Ch 1 and 2 Flashcards by Bill Foty

Which of the following statements is true regarding a mortgage loan originator?
a. A mortgage loan originator is the same as
a mortgage lender.
b. A mortgage loan originator must have a
separate license.
c. A mortgage loan originator makes loans.
d. A mortgage loan originator must have a
real estate license.

b. A mortgage loan originator must have a

separate license.

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A real estate appraiser’s fee for professional service is based on which of the following?
a. A percentage of the property’s gross
income
b. A percentage of the fair market value of
the property
c. The time and difficulty of the appraisal
d. A percentage of the property’s sales price

c. The time and difficulty of the appraisal

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Which of the following best describes the real estate brokerage business?

a. Service business
b. Simple business
c. Business with few opportunities available
d. Construction business

a. Service business

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When a developer completes construction of a new subdivision, all streets, electric, water, and sewer installation are finished and deeded to the city or county. What is this process called?

a. A quit claim deed
b. An easement
c. Annexation
d. Dedication

d. Dedication

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All of the following are responsibilities of a property manager, EXCEPT:

a. Renting property for an absentee owner
b. Collecting rent
c. Overseeing maintenance
d. Preparing leases

d. Preparing leases

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What does the term “farming” refer to in real estate?
a. Specializing in one geographic area
b. Working in a cooperative manner
c. Specializing in agricultural properties
d. Specializing in the sales of orange groves
or cattle farms

a. Specializing in one geographic area

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Which insurance policies can a real estate licensee offer to the public without additional state licensing?

a. Flood insurance
b. Fire insurance
c. Renter’s insurance
d. none of the above

None of the above

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What is the purpose of the National Association of REALTORS®?

Preserve the right of individuals to own
real property through an exchange of
information

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What does the designation of REALTOR® signify?

a. Anyone in possession of a real estate license is a REALTOR®.
b. The designation identifies the real estate professional as a member of NAR
c. The designation is evidence that the licensee has an extensive background in the real estate profession.
d. The designation is evidence that the licensee has completed extensive real estate studies.

b. The designation identifies the real estate professional as a member of NAR.

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A developer contracts to build a home according to the buyer’s specifications. This is an example of which type of building?

a. Tract
b. Custom
c. Speculative
d. Subdivision

b. Custom

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The federal, state, and local governments all play a role in the regulation of real estate. In which of the following areas would the local government have the most impact?
a. Property taxes, building moratoriums, and zoning
b. Primary and secondary mortgage markets
c. Documentary stamp taxes, intangible
taxes, and note taxes
d. Civil rights enforcement and monetary
policy

a. Property taxes, building moratoriums, and zoning

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Which of the following best describes licensees who are involved in business opportunity brokerage?
a. They must be able to analyze financial statements and understand balance sheets
b. They are not required to know much about
the business they are selling.
d. They never become involved in the tax
aspects of the business.

a. They must be able to analyze financial
statements and understand balance
sheets.

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Real estate licensees are expected to be knowledgeable in all of the following areas, EXCEPT:

a. Marketing
b. Valuation
c. Property transfer
d. Accounting

d. Accounting

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Which service provided by real estate licensees requires the most experience and knowledge?

a. Property management
b. Counseling
c. Appraising
d. Agricultural sales

b. counseling

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An appraiser, who is registered, licensed, or certified under F.S. 475, Part II, must be utilized in which of the following?
a. All appraisals
b. Comparative market analysis (CMA)
c. Broker price opinion (BPO)
d. Valuation in non-federally related
transactions

a. All appraisals

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objectives of Chapter 1

Describe the various activities of real estate brokerage

Distinguish among the major areas of specialization within the real
estate profession

Identify the role of property managers

Understand the role of the appraiser and when a licensed appraiser is required

Understand the role of mortgage loan originators in the transaction of real estate

Explain the three phases of development and construction

Distinguish among the three categories of residential construction

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key terms of chapter 1

Absentee owner
Appraisal
Appraiser
Broker price opinion (BPO) Business opportunity
Comparative market analysis (CMA) Dedication
Farm area
Federally related transaction Florida REALTORS® (FAR) Follow-up
Local Board (Association) of REALTORS®
Multiple listing service (MLS) Mortgage loan originator (MLO) National Association of
REALTORS® (NAR)
Property management
Real estate brokerage
Residential transaction Subdivision plat map

Uniform Standards of Professional
Appraisal Practice (USPAP) is the quality control standards

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A contractor who builds on his or her own lot in the hope of finding a purchaser upon completion is building on ________________.

spec

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One type of a residential sales transaction involves the sale of any improved residential property of ___________ units or less.

four

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The term ____________________ is a registered trademark of the National Association of REALTORS® and may be used only by members of the organization.

REALTOR®

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Most real estate licensees are involved in _______________ brokerage.

residential

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Property management has grown as a service of real estate primarily because of an increase in _______________ _______________.

absentee ownership

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The portion of the Federal Financial Institutions Reform, Recovery and Enforcement Act that requires the use of state-licensed or state-certified appraisers in federally related transactions is _______________.

title X1

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An estimate of the value of property developed by a real estate licensee for use in listing or selling property is known as a _______________ ________________ _______________.

CMA

comparative market analysis

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8. Mortgage loan originators are licensed in Florida by the ________________ _______________ __ _______________ ________________.

FDFS | Florida Department Of Financial Services

9. The category of construction that applies when a property owner employs a contractor to build according to their individual specifications is called _______________ ________________

custom building

10. After completion of construction of a subdivision, the streets, sidewalks, and common areas are frequently conveyed to the city or county in a process called ________________.

dedication

11. Appraising is the process of developing an ________________ of value.

opinion

12. Valuing a business requires an analysis of _______________ _____________ and _______________ _________________

balance sheets and financial statements

13. The three areas of expertise real estate licensees bring to the transaction relate to _______________ ________________, ________________ and ________________.

property transfer, valuation, marketing

14. The composite value of the real and personal property, plus the intangible assets of a business, is called ________________ ________________ ________________.

going concern value

15. A real estate ________________ is a business in which real estate related activities are performed under the authority of a licensed real estate broker. A sales associate works for the ________________, providing services to prospective buyers and sellers on behalf of the ________________.

brokerage, broker, broker

What are the most common services of real estate?

“A BAR SALE” ``` A = Appraising B = Buying A = Auctioning R = Renting S = Selling A = Advertising L = Leasing E = Exchanging ```

1. A sales associate license will be ______________ if he or she does not complete the required post- license education during the initial license period.

Void

2. A broker who does not complete the required post-license education prior to expiration of his or her initial license period may request a(n) _______________ license by completing a continuing education course within _____________ ______________.

sales associate, 6 months

3. A broker associate acts in the capacity of a(n) _________________

sales associate

4. Residency in Florida may be claimed by anyone who resides, or has resided, in the state for not less than ________________ ________________ within the previous 12 months.

4 months

5. The first real estate license law in Florida was enacted in __________.

1923

6. Upon passage of the state examination, an applicant for a sales associate license will receive a(n) __________ license.

inactive

7. Florida does not reciprocate with other states, but does have ________________ ________________ with some states that have educational requirements that are similar.

mutual consideration

8. The post-license educational course for sales associates consists of __________ hours.

9. The continuing education requirement consists of __________ hours.

10. Florida sales associates who desire to become brokers must wait _______________ before taking the state examination.

2 years

11. The notice of satisfactory completion of a pre-license course is valid for __________ ____________________.

2 years

12. Owner-developers are ______________ but do not receive a license.

registered

13. A tenant in an apartment complex may receive up to ________________ for referral of a new tenant for the same complex.

$50

14. _______________ education must be completed during the initial sales associate’s license period.

post - license

15. Legal authority to sign a document on behalf of another requires a(n) __________ ___ _______________.

power of attorney

16. Individuals who have no intention of buying at an auction but are used to driving the price up are called .

by - bidders

17. Licensees who are members of the armed forces have all fees, dues, continuing education, and other requirements waived during their military service and for after returning to civilian life.

2 years

2. What is the purpose of the real estate license law? a. To protect the public b. To protect licensees c. To clarify the law d. To grant licenses

a. To protect the public

3. Why was the Florida Real Estate Commission created? a. To protect the public b. To administer and enforce the law c. To discipline licensees d. To award professional designations

b. To administer and enforce the law

4. A sales associate failed to complete the required post-license education prior to renewal. What is the status of the license? a. Revoked b. Suspended c. Involuntarily inactive d. Void

5. What does the registration of an active sales associate with the Department refer to? a. Placing and keeping on record the sales associate’s name and home address b. Placing and keeping on record the sales associate’s name, home address, and business address of his or her employing broker c. The broker’s name and business address d. Placing and keeping on record the sales associate’s name and the business address of his or her employer

b. Placing and keeping on record the sales | associate’s name, home address, and business address of his or her employing broker

6. How may a licensed sales associate be paid by his or her owner-developer? a. On a salary basis only b. On a commission basis only c. On a commission basis without a bonus d. On a commission or salary basis

d. On a commission or salary basis

7. What are the minimum employment requirements for a licensed sales associate to qualify for a real estate broker’s license? a. Employed for 6 months under one actively licensed broker b. Employed for 12 months under one actively licensed broker c. Employed for 24 months under one or more actively licensed brokers d. Employed for 6 months under one or more actively licensed brokers

c. Employed for 24 months under one or more actively licensed brokers

8. How many hours of post-license education are required to renew a broker license? a. 14 b. 30 c. 45 d. 60

d. 60

9. All of the following services require a real estate license, EXCEPT: a. Leasing b. Mortgaging c. Buying d. Selling

b. Mortgaging

10. All of the following information appears on a Florida real estate license, EXCEPT: a. The seal of the state of Florida b. An expiration date c. The signature of the governor d. The name of the secretary of Department of Business and Professional Regulation

c. The signature of the governor

11. What must an applicant for a real estate license do if he or she has been convicted of a crime? a. The applicant must disclose the crime only if it was a felony or resulted in jail time. b. The applicant does not need to disclose it on the application unless there was an order of restitution. c. The applicant must disclose all arrests and convictions. d. The applicant must disclose all convictions on the application.

d. The applicant must disclose all | convictions on the application.

12. Which condition must exist for an applicant to qualify for a Florida real estate license? a. The applicant must be a citizen of the United States. b. The applicant must be a Florida resident. c. The applicant must be at least 21 years of age. d. The applicant must have a high school education or equivalent.

d. The applicant must have a high school | education or equivalent.

13. Which of the following statements best describes an attorney-in-fact? a. An attorney-in-fact must be a member of the Florida Bar. b. An attorney-in-fact may be paid a commission for services of real estate. c. An attorney-in-fact is authorized by a power of attorney to act for another. d. An attorney-in-fact is required to hold an active real estate license

c. An attorney-in-fact is authorized by a | power of attorney to act for another.

14. Which individual is exempt from the licensing requirements of Florida Statute 475? a. A partner in a real estate partnership who receives compensation in excess of his or her interest in the partnership for performance of real estate services on behalf of the partnership b. A condominium manager who is paid on a commission basis for rentals of less than one year c. An appraiser who is certified under Florida Statute 475, Part II, when performing brokerage services d. An attorney who performs legal duties in connection with a real estate transaction

d. An attorney who performs legal duties in connection with a real estate transaction

15. Complete this statement. An actively licensed attorney who is a member in good standing with the Florida Bar . a. May charge commissions in connection with real estate activities b. Is exempt from continuing education requirements to maintain a real estate license c. Is not allowed to simultaneously hold a real estate license d. May be licensed as a broker but not as a sales associate

b. Is exempt from continuing education requirements to maintain a real estate license

16. What is a broker associate? a. A broker who employs sales associates b. A sales associate c. A broker who is employed as a sales associate d. A sales associate who is employed a

c. A broker who is employed as a sales | associate

17. Florida has an agreement with some other states that recognizes the similarity in education and experience requirements for licensees. What is the agreement called? a. Reciprocity b. Mutual recognition c. Cooperative licensure d. Intrastate licensing

b. Mutual recognition

18. Which of the following statements is true regarding a plumber who has been appointed by a court to appraise a small business? a. The plumber is in violation of F.S. 475. b. The plumber may charge a commission. c. The plumber may do so and be paid a fee. d. The plumber must first be licensed under F.S. 475, Part II

c. The plumber may do so and be paid a fee.

19. All of the following individuals are exempt from the real estate license law, EXCEPT: a. Employees of a corporation who are paid on a salary basis b. Partners in a partnership who receive a pro rata share of the profits c. Condominium managers who rent units within the complex for periods up to 1 year d. Funeral directors performing duties of real estate for compensation

d. Funeral directors performing duties of real | estate for compensation

20. A Georgia broker with extensive experience in conducting auctions was asked by a local real estate broker to auction a small motel in Jacksonville. The auction did not result in a sale. The Florida broker paid the Georgia broker for out-of- pocket expenses, but did not pay a commission. Which of the following statements is correct? a. The Georgia broker violated license law. b. The Florida broker did not violate license law. c. The Florida broker is not subject to discipline by the Commission. d. The transaction is perfectly within the license law

a. The Georgia broker violated license law.

what a realtor does? | MVP

MVP | Marketing, Valuation, Property transfer

What is Commercial sales? | TEA

TEA | Tax consequences, Extensive knowledge, analyze past and future income

What is business brokerage? | LAG

LAG Listing and sale of businesses analyze financial statements going concern value -company will remain in business indefinitely and continue to be profitable

Appraising?

Estimating value of property An art, not a science Paid based on time and expense not paid on property value non-biased opinion of value

appraisal?

A non federally related transaction | We do CMA's instead because our goal is different.

what is financing?

financing is the lifeblood of sales

is property insurance mandatory on homes?

Yes

What is dedication?

gift of real property from an individual to the government.

Custom home

sold first built later

Spec home

built first sold later

Tract homes

speculative in nature done with model homes on large scale

FAR?

Florida association of realtors. real estate forms, technology help, legal advice,

Government regulation?

``` local government is most intrusive Building and health codes Building moratoriums Planning and zoning Property taxes ```

Federal Govt?

handle Federal Reserve Monetary policy

An active florida Real Estate license is required if?

performing a service real estate In Florida For another For compensation

What are the 8 most common services of Real Estate

``` Appraise Buy Auctioning Rent Sell Advertise Real Estate Services Lease Exchange ```

when is 45 hour post license taken?

it is taken prior to 1st renewal

State exam past grade for sales associate and broker?

75% sales associate | 70% broker license

broker associate?

gone through requirements to become a broker and continues to work as and associate. Works for employing broker .

license process?

pass grade is 70% fingerprints pass state exam than do post licensing and do Continuing Education (complete every 2 years)

Registration is not licensed because it is not a person

fact

Ch 1 and 2 Flashcards

(90 cards)