Florida Real Estate Exam 1-(The Real Estate Business) – Flashcards
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What does market conditions refer to?
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includes how much property is on the market, how property can be financed, how well property is selling and how much the property is worth, and laws on advertising properties. Also the real estate professional must know how much rent a property can bring; or what the rate of return will be on an investment property
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What does how to market Real Estate Refer to?
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includes proper pricing, disclosure to both buyer and seller, service to the buyers and sellers, and maintaining relationships with other real estate professionals.
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What is a Real Estate Brokerage?
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It brings interested parties together to sell, lease, and rent or exchange real property.
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Can a sales associate work alone?
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Sales associates cannot act alone. A sales associate can provide all services to the buyers and sellers under the direction of a broker
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Why would anyone use a real estate professional?
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Both brokers and sales associates have expert information that the average layperson does not possess. Generally, it is more efficient to acquire this information through a real estate professional.
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What is Farming in real estate?
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Real estate professionals often specialize in one particular geographic area or property type.
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What is a farm area?
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The area the real estate professional specializes in.
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What are the 6 major real estate specialties?
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Residential property Commercial property Industrial property Agricultural property Business Opportunity Special Purpose property
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What is Residential Property?
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in Florida is a family home that is a single family dwelling, a duplex, a triplex (3units) or a quad (4 units) or vacant land that has been zoned for 4 units or less. Farm/Agriculture residential is a family home on less than 10 acres land
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What is Commercial Property?
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is income producing property such as a retail center or an apartment complex of more than four units. The real estate professional must be able to convey to their clients and customers information about how to produce income, and create after-tax cash flow
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What is Industrial Property?
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usually manufactures or distributes products such as a factory or warehouse. This involves sites in industrial parks or subdivisions; redeveloped industrial parcels in central areas and undeveloped industrial acreage
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What is Agricultural Property?
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is farm or ranch land of more than ten acres
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What is Business Opportunity Property?
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consists of an investor purchasing an income producing business. The purchase may include real estate along with the business or just the business within a leased space. Knowledge of business practices, specific business loans, and the characteristics of valuation as they apply to the business.
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What is Special Purpose Property?
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examples would be schools, churches, nursing homes, post offices and hospitals. Each zoning district will look at the combination of land an improvements with highest and best use in mind.
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Why is there a high demand for Property Managers?
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because so many owners are absentee owners, persons who own real estate but do not reside in that real estate
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What is a property manager?
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They are licensed Florida real estate brokers who, under law, perform duties and services on behalf of the owner. Generally, a property manager is defined as one who preserves the value of an investment (by an owner) while generating income as an agent for the owner
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Where are the duties of the property manager posted?
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in a Property Management Agreement
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What are some functions of a property manager?
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Budget expenses for the property Evaluate the rental market Advertise and market the property Rent the property under the guidelines of the owner Maintain good relationships with the tenants Handle any environmental concerns Adjust the rates with the market and the consent of the owner Show property/ies Maintain the property in good repair Act as a Fiduciary to the owner
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What does Fiduciary mean?
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a person having a duty to act primarily for another's benefit
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What things must be contained in a property management agreement?
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The name and address of the owner The name and address of the property manager A address and legal description of the property The start and end date of the agreement Specific services to be rendered Extent of the property managers' authority Procedures for reporting on the status of the property Method and schedule of compensation Signature of owner Signature of the property manager
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What are the 4 types of maintenance a property manager must handle?
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preventative maintenance, routine maintenance, repair maintenance, construction maintenance
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What is preventative maintenance?
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is work done before expensive repair work is needed such as caulking windows and doors, changing furnace filters etc.
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What is routine maintenance?
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consists of lawn mowing, cleaning carpets and other day to day cleanup other items which keep the property in order for tenancy
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What is repair maintenance?
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involves fixing the broken water heater or dishwasher. A property in disrepair is hard to rent.
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What is construction maintenance?
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is a total remodel or addition. For example, a club house or pool to help make the property more competitive.
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What is the primary responsibility of any property manager?
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is to protect the owner's investment and maximize the owner's returns
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What 3 duties does the property manager owe to the tenant?
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honesty accuracy disclosure of material facts
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Does a property manager act as fiduciary to the owner or the tenant?
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The owner
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What is the most accurate valuation of a house?
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an appraisal
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What are the 3 levels of appraisers?
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Registered Trainee appraiser - must work under guidance of a Certified Residential Appraiser or a Certified General Appraiser; Certified Residential Appraiser - Appraises residential properties; Certified General Appraiser - may perform any type of commercial or residential appraisal
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What do most appraisers perform?
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a fee appraisal
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Who are appraisers regulated by?
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The Florida Real Estate Appraisal Board (FREAB)
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Where is the FREAB and how many people are in it?
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its headquartered in Orlando and consists of nine members
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Can Licensees perform property valuations?
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Licensees may perform real property valuation services in Florida as long as they do not represent themselves as a certified appraiser
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What is USPAP?
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The rules for Appraising. Uniform Standards of Professional Appraisal Practice
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What does the USPAP state?
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It is unethical for an appraiser to accept compensation for performing an assignment when it is contingent upon: The reporting of a predetermined result (e.g. opinion of value) A direction in assignment results favors the cause of the client The amount of value opinion The attainment of a stipulated result The occurrence of a subsequent event directly related to the appraiser's opinions and specific to the assignment's purpose. Payment for the appraisal is a percentage of the appraised value
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How are appraisers paid?
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paid on a fee per-job basis, not a percent of the value of the property.
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What is a Comparative Market Analysis?
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approach to determining value of a property. Usually used by licensees
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What 3 things does a CMA look at?
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recent home sales homes currently on the market homes that were listed but did not sell
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How many comparables should be used for a CMA?
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Atleast 3
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Is a CMA an appraisal?
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Real Estate Professionals do CMAs and may not call a CMA an appraisal.
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What are some sources of financing?
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banks savings and loans credit unions mortgage bankers and mortgage brokers insurance companies Sellers of the property
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What is the dodd frank act?
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changed some specific criteria to establish extensive requirements applicable to mortgage lending industry
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What is a loan originator?
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those who finance (Lenders) and those who work to bring lenders and consumers together (Mortgage brokerage)
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What is the CFPB?
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Consumer Financial Protection Bureau. It is who the mortgage originators must be registered with.
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Who must be registered with the Florida Department of Agriculture?
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Non-federal chartered banks and savings associations who broker or lend for mortgages Sellers of a property who provide financing if they finance two properties in a two year time frame.
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What are 4 steps a developer must take to prepare and create land development?
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1. land acquisition 2. subdividing and development 3. subdivision plat map and recording 4. construction
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When does land acquisition occur?
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when a developer buys undeveloped or previously developed land to build homes or commercial ventures
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What is assemblage?
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assemble several small pieces of land to create a large piece
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When does subdividing and development occur?
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when a residential sub-divider takes over the property and divides it into the size lots he wishes for the price range of properties in this area
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What is a subdivision plat map?
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a visual drawing of where each lot and block will be as well as streets, parks and utilities which is submitted to the municipality
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What is dedication?
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An individual "Dedicates" real property for public use such as streets, parks, schools etc
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What is a PUD?
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(Planned Unit Developments), where homes may be mixed with condominiums, and commercial properties creating a mini community within a community.
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What are the 3 types of homes?
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Spec homes Tract homes Custom homes
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What is a spec home?
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mean speculation homes, built without having a specific buyer in mind
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What is a tract home?
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are built to a certain set of guidelines used for a particular subdivision. These homes are very similar in design
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What is a custom home?
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is one that is built for a specific buyer
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What are the 3 types of government?
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Local Government State Government Federal Government
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What does Local government handle?
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zoning laws occupancy permits taxation of real property business permits for real estate professionals
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What does State government handle?
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recording of deed, transfers of property estate taxes and rules regarding inheritance
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What does Federal government handle?
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Federal agencies such as HUD (Department of Housing and Urban Development), Federal Housing Administration (FHA) and Veterans Administration (VA) Laws such as Federal Fair Housing, the Real Estate Settlement Procedures Act (RESPA), Truth in Lending Act Taking of land for National parks, wildlife and wetland areas Environmental rules and regulations Inheritance taxes
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Do you need to be a realtor?
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A sales associate, broker associate, and broker may operate and be paid without belonging to any of the above organizations. However, no licensee may present themselves as a REALTOR® without belonging to a local, state, and national association of REALTORS®.
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