Real Estate Sale Associate 63-Hr.Pre-Licensing Course
Real Estate Sale Associate 63-Hr.Pre-Licensing Course Pre-Exam Review: STUDY! You are now eligible for the Final Exam, so to ensure your success: 1. Purchase the course text book ( 44) 2. Review the Course Modules as needed 3. Complete the Module Crossword Puzzles 4. Study the Vocabulary Terms mailed to you 5. Take the two Practice Exams mailed to you 6. Read the “Gap Filler Discussion”below 7. Read the“Practice Exam #1 Q&As” below GAP FILLER DISCUSSION The items that follow are called “gap fillers” because they are not extensively covered in module slides. However, you may be required to know this information on the course exam and state exam, so we are providing detailed resources that match a “typical” exam question. Purchase the course textbook to have all this information and more background and good-to-know information at your fingertips now and throughout your career as a real estate agent. Important: The Florida Statutes, Chapter 475, is where Florida Real Estate Law resides and it is the basis for all real-estate licensing coursework and the state exam. Take time to read through this chapter of Florida Statutes on Real Estate. Below are detailed answers to select questions that you are likely to encounter in your real estate exams. Notice that the answers are often derived from the Florida Statutes, the source of all Florida real estate law. 1. Broker Tom's license was in involuntary inactive status for two years and one month. To operate again as an active licensee, Tom must do what? Florida Statute (FS) 475.183 (1) Inactive status.— A license which has become voluntarily inactive may be renewed pursuant to s. 475.182 upon application to the department. The commission shall prescribe by rule continuing education requirements, not to exceed 12 1
classroom hours for each year the license was inactive, as a condition of renewing a voluntarily inactive license. The commission shall substitute for such continuing education requirements, on a classroom-hour-for-classroom-hour basis, any satisfactorily completed education course approved in the manner specified in s. 475.182(1). A person whose license is voluntarily inactive and who renews the license may elect to continue her or his voluntarily inactive status. (2)(a) A licensee may reactivate a license that has been involuntarily inactive for 12 months or less by satisfactorily completing at least 14 hours of a commission-prescribed continuing education course. Notwithstanding the provisions of s. 455.271, a licensee may reactivate a license that has been involuntarily inactive for more than 12 months but fewer than 24 months by satisfactorily completing 28 hours of a commission-prescribed education course. (b) Any license that has been involuntarily inactive for more than 2 years shall automatically expire. Once a license expires, it becomes null and void without any further action by the commission or department. Ninety days prior to expiration of the license, the department shall give notice to the licensee. The commission shall prescribe by rule a fee not to exceed 100 for the late renewal of an involuntarily inactive license. The department shall collect the current renewal fee for each renewal period in which the license was involuntarily inactive in addition to any applicable late renewal fee. (3) The commission shall adopt rules relating to voluntarily inactive and involuntarily inactive licenses, and for the renewal of such licenses. Answer:FREC Course I and pass the sales associate’s licensing exam. 2.Four individuals involved in the same real estate transaction have requested that FREC provide them funds from the Real Estate Recovery Fund. The aggregate payment for their claims is limited to: FS 475.484 (1) Payment from the fund.— Any person who meets all of the conditions prescribed in s. 475.482(1) or (2) may apply to the commission to cause payment to be made to such person from the Real Estate Recovery Fund: (a) Under s. 475.482(1), in an amount equal to the unsatisfied portion of such person’s judgment or 50,000, whichever is less, but only to the extent and amount reflected in the judgment as being actual or compensatory damages. Except as provided in s. 475.483, treble damages, court costs, attorney’s fees, and interest shall not be recovered from the fund. (b) Under s. 475.482(2), in an amount equal to the judgment against the broker or sales associate or 50,000, whichever is less. (2) Upon receipt by a claimant under paragraph (1)(a) of payment from the Real Estate Recovery Fund, the claimant shall assign her or his additional right, title, and interest in the judgment, to the extent of such payment, to the commission, and thereupon the commission shall be subrogated to the right, title, and interest of the claimant; 2
and any amount subsequently recovered on the judgment by the commission, to the extent of the right, title, and interest of the commission therein, shall be for the purpose of reimbursing the Real Estate Recovery Fund. (3) Payments for claims arising out of the same transaction shall be limited, in the aggregate, to 50,000, regardless of the number of claimants or parcels of real estate involved in the transaction. (4) Payments for claims based upon judgments against any one broker or sales associate may not exceed, in the aggregate, 150,000. (5) If at any time the moneys in the Real Estate Recovery Fund are insufficient to satisfy any valid claim or portion thereof, the commission shall satisfy such unpaid claim or portion thereof as soon as a sufficient amount of money has been deposited in or transferred to the fund. When there is more than one unsatisfied claim outstanding, such claims shall be paid in the order in which the claims were approved by the commission. However, if the total claims approved at any one commission meeting exceed the aggregate amount established in subsection (4) against any one broker or sales associate, the claims approved on that day shall be prorated. (6) All payments and disbursements from the Real Estate Recovery Fund shall be made by the Chief Financial Officer upon a voucher signed by the secretary of the department. (7) Upon the payment of any amount from the Real Estate Recovery Fund in settlement of a claim in satisfaction of a judgment against a broker or sales associate as described in s. 475.482(1), the license of such broker or sales associate shall be automatically suspended upon the date of payment from the fund. The license of such broker or sales associate may not be reinstated until the licensee has repaid in full, plus interest, the amount paid from the fund. No further administrative action is necessary. A discharge of bankruptcy does not relieve a licensee from the penalties and disabilities provided in this section, except to the extent that this subsection conflicts with 11 U.S.C. s. 525, in which case the commission may order the license not to be suspended or otherwise discriminated against. Answer: 50,000 3. What is the definition of the income capital approach for appraisal purposes? Answer: See pages 96 & 99 in this online textbook. 4. In relation to Section 1 of a township, is Section 12 due West, South, East or North? Answer: See pages 190 in this online textbook. 5. Within how many days must an address change must be reported to the real estate board? 475.23 License to expire on change of address.— A license shall cease to be in force whenever a broker changes her or his business address, a real estate school operating under a permit issued pursuant to s. 475.451 changes its business address, or a sales associate working for 3
a broker or an instructor working for a real estate school changes employer. The licensee shall notify the commission of the change no later than 10 days after the change, on a form provided by the commission. When a broker or a real estate school changes business address, the brokerage firm or school permitholder must file with the commission a notice of the change of address, along with the names of any sales associates or instructors who are no longer employed by the brokerage or school. Such notification shall also fulfill the change of address notification requirements for sales associates who remain employed by the brokerage and instructors who remain employed by the school. Answer: 10 days 6. Lucille has homesteaded her residence. She is a nonveteran who is totally and permanently disabled due to a serious car accident. Lucille is also legally blind. What is her cumulative tax exemption on her homesteaded residence? 196.031 (1)(a) Exemption of homesteads.— Every person who, on January 1, has the legal title or beneficial title in equity to real property in this state and who resides thereon and in good faith makes the same his or her permanent residence, or the permanent residence of another or others legally or naturally dependent upon such person, is entitled to an exemption from all taxation, except for assessments for special benefits, up to the assessed valuation of 25,000 on the residence and contiguous real property, as defined in s. 6, Art.VII of the State Constitution. Such title may be held by the entireties, jointly, or in common with others, and the exemption may be apportioned among such of the owners as shall reside thereon, as their respective interests shall appear. If only one of the owners of an estate held by the entireties or held jointly with the right of survivorship resides on the property, that owner is allowed an exemption of up to the assessed valuation of 25,000 on the residence and contiguous real property. However, no such exemption of more than 25,000 is allowed to any one person or on any one dwelling house, except that an exemption up to the assessed valuation of 25,000 may be allowed on each apartment or mobile home occupied by a tenant-stockholder or member of a cooperative corporation and on each condominium parcel occupied by its owner. Except for owners of an estate held by the entireties or held jointly with the right of survivorship, the amount of the exemption may not exceed the proportionate assessed valuation of all owners who reside on the property. Before such exemption may be granted, the deed or instrument shall be recorded in the official records of the county in which the property is located. The property appraiser may request the applicant to provide additional ownership documents to establish title. (b) Every person who qualifies to receive the exemption provided in paragraph (a) is entitled to an additional exemption of up to 25,000 on the assessed valuation greater than 50,000 for all levies other than school district levies. (2) As used in subsection (1), the term “cooperative corporation” means a corporation, whether for profit or not for profit, organized for the purpose of owning, maintaining, and operating an apartment building or apartment buildings or a mobile home park to be occupied by its stockholders or members; and the term “tenant-stockholder or member” means an individual who is entitled, solely by reason of his or her ownership of stock or membership in a 4
cooperative corporation, as evidenced in the official records of the office of the clerk of the circuit court of the county in which the apartment building is located, to occupy for dwelling purposes an apartment in a building owned by such corporation or to occupy for dwelling purposes a mobile home which is on or a part of a cooperative unit. A corporation leasing land for a term of 98 years or more for the purpose of maintaining and operating a cooperative thereon shall be deemed the owner for purposes of this exemption. (3) The exemption provided in this section does not apply with respect to the assessment roll of a county unless and until the roll of that county has been approved by the executive director pursuant to s. 193.1142. (4) The exemption provided in this section applies only to those parcels classified and assessed as owner-occupied residential property or only to the portion of property so classified and assessed. (5) A person who is receiving or claiming the benefit of an ad valorem tax exemption or a tax credit in another state where permanent residency is required as a basis for the granting of that ad valorem tax exemption or tax credit is not entitled to the homestead exemption provided by this section. This subsection does not apply to a person who has the legal or equitable title to real estate in Florida and maintains thereon the permanent residence of another legally or naturally dependent upon the owner. (6) When homestead property is damaged or destroyed by misfortune or calamity and the property is uninhabitable on January 1 after the damage or destruction occurs, the homestead exemption may be granted if the property is otherwise qualified and if the property owner notifies the property appraiser that he or she intends to repair or rebuild the property and live in the property as his or her primary residence after the property is repaired or rebuilt and does not claim a homestead exemption on any other property or otherwise violate this section. Failure by the property owner to commence the repair or rebuilding of the homestead property within 3 years after January 1 following the property’s damage or destruction constitutes abandonment of the property as a homestead. After the 3year period, the expiration, lapse, nonrenewal, or revocation of a building permit issued to the property owner for such repairs or rebuilding also constitutes abandonment of the property as homestead. 2(7) The exemptions provided in paragraphs (1)(a) and (b) and other homestead exemptions shall be applied as follows: (a) The exemption in paragraph (1)(a) shall apply to the first 25,000 of assessed value; (b) The second 25,000 of assessed value shall be taxable unless other exemptions, as listed in paragraph (d), are applicable in the order listed; (c) The additional homestead exemption in paragraph (1)(b), for levies other than school district levies, shall be applied to the assessed value greater than 50,000 before any other exemptions are applied to that assessed value; and (d) Other exemptions include and shall be applied in the following order: widows, widowers, blind persons, and disabled persons, as provided in s. 196.202; disabled ex-servicemembers and surviving spouses, as provided in s. 196.24, applicable to all levies; the local option low-income senior exemption up to 50,000, applicable to county levies or municipal levies, as provided in s.196.075; and the veterans percentage discount, as provided in s. 196.082. Note: Other statutes from within the above chapter of Florida statutes (linked above) could also apply. Answer: 50,500 5
7. Whatis the formula to calculate the overall capitalization rate? Answer: [Net Operating Income (NOI) Value (or price)].See pages 329 in this online textbook. 8. A property has been assessed at 40,000. The city tax rate is 10 mills, the county tax rate is 9 mills, and the school board levy is 8 mills. The owner has qualified for and received homestead tax exemption. How much will the owner save from his county taxes as a result of the homestead tax exemption? Answer: 225.Use #6 above to determine the exemption amount. See page 81 of this online textbook to calculate the mill amount. 9. You have a level-payment, amortized mortgage of 42,000 at the 12.5 percent for 30 years. The monthly payment is 448.25. What amount of interest will be paid from the second monthly payment? Answer: 437.39.See page 76 of this online textbook. Also, use this Loan Amortization Calculator (and save a copyof the file for your personal reference). *** PRACTICE EXAM #1 Q&AS Below are thoughtful Q&As on select questions from Practice Exam #1, found in the course study booklet that was mailed to you. Question #1 “.seller asked broker for 50% of the deposit. Broker refused and showed seller thephrase that was inserted into the contract.” Why should the broker split the deposit with the seller if it clearly stated that is the buy default the deposit goes to the broker?A 50/50 split is customary, but it doesn’t state that seller and buy have agreed upon the split.Would it be because sale associate is operating in a fiduciary composite? 6
You are correct. It is because the broker failed to act as a fiduciary. Therefore, the customary split would apply. Question #12 I thought is you were a licensed real estate agent that you can appraise a home only if you conform to the UPAP, but did not portray yourself as a licensed appraiser. This is a tricky question. The Florida Statutes state: Where the term “appraise” or “appraising” appears in the definition of the term “broker,” it specifically excludes those appraisal services which must be performed only by a statelicensed or state-certified appraiser, and those appraisal services which may be performed by a registered trainee appraiser as defined in part II. Therefore, where an appraisal doesn’t require such, then the agent could conduct it if not a conflict of interest. Real estate licensees are eligible to conduct appraisals. Also, a real estate licensee is authorized to perform a Broker Price Opinion (BPO) or Comparative Market Analysis (CMA) for a customer, under section 475.25(1)(t), but the CMA or BPO should not be referred to as an appraisal. Question #13 How many of the members of the FREC need to be present for a rule to pass? Refer to the FREC’s website for more detailed information; however, this question would be answered via FREC rules, not via the Florida Statue 475.02 and would not be an exam question: http://www.myfloridalicense.com/dbpr/re/frec.html Question #15 How much is the fee to open or move a branch office? Please refer to the current fee schedule at www.myfloridalicense.com, and this would not be an exam question. Question #32 What would be the mathematical equation for this answer? I did 100ft X 54 5400. 5400/4 1350 25%, thecity cost; 4050 75%, Joyce cost. But the correct answer is 2,025. How did they come to this conclusion? This is a tricky and not the best question ever drafted. It assumes that the neighbor on the other side of the street (across from Joyce) pays his or her half, thereby cutting Joyce’s responsibility in half ( 4050/2 - 2025). 7
Question #25 I thought name of broker needs to be on the door of the real estate office is that correct? You are correct on that requirement. However, the “sign” answer choice is irrelevant to the call of the question, which concerns a “legal office,” not what is a legally or prominently presented office. Question #29 How many Hrs is the post license class and to renew license you must take the postlicense class. Along with submitting a late fee is there anything else that you have to do to re- new your license if it has become involuntary inactive? It is 45 hours. Regarding late fees, refer to current DBPR policy: etail/a id/711/ nt%2Finvoluntary-inactive-more Question #31 From my understanding only out of state brokers can be given a referral fee or can itgo to anyone as long as it’s under a certain amount or if they don’t come to or live inFlorida? A referral fee may be paid to any agent licensed in good standing in Florida or their respective state. Question #35 What is a no official brokerage relationship? This is a relationship that implies that less of a duty of care owed to the customer/client than is owed under a Single Agent or Transaction Broker relationship. The “no brokerage” relationship reduces the role of the agent to mere facilitation of the transaction. In other words, under this relationship, the client cannot expect loyalty, among other things that are offered under the other relationships available. See the disclosures for details on each: http://www.leg.state.fl.us/Statutes/index.cfm?App mode Display Statute&Search String & URL 0400-0499/0475/Sections/0475.278.html Question #36 What is the NAR and why does all Realtors have to be members? Is it an automaticregister or do you have to register yourself? It’s the National Association of Realtors. It’s a trade organization with local spinoff organizations, such as Northeast Florida Association of Realtors, or Orlando Realtors Association. As an agent, you register voluntarily after 8
joining a registered brokerage. Not all brokerages are members of such an association, and the law doesn’t require brokers to be members. However, when a broker is a member, all agents under the brokerage must become members. Generally, a local NAR-based association membership is needed to access the Multiple Listing Service (MLS), which provides agents with real time access to all listed properties and the ability to conduct detailed searches and create auto-email updates for clients. That is the primary benefit of membership. You should call or visit the website of your local NAR office to get more information on their rules and their current fees. Also, talk to brokerages in your area to learn how they coordinate with the local association. Question #46 What is the definition of easement appurtenant?And how is a license permission to use another’s property? This term describes anlegal and authorized use of another’s property, such as in order to gain access (i.e., imagine a country road owned by one landowner yet the only way to get to the small properties that this landowner previouslysubdivided and sold). “License” in this sense means a form of legal permission only: a license to use the property legally. Question #47 What is the definition of easement by prescription? It is a legal right to use land that was established through continuous unauthorized, though uncontested use, of such land. An example would be where residents of a particular neighborhood for ten years straight drove through a privately owned lotto access the shopping center. That path becomes an irrevocable easement now legal for permanent use. Question #48 What is the difference between patent and a sales contract? A patent is a documented ownership right in intellectual property or a demonstrated invention, not an agreement for trade or purchase. What is the definition of eminent domain? This term describes the government’s right to take property under certain circumstances (i.e., the greater public good, such as where necessary to build a bridge or highway). Question #55 9
What would be the mathematical equation for this question? In this question, the individual is actually not subject to the tax. Under IRS law, individuals can exclude up to 250,000 in profit from the sale of a main home (or 500,000 for a married couple) as long as they have owned the home and lived in the home for a minimum of two years. Those two years do not need to be consecutive. In the 5 years prior to the sale of the house, you need to have lived in the house for at least 24 months in that 5-year period. Question #58 How is an FHA loan acting as an insurance plan? FHA mortgage insurance provides lenders with protection against losses as the result of homeowners defaulting on their mortgage loans. FHA will be financially responsible for paying the lender. FHA loans also offer the buyer a lower down payment, to help encourage and assist them in purchasing property. Lenders agree to receive less down payment because FHA will pay a claim to the lender in the event of a homeowner's default. Loans must meet certain requirements established by FHA to qualify for insurance. Question #85- What is the RESPA? The Real Estate Settlement Procedures Act is a law focused on making mortgage financing clearer, transparent, and, ultimately, cheaper for consumers. Learn more here: http://www.hud.gov/respa/ *** At this time, e-mail us if you have not already received your final exam username and password. If you have your username and password proceed here: Final Exam. Have a question on subject matter or Technical Support?Send an e-mail to the address below. o Include your full name and phone number (optional) o You will receive an e-mail or phone call reply within 24 to 48 hours. o E-mail your question to: questions@relicenseflorida.com Tip: At any time, you may return to the My Course page to study more by clicking through lessons before taking your final exam.Per Florida law, your course access is good from one year from your enrollment date and you have two attempts to pass this course exam before being required to retake the course. 10
and good-to-know information at your fingertips now and throughout your career as a real estate agent. Important: The Florida Statutes, Chapter 475, is where Florida Real Estate Law resides and it is the basis for all real-estate licensing coursework and the state exam. Take time to read through this chapter of Florida Statutes on Real Estate.
Real Estate Employee Level 1 (Associate Level) - first 12 months 728.20 Real Estate Employee Level 1 (Associate Level) - after 12 months 768.60 Real Estate Employee Level 2 (Representative Level) 809.10 Real Estate Employee Level 3 (Supervisory Level) 890.00 Real Estate Employee Level 4 (In-charge Level) 930.50
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Page 39 339.2502 Board of real estate brokers and salespersons; creation. Page 40 339.2502a Real estate broker, associate real estate broker, and real estate salesperson; term of licensure. Page 40 339.2503 Exemptions; definition. Page 41 339.2504 Real estate broker's license; approved classroom courses; application; condition to
Trust account handboo for real estate agents and real estate business agents. 2. Introduction. All real estate agents and real estate business agents who hold or receive money on behalf of others relating to a real estate transaction in Western Australia are required to open and maintain trust . accounts. T
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