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Real Estate Exam Florida > Exam Prep > Flashcards

Flashcards in Exam Prep Deck (187):
1

When a Florida applicant is upgrading from sales associate to broker, what course must they complete?

A 72-hour pre-licensing course.

2

Vale can be estimated in the income approach by:

Dividing NOI by the Overall Cap Rate

3

On what IRS form must details of closing be reported?

IRS 1099 S

4

On what IRS form are brokers required to report commissions paid to salespersons?

IRS MISC

5

Real estate term describing the process of converting real property into personal property

Severance

6

To whom does a tenant or prospective tenant lodge a housing discrimination complaint?

Secretary of HUD

7

Refers to a provision in the lease that gives the right to the tenant to extend the lease for a given amount of time

Renewal option

8

By what process is a completely abandoned property returned to the county/state

Escheat

9

Condition of a property owner who dies without a valid will

Intestate

10

Condition of a property owner who dies with a valid will

Testate

11

Right of the government to take private property and use it for the good of the public

Eminent domain

12

Four powers of the government

PETE

Police Power
Eminent Domain
Taxation
Escheat

13

Term that refers to a government's use of their right to eminent domain

Condemnation

14

When is a comparative market analysis most often used?

Setting the listing price

15

If a buyer entered a contract with a seller, but wanted to not buy the property, what would happen to the earnest money?

It would go to the seller.

16

Term for when the board of Zoning Appeals grants someone the ability to construct or improve a property that is not authorized by current zoning ordinance.

Variance

17

How long do you have to file a complaint with HUD if you believe your rights have been violated under Fair Housing Laws?

1 Year

18

Describe an exclusive right to sell listing

The listing belongs to the broker

19

What disclosures does Regulation Z require?

Finance Charge
APR
Amount Financed
Total Payments

20

What must a Florida deed have to be valid?

It must be signed and witnessed.

To be recorded in the court, it must be notarized

21

When is does a contract begin to be enforcable?

When it is accepted and mailed back to the buyer

22

In Florida, if a sales associate does not complete the 14 hours of continuing education requirements prior to the expiration date, what occurs?

The licensee is allowed up to 12 months after the expiration date to complete the 14 hours continuing education and pay the renewal fee.

23

When will a warranty deed transfer title to a grantee?

When it is delivered and accepted

24

What type of contract would show the intentions of the parties by their actions?

An implied contract

25

What type of contract would show the intention of the parties by the specific terms agreed upon in words? (Written or oral)

An expressed contract

26

What is an Executory contract?

A contract between a debtor and another party under which both sides still have important performance remaining (example: Real estate leases- tenant has to pay rent, landlord has to provide space.)

27

What is the primary purpose of acknowledgement when a deed is recorded?

To verify that the deed was signed without duress

28

What is the secondary purpose of acknowledgement when a deed is recorded?

To verify the identity of the party signing the contract

29

Until pay off, who would hold title when a purchase of a home is financed by means of a trust deed?

Trustee

30

Are special assessments prorated at closings?

No

31

What is one manner in which a husband and wife could NOT hold title to their home?

Tenants at will

32

Tenancy at will

An arrangement in which one party (the tenant) occupies real estate with the permission of the owner, for an unspecified period of time. This is NOT a form of ownership

33

Tenenacy in common

An estate owned by two or more persons, each of whom as an equal undivided interest (they do not need to be related)

34

Tenancy by entireties

Form of ownership between a married couple. (Joint tenancy for married people)

35

Usury

Term used when an interest rate charged is in excess of the maximum rate allowed by law

36

Subordination

When something is lower in rank and importance, such as the case with a subordination clause which makes other debts in collateral real estate secondary to the claim of the mortgage lender

37

Puffing

Best defined as non-factual or extravagant statements and opinions made to enhance the perceived desirability of a property

38

Hedging

Financial technique used in order to reduce or eliminate financial risk.

39

If a buyer offers to pay the full asking price for a property, but the seller then does not what to sell, is the owner forced to sell?

No, but the owner is liable to the broker for commission

40

Term for when a title insurance company obtains the policy owner's legal rights to defend a claim against the title

Subrogation

41

Assignment

Transfer of rights and interest in a mortgage, lease, etc.

42

Attachment

When someone's property is taken into legal custody by a judicial order

43

If a disabled tenant requests and receives permission from the landlord to make modifications to a rental unit to make it safe and comfortable to live in, is the landlord required to pay for improvements?

No

44

Can not paying property taxes or assessments result in the sale of property?

Yes

45

Term for a business that existed before the land was zoned residential by a new zoning ordinance

Nonconforming use

46

Describe a recorded restriction

Use, with limitations. A restriction is classified as an encumbrance.

47

What would a violation of a condition result in?

Loss of title, but not necessarily a violation of a restriction

48

If a person has no living relatives and dies without writing a will, what happens to their property?

It becomes property of the state under the State's law of Intestate Succession

49

If someone rents units in an apartment complex for an owner, what type of agent would they be considered?

General agent

50

When working with a federally-related transaction (FRT), an appraiser must be state licensed or certified if the loan amount is more than:

250,000

51

What is a Note?

A written agreement that gives evidence of a debt and also states the repayment terms

52

What is a special agent?

Someone who has authority to represent a principal in a specific transaction.

53

General Agency

Authorized for a series of transactions or acts of over a continuous period of time. (A good example would be a property manager)

54

Universal Agency

Power of attorney. Can act in all matters of real estate on behalf of the client

55

Alienation

Legal term for the transfer of title

56

Involuntary alienation

When transfer of the title is done without the owners consent or control.

57

What is the method by which a government can take private property?

Condemnation

58

Standing trees would legally be considered:

Real property

59

Crops that require annual planting are called:

Emblements

60

Is a restriction considered a lien?

No. They are considered non-money encumberances

61

Foreclosure

the legal process by which an owner's right to a property is terminated, usually due to default.

62

When is a contract void?

When it is not legally enforcable

63

FLorida has mutual recognition with how many states?

8 states
-Alabama
-Arkansas
-Connecticut
-Georgia
-Indiana
-Mississippi
-Nebraska
-Oklahoma

64

When one spouse solely owns a property, the ownership is:

Owned in severalty

65

What are homestead rights?

Refer to a property's protection from judgments for unsecured debts or forced sale by creditors of the homestead owner. Additionally, there may be restrictions on who may receive property in wills and trusts based upon relationship to the homestead owner

66

What is a trust?

A trust is a legal arrangement in which an individual (trustor) gives fiduciary control of property to a person or institution (trustee) for the benefit of beneficiaries

67

What is an easement?

the right to use the land of another for a specific purpose. It's use is limited to that purpose

68

What is an appurtenant easement?

Benefits the land and can only be used by that land

69

Deed recordation

Meaning that the recording of the deed provides notice that a conveyance has occurred

70

Blanket Mortgage

A mortgage which covers two or more pieces of real estate

71

Wrap Around Mortgage

when a second mortgage is wrapped around the first mortgage

72

Package Mortgage

Made for an individual property

73

Open end mortgage

allows for future fund advances by the lender to the borrower

74

Balloon Payment

associated with a partially amortized loan because it has unpaid amounts of principle left at the end of the term, where as a fully amortized loan has totally paid principle at the end of the mortgage term

75

Encroachment

When a permanent object from one property extends over onto another property illegally

76

Encumbrance

Anything that affects the title of a property or limits its use, such as mortgages, judgments, leases, easements, liens, or restrictions

77

Riparian Rights

rights associated with being located directly next to a flowing water source, like a river or stream

78

What is the usually penalty for failing to maintain an office and sign at the entrance of an office?

Suspension up to 90 days

79

When are utility easements created?

Usually at the time of new construction to allow utility companies to maintain cable television/internet/phone, gas, electric, water, sewer, etc.

80

How many days do credit companies have to let applicants know that they have been rejected?

30 days

81

Contribution

the principle that claims that an item is only worth what it contributes in value to the whole

82

Conformity

the proper melding of the uniqueness of the individual property with the character of the neighborhood and the desirability of the market

83

Substitution

the principle that a knowledgeable buyer will pay no more for one item than for a comparatively equivalent substitute

84

What is an installment or land contract?

A method of selling real estate whereby the purchaser takes possession and pays for the property in regular installments while the seller retains title until the property is paid for in full.

85

Condicil

A legal document that changes specific provisions of a Last Will and Testament, but leaves all of the other provisions unchanged

86

Life estate

an estate whose duration is limited to the life of an individual and a legal arrangement whereby the "life tenant" during his or her life retains use, possession of the property and costs of maintaining the property.

87

What is a common penalty for the violation of conditions in a deed

Property would return to its original owner

88

Mortgage

a method of using property (real or personal) as security for a loan

89

Deed

Is like a bill of sale. It transfers the title. Being like a bill of sale, it can only be used ONCE. A new deed is required every time the title is transferred

90

Title

A formal legal document that servers as evidence of ownership

91

A broker that violates the Sherman Anti-trust act could be punished by a maximum fine of:

$1 Million (and 10 years in prison)

92

Lease

Document that states all the rights of use and the occupancy of the property for a given period of time and given amount of rent

93

Quitclaim Deed

Provides the grantee the least amount of protection of any deed. There are no express or implied convenants or warranties

94

Bargain and Sale Deed

Provides the grantee with an implication that the grantor actually does hold title and possession. No other express warranties exist

95

Special Warranty Deed

Warrants that the grantor does hold title and the property was unencumbered during the time the grantor held title (except when otherwise noted in the deed)

96

General Warranty Deed

Offers the most protection to the buyer.

97

Defeasance Clause

gives the borrower the right to redeem title to the property upon payment to the lender of the complete debt obligation

98

Acceleration Clause

Allows the lender to demand the entire balance of the mortgage loan when the borrower fails to make some installment payments

99

Alienation Clause

Allows the lender to declare the entire unpaid balance immediately due and payable in the event of a sale or transfer or mortgage property

100

Escalation clause

allows the interest rate to adjust over the life of a loan

101

Subordination clause

makes other debts in collateral real estate secondary to the claim of the mortgage

102

Factors considered in the market or sales comparison approach

1. Location
2. Time
3. Physical characteristics
4. Terms of sale

103

Accretion

When land is actually increased because of water depositing additional soil gradually

104

Reliction

when the water line recedes and leaves exposed land permanently dry

105

Avulsion

Sudden loss of land or soil due to a sudden natural act (e.g. earthquake, sudden change in river flow, etc.)

106

Egress

Means to exit

107

Latent Defect

Defect that is not easily visible or detectable during a normal inspection

108

Patent Defect

Defect in which property that is obvious and easily visible

109

Erosion

The gradual loss of land

110

Net listing

Agreement where a broker receives as commission any amount above a predetermined minimum sales price(illegal in some states)

111

Subdivider

Term for someone who buys undeveloped land and divides it unto smaller lots for sale

112

Doctrine of prior appropriation

Used in areas where water is scares. Use of water is determined and controlled by the local government under doctrine that all water belongs to the public.

113

Equitable lien

Occurs when there is a claim on goods or property conferred by a court

114

General Lien

A lien against all property owned by the debtor

115

Specific lien

a lien against a particular property owned by the debtor

116

Can a Grant Deed be assigned?

No, a grant deed CAN NOT be assigned.

When there is a new buyer of property, a new grant deed would be drawn up.

117

Metes and Bounds

metes means distance, bounds means direction

118

Governmental survey

uses townships (6mi x 6mi).

There are 36 sections in one township and 640 acres in each section

119

Lot and Block

Method used in subdivisions (subdivided plat)

120

Would a lessor selling a property terminate a lease agreement?
Why?

No.
When a lessor sells property, the buyer must abide by the existing lease.

121

When does a broker earn their commission?

When an offer is accepted by the seller

122

Warrants provided by a special warranty deed

Warrants that the grantor DOES hold title and the property was unencumbered during the time the grantor held title.

123

3 examples of encumberances

Liens
Easements
Restrictions

124

What is the ratio that compares the buyer's gross income to the proposed PITI?

Payment to Income

125

Hypothecation

Pledging an asset as collateral for a loan

126

Mortgage release

A release of a mortgage is a document issued by a mortgage lender once a borrower has repaid a loan. It indicates that the borrower now owns the home without any further obligation to the lender

127

Participation mortgage

mortgage in which a lender shares the income produced from the resale or rental income of the property

128

Buy down

A lump-sum payment to the lender that reduces the interest payments of the loan

129

Package mortgage

A mortgage that covers both the real and personal property

130

Inverse Condemnation

An act property owners may force to receive just compensation if government action has forced a significant loss in value or inability to use the proprety

131

Open End Mortgage

allows the mortgagor (borrower of the loan) to re-borrow against the principle that has been paid so far.

132

If a property owner leases space to a tenant, what is the owner's interest?

Lease fee

133

Are street addresses used in legal descriptions of real estate?

No.

Street address may change over time.

134

What does a tenant pay for in a net lease?

maintenance fees, taxes, insurance, etc.

135

Straight line method

Used when calculating depreciation

136

3 traditional cost approach methods

Comparative unit method
Unit in place method
Quantity Survey method

137

Recission

cancels the contract and returns all parties to the way they were before a contract was entered to

138

Novation

Replacing of something old for something new

139

Specific performance

a contract that must be fulfilled by parties involved.

140

Lis Pendens

Latin phrase meaning "suit pending" or "action pending"

141

Situs

The physical location of a property

142

Ex parte

means "one side only", in a legal setting this means that only one side is represented in the matter

143

Executory contract

A contract not fully performed (usually something remains to be completed by one or more parties)

144

When would flood insurance be required in order to obtain a loan?

When a property is located in a flood hazard zone

145

Equitable conversion

Refers to when, after parties have entered into a binding contract for the sale of land, the buyer becomes the "equitable owner" before the delivery of the deed

146

Perfecting the title

correcting issues with the title

147

Percentage lease

Has a base rent which is fixed and an excess rent which is commonly based on the percentage of sales

148

Et Ux

"and wife"

149

E & O insurance

Errors and Omissions Insurance is business liability insurance for professionals.

150

Marketable Title

Title that is found to be clear of liens and defects or any other reasonable objection

151

What percentage of a salesperson's income must be based on production for him/her to be considered for independent contractor status?

90%

152

Physical Characteristics of Land

Indestructible nature
Immobility
Non-homogeneity

153

Economic Characteristics of Land

Situs
Permanence
Scarcity

154

1968 court case that held up the Civil Rights Act of 1866

Jones v. Mayer

155

Maximum tax exemption from the homestead exemption

$50,000
The first $25000 applies to all property taxes

156

How many days after pleading guilty or being convicted and found guilty of any felony must you notify the Florida Commission?

30 days

157

Once per renewal period, attendance of a FREC meeting will count for how many CE hours?

3 hour continuing education hours

158

Within what time must an inactive license become active without having to retake the exam in Florida?

2 years

159

Reconciliation

Provides an analysis of two or more residential property valuations to assist lenders and servicers in reconciling disparate values on specific nonperforming real estate assets

160

Who is regulation Z controlled by?

Federal Trade Commission

161

Constructive Notice

Legal presumption that anything recorded in a public record can known by anyone who wants to know it

162

Actual Notice

Direct knowledge that one has of the property, either by direct inspection, possession, or other means.

163

Inquiry Notice

information that should impel a reasonable person to make further inquiries about a property

164

Economic Obsolescence

Occurs when factors unrelated to the property itself and outside of the owner's control diminish the property

165

Obsolescence

process or condition of going out of date or being no longer in use

166

Functional obsolescence

Pertains to a property not complying with recognized utility; in other words, there are features that are not practical or desirable

167

External Obsolescence

caused by events outside of the owner's control make the building's current use nonconforming.

168

Statute of limitations

Certain limit of time allowed in which parties to a contract may bring a legal action to enforce their rights

169

How long is a FL broker required to maintain legible records of all transactions, financial records, etc.?

5 years

170

Rod

1 rod = 16.5 feet
320 rods = 1 mile

171

If a FL real estate company has more than one broker, who is responsible for the company?

All brokers in a real estate company are equally responsible

172

Covenant of seisin

The grantor owns the property and has the right to convey title to it. (Seisin means possession)

173

Unlicensed practice of real estate constitutes what?

A Felony of the Third Degree

174

Reproduction cost

Dollar amount required to construct an exact duplicate of the subject

175

Replacement cost

cost to create a building or other improvements which have the same utility as the original

176

Environmental impact statement

Detailed, full-disclosure report that identifies and analyzes the anticipated environmental impact of a proposed action and discusses how adverse effects will be mitigated.

177

Common stock ownership

Gives an interest as personal property (stock in a corporation is personal property)

178

Who funds and provides loans for the Department of Veterans Affairs?

Approved lenders

179

What is CERCLA? When was it passed?

CERCLA established prohibitions and requirements concerning closed and abandoned hazardous waste sites.

It was passed in 1980

180

What is RESPA

RESPA: Real Estate Settlement Procedures Act

Mandates certain disclosures in connection with the real estate settlement process AND prohibits certain unlawful practices by real estate settlement providers (like kick backs and referral fees)

181

Judgment Lien

Occurs when a court order puts a lien on personal and/or real property in order to pay a debt

182

Mechanics Lien

Specific lien placed by a contractor, laborer, etc when they performed work in the improving or repairing of a property

183

Statutory lien

Lien created by statute (law). Common example is a real estate tax lien.

184

Assemblage

Refers to the combining of two or more parcels into one ownership or use

185

Plottage

Refers to the value of the combined sites having a total value higher than that of each parcel

186

Formula for figuring the value using the Gross Rent Multiplier

Value = Market Rent x GRM

187

Compare a license to an easement

A license, unlike an easement, is having the permission of the owner to enter his land for a specific purpose.

Unlike an easement, the license can be rescinded at any time.