FLORIDA REAL ESTATE CLASS FINAL EXAM(QUESTION AND ANSWERS) GADED A+

FLORIDA REAL ESTATE CLASS FINAL EXAM(QUESTION AND ANSWERS) GADED A+ A Business Broker - CORRECT ANSWERSpecializes in the sale, purchase or lease of businesses. Is required to have a real estate license and may be licensed as a real estate broker or sales associate Follow-Up is - CORRECT ANSWERKeeping in contact with the new owner after the closing of the sale A builder constructs a house on an owner's lot according to the owner's plans and specifications. This is called - CORRECT ANSWERCustom Building A builder purchases several vacant lots in an established residential subdivision. The builder constructs houses w/o having secured a buyer in advance of the construction of each home and advertises them for sale to prospective buyers. This is which type of residential construction? - CORRECT ANSWERSpec Building What is exempt from Real Estate licensure under Chapter 475? - CORRECT ANSWER 1. Straight Salary . 2. A person who sells cemetery lots for a commission. 3. Court jurisdiction. 4. Renting of a mobil home lot in a mobil home park Other exemptions from licensure include - CORRECT ANSWER1. For Sale by Owner 2. Owner of a Timeshare period who offers the property for resale. 3. A leasing agent of an apt. complex if they are salaried, work in an onsite rental office and work in a leasing capacity. 4. A manager of a condo and Co-op if employed for a salary and rent is for periods no greater than 1 yr. 5. An Attorney-in-Fact (Power of Attorney) 6. An Attorney-at-Law when acting in the scope of his or her duties as an attorney. Not receiving any compensation for a sale. 7. A decedent (personal representative) when appointed by the court. 8. A person selling entities licensed by the FCC (radio, TV or cable enterprises) 9. A person selling personal property. A farmer is appointed by the court to appraise the farm land of a deceased neighbor. The farmer will be paid a $3000 fee for the appraisal. Is he exempt from Chapter 475? - CORRECT ANSWERYes because he was appointed by the courts. A sales assoc employs an unlicensed assistant. The licensee prepares a fact sheet for all of her listings. The sales assoc instructs her assistant to drive a prospective purchaser by several listed properties. When questioned about a particular property, the assistant reads information from the fact sheet. The prospect decides to buy after the assistant showed her the interior of the last property. Have one or the other or both violated Chapter 475? - CORRECT ANSWERBoth violated the license law when the assistant entered the property to show it. Under FREC rules, a Fla resident is a person who has - CORRECT ANSWERresided in Fla for at least 4 mos within the preceding year. Tom intends to make application to become a Fla real estate sales associate. He must have a Social Security number, a high school diploma, be over 18, and be competent to negotiate. What is not required? - CORRECT ANSWERTo be a US Citizen Mary has a 4 year degree in real estate. Mary must still attend the pre-licensing course and post-licensing education. What class is she exempt from? - CORRECT ANSWER Continuing Education If a Florida licensee becomes a non-resident of Florida, he or she must - CORRECT ANSWERnotify the BPR within 10 days and file an "irrevocable consent to service" within 60 days If a real estate licensee moves to Florida from another state and wants to obtain a Fla Sales Assoc license based on Mutual Recognition, the licensee must - CORRECT ANSWERcomplete the 63-hour sales assoc pre-licensing course and pass the Fla license exam. To obtain a broker's license, the applicant must have - CORRECT ANSWER1. Satisfactorily completed the 72 hr broker course. 2. been an Active Sales Assoc for at least 24 months. What information is required to be disclosed on an application for RE licensure? - CORRECT ANSWER1. If you've ever been convicted of a crime. 2. Entered a plea of nolo contendere, regardless of adjudicaton. 3. Any violation of the law (except traffic violations, speeding tickets, etc) What does NOT have to be disclosed on an application for RE licensure? - CORRECT ANSWERPersonal Bankruptcy If a developer owns 3 subdivisions in the names of 3 different entities. A sales assoc or broker assoc may be employed by the owner-developer on a commission basis to sell lots in the 3 subdivisions if the assoc is issued what type of license? - CORRECT ANSWERA Group License To be a broker for several real estate brokerage companies, you must be issued what type of license? - CORRECT ANSWERMultiple Broker licenses (one for each company) If a real estate licensee fails to renew her license at the end of the biennial renewal period, what will happen to the license? - CORRECT ANSWERIt reverts to an involuntary inactive status If Mary's initial license was issue on Feb 6, 2011, what is the expiration date on her license? - CORRECT ANSWERSeptember 30, 2012. (Licenses are renewed on March 31 and September 30 every year) If a RE licensee becomes a member of the US Armed Forces and is not engaged in the practice of RE in the private sector, what is the status of his license? - CORRECT ANSWERIt is kept in good standing while he is on active duty and for a period of 6 mos after his discharge from active duty. What happens if a licensee changes last name or mailing address? - CORRECT ANSWERMust notify BPR within 10 days of the change If a real estate broker's license is suspended for 6 mos for a violation of license law, the licenses of the sales assoc registered with the broker with become what? - CORRECT ANSWERInvoluntary Inactive Which power gives the Fla Real Estate Commission (FREC) the authority to regulate and enforce real estate license law? - CORRECT ANSWERThe Executive Power What is the BPR? - CORRECT ANSWERDept of Business and Professional Regulation Who is the Secretary of the BPR appointed by? - CORRECT ANSWERAppointed by the Governor and confirmed by the Senate What is the purpose of Laws? - CORRECT ANSWERTo protect the public What is the DRE? - CORRECT ANSWERThe Division of Real Estate Who is the Director of the DRE appointed by? - CORRECT ANSWERThe DRE is a division within the BPR. The Director is appointed by the Secretary of the BPR and subject to approval by the Commission What is FREC? - CORRECT ANSWERFlorida Real Estate Commission What are the primary powers and duties of FREC? - CORRECT ANSWERAdopt Rules and Discipline Licensees who violate chapter 475. How many members does FREC consist of? - CORRECT ANSWER7 members: 4 must be brokers who have held a license for 5 years. 1 must be a broker assoc or sales assoc who has held a license for 2 years. 2 must be lay members who have never held a license. At least 1 member must be 60 years old. Who are the members of FREC appointed by? - CORRECT ANSWERAppointed by the Governor and confirmed by the Senate Are FREC members salaried employees of the BPR? - CORRECT ANSWERNo. they are compensated $50/day when on official business FREC's Quasi Legislative Power does what? - CORRECT ANSWERAdopts Rules FREC's Quasi Judicial Power does what? - CORRECT ANSWERDSRF - Deny, Suspend, Revoke and Fine ($5000) licensees If FREC advertises a public hearing to consider a rule change, who can go? - CORRECT ANSWERAnyone effected by the change but NOT the general public. Can FREC impose Administrative penalties? - CORRECT ANSWERYes Can FREC impose Criminal penalties? - CORRECT ANSWERNo. they must be reported to the state attorney's office. Can FREC impose Civil penalties? - CORRECT ANSWERNo. they must be imposed by a Court of Equity. These include financial damages to a plaintiff, injuries or the return of a real estate commission Can FREC order a licensee to make restitution when damaging the public? - CORRECT ANSWERNo. that would be a Civil penalty and must be imposed by a Court of Equity. What does the FREC handbook contain? - CORRECT ANSWER1. Chapter 475 2. Rules of the Commission 3. Other laws applicable to the RE profession What are the 3 forms of brokerage relationships? - CORRECT ANSWER1. Single Agency 2. Transaction Agency 3. No Brokerage What is FLOC? - CORRECT ANSWERF - Full Disclosure L - Loyalty O - Obediance C - Confidentiality When do you have to disclose to someone if your are going to be a Single Agent, No Brokerage or Transactional Agent? - CORRECT ANSWERNot a first contact If someone wants limited representation of a real estate broker but doesn't want to be legally liable for the acts of the licensee, what type of brokerage relationship should be chosen? - CORRECT ANSWERTransaction Broker (Non fiduciary) In a Single Agent Relationship, does the broker represent both the buyer and the seller? - CORRECT ANSWERNo. An SA only represents either the buyer OR the seller (fiduciary) Duties of "No Brokerage" are - CORRECT ANSWER1. Honest and Fair Dealing 2. Facts Affecting Value (material) 3. Accounting for Funds Duties of "Transactional Brokerage" are - CORRECT ANSWER1. Honest and Fair 2. Facts Affecting Value 3. Accounting for funds 4. Skill, Care and Diligence 5. Present all offers 6. Limited Confidentiality (neutral) 7. Any additional Duties Duties of "Single Agent" are - CORRECT ANSWER1. Honest and Fair 2. Facts Affecting Value 3. Accounting for funds 4. Skill, Care and Diligence 5. Present all offers 6. Limited Confidentiality (neutral) 7. Any additional Duties 8. FLOC (full disclosure, loyalty, obediance, confidentiality) Do Transactional Brokers have Principles or Clients? - CORRECT ANSWERNo. They have Prospects or Customers What does Caveat Emptor mean? - CORRECT ANSWERLet the Buyer Beware. Usually applied to transactions where the parties have conflicting interests. This does NOT apply to a Single Agency relationship. Is Full Disclosure required of a Transactional Broker? - CORRECT ANSWERNo. In a No Brokerage or Single Agent relationship, written disclosure applies to whom? - CORRECT ANSWERSingle Family Residential. Includes: 1. 1-4 units 2. Vacant land zoned for 1-4 units 3. Agricultural land of 10 or less acres 4. Lease-option to purchase 1-4 residential units Ace Realty is representing the seller and the buyer as transaction broker. Assoc Henry tells the prospective buyer that he believes the seller would accept $10,000 less than the $200,000 list price. Which duty has Assoc Henry violated? - CORRECT ANSWER Limited Confidentiality An offer of $200,000 on a contract for purchase and sale has been accepted by the seller. Subsequent offers can what? - CORRECT ANSWERBe submitted until closing when the title is transferred. A Sales Assoc shows a property which the brokerage firm has listed for sale to a prospective buyer. The sales associate is considered what to the broker? - CORRECT ANSWERA general agent of the broker When is a single agent brokerage relationship terminated? - CORRECT ANSWER1. Death of Principle agent 2. Insanity of Principle agent 3. Bankruptcy of Principle agent 4. Destruction of the subject property (bldg destroyed) 5. Fulfillment of the object of the employment How many years must disclosure documents be retained? - CORRECT ANSWER5 A Real Estate broker may sign a contract on behalf of a party to a transaction when he or she is an - CORRECT ANSWERAttorney-in-fact What are the 3 types of Agents? - CORRECT ANSWER1. Universal Agent - Assigned by the Principle to perform all acts that the principle can 2. General Agent - Employed to handle all the affairs in a business such as a Sales Assoc or Property Manager. 3. Special Agent - Limited to finding prospects, showing the property and negotiating on behalf of the principle. Who may the sales assoc accept deposits in the name of? - CORRECT ANSWER The Broker only (always) A sales assoc is listing a property for sale. He learns there is a lien on the property. What should he do? - CORRECT ANSWERAdvise all prospective buyers of the lien before they submit an offer. A RE broker's client asks the broker to order a title insurance policy while the client is out of town. The broker orders a policy and the title company offers the broker a paid trip to the Bahamas. What should the broker do? - CORRECT ANSWERThe broker must fully disclose the facts pertaining to the arrangement to the client. (Because this is a single agency. Hints the word "client") Can a sales assoc be a general partner in a brokerage partnership? - CORRECT ANSWERNo Which ownership (business) entities can NOT register with BPR as a Real Estate broker? - CORRECT ANSWER1. Corporation Sole (meaning one. Like a religious organization) 2. Business Trust (REIT - Real Estate Investment Trust) 3. Co-op Assn. 4. Unincorporated Assn. Which ownership entities ARE permitted to broker real estate? - CORRECT ANSWER 1. Sole proprietorship 2. Corporations (for profit) 3. Partnerships (limited and general) 4. Limited Liability Company (LLC) 5. Limited Liability Partnership (LLP) 6. Corporations (not for profit) When does a broker have to have money in escrow? - CORRECT ANSWER3 business days following receipt A sales assoc wants to move into his own office at a location other than the broker's place of business. He is willing to pay all expenses associated with his own office and will continue to be supervised by the broker. Is this allowed? - CORRECT ANSWER Only if the Sales Assoc works out of an office registered in the name of the broker. Can a branch office be in a temporary shelter? - CORRECT ANSWEROnly if the business records are kept there and here are sales associates assigned to that office. Otherwise, no. Release Clause - CORRECT ANSWERBlanket Mortgage Are kickbacks and Rebates allowed to a licensee? - CORRECT ANSWERNo. They are a violation of chapter 475 UNLESS the licensee has fully advised the principal and all affected parties. Must be upfront. What are the 3 principal parts of a Corporation? - CORRECT ANSWER1. Stockholders - owners (a sales assoc may be a stockholder but NOT an officer or director) 2. Directors - must be registered and licensed as a broker or be an unlicensed person altogether. 3. Officers - must be registered and licensed as a broker or be an unlicensed person altogether. Can a Corporation do a BARSALE? - CORRECT ANSWERNo. Only Broker Corporation's can. Is a corporation a separate legal entity from the owners of the business? - CORRECT ANSWERYes. A corporation is an artificial person created by law. Owners have limited liability. How is a corporation "born"? - CORRECT ANSWERThe Secretary of State charter the corporation and issues a Certificate of Incorporation (like a birth certificate) What is a foreign corporation? - CORRECT ANSWERAny corporation operating outside of Florida. They may petition the Sec of State for authorization to do business in Florida. What happens if an active broker fails to renew his license at the end of a biennial period? - CORRECT ANSWERHis license, and all sales assoc, will be cancelled. All sales assoc will automatically go into Involuntary Inactive status. If there is only one active broker in an office and he/she dies, resigns or is removed, the vacancy must be filled within how many days? - CORRECT ANSWER14 calendar (not business) days. What is a General Partnership? - CORRECT ANSWERWhere there are two or more persons who agree to engage in a business and agree to share in in the profits and losses. A broker-Realtor is a sole proprietor. He wants to use a trade name to identify his real estate brokerage business. what is the minimum requirement on the entrance sign? - CORRECT ANSWERTrade name, his name and the words "licensed real estate broker". What type of partnership is it when the public is deceived into believing that a partnership exists? - CORRECT ANSWEROstensible Partnership Can two or more brokers, that are NOT partners, share an office? - CORRECT ANSWERYes. As long as each broker makes his/her true status or capacity clear with 1. signs on the door in each brokers name/business name. 2. telephone listings 3. advertising 4. representations