CHEGG RE Final Study Guide
Mrs. Smith owns a piece of Florida real estate. Her millage rate is 45 and the home has been assessed at $225,000. She has a Homestead exemption. How much money does the Homestead Exemption save Mrs. Smith?
$10,125
The city is replacing all the streets, curbs, and gutters in Middleville. The homeowners on both sides of the street are charged special assessment taxes to cover the cost. Mr. Kyle has a 120-front-foot lot. The cost of the construction is $90 per front foot for each affected homeowner, and the city will pay 25% of the cost. How much will the cost be to Mr. Kyle in special assessment taxation?
$8100.00/2 4050
The Real Estate Recovery fund is financed through money received from administrative fines and surcharges on new and renewing licenses. What is the dollar amount accumulated in the fund where surcharges are no longer levied on licenses?
1,000,000
Index lease old=1.3 rate new=1.6 rate sq ft $= 21.00
1.6 / 1.3 =1.23 increase 1.23 + 21.00=22.23
The licensee charged in a DBPR complaint is made public when?
10 days after probable cause is found to exist
Ginger had purchased the property for $48,000. Six months later she sold it for $54,000. What was her percentage of gain?
12.5%
The administrative law judge has issued a Recommended Order. How many days will a party to the hearing have to file an exception to the Recommended Order?
15 DAYS
The Probable Cause Panel of FREC acts as a grand jury. They determine if there is a law violation or not and they recommend whether to take further action or dismiss the case to the FREC. How long does the Probable Cause Panel have to determine whether the case should go forward? pg 126
30 days
A fully amortized loan has a 360 month payment schedule with principal and interest payments of $2588 each month. The amortization of this loan will pay off the loan in:
30 years.
Broker Bill takes his Broker course and passes it. He applies and gets his license on time. He pays all his fees and begins to work. ( He does not have a 4 year degree in real estate ). He does not know what course to take to renew his license for the 1st time. What must Broker Bill do?
60 hour post license course
As used in the government survey method, a section of land with a land area of one square mile contains:
640 acres.
If Joe violated a rule under Chapter 475 F.S. and this is his first offense, what is the period of time of probation he could receive, unless otherwise stated by the Commission?
90 DAYS
When a licensee is being served with the Final Order of the FREC, how many days does he have to file an appeal with the District Court?
90 DAYS
Emma, a 70-year-old widow living alone, has a fixed income of $11,000 per year from social security. If the local option homestead relief exemption exists in Emma's county of residence, Emma may be entitled to:
A Homestead exemption of $25,000, which is a standard deduction.
Blind Ads are illegal
A blind ad is an advertisement that does not make it clear that a broker or real estate company is advertising the property for sale, rent or lease. The name of the brokerage must always appear in an advertisement, no matter what type of advertisement. Refer to FREC Rule 61J2.10.25
Record keeping of Disclosures
A broker is required to keep and make available to the department such books and records as will enable the department to determine if such a broker is in compliance with Florida real estate Statutes. Each broker shall preserve one legible copy of all books, accounts, and records, including disclosure documents for at least 5 years from the date of the document. Documents must be kept for two years after any legal proceedings.
Conversion
A broker took earnest money from a buyer. He deposited the money in the trust account, but when his electric bill was due, the broker deposited the buyer's money into the broker's business account. What is this action called
Goodwill is a measurement of pg 391
A business' reputation
Probable Cause Panel
A copy of the complaint is sent to the licensee or the licensee's attorney and the licensee will have an opportunity to answer the complaint against him All the information obtained is considered confidential until 10 days after probable cause is found. If the complaint is found to be criminal, it is forwarded to the State Attorney's Office for resolution.
A broker from Nebraska wants a license in Florida. He takes a written exam of 40 questions and passes 35 of them. The broker has taken advantage of the written agreements between the states for real estate licensing. This is an example of:
A mutual recognition agreement between the states of Florida and Nebraska, created for real estate licensing.
A subagency relationship would mostly likely occur in which of these situations?
A salesperson is working for a broker who is a single agent of the seller or buyer
A large piece of ground is developed with lights, streets, and sewers. The subdivider wants to get it ready for building. He does an environmental impact statement and makes a large map which shows where each lot and block is located. Streets, parks, and utility easement are also shown. This is visual representation is called:
A subdivision plat map.
Clauses in a mortgage or Deed of Trust
Acceleration Clause: If a borrower defaults on the loan (does not make payments, etc.) the lender can call the entire balance due and payable immediately. Without this clause in the mortgage or deed of trust, the lender would not have the power or right to foreclosure without suing each month for the monthly payment. Alienation Clause: (also called the "due on sale" clause). The mortgagee or beneficiary declares the entire balance of the loan due and payable when any interest in the property is transferred without the written consent of the lender. When this clause is present, the loan cannot be assumed by new purchaser. The reasoning for this is that the lender wishes to know who owns the property, that the purchaser is qualified, and that the property is held intact and unencumbered for the duration of the loan. Prepayment and Prepayment Penalty Clause: This is a clause which allows the borrower or mortgagor to pay the loan earlier than the schedule called for in the mortgage contract. Occasionally, the lender may charge extra interest or an additional fee if the loan is paid off before the normal completion date (for example, if a loan is paid off in 10 years rather than 30 years.) If a prepayment penalty is present, the mortgage document will state the penalty for paying off the loan early, usually six months interest or a flat fee. Many newer mortgages and deeds of trust do not have a prepayment penalty. However, most subprime loans do contain a prepayment penalty. Defeasance Clause: This is the clause that provides for a satisfaction piece to be issued when the mortgage (deed of trust) has been paid in full.
Natural Rights: land gain or loss due to water
Accretion: is the increase of land created by deposits of soil by the natural action of water. •Erosion: is the decrease of land by the gradual wearing away that is caused by flowing water. •Avulsion: is the "sudden" loss of land by an act of nature such a hurricane or typhoon (like the loss of beach). •Reliction: is an increase in land due to the receding of water (such as the increase of land at the Great Salt Lake). •Alluvial plain: is the delta area where the soil deposits from the river. The soil deposited is called Alluvion
FLORIDA HOMESTEAD EXEMPTION
Additional $500 homestead exemptions: Widows and Widowers (not remarried) Legally blind individuals Completely disabled persons who are non-veterans Disabled There are three additional categories that may allow for more exemption: Disabled Veterans: A disability of 10% or more entitles such veteran to an additional $5,000 worth of exemption. A permanent, total disability caused by a service related event entitles such individual to a 100% exemption from taxes on homestead property. Age 65 and older: Certain counties have an ordinance allowed by Florida law, which gives an additional $50,000 exemption to residents who are 65 or older with a household income of NOT more than $20,000. The county has a choice with regard to passing such ordinance and the $20,000 income amount may be adjusted for inflation. This is known as the local option for age 65 and older. Quadriplegics and other low income individuals: A homestead property owned by a quadriplegic, and certain other individuals in a wheelchair, is exempt.
john is considering purchasing a commercial building. His accountant is working with him to determine the property's value to John. The initial cost of an investment property plus the cost of any additional improvements less qualified deductions represents the:
Adjusted basis.
Three brokers get together and decide to form a corporation to sell real estate. They want to call their company "House of Brokers." Each broker wishes to maintain contact with the public. What is necessary to do this?
All three brokers must be active brokers, the corporation must be registered, and the trade name must be registered
To be a fixed-rate, fully amortized loan, certain terms must exist. Which is not a term or condition of an amortized loan?
An amortized loan will have the same monthly payment for P & I over the lifetime of the loan.
Which would be exempt under the Federal Fair Housing Acts of 1968?
An individual selling a personal residence who does not use a broker or discriminatory advertising
COMPLAINT
Anyone can file a complaint with the Department against a licensee. A complaint is filed with the Department of Business and Professional Regulation. If the complaint is in writing and signed by the complainant, the DBPR is charged with the responsibility of investigation. When the investigation is complete, it is the responsibility of the FREC to determine the guilt or innocence of a licensee or potential licensee.
The subdivision has a deed restriction that states all homeowners must build their homes with shaker shingle or Spanish style roofs. One home was not built to the restriction and the other homeowners are upset. What can the neighbors do?
Apply for a court injunction against the property owner.
Estimating the value of a property uses
As a result of a major hurricane, James' property experienced heavy flooding. His home was in a specialized flood hazard area. What insurance will allow James to recoup part of his losses?
A product found in homes built before 1978 is harmful to children. It can lead to birth defects and is generally hazardous. It should only be cleaned up by specialists, and is a required disclosure for sales of real property. What environmental hazard is this?
Asbestos
Berry, the seller, wants Paul, the broker, to change from a single agency relationship to a transaction broker. Paul agrees to do this as long as the transition disclosure is made in writing so that all parties understand what is happening. Paul needs to transition to a transaction broker:
Before the listing agreement is signed.
kickback
Brokers can, under some circumstances, receive kickbacks from providers outside the transaction as long as the buyer and seller are informed of the kickback. A referral fee from a carpet company would be an example of a legal kickback.
Record Keeping of Escrow/Trust Accounts
Brokers who fail to reconcile their escrow accounts monthly (or more frequently) are subject to a citation. Failure to properly maintain escrow accounts is the one of the most common problems found during a DBPR Audit
June is looking into buying her first home. She is shown a number of houses on the market, but the market appears to be sluggish because there are so few buyers. Interest rates are steady and June has several good prospect homes to choose from at reasonable prices. This would be called a:
Buyer's market
how much is the Homestead Exemption for a person who is 65 years of age whose household income does not exceed $20,000?
Certain counties have an ordinance allowed by Florida law, which gives an additional $50,000 exemption to residents who are 65 or older with a household income of NOT more than $20,000. This would make the total exemption equal to $100,000.
The federal government department which regulates RESPA is the
Consumer Financial Protection Bureau (CFPB).
Types of Business Entities
Corporation: is a company that is an entity, rather than a single person Limited Liability Partnership (LLP): is a form of ownership that provides liability protection similar to protection offered to limited partners in a limited partnership Limited Liability Company (LLC): is also called a "professional company" and its purpose is to provide professional real estate services without the liability of an unprotected broker's or sales associate license.
What Florida agency is responsible for investigating real estate complaints
DBPR
Greater Florida Builders wants to build a 450-acre housing development. They submit the plans to the local zoning commission who agrees with the plans, providing that Greater Florida Builders agree to give land for a new school to be located within the subdivision. Greater Florida Builders has been required to:
Dedicate property for a school.
Population of household composition, price of real estate in the area, availability of mortgage credit, consumer tastes, and income of consumers are all indicators of:
Demand
characters of value
Demand - how much call is there for this property? Utility - how useful is the property in connection with the buyer's needs? Scarcity - how hard to find is the property, how much of this type of property in this price range is there? Transferability: Can the seller provide a marketable title? Is the property free of encumbrances unless clearly stated? Will a lender be willing to loan on the property? Situs: is the Latin word for location. In real estate, the term "Location, Location, Location is often used to describe the value of property. In this case, Situs is everything!
Certain disclosures under CERCLA are required when Federal property is transferred by the
Department of Environmental Protection
Government group charged with the record keeping services of real estate?
Division of Real Estate
Transaction Broker Relationship Obligations
Duties include: •Deal honestly and fairly •Account for all funds entrusted to the broker •Use skill, due care and diligence in the transaction •Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer •Present all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing •Provide limited confidentiality, unless waived in writing by a party. This limited confidentiality will prevent disclosure that the seller will accept a price less than the asking or listed price, that the buyer will pay a price greater than the price submitted in a written offer, or the motivation of any party for selling or buying property, that a seller or buyer will agree to financing terms other than those offered, or any other information requested by a party to remain confidential. •Provide any additional information that is mutually agreed to.
Single Agency Relationship Obligations
Duties include: •Deal honestly and fairly, •Be loyal, •Maintain confidentiality, •Maintain obedience to the Principal's instruction unless in violation of law, •Provide full disclosure to all parties, •Account for all funds entrusted to the broker, •Provide skill, due care and diligence in the transaction, •Present all offers in a timely manner, •Disclose all known facts that materially affect the value of residential real property that are not readily observable, •Provide the single agent disclosure before or at the time of entering a listing agreement or an agreement for representation, at the time of or before showing a property, whichever occurs first, •Provide the required information on the required format. There will be a sample disclosure on the next screen.
Which side of the Tallahassee Principal Meridian is Range 1E?
EAST
Jennifer, the owner, and Jacob, a licensed Florida salesperson, make a handshake deal allowing Jacob the right to sell Jennifer's condo for a six-month period. They are both of sound mind and legal age and they agree on the terms and conditions for the sale. Under the Statute of Frauds, this type of contract is considered:
Enforceable.
Office Entrance Signs
Every office entry must have a sign located on the front entry door or directly adjacent to the door. The sign must contain the NAME of the BROKER who is registered as the broker of record for that office. If the office has a trade name, the Trade name must be located on the sign, followed by the broker of record's name. A partnership or corporation shall contain the name of the firm or corporation or trade name along with at least one of the brokers. At a minimum the words "Licensed Real Estate Broker" (or "Lic. Real Estate Broker") must appear immediately below the broker/s name/s
True or false: Liquidity is how fast property can be sold?
False. Liquidity is the ease with which an asset can be converted into cash
First Federal has a loan on a property for $40,000. The homeowner gets a second deed of trust from Home Savings in the amount of $100,000 and the home is valued at $300,000. Home Savings wants to be in the higher priority than First Federal since they have a larger loan. First Federal agrees. How can they do this?
First Federal signs a subordination agreement with Home Savings
Jack, a dairy farmer in Florida, stores a banned chemical, DDT, on his property. He got it several years ago and uses it to keep flies off his milking cows. He thinks nothing of it until he gets a letter from his lender stating that if he doesn't get rid of it in a safe and proper manner, his entire loan on his property will be called. How can the lender do this?
Florida law inserts a Hazardous Waste Clause in the standard mortgage instrument.
Types of Estates
Freehold: this term indicates ownership, and an indefinite period of time or Leasehold: this term indicates renting or leasing for a fixed term.
A 150-year-old 3-story mansion in the center of town was up for sale. The home has one bathroom on the first floor and wide columns that cannot be removed in the living and dining rooms. The appraiser depreciated the value of the home based on:
Functional obsolescence.
A grantor may use any number of deeds to convey (transfer) property from one person to another. The importance of each type of deed is the type of promises made from the grantor to the grantee. The highest and best deed for the grantee is:
General warranty.
ADVANTAGES OF REAL ESTATE INVESTMENTS
Good rate of return: Historically, real estate through its appreciation and improvement in the market place has yielded the investor with as good or better return on his money as stocks or bonds or other investments. Tax advantages: There are several tax advantages such as tax shelters, depreciation, installment sale, capital gains and exchanges that benefit an investor as he seeks to reduce his federal Income Tax. Hedge against inflation: Because real estate usually increases in value with the market, real estate investments are considered to offset inflation since the property grows with inflation. Leverage: By using borrowed money, the investor is able to spread the risk of failure to others as well as him, thus cushioning the fall if there should be one. Equity build up: As the loan is paid, the amount of money the investor has invested in the home increases, thus decreasing the loan and increasing the equity. In essence, it is a forced savings account
The owner and a property manager sign a property management agreement. The property manager advertises the property, shows the rental units, collects the rent and deposits the money in the proper account. He fails to maintain the units in proper working order and the property declines in value. The owner is an absentee owner who arrives to find his property in disrepair. The property manager:
Has failed in his fiduciary duties and is responsible for any losses in value the owner has suffered.
As a result of a major hurricane, James' property experienced heavy flooding. His home was in a specialized flood hazard area. What insurance will allow James to recoup part of his losses?
Hazard Insurance
The federal government allows a homeowner certain deductions when filing the long form for income tax. Which is not an allowable deduction?
Hazard insurance premiums
A nonresident licensee retires from his job in St. Louis and moves to Florida to begin work as a real estate broker. He has had his nonresident license for several years and has completed all the requirements to maintain his license. He has renewed his license appropriately. What must he do first to begin work in Florida?
He must begin by notifying the FREC that he has moved to Florida within 60 days of the change.
Principles of Value
Highest and Best Use: is the possible use of a property that would produce the greatest net income and thereby develop the highest value Substitution: the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property. (Comparison shopping- basis for market data approach.) T he Law of Supply and Demand: The value of a property increases when the supply is limited and decreases when there is too much property available. Similarly, the value increases when the supply is short, and decrease when there is little demand. Conformity: An appraisal principle of value based on the concept that the more a property or its components are in harmony with the surrounding properties or components, the greater the value. Regression and Progression: Regression and progression occurs between dissimilar properties. This means the value of the better quality property is affected adversely by the presence of the lesser quality property and a lesser house will benefit from a larger house. Anticipation: Property can increase or decrease in value in expectation of something in the future such as appreciation or rezoning. Contribution: means the value of any component may or may not give value to the whole. Assemblage: is the combining of two or more adjoining lots into one larger tract to increase their total value. Competition: is when one business attracts another business of similar type; together they may make more money than they would have singularly. Change: real property is constantly changing- expanded, stabilizing, declining or rebirth.
Jim and Joan owned a farm which produced fruits and vegetables for sale. The farm was located in a heavily populated area. Every year, hundreds of customers came to buy produce from them at the farm. One day, customers were surprised to see that the farm stand was gone and that Jim and Joan had sold the property for a much higher price than farm land would normally cost. Which principle of value did the appraiser use in determining the value of the property?
Highest and best use
Discipline for lack of Disclosure
If a licensee fails to provide or adhere to the provisions of disclosure, the Commission may •deny an application for licensure, registration, permit or renewal •place the licensee, registrant or permitee on probation, •suspend a licensee, registration or permit, •impose an administrative fine not to exceed $1,000 for each count, •issue a reprimand, •do any or all of the above Definition
Formal Complaint
If probable cause is found, a formal or "administrative" complaint is filed against the licensee involved. The formal complaint clearly defines all of the charges against the licensee. The Department has a limitation of 5 years in which to file the complaint. The licensee is notified in writing and has 20 days to file an answer
annualized interest rate
If the interest on a loan at 9% for 8 months was $5,400, what was the amount of the loan? First divide $5,400 by 8 to see how much interest is per month so it can be annualized. $5,400 ÷ 8= $675 per month. Multiply the interest times 12 months to get annualized interest ($675 x 12= $8,100). This is the annualized interestAnnualized interest of $8,100 ÷ interest rate of 9% = loan amount of $90,000
DISADVANTAGES OF INVESTING IN REAL ESTATE
Illiquid: property is not always easy to sell in a quick fashion so if the market isn't right for sale or the property hasn't appreciated enough, the investor may not be able to sell as fast and at the price he seeks. Market is local in nature: In the global economy of the 2000's, real estate remains a local property with local customs and prices, as well as local problems such as a plant closing or company layoffs. Need for Expert Help: An investor may need to hire some help with this property: this need ranges from a broker to sell the property to a contractor to help to fix up the property. It is difficult for the investor to be the sole expert in the property. There will be a need (and an expense) to pay others. Management Effort: it takes time and energy to keep track of real estate investments and it takes energy to keep up with market trends and investment strategies. Real estate investment is not for "the faint of heart." Risk: There is always the chance that the investment will fail; that the investor will pay too much for the property, or that physical concerns beyond the investor will diminish his rate of return. The higher the risk, the lower the price he will want to pay for the property.
Important measurements
Important Measurements •1 mile = 5,280 feet •1 square yard = 9 square feet •1 cubic yard = 27 cubic feet •1 square mile = 640 acres •1 acre = 43,560 square feet.
An appraiser is trying to find the value of a piece of property. He looks at the land first and figures its value, and then he determines the value of the building by subtracting depreciation factors. After he has determined these facts, he adds the cost of land to the cost of the building to determine the value of the piece of property. Why does he do this?
In appraising, land is never depreciated, as are buildings.
Exclusive Right to Sell Contract
In this type of listing, the listing broker is always entitled to a commission regardless of who procures the buyer. It provides the most protection to the broker. If the owner of the property procures the buyer, the owner will be required to pay the listing broker. Both parties must perform in this type of listing - the seller has specific requirements that he must perform; such as having the property available for viewing by potential buyers, allowing a lockbox, informing the broker of any changes in the property's status as well as the broker's responsibility to advertise and sell. Because this type of listing is a bilateral agreement, it should be in writing.
The Department receives an unsigned complaint. What can the Department do?
Investigate the complaint if the Department wishes
Blockbusting (or Panic Peddling)
Is the illegal act of inducing panic selling in a neighborhood for gain by a broker or sales associate. "You'd better sell now, because they are moving in," is a clear violation of the law
Mike wanted to make lots of money in real estate. He agreed to represent Kevin is the sale of his property and Mike also represented Sharon, the buyer, in the same transaction. Neither parties were aware they were both represented by Mike. The transaction went badly for both parties. Sharon wants to file a complaint. What grounds can she file?
It is illegal to represent both parties simultaneously without the consent of both parties. No Duel agency in FL but can be transactional.
emergency suspension order
It is issued by the Secretary of the DBPR when the public is in immediate danger from the actions of the licensee. The suspension must be followed by action by the FREC.
Jimmy has used his neighbor's property to run his cattle across for several years. He never spoke to the neighbor about it, nor did the neighbor speak to him about it. His cattle were in the open for all to see and Jimmy continued to do this for 20 years. Jimmy determined that his neighbor might sell the property some day so he decided to get the right to use the property himself without buying it. Is there a way he can legally do this?
Jimmy appears to have met the claims of easement by prescription.
Ad valorem taxation in Florida is based on which of the following types of value?
Just value
Justin is an unlicensed person and he has been appointed a trustee of a special needs trust for his nephew. The trust will be funded by the sale of the property of his brother. Justin lists, sells, and puts the money into the trust as he is required to do. What best describes this situation?
Justin cannot take any money for selling the property since this would be compensation and he would need a license to do this.
Ken represented John in the sale of a home. Sale went well and closed on time. Later, John discovered that Ken told the buyer that John was willing to take a lower price to speed up the sale of the home and that Ken told the buyer a specific price. Which describes the situation?
Ken, the agent, violated the law of agency
escrow disputes
Mediation: Both parties agree in writing to mediation by a mediator. If the issue is not solved within 90 days, the licensee must use the other types of dispute procedures. Arbitration: If the buyer and seller cannot agree, the issue is submitted to arbitration and a third party (arbitrator) makes a decision for one party or the other. If this fails, the parties go to Litigation. Litigation: is simply a law suit, asking the courts through a process called Interpleader to determine the rightful owner of the disputed escrow. The court issues a declaratory judgment which is a binding determination of the rights and status of the parties.
Commingling
Mixing business and personal money
Which is not a source of financing in the primary mortgage market? pg 301
Mortgage bankers
Jacob got a new home loan to purchase his home. He went to a local savings and loan and signed a deed of trust as part of his closing. What is the lender called in the deed of trust?
Mortgagee
What is her loan amount
Mrs. Smith paid $7200 in interest this year on her loan. The rate is 5% Put $7200 in the calculator first; divide by 5%. $7200 ÷ .05 or 5% = $144,000 is the loan amount
agency relationships
No Brokerage Relationship: When the Agent represents one side or the other in a transaction but not the party who is given the form. •Single agent broker: an agent who represents either the buyer or the seller in the transaction but not both, •Transaction broker: an agent who provides limited representation to a buyer, a seller or both, in a real estate transaction but does not represent either in a fiduciary capacity, •Designated Sales Associate: a special case for non-residential transactions where two licensees under the direction of one broker act as single agents. One represents the buyer and one the seller. In this case both buyer and seller must verify assets of more than $1 million.
A property owner moved from a farm he owned in fee simple to another county. He continued to pay taxes on the property and keep the title clear. Did he violate his rights of private ownership?
No, because as long as he paid the taxes, the property is not considered abandoned.
Under the Statute of Frauds in Florida is a handshake a legal contract?
No, it is unenforceable
Bill Broker prints an office policy that says he requires a security deposit of "$350 for whites and $500 for blacks" in his area, since he has records to prove that "blacks have weaker financial qualifications." Is this an acceptable policy?
No. It is discriminatory to set different deposits because of race.
James, a real estate broker, decides he wants to open a property management company. He contacts a number of his friends and they agree that he will be responsible for their properties. They all sign a property management agreement that lists all the names and addresses of the owners, the legal description of the property, and the method and schedule of compensation. Is this a sufficient property management agreement?
No. The agreement does not specify a beginning and end date, the extent of the property manager's authority, or the specific services to be rendered.
The FREC is investigating a claim by a buyer that the broker had not given the proper disclosure to the buyer before the buyer purchased a home. The broker has paperwork dating back three years from the date of the signing of the document in question, and one year after the legal action of the case. Is the broker protected?
No. The broker needs to keep the records five years from the date of the document and two years after any legal action.
A property has a subdivision restriction forbidding use of properties for commercial purposes. The zoning ordinance for the area would permit a commercial use. Can the property be used for a commercial purpose?
No. The subdivision restriction takes precedence over the zoning ordinance since it is more restrictive.
Johnson has his property listed with ABC Realty. On November 1, a fire causes considerable damage to the property. On November 15, Johnson rescinds the listing. On November 30, the broker was deemed by a judge to be incompetent. December 30 was the listing contract expiration date. On which date was the listing terminated?
November 1
The Equal Credit Opportunity Act requires lenders to make consumer loans without regard to all except:
Occupation.
days dispute
Once the dispute is settled, the broker must notify the FREC within 10 days that the dispute is over •Request a refund of 75% of the fee (if requested within 30 days) if the tenant does not find a rental; and •Request a refund of 100% of the full fee (if requested within 30 days) if the information is inaccurate.
Exclusive or Exclusive Agency Listing
Only one broker is allowed to act on behalf of the seller but if the owner sells the property himself, no commission is paid to the broker. If the broker sells the property, he will be entitled to a commission. The seller must make the house available for the broker to show, provide entry, and inform the broker if there is a change in the property's availability, and the broker must work to advertise and sell the property. This type of listing benefits the seller as the broker could lose money in marketing a property should a buyer walk up to the seller's house and make an offer.
A very important person bought a home at Lake Geneva, WI. He purchased a home and in the mortgage he also included the boat, boat dock, and boat house. What type of mortgage did this important person have?
Package Mortgage
Peter held a sales associate's license. He renewed his license by completing the post-licensure class on time, but he filled out the renewal form fraudulently. He was discovered by the FREC and his license was revoked. Can Peter ever apply for a real estate license again?
Peter can apply for the license after this renewal period, but he is not likely to receive it.
powers of the government
Police power - The constitutional authority and inherent power of a state to adopt and enforce laws and regulations to promote and support the public health, safety, morals and general welfare. Eminent Domain-The right of the government (both federal and state), public corporations, (school districts, sanitation districts), public utilities and public service corporations (railroads, power companies) to take private property for a necessary public use, with just compensation paid to the owner. Taxation -The right of the government to collect taxes on properties to support the cost of public services. Escheat - If property owners die without a Will and with no heirs, their property "Escheats" or belongs to the stat
The Sherman Anti-Trust Act
Price fixing- Collusion between brokers and sales associate with competing companies in setting commission rates is illegal. "Everyone charges the same so you might as well list with me" would be considered an illegal statement and a violation of the Act, since brokers cannot get together and set rates. Making a statement that a broker charges more commission than another or that a broker offers a discount commission could also violate this rule as brokers charge the commission that they need to meet their own business plan. There is NO standard commission in real estate! •Group Boycotts - Licensees of different companies should not agree to boycott a company because of the company's business practices. For example, a group of brokers boycott a discount broker because the discount broker has lower rates. This is illegal. •Division of markets by location or price - Dividing up the town either geographically or by price range is a violation of law. Giving ABC all of the north side while XYZ takes the south side is a violation of law as is ABC taking all the listings of below $200,000 and XYZ all the listings above. Violations of the Sherman Anti-Trust Act can include prison terms and fines of up to $10 million for corporations and a fine of up to $1 million or ten years imprisonment (or both) for individuals. All business must be allowed to flow freely in an open market.
Civil Rights Act of 1866
Prohibits discrimination in real estate transactions based on a consumer's race.
Repairing the roof, recoating the driveways, replacing lighting, and cleaning out the gutters on an apartment building are considered by the property manager and the owner to be part of the job. This is considered:
Proper Maintenance and is required
The Florida Real Estate Commission (FREC) was first organized in 1926. It is composed of 7 members who are appointed by the Governor and approved by the Senate. Its primary purpose for being in existence is to:
Protect the public.
puffing
Puffing is making such statements as "The transportation, shopping and schools in this area are terrific." or "Isn't this the most beautiful yard you have ever seen." This is a misrepresentation of the property and could result in a loss of perceived value on the part of the buyer. If the broker or salesperson causes a material loss to a party as a result of misrepresentation, a resulting charge of FRAUD could follow.
A broker advertised in his local newspaper that a home was for sale for $50,000 when it was really for sale for $500,000. A buyer called in and was told that this was simply a typing error and that the correct price was $500,000. The buyer was angry that the associate was so arrogant on the phone and the buyer filed a written complaint with the FREC. The most serious determination by the FREC would be to:
Punish the broker with an administrative fine of $1000 up to a one-year suspension.
The FREC's authority to impose disciplinary actions on licensees is part of its
Quasi-judicial powers
disclosures in a sales contract
Radon gas (The law behind the Radon Program has six guidelines/roles for disclosure). •Energy Efficiency brochure (1993 Florida Building Energy-Efficiency Ratings Act). •Lead-based paint disclosure (Lead Hazard Control Grant Program was designed by HUD to address this issue in thousands of low-income privately owned housing units). •Homeowner Association disclosure •Flood insurance disclosure (Homeowner's Insurance policies often do not cover this issue) •Condominium and cooperative disclosures, documents and FAQ's •Building Code Violation disclosure
AD VALOREM
Real property tax is an ad valorem tax based on the assessed valuation of the property. Real estate is ASSESSED for tax purposes by county appraisers. An assessment is an official valuation of real property for tax purposes based on appraisals by the local assessor's office.
The practice by some lenders to refuse to lend in certain areas because of race, color, national origin, or religion, regardless of the ability of an individual person's ability to pay, is best described as:
Redlining.
Steve is interested in learning how to be a single agent business broker. He needs to know the steps in selling a business. All are steps in a business sale EXCEPT
Represent the buyer and obtain a purchase agreement.
Americans with Disabilities Act (ADA)
Requirements for new buildings included under the act are buildings built after March 1991 with an elevator and four or more units- otherwise only the first floor must meet specifications for handicap accessibility
Jim Jones, the landlord, rents a property to Tom Smith, a physically disabled person. Mr. Smith, with Mr. Jones' permission, modifies the house to suit his needs. When the lease expires, Mr. Smith will NOT be required to:
Restore the wide doorways that were installed for his wheelchair to their original size.
Water rights
Riparian: Along a Navigable river, an owner owns to the water's edge. Along a Non-Navigable stream, the owners own the land to the center of the stream and the government owns the water. •Littoral: Along large navigable lakes or oceans, the owner owns to the average high water mark. •Littoral Rights: The body of real property law that defines an owner's interest when the property abuts a navigable large body of water like an ocean, sea, or lake. Both riparian and littoral rights are tied to land that is adjacent to water. Generally, the property line ends at the mean high water mark
After working with a buyer for 2 months, Sally finally has accepted contract between her buyer and seller. The contract calls for earnest money deposit (EMD) to be delivered to the seller upon acceptance. Sally's out of state buyer did not bring his checkbook for the deposit. Which of the following statement correctly describes the best course of action regarding the earnest money?
Sally should suggest an amendment to the contract with a mutually agreeable time frame for completing the EMD deposit
An appraiser is working on an appraisal. He gathers information about highest and best use, identification of key features, and identification of possible legal or physical problems. This is called:
Site analysis.
Which is not a method of solving a good-faith doubt in the resolution of an escrow account dispute?
Subrogation
To determine the effective gross income on a property, the sales associate should:
Subtract vacancy and collection losses from potential gross income.
A legal description of a piece of real property should be complete enough so that a reasonably competent:
Surveyor could find it.
Richard and Katherine are man and wife. They own a house in tenancy by the entirety in the Florida Keys and live there all year. One day Katherine comes home to find that Richard has sold the house without her knowledge or consent. Richard says he is entitled to do this since this is the way they own the property. Which statement about tenancy by the entirety is not true?
Tenancy by the entireties allows for each person to be able to sell his/her interest independent of the other.
A notice of noncompliance may be issued for a first-time minor offense or a minor violation. Who can issue this notice?
The DBPR investigator
A developer is considering building a community for Senior Citizens. He sets up a building that is occupied only by tenants 62 yrs or older. HE designs his community with barrier free access and advertises to older people in retirement magazines. A niece of one of the owners requests to move in with her 2 kids and live with her aunt in the building. Can the homeowners and developers refuse to let her move in?
The Developer may discriminate against the children and mother because senior housing is exempt under Federal Fair Housing when certain conditions have been met.
_______________________________provides independent Administrative Law Judges to conduct hearings pursuant to Florida Statutes, pursuant to other law, and under contract with governmental entities.
The Division of Administrative Hearings (DOAH)
Final Order
The Final Order Panel receives the Recommended Order from the administrative law judge order along with exceptions. The licensee has the right to be present, to have an attorney and to make final arguments. The FREC has the power to accept, reject, reduce, or modify the Recommended Order, with the final order being submitted within 90 days of receiving the Recommended Order. The Final Order must be signed by the Chairperson, Vice Chairperson or Director of the Division of Real Estate. This is called the "Certificate" and is the final directive of the FREC. It can be used as prima facie evidence* in civil suits. This is placed on record by the Division.
non federal or charted banks who broker or lend for mortgages must be registered with
The Florida Department of Agriculture
The appraiser was looking at three different homes to compare to the subject house. House A had one more bedroom and a screened-in porch compared to the subject house; House B had two fireplaces where the subject house had one; and House C had a three-car garage when the subject house only had a two-car garage. In order to reconcile these properties to the subject house, what must the appraiser do?
The appraiser will subtract from Houses A, B, and C to get the subject value.
The buyer of an industrial complex wants the broker to place the earnest money in an interest bearing account. The broker does this, clearly identifying all parties who are to receive the interest and the date the earned interest is to be disbursed. With only the verbal consent of the buyer, he places the money in an insured account in a depository in Florida. When the time comes to disburse the account, the broker will write a check to the buyer for the interest as the buyer agreed. Which statement describing this situation applies?
The broker is able to follow the buyer's instruction and has complied with Florida law.
The buyer of an industrial complex wants the broker to place the earnest money in an interest bearing account. The broker does this, clearly identifying all parties who are to receive the interest and the date the earned interest is to be dispersed. With only the verbal consent of the buyer, he places the money in an insured account in a depository in Florida. When the time comes to disburse the account, the broker will write a check to the buyer for the interest as the buyer agreed. How would you describe this situation?
The broker is able to follow the buyers instructions and has complied with Florida Law
Escrow Accounts Deposited
The broker must be a signatory on all escrow accounts. A broker may maintain more than one escrow account and maintain up to $1000 of his own money in each sales escrow account or up to $5,000 in a property management account A broker is NOT required to have an escrow account. When earnest money or deposit funds are entrusted to a title company or attorney, the licensee who prepares the contract must indicate on that purchase agreement the contact information for the depository where the funds will be held. Within 3 BUSINESS DAYS of the date of receipt, the broker shall make a written request to the title company or attorney to provide a written verification of receipt of the deposit. •Within 10 days of verification of deposit, the broker shall provide the seller (if unrepresented) or seller's broker a copy of written verification
A buyer of an installment contract buys the property on a five- year contract. At the end of the second year, the buyer of the installment decides to sell the property to someone else because he is too busy to manage it. Can the buyer legally do this?
The buyer cannot sell the property because he does not have equitable title.
The Federal Housing Administration (FHA) insures loans for lenders of real property. Which statement about FHA loans is FALSE?
The buyer does not have to make a down payment.
Cash Flow Statement:
The cash flow statement is a statement (report) of flows (both in and out of the business) of cash. This statement is a key accounting report. One could show the most profitable performance using an income statement, with huge profits, and yet have nothing left in the bank. In this situation the business would not survive. Overspending on credit on behalf of the business occurs when all of your sales have been made on credit and no payments are being made. It could also occur if one was not monitoring the cash flows of the business (income to expense). Comparing the budget to the cash flow statement helps the business owner to adjust for expenses not planned as the business year progresses
The homeowner has just purchased his new home and is meeting his new neighbors. They are discussing the annual taxes and the assessed value of the property. The new home owner feels he is paying too much in taxes compared to his neighbors. To whom can the homeowner appeal to in Florida to have some reduction in his taxes?
The county's tax collector
Nathan made out his last will and testament with his attorney. He was of legal age, the will had the proper wording, and had the correct number of witnesses. The next day, Nathan was committed to a state mental health hospital. Can Nathan's will serve the purpose for which it was intended?
The courts will determine at probate if Nathan was of sound mind at the time of signing before the will is certified as valid.
A developer is considering building a community for senior citizens. He sets up a building that is occupied only by tenants 62 years or older. He designs community areas with barrier-free access and he advertises to older people in retirement magazines. A niece of one of the owners requests permission to move in with her two children and live with her aunt in the building. The homeowners and the developers refuse to let her move in. Are they justified in doing this?
The developer may discriminate against the children and their mother because senior housing is exempt under Federal Fair Housing when certain conditions have been met.
Yield, as it is referred to in financing, is:
The effective annual amount of income that is being accrued on an investment.
Organizations that Cannot Be Registered as a Real Estate Brokerage
The following cannot be registered as a real estate brokerage: •A Corporation Sole- church organization, but not a non-profit •A joint venture-temporary relationship •A Business Trust-investment group for its own purposes •A Cooperative/Condominium/Homeowners' Association- These associations are formed to manage common ownership and do not deal in real estate •An Unincorporated Association- local property owners, not partners •An Ostensible (Quasi) Partnership - hidden relationship •An ostensible partnership may be formed without the knowledge of a real estate broker
THE HOMEOWNER'S RIGHT OF APPEAL
The homeowner seeks an adjustment within 25 days from the county property appraiser, or his representative. If the county appraiser finds in the homeowner's favor, the appraiser has the right to make a change and lower the assessed value. If the appeal has been rejected by the county appraiser, the homeowner may file an appeal with the Value Adjustment Board, a local group made up of 2 county commissioners,1 local school board member, and 2 citizens, all elected members. If this group agrees with the homeowner, the board can change the assessed value. If the board agrees with the county appraiser, the board rejects the homeowner's request. If the previous board and county appraiser have both rejected the homeowner's request, the homeowner may file suit in the courts after he pays taxes under protest. This is called a Certiorari proceeding which means the court will review the matter. If the court finds for the homeowner, it will direct the county appraiser to re-examine the value with the appropriate methods of value; if it finds for the country appraiser, the homeowner loses his appeal.
Income Statement
The income statement is also known as the profit and loss statement. It is a report showing the profit or loss for a business during a certain period, as well as the incomes and expenses that resulted in this overall profit or loss. The amount of the profit or loss for a business during a certain period indicates the financial performance or health of the business.
Along his beachfront property, a homeowner put a large "Keep Off" sign on the high tide mark. He was tired of all the noise and trash that the general population had deposited on the property and he felt he owned it. His lawyer told him he had to take the sign down. Why did the lawyer do this?
The lawyer was concerned about littoral rights.
Judicial Review
The licensee must appeal within 30 days to the District Court of Appeals. While the case is under appeal, the licensee does not receive a stay enforcement (stop enforcement) against the FREC
When a property is sold "subject to mortgage" how does it affect the original borrower?
The original buyer is still liable because no new note was signed.
If house A had a sale price of $70,000, monthly rent of $500, and a GRM of 140; House B had a sale price of $68,500, monthly rent of $490, and GRM of 139.8 and House C had a sale price of $70,500, a monthly rent of $485, and a GRM of 139.6, what would be the value of a property which rented for $495 in the same neighborhood, assuming that house A is the best comparable?
The sale price should be $69,300.
A listing sales associate who shows a property to a ready, willing, and able buyer has certain obligations to the buyer. Which is NOT true?
The sales associate MUST disclose to the buyer that he is a Transaction Broker
A prospective buyer submits an offer to purchase a home for $256,000. The seller changes the price to $260,000, initials the change, signs the offer and sends it back to the purchaser. What has occurred here?
The seller has rejected the initial offer and has become the offeror of a counter offer.
A prospective buyer submits an offer to purchase a home for $256,000. The seller changes the price to $260,000, initials the changes, signs the offer and sends it back to the purchaser. What has occurred here?
The seller rejected the initial offer and has become the offeror of the counter offer.
Open Listing
The seller retains the right to hire any number of brokers to sell his property. Whoever provides the seller with a ready, willing and able purchaser is entitled to a commission. If the seller sells the property without the broker, he pays no commission. This is considered a unilateral contract because the broker is the only one who must perform and the seller has no responsibility other than to pay the broker after performance. This type of listing benefits the seller only
Fred leases a taco store in the shopping center. In order to prepare his tacos, Fred installs a large, old stove to cook the meat. The lease runs out and Fred does not want to renew the lease. He leaves town and leaves the stove in the landlord's property. The lease contract did not mention the stove and the landlord is very unhappy. What is the legal situation now?
The stove is a trade fixture, but Fred did not take it with him upon the expiration of the lease. Now it is the property of the landlord.
A buyer bought a property without telling the seller or broker of his intended purpose for the property. The contract contained no contingency clause and was properly signed and executed. The buyer is now unable to obtain the zoning he planned for the commercial project he needs for this property and he is unable to use the property. What is the status of the contract at this time?
This is a valid, enforceable, executed contract
A buyer bought a property without telling the seller or broker of his intended purpose for the property. The contract contained no contingency clauses and was properly signed and executed. The buyer is now unable to obtain the zoning he planned for the commercial project he needs for this property and he is unable to use the property. What is the status of the contract at this time?
This is a valid, enforceable, executed contract.
Steering
This is directing a buyer to or away from a certain area because of race, color or national origin. Such statements as "You'll be more comfortable with your own kind" or" you don't want to live there, they're not your kind of people," are against the law. Decisions about buying property should be based on financial concerns, rather than race, color, religion or national origin. Even if a buyer wishes to be located in a segregated area, sales associates are cautioned to ensure that they show the buyer all properties which they are qualified to buy, then let them make the decision after seeing what is available to them
Redlining
This is the practice by some lenders to refuse to lend or insure in certain areas because of race, color, national origin or religion, regardless of the ability of an individual person to pay. Lenders actually outlined the area on a map (usually with red marker!) This is forbidden by law
TITLE INSURANCE
This policy is for protection against claims of others which may not have surfaced prior to closing.
The fact that all real estate rules must be written or printed under the seal of the commission provides for what point of law?
This provides Prima Facie evidence of their existence.
FLORIDA GREEN BELT LAW
This taxes agricultural land at a lower rate than the encroaching cities around the land, and preserves the land for future agricultural use. Without this protection, owning farm land and paying taxes would be prohibitive.
A division of territory used in the government rectangular survey system of land description that is six miles square and contains 36 sections is a:
Township
What must be on a Real Estate Brokerage sign?
Trade Name Brokers Name Licensed RE Broker
A Buyers Agency Agreement is an employment contract between the buyer and the broker. The agreement should contain all elements except?
Type of Broker - Seller relationship
A Buyer's Agency Agreement is an employment contract between the buyer and a broker. The agreement should contain all elements except:
Type of broker-seller relationship.
four types of agency
Universal agent: handles all delegated business of the Principal. The Universal agent has the Power of Attorney and is called an Attorney-in-Fact. 2.General Agent: handles multiple transactions of a principal/client. 3.Agency coupled with an Interest: when the real estate licensee is a partner in the ownership of the property as well as represents the partners in an agency relationship. 4.Special Agent: handles one transaction for one seller of one property. This is the most common type of real estate representation. The broker can represent several sellers on one house each at one time but never the seller and buyer for a transaction
The differences between selling property and selling a business
Usually these transactions of selling a business involve more than a property. Personal property is involved, trade fixtures are involved and the good will (called "blue sky") that the business has generated is involved. Trade fixtures are items that make the business run. i.e. racks and shelves for bookstores, store items for showing purchasable items, restaurant ovens and equipment, desks and computers. These are tangible assets, meaning they can be physically counted. The value of the business may be less than, equal to, or greater than the value of the real estate. The "going concern" value* may be different than the real estate value. Markets for business enterprise are typically wider in geographic scope than markets for individual parcels of land. An additional measurement a business is the "good will" of the business. Good will is a part of the going concern value as it measures the business' name and customer history. This is called an intangible asset meaning that it cannot be counted physically.
What is the major difference between acquiring title by voluntary alienation compared to involuntary alienation?
Voluntary alienation means that the grantor is involved in the transfer; in involuntary alienation the grantor is either not involved or it is against his wishes.
Advertising
When advertising on the Internet, the brokerage firm name shall be placed adjacent to or immediately above the POINT of CONTACT information. "Point of Contact" refers to any means by which to contact the brokerage firm or individual licensee including mailing address, physical street address, e-mail address, telephone number or FAX number
Mortgage fraud may be prosecuted in the United States as
Wire Fraud
A listing contract that spells out terms and conditions for the seller and broker is what type of agency agreement?
Written or expressed agency agreement
Ted, Will, Mike, and Tom own a 20-room home as tenants in common. Mike and Tom, two of the owners, decide to sell to two new owners, Larry and Joe. Can this be legally done?
Yes, because each co-owner has a separate title to the undivided interest.
A broker moves his office without telling the FREC where he is moving. Two weeks later, a seller comes in and lists his property. The property sells, but the seller is most unhappy with the way the broker performed. The seller refuses to pay a commission to the broker. Can the seller do this?
Yes, because the broker's license ceases to be in force when the broker changes his address without notifying the FREC within 10 days
A city acquires a 10-foot strip of a property owner's land for a public walking trail. The owner's home is not affected and she is able to use the land. Is the homeowner eligible for compensation?
Yes, because the city is using its power of eminent domain for public good.
A broker desires to keep an escrow account in an interest bearing account. Would this be legal?
Yes, if all parties to the transaction agree, in writing that the funds will go into an interest bearing account and who is to receive the interest
When Paul decided to become a real estate sales associate, he applied for his license. He was 23 years old at the time, had a college degree, and had previously owned a business--a lawn service company known as Green Acres Land Service, and he called himself John. He had been found guilty of several parking violations which had resulted in an outstanding warrant for his arrest. He paid the parking tickets and settled the arrest warrant. Does Paul have any other disclosures he needs to make?
Yes. He used another name for himself when he had the business.
The real Estate brokerage sign says: XYZ REALTORS®, Tom L. Smith Broker Office Hours are 8:00 a.m. until 10:00 p.m. daily Shirley Jones and Karen Smith, Sales Associates The sign has been placed where it can be easily seen on an exterior wall of the office. The sign has letters no less than one inch in height. The sign is placed in front of the primary office of XYZ. Is this an acceptable sign?
Yes. The sign is placed correctly on an outside wall where it is clearly visible.
Neighbors have gotten into a quarrel over a big black walnut tree that sits on Mr. Jones' property. The tree's limbs extend over to Mr. Simpson's property, and the fruit from the tree falls everywhere, leaving a big mess. Mr. Simpson wants the limbs removed from his property. Does he have a legal reason to want this done?
Yes. The tree is legally invading Mr. Simpson's air space and is an encumbrance on the property.
The government control real estate market by?
Zoning Ordinances
Local governments promote health, safety and general welfare by establishing:
Zoning ordinances.
kickback (respa)
a broker seeking a kickback from a title company, or mortgage provider for referring and closing a property with their particular company is a violation of the federal Real Estate Settlement Procedures Act (RESPA). As a result of the Dodd Frank Wall Street Mortgage and Consumer Protection Act, signed into law 2010, RESPA oversight was transferred from the U.S. Department of Housing and Urban Development to the Consumer Financial Protection Bureau (CFPB). Kickbacks are legal only under limited conditions: •All parties to the transaction must be fully informed of the kickback. •The kickback must not be prohibited by other law (such as the Real Estate Settlement Procedures Act). •The commission may be shared with an unlicensed seller or buyer of the property sold with lender approval.
Housing and Community Development Act of 1974
added gender to the protected classes
Federal Fair Housing Amendments Act of 1988
added mental or physical handicap and familial status (people with children under 18) to protected classes
Disclosed dual agency
both the seller and buyer are aware of the agency relationship and both agree to be represented equally and with all the requirements of agency all at the same time.
A broker price opinion is often requested
by a bank
Annexation
changes personal property to real property. An example of this is when a tree is planted; the tree is annexed to the property so it becomes part of the real property
Severance
changes the real property to personal property. An example of this is when the tree is cut down and cut into firewood. The logs from the tree are considered personal property
A broker is charged with discrimination. The Federal fair housing investigator notices that the Fair Housing Poster is not displayed in the broker's office. The investigator may
charge the broker with discrimination with no further evidence
An undivided share in "common elements" describes
condominium ownership
A charge of unauthorized practice of law could ensue if a sales associate
discusses a chain of title as presented by the title company
A good source of heating in a home that has cables run throughout the floors or in the walls, and provides clean, even heat throughout a home is?
electricity
Enabling acts
establish government agencies to carry out specific policies within specific jurisdictions. On a local level, the Enabling Acts to effect various forms of land use control are manifested as police power, planning, and zoning.
Yield
he return on an investment or the amount of profit, stated as a percentage of the amount invested; the rate of return. In real estate, yield refers to the effective annual amount of income that is being accrued on an investment. The yield, or profit, to a lender is the spread or differential between the cost of acquiring the funds lent and the interest rate charged
what is the interest rate
if the total amount of interest paid is $6,000 per year and the loan amount if $50,000 6000 ÷ $50,000 = .12 or 12% is the answerIf you owe $12,000 on a loan and you pay $1,080 interest $1,080 (interest paid) ÷ by $12,000 (loan amount) = .09 or 9%. (interest rate
Limited Partnerships
is a business owned by at least one general partner and at least one limited partner. All the management is done by the general partner. Limited partners contribute investment cash but are limited in the amount of liability to the amount of money they have already given. Limited partners (sometimes called silent partners) do not have a voice in the managing of the company. The limited partnership is registered with the FREC, and at least one of the general partners must be an active broker The partnership is created by filing with the Secretary of State. The partnership must also be registered with the FREC. General partners who work with the public must be active brokers and licensed with the FREC.
General Partnership
is a business owned by more than one broker. Each partner in a general partnership is liable for any debt; each partner helps to make the decisions and receives a share of the profits. At least one of the brokers must be specified as the active broker. All partners dealing with the public must be an active broker. A sales associate or a broker associate cannot be partners in a general partnership. Any change in the makeup of the partnership must be reported to the FREC. The partnership is registered with the FREC but does not have to be filed with the Secretary of State.
Sole proprietorship
is a business owned by one person. It may have a trade name rather than the name of the owner. The advantages are that it is easy to manage - and decisions are made by the owner. The disadvantage is that when the owner dies, the company ceases to exist. Liability is completely held by the one owner. All actions of associates to this broker are his responsibility and his alone. A sole proprietor does not need to register with the Secretary of State unless a trade name is used
Novation
is a change in the original terms, such as an extension of time for closing or loan commitment. All other terms of the contract remain the same
planned unit development
is also called the planned urban development. This type of planning is similar to cluster planning and it integrates several types of zoning to create a community. Within these developments, one may find zero lot homes, estate homes, standard lot homes, condominiums, and maybe even some commercial and industrial properties
implied contract
is an unstated or unitentional agreement that may be deemed to exist when the actions of any of the parties suggest the existence of an agreement
A mortgage prepayment penalty
is charged to a seller who is paying a loan off prior to the maturity date.
Trade Fixture
is personal property and can be removed by the tenant at any time before the end of the lease. Damage caused by removal of the trade fixture must be repaired by the tenant. If a trade fixture is not removed by the expiration of the lease, the trade fixture becomes the property of the landlord at the end of the lease term.
The Real Estate Settlement Procedures Act (RESPA)
is regulated by the Consumer Financial Protection Bureau. It was enacted to protect consumers from abusive practices and high settlement charges. A broker seeking a kickback from a title company or mortgage provider for referring and closing a property with their particular company is a violation.
Datum
is the level plain which is used by the bench mark to determine elevation and from which the surveyor's measuring begins
Growth Management Act
is to encourage compact development and limit urban sprawl. It requires local governments to create planning consistent with a statewide land-use plan. Two of the major provisions of the act are All local comprehensive plans put land into zones; and Infrastructure (such as city streets, water services, fire services and sewer management) will be in place concurrently with land development.
Escrow Accounts in Dispute
it is the responsibility of the broker to then notify the FREC within 15 business days from the last party's demand. if the broker has a good-faith doubt (meaning the broker honestly doubts the claim of a party), the broker reports the situation to the FREC. The broker has 30 days from the last party's demand to implement one of the procedures set up for escrow disputes. These are •Escrow Disbursement Order, •Mediation, •Arbitration, •Litigation
Save Our Homes limit
limits increases in the assessed value to no more than 3% or the CPI (Consumer Price Index), whichever is less. Thus, once the homestead is established and no marital interest is transferred, the homeowner is protected by the 3% annual cap efinition
In what section of a Closing Disclosure would you find information regarding the loan term, purpose of the loan, product type, loan type and loan ID number?
loan summary
A property manager
manages all common areas for owners.
A military spouse has relocated with his wife who is assigned to a duty station in Jacksonville. He has an active real estate license in New York. The spouse
may be issued a temporary license for 6 months
Contingency
means conditions or terms yet to be performed. A financing contingency means the buyer will buy the house on the condition that he receives the loan applied for. All contingencies must be met before a contract can be execute
Undisclosed dual agency
means one of the parties (either the buyer or seller) is unaware that a dual agency exists. This situation may lead to the unfair disclosure of information that one party does not want the other party to know. This is illegal under Florida law.
expressed contract
one in which all the terms and covenants of the agreement have been manifestly stated and agreed to by all parties
bilateral contract
one in which both parties promise to perform their respective parts of an agreement in exchange for performance by the other party
executed contract
one that has been fully performed and fulfilled, neither party bears any further obligation
unilateral contract
only one party promises to do something, provided that the other party does nothing
executory contract
performance is yet to be completed. sales contract prior to closing is executory
The Florida Uniform Land Sales Practices Law
prevents fraudulent and misleading methods and unsound financing techniques which could detrimentally affect subdivided lands, remote land purchasers, the land sales industry, the public, and the state
Hypothecation most nearly means the:
property is pledged as collateral for the loan if the buyer defaults. pg 270
The Florida Real Estate Commission (FREC) was organized in 1926. It has 7 members who are appointed by the Governor and approved by the Senate. It's primary purpose is:
protect the general public, (provide licensing requirements for broker and sales)
Civil Rights Act of 1988
protected classes to the 1968 Law and gave greater punishments to those who broke the law.
The purpose of the Interstate Land Sales Disclosure Act is to
provide consumer protection
At a listing appointment, the seller of a large, expensive home on the water gives specific instruction to the sales associate not to show the home to anyone from a certain protected class. The sales associate tells the seller this is a clear act of discrimination, but the property owner insists. The sales associate should
refuse the listing.
statue of fraud
requires that certain contracts must be in writting to be enforceable
statue of limitation
restrict the tine period for which and injured party in a contract has the right to rescind or dis-affirm the contract
commission math example
sale price =$250,000 comm 7%, com split 50/50 each office sale assoc split 60/40 selling broker250000x.07=17500 17500 x.50=8750 each office broker 87500 x.60=5250 sales assoc comm
A really modern looking home is being built on the corner of 5th and Main. It has huge windows, an open floor plan, and a slanted roof with a single steep plane. This type of roof is called
shed roof
Due on sale clause
states that the full balance of the loan may be called due (repaid in full) upon sale or transfer of ownership of the property used to secure the note. This prevents the seller from allowing a purchaser to assume the loan for a specific property.
benchmark
surveyors have identified locale elevation markers; to provide reference elevations for nearby properties. once it has been registered, it provides a valid reference point for surveying other elevations in the immediate area. To speed up the surveying process, surveyors use a short cut known as a bench mark. The bench mark is a permanent brass plate, placed in the ground and it notates the feet above sea level at that location. The surveyor can then start at the bench mark in order to determine elevation (feet above sea level).
vendee/vendor
the Vendee makes the offer, Vendor Accepts the offer and the sales contract is in effect once the contract is signed and delivered to all parties
Civil Rights Act of 1964
the law stated that all federally-funded housing must be integrated
Voluntary Alienation
the transfer of real property, by deed or by will.
Culpable Negligence
when a sales associate either knew or should have been aware of a defect yet did not disclose that information
Balance Sheet
where the income statement shows changes (to income and expenses) over a certain period of time, the balance sheet shows the balances of assets, liabilities and owner's equity on a particular day. The balance sheet is thus the component of the financial statements that provides a snapshot of a business at an exact point in time - it shows the balances of the various accounts on the day of any reporting period.
involuntary Alienation
will means intestate; property passes according to descent and distribution through heirs. If there are no heirs, Florida has the legal authority to take ownership of the property. This is called Escheat.
collect a commission
•Must be a licensed real estate broker or sales associate working under the supervision of an employing broker. A broker can only pay a sales associate licensed and registered under him. A sales associate can never collect a payment from other than the employing broker. •Must have been employed by the principal under a valid contract such as a listing agreement, buyer's agency agreement etc. •Must have been the procuring cause of the sale. Procuring cause is a series of events leading to the sale/purchase or renting of real property. •Must have a ready, willing and able buyer, seller or tenant, depending who the contract calls for.
Termination of Agency
•The fulfillment of the purpose of agency is completed (the transaction is completed). •The time limit has expired as stated in the agreement (the listing agreement expires or a buyer's agreement expires). •Breach or cancellation by one of the parties is given: renunciation by the broker ("I quit") or revocation by the principal ("You're fired"). •Mutual consent is given (both agree that it is mutually acceptable that it is in the best interest of all the parties to terminate the agreement). •Death or incapacitation of either party occurs (seller or broker dies). •Destruction of the property or a change in the property is caused by outside forces (a change in zoning or condemnation etc.). •Bankruptcy of either party or foreclosure of the property occurs.
First Degree misdemeanor
•failing to provide accurate and current rental information for a fee The penalty for a First Degree misdemeanor is not more than $1000 fine (for each offense) and/or not more than one year in jail
