Chapter 1 - The Real Estate Business

Question 1

A real estate licenses is a professional who provides specialized service and expertise in the following 5 areas:

Answer 1

1. Details of property transfer
2. Knowledge of market conditions
3. Knowledge of how to market real estate or businesses
4. Knowledge of how to analyze buyers needs
5. Knowledge of laws that pertain to real estate

Question 2

What is involved in property transfer?

Answer 2

Transrs of titles, property taxes, financing, and local zoning ordinances; knowledge of real estate purchase and sale contract used

Question 3

What is market condition?

Answer 3

Changes in income tax laws, building moratoriums, and fluctuations in supply and demand that affect property values

Question 4

What is farm area?

Answer 4

Staying specific to an area to have an expertise in that particular portion

Question 5

What is the most prevalent and most well known component of real estate brokerage?

Answer 5

Sales

Question 6

What are the the 5 major sales specialties real estate sales associates can become involved in?

Answer 6

1. Residential
2. Commercial
3. Industrial
4. Agricultural
5. Businesses

Question 7

What is included in residential sales?

Answer 7

Four or fewer residential units, vacant land zoned for four or fewer residential units, or agricultural property of ten or fewer acres

Question 8

What in included in commercial sales?

Answer 8

Income- producing properties, investment analysis, and the various techniques for increasing after-tax cash flow; examples include improved residential property of more than four units, retail stores, office buildings, and shopping centers

Question 9

What is included in industrial sales?

Answer 9

Sites in industrial parks or subdivisions, redeveloped industrial parcels in central areas, and industrial acreage

Question 10

What is included in agricultural sales?

Answer 10

Agricultural property of more than ten acres

Question 11

What is included in business sales?

Answer 11

Sales or lease of an existing business, including the sale of tangible and intangible assets
Also known as business brokers or business opportunity brokerage

Question 12

What is follow up and why is it important?

Answer 12

What a sales associate does for buyers and sellers after the sale; it ensures satisfied buyers and sellers

Question 13

What is property management?

Answer 13

Leasing, managing, marketing, and overall maintenance or property for others

Question 14

What is an absentee owner?

Answer 14

Property owner who does not reside on the property and who often relies on a professional property manager to manage the investment

Question 15

What is appraisal?

Answer 15

Process of estimating the value of real property; considered to be an art, not a science, because although the appraisal process involves mathematical calculations, appraisers also use their own judgment when appraising real property

Question 16

What is the FREAB?

Answer 16

The Florida Real Estate Appraisal Board - they regulate state certified, licensed, and trainee appraisers

Question 17

What is a real estate licensee?

Answer 17

A person paid to handle other peoples properties

Question 18

What is a CMA?

Answer 18

Comparative market analysis; it helps potential sellers determine an asking price and buyers to make an informed decision when offering to purchase real property

Question 19

How are CMAs developed?

Answer 19

By collecting information concerning real estate activity in the area, including recent sales of similar properties, properties currently offered for sale, and expired listings

Question 20

Appraisers are paid a ________, not a ___________.

Answer 20

Fee, commission

Question 21

What is a subdivision plat map?

Answer 21

Engineers plan for land use superimposed on a map of the he land to be developed

Question 22

What is dedication?

Answer 22

Gift of land by an owner or developer to a government body for a public use ( roads, sewers, etc)

Question 23

What do restrictive covenants do?

Answer 23

Affect how the land can be used and establish criteria such as minimum square footage, type of construction, architectural design, etc. To ensure that homes built there conform to the neighborhood

Question 24

Developer Bob acquires a tract of land that he divides into 25 home sites. Prior to marketing the home sites, Bob must submit the subdivision plat to the:

Answer 24

Local governmental planning agency

Question 25

The term follow-up refers to:

Answer 25

What a sales associate does for buyers and sellers after the sale

Question 26

Even though certain exceptions apply, an active real estate licensee is legally entitled to appraise real property for compensation concerning a non federally related transaction as long as:

Answer 26

She does not represent herself as a state-certified or licensed appraiser, and complies with the USPAP

Question 27

The field of property management has experienced growth and specialization primarily because of:

Answer 27

The increase in the number of absentee owners

Question 28

Appraising is considered to be:

Answer 28

An art

Question 29

Appraisers are paid a fee because:

Answer 29

To accept compensation based on the appraised value is a conflict of interest

Question 30

When a developer makes lots available for custom building in a newly developed subdivisions, the overall purpose of restrictive covenants is to ensure that custom-built homes will:

Answer 30

Not decrease the value of neighboring properties

Question 31

The real estate activity that is devoted to leasing, managing, marketing, and overall maintenance of property for others is referred to as:

Answer 31

Property management

Question 32

Which type of construction involves building for a specific buyer to his or her specifications?

Answer 32

Custom Homes

Question 33

The term dedication as it applies to development and construction refers to:

Answer 33

A gift of land by the owner to the local government for public use

Question 34

Sales associate Harry recently began working at All Action Realty. All Action is not a member of the local association of Realtors. Can Harry join the association?

Answer 34

No, Harry cannot join the association unless All Action Realty joins the association

Question 35

Residential real estate is defined in Chapter 475, F.S., as:

Answer 35

Vacant land zoned for four or fewer residential units

Question 36

The real estate profession requires:

Answer 36

Skill and experience in real estate values, specialized service, and expertise

Question 37

Selecting a limited geographical area in which a real estate professional develops special expertise is referred to as:

Answer 37

Farming

Question 38

Broker Mike charges a prospective seller $50 for a comparative market analysis (CMA). Is this allowed?

Answer 38

Yes, provided Mark does not represent the CMA as an appraisal

Question 39

The duties of a property manager include all except:

Answer 39

Selling the property

Question 40

Which is the most important issue for a broker acting as a property manager to accomplish?

Answer 40

To get maximum income while preserving the value of the investment

Question 41

The real estate industry makes up about ____% of the nation's economy.

Answer 41

25%

Question 42

It is unethical for an appraiser to accept compensation for performing an assignment when it is contingent upon:

Answer 42

The reporting of a pre-determined result

Question 43

The act of appraisal can be completed by:

Answer 43

An appraiser following the USPAP standards

Question 44

The practice of a real estate sales associate specializing in a certain geographic area is called:

Answer 44

Farming

Question 45

Which would not usually be involved in financing real estate:

Answer 45

A real estate broker

Question 46

Services that a property manager must perform for the owner are listed in:

Answer 46

A property management agreement

Question 47

Agriculture property in Florida is property that:

Answer 47

Has more than 10 acres

Question 48

A real estate professional needs a license because:

Answer 48

He has expert information on real estate that an average layperson does not have

Question 49

Local communities regulate real estate by:

Answer 49

Creating zoning laws

Question 50

Putting together two or more parcels of land to make a large piece is called:

Answer 50

Assemblage

Question 51

A home that is specially built for a buyer, using his blueprints is called:

Answer 51

A custom home

Question 52

Which is not commonly an area of federal government interference in real property:

Answer 52

Zoning laws

Question 53

What are the common areas of local government interference in real property?

Answer 53

Zoning laws Occupancy permits Taxation of real property Business permits for real estate professionals

Question 54

What are the common areas of state government interference in real property?

Answer 54

Recording of deed, transfers of property | Estate taxes and rules regarding inheritance

Question 55

What are the common areas of federal government interference in real property?

Answer 55

Federal agencies (HUD, FHA, VA) Laws (Federal Fair Housing, RESPA, Truth in Lending Act) Taking of land for National parks, wildlife, and wetland areas Environmental rules and regulations Inheritance taxes

Question 56

Dedication most nearly means:

Answer 56

Giving private land for public use

Question 57

In Florida, there is a demand for property management services due to the large amount of:

Answer 57

Absentee owners

Question 58

The Florida Real Estate Appraisal Board (FREAB) is headquartered in Orlando and consists of how many members?

Answer 58

9 members

Question 59

One example of a Loan Originator would be a:

Answer 59

Seller who finances more than hone home in a two year period