The Real Estate Business Flashcards
(260 cards)
0
Q
What is a farm area ?
A
A selected and limited geographical area a sales associate devotes special attention and study
1
Q
Five major real estate sales specialties
A
- Residential : 4 or less res. units or agriculture 10 or less acres
- Commercial : income producing properties
- Industrial : sites in indust. Parks
- Agriculture : more then 10 acres
- Business : sale, purchase, or lease of businesses
2
Q
What is a property manager .
A
A person who manages properties for others. Primary duties are to secure and keep tenants, provide financial records and accounts, provide upkeep and maintenance of the property
3
Q
What is the USPAP ?
A
Uniform Standards of Professional Appraisal Practice sets guidelines real estate brokers and sales associates must follow when conducting appraisals of real property
4
Q
What is FREAB ?
A
Florida real estate appraisal board
Regulates state certified, licensed, and registered appraisers
5
Q
How are appraisers paid ?
A
Fee based, never commission
6
Q
What is a CMA ?
A
Informal estimate of market value performed by a real estate licensee for the seller, to assist in arriving at an appropriate listing price, or help the buyer figure out an appropriate offering price
7
Q
Can realtors due appraisals ?
A
Yes, but must be a cash deal and they must follow USPAP standards
8
Q
What is a BPO ?
A
Broker price opinion. Written opinion of the value of property. Licensees can charge for BPOs provided it is not referred to as an appraisal. Often requested by relocation companies and lenders involved in short sales
9
Q
Services of Real estate : A bar sale
A
Advertising Buy, Appraise,Rent. Sell,Auction,Lease,Exchange
10
Q
Your license is VOID if it is…. REC
A
Revoked
Expired
Cancelled
11
Q
Single agent :COLD PAC
A
Care, Obedience , Loyalty, Disclosure
,
Present all offers, Accountability , Condidentiality
12
Q
Transaction broker
CD. PAC
A
Care, Disclosure (full)
Present all offers, Accountability, Confidentiality
13
Q
No brokerage relationship C D P A
A
Care
Disclosure
Present all offers
Accountability
14
Q
Four settlement procedures for conflicting demands on escrow: M A L E
A
Mediation
Arbitration
Litigation
Escrow disbursement order
15
Q
1968 civil rights act, 7 protected classes
F R E S H
C O R N
A
F: family status, R: race, E: Equal, S: sex, H: handicap
C: Corn, O: opportunity, R: religion, N: nationality
16
Q
Bundle of rights : D U P E
A
D: disposition ( sell or give away )
U: use ( control )
P: possession ( occupy )
E: exclusion ( quiet enjoyment )
17
Q
Test courts use to determine of something is a fixture I R M A
A
I: intent of parties
R: relationship between parties
M: method of annexation
A: adaptation of the article
18
Q
Four unities of joint tenancy: P I T T
A
P: possession
I: interest
T: title
T: time
19
Q
Conditions for alienation by adverse possession
HOT
CAN
A
H: hostile possession of property ( without owners permission )
O: open possession with no attempt to conceal occupancy
T: taxes paid on property by adverse possessor
C: claim of title
A: adverse possession must continue for 7 or more years
N: notorious and flagrant public possession of the property
20
Q
Elements of a deed
C E D D I N G
A
C: consideration ( valuable or good )
E: execution ( signed by a competent grantor & 2 witnesses
D: description of property
D: delivery and acceptance ( voluntary )
I : interest or estate being conveyed ( habendum clause )
N: names of grantee and grantor
G: granting and other appropriate clauses
21
Q
Private limitations on ownership of real property: D E L L
A
D:deed restrictions
E: easements
L: leases
L: liens
22
Q
Elements of a valid and enforceable real estate contract
C O L I C
A
C: competent parties O : offer and acceptance ( meeting of the minds ) L: legal purpose I: in writing C: consideration ( valuable or good )
23
Q
Ways an offer is terminated:
W I L D
C A R D
A
W: withdrawal by offerer. C: counteroffer
I: insanity. A: acceptance
L: lapse of time. R: rejection
D: death. D: destruction of the property
24
```
Characteristics of value
D
U
S
T
```
D: demand
U: utility
S: scarcity
T: transferability
25
USPAP's ethic's rule for appraisers
Unethical to accept compensation contingent on the value of the property
26
How is compensation paid for broker price opinions ( BPO ) ?
Compensation must be paid to the broker and not directly to the sales associate or broker associate who prepared the BPO
27
Three categories of residential construction
1. Speculative: purchasing one or more lots and constructing a home without a buyer in advance of construction
2. Custom homes : constructed under contract with buyer, often using building plans from architects
3. Tract homes: type do speculative building, Typically has model homes where buyers selects a floor plan in subdivision
28
Role of local government in real estate
Impacts real estate through property taxation and regulatory activities ( building permits, zoning, building codes, building moratoriums )
29
What is role of state government in real estate ?
State government owns and manages a large amount of property and identifies areas protected from development. State documentary and intangible taxes are required when property is transferred
30
What is the role of federal government in real estate
Federal government impacts real estate through its fiscal and monetary policy. Various fed. agencies that impact real estate are: HUD, FHA, va, EPA, and IRS.
31
Commercial real estate lien act
Part 3 of chapter 475, applies only to commercial property, not residential property. Lien is only on owners net proceeds ( personal property ) and does not attach to the commercial property
32
Mutual recognition applicant must
Pass a written florida specific real estate law license exam. Exam consists of 40 questions worth 1 point each. A grade of 30 points ( 75 %) or higher is required to pass exam. After demonstrating knowledge of Florida license law, applicant is issued a Florida real estate license.
33
Broker experience requirements
Applicant can fulfill experience requirements if they held an active broker license in another state or in any foreign jurisdiction for at least 24 months during the five-year period preceding application to become a florida real estate broker.
34
Example of a person Chapter 475 of the florida statutes gives exemption to holding a real estate license
Court appointed individuals acting within the limitations of their dutie
35
Florida real estate commission compensation
Commission members do not receive a salary. However, in lieu of salary, they are paid $50 per day for each day they attend an official meeting and for each day they participate in other commission business
36
Real estate licensing fees for veterans
Fee waiver for military veterans. The initial application fee, biennial license fee, and unlicensed activity fee are waived for military veterans who apply for a real estate license within 24 months after honorable discharge from the armed services. The fee waiver applies to all licenses issued by the DBPR.
37
One way a license becomes ineffective is :
Suspended: if the result of a disciplinary proceeding is to suspend a license, the licensee is prevented from working for a period of time. The license is ineffective during the period of suspension.
38
What is a group license ?
A group license is sometimes issued to sales or broker associates who are registered under an owner-developer. Owner/developer may own properties in the names of various entities.
39
Residential sale
The sale of improved residential property of four or fewer units, the sale of unimproved residential property intended for use as four or fewer units, or the sale of agricultural property of ten or fewer acres.
40
Two of the seven duties of a transaction broker
1. Disclose all known facts that materially affect the value of residential real property and are not readily observable to the buyer.
2. Exercise limited confidentiality, unless waived in writing by a party. Prevents disclosure that the seller will accept a price less than the asking or listing, or that the buyer will pay price greater than the price submitted in a written offer
41
One of the nine duties of a single agent to a buyer or seller
Full disclosure. It is a broker-agents duty to keep the principal fully informed at all times of all the facts or information that might affect the transaction or the value of the property
42
a broker may open a branch office in the same location during the same license period with out paying a fee by
Requesting FREC to reissue the branch office license
43
Active brokers must display an official sign on either the exterior or interior of the entrance of their pro ciao office. It must contain the following information
- Trade name ( if one is used )
- brokers name
- the words, " licensed real estate broker " or " lic. Real estate broker "
44
Blind advertisements
Advertisements that fail to disclose the license name of the brokerage firm
45
Exception to the federal do not call law for real estate sales associates
Associates may contact individuals with whom the associate has had an established business relationship, even if those customers numbers are on the national registry. A company that previously listed a property may contact the former customer to solicit new business for up to 18 months after the transaction has concluded
46
When must a broker place trust funds into an escrow account ?
immediately, which means no later than the end of the third business day after their sales associate has received it. The three business day time period coincides with the day that the sales associate must turn over the deposit to the broker
47
When a deposit is placed with a title company or attorney what is one of the procedures that must be used .
No later then 10 business days after each deposit is due under the terms of the sale contract, the licensee's broker must request a written verification of receipt of the deposit
48
Brokers must institute one of the 4 settlement procedures within 30 days from the time the broker received the conflicting demands. If a broker waits 10 business days to report the conflicting demands, the broker has how many days remaining to implement a settlement procedure ?
20 days
49
One conflicting demand settlement procedure
Arbitration: arbitration is a process whereby, with the prior written consent of all disputing parties, the matter is submitted to a disinterested third party. Each side presents it's case to the third party, who in turn makes a binding judgement in favor of one side or the other. Parties agree in advance to abide by the decision
50
What is law regarding rental information
If information provided under this contract is not current or accurate in any material aspect, you may demand with in 30 days of this contract date a return of your full paid fee. If you do not obtain a rental you are entitled to receive a return of 75% of the fee paid, if you make demand within 30 days of contract date
51
One type of business entity that may not register as a real estate broker
Corporations sole ( church organization )
52
In Florida, the legal bases for investigations and hearings are:
```
Chapter 120, FS
Chapter 455, FS
Chapter 475, FS
Chapter 28, sections 101-110
Chapter 61J2
```
53
What is a stipulation ?
An agreement as to the facts of the case and the penalty reached between the attorneys for the DRE and the licensee or the licensee's attorney
54
What is a subpoena ?
A command to appear at a certain time and place to give testimony or to produce records.
55
The administrative law judge prepares and submits the the DBPR and all other parties a Recommended Order, which..
Includes the judges findings and conclusions and the recommended penalty, if any, in accordance with the commissions range of penalties set forth in rule
56
Suspension of an individual's license is a temporary penalty. What happens if an individual receives a second suspension for the same or different violation ?
May result in revocation ( permanent ) of the license, registration, certification, or permit
57
What is a notice of non compliance ?
Issued by the DBPR/DRE as a first response to a minor violation by a licensee.
58
The One violation of real estate that is a first degree misdemeanor
Failing to provide accurate and current rental information for a fee. The penalty is a fine of up to but not more then $1000, and/ or up to one year in jail
59
Type of damages not covered by the real estate recovery fund
Punitive damages and interest
60
Conversion
Brokers may not use earnest money funds for their personal use. A licensee's personal use or misuse of client ( or customer ) monies
61
Civil rights act of 1866
Prohibits any type of discrimination based on race in any real estate transaction
62
Civil rights act of 1968
The fair housing act
63
Redlining
Deny loans or insurance coverage by a lender or insurer that presents different terms or conditions for homes in certain neighborhoods
64
Violation of fair housing law
Answering an inquiry concerning race
65
Triggering terms
The truth and lending act requires creditors to disclose certain information if certain credit terms, called triggering terms, are included in the advertisement. Triggering terms include the amount or percentage downpayment, number of payments, period of repayment, amount of repayment, and the amount of any finance charges
66
Real estate settlement procedures ( RESPA ). When borrowers apply for a mortgage loan, they must be given disclosures...
At time of loan application or within three business days
67
Good faith estimate
Disclosure RESPA requires to borrowers listing the charges the buyer is likely to pay at closing.
68
One way a landlord is obligated to account for security deposits or advanced rents
Hold the money in a separate non interest baring account and not commingle, hypothecate, that is, pledge as security for a debt, or use any such funds until due to tenant
69
Reliction
Gradual receding of water, uncovering additional land ( the new land usually belongs to the landowner of the area that was previously covered by water
70
Method of annexation
The manner in which an article is attached to real property generally indicates whether it is a fixture or personal property
71
Freehold estate
Is and ownership interest for an indefinite period
72
Life estate
Type of free hold estate. the owner has considerably fewer rights than the owner of a fee simple estate. The life estate owner owns the property for only the period of the lifetime of an individual ( the owner or other designated person )
73
Sole ownership
Estate In severalty, title held by one person
74
Types of concurrent ownership with right of survivorship
Joint tenancy
| Tenancy by entireties
75
When Sally and Kathy die, their interest in the property will descend to their heirs. On Sally's death, for example, her two thirds interest I the property will descend to her legal heirs ( or as instructed in her will )
Tenancy in common
76
Stipulation when a joint tenant wants to sell his share of the property
The person who buys that share cannot be a joint tenant with the other original owners, but instead will be a tenant in com I without the right to receive any property on the death of one of the original joint tenants. The tenant in commons share can be disposed of by will, descent, or other arrangement
77
One of the protections and benefits for declaring ones residence as a homestead is : Protection of the homestead, it means
The homestead property is protected from forced sale for debts owing to personal loans, credit card debt, ect. However, the protection does not prevent foreclosure for nonpayment of property taxes, mortgages, ect
78
One of the protections and benefits for declaring ones residence as a homestead is: protection of the family, and it means:
If a married person dies and the family homestead was titled in that deceased persons name only, the surviving spouse receives a life estate and the children receive a remainder estate
79
What is a proprietary lease ?
A written agreement between the owner-corporation and the tenant-stockholder in a cooperative apartment
80
Eminent domain
Governments right to take land from an owner through a legal process referred to as condemnation, as long as the taking is for public purpose
81
In order for a deed to be valid, it must ....
Must be signed by a competent ( of sound mind and legal age ) grantor ( owner giving title ) and witnessed by two people to be valid. The grantee ( new owner ) need not be competent nor sign the deed.
82
Habendum clause
" to have and to hold " provision in a deed to real property that stipulates the estate or interest the grantee is to receive and the type of title conveyed
83
Bargain and sale deed
Consists of the granting clause, habendum clause, and covenant of seisen.
84
When is transfer of title effective ?
When the conveyance instrument ( deed ) is delivered and accepted by the grantee ( new owner )
85
Variable lease
Type of lease agreement where rent will change. Is graduated at set times and tied to an index ( usual consumer price index )
86
Figuring out rent increases based on increase in index. Rent is $12/sq.ft. With index of 1.5. Index increases to 1.8. What is the adjusted rare ?
1. Calculate how much the rent increased 1.8-1.5 = .3 difference
.3 divided by 1.5 = .20 or 20 percent increase
2. Multiply percentage increase by the beginning rent per sq.ft. Then add this amt. to the beginning rent per sq. ft.
.20x$12= $2.40. $2.40+ $12 = $ 14.40 adjusted rental rate
87
Florida residential landlord and tenant act
Says that when a residential rental property is sold the tenants security deposits and advance rents must be transferred to the new owner
88
Venders lien
If a buyer of a property ( vendee ) us unable to make the full down payment required, a seller ( vender ) frequently will allow a purchase money mortgage to make up the amount of money the buyer is unable to produce. Actually, any portion of the sale price remaining unpaid to the vender creates vendors lien
89
How are township tiers numbered .
They are numbered at the baseline ( BL ). The first horizontal ( east/west ) strip of land above ( north of ) the base line is numbered Township 1North, or more concisely, T1N. The township numbers increase by one moving farther from the BL
90
Government lot
Fractional pieces of land less then a full quarter section located along the banks of lakes and streams. Government lots were identified by a specific lot number, which became the legal description of that parcel.
91
To find the number of acres in a tract
Take 640 ( the number of acres in one section ) and divide by the bottom number ( the denominator ) of each fraction in the legal description.
92
Survey measure, acre
43,560 square feet
93
Survey measure, bench mark
Te permanent reference mark ( PRM ) affixed to an iron post or brass marker that is embedded in the sidewalk or street, used to establish elevations and altitudes above sea level on survey. Parcels
94
Survey measurement, mile
5,280 feet
95
Unenforceable contracts
Contract that cannot be proven or will not be recognized by a court. May not be in writing, statute of limitations has passed, or the property has been destroyed
96
Four essential elements of a valid contract
1. Competent parties
2. Offer and acceptance ( mutual assent )
3. Legal purpose
4. Consideration
97
Statute of frauds
An act that requires that certain real estate instruments and contracts affecting the title to real property be in writing in order to be enforceable
98
Statute of limitations for written contracts
Five years
99
When a counter offer is made
It kills the original offer and substitutes a new offer in it's place
100
Presence of Lead- based paint must be disclosed to prospective buyers and tenants in residential property built before when?
1978
101
Buyers must be given an energy efficiency brochure but the sell doesn't have to ?
Perform an energy inspection
102
Lien theory
The borrower retains title to the property. The lender is protected with a lien on the real property to secure the payment of the mortgage debt. If the borrower defaults on the mortgage debt, the lender will foreclose to recover the money owed
103
Hypothecation
Refers to the pledging of property as security for payment of a loan without surrendering possession of the property
104
Assignment of mortgage
When ownership of mortgage is transferred from one company or individual to another
105
Acceleration clause
Clause in a mortgage that authorizes the mortgagee ( lender ) to accelerate or advance the due date of the entire unpaid balance if the mortgagor ( borrower ) fails to fulfill any promises stated in the mortgage instrument
106
Acceleration
Upon default, accelerates the entire debt due and payable
107
UFMIP : up front mortgage insurance premium
FHA charges on loans based on the type ( new or refinanced ) and the term ( 15 or 30 year ). On a new 30 yr. the UFMIP isn1.75 % of the loan amount. The UFMIP is paid at closing and can be financed into the mortgage amount. Loans to finance condos do not require UFMIP
108
VA or GI loan
1944 passed to help ww2 vets. The act gives the department of veterans affairs ( VA ) the authority to partially guarantee mortgage loans made to veterans by private lenders.
109
Assumability of VA loans
Because they do not have do-on-sale clauses, VA loans are assumable ( even by non veterans )
110
Expenses with FHA-insured mortgage loans
Monthly mortgage principle and interest payments, property taxes, hazard insurance, and FHA mortgage insurance. FHA requirements currently allow up to 31 % for the HER ( housing expense ratio ) and up to 43 % for the TOR ( total obligations ratio )
111
Federal reserves duties
1. Conduct the nations monetary policy
2. Supervising and regulating banking institutions and protecting credit rights of consumers
3. Maintaining the stability of the financial system
112
Monetary policy
Refers to the actions undertaken by the Fed to influence the availability and cost of money and credit to promote national economic goals
113
Fed uses three tools to influence money supply
1. Open market operations: purchase and sale of us treasuries
2. Discount rate : interest rate charged to banks from Fed
3. Reserve requirements
114
Reserve requirements
The amount of funds that an institution must hold in reserve against deposit liabilities. Institutions must hold reserves in the form of vault cash or deposits with the Federal Reserve Banks
115
Ginnie Mae
Provides liquidity to the mortgage market by guaranteeing mortgage backed securities. 2/3 s of all residential mortgage loans originated in the US are now sold in the secondary mortgage market and used as collateral for the issuance of mortgage backed securities
116
Each discount point paid to the lender, increases the lenders yield how much ?
1/8 of 1 percent ( .00125 )
117
Profit formula
Amount made on sale -/- total cost = percent profit
118
Loss formula
Amount lost on sale -/- total cost = percent lost
119
Amortizing a mortgage
1. Principal balance x annual interest -/- 12 = first months interest
2. Monthly mortgage payment - first months interest = payment on principal
3. Beginning principal balance - principal payment ='new principal balance
120
Prepaid rent
Any rental income collected in advance belongs to the new owner as of the date of closing, therefore, the unused portion of advance rent belongs to the buyer
121
County and or city taxes on closing statement
Are prorated on the bases of 365 day year, and paid in rears
122
State documentary tax on a deed
.70 take price -/- by $100 and then x by .70
123
State documentary tax on notes
.35 on new money
124
On closing statement, earnest money is :
Credited to the buyer
125
4 traits possessed to have value. DUST
1. Demand
2. Utility
3. Scarcity
4. Transferability
126
CBS vs CIA
Comp.
Better
Subtract
Comp
Inferior
Add
127
Market conditions
Property may sell for more, or less, today, even though the property has not changed. Adjustments for market conditions are whether the price paid for a comparable property, if that property sold today, would differ from price paid during some other period
128
Reconciliation
The process of weighting the estimates of value derived from the sales comparison, cost, and income approaches to arrive at a final estimate of market value
129
Functional obsolescence
Anything that is inferior due to operational inadequacies, poor design, or changing tastes and preferences. Examples
Poor traffic pattern, too few bathrooms, or inadequate amount of insulation. An over improvement is also considered to be functional obsolescence
130
Effective gross income ( EGI )
The resulting amount when vacancy and collection losses are subtracted from the potential gross income
131
Direct capitalization formula ( IRV )
```
I = net operating income ( NOI) = rate x value )
R= capitalization rate = income -/- value
V= value ( or sale price ) = income -/- rate
```
132
Situs
Peoples preferences, both physical and economic, for a certain are owing to factors such as weAther, job opportunities, and transportation facilities
133
Plottage
The added value as a result of combining two or more properties into one parcel
134
Assemblage
Combining 2 or more adjoining properties to one tract of land, consolidating properties
135
Progression
The value of an inferior property is enhanced by its association with superior properties
136
Regression
Value of a superior property is adversely affected by its association with an inferior property of the same type
137
T-intersection
Interior lots that suffer from their location at the end of a t intersection. Less desirable because of car headlights shining into home and a possible danger from speeding runaway cars
138
Hip roof
Roofs that peak at the center ridge but extend downward on four opposite sides. Have overhang protection and are architecturally pleasing. Trusses are more expensive because of special engineering required
139
Wattage
How much energy something consumes
140
Casement window
One or more sashes hinged at the side like a door, swinging out horizontally out or in, usually with the aid of a crank
141
Investment
Outlay of an investors money in anticipation of income or profit. Investors use some of their own money, called equity and borrowed funds
142
Static risk
Risk that can be transferred to an insurer such as risk of vandalism, fire, and so forth
143
Similarities of Business broker vs real estate broker
Real property involved
| Long term liabilities
144
Capital
Net worth of business. The amount the assets exceed liabilities
145
Assets
The entire resources of a business, including tangibles and intangibles
146
Liabilities
All of the debt of a business
147
Equity
Current market value minus mortgage debt
148
Cash flow
The amount of money generated from an investment after expenses have been paid
149
Tax year begins
Jan. 1
150
Tax exemption filing period ends
March 1, can not get tax discount after March 1
151
Property taxes from previous year become delinquent
April 1
152
Property tax protest procedure
1. Complain to county property appraiser
2. Go before adjustment board
3. Go to court
153
Properties exempt from property taxes
Churches, nonprofits, they are subject to taxation but the owner is released from obligation
154
Increments of assessed value
```
0-25,000. = base 25,000
25,000-50,000= 25,000 deduction
50,000-75,000 = 50,000, no school deduction on second 25,000
```
155
Purchase of real property from foreign sellers. To prevent foreign sellers from avoiding the payment of taxes due on the sale of real property the IRS requires that buyers withhold
withhold 10 per cent of the gross sale price (including cash paid and any debt assume by the buyer)
156
Investment Property
| Depreciation components.
Straight line method. Depreciation is calculated using the straight line method. An equal amount of depreciation is taken annually over the useful life of the asset. The IRS has currently established useful asset life as 27.5 years for residential rental property and 39 years for nonresidential income producing property.
157
Variables that influence Supply
Availability of skilled labor
Availability of construction loans and financing.
Availability of land
Availability of materials.
158
Variables that influence Demand
```
Price of Real estate
Population numbers and household composition
Income of consumers
Available of mortgage credit.
Consumer taste or preference.
```
159
Price of real estate.
There is an inverse relationship between price and the demand for real estate when prices rise, demand goes down. When prices decrease demand goes up
160
Interpreting Market Conditions
Buyers market excess supply
| Sellers market excess demand
161
Vacancy rates. A 5 percent vacancy rate =
95 per cent occupancy rate.
162
Three areas of responsibility for which city planning commissions are commonly delegated final authority are:.
(1) subdivision plat approval, (2) site plan approval and (3) sign control
163
Economic Base Studies
. Base Industries are those industries that attract outside money to the area such as film making, fertilizer plants and the citrus industry
164
Service industries
are local
165
Residential zoning regulates density meaning
the number of units (homes) per acre.
166
Buffer zone
A strip of land separate one land from another use.
167
Appeals and Adjustments
-Zoning Board of Adjustment
168
Legally nonconforming use.
If a property’s use was lawfully established but no longer confirms to the use regulations of the zone in which it is located because of the enactment of a new zoning ordinance the use is allowed to continue as a non conforming use
169
A suspended license is...
Ineffective
170
A group license
Issued to Sales associates working with a owner developer because the developer may own properties in the names of various entities
171
Plat map
Required by government to protect the public, has lots recorded and goes to planning commission
172
Dedication
Gift of land for public use
173
Residential sale
4 or fewer units or agricultural property under 10 acres
174
License is ineffective if
It's inactive
| Or suspended
175
License is VOID if it is
```
REC.
Revoked
Expired
Cancelled
Avoid a wreck
```
176
Brokers can have multiple licenses but sales associates only have
Group licenses
177
Ostensible partnership
Quasi partnership, is not intentionally created.is fraudulent
178
LLC
Limited liability companies, best features of a corporation and a partnership.
179
Corporation sole
Not for profit, can not be real estate brokerages
180
Stipulation
An agreement of facts and penalty between DRE attorneys and licensee attorney
181
Recommended order
Administrative law judge submits to the DBPR it includes judges findings and conclusions
182
A license will be revoked or canceled if it was ....
Issued by mistake
183
Two suspensions for the same or different violation may result in
Revocation
184
Notice of non compliance
Warning for a minor violation that allow a licensee 15 days to correct the problem
185
Revocation of a license is
Permanent
186
Recovery fund does not cover
Punitive damages
187
FREC pays civil judgements, not
Punitive damage
188
How much is paid to fund per 2 year renewal period by
Realtor ?
Broker ?
$3
| $7
189
Conversion
Using earnest $$ for personal use
190
Fair housing act
1968
191
Civil rights act
1866, 1964
192
Redlining
Deny loans or insurance coverage or present different term to people in a certain neighborhood
193
To answer a question regarding race, violates
Fair housing law
194
Americans with disabilities act
(ADA) 1990 statute to protect handicapped people
195
Purpose of TILA or regulation Z
Inform borrowers of the true cost of a loan
196
Oldest survey method
Meets and bounds, most important part is point of beginnin
197
A Township is
6 mi x 6 mi
198
How many sections in a township
36, each 1mi x1 mi
199
How big is a section
640 acres
200
Largest measurement by government
Check, 24mi. By 24 mi.
201
What surveyors use to mark property
Monument
202
Clause in deed that gives seller the right to a sell property
Seizen
203
An acre is how many feet ?
43560
204
Valid deed must be _______
Signed and witnessed
205
Are witnesses required on a legal contract ?
No
206
Title to real property passes to the grantee when the deed is
Delivered and accepted
207
FHA
Insures
208
Most common method of federal reserve board to control supply of money is
Open market operations
209
What is deducted from income taxes but not deducted when calculating net operating income ?
Interest and depreciation
210
If capitalization rate increases, the value
Decreases
211
Plottage is ?
In increase in value of individual parcels when joined with other parcels
212
Considering a buyers attitude and willingness to pay, the lender considers what ?
Credit rating
213
What kind of depreciation is usually found in external obsolescence ?
Incurable
214
Who changes depreciation rules ?
IRS
215
Under the income approach, value equals ?
Income divided by rate
216
Lien theory means that the mortgage
Is a lien on the property, but title is vested with the mortgagor
217
Mortgagor
Home owner, borrower
218
Final step after an appraiser has utilized all three approaches to value is ?
Reconciliation
219
The passage of rules requires
A quorum vote of the commission
220
If a sales associate chooses not to renew his license at the appropriate time, his license will be ?
Involuntary inactive
221
Practicing real estate without a license is a
Third degree felony
222
Commercial agents may also
Have no brokerage status, be single agents, or transaction brokers
223
All realtors must be members of
NAR.
224
A single agent who wishes to remain loyal to the principal yet be involved in both sides of the transaction must
Work with the other party in a " no brokerage relationship " role
225
Permission to use another's property that may be withdrawn at will is
A license
226
Easement by prescription
Securing an easement through an unapproved use over a period of time 20 years
227
Partially amortized mortgage
Has a balloon payment
228
What percent occupancy rate is a good indicator of when to build, or supply balanced with demand ?
95%
229
Local planning commissions are usually comprised of
Lay members representing a cross section of the community
230
Part 1of 475
Deals with real estate brokerage
231
FREC part 2
Real estate appraisers
232
FREC 3
Commercial only broker lien rights
233
FREC 4
Commercial real estate leasing
234
Freehold estate
Must be immobile ( land ) and be owned for an undetermined amount of time
235
Fee simple ownership
Highest ownership one can have in land the types are :
Estate in severalty- one person
Estate by the entireties - husband and wife ( right of survivorship )
Joint tenancy - two or more people ( right of survivorship )
Tenancy in common- two or more people ( is willed to heirs )
236
What are Life estates
Not fee simple estates but are freehold ( land and no set time )
Ownership who's duration is limited to the life of some person, then they automatically go to another ( way to avoid probate ) types are:
Estate in reversion - goes back to original owner
Remainder estate - goes to third party ( remainder man ( vested, specifically named ; contingent, not named )
237
Non freehold estates are basically
Leases
238
Types of leaseholds ( non freehold estates )
Estate for years - standard lease written with specific start and end
Tenancy at will- written or oral agreement that is open ended ( month to month lease )
Tenancy at sufferance - no lease , no agreement
239
HER equation
Principal+interest + taxes + insurance = PITI
PITI -/- monthly gross income ( MGI ) = HER
Convential loan = 28 %. FHA = 31 %
240
TOR equation
Total obligations ( all monies owed per month ) -/- monthly gross income = TOR
Conventional = 36%, FHA = 43%' VA = 41%
241
FHA requirements
3.5% down
Downpayment cannot be financed into loan
Seller may contribute 6% of closing costs including the down payment
Requires mortgage insurance premium of 1.75 % financed into loan and .55% of loan amount -/- 12 months to be paid monthly
100,000 x 1.75 % = 1750 in loan
100,000 x .55% = 550 -/- 12 = 45.83 pay monthly
242
VA loans requirements
Funding costs 2.15 % of loan amount must be financed into loan if it is a first time loan.
If it is the second time, it's 3.3%
243
HUD federal housing rule, you can not get an FHA loan if the seller has owned the property for less then _______
6 months
244
GRM ( gross rent multiplier ) formula
Sales price -/- monthly rent = GRM
248,000 -/- 1200 = 206.67
245
Gross income multiplier ( GIM ) formula
Sales price -/- gross annual income
| 400,000 -/- 50,000 income = 8.0 GIM
246
Formula To find property value with GRM
Rental income x GRM = market value
| 560 x 171.4 GRM = 95,984
247
Limited partnerships
Limited partners must make investment of cash or property, but not of service
248
Failure to account
Failing to pay money to a person
249
Jones vs Mayer case that upheld civil rights act of
1866
250
Real estate protected by homestead must be what size?
160 acres outside a city, or 1/2 acre in town
251
Premises section of a deed
Names the parties and date
252
Habendum clause in a deed _______
Indicates the type of estate being conveyed
253
Seisin clause in a deed
A promise that the grantor has the legal right to convey title
254
Plat map shows what ?
Engineers plan for land use showing the lot divisions and street locations
255
How long does oral agreement last
4 years
256
Executory contract
Agreement that has some act or conditions hat remains to be completed
257
Express contract
Terms are specifically stated
258
Unilateral contract
Only one person promises to preform without promise to reciprocate from other party
259
Liquidated damages
Earnest money deposit paid in default
