Term
| Who may pay a licensee a commission? |
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Definition
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Term
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Definition
7 appointed members serving 4 year terms, 2 consecutive terms
4 brokers (w/ 5 yrs experience)
1 Sales (w/ 2 yrs exper)
2 never licensed
-At least one member age 60+
-Govenor appoints, subject to state Senate confirm
-$50/day + expenses reimbursement |
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Term
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Definition
-Executive: regulate & enforse license law
-Quasi-Legislative: enact & revise admin rules & regs
Quasi-Judicial: power to grand/deny license apps, determine license law violations, administer penalties
Also:
-Adopt a seal
-Foster the education of applicants & licensees
-Determine violations-refer to state attorney
-Regulate professional practices (EDO, records rules, etc)
-Create & pass rles & regs
-Establish fees
-Grant/deny applications for licenses
-Suspend/revoke licenses, impose admin fines
-NOT criminal actions, no imprisonment penalties |
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Term
| Division of Real Estate (DRE) |
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Definition
-Director is appointed by Secretary of DBPR (FREC approval)
-Regulation of general real estate
-ministerial duties-record keeping
-DBPR employs all DRE personnel to support FREC
-Investigate, Enforcement, Records, Exam (properly admin) |
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Term
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Definition
-Sales Associate 45 hours
-Broker 60 hours
-must take within 2 years after being licensed or license becomes |
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Term
| Licensee fails to renew active or voluntary inactive before expiration date: |
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Definition
Involuntary Inactive
-no more than 2 years, or it expires & becomes null & void-start at square 1 with prelicense course, take state exam, etc.
-if involuntary inactive fore more than 12 months, must take 28 hour reactivation course |
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Term
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Definition
exists, but licensee can't use it,
-either involuntary inactive or suspended
-if suspended for a period of time (discipline) |
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Term
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Definition
| when a Broker is responsible for multiple offices and is has licenses issued for more than one business entity |
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Term
| How many days to notify the DBPR of change of mailing address? |
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Definition
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Term
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Definition
| unwritten law, general acceptance |
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Term
| a person entrusted with another's business |
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Definition
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Term
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Definition
| principle authorizes universal agent to do whatever can be legally delegated (attorney who manages a trust for mentally handicapped) |
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Term
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Definition
| principle authorizes general agent to do things for a certain job or business (sales associate for a broker) |
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Term
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Definition
| principal authorizes the special agent to handle only a specific business transaction (single agent, accountant) |
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Term
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Definition
-four or fewer units
-unimproved residential property intended for four or fewer units
-agricultural property of 10 or fewer acres |
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Term
| Are licensees required to give customers written disclosures when a transaction broker relationship is chosen? |
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Definition
| No (it is presumed to be a transaction brokerage unless single agent or no brokerage relationship is established in writing with the customer) |
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Term
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Definition
-limited representation, not a fiduciary
-customer (not principal)
7 duties:
-Deal honestly & fairly
-Account for all funds
-Use skill care and diligence
-disclose all known facts that materially affect value
-present all offers/counteroffers
-LIMITED confidentiality (can say they will accept less, etc)
-Additional duties if mutually agreed (but nothing that would imply a fduciary)
limited representation, always stay neutral if representing buyer & seller |
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Term
| Single Agent Relationship |
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Definition
Represents principal
can't represent buyer & seller
9 duties
-Deal honestly & fairly
-Loyalty (as fiduciary, always place principal's interests above others, get most favorable price)
-Confidentiality-may not reveal info without permission
-Obedience (act in good faith according to principal's lawful instructions)
-Full disclosure (keep principal fully informed, all material facts no matter what, must tell principal if agen is personally interested in the property)
-Account for all funds
-Skill, care & diligence
-Present all offers/counteroffers
-Disclose all known facts that affect value
FOUR DUTIES EXCLUSIVE TO SINGLE AGENCY:
COLD- Confidentiality, Obediance, Loyalty, Disclosure (full) |
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Term
| No Brokerage Relationship |
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Definition
common with FSBO's
Only facilitate the sale
-Deal honestly & fairly
-disclose all known facts
-account for all funds |
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Term
| Signature is not mandatory on brokerage relationship disclosure EXCEPT |
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Definition
| when transitioning TO transaction broker |
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Term
| Designated Sales Associate |
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Definition
Nonresidential
-buyer & seller have over 1 million in assets
-2 sales associates from same broker act as single agents for buyer & seller
-broker stays neutral
-special disclosure notice |
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Term
| How long do brokers have to keep records? |
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Definition
-5 years
-after a lawsuit keep records additional 2 years |
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Term
| How to terminate brokerage relationship |
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Definition
-Fulfillment
-Mutual agreement to terminate
-expiration of agreement
-broker renounces
-principle or customer revoke
-death, destruction or bankruptcy |
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Term
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Definition
-licensee made misstatement or failed to disclose
-Licensee knew or should have known wasnt accurate
-party relied on the misstatement
-party was damaged as a result |
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Term
| Brokerage Office registrations |
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Definition
-move with the principal office
-don't move with branch office moves, must register as new branch |
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Term
| Office signs must contain |
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Definition
-Trade name if used
-Broker's name
-the words Licensed (Lic.) Real Estate Broker |
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Term
| Failing to disclose the license name of the brokerage firm in an adveritisement is |
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Definition
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Term
| When a licensee sells their own property |
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Definition
-not necessary to indicate that it's owned by a licensed RE agent
-but to reduce liability, should disclose at first point of negotiation
-mandated in NAR standards of practice |
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Term
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Definition
| account for the deposit of money a disinterested 3rd party holds in trust for others |
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Term
| when should a sales associate deliver deposits to broker? |
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Definition
| immediately, no later than end of next business day |
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Term
| when should brokers place trust funds into escrow account? |
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Definition
immediately: end of 3rd business day after their sales associate received it.
SA gets it Tuesday, gives it Wed to broker, must be deposited by Friday |
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Term
| Acceptable escrow depositories |
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Definition
-interest or non interst bearing (must get written permission from all parites, determine who gets interest) account in FL commercial bank, credit union, savings association
-FL based title company or FL attorney
- |
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Term
| when deposit is placed with title company or attorney-procedures |
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Definition
-indicate on sale agreement the title co's name address & phone
-no later than 10 business days after, request written verification of receipt of deposit
-provide the written verification to seller |
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Term
| does the FREC have jurisdiction over title companies and attorney's escrow accounts? |
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Definition
| No, license law governs only broker's escrow accounts |
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Term
| Broker may keep how much of personal or brokerage funds in sales escrow account? |
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Definition
$1000
$5000 if its a property management escrow account |
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Term
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Definition
illegal
mixing broker's own money with funds, can't put it in personal account |
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Term
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Definition
| unauthorized control or use of another's personal property, when you use commingled money |
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Term
| When conflicting demands of escrowed funds happens |
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Definition
-Notify FREC in writing within 15 days (if its in broker's escrow account)
-within 30 days use of of these escape procedures:
1. Mediation (mediator recommends)
2. Arbitration (binding judgement)
3. Litigation -Interpleader when broker doesn't care, Declaratory judgment-when broker wants to claim against disputed funds
4. EDO-to FREC, only for funds from a broker's escrow
MALE
exceptions:
-HUD |
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Term
| When providing a rental list to a prospective tenant, the contract or receipt must have |
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Definition
the provision for repayment, stating that if they don't obtain a rental, they can be repaid 75% of the fee paid if requested within 30 days.
If the info on the rental list is inaccurate, broker must pay 100% refund within 30 days. If this happens, send in to DBPR within 30 days.
Inaccurate rental lists are a 1st deg misdemeanor, fine up to $1000, 1 yr in prison. |
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Term
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Definition
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Term
| A broker may place a lien on real property for nonpayment of commission if |
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Definition
authorized to do so in a contractual agreement.
Otherwise, must obtain a civil judgement. |
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Term
| If a sales associate doesn't recieve their commission, who can they sue? |
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Definition
The broker, not the customer.
Closing title agent can write a check directly to the SA if the BK gives written auth & instructions (not a blanket auth) |
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Term
| Unearned fee paid to a licensee |
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Definition
kickback
for non-real-estate services such as a mortgage fee if the SA is licensed as mortgage broker)
-buyer & seller must be informed
-not violate RESPA (anything to do with settlement)
-no sharing of commission with unlicensed person, but can be a rebate if to buyer or seller if disclosed.
-no referral fees to unlicensed |
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Term
| A property management firm or the owner of an apartment complex may pay a finders fee up to |
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Definition
| $50 to an UNLICENSED person |
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Term
| When SA changes employers, they have how many days to notify DBPR |
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Definition
10 days
Don't take records, receipts. Don't divert buyers/sellers to new BK. |
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Term
| Types of business entities that may register |
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Definition
Sole Proprietorships (one person)
General Partnership (2 or more, share profit, debt, liabilities
Limited Partnership (1 or more general parties, 1 or more limited parties. limited parties make investment but not service)
Limited Liability Partnership (no limited partners, but share liability like limited partnership)
Corporation (artificial, directors must register with DBPR, SA can't be officer or director but can be shareholder)
All must have at least one licensed, register BK. |
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Term
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Definition
Not intentional
when conduct creates appearance of a partnership
considered fraud |
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Term
| What business entities may not register as brokers? |
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Definition
-Corporation Sole (church)
-Joint Venture (temporary business arrangement)
-Business trust (engage in business with thier own property only)
-Cooperative Association (sell it's own property
-Unincorporated Associations-noncommercial common purpose (not condos) |
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Term
| Can a BA or SA form a professional corporation? |
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Definition
Yes, an LLC.
-license issued in licensees name w/ entity designation (Jane Doe, LLC)
-done for tax purposes |
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Term
| Who is responsible for investigating complaints? |
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Definition
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Term
| A complaint is legally sufficient if it contains facts indicating that a violation has occured: |
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Definition
-FL Stature
-DBPR rule
Anyone can file a complaint, doesn't have to be in FL
-FREC rule |
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Term
| First time offense is considered |
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Definition
notice of noncompliance, usually issued a citation
(written warning) |
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Term
| Steps of complaint process |
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Definition
1. Filing a complaint
2. Investigation
3. Probable Cause
4. Formal Complaint
5. Formal or Informal Hearing
6. Final Order
7. Judicial Review (Appeal) |
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Term
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Definition
-2 current members of FREC (or 1 former member appointed by chair)
-determines if probable cause exists
-makes a decision within 30 days |
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Term
| A formal or Admin. Complaint is |
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Definition
an outline of allegations against a licensee
Licensee chooses
Formal-dispute the allegations & go before admin law judge
Informal-goes before FREC, admit & plead for mercy |
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Term
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Definition
The FREC issues in each disciplinary case
Can be appealed by petition of judicial review |
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Term
| How long can a license be suspended |
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Definition
| max of 10 years, but its temporary |
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Term
| What is revocation of a license mean? |
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Definition
Permanent
only 2 exceptions, after 5 years (licensee filed for renewal but didn't comply with cont. ed or filed app with false info, which has $5,000 minimum penalty) |
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Term
| Is violation of Fl St. 475 illegal? |
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Definition
| Yes, a misdemeanor of the 2nd degree, up to $500, imprisonment max 60 days) |
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Term
| What is a felony in the 3rd degree? |
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Definition
performing real estate services without a license for compensation
up to 5 yrs in jail/$5000 fine |
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Term
| Real Estate Recovery Fund reimburses who? |
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Definition
anyone suffered monetary damages due to an active SA who was not the seller/buyer/landlord, etc
-You get what you lost, up to $50,000 per transaction
-up to $150,000 per licensee
-must be from a civil suit with judgement against licensee
-within 2 years of alleged violation
-spouse of licensee not eligible
-license automatically suspended until money repaid |
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Term
| Protected classes of Fair Housing |
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Definition
FRSHCRN
Familial Status
Race
Sex
Handicap status
Color
Religion
National Origin |
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Term
| Civil rights act of 1866 prohibits |
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Definition
| discrimination based on race without exception |
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Term
| Fair Housing covers two categories |
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Definition
-Single Family (FSBO's don't apply unless they own more than 4 units or has sold more than 2 houses in last 2 yrs)
-Multifamily Housing (5 or more units, 4 or fewer if the owner doesn't reside) |
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Term
| Complaints of fair housing act filed with |
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Definition
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Term
| Developers of 25 or more units must provide each purchaser with |
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Definition
a property report
-Interstate Land Sales Full Disclosure Act |
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Term
| What is Truth in Lending Act |
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Definition
| inform consumers of exact credit costs before they purchase to they can compare |
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Term
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Definition
| it applies to credit associated with residentail mortgage loans, requires lendors disclose APR and finance charges within 3 business days of loan app. |
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Term
| What are triggering terms? |
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Definition
in advertising loan programs, if one thing is advertised (monthly payment), must disclose all (# pmts, # yrs, %)
-not triggering terms: % of down payment, terms of repayment, APR (low down payment) |
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Term
| 3 day right of rescission applies to |
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Definition
| home equity loans, 2nd mortgages, refinance |
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Term
| What act ensures financial institutions will make credit available to protected classes (and age, public assistance) |
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Definition
| Equal Credit Opportunity Act of 1974 |
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Term
| RESPA Real Estate Settlement Procedures Act |
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Definition
ensures buyers are informed what amount & types of charges at closing
-federally related loans, 1-4 family res. property
-NOT 25 acres or more, if not purchasing title, vacant lots, assumption of loan, construction loans, if lot is owned & building, if planning to resale |
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Term
| RESPA states that within 3 days of loan app |
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Definition
borrowers must get:
-Special Info booklet publised by HUD
-Good Faith Estimate
-Servicing Disclosure Statement (are they servicing the loan or transfer it) |
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Term
| HUD-1/Uniform Settlement Statement |
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Definition
| shows all charges for closing, must be provided to borrower, must provide if requested 1 day before closing |
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Term
| What Act requires cities and counties to prepare plan of land use, that all infrastructure must be in place before development? |
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Definition
| Growth Management Act of 1985 |
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Term
| Deposits given to a landlord must be accounted for in one of 3 ways |
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Definition
-seperate nonintersted bearing FL bank acct, no commingle
-Hold in separage interst bearing acct in FL & pay tenant 75% of interest, no commingle
-Post a surety bond with clerk of court, pay tenant 5% interest
-notify tenant within 30 days, how deposit will be held |
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Term
| landlord have __ days to make a claim on security deposit |
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Definition
30
15 days to return deposit
tenant has 15 days to object to claim against deposit |
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Term
| After tenant gives written notice of noncompliance and intends to cancel contract |
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Definition
| landlord has 7 days to correct, or tenant has right to cancel |
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Term
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Definition
-tenant notified in writing, has 3 days to get out
-landlord files complaint of eviction in court
-tenant has 5 days
-landlords gets final judgement from court
-sheriff puts 24 hour notice posted
-landlord may remove all property and change locks with sheriff. |
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Term
Riparian rights
Littoral rights |
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Definition
assoc. with land abutting the banks of river/stream
-land abutting tital bodies (ocean, lake) |
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Term
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Definition
IRMA
Intent of parties
Relationship between parties
Method of annexation (creates damage)
Adaptation of article (custom made) |
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Term
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Definition
right of disposition (sell or give away)
right of use & control
right of possession (to occupy)
DUPE |
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Term
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Definition
Indefinite period
Fee Simple-forever and ever
Life Estate-owned for lifetime of owner, when that person dies, goes back to original owner or to remainderman in fee simple. |
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Term
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Definition
tenancy, measure in calendar time
-Estate for years-1 yr lease
-Tenancy at Will-a nanny for example or month to month
-Tenancy at sufferance-when you stay after your lease is over |
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Term
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Definition
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Term
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Definition
-2 or more
-own % of whole property
-bought at same or differnt time
-can be more than one title
-no right of survivorship-heirs inherit |
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Term
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Definition
-2 or more
-equal % of ownership
-bought at same time, one title
-if one dies, their portion gets divided up, until 1 person gets sole ownership |
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Term
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Definition
-Husband & wife only
-each has 100%
-bought at same time, same title
-one dies, the other gets it |
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Term
| Protections for a surviving spouse |
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Definition
-Homestead-surviving spouse recieves property in life estate, children as remaindermen
-elective share-if excluded from will, recieves 30% of net estate
-tenancy by entireities-gets house 100% estate in severalty |
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Term
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Definition
-protected against force sale for debts owed
-tax exemption
-size-160 acres outside of city, 1/2 acre inside city
-protection of family |
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Term
| Distribution of assets after divorce |
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Definition
-nonmarital assets are separate assets, owned prior to marriage or recieved by inheritence or gift
-marital assets distributed equitably if obtained during marriage |
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Term
| Florida Cooperative, Condominium & Time Share Act |
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Definition
requires developer before sale to provide purchasers with certain disclosures
Division of FL Condo, Timeshares, Mobile Homes of DBPR ensures compliance |
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Term
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Definition
-A corporation who owns title
-owners own shares of stock
-propietary lease gives right to occupy the unit |
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Term
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Definition
| -owner owns unit and % of common elements, deed conveys portion of common elements |
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Term
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Definition
-Declaration (legal description, membership, voting rights, restrictions)
-Articles of Incorporation
-Bylaws (operational requirements, rules & regs)
-FAQ
-Estimated Operating Budget |
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Term
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Definition
Summary of condo docs
-developer (of 20 or more units) must give copy to prospective buyers |
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Term
| How long do you have to cancel if you are purchasing a condo? |
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Definition
-Resale: 3 days, can get deposit back
-15 days if from developer |
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Term
| How long to cancel for time share? |
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Definition
| 10 days after contract signing |
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Term
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Definition
| each unit to condominium is divided into time segments of ownership and a deed prepared for each segment, can be sold, rented, etc. |
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Term
| a transfer of title from any level of government to a private party is called a |
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Definition
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Term
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Definition
| you'll get legal title at a future date, all promises fulfilled, seller must sell and buyer must buy |
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Term
| act of transferring ownership |
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Definition
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Term
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Definition
with a will
to devise-gift to devisee
bequest-gift of personal property to a beneficiary |
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Term
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Definition
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Term
| involuntary alienation, examples |
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Definition
to receive through will
Escheat-state takes it in the absence of heirs
Adverse posession-squator claims, pays taxes, after 7 years you don't claim it, they get legal title, snooze you lose!
Eminent Domain-condemnation |
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Term
| Actual notice vs. Constructive notice |
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Definition
| equal, but constructive is recorded, actual is oral |
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Term
| Acknowlegement of a deed means |
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Definition
| its signed and notarized, then can be recorded |
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Term
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Definition
complete successive record of property's ownership, back to earliest recorded owner
-title searches only go back 30 years |
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Term
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Definition
| summary report of title search findings, abstractor prepares it. not an opinion, a summary |
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Term
| Who can give an opinion of title? |
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Definition
| Attorney, based on the abstract of title |
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Term
Title Insurance
Owner's Policy vs. Lender's Policy |
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Definition
protects the policy holder from losses in defects in title
Owners-not transferable, up to purchase price of home
Lender's-transferable, buyer's expense, up to the loan amount |
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Term
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Definition
grantor gives title, grantee is new owner getting title
grantee doesn't have to be competent |
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Term
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Definition
CEDDING
Consideration (valuable)
Execution (signed by competent grantor & 2 witnesses)
Description of property
Deliver & acceptance (voluntary)
Interest or estate being conveyed (habendum clause)
Names of grantee & grantor
Granting clause (& covenent of seisin) |
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Term
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Definition
| the grantor grants, sells, etc. |
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Term
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Definition
| To have and to hold forever |
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Term
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Definition
| promise that the grantor owns the property and can give it away |
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Term
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Definition
| clears clouds on title, grantor makes no warranties of title |
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Term
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Definition
| Owners have right of siesen but don't guarantee title & won't defend it in the future |
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Term
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Definition
grantor doesnt' warrant the title at all, grantor just says that nothing has happened while they owned the property.
Used by lendors who've forclosed on the property & large companies when selling property |
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Term
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Definition
gives grantee every possible future guarantee to title protection
grantor guarantees they won't be bothered by issues in the future, the grantor will do whatever is necessary in the future to defend it, to have & to hold forever |
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Term
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Definition
Personal Rep deed: someone is appointed by will or similar
Guardian's deed: when a guardian legally conveys a minor's property
Committee Deed: when owner is legally incompetent, committee appointed by the court |
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Term
| If its not specified, what type of deed is it? |
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Definition
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Term
| Government Restrictions on Ownership |
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Definition
Police Powers (zoning, building codes, health standards)
Eminent Domain
Taxation (you don't pay, they take it away) |
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Term
| Private Restrictions of Ownership |
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Definition
Deed Restrictions (anyone who has title can put a deed restriction, effect property only, not subdivision)
Easements (right to use for specific purpose)
Leases-right of possession
Liens |
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Term
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Definition
Appurtenant-adjacent property (driveway)
in gross-utility
by necessity-landlocked property can enter & exit
by prescription-longtime usage, 20 yrs (acquires easement, not title) |
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Term
|
Definition
unauthorized use (fence, garage)
More than 7 years, becomes an implied easement |
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Term
|
Definition
Gross-fixed base rent
Net-fixed rent plus property costs like taxes, insurance
Percentage-base + % of sales
Variable-increases based on an index
Ground-just land |
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Term
| Assignmentn of lease vs. sublease |
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Definition
Assignment-tenant assigns another for remainder of lease
Sublease-give away a part of a lease (sublet one room or for summer only) |
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Term
| When leased property is sold... |
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Definition
| the lease is binding on the new owner, deposits transferred to new owner |
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Term
|
Definition
right of a creditor to satisfy debt when something is sold.
Encumberence. |
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Term
|
Definition
General-affect all properties of a debtor (income tax, estate tax, judgment)
Specific lien-apply to certain property (property tax, mortgage, vendor, construction) |
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Term
|
Definition
Always 1st-Property Tax
determined by date & time recorded.
Construction liens exception-retroactive to date work first performed up to 1 year
IRS liens are NOT 1st |
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Term
|
Definition
Metes-distance (meters)
Bounds-direction
Uses point of beginning, visible markers called monuments |
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Term
|
Definition
| based on intersecting lines, principal meridian, base line |
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Term
|
Definition
the Principal Meridian
every 6 miles
strip of land on either side of PR is a range |
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Term
| Township lines parallel to |
|
Definition
Base line
every 6 miles
T1N, T2N |
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Term
|
Definition
6 x 6 miles, 36 square miles
T2N, R2E |
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Term
|
Definition
1 mile by 1 mile
640 acres, numbered 1-36 (s pattern) |
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Term
|
Definition
| 24 x 24 miles-correction lines |
|
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Term
|
Definition
160 acres
2,640' x 2,640'
(Homestead) |
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|
Term
| Calculate size of tract of land using legal description |
|
Definition
SW 1/4, NE 1/4, SE 1/4, NW 1/4
640/4/4/4/4= 2.5 miles
SE 1/4 of NW 1/4 & NE 1/4 of SW 1/4
add each together
640/16 + 640/16 = 80 acres |
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Term
| Licensees may fill in blanks on |
|
Definition
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Term
| Licensees may draw up these contracts |
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Definition
Listing Agreement
Buyer Brokerage Agreement
Sale & Purchase contract
Option Contract |
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Term
| Are oral sales contracts enforceable? |
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Definition
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Term
|
Definition
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Term
| Contracts are valid if they have these elements |
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Definition
COLIC
1. Competent Parties (minor makes it voidable, can choose to void)
2. Offer & acceptance (contract formed when offer is accepted)
3. Legal purpose (can't violate law)
In writing & signed
4. Consideration (obligation, $, love & affection) |
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Term
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Definition
-makes certain contracts enforceable, must be in writing & signed:
Purchase/sale agreements
Option Contracts
Deeds & mortgage
Lease (if over 1 yr)
Listing agreements (if over 1 yr)
Oral doesn't make it illegal, makes it difficult to enforce unless actions imply a contract |
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Term
| Statute of limitations for contracts |
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Definition
Oral-4 years
Written-5 years
Time contract can be enforced |
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Term
| Formal vs. informal contracts |
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Definition
Formal-in writing
Informal-"Parol" ORAL |
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Term
| Bilateral vs. unilateral contracts |
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Definition
Bilateral-obligates both parties to perform
Unilateral-obligates one party (option contract, only optionor is required to sell, optionee doesn't have to buy) |
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Term
| Express vs. implied contracts |
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Definition
Express: can be written or oral, means there is a mutual understanding
Implied: some obligations are not spelled out (person walks into a restaurant and orders, imply they will pay) |
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Term
| Executory vs. executed contracts |
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Definition
Executory-Something remains to be done
Executed-all promises fulfilled |
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Term
| When a counteroffer is made, it kills |
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Definition
| the original offer and substitutes a new offer in its place, offeror and offeree switch roles |
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Term
| Ways an offer are terminated |
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Definition
WILD CARD
Withdrawel by offeror (cold feet)
Insanity (on meds)
Lapse of time
Death
Counteroffer (terms change)
Acceptance (yes in writing)
Rejection (no)
Destruction of property (sinkhole) |
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Term
| How to terminate a contract |
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Definition
Performance (yay!)
Mutual Recission (both say no)
Impossibility of performance (just can't happen, death)
Lapse of time (too long)
Bankruptcy (of seller, trustee will liquidate the home)
Breach (someone screws up) |
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Term
| Remedies of Breach of contract |
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Definition
Specific Performance-Sue to have the contract enforced
Luquidated damages-usually the deposit
Rescission-just cancel the contract
Compensatory damages-sue for damages |
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Term
|
Definition
Assignment-transfer rights & duties under a contract, must be released
Novation-substitute someone, discharges original from obligation |
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Term
| Can there be an automatic renewal of a listing agreement? |
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Definition
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Term
| Can a BK sign for buyer or seller on a contract? |
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Definition
| No,unless they have Power of Attorney |
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Term
|
Definition
any number of brokers can sell property
Unilateral contract
seller can sell
NOT ON MLS |
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Term
|
Definition
Seller can sell
One BK
ON MLS
Seller likes this one |
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Term
| Exclusive right of sale listing |
|
Definition
only BK can sell,
On MLS
Broker likes this one |
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Term
|
Definition
LEGAL in FL
seller agress to sell for amount, broker gets anything over that amount
NOT ON MLS |
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Term
| to be paid a commission, a BK must |
|
Definition
-hold current license
-be employed by buyer or seller or both with listing agreement
be the procuring cause (BK started chain of events that led to sale) |
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Term
|
Definition
| Buyer's agent (single, transaction or nonrepresentative) |
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Term
|
Definition
Unilateral
Attorney usually draws up
seller grants the optionee the exclusive right to buy (but buyer doesn't have to buy, that's why its unilateral).
Optionee pays a fee for right to purchase
Licensees shouldn't draw these up!! |
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Term
| Sale & Purchase contracts |
|
Definition
Bilateral
Vendor & Vendee
Must be in writing
earnest money not required
If homestead, both spouses sign |
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Term
| Disclosures in a purchase contract |
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Definition
Material defects (sellers disclose anything wrong that effects value)
Radon Gas-doesn't require testing
Lead-based paint-if pre-1978, sellers allow 10 days to test, EPA pamphlet
Energy efficiency-brochure
HOA disclosure-if there's an HOA, assessments, says they have 3 days to cancel
Property Tax-cautions buyers to not rely on sellers tax cost
Building code violation-if seller was cited, must disclose (& seller sends buyer's info to code enforcement) |
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Term
|
Definition
| borrower retains title, lendor has lien on property |
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Term
|
Definition
|
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Term
|
Definition
|
|
Term
|
Definition
creates the debt-promise to repay
includes amount, rate, repayment method, term, penalties |
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Term
|
Definition
pledging property as security for payment of a loan without giving up possession.
Hypothetically, its yours. Give it up for security while you make payments |
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Term
|
Definition
pledges property as collateral
borrower pledges to mortgagee |
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Term
|
Definition
assignee becomes new owner of the debt
lendor can assign mortgage (transfer) to an investor |
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Term
|
Definition
when entity purchases mortgage (investor) they get this to stop a claim the the amound owed is different than the unpaid balance.
has unpaid balance, date that interest has been paid to |
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Term
|
Definition
| when mortgagor pays off debt, recieves this within 60 days, recording must happen, taking lien off the property |
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Term
| Foreclosure-options of the mortgagee |
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Definition
1. initiate a suit on the note (not usually done)
2. Initiate forclosure-easy
Mortgagee accelerates mortgage (all due now), files lawsuit, final judgement then property is sold at public auction |
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Term
|
Definition
can redeem yourself from foreclosure if you pay what's due
after foreclosure sale, certian period of time they can buy it back=statutory redemption period |
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Term
|
Definition
Occupancy-borrower will occupy property, not investment
Due-on-sale- mortgagee is due loan balance when property sold (so they can't transfer or assign the mortgage)
Acceleration-pedal to the metal-don't pay, they make it all due
Right to reinstate-pay whats due and will reinstate
Defeasance-defeats the lien when satisfied
Prepayment-can pay off early
Prepayment penalty-charge fee if paid off early |
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Term
|
Definition
| right to increase rate to investment rate if don't occupy the property as residents (lease it) |
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Term
|
Definition
| lendor waives right to deficiency judgement, borrower is not personally liable to repay the loan (yeah right!!) |
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Term
|
Definition
| when someone buys land, they will allow the house mortgage lien to come before the land lien |
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Term
|
Definition
| covers many parcelse (usually lots) certain parts can be paid off and lots released to sell |
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Term
|
Definition
for income producing property only-
a reciever will be appointed in the event of default to collect income from property to be applied to mortgage |
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|
Term
| Conventional vs. nonconventional loans |
|
Definition
Conventional-not insured or guaranteed by government
Non conventional (VA, FHA, etc) government provides risk protection to lendor |
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Term
|
Definition
to stimulate the housing market after the depression
FHA is under HUD
Insures loans
DOESN'T MAKE LOANS
DOESN'T REGULATE INTEREST RATES |
|
|
Term
| FHA INSURES what kinds of properties? |
|
Definition
Home & land improvement
fixed rate on 1-4 family residences
condo units |
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Term
|
Definition
if less than 20% down
Upfront-borrower pays at closing, can be put in mortgage
Monthly-.55% of loan collected annually but paid monthly |
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|
Term
|
Definition
|
|
Term
| Can closing costs be used to meet the 3.5% down payment required by FHA? |
|
Definition
| No, in addition to the closing costs. |
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Term
|
Definition
|
|
Term
|
Definition
assumable
no prepayment penalty
HUD requires inspection of property |
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Term
|
Definition
| to aid returning WWII vets to buy homes |
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|
Term
| Who can assume a VA loan? |
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Definition
|
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Term
|
Definition
vet gets certificate of eligibility
VA guarantees top portion of loan
1-4 family homes
lenders set loan limits, not VA
No down payment
No due on sale clause-assumable
closing costs can't be part of the loan |
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|
Term
|
Definition
80% of LTV, usually 20% down. If less than 20% down, pay PMI (private mortgage insurance)
Usually not assumable |
|
|
Term
|
Definition
kill balance slowly...
fixed rate, regular payments
portion of interest decreases each month |
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|
Term
| Partially amortized mortgage |
|
Definition
balloon payment!
regular payments that are small but large payment due at a certain date |
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|
Term
|
Definition
for businesses usually
includes furnishings, personal property |
|
|
Term
|
Definition
loan from the seller, helps the buyer
title transferred to buyer, but seller keeps lien on property |
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|
Term
| Ways to buy mortgaged property |
|
Definition
Cash
Mortgage
Assume existing mortgage (buyer pays payments and assumes mortgage, but seller is also liable in event of default)
Novation-lendor approves for buyer to substiture seller in mortgage. buyer becomes new debtor, lendor releases seller of debt. |
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Term
|
Definition
| when buyer doesn't have enough cash for down payment, buyer pays a little and takes possession. Seller finances of purchase price rest and buyermakes payments. Seller keeps legal title until loan is repaid, but buyer can get homestead tax exemption. |
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Term
|
Definition
seller takes new mortgage, difference between existing mortgage and purchase price and buyer pays seller for both mortgages. If old mortgage interest rate is less than new mortgage rate, seller gets some return $)
Mortgage can't have due on sale clause |
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Term
|
Definition
| occures when mortgage payments aren't enough to cover interest expense-principal balance goes up and loan increases |
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|
Term
| Shared Appreciation mortgage |
|
Definition
| lendor gets % of increase in property's value in exchange for low interest rate |
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Term
|
Definition
good if you know your income will increase
makes payments rapidly higher and applies extra to principal-shorter maturity date |
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|
Term
|
Definition
Housing expense ratio
monthly housing expense (PITI)/monthly gross income= ratio |
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Term
|
Definition
Total Obligations Ratio
total monthly obligations/monthly gross income=ratio |
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|
Term
|
Definition
ratio between loan amount and value
Loan amount/price or value=ratio |
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|
Term
| What determines interest rates? |
|
Definition
| total demand for money with total available supply of money |
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|
Term
|
Definition
Central bank of US.-provides for safer more stable monetary system
Duties:
conduct monetary policy
supervise & regulate banking, protecting credit rights
maintina stability of financial system |
|
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Term
|
Definition
| 7-appointed by president, confirmed by senate. |
|
|
Term
|
Definition
| Actions by the Fed to influence availability & cost of money & creid-promotes national economic goals |
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|
Term
|
Definition
Open Market Operations: uprchase & sale of securities
Fed sells=interest rates up=inflation down
Fed buys (spends money putting money in the system)-interest rates down
Discount rate: interest rate charged to banks for borrowing money from Fed.
Discount rate up-banks pay more=higher interst rates to consumers. not effective on mortgages, they are long term loans
Reserve Requirements-How much a bank must have/hold & not lend. Requirements up=less to lend=higher rates |
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|
Term
| Fed for savings associations= |
|
Definition
Federal Home Loan Bank System
1989, FIRREA created Office of Thrift Supervision to regulate federal savings assoc.
Think "thrifty, home"=savers, home loan banks |
|
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Term
|
Definition
| Insures deposits at banks and savings up to $250,000 per depositor in each bank (back to $100K in 2014) |
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Term
|
Definition
| lendors who originate new loans |
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|
Term
| Secondary mortgage market |
|
Definition
| investor market-buys and sells existing mortgages |
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|
Term
| Mortgage broker vs. banker |
|
Definition
broker: middleman, brings buyer & lender together gets part of origination fee
banker-person or firm who originates, sells & services mortgages. Uses their funds |
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Term
| Intermediation vs. disintermediation |
|
Definition
intermediation-thrift institutions accept savings deposits
disintermediation-savers withdraw funds to invest somewhere else |
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|
Term
|
Definition
|
|
Term
|
Definition
agency of dept. of ag. loans to farmers, rural
originate loans |
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|
Term
| Federal institutions that buy loans to ensure constand availability of $ |
|
Definition
Fannie Mae, Freddie Mac, Ginnie Mae
Secondary mortgage market |
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|
Term
|
Definition
-Stockholder owned
-Est. in 1938 by congress, 1968 became private
-doesn't lend to borrowwers
-provides master commitments of $25 million in funds in advance-assuring mortgage lenders available funds
-buys loans from anyone |
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|
Term
|
Definition
| conform to Fannie Mae guidelines (they only buy loans of certain size & kind) |
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|
Term
|
Definition
created by congress 1970, private in 1989
buys conventional loands from savings associations |
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|
Term
|
Definition
Government Owned corporation
part of HUD
guarantees securities that are backed by pools of mortgages.
basically, guarantees timely payment to investors & guarantess mortgage backed securities. |
|
|
Term
| __________ mortgage backed securities are the only MBSs to carry the full faith and credit guarantee of the US govt. |
|
Definition
|
|
Term
|
Definition
points=1% is 1 point, increases yeild 1/8%
interest paid in advance, makes monthly payment lower because rate is lowered |
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|
Term
| Other ways mortgage companies make $ |
|
Definition
loan origination fees
commitment fees (developers)
servicing fees |
|
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Term
|
Definition
| the person who hired them |
|
|
Term
|
Definition
what you made or lost, divided by the cost=% of profit
profit of 100/total cost of 1000=10% |
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|
Term
| Property taxes are paid... |
|
Definition
| in arrears (pay at the end of the year for that year) |
|
|
Term
|
Definition
State doc stamps on deed=.70 rate per $100 (rounded up!), seller pays so state recognizes transfer, use sale price
State doc stamps on the note-buyer pays on NEW & ASSUMED. .35 per $100 (rounded up!) on loan amount
State Intangible tax-new mortgages only, mortgage x .002 (2 mills) |
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|
Term
|
Definition
| purchase price, anything they have prepaid |
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|
Term
|
Definition
| total purchase price, title insurance, state taxes (on note, intang.), recoding fees for deed & mortgage, prep of mortgage |
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|
Term
|
Definition
Earnest Money deposit
mortgages assumed or created
prorated property taxes (that seller hasn't paid for year, seller pays these to buyer and buyer pays taxes for whole year)
prorated advance paid rent
security deposits from renters |
|
|
Term
|
Definition
mortgage to pay off
prorated tax, interest or advance rent
security deposits
doc stamps on deed
commissions
title insurance
prep of deed |
|
|
Term
| What rules do appraisers and SA follow? |
|
Definition
| USPAP. FREC can discipline if violation |
|
|
Term
| federally related transactions require |
|
Definition
|
|
Term
|
Definition
Assessed-for taxes
Insurance-to replace
Investment (depends on the investor)
Liquidation-rapid sale
Going-concern-income producing
Salvage-to sell the parts |
|
|
Term
|
Definition
| most probable price in a competitive & open market under all conditions, etc. |
|
|
Term
|
Definition
Cost-total required to CREATE new improvement into existence
Price-amount PAID
Value-the WORTH |
|
|
Term
| Charachteristics of Value |
|
Definition
Demand (desire or need)
Utility (useful)
Scarcity (availability)
Transferability (ability to convey title) |
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|
Term
| The most profitable use to which a property may be put is |
|
Definition
|
|
Term
| Approachees to estimating value of property |
|
Definition
Sales Comparison
Cost-depreciation
Income Catitalization approach |
|
|
Term
| Principle of substitution |
|
Definition
basis for appraisal value approaches
a buyer won't pay more thank the cost of getting something equally desireable. |
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|
Term
| Sales Comparison Approach |
|
Definition
based on principle of substitution.
compare recent sales in same area, similar to subject property.
adjust the comparable, not the subject to make it similar by going up or down |
|
|
Term
| Adjustments made in Sales Comparison approach |
|
Definition
conditions of sale
market conditions
square footage
landscaping
Then weigh each comp based on appraiser's opinion |
|
|
Term
| Cost depreciation approach |
|
Definition
| cost of acquiring similar site & constructing substitute, then subtract accrued depreciation |
|
|
Term
| Steps to cost depreciation approach |
|
Definition
1. estimate reproduction or replacement cost (labor, materials, builder profit, etc.)
2. estimate amount of depreciation (curable and incurable) (can use lump-sum age-life method, take its effective age and ecomonic life)
3. value of the site
4. depreciated value + site value=total est. value using cost-depre. approach |
|
|
Term
| Income Capitalization approach |
|
Definition
meausre flow of income projected in the future, used on commercial & income producing property.
Potential Gross Income (deduct vacancy and collection losses) =
Effective Gross Income
Subtract expenses=
Net operating Income (income expected after expenses)
then find Cap rate-determined by using the sale price and NOI of similar properties-its the multiplier to figure value
IRV |
|
|
Term
|
Definition
like in income cap rate for rentals, used to estimate value
Sale Price/Gross Monthly Rent=GRM |
|
|
Term
|
Definition
for small income-producing properties. same as for GRM, but refers to all income a property could produce.
Sale Price/Gross Annual Income= GIM |
|
|
Term
|
Definition
includes
-what's sold in the previous 12 months
-what's currently on the market
-what's expired in the previous 12months
similar to subject property in size, age, amenities, location. |
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|
Term
| slab on grade construction |
|
Definition
| pour concrete slab directly on the ground |
|
|
Term
|
Definition
| foundation and footers poured at the same time |
|
|
Term
|
Definition
Platform-least expensive
Balloon-expensive-good for homes with masonry
Post & Beam-larger span between walls. |
|
|
Term
| Electrical wire colors/meaning |
|
Definition
white-neutral
green-ground
black or red-hot |
|
|
Term
| determines how much energy a device consumes |
|
Definition
|
|
Term
|
Definition
high-pressure
supply to main valve-to cold water main-to hot water heater & fixtures. |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| higher effieciency, how well it resists heat transfer |
|
|
Term
|
Definition
| large, national investment company that pool money to invest |
|
|
Term
| deferred maintenance means |
|
Definition
|
|
Term
| Business opportunities defined as |
|
Definition
| any interest in business enterprise or business opportunities |
|
|
Term
| Origin properties describes |
|
Definition
| not attractive, not well situated. Usually "originate" products (assembly plants, etc) |
|
|
Term
|
Definition
| investor's opinion of worth |
|
|
Term
|
Definition
use of borrowed funds to finance the purchase of an asset
positive leverage=benifits of borrowing exceed the cost of borrowing
negative leverage-borrowed funds cost more than what they are producing |
|
|
Term
| Business enterprise broker vs. business opportunity broker |
|
Definition
Enterprise: sale & purchase of corporate businesses, involve corporate stock
Opportunity: smaller businesses |
|
|
Term
|
Definition
| reputation & customer loyalty |
|
|
Term
|
Definition
| value of an established business property is based on intangibles & goodwill |
|
|
Term
|
Definition
|
|
Term
|
Definition
| current assets minus total liabilities |
|
|
Term
Income Statement
balance sheet
cash flow |
|
Definition
income statment-summary of income & expenses for period of time
balance sheet-financial position at a moment in time
cash flow-after expenses, total money generated from an investment |
|
|
Term
|
Definition
property tax, according to value
paid in arrears
1/1-12/31
payable 11/1, due 3/1 for previous year, late as of 4/1. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| value of property for tax purposes |
|
|
Term
| TRIM Truth in Millage Notice |
|
Definition
given to property owners to inform them
Owners allowed 25 days after getting TRIM to protest taxed amount |
|
|
Term
|
Definition
1-contact appraisers office to protest within 25 days of getting TRIM notice
2. if request for adjustment rejected, file an appeal
3. litigation in court, pay the taxes and file suit |
|
|
Term
| Exemptions from Property Taxes |
|
Definition
Immune-government properties
Churches & nonprofits
partially exempt-homestead, ect. |
|
|
Term
|
Definition
hold title
permanent residence as of 1/1
reduces taxes
$25,000 from assessed value city county school taxes
$25,000 city & county taxes only of value between $50k & $75K. Value over $75K is full $50K exemption
If value under $50K, $25K exemption only |
|
|
Term
| additional $500 exemptions for |
|
Definition
widows
legally blind
permantently disabled |
|
|
Term
|
Definition
Vets at least 10% disabled-$5K exemption
Total disability of vets-total exemption
Quadriplegics-total exemption |
|
|
Term
|
Definition
protects farmers from having taxes increased.
mandates that all land is classified annually |
|
|
Term
|
Definition
| caps how much assessed value of homesteaded property may increase each year. 3% annually or Consumer Price Index (whichever is less) |
|
|
Term
|
Definition
| is one one thousandth of a dollar (.001) |
|
|
Term
| If outside city limits, get taxed city taxes? |
|
Definition
|
|
Term
|
Definition
| 1 time tax levied on properties to help pay for a public improvement, like repaving a road |
|
|
Term
| What happens if you don't pay your property tax? |
|
Definition
property tax is a lien (superior) on your property (special assessments are next in priority).
considered a debt
property can eventually be sold to satisfy the obligation |
|
|
Term
| Deductions from federal income taxes: |
|
Definition
Mortgage interest
property taxes
interest on home equity loan
mortgage origination fees
---first time homebuyers can take $10K from IRA no penalties
Exclusion of gain, up to $250K (or $500K if married) |
|
|
Term
|
Definition
income profit from sale of principal residence, investment property, etc.
Amount of sale minus adjusted base (that was paid for house + buying expenses) = capital gain
exclusion of gain every 2 years. |
|
|
Term
| If you buy property from a foriegn seller |
|
Definition
| IRS requires that buyers withhold 10% of gross sale price, report the purchase and pay the IRS the amount withheld. |
|
|
Term
|
Definition
availability of:
-skilled labor
-construction loans/financing
-land
-materials |
|
|
Term
|
Definition
price of real estate
population and household composition
income of consumers
availability of mortgage
consumer tasts |
|
|
Term
| Florida's Growth Management Act |
|
Definition
of 1985
infrastructure need to be in place before development |
|
|
Term
| What is the planning commission responsible for? |
|
Definition
not trained planners
appointed
planning, but they aren't the final authority.
1. subdivision plat approval
2. site plan approval
3. sign control |
|
|
Term
| Physiographic studies study |
|
Definition
the soil
drainage
percolation
load bearing capacity |
|
|
Term
| Economic base studies study |
|
Definition
effect of base industries employment in the area.
Base industries attract outside money to an area |
|
|
Term
| what is a special use land use classification? |
|
Definition
| public schools, churches, parks |
|
|
Term
| What is a thoroughfare study? |
|
Definition
|
|
Term
| What are zoning ordinances? |
|
Definition
they protect integrity of neighboring properties and regulate:
use of land
lot size
type of structures
building heights
setbacks
density (# of units per acre) |
|
|
Term
| Commercial & industrial zoning regulate |
|
Definition
intensity of use
amount of traffic, etc |
|
|
Term
| What is a zoning board variance? |
|
Definition
allows property owner to vary from compliance with a zoneing code
-must show hardship exists |
|
|
Term
PUD
Planned Unit Development |
|
Definition
special land use for residential & commercial (not industrial)
small lots, high density, around parks |
|
|
Term
|
Definition
| when structure's side rests on lot's boundry line |
|
|
Term
| Environmental Impact Statement |
|
Definition
| summarizes the long term effect the project will have on the surrounding environment |
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|
