Real Estate - 25 Very Important Questions

When does a licensee need to go to the DBPR website, renew their license, and pay the fee?

after finishing the 45 hour post licensing course

Does completing the 45-hour course automatically renew the license?

No the license does not automatically renew

After finishing the course, will the the licensee’s license automatically renew?

No, they must take action online to renew and pay the fee

What happens if a licensee does not complete the 45-hour post license course before their first license renewal?

their license becomes null and void

If a license becomes null and void for not completing post licensing, what must the person do?

requalify by submitting fingerprints, taking the 63 hour pre license course, and pass the state exam

How long does the licensee have after renewal to complete 14 hours of continuing education?

two years

What is it when the cost of borrowed funds is more than the rate of return?

negative leverage

What is it when the rate of return is higher than the cost of borrowing?

positive leverage

Is leverage the same as equity?

no, leverage is not the same as equity

How is the binder deposit treated on a Closing Disclosure?

credit to the buyer only

Why is the statement “The binder deposit is a credit to the buyer and a debit to the seller” false?

because the binder deposit is not a debit to the seller

How is the intangible tax listed on the Closing Disclosure?

debit to the buyer

How are unpaid property taxes, assumed mortgage interest, and rental income handled on the Closing Disclosure?

they are debits to the seller and credits to the buyer

At the beginning of a fully amortized loan, what is most of the payment applied to?

interest

At the end of a fully amortized loan, what is most of the payment applied to?

principal

What does “fully amortized” mean in a 30-year loan?

the loan is fully paid off through equal monthly payments

Is a balloon payment required at the end of the loan period with a fully amortized loan?

no, it is not required with an amortized loan

What clause allows the lender to demand full loan repayment if the property is sold without consent?

the due on sale clause

What happens when the defeasance clause is activated in a title theory state?

the borrower receives the deed once the loan is paid off

What does the acceleration clause allow the lender to do in a default?

demand full payment of the remaining loan balance and fees

Which lien type always take priority over all others?

Real estate tax (property tax)

Which of the following is a clause in a deed that states that the grantor owns the property and has the legal right to convey it?

seisin

In lien theory states, who keeps ownership during the loan?

the borrower keeps ownership

In title theory states, who holds title during the loan?

the lender

What theory does Florida use?

Florida uses the lien theory

Why is the statement “the borrower does not retain ownership in lien theory” wrong?

because the borrower does keep ownership

When must no brokerage disclosure be given?

before showing property

What is the default agency relationship in Florida?

transaction broker

Can a single agent represent both a buyer and seller?

no they cannot

Do transaction brokers owe fiduciary duties?

no just limited duties

What are the rights associated with water flowing through your property?

riparian rights

How many acres are in a section of a township?

640

How many square feet are in one acre?

43,560

What method is used in subdivisions with recorded plat maps?

the lot and block method

What does metes and bounds use to describe land?

it uses a starting point and compass directions

What method divides the state into a checkerboard grid using meridians and base lines?

the government survey method

Can a sales associate legally perform an appraisal for a fee?

Yes if it is not for a federally related transaction

What must appraisers follow in federally related transactions?

USPAP standards and be licensed

Is a sales associate required to follow USPAP?

only if they are licensed as an appraiser or if its a federally related transaction

Who is responsible for disclosing lead-based paint in homes built before 1978?

the homeowner

What must the seller provide regarding lead-based paint?

a disclosure form, an EPA pamphlet, and 10 days for buyer to inspect

Why is it false to say the sales associate is legally responsible for the lead paint disclosure?

because its the sellers responsibility

What must the buyer do regarding lead-based paint disclosures?

acknowledge they received the disclosure and EPA pamphlet

What are the two types of mortgage theories?

the lien theory and title theory

What is it when the borrower keeps the title (ownership) of the home, and the lender just has a legal claim on the house?

lien theory

What is it when the lender holds the title (ownership) of the home until the mortgage is paid off, the borrower has the right to live there but the lender technically owns it.

title theory

What are the 3 types of agency relationships in Florida?

no brokerage relationship, transaction broker, and single agent

What sort of relationship is it when the licensee doesn’t represent either party?

no brokerage relationship

What is it when there is limited representation to a buyer/seller (or both)?This is also the default in Florida.

transaction broker

What is it when the licensee has full loyalty, confidentiality, and obedience to their party? They can also only represent one party (cannot be both sides).

single agent

What are the 3 main ways to legally describe land?

metes and bounds, government survey system, and lot and block system

What system is used for older properties and odd shaped land? It starts at the point of beginning and uses compass directions and distances to describe the boundaries.

metes and bounds

What system breaks land into a grid using imaginary lines (meridians and baselines). It also uses townships.

government survey system

What system is used when a developer divides the land into numbered lots? These are recorded with a plat map and is mostly used in subdivisions or neighborhoods.

lot and block system

What is this the definition of: Involves a federal agency or federally regulated financial institution (a bank thats FDIC-insured)

federally related transaction

What market is where loans are made, with borrowers and lenders

primary market

What market is where loans are sold, investors buy the loans

secondary market

Who is the largest contributor in the secondary mortgage market?

Fannie Mae

What is the law in Florida that protects your home in 3 ways?

Florida constitutional homestead

What is when a licensee channels home seekers to or away from a particular neighborhood because they are a member of a protected class?

steering

What is when a licensee’s use the entry or rumor of the entry, of a protected class into a neighborhood to persuade homeowners to sell their property?

blockbusting

What is it when lenders or insurance companies deny loans or insurance coverage based on discriminatory practices?

redlining

Where are the rules that the FREC make and enforce?

Ch61j2

Where are the real estate laws?

F.S.475

Where are the Homeowners Association law that requires sellers to provide buyers with an HOA disclosure?

F.S.720