Florida Real Estate License Exam

Real Estate Basics

• F.S. 455 establishes the requirements for obtaining a real estate license
• F.S. 475 gives the Florida Real Estate Commission power to enforce law in real estate transactions

Real Estate Transactions

• A prearranged one-time real estate transaction is called a joint venture
• A sales associate who fails to collect a security deposit is guilty of negligence
• If a sales associate fails to collect an escrow deposit, they are committing conversion

Real Estate Licensing

• If someone obtains their broker's license but chooses to work under a brokerage as a sales associate, they are called a broker's associate
• A person who moves out of state has 60 days to correct their address with the DBPR
• Failure to complete continuing education forces a license to become null and void

Real Estate Agency

• A single agent owes full fiduciary duties to the principal
• A transaction broker owes a principal or fiduciary duties
• A subagent is a type of agency where the agent owes fiduciary duties to the principal

Real Estate Law

• The Statute of Frauds states that something must be in writing to be enforceable
• The Statute of Limitations stipulates time periods that one party can sue another
• A void contract is a contract that cannot be enforced
• A voidable contract is a contract that can be enforced, but one party has the option to cancel

Real Estate Contracts

• A real estate contract requires consideration, offer and acceptance, and competent parties
• An express contract is a contract that is explicitly stated in writing
• An implied contract is a contract that is inferred by the actions of the parties

Real Estate Appraisal

• Appraisers use the market approach, cost approach, and income approach to value property
• The market approach values property based on the sales of comparable properties
• The cost approach values property based on the cost of replacing the property
• The income approach values property based on its potential to generate income

Real Estate Finance

• A mortgage is a security instrument that pledges property as collateral for a loan
• A deed of trust is a security instrument that pledges property as collateral for a loan
• The maximum fine per offense is $5,000

Real Estate Ethics

• Steering refers to directing a buyer to a property within their budget

• Blockbusting refers to encouraging homeowners to sell their properties due to market trends

• The Americans with Disabilities Act requires property owners to make modifications to accommodate disabilities### Contracts

• A "meeting of the minds" means mutual understanding between parties.

• True consideration in a contract requires a sufficient consideration to be specified.

• For a contract to be enforceable, one party must accept, and the acceptance of the offer must be communicated.

Listing Agreements

• In an "as is" contract, the seller must disclose all material defects but are not required to fix them.
• An exclusive right of sale listing gives the best protection to compensation.

Mortgages

• A mortgagor is the buyer, and the mortgagee is the lender.
• In a lien theory state like Florida, grantees are granted title insurance on the day of closing.
• Evidence of debt is called a promissory note.

Foreclosure

• An acceleration clause allows lenders to demand full payment of the loan if the borrower defaults.
• If the balance of the promissory note has not been paid in full, the lender cannot obtain a deficiency judgement for the unsatisfied amount, thanks to an exculpatory clause.

Loans

• A loan with no legal recourse against the borrower for the unsatisfied portion of the loan in a foreclosed property is called an exculpatory clause loan.
• If the borrower pays the entire balance of the debt plus any interest and costs that have accrued since the default, the borrower can redeem the property (equity of redemption).
• The loan-to-value ratio is the ratio of the loan amount to the purchasing price of the property.

Mortgage Insurance

• A VA loan is a type of mortgage that is insured, and the lender is reimbursed for losses, including foreclosure.
• To qualify for a VA Guaranteed loan, it must be the primary residency.

Primary Loan Market

• Federal National Mortgage Association, commercial banks, savings and loan associations, and credit unions are all part of the primary loan market.

Real Estate Principles

• The principle of substitution states that a property's value is determined by the cost of acquiring a similar property in the same area.
• Economic obsolescence occurs when a property feature, like a swimming pool, costs more to construct than its market value.

Property Taxes

• To qualify for the homestead tax exemption, property owners must file for the exemption between January 1st and March 1st.
• If property owners don't pay their property tax by April 1st, they become delinquent.

Planned Unit Developments

• Planned unit developments (PUDs) allow for zero lot lines.