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183 Cards in this Set
- Front
- Back
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Compensation |
Is defined as anything of value or a valuable consideration , directly or indirectly paid, promised or expected to be paid or received |
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Is is violation of License Law to share a commission with or to pay a fee or other compensation to an unlicensed person for the referral of real estate business clients, prospects or customers. |
Florida broker however may a referral fee to a broker licensed in another state so long as the broker does not violate Florida Law |
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Non Resident Applicant Requirements |
Must have a Social Security Card and do not have to reside in Florida |
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Mutual Recognition |
The agreements apply exclusively to to nonresident who are licensed in other jurisdictions |
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Real Estate applicants approved for licensure under mutual recognition are exempt from prelicensing education course |
However the mutual recognition applicant must demonstrate mastery of Florida Real estate course by passing a written Florida specific real estate law license exam the exam consists of 40 questions |
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Broker Experience Requirement |
A broker applicant fulfills the experience requirements by having held an active real estate license for at least for at least 24 months during the five year period period preceding application. |
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Florida Broker License Exam |
The passing score is 75 percent or higher |
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An Applicant has the right to petition for a formal hearing before the Division of Administrative Hearings |
If License is denied |
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4 Year Real Estate Degree |
Exempt from Pre licensing Course 1 Exempt from Pre licensing Course 2 Exempt from Post licensing Course NOT EXEMPT FROM CONTINUING EDUCATION |
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Florida Licensed Attorney |
Exempt from Prelicensing Course 1 NOT EXEMPT FROM PRE LICENSING 2 NOT EXEMPT FROM POST LICENSING Exempt from Continuing Education |
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POST Licensing Education |
Complete post licensing education before the first renewal of their licenses. Failure to complete the post licensing education requirement will cause the initial license to become null and void. |
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Failure to Complete post licensing education will cause the initial license to become null and void |
However brokers may request and receive a sales associate license if they complete 14 hours of continuing education within six months following expiration of the broker license and have complied with all requirements for renewal |
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Who is and is not Exempt from Post licensing |
4 year degree in real estate from institution of higher learning are Exempt Florida Licensed Attorneys must complete post Licensing |
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Continuing Education |
At least 14 hours of continuing education during every two year license period after that |
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License Renewal |
The Expiration Date is March 31 to Sept 30
the close date possible to license date without exceeding 24 months |
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License Renewal |
After Post licensing the is satisfied and the initial license renewed licensees must complete 14 hours of continuing education during each renewal period |
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Armed Forces Exemption |
A licensee in good standing who is a member of the US ARMED FORCES is exempt from the renewal requirements during the licensee period of active duty and six months after discharge fro active duty The exemption also applies to a licensed spouse |
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Spouse of Armed Forces Member |
The DBPR may issue a temporary real estate license to the spouse of an active duty member of the Armed Forces who is assigned to duty in Florida. The Spouse must hold a valid real estate license in another state or foreign jurisdiction Temp license is only valid for six months after the date of issue and is not renewable |
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Voluntary Inactive |
The Licensure status that result when a licensee has applied to DBPR to be placed on inactive status an has paid the renewal fee. Voluntary Inactive must complete the continuing education requirements every two years and pay the fees to renew their inactive licenses |
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Involuntary Inactive |
The licensure status that results when a license is not renewed at the end of the license period prescribed by the Department |
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Involuntary inactive licensees may activate their licenses |
Satisfactorily completing FREC prescribed Courses of instruction and paying the appropriate late fee. 12 months of less 14 hours of CE 12 to 24 months Complete 28 hours |
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Registration |
Only a Natural Person Can get License |
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Multiple Licenses |
A broker who holds more than one Florida broker License is said to hold Multiple Licenses |
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Group License |
is sometime issued to sales associates or broker associates who are registered under a owner developer An owner developer may own properties in the names of various entities |
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IF A Broker changes business address |
the License ceases to be in effect until the DBPR is notified of the new business location and it is properly registered. The DBPR must be notified of the new office location within ten days |
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Business Brokers must have a business License |
the definition of real property includes any interest in business enterprises or business opportunities, individuals who specialize in the sale of businesses |
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A Broker who is a salaried employee of an owner developer is Exempt from having a license if |
They do not receive commission |
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Condo Managers do not need a Real Estate License if |
rent units for period no longer than one year and who are not paid a commission |
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Real Estate brokerage general partnership |
If the partnership has only one active broker (broker of record) and the broker dies resigns or is removed as a general partnership The Broker must be replaced within 14 calendar days |
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A Limited Partnership |
There must be one General Partner and one Limited Partner to qualify under the law. Limited Partners must be make an investment of cash or of property but not of services |
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Real Estate brokerage Limited Partnership |
General partners who deal with the public and perform services must be licensed as active brokers All partners who are expected to perform services of real estate must be licensed |
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Real Estate brokerage corporations |
Sales associates and broker associates may not be an officer or director in a real estate brokerage corporation. A sales associate or broker associate may be issued a citation and fined for serving as an officer or director of a brokerage corporation |
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Real Estate Brokerage Corporations |
Sales associates and broker associates may be shareholders of a real estate brokerage corporation |
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S corps |
100 shares and stock holders must be citizens or residents of the United States |
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Corporate Sole |
A corporate sole cannot be registered as a real estate brokerage entity |
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Associations |
A cooperative association is permitted to conduct commercial business and to convey sell or buy its own property but it cannot be registered as a real estate brokerage entity |
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Temporary Shelter |
Shelter is intended only for the protection of customers and sales associates If associates are assigned there Supplies are on hand Sales transactions are concluded there then it must be registered as a branch office |
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ADA & Home Office |
Homes with Plans to be turned into offices must plan for costly upgrades to facilitate ADA standards |
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ADA and Parking |
mandates the minimum amount of parking spaces and requires that the spaces be located on the shortest safely accessible route from the parking spaces to the business entrance so that the user will not have to walk or wheel behind a vehicle |
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ADA Guidelines |
Guidelines and specifications are available from local building inspectors and the Department of Justice |
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Blind Advertisements |
Advertisements that fail to disclose the license name of the brokerage firm |
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Familial Status |
refers to the presence of one or more children under the age of 18 who live with either a parent or guardian Woman who is pregnant Fair Housing Act protections extend to families with minor children Unless property qualifies for housing for older people All properties must be made available to families with children under the same terms and conditions as everyone else |
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Rental Information and Lists |
List must state that a prospective tenant who does not obtain a rental is entitled to 75 percent of the fee if requested within 30 days of receipt date |
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Federal Do Not Call List 11k |
Violators will be charged 11 k per call Cannot be called for any reason NO FSBO |
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State Do not Call List 10 k |
Violators will be fined 10k and are not allowed to call FSBO |
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Institutional Advertising |
advertising that describes the firm its personnel and its services |
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Fixed Expenses |
don't change proportionately with increase or decreases in income |
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Product Advertising |
is advertising to showcase a house
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Company Dollar |
the funds remaining after the cost of sales. Such as commissions referral fees cooperating fees are deducted from gross commissions4 |
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Calculating Number of Monthly Transactions |
Company Dollar DIVIDED Number of transactions Amount need for expenses + Profit Divided Average Company Dollar |
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Unlicensed Personal Assistants and clerical Assistants |
Unlicensed personal assistant must be paid salary cannot be paid commission Must be an employee and cannot be contractor |
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Licensed Personal Assistants |
Sales associates may use licensed personal assistants only brokers can pay them commissions. the broker holds their licenses and FREC holds them responsible for their actions |
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Graduated commission |
Sales Associate is compensated at a lower rate until a certain level of production is achieved |
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Escrow Management |
If a buyer of a residential condo unit timely delivers to a licensee written notice of the buyers intent to cancel the contract as authorized by the condo act the licensee may return the escrowed propertu to the purchaser without notifying the commission |
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Escrow Disbursement Dispute Process |
If the broker has requested an EDO and the dispute is settled or goes to court before the order is issued The broker within ten business days of the settlement or the decision to litigate the matter to court |
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Complaints Any complaint that is filed in writing and is legally sufficient will be investigated |
A complaint is legally sufficient if it contains facts that indicating that a violation of any of the following has occured Florida Statute Legally inacted DBPR rule Legally inacted FREC rule |
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7 steps of complaint Process |
Complaint filed Investigation Probable Cause Formal Complaint Presented as Informal / Formal Hearing Final Order Judicial review |
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Summary Suspension |
So serious it cannot allow the licensee to continue to endanger public welfare License is suspended immediately Also known as Emergency suspension Final Summary Order |
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Grounds for revocation |
License is suspended or revoked all licenses issued to sales associates and broker associate registered with the penalized broker are placed in involuntary inactive status |
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Notice of Noncompliance |
Is a warning as a first response to a minor violation by a licensee. |
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Citation |
A licensee has 30 days to accept or reject the alleged violation |
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First Degree Criminal Penalty |
Failing provide an accurate and current rental information for a fee First Degree misdemeanor 1000 penalty One year in jail |
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Claim resulting from an EDO |
If Broker complied with Escrow Disbursement offer from Frec and is Required by a court of law to to pay money damages asa a result of legal actions Frec will reimburse the broker up to 50k |
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Monetary Limits of Claims |
Payments for claims arising out of the same transaction are limited in total to 50k or the unsatisfied portion of the judgement which every is less Regardless of how many claims |
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Monetary Limits on Claims on Brokers and Sales Associates |
Payments for claims based on Judgments against one broker or sales associate may not exceed in total 150 k |
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Mandatory Suspension |
Suspension of Licensee's is mandatory upon payment of any amount from the Real Estate Recovery Fund In Settlement
The Licensee is automatically suspended until the licensee has repaid the amount paid from the fund in full |
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Appraisal Basics |
It is important that the appraiser indicate which type of value was used and define the specific type of value |
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Appraisal Basic |
An appraisal will be used by a client to establish the value of a residential property at the time a divorced was finalized |
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Real Estate Related financial transaction |
is any transaction involving the sale lease purchase investment in or exchange of property including interest in property or the financing thereof |
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Certified General Appraiser |
Prior to Jan 2015 30 semester hours of college credit courses the required hours include specific core curriculum courses and hours mandated by the AQB After Jan 2015 Bachelors Degree and Pre licensing Education |
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Price |
refers to amount paid in a transaction PAST |
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Cost |
Is the total dollar expenditure for land, labor, materials, overhead and entrepreneurial profit required to bring a property into existence |
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Value |
as of a certain point of time represents the monetary worth of goods and services to buyers and sellers |
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Assemblage |
the combining of two or more properties into one tract |
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Plottage |
The added value as a result of assembling combining two or more properties into one large parcel |
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Characteristics of Value |
Demand Utility Scarcity Transfer-ability |
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Assessed Value |
Assessed value is calculated in relation to a market value based (comparable) |
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Going Concern Value |
The value of Enterprises Goodwill associated with the businesses reputation for reputation recognition name franchise or customer loyalty |
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Liquidation Value |
is the amount a property most likely will bring at a forced or hurried sale |
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Value in Use |
the value of a property based on a specified use that may not represent it highest and best use GREEN BELT LAW |
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Principle of Substitution 3 approaches |
Hold that when several goods offering similar benefit are available consumers tend toward the one with the lowest price |
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Principle of Substitution 1 Sales Comparison Approach |
A knowledgeable purchaser would pay no more for a property that the cost of acquiring an acceptable substitute property |
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Principle of Substitution The income Capitalization Approach |
Property tends to be related to its competitive position among alternative investment choices producing equivalent investment returns and risks |
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Principles of Substitution The cost depreciation |
Purchaser would pay no more for a property that the cost of acquiring an equally desirable site combined with building an acceptable substitute structure |
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Increasing and Decreasing Returns |
When one or more factors of production are increased while others are held constant output may increase at an increasing rate up to a certain point however beyond some point each additional unit of consumption adds less and less to satisfaction or total utility |
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Overimprovement |
if a homeowner puts too many improvements into a home the homeowner will not recover the capital invested |
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Conformity |
suggests that property values are maximized when architectural homogeneity and uniformity of land use occur in a neighborhood. |
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Highest and Best Use |
of a site as though vacant is the legal permissible use of the site that would produce the greatest value |
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Highest and Best use Vacant |
If the site is or were vacant what type of structure or other improvements should be erected |
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Highest and best use existing improvements |
Ask yourself if highest and best use compare cost of demolish improvement and build new improvement vs Income generated by using existing structure to full potential |
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Form Report |
Is used by appraiser to present final reconciliation and best value |
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Final reconciliation |
Sales Comparison X Weight = Cost Depreciation X Weight= Income Capitalization X Weight= Add all results together to get Final Estimate of value |
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Market Conditions |
An adjustment for market conditions is required if, since the time the comparable sales were transacted property values in a given market have either appreciated or depreciated |
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Adjustment for Market Conditions |
is justified only if the market conditions in a particular market have changed over time |
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Market Condition Adjustment |
Resale Price minus (Initial Sale Price) equals to difference in prices Divided by the initial sales price Equals Percentage rate Divided by Number of months between sales Equals Monthly rate of change |
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Methods of Adjustment |
Appraiser will always adjust the comparable up or down but never touch the subject |
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Methods of Adjustment |
The Appraiser makes any necessary adjustments for financing and conditions of sale first to determine A Normal Sales Price |
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Reproduction Cost |
is the dollar amount that would be required to build a structure that is an exact duplicate of the structure being appraised |
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Replacement Cost |
is the dollar amount that would be required to construct improvements of equal utility to those being appraised although not the exact duplicate |
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Appraisers use three methods to estimate building costs. |
Quantity Survey Unit in Place Method Comparative Unit method |
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Quantity Survey |
Appraiser multiplies number of raw materials in an inventory by the cost of an item This method involves a detailed inventory of all labor materials products and indirect costs |
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Unit In Place |
The appraiser calculates the cost of materials and labor for each component of a structure |
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Comparative Unit Method |
The appraiser multiplies the cost per square foot or cubic foot of a recently built comparable structure |
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Deterioration |
Physical Deterioration Functional Obsolescence External Obsolescence |
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Physical Deterioration |
This type of deterioration includes ordinary wear and tear Exposure to elements Physical Damage |
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Curable |
fixing something brings up the value to compensate for the price of fixing it |
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Incurable |
fixing the something cost more than the value it would generate |
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Functional Obsolescence |
Anything inferior due to operational inadequacies Poor Design Changing Taste An Over-improvement may be considered a functional Obsolescence |
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External Obsolescence |
Any loss of value due to influences outside of the properties boundaries House next to mount Trashmore |
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Effective Age |
is indicated by the structure condition and utility it is approximated by taking into consideration the improvements current condition |
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GROSS INCOME MULTIPLIER GIM |
is the ratio between a property's gross income from all sources and its selling price |
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GROSS RENT MULTIPLIER GRM |
Is the ratio between a properties gross monthly rental income and the sale price of the property |
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Appraisal for business |
divides the NOI by the market derived capitalization Rate to obtain the capitalized value |
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CMA components |
Currently on the Market Sold within the last 12 months Expired in last 12 months |
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CMA |
Brokers Opinion is only useful if it reflects the interaction of supply and demand for a specific property |
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Location |
is the most important aspect and only in unusual circumstances should the licensee use a property outside the neighborhood as a comparable |
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Size and Shape of Lot |
A level site usually is more valuable than a sloping site. Bigger is usually better and a rectangular lot is more desirable than a pie shaped lot |
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Age |
If doing a comparable for a 20 year old home the licensee should avoid using a new home as a comparable |
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Adjusting the Comparable never the Subject |
If the Comparable is Inferior ADD If the Comparable is Better Subtract |
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Business Appraisers TWO FINANCIAL STATEMENTS |
The Balance Sheet (Company's Financial Position) The Income Statement (Reflects the profitability) |
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Cash Basis Accounting |
A bookkeeping system that applies revenues tot he period of time they were collected and expenses to the period they were paid without regard for the period for which item was applicable |
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Accrual Basis Accounting |
A method of matching income and expenses to a period for which they are applicable. regardless of when they were paid |
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Current ratio |
Current ratio by dividing current assets by current Liabilities measures the firms ability to meet its obligation |
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Quick Ratio |
is a more conservative way or measuring if a company can meet its short term debt Divide current assets (WO inventory) by current Liabilities |
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Inventory Ratio |
efficiency in which the company manages its inventory Firms Cost of Goods divided ending inventory |
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Universal Agent |
is authorized by the principle to perform all acts that the principle can personally perform that may be delegated to another |
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Residential Sale |
Is defined as the sale of improved residential property of four or less units Agriculture 10 acres or less |
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Transaction Broker |
in Florida its is presumed that all licensees are operating as transaction brokers unless a single agent or no brokerage relationship is established does not represent either party in a fiduciary capacity or as a single agent |
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COLD SIngle Agent relationship |
Confidentiality Obedience Loyalty Disclosure |
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Designated Sales Associate |
a non residential transaction were both parties are represented by the same broker. two separate agents are assigned single broker relationships. parties must have more than one million dollars No transition Notice is required |
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Record Keeping |
5 Years and 2 years after closing of litigation |
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Withdrawl of offer does not terminate Single Agency Relationship |
Does Single Agency still exist when contract is withdrawn |
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A net listing |
is created when an owner states a minimum acceptable amount and a broker agrees to market the property at a higher price and keep the overage not to exceed the customary brokerage fees in the area |
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Procuring Cause |
Find a purchaser = the broker is entitled to his commission when the seller is presented with an offer from a ready willing and able buyer at the list price Effect a sale Broker must bring an offer from a buyer who closes the transaction " No Closing No Commission" |
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PRACTICING LAW |
Do Not prepare legal documents, such as deed, mortgages, and promissory notes. May result in charges of practicing law |
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Statue of Fraud 1677 |
to be enforceable sale must be in writing and signed by all parties bound by the contract |
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Statute of Fraud exceptions
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Performance of the promise made proves the contract existed |
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Statue of Fraud Exception 2 |
Partial Performance taking full or partial payment taking pocession |
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Time is of the Essense |
Failure to perform the promises made within contract time limit is a default on the nonperforming party |
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SOLE OWNER OWNER In SEVERALTY |
can be single unmarried divorced widowed At the owners death it can inherited intestate |
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Sole and Separate Owner |
is a married person who owns property in her own name while implying the spouse is alive |
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Joint Tenancy |
Survivability If one party dies the other owns the property immediately and the property does not become part of the decedents estate |
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Tenancy in Common |
Inheritability If one owner dies that share will distributed according to will and state law |
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tenancy by the Entireties |
is ownership by husband and wife treated as one owner |
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personal Property |
if personal Property is involved agent must collect tax and pay to the dept of revenue |
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Liquidated Damages |
When a buyer defaults the seller is entitled to the earnest money |
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Conditional on Spouse Approval |
a contingency that would allow a specified window of time for a spouse to travel and approve the sale |
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Option Contracts |
Contract is Unilateral Only the Optioner is obligated to sell if given proper notice Optionee may allow the option to expire |
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NOTES |
A note requires only the borrowers signature if Another person Signs the notes face that person becomes a cosigner and is personally liable for repaying the debt. For this reason notes are not witnessed or acknowledged |
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Exculpatory Clause |
is a mortgage provision that requires the lender to look only to the property in case the borrowers defaults> cannot sue the person for shortage or mess up their credit |
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Florida Is A Lien Theory State |
borrower owns the property and the lender has a lien. |
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Foreclosure |
is the legal action used after a mortgagor defaults on a a note secured by a mortgage on real property |
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Junior Liens |
lower priority lien if the auction proceeds of the sale exceed the amount owed to the bank the junior liens will be paid in chronological order until all sales proceeds are used up. Those that are not paid after funds have been exhausted get nothing |
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PMI Private Mortgage Insurance |
Insurance pays up to 25 percent of the mortgage if there is a loss and the borrower defaults |
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Homeowner Protection ACT |
set rules for automatic termination and for borrower cancellation of PMI on home Mortgages These rules do not apply government insured FHA and VA loans or to loans with lender paid PMI |
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FHA LOAN 234 |
Insures graduated payment mortgages for those who expect their income to increase in the next five or ten years. The monthly Payment in the early years of these negative amortization loan so not cover the interest and this unpaid interest accumulates to the loans balance |
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Adjustable Rate loans |
determined by adding a margin to the recognized index interest can be set to change 1 3 or 5 years |
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Home acquisition Loan |
are used to buy construct or improve homes 1 Million Dollars in Debt qualifies for deductible interest for married filing jointly 500 for single |
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Home Equity Loan |
100000 |
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Points |
equals prepaid interest 1 point equal 1/8 Points are deductible only in the year paid only if the loan is for purchase of a principal residence Points paid by the seller are deductible by the buyer as interest the seller may treat points as a selling expense |
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Tax Relief ACT of 1997 |
SIngle 250 of personal gain on sale of home Married 500 of personal gain on sale of home |
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Depreciation |
for tax purposes depreciation is a deductible expense of an income property |
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SHORT TERM GAIN |
Less than one year |
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Long Term gain |
More than one year |
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Percentage Lease |
A predetermined threshold is established for base rent once sales exceed that threshold the rent increases by a percentage of of gross sales over predetermined threshold |
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Operating Expense Ratio |
This ratio is calculated by dividing operating expenses by effective gross income |
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Overall Capitalization Rate or ROI |
Net operating Income divided by Value = Rate |
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Equity Dividend Rate |
before Tax cash Flow divided Equity = Equity Dividend Rate |
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Loan Constant |
Annual Debt Service Divided by Original Loan Balance equals Mortgage constant |
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Shoulder Constant Elbow Cap down equals negative |
Shoulder Constant Elbow Cap up equals positive leverage |
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Business Risk Dynamic Risk |
Concerns in changes with the economy supply demand and taxes
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Business Risk |
Is Associated with Fire Storm Flood theft or liability from accidents |
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DRI Development of Regional Impact |
any development because of location and magnitude would have a substantial effect on the health and welfare of citizens in more than one county |
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Variance |
Is permission obtained from the appropriate governmental authorities to deviate somewhat from the designations of the zoning code |
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PUD Planned Unit Development |
is a concept involving larger than traditional subdivisions generally allowing mixed use |
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Impact Fees |
Developers pay to municipalities to fund off site infrastructure required to serve the community at large as well as the subdivision residents |
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Interstate Land sales full disclosure Act |
Federal law that regulates the sale or lease of land. intended to prevent fraudulent marketing schemes through the mail or other means of interstate commerce. Every purchaser must receive a property report prior to closing they may cancel contract up to 2 years after closing Contract is in 7 days |
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Clean Water Act |
created a permit system admin by the US Army Corp of Engineers for most dredging filling of wetlands that connect with navigable water ways |
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A community Association |
100000 in budget or 10 units |
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Technical Oversupply |
when units outnumber potential tenants |
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Economic Oversupply |
occurs when available units are priced beyond the purchasing power of potential clients |
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When tenant leaves the premises |
Landlord must return the deposit within 15 days or notify the tenant 30 days prior that landlord is keeping some or all the deposit |
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Landlords right to enter premises |
May enter at any time to preserve premises example fire 12 hours notice before entering may enter between 730 am and 8 pm |
