Florida Real Estate Sales Associate Exam Prep: Questions & Answers, Exams of Real Estate Management

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(GOLD COAST HIGHLIGHTS) Real

estate sale associate pre license

course exam prep Exam with Answers

Farming - Answer: ✅✅ licensee concentrate on one type or style of property or on one particular neighborhood

Farm area or target market - Answer: ✅✅ Finding and specializing in a particular neighborhood or type of property. Considered to be one of the best ways to succeed in the real estate business

Tract building - Answer: ✅✅ When a developer acquires a large tract of land, records a subdivision plat map, and uses a model center from which sales may be made

Local level - Answer: ✅✅ Government Regulation:

At the local level, planning and zoning, property taxation, building, and health codes and regulations, and building moratoriums that affect development, play a significant role in the cost and desirability of real estate

Purpose of the law - Answer: ✅✅ F.S. 475 to protect the public

Commission or FREC - Answer: ✅✅ Refers to the Florida real estate commission

Department or DBPR - Answer: ✅✅ Refers to the department of business and professional regulation

Division or DRE - Answer: ✅✅ Refers to the division of real estate

License - Answer: ✅✅ Means any permit, registration, certificate, or license issued by the department

Licensee - Answer: ✅✅ Refers to any person to whom a permit, registration, certificate or license is issued by the department

A BAR SALE - Answer: ✅✅ The most common services of real estate:

Appraising

Buying

Auctioning

Renting

Selling

Advertising

Leasing

Exchanging

Sales associate - Answer: ✅✅ Must be employed by a real estate broker or owner developer to practice real estate

content of their mutual education and experience requirements for real estate licensing.

Alabama

Arkansas

Connecticut

Georgia

Mississippi

Illinois

Nebraska

Form #1 DBPR RE 1

"Have you ever been convicted or found guilty of, or entered a plea of Nolo contendere (no contest) or guilty to, regardless of adjudication, a crime in any jurisdiction, or are you currently under criminal investigation?"

The question further defines which offenses are covered - Answer: ✅✅ For practical purposes, this question requires the disclosure of any criminal convictions, including felony or misdemeanor convictions or pleas ( other than minor traffic offenses).

DUI is not a minor traffic offense and must be disclosed

Application Denial - Answer: ✅✅ If an application to take state exam is denied, the applicant will be notified in writing.

The notification will identify the reasons for denial and advise the applicant they they have 21 days from the date of receipt to request a formal hearing before an administrative law judge

Compensating broker or sales associate - Answer: ✅✅ Florida real estate license law requires a sales or broker associate to be employed as an agent of either a broker or owner developer before performing real estate services for compensation.

They may NOT be directly compensated for real estate services by a member of the public.

Only their employing broker or owner developer

Employment by owner developer - Answer: ✅✅ The owner developer must register with the department but does not receive a real estate license

Post licensing course - Answer: ✅✅ All licensees, whether active or inactive, must satisfactorily complete a Commission prescribed post licensing course before the first renewal expiration date, following initial licensure.

Sales associate first renewal - Answer: ✅✅ Sales associate must complete a 45 hour post license course.

Failure to complete this requirement will result in licensee being out of business and voided license

Continuing education - Answer: ✅✅ All licensees active or inactive, broker or sales assoc., must complete 14 hrs of commission approved continuing education and pay a renewal fee during each license renewal period, excluding the first renewal period of their current license.

If CE requirements are no met within the renewal deadline, the licensees license will be changed to INVOLUNTARY INACTIVE

CE courses may be completed by classroom or distance learning(online)

Be placed on probation

Or Have their license suspended for up to ten years or permanently revoked

Subsequent renewal - Answer: ✅✅ 14 hr CE

Failure to do so results in null and Void license

The licensee may not practice real estate while his or her license is involuntary inactive.

The license can remain in this statutes for up to two years

Voluntary inactive - Answer: ✅✅ Individual who had attained their license but does not wish to engage actively in real estate can request a voluntary inactive.

May remain In this status indefinitely

Suspended brokers license - Answer: ✅✅ Suspended, revoked, or otherwise void or ineffective brokers license results in all persons license who are employed under such broker to become automatically inactive

Cancelled licensed - Answer: ✅✅ If a licensee no longer wishes to practice real estate, they can return their license to the department. The license would be...

Group license - Answer: ✅✅ A single real estate license that can be obtained if the sales associate or broker associate works for one owner developer with affiliated organizations, which provides real estate services in different geographic areas

Multiple licenses - Answer: ✅✅ A broker can be issued additional licenses in two or more capacities by requesting...

NOT available to sales associates or broker associates

*broker cannot own stock in any of the corporations

Examples of administrative agencies empowered by statutes - Answer: ✅✅ Statutes can authorize the creation and operation of administrative agencies to administer and enforce certain laws.

The DBPR created by F.S. 455

FREC created by F.S. 475

are examples.

Special agent - Answer: ✅✅ Authorized under agency law by the employer to perform a single act.

General agent - Answer: ✅✅ ...Of his or her broker or owner developer..

(Sales associate or broker associate)

Sub agent - Answer: ✅✅ Extension of another agency, a party who has been granted authority to act on behalf of another agent.

NOT a type of agency

What a sales associate is to his or her broker, and automatically becomes to all of the brokers principals

*Under agency law a sub agent has the same duties to the principal as the agent who was empowered by the principal.

Duties:

Deal honestly and fairly

Account for all funds

Disclose all known facts that affect the value of residential property

Skill, care, and diligence

Present all offers and counters offers

Confidentiality

Obedience

Loyalty

Full disclosure

Dual Agency - Answer: ✅✅ An attempt to represent both parties in a transaction would create a dual agency

Single agency relationship - Answer: ✅✅ The employer becomes the principal , who authorizes the broker as an agent to perform certain services on his or her behalf.

The party whom the broker does not represent as an agent, and with whom the broker attempts to be successful in achieving the purpose of his or her employment by the principal, is the brokers customer.

The brokers sales associate is now their general agent, and becomes a subagent of all the brokers principals

Brokers customer - Answer: ✅✅ The party whom the broker does not represent as an agent, and with whom the broker attempts to be successful in achieving the purpose of his or her employment by the principal.

Fiduciary duties owed by a broker to principal - Answer: ✅✅ Confidentiality- required to keep any harmful information received from the principal confidential, even after relationship ends.

Obedience- an agent must obey all legal instructions of the principal or withdraw from the relationship. If Illegal instruction is given and principal persists, agent must withdraw.

Loyalty- may not place the interest of anyone else above those of the principal.

Full disclosure- required to report any fact or rumor to the principal that may affect his or her decision

Consent to transition to Transaction Broker - Answer: ✅✅ may be change at any time during the relationship between an agent and principal, provided the agent gives the written disclosure required and the principal gives his or her written consent before a change in the relationship occurs.

Must be in writing to the principal as a separate and distinct document or included as part of other documents such as listing agreement or others agreement for representation.

Non representation (No Brokerage relationship) - Answer: ✅✅ When in this relationship, a broker may provide specified services for a fee. Care must be taken not to confuse or mislead the customer by inappropriate words or acts

Illegal commission - Answer: ✅✅ A broker cannot collect a commission from both both parties in a transaction without the knowledge and consent of both parties

RESPA- Real Estate Settlement Procedure Act - Answer: ✅✅ Allows brokers to pay referral fees between real estate agents and brokers without disclosure,

Referral Fees - Answer: ✅✅ A Florida broker may pay a referral fee to, or share a commission with, a broker licensed or registered by another state or foreign country. The out of state or foreign broker may accompany the customer to Florida, but may not participate in the transaction in any manner.

If the out of state or foreign broker comes into Florida and provides real estate services, within the transaction, no referral fee or commission can be paid

A Florida broker may not pay compensation, fees, or share commission with unlicensed individuals In exchange for soliciting or referring business. Includes gifts or reimbursement of expenses.

The sharing of a brokerage compensation by a licensee with a party to the transaction with full disclosure to all interested parties is not considered a violation

Surveyors Method (Metes and Bounds) - Answer: ✅✅ The oldest method of land description and provides the most accurate type of legal description.

Point of Beginning - Answer: ✅✅ The survey begins by giving directions from the monument to the edge of the property, which is called the Point Of Beginning.

When the survey returns to the POB it is called a closing

In essence, a person starts at a known point, goes to POB on the property, and walks around the property until returning to the POB.

Example: surveyors method (metes and bounds) - Answer: ✅✅ The opposite of north 37 degrees East is South 37 degrees West

Township - Answer: ✅✅ Six miles square, and contains 36 square miles

In the government survey method, a township is further subdivided into 36 sections

(Starting at 1 in the top right hand corner and zig zagging back and forth til

Section subdivided - Answer: ✅✅ Each section is 1 sq mile, or 640 acres

When a section is subdivided into quarters, each resulting subsection contains 160 acres (1/4 of 640 acres)

Plat Method - Answer: ✅✅ "Recorded plat" method, or "Lot and block Method",

A Method of legal description used to identify small parcels of property in subdivided areas and cities

Check - Answer: ✅✅ The intersection of guide meridians and correction lines that forms a 24 mile square. Called a ....

Essentials Of A Valid Contract - Answer: ✅✅ Offer and Acceptance: There must be an offer and acceptance, agreement , or meeting of the minds

Consideration: A

Price - Answer: ✅✅ The amount that is actually paid in a real estate transaction.

Amount that the buyer is willing to pay and the amount the seller is willing to accept

Liquidation Value - Answer: ✅✅ Th amount that remains after all assets of a business have been sold in a hurried, but not forced, sale and all liabilities have been paid.

The value of a failing business that is not expected to continue. It can also be used to estimate the minimal value of a Profitable business.

Market Value - Answer: ✅✅ The market value of a property is the most probable price at which specified property rights should sell.

The most common type of value

Principal of Highest and Best use - Answer: ✅✅ States that the best use for the property, known as its highest, best, and most profitable use, is that which will most likely produce the greatest net return to the land over a given period of time. This net return is realized in terms of money or other amenities.

Principal of Substitution - Answer: ✅✅ Recognizes that no one would pay more for a property than the amount necessary to acquire an acceptable substitution.

Highest and Best Analysis - Answer: ✅✅ This assists in determining whether the present use is the best use, or if an alternative should be considered to maximize the value of the land and improvements of the property (property value)

Sales Comparison Approach - Answer: ✅✅ Also referred to as the "Comparable Sales Approach", is used to estimate the value indicated by the recent sales of comparable properties in the market. This approach is a direct application of the Principal of Substitution.

Step 3: Adjust the comparable sales price - Answer: ✅✅ adjustments are always made to the Comparable property, but never to the Subject property

If the Comparable property is superior to the subject property, the comparable sales price is adjusted downward by the value of the superior features; superior means subtract. If the comparable property is inferior to the subject property, the comparable sales price is adjusted upward by the value of the inferior features; inferior means increase.

Cost Depreciation Approach - Answer: ✅✅ Or Cost Approach, is used to estimate the current cost of reproducing or replacing a building, minus an estimate for depreciation, plus the value of the land.

This approach is also based on the principle of substitution.

External Obsolescence- a loss in value caused by factors beyond the boundaries of the subject property

Effective Age - Answer: ✅✅ The age something appears to be

Functional obsolescence - Answer: ✅✅ Can be caused by a deficiency or an over improvement (or super adequacy)

An investment made to the property that doesn't make the best use of the property or is excessive in comparison with the improvement of similar properties.

May suffer from this, since it won't sell in the market for the amount invested.

External Obsolescence - Answer: ✅✅ A loss in value caused by factors beyond the boundaries of the subject property.

( property near landfill, ugly house across the street)

Problem is beyond the control of property owner

Income Approach - Answer: ✅✅ Used to estimate the value that a property's net earning power will support.

This approach is used to estimate the value of income producing property and for the valuation of a business.

This approached is based on the appraisal principals of substitution & anticipation

(Direct Capitalization & Gross Multiplier are two techniques applied for this approach)

Direct Capitalization Technique - Answer: ✅✅ Proforma Income Statement.

Math

*Formula in which future income is converted into a present value

STEP 1: FORECAST THE POTENTIAL GROSS INCOME (PGI), which is the total annual income for the coming year.

(The 2 types of gross income that must be considered are contract rent and market rent)

STEP 3: V&C - PGI= (EGI)

V&C- VACANCY & COLLECTIONS losses, represent income that the owner will not receive.

PGI- POTENTIAL GROSS INCOME,

(This is the actual amount the owner can expect to receive from the operation of the property for one year into the future.)

STEP 4: ESTIMATE OPERATING EXPENSES

3 types of operations expenses:

(FE) FIXED EXPENSES , (VE) VARIABLE EXPENSES , (R) RESERVES FOR

REPLACEMENTS

STEP 5: SUBTRACT ALL 3 TYPES OF OE's FROM THE EGI TO CALCULATE THE (NOI) Net Operating Income