Florida Real Estate Flashcards

Florida Real Estate Statutes and Regulations

• Chapter 475 defines the requirements for practicing real estate in Florida.
• FREC (Florida Real Estate Commission) regulates and enforces state licensing laws.
• The Division of Real Estate ensures compliance with FREC's rules and regulations.
• The Department of Business and Professional Regulation is Florida's primary licensing authority.

Real Estate Roles and Relationships

• Owner user holds property primarily for personal or business use while benefiting from long-term appreciation and tax shelter.
• Owner investor holds property aimed at progressive value growth and potential income from sales.
• Real estate brokers provide services to the public and can act in various capacities including transaction broker, single agent, or no brokerage.
• A transaction broker offers limited representation in a residential deal without fiduciary duties.
• A single agent owes fiduciary duties such as loyalty, confidentiality, and full disclosure to their principal, usually compensated by the client.
• Principals are individuals in a singular agent relationship entitled to fiduciary protections.
• No brokerage capacity occurs when a broker provides no agency representation while still disclosing relevant material facts.

Employment Structures in Real Estate

• Owner employers can only conduct real estate services related to their own properties and are compensated solely by the owner.
• Sales associates must operate under the direct supervision of a licensed broker or owner employer.
• Broker associates have fulfilled educational and licensing criteria and work under the broker's supervision.

Property Valuation and Analysis

• An appraisal is a defended estimate of a property’s value.
• Comparative market analysis helps in determining a property’s listing price but is less comprehensive than an official appraisal.
• BPO (Broker Price Opinion) estimates probable sales prices and the expected marketing duration of a property.
• USPAP (Uniform Standards of Professional Appraisal Practice) provides guidelines for all appraisal services.
• FREAB (Florida Real Estate Appraisal Board) oversees the regulation of appraisers in Florida.

Real Estate Development Processes

• Subdividing transforms a large parcel of land into smaller lots for sale or development.
• Development includes enhancing land with infrastructure improvements like utilities and drainage before constructing properties.
• The three-part development process includes land acquisition, infrastructure development, and construction for sale or marketing.
• Contract construction refers to customized building based on client specifications.
• Speculative construction aims to sell properties built without a confirmed buyer, also known as "building on spec."
• Model home construction provides examples of different home designs for prospective buyers, also called tract building.

Financing and Counseling in Real Estate

• Mortgage brokers connect borrowers with lenders but do not make lending decisions; they earn fees upon loan approval.
• Mortgage bankers actively lend on real estate and may hold the title to loans.
• Real estate counseling offers analytical guidance regarding property ownership challenges and opportunities.

Legal Concepts in Real Estate

• Eminent domain grants the state the right to condemn property for public use, requiring fair market value compensation to owners.
• Condemnation is the process by which governments legally acquire private property.
• "Caveat emptor" emphasizes buyer responsibility in property transactions.

Licensing and Regulatory Information

• Sales associate requirements include 63 hours of education, passing rate of 70% within two years, minimum age of 18, and a high school diploma.
• The Department of Business and Professional Regulation aims for effective oversight of various industries, including real estate.
• DBPR responsibilities include complaint investigations, license administration, and financial management.
• DRE manages the licensing and regulation of over 300,000 individuals and institutions within real estate, supporting FREC and FREAB.
• Inactive licensees are not currently engaged in public real estate transactions.
• Active licensees are supervised by employers and may operate under their purview or independently.
• Ineffective licenses are suspended, whereas voided licenses are no longer valid, either expired or revoked.
• Brokers can have multiple licenses when operating in different companies, while group licenses allow associates to work within multiple properties of the same employer.