or more and sign disclosures stating their assets meet the required threshold.

What qualifies an appraiser?

USPAP (Uniform Standards of Professional Appraisal Practice

florida law requires appraisers, real estate brokers, and sales associates to abide by

USPAP when conducting appraisals of real property.

Encroachment

Unauthorized use of another person's property.

Conversion

Unauthorized use or retention of money or property that rightfully belongs to another person.

Fee Waiver for Military Veterans and Their Spouses

Waives the application fee, initial licensee fee, and the unlicensed activity fee for those who apply for a license within 60 months after honorable discharge. Applies to all types of professional licenses issued by the DBPR. Fee waiver does not include examination fee and fingerprinting processing fee.

Follow UP

Whats sales associates do for buyers and sellers after the sale

withhold adjudication

When the court determines that a defendant is not likely to again engage in a criminal act and that the ends of justice and the welfare of society do not require that the defendant suffer the penalty imposed by law, the court may withhold adjudication of guilt, stay (stop) the imposition of the sentence, and place the defendant on probation.

A loan applicant's past credit history indicates his ________ to honor dept obligations, and his income is a measure of the _______ to repay the loan.

Willingness, Ability

The seller instructs the listing broker NOT to show his home to members of a protected class. The broker informs the seller that this would be a violation of the Fair Housing Laws, but the seller is insistent. Which choice is the broker's best course of action under these circumstances?

Withdraw from the listing agreement. Licensees may not violate the law. For example, if a principal instructs a listing broker not to show the property or sell to a member of a particular minority or ethnic group, the broker cannot obey the principal's instructions because doing so would violate the law.

ways an offer is terminated (WILDCARD)

Withdrawal by offeror Insanity Lapse of time Death Counteroffer Acceptance Rejection Destruction of the property

assessed value

Worth establishing for each unit of real property for tax purposes by a county property appraiser.

money to maintain escrow account

a broker is allowed to place in a sales escrow account up to $1000 of personal or brokerage funds brokers can keep up to 5,000 of their own monies in a property management escrow account

residential property

a broker may place a lien on real property for nonpayment of commission only if the broker is expressly authorized to do so in a contractual agreement

transaction broker

a broker who provides limited representation to a buyer, seller or both in a real estate transaction does not represent either party in a fiduciary capacity or as a single agent all licensees are operating as transaction broker unless another brokerage relationship is established (no need for written disclosure)

single agent relationship

a broker who represents, as a fiduciary, either the buyer or the seller but NOT BOTH. sales associates and broker associates owe the same fiduciary obligations to the brokers principals as does their broker

it is a violation of license law to share a commission with or to pay a fee or other compensation to an unlicensed person for the referral of real estate business clients, prospects, or customers, however

a florida broker may pay a referral fee to a broker licensed in another state so long as the foreign broker does not violate florida law.

an individual typically begins a real estate career in Florida as

a licensed sales associate. starts with license as voluntary inactive sales associate

Real Estate Investment Trust (REIT)

a method of pooling investment money using the trust form of ownership

Adverse Possession

a person in opposition to the interest of another party (as, for example, with a buyer and a seller).

broker

a person who for another, and for compensation or other consideration (or anticipation of compensation or other consideration) performs real estate services

broker associate

a person who holds a brokers license but chooses to register and work in real estate under the direction of another broker.

absentee owner

a property owner who does not reside on the property and who often relies on a professional property manager to manage the investment

Target Market

a specific group of prospects chosen because of its demographic, financial, and lifestyle characteristics

Conforming Loan

a standardized conventional loan written on uniform documents that meets the purchase requirements of Fannie Mae and Freddie Mac - both loan amount and borrower characteristics must meet the guidelines

If a developer wants to develop a new subdivision, she must submit

a subdivision plat map to the planning commission. A developer planning to create a subdivision must submit a subdivision plat to the planning commission for approval.

background check of criminal history

a withhold of adjudication must be disclosed on the application

When is a request for the renewal of a license effective? a. when recieved by the department b. the day following the experation c. on the date the application is mailed d. on the date indicated on the license

a. when recieved by the department

americans with disabilities act of 1990

access to public transportation, public accommodations, and commercial facilities new construction and renovation. examples of alterations include widening doorways, making cuts in street curbs, lowering telephones, installing ramps, and providing ADA compliant toilets and grab bars in restrooms

The seal of a Notary public, called an __________, should not be confused w/ the word "seal" as used in connection with contract law.

acknowledgement

additional survey measures and terminology

acre- 43,560 square feet (approx. 208.71 feet x 208.71 feet) benchmark-permanent reference mark (PRM) affixed to an iron post or brass marker that is embedded in the sidewalk or street, used to establish elevations and altitudes above sea level on surveyed parcels mile- 5,280 feet in length

new sales associates must change their license to

active status before operating as a sales associate. submitting DBPR from RE:11

waiver hearing

administrative complaint fails to timely respond to election of rights

3 type of administrative penalties

administrative, civil, and criminal FREC does not have the authority to order restitution

general partnership

an association of 2 or more persons for the purpose of jointly conducting business

fixtures

an item that was once personal property but has been permanently attached to or made part of the real estate and is now legally considered real property

freehold estates

an ownership interest for an indefinite period

When all rights under a lease have been transfered to another, the process is called an ___________.

assignment

broker applicant must have held an active real estate license for

at least 2 years during the 5 year period preceding application to become a broker.

universal agent

authorized by the principal to perform all acts that the principal can personally perform and that may be lawfully delegated to another

special agent

authorzed by the principal to handle only a specific business transaction or only to perform a specific act broker agrees to represent the buyer OR the seller

tenancy by the entities

basically a joint tenancy between husband and wife if parties are truly husband and wife, the estate is implied one spouse cannot do anything that affects the ownership of a tenancy by the entities such as mortgage, will, or sell any portion of the spousal interest in a tenancy by the entireties without the other spouses consent

implied contract

by acts and conduct

chapter 475 of florida statute exempts the following individuals from holding a real estate license

cemetery lots rent lots in mobile home park attorneys at law CPAs (certified public accountants) power of attorney (attorney in-fact) owners of time shares appraisers court appointed individuals hotel/motel clerks SEC (securities and exchange commission) apartment property owners

steering

channel homeseekers to or away from particular neighborhoods because they are members of a protected class

commercial real estate leasing commission lien act

chapter 475 part IV, gives a broker lien rights for earned commission associated with a brokerage agreement to lease commercial real estate

A metes and bounds description must cover an area larger than 10 acres. only be made in areas not included in the Rectangular Survey System. commence and finish at the same identifiable point. always use north as the basis for directions.

commence and finish at the same identifiable point.

florida statute chapter 475 part 3

commercial real estate sales commision lien act gives broker lien rights for earned commission. applies to commercial property, NOT residential. Lien is only against the onwers new proceeds from the sale and does not attach to the commercial real property.

CMA

comparative market analysis. sellers often ask real estate brokers and sales associates what buyers are likely to pay for their property's

7 steps involved with filing a complaint

complaint is filed investigation of the complaint probable cause determination formal complaint is issued if probable cause is found informal hearing/formal hearing is conducted final order is imposed judicial review (appeal) of final order

chain of title

complete successive record of a propertys ownership

executed contract

completed all terms and conditions

tenants obligations

comply with applicable building, housing and health codes keeping clean and sanitary use reasonable care in the operation of all plumbing, electrical, heating, and AC equipment behave, and do not disturb peace of other tenants

cooperatives

coperative association, or co op is a multiunit building that is owned by a corporation corporation holds title to the land and improvements owners purchase shares of stock ownership of the stock entitles the purchaser to a proprietary lease and the right to occupy the unit common expenses and transfer of ownership of a cooperative unit is accomplished by sale of the stock

relationship of agreement of the parties

courts seek to determine the exact nature of the relationship of the parties

The documentary stamp tax on deeds is based on the

entire sale price of the property. Doc stamps on deeds are charged on the entire purchase price.

FREC powers and duties (3 areas)

executive powers, quasi legislative, quasi judicial. limited to administrative matters, nothing criminal makes decisions and sets policies carried out by DRE

1st degree misdemeanor

failure to provide accurate rental info $1000 fine, 1 year in jail

notice of noncompliance

first time minor violation if a licensee fails to take action to correct the minor violation within 15 days after being notified the licensee maybe issued a citation or licensee may be subjected to a disciplinary proceeding

A licensee makes a statement that is material to the transaction as if it were a fact when the licensee does NOT know if the statement is TRUE or FALSE, and the buyer relies on the statement. As a result of the statement made by the licensee, the buyer suffers damages. This situation constitutes

fraud.

dedication

gift of land by an owner. involves streets, sidewalks, park areas, and other improvements. streets and public areas obligates the local government to maintain them.

ginnie mae (government national mortgage association)

government corporation under HUD guarantor on the pools of FHA and VA mortgage loans

5 types of leases

gross lease, net lease, percentage lease, variable lease, ground lease

unincorporated association

groups of people associated for some non commercial common purpose

A Single Party listing: does not require a contract has no holdover clause does not fall under the Statute of Frauds requires two agents

has no holdover clause As per commission position 13: Brokers often secure single-party listings because they have what they believe to be a good prospect for purchase. These listings are usually only for a few days, but occasionally the broker wishes to be protected for a longer period while the broker is negotiating with a particular prospective purchaser. Usually, when an owner signs an exclusive right to sell with an exclusive brokerage adendum concerning a single party, the owner wishes to limit the rights of the broker under the listing contract. Therefore, in the space provided for additional provisions, one, two, or all of the following limitations should be inserted in this space: 1. The provisions of this listing contract shall apply only in the event a sale is made to ___________________________________. 2. The termination date shall not be extended by the "Holdover Period" of this listing contract. 3. In the event a sale is made by the owner or their broker to any other party than the above names, this isting contract is void.

A man successfully negotiated (and was paid for) the sale of a Federal Communications Commission license for a television station. He is NOT a licensed real estate broker or sales associate. The man

has not violated F.S. 475.

disadvantage of investing in real estate

illiquidity. not considered a liquid investment

requirements for a valid deed

in writing (statute of frauds) names of grantor and grantee grantor must be of legal capacity (competent) consideration must be described granting clause (words of conveyance) habendum clause (ownership interest being conveyed) legal description signed by grantor and 2 witnesses voluntary delivery and acceptance

time share ownership

interval ownership- deeded interest, for fee simple ownership right to use

A licensee that fails to renew when required to do so will have his or her license placed on _______ ________

involuntary Inactive

judgement lien

involuntary lien attaching to real property when a judgement is obtained against the owner

Depreciation (cost recovery)

is an allowable deduction that requires no current outlay of cash.

multiple licenses

issued to a broker who qualifies for more than 1 business entity

3 phases of development and construction

land acquisition, subdividing and development, recording the subdivision plat map

real estate

land and all human-made improvements

surface rights

land and water rights

MLS

multiple listing service, clearinghouse

parts of a deed

names of the grantor and grantee-names, addresses, and date of the deed consideration- anything of value being given in exchange for title words of conveyance-granting clause, conveys the property are grants, bargains, and sells interest of estate being conveyed- habendum clause to have and to hold voluntary delivery and acceptance-title passes at the time of delivery and acceptance; when the grantor delivers a valid deed that is accepted by the grantee singature of the grantor and 2 witnesses-do not need to be notarized, but if the grantee wants to give constructive notice of ownership, the deed must be notarized before it can be recorded in public records

NAR

national association of realtors. largest trade organization in the world. promotes ethics and education in the industry. NAR realtors must complete 3 hours of training every 4 years

telephone solicitation federal law

national do not call registry calls restricted from 8am-9pm $16,000 fine per violation no FSBO exception-must check registry (federal law supersedes state law)

examples of grounds for licensee application denial

neglecting to answer all questions of application neglecting to forward the proper fees with the application request neglecting to correct errors or omissions on applications returned failing to successfully complete the required end of course exam

The maximum amount of days that can be specified in the Holdover Period in the Listing Contract is: 30 days 60 days 90 days negotiable by Seller and Broker

negotiable by Seller and Broker From the Exclusive Right to Sell: Any Sale (or Lease if § x.x.x is checked) of the Property within _____ calendar days after the Listing Period expires (Holdover Period) (1) to anyone with whom Broker negotiated and (2) whose name was submitted, in writing, to Seller by Broker during the Listing Period (Submitted Prospect). Provided, however, Seller ___ Will __Will Not owe the commission to Brokerage Firm under this if a commission is earned by another licensed real estate brokerage firm acting pursuant to an exclusive agreement entered into during the Holdover Period and a Sale or Lease to a Submitted Prospect is consummated. If no box is checked in this then Seller does not owe the commission to Brokerage Firm.

overall capitalization rate

net operating income / value (sale price) = overall capitalization rate formula for direct capitalization 1. capitalization rate x value (sale price) = net operating income 2. net operating income / value (sale price) = capitalization rate 3. net operating income / capitalization rate = value (sale price) investors prefer to specify a capitalization rate because investors are free to choose acceptable rate of return they desire investment value- value of property to a particular investor based on the investors desired rate of return, risk tolerance, etc. definite relationship exists between present value, net income, and capitalization rate

null and void

no longer exists

If a Colorado real estate licensee's license is revoked, his employing broker's license may also be: canceled until a hearing can be held automatically revoked automatically suspended not suspended or revoked until a hearing is held

not suspended or revoked until a hearing is held Licenses are never automatically revoked or suspended without a hearing.

consideration

obligation each party is making to the other a promise undertaken by one party must be supported by a promise undertaken by the other party benefit or sacrifice may not be equal valuable consideration-can be measured in terms of money good consideration- not measured in terms of money

5 purposes of surveying property

obtain current and accurate boundary information required to write a legal description establish the exact quantity of area within a described tract, whether described in square miles, acres, or square feet reestablish boundaries that may have become lost or obliterated obtain data required to divide a large tract into smaller units for development and sale identify and describe encroachments

tenancy at sufferance

occurs when a tenant stays in possession of the property beyond the ending date of legal tenancy without the consent of the landlord tenant has naked possession and is not entitled to notice to terminate holding over

voluntary lien

owner places against the property to secure payment of a long term debt (mortgages)

grantee

owner receiving title

termination of contracts

performance, mutual rescission, impossibility of performance, lapse of time, breach

The statute of limitations is the authority that outlines the

period of time during which a contract may be enforced. The answer is PERIOD OF TIME DURING WHICH A CONTRACT MAY BE ENFORCED. The statute of limitations prescribes specific time restrictions for enforcement of rights by operation of law.

complaints filed with HUD under fair housing act

person has 1 year from the day the discriminatory act occured to file complaint with HUD HUD is able to mediate the complaint and have the parties sign a conciliation agreement

principal

person who delegates authority (client)

florida resident

person who has resided in FL continuously for a period of 4 calendar months or more within the preceding year regardless of whether the person resided in a recreational vehicle, hotel, rental unit, or other temporary/permanent location

title to real property

person who holds vested ownership rights in property has title. the rights referred to may be a limited or full bundle of rights title to real property is a legal concept signifying ownership of the collection of rights called an estate the new owner receives the estate specified in a deed or other legal instrument of conveyance equitable title

sales associate

person who performs real estate services for compensation but who does so under the direction, control, or management of a broker/owner developer

florida statute chapter 475 part 2

pertains to real estate appraisers and sets forth requirements for licensed and certified appraisers according to federal statute. FREAB (florida real estate appraisal board) regulates state certified, licensed and registered trainee appraisers

florida statute chapter 475 part 1

pertains to real estate brokerage, sales associates, schools

impossibility of performance

physical improvements, the death of the buyer or seller

A real estate broker shall NOT engage in any of the following acts: dealing in options on real estate preparing legal documents as a courtesy for the seller of a for a sale by owner transaction selling or offering to sell or exchange a time-share auctioning real estate

preparing legal documents as a courtesy for the seller of a for a sale by owner transaction According to the Conway-Bogue court decision - a Broker is only allowed to perform a licensed activity, such as prepare contracts, on a transaction in which they have been engaged as a Broker by at least one of the parties.

variables that influence demand

price of real estate population of numbers and household composition income of customers avalibility of mortgage credit consumer taste or preferences

general warranty deed

provides greatest protection to the buyer contains all covenants and warranties to give the grantee every possible future guarentee for title protection most common used deed in florida contains covenant of seisin, covenant against encumbrances, covenant against further assistance, covenant of quiet enjoyment, covenant of warranty forever

vendors lien

purchase money mortgage a valid vendors lien is enforceable by foreclosure

VA mortgage loan characteristics

qualifications for program- only veterans, unremarried surviving spouses of veterans eligibility requirements-period of active duty of continuous service lending source and eligible property- one to four unit properties loan guarentee and entitlement- 2015 maximum entitlement is 104,250. veterans entitlement is the maximum amount the government guarentees the lender will be paid in the event the borrower defaults reusing entitlement loan limits-VA does not set loan limits, depends on the value of the real estate, loan may not exceed the amount stated in the certificate of reasonable value (CRV) loan origination fee VA funding fee-may be added to the maximum loan amount and financed, if a veteran has a service connected disability, the funding fee is waived down payment-VA loans of 417,000 or less do not require down payment qualifying ratio-veteran borrowers total monthly obligations may not exceed 41% closing costs-veteran is not allowed to pay for termite report

Of the following; who is responsible for for an accurate and complete closing statement? closing company closing agent for closing company employing broker not attending closing real estate broker attending closing

real estate broker attending closing Real estate brokers are required by Rules E-4 and E-5 to provide copies of complete and accurate closing statements to buyers and sellers for any transaction in which the broker assists or acts in an agency capacity. Although the brokers usually engage a closing company to create the closing statements, they cannot delegate responsibility for the statements being accurate and complete.

DRE ministerial duties involve what?

record keeping

sales associates and broker associates licensed in florida must be

registered under their employing broker.

FREC executive powers

regulate and enforce license law, establish fees

time line to deposit escrow funds (example)

sales associate receives deposit from a prospective buyer on a tuesday (no legal holidays involved) sales associate has until the end of the next business day (wed) to deliver the deposit to the broker broker has until the end of the 3rd business day (friday) to deposit the funds. the 3 day business period for the broker to deposit the funds begins on the day the sales associate is required to deliver the funds to the broker.

abstract of title

search of the recorded documents concerning a parcel of real property reveals mortgages, liens, judgements, or unpaid taxes

A seller must provide a Seller's Property Disclosure form based on which of the following? seller's opinion of condition at the time of the contract seller's current actual knowledge results of a professional property inspection advice of the listing agent regarding the condition of the property

seller's current actual knowledge The Property Disclosure of the Residential Contract to Buy and Sell specifies that the form should be completed by the seller (not the broker) and based on the seller's current actual knowledge.

counseling

service of analyzing existing or potential projects and providing advice to individuals and firms regarding the purchase and use of real estate investments

similarities and differences between business brokerages and real estate brokerage

similarities 1. sale of real property or assignment of a long term lease 2. real estate license required differences 1. assets include personal property and goodwill 2. going-concern value may differ from real estate value 3. wider geographic market

title opinion

some buyers will accept option of title executed by an attorney who has studied abstract of title lists any defects or clouds ie liens, easements, encumbrances will include whether the seller has marketable (merchantable) title

closing statements

some entities on the closing statement are shared between the buyer and the seller

3 categories of residential construction

speculative, custom homes, tract homes

real estate professionals have found that advertising money is more efficiently spent and produces better outcomes if efforts are focused on a target market

target marketing involves expertise in locating prospects

estate for years

tenancy with a starting and ending date created by written lease agreement

gross lease

tenant (lessee) pays a fixed (base) rent and the landlord (lessor) pays all expenses associated with the property including taxes, utilities, insurance, and repairs

net lease

tenant (lessee) pays fixed rent plus property costs net-net-net or triple net

ground lease (land lease)

tenant leases the land only and erects a building on the land

eviction requirements

tenant must be notified in writing that the landlord is demanding possession of the premises landlord must file a complaint for eviction in court of county where dwelling is located tenant is allowed 5 business days to file a reply in defense against the complaint if the tenant merely continues to occupy the premises without answering the complaint, the landlord must obtain a final judgement from the court clerk of court issues a writ to the sheriff at the time the sheriff executes (signs) writ of possession, the landlord or the landlords agent may remove any personal property found on the premises

termination of rental agreements by the tenant

tenant must first give written notice to the landlord citing the noncompliance and stating the intent to cancel the agreement if the noncompliance is not corrected thereafter, the landlord has 7 days to correct the noncompliance and resolve the problem if noncompliance is not corrected within 7 days after the delivery of the tenants compliant to the landlord, the tenant is entitled to terminate the agreement rent may be reduced by a court if the dwelling is rendered uninhabitable, owing to the landlords failure, the tenant may not be liable for the rent during the period the premises remain untenable, if the court agrees with the tenants assertions

percentage lease

tenant pays rent based on gross sales received by doing business on the leased property

variable lease

tenant pays specified rent increases at set future dates tied to a consumer price index (CPI)

If any of the title documents are not delivered to the buyer on or before the date specified in the contract. The contract can be: terminated voided no effect canceled

terminated If the sellers or sellers representatives miss this date then the buyer may terminate the contract and recieve his/hers earnest money back.

adaption of the item

test that seeks to determine whether an item was designed for, or necessary to, the normal use of the specific property

The broker is a single agent of the seller. The principal has disclosed to the broker that the roof leaks, although there is no visible evidence of a water problem. The broker has satisfied her legal obligation to both the principal and all prospective buyers if she discloses

that the roof leaks.

transition from single agent to transaction broker

the agent must first obtain the principals WRITTEN consent to the change in the relationship requires buyer/sellers signature the consent to transition to transaction broker notice includes wording regarding the principals permission to allow the single agent to transition to transaction broker

procuring cause

the broker must have started the chain of events that resulted in a sale procuring disputes between licensees are usually settled through an arbitration hearing disputes between a broker and a buyer/seller be litigated in court

real estate brokerage

the business of bringing together buyers and sellers, owners and renters, and of completing real estate transactions

Under a government rectangular survey, a correction line is required because of errors made by surveyors. the monument being in the wrong place. the curvature of the earth. an error in legal description.

the curvature of the earth.

the initial effective date of a real estate licensee is

the date the applicant passed the license exam

sales associates must deliver escrow deposits to their broker by

the end of the next business day

special warranty deed

the grantor guarentees that nothing has been done to encumber or cloud the title during the grantors ownership

A licensee may negotiate the terms upon which to take a future listing when: by first contacting the current listing broker and receiving permission to seek the seller's future business the licensee is contacted by a seller the licensee contacts a seller and the seller agrees to sign a future listing this is not permitted under any circumstance

the licensee is contacted by a seller When a licensee attempts to interfere in the written relationship between another agent and his/her client - this is called "signcrossing" and is prohibited by the Real Estate Commission. This means do not steal another agents business. However, negotiating a listing or buyers agency agreement is permissable if: 1) it is for a future date after the expiration or termination of an existing agreement and 2) the initial contact was initiated by the Seller.

In the cost-depreciation approach, estimating accrued depreciation involves estimating

the loss in value of the improvements. Depreciation is loss in value due to physical deterioration, functional obsolescence, and external obsolescence. Depreciation applies to the structure only.

real estate brokerage partnerships

the partnership must register with the DBPR under the partnership name at least one partner must be licensed as an active broker partners who deal with the public and perform services of real estate must be licensed as active brokers sales associates and brokers associates may not be general partners in the real estate brokerage partnership 14 calendar days for a broker to be replaced

property manager

the property owners local representative

conditions that create a buyers market

the supply and demand equilibrium is upset by excess supply and demand (more houses for sale than potential buyers) develops a buyers market vacancy rate- percentage of rental units that are not occupied

Which of the following is true concerning listings based on a "net price?" they are illegal in Colorado they are more profitable because no minimum is set on the amount of commission they are legal in Colorado as long as the seller agrees, and the broker has the necessary form prepared by an attorney representing one of the parties to the transaction. they are permissible with approval of the real estate commission

they are legal in Colorado as long as the seller agrees, and the broker has the necessary form prepared by an attorney representing one of the parties to the transaction. A traditional Net Listing is one in which the broker receives as commission all proceeds above a set net price. Net listings are legal in Colorado. Because of the potential for conflict of interest between the seller and broker, they can be problematic.

When a broker presents the Definitions of Working Relationships form to a purchaser: this is considered adequate disclosure of agency no other agency documents need be executed this is not considered complete disclosure of agency this form is never necessary or required

this is not considered complete disclosure of agency The definitions form is an explanation of types of agency - not a disclosure.

title theory

title to the mortgaged property is conveyed to the lender through a mortgage deed or to a trustee through a deed of trust if borrower defaults, the lender may take possession of the property. the borrower retains equitable title to the property. once the debt is paid in full, the lender conveys legal title to the borrower

cost

to create, expenditure to create an improvement including materials, labor, land

legal description

to describe a parcel of land with sufficient detail that it will be accepted by a court of law a legal description is legally sufficient if it allows a surveyor to define the exact boundaries of the property should be inserted into sale contracts with extreme care

home equity loan

to finance consumer purchases secured by a borrowers primary residence usually a 2nd mortgage the dollar amount of a home equity loan is based on the amount of equity. the borrower may take a lump sum amount or access a line of credit

What is the purpose of the real estate commission in Colorado? to provide mediation in disputes between brokers and Colorado residents to protect Colorado residents in real estate matters to assure that licensees collect commissions in accordance with the law to provide legal assistance to the public regarding real estate transactions

to protect Colorado residents in real estate matters The function of the real estate commission is to protect the public. This is done chiefly by licensing brokers, enforcing the licensing law through rules, forms, and disciplinary proceedings

common law

unwritten law or case law. law based on usage, general acceptance, and custom

sublease

used to give another person only part of an existing lease occurs in 2 ways 1. the lessee (tenant) assigns only a portion of the leased property 2. lessee (tenant) assigns all property for a period that is less than the remaining term of the lease

Local government exercises its greatest effect on the real estate business by

using zoning, taxation, and the planning process.

range

vertical (north and south) range lines parallel to the principal meridian every 6 miles

Title to real property is technically conveyed when the deed is

voluntarily delivered and voluntarily accepted.

notice and settlement procedures

when a broker assumes responsibility of an escrow in a real estate transaction, the deposit belongs to and is under the control of the depositor until the party accepts the offer and acquires some interest or equity in the deposited funds

the state government impacts the real estate business

when ownership to real property is transferred or pledged as collateral for a mortgage

sellers market

when supply does down, prices go up ( more buyers competiing for fewer homes) the supply and demand equilibrium is upset by excess demand ( more buyers than supply) creates a sellers market

broker relationship disclosure act and residential transactions

written disclosures are required only when dealing in residential real estate sale transactions residential sale improved residential property of 4 or fewer units, the sale of unimproved residential property intended for use as 4 or fewer units, or the sale of agricultural property of 10 or fewer units

When you, as a licensee, are selling your own property: you are required to list it with another broker you must inform all prospective purchasers that you are the owner as well as a licensee you are required to list it at or under the market price you are not allowed to list your own property

you must inform all prospective purchasers that you are the owner as well as a licensee A licensed salesperson must inform all prospective purchasers that he is a licensee.

A licensed real estate broker has a buyer who is interested in investing in income-producing property. The broker finds a property producing net income of $1,750 per month. The buyer informs the broker that she will buy the property if she can get it for a price that will return 14 percent per year on her investment. If the desired 14 percent rate of return is regarded as a 14 percent capitalization rate, what will the buyer be willing to pay for the property?

$150,000 The answer is $150,000. The solution is: $1,750 monthly net income × 12 months = $21,000 NOI; $21,000 ÷ .14 cap rate = $150,000 target price.

The city has decided to pave the streets of a recently incorporated community. Property owners are to be assessed 70 percent of the cost of paving, which is found to be $25 per foot. The 70 percent assessment tax is to be apportioned between owners on both sides of the streets. What will the special assessment be for a property with 80 feet of frontage?

$700 The answer is $700. The solution is: $25 cost × 80 feet = $2,000 total cost of paving; $2,000 × .70 property owner's rate = $1,400 non-city portion; $1,400 ÷ 2 sides of street = $700 home owner's cost.

Which variable does NOT influence demand?

Availability of construction loans The answer is AVAILABILITY OF CONSTRUCTION LOANS. Availability of construction loans influences supply.

A property closes on April 8, with the day of closing charged to the seller. The annual property taxes are $1,486. Which entry will appear on the closing statement for the property taxes?

Debit to seller and credit to buyer in the amount of $398.98 The answer is DEBIT TO SELLER AND CREDIT TO BUYER IN THE AMOUNT OF $398.98. Taxes are paid in arrears. Therefore, calculate number of days seller is responsible for paying: January (31) + February (28) + March (31) + April (8) = 98 days. $1,486 ÷ 365 days × 98 days = $398.98 seller owes, so debit seller and credit buyer.

If all legislated requirements have previously been met, an active broker in Florida may hold an active license in

Florida and any other state or foreign country whose licensing laws have not been violated. A broker may hold licenses in several states as long as the laws of each state are not violated.

Which item below is NOT a requirement under RESPA?

Give mortgage applicant a list of competing lenders so that the consumer can comparison shop for the best rate The statement is false. RESPA does not require the lender to give mortgage applicants a list of competing lenders.

The purchase price of a business minus the value of the tangible assets of that business equals the intangible assets of the business, referred to as

Goodwill.

You have a level-payment, amortized mortgage of $42,000 at 12½ percent for 30 years. The monthly payment is $448.25. What amount of interest will be paid from the second monthly payment?

The answer is $437.39. The solution is: $42,000 mortgage × .125 rate = $5,250 annual interest; $5,250 ÷ 12 months = $437.50 interest month 1; $448.25 PI - $437.50 = $10.75 principal month 1; $42,000 - $10.75 = $41,989.25 outstanding balance; $41,989.25 × .125 rate = $5,248.6563 annual interest; $5,248.6563 ÷ 12 months = $437.39 interest month 2.

Three claimants have come before the Commission requesting relief from the Real Estate Recovery Fund. All three claimants were involved in the same real estate transaction. Payment for their claims, in the aggregate, is limited to

The answer is $50,000. The maximum payment from the recovery fund for damages associated with a single transaction is $50,000.

The rate of interest that the Federal Reserve Bank charges member banks for borrowing from the Federal Reserve Bank is referred to as

The answer is THE DISCOUNT RATE. The discount rate is the interest rate charged member banks for borrowing from the Federal Reserve.

The broker is guilty of culpable negligence. Culpable negligence is the term used to describe inadequate attention to duties and obligations.

A licensed real estate broker has been hired by a lender to appraise a home for a buyer who has made application for an FHA loan. Which statement is TRUE regarding this situation?

The broker is required to be a state-certified appraiser to perform this appraisal assignment.

The lender's actions are a violation of the Equal Credit Opportunity Act. The Equal Credit Opportunity Act prohibits discrimination regarding credit on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of income from public assistance.

A sales associate who is employed by an owner-developer who owns properties in the name of various entities may be issued

a group license. A group license is issued to a sales associate or broker associate to work various properties owned by affiliated entities under one owner developer.

An example of an ad valorem tax is

a property tax. Property taxes are calculated based on the just value of the property.

A mortgage in which changes in the interest rate may cause changes in the monthly payment amount is called

an adjustable-rate mortgage.

The mortgage clause that requires the lender to waive the right to a deficiency judgment against the borrower, relieving the borrower of personal liability to repay the loan, is referred to as

an exculpatory clause. The exculpatory clause is a provision in a mortgage or note in which the lender waives the right to a deficiency judgment against the borrower and the borrower is relieved of personal liability to repay the loan.

Failure to comply with the statute of frauds will result in

an unenforceable contract. The statute of frauds is a law that requires that certain real estate instruments and contracts affecting title to real property be in writing in order to be enforceable.

A provision in all mortgages that allows the delinquent mortgagor to avoid foreclosure by paying all of the back mortgage payments, late penalties, and costs of collection up until the time of foreclosure sale is the

equity of redemption. Equity of redemption is the right of a mortgagor, before a foreclosure sale, to reclaim forfeited property by paying the entire indebtedness.

A single agent broker received an offer on a listed property at the seller's price and terms. Before informing the seller, the broker received a higher offer. She submitted only the first offer, and the seller, her principal, accepted it. The broker

has violated her fiduciary duty to her principal. The licensee has a fiduciary duty to present all offers to the principal.

Brokers should NOT accept the task of appraising a parcel

if their fees are contingent on the appraised value. The answer is IF THEIR FEES ARE CONTINGENT ON THE APPRAISED VALUE. To accept an appraisal assignment contingent on the appraised value is a violation of the USPAP.

Business brokers appraise businesses using appraisal methods similar to real estate appraisal EXCEPT for the additional technique of

liquidation analysis.

A comparable property has one more bedroom ($8,000) and is on a slightly larger lot ($2,000) than the subject property. The comparative market analysis requires a net adjustment of

minus $10,000 to the comparable property. Adjustments are always made to the comparable, not to the subject. (-$8,000 bedroom and -$2,000 for the larger lot equals a -$10,000 adjustment.)

Individuals who originate loans, often with their own funds, and who may serve as loan correspondents are referred to as

mortgage lenders.

A buyer who obtains a mortgage loan that covers the purchase of a condominium plus furniture, appliances, and other personal property such as towels and kitchen utensils has a

package mortgage.

Constructive notice is

provided by recording in the public records.

A title theory state is one in which a mortgage

transfers title to the lender or escrow agent until the loan is paid.

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