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112 Cards in this Set
- Front
- Back
- 3rd side (hint)
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During a routine inspection of a real estate brokerage office in investigators authorized to verify compliance of office entrance sign inspect the Brokers escrow accounts without a prior appointment verify licenses and registration of the Brokers entity including individual Brokers and sells Associates. The investigator is not authorized to do the following? |
Review Brokers operating accounts |
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A DBPR investigator issues a notice of non-compliance for minor violations to a licensee how many days must a licensee take in order to respond to corrective action? |
Within 15 days |
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Where must the Florida Real Estate Commission report criminal violations of chapter 475.42? |
To an attorney having jurisdiction for prosecution. |
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An investigation of a complaint has been completed in an investigative report has been submitted to the commission what's the next step in the administrative procedure? |
Determination of probable cause by the probable cause panel. |
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Administrative complaint is filed against a broker for failure properly maintaining an escrow account. An attorney for the division of real estate and attorney for the broker reach what type of agreement for the violation of license law. And what type of agreement is referred to in this situation? |
Agreement as to the penalty, stipulation |
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The commission orders a five-year suspension to a broker license the broker appeals the commission's final order to The District Court of Appeals what does the broker need to do in order to continue practicing real estate until the appeal is decided? |
Appellate Court must issue a right of supersedeas. |
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A broker fails to pay an associate is share of commission on a closed cell. The associate sues the broker in a civil proceeding and is awarded a judgement for the amount of the commission. If the broker fails to satisfy the Judgment within a reasonable time, the associates can file a complaint with who and what will the broker be charged with? |
The associate can file a complaint with the dbpr and the broker may be charged with "failure to account or deliver". |
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An owner refuses to pay a broker Commission on a residential sale. The burger places in a public records lien upon the property for the purpose of collecting a commission. The owner did not authorize the broker to place a lien on the property and no judgement has been obtained by the broker. Has the broker committed a violation and if so what chapter? |
A violation of chapter 475 |
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A breaker is found guilty of violating a provision of chapter 475 that results in a financial loss to a seller or buyer the Florida Real Estate Commission has the authority to_________________? |
1) place a licensee on probation for an indefinite period of time 2)order the licensee to attend to satisfactorily complete pre license course 1 3)suspend the license for period not exceeding 10 years. |
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What can the commission not do in order to receive financial damages to an injured party? |
They cannot order restitution. |
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When a violation occurs of chapter 475 .42 what can result as a fine? |
Second degree misdemeanor can result in a fine of $500 or imprisonment not to exceed 60 days. |
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An individual broker is convicted of mail fraud relating to the practice of real estate. The broker is not imprisoned and it's cases is being appealed to The District Court of Appeals. What made the commission do in order to enter Institute administrative proceeding? |
Without waiting for the results of the appeal, the commission may immediately Institute several proceedings. |
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An idiot issued by the commission orders a broker to return $10,000 earnest money deposit to a buyer. The broker Returns the deposit to the buyer the seller Susan civil proceeding and is awarded $10,000 judgment against the broker. The broker applies for recovery and payment of $10,000 plus attorney fees and court cost. What will the commission likely do and where will the funds come from? |
The funds will come from the referral cover refund and the commission will take no action against the broker for following compliance with EDO. |
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A licensee is eligible to make a claim from The Recovery Fund if? |
Licensee acted solely in the capacity of a buyer-seller lessor or lessee and did not act as an agent or transaction broker. |
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The individual breaker commits a fraudulent act which ultimately results in a payment from the real estate Recovery Fund. Pawn payment from the fund the commission will automatically do what to the licensee? |
The commission will automatically suspend the licensee and may not reinstate until the registrant has repaid in full the amount paid from the funds plus interest. |
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What is the definition of market value |
Most probable sale price under assumed conditions. |
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What is an example of over Improvement? |
1100 square foot house has 2 bedrooms and is located in the neighborhood with houses of similar size and number of bedrooms the owner is considering adding 500 square feet that includes two additional bedrooms at cost of 50,000 and appraiser advises the homeowner that the additional space will add about $40,000 value of the home if the homeowner makes the proposed Improvement in appraiser will classify this as ..... |
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What is the definition of principle of externalities? |
Factors outside the boundaries of a property may have a positive or negative effect on its value. |
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What is the definition of situs? |
A qualitative aspect of a site resulting from a preference for its location. |
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In the appraisal process what are the correct sequence of steps in the real estate appraisals |
1) definition of appraisal problem 2) determine scope of work 3) do a preliminary data collection and Analysis 4) determine the highest and best use of the property 5)apply appropriate appraisal approaches to estimate the value |
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How is the traditional appraisal written? |
It is written as report formats which give you a form and narrative |
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What are restricted appraisal reports? |
They are intended for clients only. |
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Market value inferred from adjusted sales price |
Speaking of when subject property is inferred from the adjusted sales price the comps are adjusted |
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Reasons for adjustments in market conditions |
Justin's may be required to reflect changes in property value since the transaction dates of the incomparable sales. |
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Market conditions Market extraction example. |
Sales price for residential properties in the market area have been increasing about 6% per year for several years property which sold six months ago for $100,000 used as a comp the sale price should be adjusted plus 3% for market conditions.. |
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Market conditions adjustment for requirement |
And appraiser concludes that under the present market conditions a comparable Mark property would sell for 10% more than it did on the data contract the sale price of the comparable should be adjusted upward by 10%. |
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Market conditions successive sales analysis |
An appraiser is analyzing successive cells in order to estimate an adjustment for market conditions property sold 18 months ago 400,000 recently the same property sold again 409 the estimated monthly rate of change is .5% |
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How do you define incurable depreciation? |
The cost of repairing or replacing an item is greater than the value and adds to the property. |
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Incurable functional obsolescence eg |
A house has a floor plan that requires an occupant to walk through one bedroom to get to another and appraiser would classify this deficiency as |
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External obsolescence eg |
A convenience stores located adjacent to a single family residence |
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Incurable external obsolescence |
a residential house is located on a high traffic volume Street the value of the houses is adversely affected by Road dust traffic noise and Hazard to children playing in the yard adjacent to the street. This is a loss in value and will be classified as... |
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Reconstructed operating statement; exclusions |
An appraiser is estimating the net operating income of a commercial investment property the appraiser should should subtract a reverse for replacement on the effective gross income. |
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Overall capitalization rate; Market extraction formula |
An overall capitalization rate may be extracted from a comparable so property by the formula net operating income divided by sales price. |
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Parole contract |
An Unwritten contract |
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Formal contract |
Written contract |
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Exclusive listing |
Seller can procure a buyer and broker may not get Commission |
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Exclusive right to sell |
An owner sells his or her home with no assistance from a broker but is still obligated to pay the brokerage a commission |
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Net listing |
a breaker takes a listing with an agreement that the seller will net a hundred thousand property sells for 125000 the broker is entitled to Commission of the gross sales price only. |
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Broker employment |
The expression no closing no commission describes a listing agreement to effect a sale |
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Right to Commission active status requirement |
a single agent broker procure is a ready willing and able buyer the contract is signed by the parties in October 5th and a closing scheduled for 30 days later 2 days prior to closing the principal discovers that The Brokerage license expired on September 30th the broker is not entitled to a commission |
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Right to commission transaction does not close |
A broker negotiates a contract which is signed by the buyer and seller for the sell the property of $150 k no deposit is paid by the buyer the buyer and seller agree that the full price will be paid at closing the day before the scheduled closing the seller refuses to close the transaction and convey title The Breakers and title to a commission a cell does not have to close for a broker to earn commission. |
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Associate commission procuring cause of sale |
a sales associate is employed on October 5th and agrees upon a 50-50 commission split with a broker the associate negotiate the purchase and sale agreement on October 10th the associate terminates his or her employment with the broker the next day the cell closes 4 Weeks Later the associate is entitled to a full commission on the sale the associate was the procuring cause of sale. state exam: broker is back in active status |
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Statute of frauds enforceability of contracts |
to be enforceable in a court real estate sale and purchase contract must be in writing and signed by the parties to be bound a valid and enforceable real estate contract is not required to be witnessed is not required to be acknowledged by Florida notary public is not required to be sealed is not required to be recorded in the public records |
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Statute of frauds application of statute |
an easement agreement and mortgage secured by real property a quick claim deed the statute does not apply to Chateau property a 12-month listing contract a listing contract is a marketing agreement between an owner and a broker. |
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Statute of frauds lease agreement |
And landlord rents unit for $100 per month for 15 months. Based on an oral agreement beliefs is unenforceable based on statute of frauds a lease agreement is more than one year and must be in writing to be enforceable |
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Statute of frauds periodOf enforceability |
a statue of limitation provides a limitation of time during which a contract or other instrument may be enforced in civil court. |
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Statute of limitations parole and formal contracts |
The statute of limitation for a parole contract or oral contract is for years and the limitation for a formal contract also known as a written contract is five years. |
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Earnest money deposit not a requirement of law |
a buyer refuses to give an earnest money deposit with an offer to purchase a property a broker must present the offer in a timely manner a deposit is not requirement of a valid contract. |
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Breach of contract specific performance |
a seller in a buyer have a valid and enforceable contract to sell form the seller notifies the buyer that he or she is cancelling the contract the buyer petitions a quartz to deliver the title to him or her upon the payment of the agreed to purchase price the buyer is Seeking a remedy for specific performance |
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When does Equitable Title Transfer |
On day of agreement |
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Breach of contract liquidated damages |
a real estate contract specifies the penalties that are to be paid if the buyer defaults this remedy for breach of contract is called.. |
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Special assessment summary points |
It creates a Layne for Capital Improvements that are expected to increase the property value when the work is complete the increase in the value of the property is usually effective when the work is complete the seller usually must pay a special assessment lien if the work is completed and certified on or before the date of the contract |
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Who gets paid first in a foreclosure process |
Taxes special assessments First Mortgage second mortgage |
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Side of homicide not Material fact |
a broker list a house for sale that was the site of a homicide 4 years ago the homicide is not a material fact that must be disclosed in a real estate transaction law prevails material fact only |
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Radon gas summary points |
a radon gas disclosure must be provided at the time of or prior to executing a contract for the sale of purchase a rental agreement or of any building on at least one document form or application at the time or prior to executing the agreement. a test to determine the level of radon gas is not required by law. If a test is performed, the seller or landlord is not required by law to pay for the test. |
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Lead-based paint hazards summary points |
with respect to the residential lead-based paint Hazard reduction act as seller or landlord must disclose the presence of any known LED base and a residential dwelling prior to 1978 a prospective buyer or tenant must be given an MPA pamphlet regarding lead-based paint a prospective buyer or tenant must sign a disclosure form before signing the contract or lease a test to determine the presence of lead-based paint is not required by the ACT. |
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New residential condominium prospectus and faq |
A developer of more than 20 in new residential condominium units must give a prospect who is purchasing a unit a PROSPECTUS. This document provides the information a purchaser needs to make an informed decision (rights obligations and risk) |
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Option contract summary points |
A buyer enters into a written contract to purchase a farm for 200,000 and pays the seller of 5000 consideration in the contract the seller agrees to allow the buyer for 4 months to decide if he or she wants to complete the purchase the property this is an option contract only one party the seller option or is obligated to complete the cell if the buyer exercises the option A prospective buyer option e has an option to perform or not to perform the terms of the option contract. |
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Promissory note liability of witness |
Any person who signs the face with promissory note including a witness is personally liable for the debt. |
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Subordination clause changes priority of lien |
A buyer purchases a property in assumes an existing mortgage the purchaser needs additional financing and wants to pledge the same property as security for the debt to accomplish this the existing mortgage needs to contain a subordination clause this Clauses necessary for this new mortgage which is a second and time to be a first lien against the legal title. |
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Foreclosure sale; distribution of proceeds example. Who will need to sue in order to get their funds? |
an owner sells his or her home that is subject to a first mortgage the seller takes back a second mortgage for $25,000 at 17541 year have not been paid the buyer defaults during the year on the first mortgage at a foreclosure sale the property sells for $75,000 loan balance on the first mortgage at the time of the default is 55000 the first mortgage lender has 5,000 and legal fees and 2200 of unpaid interest is due to the lender the second lien holder will receive $11,050 from the sale. First lien holder and second will need to sue in order to get their funds. |
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Assignment of mortgage; right of holder |
The ownership of a mortgage is transferred to a second or investor buying an instrument title assignment of mortgage AKA mortgage being sold to secondary lender. |
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Partially amortized mortgage; balloon payment |
Amore's requires level monthly payments the loan is not completely paid off at the end of the loan term such as seven years 84 months this is a partially amortized mortgage is also called a balloon mortgage. |
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Adjustable rate mortgage; index plus margin |
a borrower is considering an adjustable rate mortgage the borrower ask the broker to explain the interest rate on an arm the burger should have explained that the calculated interest rate for each adjustment. Is based on the index plus margin contained in the promissory note. |
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Blanket mortgage secured by two or more properties |
a developer purchases a tract of land and subdivides into 20 Lots in developer obtains a land development loan in pledges the 20 Lots as security for the loan the loan is secured by a blanket mortgage. |
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Section 234 C (C) for condominium units |
The National Housing Act ensures loans to finance the purchase of condo units |
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VA guaranteed mortgage summary |
Applicant must be currently in the military or veteran or surviving spouse of a veteran the VA is authorized to make Direct Loans to veterans in certain areas of the US the line is partially guaranteed top 25% by the Department of Veteran Affairs a conventional loan is any loan that is not be a guaranteed or fha-insured |
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Contract for deed Equitable Title |
The buyer purchases a vacant lot on a contract for deed Equitable Title is acquired by the buyer at the moment the instrument is signed by the buyer and the seller receives a "legal Title", by deed, when the debt is paid in full. |
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Ecoa; non applicant spouse |
a married person makes a loan application his or her name only the legal title to the property is held in the names of both spouses The spouse's income and credit or not used to secure the loan under ecoa the non applicants files cannot be required to sign the loan application or the promissory note he or she will be required to sign the mortgage in order to have an enforceable lien against the title. Eg Homestead |
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Truth in Lending Act APR disclosure requirement |
Federal law that requires disclosure of the annual percentage rate APR. Implemented by Regulation Z |
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Truth in Lending Act. Right of rescission |
An owner applies for a second mortgage to finance Home Improvements. The loan is approved and the loan documents are signed later that day. The borrower decides to cancel the loan. Under Regulation Z, the borrower has three business days to cancel rescind the loan agreement. |
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Security deposits; transferred to new owner |
A brokers sells and multi-tenant property subject to Servo lease agreements closing security deposits in advance rent held by the broker must be transferred to the new property owner this is a debit to the seller landlord escrow account and a credit to the buyer. |
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Municipal lien search; items included in search |
prior to closing a buyer wants to verify that these are no open permits Municipal lien search includes reports in the following items real estate property taxes unrecorded Municipal and County debts code enforcement violations verifying new open permits special assessments water utility balances sewer utility balances Solid Waste utility balances and building violations. |
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Pre-closing inspection; purpose |
should be made to verify confirm "maintenance and repair requirements" |
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Respa lender disclosure requirement |
under respa rules and lenders required to deliver closing disclosure to a buyer in a later than "3 business days prior to closing" |
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Rent proration; math problem |
A duplex property rents for 800 per month per unit the rent is payable in advance on the first day of each month the date of closing is April 12th and the day of closing belongs to the buyer assume no leap year 365 days and exact number of days for each month the closing disclosure entries are debt to seller $1,013.34 and credit to buyer $1,013.34... who gets the credit in the situation?? |
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Transfer tax documentary stamps on deed |
The documentary stamp tax on a deed is computed on the sale price of the property documentary stamps on deed are customarily paid by the seller. For simplicity, round the sale price up to the whole next hundred and multiply by .007 |
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Transfer tax Factory stamps on a new note |
Always debit to buyer. paid on the deed.. calculate purchase price rounded up to next 100 multiply . 0035 |
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Transfer tax intangible tax on new mortgage |
* .002 per dollar of indebtedness to new mortgage it is not paid on a sumption of mortgage or subject to a mortgage this is not a reoccurring tax |
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Capital gain formula |
Sales price- selling expenses- adjusted basis |
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Primary residence non-deductible expenditures |
Hazard insurance premium paid on principal residence maintenance fees paid on principal residence mortgage payments principal and interest on a principal residence the interest portion of the payment is deductible but the principal portion is not to ductable |
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Discount points math problem |
a married couple buys a home for 400000 and finances the purchase with a 75% loan to value mortgage with a 6% interest rate the seller pays 2 and 1/2 discount points to the loan the homeowners deduction for discount points 7500. Loan-to-value is 300000 X discount points of .025 equals 7500. Interest rate is a distractor. |
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Principal residence; exclusion of gain |
He married couple sells a principal Residence Inn has a large capital gain on the cell the maximum gain for that can be excluded from taxation of 250,000 for a single taxpayer 500000 for a married couple filing joint return the full exclusion is available every two years. |
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Firpta; withholding requirements |
a buyer purchases an investment property for foreign seller the buyer must withhold and pay the IRS 15% of the gross sales price |
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Firpta personal residence |
under foreign investment in real estate property tax act for a foreign seller is exempt from withholding requirement if they realized amount from the sale of personal residence does not exceed 300,000 buyers responsible unless residents and Below 300K. |
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Taxable income formula |
taxable income is calculated by the formula and a y + reserves equals adjusted in a lie then subtract the interest and depreciation expenses |
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After tax return on investment; math problem |
a real estate investor is in the 25% tax bracket the best investment is after tax return on investment of 18% given alternative before tax and after tax returns know these breakdown percentage.. |
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Passive actively losses; real estate professionals |
A tax reform Act of 1986 severely limits passive activity loss deductions. There's a special exception on the passive loss rules for Real Estate professionals. |
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Net proceeds from sale after tax Equity reversion |
The net proceeds from the sale of an investment property is called after tax Equity reversion this is the after-tax amount of equity investor receives on the sale. |
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Installment sale; potential benefits |
potential benefits of an installment sale include the following the deferral of equity receipts mate permit better investment planning in future years the interest earned on the Mortgage Investment maybe a higher rate they can be earned on other Alternatives the seller might be in a lower tax bracket and subsequent years that's reducing the tax due in those years no taxes on interest income on a sale cannot be deferred. |
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Like-kind exchange summary points |
Realized gain is recognized to the extent of boot received recognize game as a taxable gain like-kind property includes a leasehold estate with the remaining term of 30 years or more the realized gain is not tax-free or tax exempt the tax liability is deferred!!!!! |
Not tax-free or exempt |
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Is tax liability deferred? Is it exempt? |
Tax liability is deferred. It is not exempt. |
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Dynamic risk; purchasing power |
Associated with the loss of purchasing power due to an unexpected increase in inflation |
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Static risk definition |
Static risk associated with sudden unusual occurrence such as storms fire or theft may affect an investment property |
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Gross leasable area definition |
Total floor area design for the occupancy and exclusive use of tenants including basements and mezzanines |
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Expense stop Clause definition |
A landlord agrees to pay operating expenses to a specified level Above This level increases in the operating expenses or the obligation of the tenant this describes an expense stop provision in a commercial lease agreement |
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Expense cap Clause definition |
a tenant pays the operating expense up to a specified level Above This level the landlord pays the additional expenses this describes an expense cap for vision and a commercial lease agreement. |
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Triple-net-lease definition |
a type of net lease in which attendant pays utilities property taxes insurance and Property Maintenance and the landlord pays the structural repairs only |
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Index lease math problem |
a tenant signed an index lease agreement last year at a rental rate of $15 per square foot when the lease was signed the index was 271 this year the index is 279 the tenants rent per square foot for the second year will be 1545. |
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After-tax cash flow math problem |
an investor owns an apartment property that had a net operating income of a hundred thousand last year the annual Debt Service was 80,000 the investor how does depreciation allowance of 30000 and paid federal income taxes of $5,000 taxable income from the investment the after-tax cash flow is 15,000. |
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Debt coverage ratio |
net operating income divided by annual Debt Service |
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Operating expense ratio |
Operating expenses / egi |
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Equity Dividend rate math |
an investor purchases a property and makes a down payment of a hundred thousand the net operating income is 50000 mortgage payments or 35,000 the Equity Dividend rate is 15% the rate is also called Cash on cash return. |
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Police power example of regulations |
Used to regulate 1) comprehensive planning 2) subdivision regulations and 3) zoning ordinances this right does not apply to private restriction such as restriction covenants, deed restrictions |
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Board of adjustment; zoning appeals and variances |
Created to handle zoning appeals and request for Relief such as zoning appeals and variances |
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Nonconforming use definition |
A land use was lawfully established but no longer complies with the current zoning ordinances the use is allowed to continue under conditions prescribed in the ordinance |
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Nonconforming use example |
A general store has existed at the location for several decades at the time the store was constructed the property was on agricultural land use at that time and agricultural Zone allowed a retail property be constructed on the land in the past decade the area has been resigned to a single family residential land use the existing store property is an example of legally...... |
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Variance hardship |
A zoning variance is based on the concept of a hardship |
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Variance example |
residential ezone lot has a 15-foot setback requirement a prospective buyer wants to add a thousand square foot addition to the existing home to accomplish this objective the new addition will need to extend 2 ft into the setback area the prospective buyer will need to apply for a variance. |
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Concurrency definition |
The Florida growth management act mandates that the infrastructure (roads and utilities) be in place on or before the opening of the new development. This requirement is called... |
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Impact fees authority of local government |
The development of land for new residential subdivisions shopping centers in Office Buildings may have a significant negative economic effect on local governments local government may have to construct or increase the existing capacity of Roads utilities schools and recreational areas Florida law authorizes and assessment to help pay for these Capital Improvements and governmental services an authorized charges refer to in the statute as an...... |
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Leasehold estate tenant lessee holds estate |
A landlord and a tenant have a written rental agreement to rent the unit to the tenant for 9 months. the tenant holds a "leasehold estate" in the unit. this is the estate for years. the duration can be a fraction of a year eg 9 months |
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