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105 Cards in this Set
- Front
- Back
The Real estate business has how many divisons? |
Two 1. Brokerage and 2. Land Development and Construction |
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Brokerage |
Consists of sales, leasing, appraising, property management, and counseling |
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Counseling |
Requires the most expertise |
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Appraising |
🔹Is an art not science 🔹Are paid a fee not commission 🔹The fee is based upon the difficulty of the assignment and the time required performing the assignment |
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Appraisers |
🔹Do not determine value 🔹they Estimate value |
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The Market |
🔹Determines value |
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Marketing Knowledge |
The type of knowledge that relates to prospecting for listings |
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Contraction periods |
is when production decreases |
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Overpricing |
the major reason that listings expire |
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The Wilsons have contracted to purchase a home for $412,000, contingent on the property appraising for the offered price. When the appraisal comes in at $400,000, the contract is |
Voidable |
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A sales associate employs a licensed personal assistant. The assistant will prepare comparative market analyes (CMAs), design property flyers, hold open houses, and prospect for listing appointments. The assistant will be paid a salary of $12 per hour and 20 percent of the commissions received by the sales associate. The method of payment will satisfy all legal requirements is |
the associate may pay the salary and must withhold taxes on the salary, but the broker must pay commissions. |
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A licensee reviews her sales records and finds that she made $3,200 in gross income for every 100 new contacts she made last year. If she works hard this year and makes 700 new contacts, her gross income would be expected to grow by |
$22,400 Math 700/100= 7 7 x $3,200 = 22,400 |
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A sales associate is a transaction broker. If a prospective buyer asks why the seller is selling, the sales associate |
may not disclose the motivation because of the duties of limited confidentiality |
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Supply and demand (a principal) |
when the supply of listed homes increases without a corresponding increase in sales, lower prices result. |
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To avoid creating sales tax liability in the sale of a condominium, a sales associate should |
avoid listing a price for each separate piece of furniture but can itemize each item, if desired |
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a 2010 change to the Federal Lead-Based Paint Hazard Reduction Act requires that |
contractors disturbing paint in a property built before 1978 take an 8-hour course and become certified |
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Designated sales associate |
The brokerage relationship limited to only nonresidential licensees. |
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The sales price of a home is $185,000, subject to a first mortgage of $121,300. The seller owes a 6 percent commission to the broker. The seller's equity is |
$63,700 Math $185,000(sales price) - $121,000 (1st mortage) = $63,700 |
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changes in the general business economy fall into three categories-cyclic, random and |
Seasonal |
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a house sold for $185,000. Based on the figures below, what are the total expenses rounded to the nearest $100? |
math Brokerage fee 7% Title insurance $800 Termite insurance $50 Documentary stamps deed $15,100 |
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a sales associate is making up a seller's net proceeds statement. The figures she gathers are existing first mortgage at 8% $121,300.00 Property taxes for the year $2,245.60 Interest proration (paid in arrears) ? Closing date June 30
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math What are the total prorations to the nearest $100? Will the prorations be added to, or subtracted from, the equity? $1,900; subtract |
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if the sales price of a home is $198,000, the mortgage balance is $127,300, expenses are $11,800, and prorations for taxes and interest are $2,800 (paid in arrears), the seller's net proceeds are |
math $56,100 198,000 - 127,300 = 70,700 70,700 - 11,800 = 58,900 58,900 - 2,800 = 56,100.00 |
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The order of the general business cycle is |
expansion, recessions, contraction, recovery |
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If a customer calls on a real estate ad, but the house has been sold, the sales associate should |
refer to his fallback list so he can set an appointment to show other homes |
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Parroting |
when a sales associate, to test her understanding of the customer's comments, repeats the customer's words exactly. |
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Lenders expect their title to be insured with |
a title policy insured for the amount of the loan in the American Land Title Association (ALTA) form |
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The brokerage relationship notice that must be signed by the customer is the |
consent to transition to transaction broker notice |
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Under the Junk Fax Protection Act, if a customer requests to opt out of getting future faxes, some requirements are |
1. Identify the fax number or numbers to which it relates. 2. Send the request to the telephone number identified on the fax advertisement 3. Send the request to the email address identified on the fax advertisement. |
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a junk contractor who disturbs paint in a 40-year-old house must |
be certified and follow specific work procedures |
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the annual interest rate cap on a FHA adjustable-rate loan is |
1 percent |
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a seller's equity is the |
property value less mortgage balances |
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Listening skills |
1.Understand 2. Hear 3. Evaluate |
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Open Listings |
allow the owner to personally sell the property without paying a commission |
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a brokers may make appraisals in a non-federally related transaction only if |
prepared according to USPAP requirements |
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a sales associate who discusses "floor duty" with a customer is |
using Jargon |
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in an exclusive agency listing agreement |
one broker lists the property and is not paid if the owner sells it |
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Florida home inspectors |
must have a high school diploma, complete a 120-hour course, and pass a state examination |
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an owner paid $38,000 to put in a swimming pool and an appraiser values the pool the same year at $14,000. This demonstrates the principal of |
contribution |
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The knowledge or skill that will MOST help a sales associate effectively present a contract to a seller is |
communication skills |
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Operating expenses are composed of reserves for replacements, fixed expenses, and |
variable expenses |
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when showing property, the sales associate should |
1. request that the sellers vacate the house during the showing 2. suggest that the sellers remove dogs or restrain them before showing 3. call the sellers after leaving the last house to give notice that their house will be shown next |
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a buyer may expect from the single agent seller's broker the duty of |
disclosure of material facts affecting the property value |
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Written listing agreements must include a(n) |
expiration date |
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Leonard is evaluating a $400,000 mortgage. He can get a 30-year 6 percent fixed-rate mortgage with principal and interest payments of $2,398.20 with no points. He can also get a 5.75 percent mortgage loan (payments of $2,334.29) with two points. Using simple arithmetic, how many months will it take him to break even lower interest rate loan? |
math 68 months |
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The new Good Faith Estimate (GFE) |
1. Has three pages 2. Has tolerances for accuracy 3. Shows lender origination fees and discount points does not- show total amount due from the buyer at closing |
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In order to have a successful listing presentation, as described in the course material, the sales associate should |
1. have all property owners who need to sign the listing available 2. know the presentation thoroughly 3. have prepared a comparative market analysis NOT - be prepared to reduce the commission if asked to do so by the sellers |
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The Florida Association of Realtors Exclusive Right of Sale Listing Agreement provides that if the sellers withdraw the listing before the listing protection period is over, the sellers |
may be liable for the full commission if they transfer the property during the protection period |
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if a property's exact size and description is not known at the time a contract is drafted, the parties should |
1. agree to have a survey made before closing 2. give the buyer the right to void the contract if the size of the property as shown by a subsequent survey is not substantially as represented 3. agree to amend the legal description shown in the contract to that based on a survey
NOT- close the transaction until a survey shows an accurate legal description. |
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Annual changes in the economy are |
seasonal fluctuations |
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Unlicensed personal assistants may perform any of the activities shown below |
1. receive, record, and deposit earnest money deposits 2. schedule appointments for a licensee to show listed properties 3. be at an open house to hand out brochures NOT- negotiating a commission split with a cooperating broker |
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The questions asked when qualifying the buyer for her housing needs are |
1. what part of town do you want to live in 2. is there someone else who will be helping you make a decision 3. how soon do you need to move NOT - What is your gross monthly income |
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a couple apply for a new 30-year fixed-rate mortgage of $195,000. The mortgage principal and interest payment factor is $.005522. Taxes for the year are $4,800 and insurance is $2,400. What will they pay in monthly payments (PITI) |
Math $1,676.79 |
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Sales associates' first customers when starting in real estate are usually |
in their sphere of influence |
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if a contract is written for the sale of a condominium, the sales associate would include the legal descriptions |
1. county in which the property is located 2. condominium unit and parcel number 3. name of condominium complex NOT- dimensions of the property |
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to improve her credit score, a person should |
1. pay bills on time 2. pay down outstanding balances 3. avoid debt of any kind NOT- take on additional credit cards |
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a construction lien on a property would be considered by a title examiner as a |
cloud on the title |
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When ordering title insurance, the sales associate need to give the title closing agent a |
1. signed, dated sales contract 2. previous title policy, if available 3. complete legal description of the property NOT- a copy of the previous deed |
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The most important component of a credit score is |
payment history |
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Tim has a goal of making $64,000 in gross collected commissions next year. He feels that his listings that sell should contribute about 60 percent of the required income. The average commission per transcation in his office is $2,400, and about two-thirds of his listings are expected to sell. He gets about four listings in five listings presentations. Approximately how many presentations will he have to make monthly to stay on target? |
math 2.5 |
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in order to be confident of a prospective buyer's financial qualification, a sales associate should |
take the buyer to a lender for qualifying or preapproval |
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when comparing a 30-year fixed-rate mortgage to a 15-year fixed-rate mortgage, the 30-year loan |
has slightly higher interest rates |
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if a broker has used the Florida Association of Realtors Exclusive Right of Sale Listing Agreement, and gets into a conflict with the seller, the |
conflict must be first submitted to a mediator |
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Except in unusual circumstances, sales associates should limit the number of houses shown in one tour to |
five homes |
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the conditions required when selecting a comparable property for an appraisal |
1. similar to the subject property 2. sold recently in the same neighborhood 3. changed hands in an arm's-length transaction |
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Susie's goal for this year is "to make a good living." the most correct statement about her goal is |
it is not measurable |
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upon Showing homes |
negative features should be discussed on the way to the property |
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when preparing for a closing, a previous deed is found to be defective. If it can't be cleared by ordinary means |
a suit for quiet title must be filed to solve the problem |
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a property that sold is ruled out as a comparable sale. The MOST likely reason is that the home |
is in a different neighborhood, even though there are many comparable sales in the subject property's neighborhood |
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a listed home was the site of a homicide three years earlier. What disclosure to the buyers is required by Florida Statute 760? |
neither the licensee nor the seller is legally required to disclose the homicide |
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Option |
a contract that requires only one party to perform |
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when preparing an offer on the Florida Association of Realtors Residential Contract for Sale and Purchase, the sales associate should |
ensure that each buyer shown in the contract signs the signature line of the contract. |
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a buyer inserts a home inspection contingency and has ten days to complete the inspection and notify the seller of deficiencies. The inspection has some serious deficiencies. On the 11th day, the buyer notifies the seller that she wants the seller to correct the deficiencies. A review of the contract will show that the |
contingency expired and cannot be used as a reason for voiding the contract |
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a residential broker may work with a buyer in all of the following ways |
1. as a single agent 2. with not representation 3. as a transaction broker EXCEPT- as a designated sales representative |
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If owners must be members of a community association, the seller need NOT disclose to the buyer |
the previous sale price of the home |
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Transaction Brokers |
are Brokers who have limited confidentiality duties to buyers and sellers |
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Under the Americans with Disabilities Act, architectural barriers must be removed to maximize accessibility if it is readily achievable to do so. Readily achievable means |
the removal of barriers must be accomplished with little difficulty or expense |
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after listing a home, the broker must deliver a copy of the signed listing agreement to the seller |
within 24 hours |
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John is considering the purchase of a new home using an adjustable rate mortgage (ARM). His broker suggests that he get an FHA ARM loan rather than a conventional ARM loan because the FHA ARM has |
more attractive interest rate caps |
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John is developing a new strip shopping center. Which parking lot design features must be included to meet the requirements of the Americans with Disabilities Act? |
there must be at least one accessible space for every 25 total spaces |
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brokerage relationship disclosures must be kept in the broker's files for |
five years |
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for home mortgages signed on or after July 29, 1999, private mortgage insurance (PMI) must, with certain exceptions, be terminated automatically when the borrower has |
achieved 22 percent equity in the home based on the original property value |
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a brokerage firm that conspires to fix prices violates |
antitrust laws |
|
redlining |
a loan officer raises the interest rate because the home is located in a minority area. This illegal practice |
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The Americans with Disabilities Accessibility Implementation Act protects |
1. persons who are mentally impaired 2. persons who are blind 3. persons who are recovering from substance abuse NOT- Juvenile offenders |
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Holding an open house on a property |
1. it is a good method of finding prospective buyers 2. the sales associate should prepare a brochure or flyer for prospective buyers 3. an additional list of properties for sale should be prepared and ready if this home does not meet the prospect's needs NOT- the licensee must immediately give any visitors who are prospective buyers either a single agent notice or a transaction broker notice |
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Phases of Economic cycle |
contraction, expansion, recovery |
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a valid six-month lease need |
1. include a legal description of the property 2. have the term of occupancy 3. have competent parties NOT- be in writing and signed |
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a loan closes on July 7, and the first payment will be due on August 1. To account for the prepaid interest, the buyer will be |
charged from July 7 through July 31 |
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among the steps shown in the home-showing process, the correct order is |
Set appointment, preview properties, plan the route, evaluate buyers' interest, write contract |
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a sales associate who fails to prepare a comparative market analysis and suggests an improperly low listing price might be violating a duty of |
skill, care, and diligence |
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during a meeting with a customer, sales associate Hank uses the same body language as the customer. Hank is using a reflecting method called |
mirrioring
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a buyer makes a preclosing walk-through inspection. the purpose is to determine whether |
1. the property is ready for occupancy 2. personal property the seller is required to leave remains on the property 3. all required maintenance and repairs have been completed NOT- there are structural problems in the property |
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while describing the brick exterior on a home to a buyer, the licensee says, "This should reduce your home insurance compared to wood siding." In a sales presentation, this statement is called the |
benefit |
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when a property manager prepares a neighborhood market analysis, the major factors to be assessed include |
1. transportation and utilities 2. the economy 3. boundaries and land usage NOT- depreciation allowances |
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Nonresidential sales associates |
may be appointed as a designated sales associate for one party if the broker appoints another sales associate in the firm to be the designated sales representative for the other party |
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this would be included in the operating expenses section of an income property financial statement |
Property taxes |
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It is legally acceptable to advertise "adults only" in a classified ad for an apartment property when |
at least 80 percent of the units have at least one occupant who is at least 55 ears of age |
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before a closing takes place, a sales associate working with the buyer should refrain from |
contacting the seller to ensure that all documents were delivered |
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when presenting an offer to the sellers through the listing broker, a licensee should do everything |
1. make enough copies for all parties 2. allow the parties to discuss the offer without being present 3. distribute copies of the contract before discussing all other contract contingencies EXCEPT - give the original copy of the offer to the sellers |
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the type of property maintenance that involves actual repairs is |
corrective |
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most tenant-management problems involve |
maintenance service requests |
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Real estate buyers and sellers are liable only for the acts of there |
single agent |
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a private homeowner may NOT discriminate in the sale of his residence based on race |
because of the Civil Rights Act of 1866 |
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You would NOT want to take a listing from |
an unmotivated seller |
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In what way do MOST sales associates find for sale by owners (FSBOs) |
In classified newspapers ads |