Real Estate License Exam Review

A comprehensive set of flashcards to aid in the review of real estate concepts for license exam preparation.

Is a property manager that is paid a strict salary required to be an actively licensed broker?

No

Is a property manager that is paid a salary plus on a transactional basis required to be an actively licensed broker?

Yes

What is the difference between a rental agent and a property manager?

A rental agent finds renters, while a property manager manages the property and renters.

Why has the field of property management experienced rapid growth?

Due to the increase of absentee owners.

What kind of residential construction involves a builder purchasing lots and constructing homes without a buyer in advance?

Speculative home.

What kind of residential construction involves a builder contracted with a buyer, who decides the design of the house?

Custom home.

What is a tract home in residential construction?

It is similar to speculative building done in a new subdivision with model homes.

When can a new sales associate refer to themselves as a REALTOR®?

When they have joined the National Association of REALTORS®.

What does Florida Statute Chapter 475 establish?

The legal rights and responsibilities of real estate licensees and appraisers.

How many parts does Florida Statute Chapter 475 have?

Four.

What does Florida Statute Chapter 455 define?

The general legal practice of the DBPR (Department of Business and Professional Regulation).

What is Florida Statute 120?

The Administrative Procedures Act.

What does Chapter 61J2 cover?

The rules of the Florida Real Estate Commission (FREC).

What do you call a person who performs real estate services for compensation under the direction of a broker?

Sales associate.

What do you call a person who performs real estate services for compensation independently?

Broker.

What is a broker associate?

A person who holds a broker’s license but works under the direction of another broker.

If an owner-developer’s sales staff receives commission, what must they have?

An active real estate license.

Is the sales staff of an owner-developer required to hold an active real estate license if they do not receive commission?

No.

What happens to a sales associate's license if the required 45-hour post licensing course is not completed before expiration?

Null and void.

What is the time limit for a sales associate to complete the required 14-hour continuing education course after completing the post license course?

2 years.

Who is required to complete continuing education?

Actively and inactively licensed sales associates.

How many hours is the business ethics portion of the 14-hour continuing education?

3 hours.

How long does a sales associate have to be licensed under a broker before obtaining a broker’s license?

2 years.

Is the Governor's name on a sales associate’s license?

His name only.

Can an unlicensed assistant show property, hold presentations, and negotiate contracts?

No.

Can a licensee share part of their commission with an unlicensed person for referral?

No.

Is a salaried condo manager required to hold an active real estate license if they rent units for periods no longer than 1 year?

No.

How many members are on the FREC?

7 members.

How many FREC members must be brokers with at least five years of experience?

4 members.

How many members of the FREC are unlicensed consumers?

2 members.

What are the three powers of the FREC?

Executive, Quasi-legislative, and Quasi-judicial powers.

Can a licensee engage in real estate services if their license is inactive?

No.

What happens to a sales associate's license if their broker's license is suspended or revoked?

Involuntary inactive.

How many days does a licensee have to notify the DBPR of a change of address?

10 days.

What are the penalties for stealing duplicates and original listings from a previous employer?

Breach of trust for duplicates, and larceny for originals.

What happens if a broker operates with multiple business entities?

They are issued multiple licenses.

What does a sales associate need to work at multiple locations under an owner-developer?

A group license.

Can the FREC issue misdemeanors and felonies to a licensee?

No, the FREC is an administrative agency.

What is a fiduciary relationship?

A relationship characterized by complete trust and confidence.

What are the three brokerage relationship options for a broker?

1. Single agent 2. Transaction broker 3. No brokerage relationship.

Which brokerage relationship includes a fiduciary relationship?

Single agent.

Which offers must sales associates legally present?

All offers.

When must a licensee disclose known defects affecting property value?

Always.

Does an 'as is' contract remove the requirement to disclose material facts affecting property value?

No.

When must a licensee show the no brokerage relationship notice?

Before showing property.

What kind of agency relationship exists between a broker and a sales associate?

General agency.

If a broker lists a house with a single agency and finds a potential buyer, what options do they have to show the house?

1. Show no brokerage relationship notice, 2. Obtain seller’s consent to transition to transaction broker.

What brokerage relationship involves complete trust and confidence?

A single agent.

Does a transaction broker owe a duty of complete trust and confidence?

No.

Can a transaction broker discuss motivations with the other party?

No.

Is dual agency permitted in Florida?

No.

What disclosure form must be signed when transitioning from single agent to transaction broker?

Consent to Transition to Transaction Broker Disclosure Form.

What defines a residential transaction?

1. Improved property of four or fewer residential units. 2. Unimproved property zoned for four or fewer residential units. 3. Agricultural property of 10 acres or fewer.

Which brokerages must have a sign?

All brokerage offices.

What must be on all brokerage office signs?

1. Trade name (if used) 2. Broker’s name 3. 'Licensed Real Estate Broker'.

Is advertising considered a service of real estate?

Yes.

In advertising, must all advertising be done in the name of the broker?

Yes.

Is it permissible for a team's name to appear larger than the brokerage firm's name in ads?

No.

What makes an advertisement 'blind'?

It fails to disclose the name of the brokerage firm.

Are blind ads allowed?

No.

Can a licensee include personal information on advertisements?

Yes, if the name of the brokerage firm is also included.

Can a licensee sell their property by owner?

Yes, with required disclosures of their license status.

Can a licensee be punished for contacting someone on the do-not-call list?

Yes.

What are five terms that represent escrow?

1. Escrow 2. Earnest money 3. Binder deposit 4. Good faith deposit 5. Trust funds.

Are all brokers required to hold escrow in Florida?

No.

Can a broker hold escrow in another state?

No.

Can a broker hold escrow money in a stock brokerage company?

No.

When does a broker have to deposit escrow?

Immediately.

What does 'immediately' mean in terms of escrow deposits?

The third business day after receipt.

Is a broker required to be a signatory on the escrow account?

Yes.

Can a broker allow an administrative assistant to be a signatory on the escrow account?

Yes.

Can the broker hold/move escrow into an interest-bearing account?

Yes, with written authorization from both parties.

What is commingling in escrow and is it permitted?

Mixing escrow funds with personal funds; it is not permitted.

How much of their own money can a broker hold in an escrow account without it being considered commingling?

$1,000.

How much can a property manager broker hold in escrow without it being considered commingling?

$5,000.

How long must a broker keep escrow records?

5 years.

What information must be included on the purchase and sale contract if a title company or attorney is holding escrow?

1. Name 2. Address 3. Phone number.

What must a broker do first in the event of an escrow dispute?

Contact FREC in writing within 15 business days.

What is the second step a broker must take in an escrow dispute?

Institute one of the four settlement procedures.

What are the four settlement procedures for escrow disputes?

1. Mediation 2. Arbitration 3. Litigation 4. Escrow Disbursement Order (EDO).

Which settlement procedure is considered binding?

Arbitration.

How many days does a broker have to notify the FREC if an EDO resolves a dispute?

10 days.

What time limit does a customer have to request a refund after receiving a rental list with a mistake?

30 days.

If there was a mistake on a rental list and a refund is requested, how much of a refund is the customer entitled to?

100%.

If a rental list had no mistakes but a refund is requested, how much is the refund?

75%.

What is the penalty for providing an out-of-date rental list?

1st degree misdemeanor.

What law is broken if two brokers conspire to set commission rates?

Antitrust Laws.

Can a broker share their commission with an unlicensed person for a referral?

No.

Can a broker share their commission with a party to the transaction?

Yes, if all parties are informed.

Can a general partnership register to broker real estate?

Yes.

Can a sole proprietorship register to broker real estate?

Yes.

Can a limited partnership register to broker real estate?

Yes.

Can a business trust register to broker real estate?

No.

Can a corporation sole register to broker real estate?

No.

Can a joint venture register to broker real estate?

No.

Can unlicensed personal assistants show properties?

No.

Can unlicensed personal assistants negotiate contracts?

No.

What is the penalty for stealing original listings from your brokerage?

Larceny.

What is the penalty for stealing duplicate listings from your brokerage?

Breach of trust.

What is the penalty for a first-time minor violation?

Notice of Noncompliance.