REALTOR License Exam

Caveat Emptor:

"Let the buyer beware"

Florida has entered into mutual recognition with 9 states:

1. Alabama 2. Georgia 3. Indiana 4. Mississippi 5. Nebraska 6. Tennessee 7. Arkansas 8. Oklahoma 9. Connecticut.

Certain types of individuals are exempt from licensure

1. Any salaried employee of the owner of an apartment building or complex when renting units from an on-site rental office and he or she is not being paid a commission 2. A salaried manager of a condominium or co-operative when leases do not exceed one year and he or she is not being paid a commission 3. Employees of the State of Florida when performing real estate services for the state 4. Attorneys when performing duties within the scope of their attorney-client relationship 5. Persons who have been given a power of attorney (attorney in fact) are exempt for signing documents only 6. CPA's when performing duties that fall within the scope of their respective profession 7. Anyone who is court appointed 8. Persons who rent mobile home lots or recreational vehicle lots in mobile home or travel trailer parks 9. An employee of a real estate developer when paid a salary only and no commission 10. An employee of a corporation involved in buying or selling company owned property as long as it is incidental to his or her employment 11. A partner in a real estate partnership who receives no more than his or her normal pro-rata share of profits 12. Persons selling cemetery lots 13. Television and radio announcers and persons in public relations and advertising media provided the service performed is incidental to their employment in advertising 14. Hotel and motel clerks for short-term rentals 15. Property managers may pay up to $50.00 to unlicensed individuals for rental referrals

The services of real estate include the following:

1. Buying 2. Advertising 3. Renting (or rental information list) 4. Selling 5. Auctioning 6. Leasing 7. Exchanging Remember: BAR SALE

Steps in development & construction

1. Land Acquisition 2. Subdivision and Development 3. Subdivision Plat Map Recording 4. Dedication

A professional real estate licensee should possess specialized knowledge in the following areas:

1. Property Transfer 2. Market Conditions 3. Sales and Marketing

2 categories of legal rights that apply to individuals with water rights:

1. Riparian rights are those rights that affect land which abuts more rapidly flowing bodies of water such as rivers and streams. 2. Littoral rights are those rights that affect land that abut tidal bodies of water such as lakes, bays, oceans, and gulfs.

3 types of residential construction

1. Speculative 2. Tract 3. Custom

3 physical components of real property:

1. Surface rights: Includes the land and everything that is permanently attached thereon. For example: trees, buildings, fences, and waterways. 2. Subsurface rights: Includes items that are located below the immediate surface. For example: oil, gas, and minerals. 3. Air rights: Includes the rights that an owner has over the area directly above the property. For example, if a tree limb overhangs across another person's property, this is considered an encroachment.

5 major areas of sale

1. residential 2. commercial 3. industrial 4. agricultural 5. businesses

Real Estate Brokerage:

A commercial activity in which the sale, purchase, leasing, rental, exchange, or management of real property is conducted by qualified and licensed individuals acting either for themselves or for others for compensation

Dedication:

A deliberate transfer of land by its owner for public use and accepted for such use by the public

License:

A document issued by the Department of Business and Professional Regulation which certifies that the licensee is or was duly licensed on the effective date shown

Tenancy at Will:

A lease agreement that is not in writing or does not have a beginning date and an ending date or both (a month-to-month tenant)

Estate for Years:

A lease that has a beginning date and ending date and is in writing. Sometimes known as Tenancy for Years.

Proprietary Lease:

A lease that is created for individual use within a cooperative

Sales Associate:

A licensed individual who, for compensation, is employed by a broker or owner/developer

Involuntary Inactive:

A licensee fails to renew his or her license in a timely manner, or when a sales associate or broker associate is registered with a broker whose license has been suspended or revoked

Property Transfer:

A licensee needs to understand the details of transferring legal title from one party to another. An interest in real property can be transferred by deed, will, lease, or other legal methods. Additionally, a licensee needs to understand the entire process from creation of a real estate contract through final closing of title.

Market Conditions:

A licensee should understand current interest rates and the availability of financing, the relationship between real estate supply and demand in his or her particular market area, and the history of sold properties. The licensee should also have an understanding of future market trends that will be the driving force of tomorrow's sales.

Community Development District:

A local, special purpose government framework authorized under Chapter 190 F.S. for managing and financing infrastructure required to support development of a community.

Florida Resident:

A person who has resided in Florida for at least four months, or a person who is residing in Florida with an intent to remain for at least four months

Nolo Contendre:

A plea of no contest entered in a criminal court of law

Follow-Up:

A post-closing communication initiated by a licensee to maintain customer contact and goodwill

Absentee Owner:

A property owner who does not reside on the property and who usually relies on a property manager to oversee the investment

Farm Area:

A selected and limited geographical district to which a sales associate devotes special attention and study

Appraisal:

A supported, defended estimate of the value of property rights as of a given date

Land:

Actual surface of the subject property

Multiple License:

Additional license(s) issued to a broker when necessary for the conduct of brokerage business

Continuing Education Requirement

After the first renewal period of the initial license issue, and all renewals thereafter, the licensee is required to complete 14 hours of continuing education for each 2-year license period

Personal Property:

All property that is not real property such as a car, a boat, stocks, or a mortgage

Businesses:

Also called business brokerage or BUSINESS OPPORTUNITY BROKERAGE, this area specializes in the marketing and sales of up and running businesses (going-concern operations). An understanding of both tangible assets (e.g. inventory) and intangible assets (e.g. goodwill) is essential.

Freehold Estate:

An estate that consists of ownership rights of an unknown duration

Broker Associate:

An individual qualified to be issued a broker's license but who operates as a sales associate in the employ of another

Comparative Market Analysis:

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

Leasehold Estate:

An interest in real property where ownership or possession is measured in calendar time (non-freehold estate)

Life Estate:

An ownership in real property that is tied to the death of a pre-determined party

Compensation:

Any form of remuneration, payment, or value

Separate Property:

Any property owned separately prior to marriage or properties acquired by gift or inheritance during the marriage

Who must have a real estate license?

Anyone who performs: 1. Any service of real estate, and 2. In the State of Florida, and 3. For someone else, and 4. For compensation or the mere expectation of compensation, then he or she must possess a valid and current real estate license, unless he or she is exempt by law. Compensation can mean anything of value, such as money, reimbursement of expenses, or other consideration of value. If any of these four requirements are not fulfilled, no real estate license is required.

Registration:

Authorization by the state to place an applicant on the register (record) of officially recognized individuals and businesses

Sales and Marketing:

Being a professional and effective real estate licensee requires understanding the significance of past sales of similar properties. By understanding past sales, licensees can establish a price range that will ideally result in properties being bought and sold in the shortest amount of time and for the best possible price. Once a licensee has established the proper market value of a home (listing price), the next step is to procure a purchaser through the various marketing techniques available. These techniques include drafting effective advertisements, participating in the Multiple Listing Service (MLS), offeing open house presentations, and effective showing of real estate to potential purchasers. There is an old saying in the real estate business: "You have to circulate to percolate."

Real Estate Services:

Buy, advertise, rent, sell, auction, lease, and exchange (BAR SALE)

Speculative:

Constructing a speculative (spec) house is a type of development wherein the builder actually owns the land, constructs a house to the builder's tastes and satisfaction and then offers the completed construction for sale to the general public.

Custom:

Custom home construction is a type of development which provides for the builder to consult with a landowner and construct a home in accordance with the landowner's wishes and designs.

Residential:

Defined as facilities where people live and reside. The term "residential property" includes single-family homes, condominiums, duplexes, and apartment complexes. The majority of real estate licensees specialize in the sale and purchase of owner-occupied residential properties.

Department of Business and Professional Regulation:

Division of Real Estate. Actually, the DBPR regulates all licensed professions throughout the state. The Division of Real Estate (DRE) is part of the DBPR and works in conjunction with FREC. Additionally, the DRE acts as a support system to the members of FREC.

Prima Facie Evidence:

Evidence that is valid and admissible on its face requiring no further proof of authenticity

Financing:

Financing is the business of providing funds for real estate transactions. The majority of real estate transactions require the buyer to obtain financing in order to have the necessary funds to purchase. There are several major sources of lendable funds for real estate financing, including commercial banks, savings and loan associations, mortgage bankers, credit unions, and life insurance companies. Licensees should have a general understanding of mortgage lending practices in order to best serve their clients. The Mortgage Brokerage Business is a separate industry that requires a separate and distinct license. Mortgage brokers and mortgage bankers must be licensed in the State of Florida.

Cooperative:

Form of real property ownership where a corporation or association divides a single property into portions with each user owning stock in the corporation

Cease To Be In Force:

If a licensee fails to timely provide the DRE with any type of required notification

Adaptation of the Item:

If an article is custom made for a particular use (such as custom drapes) or built and installed to particular specifications and dimensions (built-in wine rack), the article will likely be considered a fixture.

Agreement of the Parties:

If the parties have specifically defined in their contract that certain items are fixtures, the terms of the contract will control. For example, a chandelier that is attached to the ceiling would ordinarily be classified as a fixture and would be included with the sale of the property. By specifying in the contract that the chandelier is not a fixture, it is not included or expected to be part of the sale.

Agricultural:

Includes farms and other agricultural land, such as citrus groves and timberland operations.

Industrial:

Includes properties located in industrial parks or properties otherwise zoned for industrial use, such as manufacturing and distribution.

Group License:

License issued to sales associates and broker associates when there is proof that ownership or control of various properties is substantially held by the same individual(s), although the properties are owned in the name of different interlocking or affiliated entities

Local Government:

Local governments implement zoning laws, building codes, and establish property taxes through authority known as Police Powers. The local government is authorized to enact laws to protect the health, safety, and welfare through its use of Police Powers.

Broker:

One who is licensed by the State of Florida to carry on the business of dealing in real estate; a broker may receive a commission for his or her part in bringing together parties in a real estate transaction

Joint Tenancy:

Ownership by two or more persons with the "unities" of time, title, interest, and possession present plus the right of survivorship

Tenancy by the Entireties:

Ownership of real property by husband and wife only

Tenancy in Common:

Ownership of real property whereby the co-owners may or may not have acquired title at the same time, may or may not have the same interest and right of use, and do not have the right of survivorship

Fixture:

Personal property that is permanently attached to real property

Commercial:

Practicing in commercial investment real estate usually requires expert knowledge in investment analysis and cash flows. These properties include shopping centers, warehouses, office buildings, and others. Licensees should be cautious about representing themselves as experts in this area unless properly qualified.

Subdivision Plat Map Recording

Prior to actual development and construction, developers must submit a SUBDIVISION PLAT MAP of the proposed project to the applicable local government. This Subdivision Plat Map, which must be approved by the local government, will identify where streets and lots will be located. Once approved, the Subdivision Plat Map is recorded in the public records of the county where the subject property is located.

Counseling:

Real estate counseling has become an important part of the real estate industry due to the complex nature of large scale commercial and investment real estate. A Real Estate Counselor acts as a consultant by performing research on the subject real property and its community location and making recommendations about the subject property's ultimate value. Real Estate Counselors are typically paid on an hourly basis or a pre-determined fee based upon the nature of the job and the counselor's experience and qualifications. Typically, Real Estate Counselors will have extensive amounts of education, knowledge, and, above all else, an abundance of experience.

Real Property:

Real estate plus the legal "bundle of rights" that a person acquires by having an interest in real estate

USPAP:

Rules and guidelines that must be followed by any professional conducting an appraisal

Time-Share:

Selling or leasing a single unit to multiple owners or tenants with specific rights to use

Condominium:

Single unit ownership in a multiple unit dwelling

Right of Survivorship:

Surviving owners in a Joint Tenancy or Tenancy by the Entireties absorb all interest and rights in a property

State Government:

The State of Florida has implemented many laws protecting our environment and waterfront properties. The Department of Environmental Protection (DEP) is the leading governmental agency in this area.

Homestead:

The dwelling of the head of household that is afforded certain privileges such as protection from judgment liens and a special real estate tax exemption

Land Acquisition

The first step in the process of development and construction is to locate and acquire suitable land. In order for new development to occur, land which has the capability of being developed must be available at a reasonable price. Developers should always consider current zoning laws and governmental planning policies before acquiring land.

Real Estate:

The land and all improvements permanently attached to the land (tangible)

Intent of the parties:

The law seeks evidence of the parties' intent on whether an item is classified as a fixture. Examples of such evidence include the contract terms, oral discussions, or other reasonable inferences and assumptions made between the parties. If the parties have a contract that specifies whether an item is a fixture or not, the language in the contract will control. Also, if the parties discussed whether an item is a fixture or not, that discussion could be evidence of their intent.

Subdivision Plat Map:

The layout of a subdivision showing lots, roads, and other infrastructure by the developer to a local government agency

Business Opportunity Brokerage:

The marketing and sale of a going concern operation; Florida requires that business brokers have a real estate license to market business opportunities

Method of Attachment:

The more permanent and substantial the attachment to the real estate, the more likely the item will be classified as a fixture. For example, an item that is bolted to a wall will more likely be considered a fixture than an item that is taped.

Fee Simple Estate:

The most popular type of estate with the greatest "bundle of rights" available

Subdivision and Development

The next step in development and construction is the process of preparing the land site for subdividing the parcel into individual, smaller parcels. The developer will also typically install infrastructure which is defined as the sewer, water, electrical, streets, and storm drains necessary for the support of a development.

Property Management:

The process of directing, controlling, operating, and maintaining real estate for a third party

Property Valuation:

The process of estimating the value of real estate is accomplished through the preparation of an APPRAISAL.

Declaration:

The recorded document that creates a condominium

Elective Share:

The right that a surviving spouse has to claim 30% of the net estate of the deceased spouse that has been willed to another party; the surviving spouse has 120 days to file a claim of elective share.

Federal Government:

There are various federal agencies and regulations that influence real estate ownership. They include the Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA), the Federal Housing Administration (FHA), and Federal Reserve System (the "Fed").

Tract:

Tract house construction is a type of spec construction which involves some input of the Buyer for design and layout of a particular floor plan or model previously chosen by the developer. Typically, a buyer will select his or her lot and then choose from a number of floor plans that have been approved for the particular subdivision.

Adjudication Withheld:

When a criminal final judgment is withheld or not recorded in public record

Tenancy at Sufferance:

When a lease expires and no agreement has been made as to future occupancy (the tenant is a holdover)

Void:

When a license is either revoked or expired

Ineffective:

When a license is suspended or ceases to be in force, cancelled, or involuntary inactive because a broker of record has been suspended or revoked

Voluntary Inactive:

When a licensee chooses not to have an active license or files the proper form with the DRE requesting inactive status

Remainderman:

When a life estate terminates, the property reverts to a pre-determined third party, not the original grantor

"real estate business"

a vocation in which real property forms the stock in trade that is bought, sold, leased, or rented

A real estate license

contains an effective date, expiration date, the name of the governor, and the secretary of the DBPR. It also contains the licensee's full name and license status.

Reliction:

gradual recession of water in a sea, lake, or stream

Severance:

occurs when real property is converted to personal property.

FREC

oversees and regulates the real estate license law and licensed individuals who participate in the real estate business

Alluvion:

sediment deposited in flowing waters.

Brokers Price Opinion (BPO)

used by banks in short sales and other distressed situations. It is a variation of the CMA and should not be construed as an appraisal.

There are certain minimal requirements that must be met by all applicants for real estate licensure. The applicant must:

ü Be 18 years of age or older ü Possess a high school diploma or equivalent (G.E.D.) ü Be honest, trustworthy, truthful, of good character, and have a reputation of dealing fairly with others ü Disclose if under investigation, convicted of a crime or ever entered a plea of nolo contendere (no contest) ü Disclose if ever declared mentally incompetent ü Disclose if he or she has ever had an alias or been known by any other name ü Disclose if another state has either denied a real estate license application or if such a license has ever been suspended or revoked ü Disclose if a license or registration to practice any regulated profession has ever been denied ü Disclose if the applicant has been found guilty of any practice or conduct that would have been grounds for suspension or revocation under Florida Real Estate License Law (F.S. 475) PLEASE NOTE: There is no Florida residency or U.S. citizenship requirement for license applicants. ****RYAN YOU MUST DISCLOSE SOME OF THESE THINGS...PLZ DONT 4GET!!!@@@%%%$$$