Sales Associate

Pre-license Workshop

Reasons to Become a Real Estate Agent

You are your own boss Minimal Start Up Cost Flexible Hours Freedom to work when and where you want Can raise a family and work without

sacrificing either Unlimited Earnings Potential

Licensing Requirements

Be eighteen years of age or older High School Diploma or equivalent (G.E.D.) Complete 63 hours Sales Associate

Prelicense Course Pass Pre-license Course Exam with a

minimum grade of 70% Submit state application and fingerprints Apply for and pass state exam with minimum

grade of 75%

Getting a License

Application through State

www.MyFloridaLicense.comFingerprinting required

www.pearsonvue.com

1-877-238-8232

Getting StartedThe Course

Internet based approved by FRECCorresponding TextbookLive Workshop

Internet Based Course

63 hour Pre-license Course FREC approved for CareerQuest Login-Logout No time requirement Audio on most pages End-of-chapter Quizzes 100% score End of course exam timed for 3 hours Download end of course report

Textbook

Corresponding Textbook Approved by FREC Contains answer key

Live Workshop

Not required, tutorial onlyGreat ReviewQ & ANo test

Chapter OneIntroduction to the Real Estate Business

Describe various activities of real estate brokerage

Know the five major sales specialties Know the difference between CMA and

Appraisal Know the 3 phases of construction

Chapter One Review

Farming is a great way to develop a real estate business

Property management is popular because of absentee ownership

Appraisers must be state certified and follow strict USPAP guidelines

Developers turn over roads and infrastructure to government through dedication

Spec building: to build with hopes of selling Custom building: build to owners plans

Chapter TwoLicense Law & Qualifications

Know qualifications for sales associate license Understand the application process Know the educational requirements Distinguish the different license categories Know the services of real estate Know the exemptions Understand Mutual Recognition

Chapter Two Review Associates can work for either brokers or owner-

employers Applicant must be 18 years old with high school

diploma or equivalent Must disclose any convictions Approved application is good for 2 years Irrevocable Consent to Service for out of state

licensees (60 days after move out) 2 License: broker and sales associate Broker Associate is broker working as associate BAR SALE

Chapter ThreeLicense Law & FREC

Know the composition of FREC Know the powers and duties of FREC Distinguish the difference between void and

ineffective Understand how a license becomes involuntary

inactive

Chapter Three Review

7 members on FREC: 5 licensed & 2 unlicensed FREC appointed by Governor confirmed by state Senate

for 4-year term Can’t serve more than 2 consecutive terms Involuntary inactive: fail to renew or employing broker has

license suspended or revoked by FREC Broker fails to notify DBPR of office move within 10 days,

license will “cease to be in force” Multiple license held by brokers for more than on brokerage Group license held by associates working for unlicensed

owner

Chapter FourProperty Rights

Define real property Know physical components of real estate Know legal test for fixtures Understand what the “bundle of rights” are Understand Florida’s Homestead Laws Know the difference between condos and coops

Chapter Four Review

Real property is the land with everything attached and the “bundle of rights”

Personal property may become a fixture: Intent Method of attachment Agreement Adaptation

Bundle of Rights include Disposition, Enjoyment, Exclusion, Possession, and Control

Continued

Session Four Review

Own real estate in fee simple or life estate Homestead: protected from judgment

foreclosure Tenancy by Entireties: husband-wife Joint tenancy: equal Possession, Interest, Time,

and Title Condo/Coop rescission: 15 day new or 3

business day resale Time Share rescission is 10

Chapter FiveReal Property Ownership

Know methods of acquiring title to real estate Distinguish between constructive and actual notice Know the difference between abstract and chain of

title Know the different types of deeds and their

components Know the difference between government and

private restrictions Distinguish among the various types of leases

Chapter Five Review

Constructive Notice is recording on public record Licensees should not give opinions of title Chain of title (ownerships) is part of the abstract Grantor (giver) must be competent Habendum clause identifies the type of estate Failing to record a deed may cause a person to

be “estopped” (prevented) from ownershipContinued

Chapter Five Review

Warrant of Seisen (declaring ownership) is not found in Quit Claim Deed

Police Powers include zoning Government limitation includes Eminent Domain Private limitation includes Deed Restriction Assignment of lease: give up everything Mechanic’s lien is effective when materials were

delivered. Can foreclose homestead

Chapter SixLegal Description

Know the purpose of a legal description Know the 3 types of legal descriptions Understand sections, townships and ranges Understand how to subdivide sections

Chapter Six Review

Metes and Bounds is the most accurate and has a Point of Beginning

Government Survey divides state into checkerboard Meridian line runs north and south Base line runs east and west Ranges are 6-mile bans running north and south Townships (Tiers) are 6-mile bans running east and west A Township contains 36 sq miles and 36 sections There are 640 acres in a section Lot and Block is used in subdivisions

Chapter SevenSales Associates and Brokerage Activities

Know the requirements of a broker’s office Know the difference between branch office and

temporary shelter Understand advertising regulations Understand how escrow money is handled Know how rental lists are handled Know how an associate changes employers

Chapter Seven Review

Every broker must have an office somewhere Required information:

Broker/brokerage Lic. Real Estate Broker Assoc may be on sign with proper

identification Branch offices are not transferable and

registration is good for 2 yearsContinued

Chapter Seven Review

Construction trailer is “temporary shelter” Broker ultimately responsible for all

advertising Ad without brokerage is “blind ad” Fed “No Solicitation” prohibits cold calling

FSBOs Immediate means 3-business days to

deliver EMD to escrow accountContinued

Chapter Seven Review

Settlement Procedures for Conflicting Demands: mediation, arbitration, litigation, and Escrow Disbursement order

10 day to notify FREC of resolution Rental Information Lists: info correct 75% refund, info

incorrect 100% refund when demand is made within 30 days

General Partnerships: 2 or more persons, 1 active broker, associates cannot be GPs

Corporations: 1 active broker, associates cannot be officers or directors but can be stockholders

Chapter EightAgency Laws

Understand provisions in Florida’s Agency Laws Know the differences between the 3 types of

agency relationships Know the disclosure procedures required by law Understand how to transition from a single

agency to a transaction broker Know how agency relationships are terminated

Chapter Eight Review

Dual agency repealed Single Agency:

Full fiduciary Work with either buyer or seller Disclose prior to showing or prior to contract whichever comes

1st

Transaction Broker: Limited obligations Work with both buyer and seller No disclosure required (presumed to be transaction broker)

Continued

Chapter Eight Review

No Brokerage (Non-Rep): No skill, care, and diligence Minimum obligations Disclose prior to showing

Transition to Transaction Broker: Must be signed by client

Chapter NineThe Real Estate Market

Know the physical characteristics of real estate

Understand how supply and demand affect price

Know the difference between Buyers market and Sellers market

Chapter Nine Review

Physical characteristics are: Immobile Heterogeneous indestructible

Situs is the uniqueness of location combined with immobility

Sellers vs Buyers markets: who ever is in the minority

Continued

Chapter Nine Review

Demand: People wanting housing Price goes up, demand goes down

Supply: Product on the market Material prices go up, prices of housing goes up

Chapter TenResidential Product Knowledge

Understand the various building codes Know the different types of lots Know the different types of roofs Know the different types of windows Understand who needs a contractors license Understand the various environmental

hazards in real estate

Chapter Ten Review

Building Codes are local in nature Contractor’s license are obtained through the DBPR A Key Lot is one that is better than adjacent lots and

generally more expensive A gable roof has 2 sloping sides where a hip roof

has 4 sloping sides The strength of insulation is defines by it’s “R” value Environment hazards include asbestos, radon gas,

lead paint, and urea formaldehyde

Chapter ElevenReal Estate Appraisal

Know Federal & State regulations regarding appraising

Understand market value Distinguish among cost, price, and value Know the 3 approaches to value Understand how to prepare a CMA

Chapter Eleven Review

Appraisals can only be done by individuals that are State Certified

Real estate licensees can prepare Comparative Market Analysis

Market value is what the normal buyer under normal conditions would pay for a property

Cost, Price, Value may or may not be the same Use that causes the greats value is highest and

best useContinued

Chapter Eleven Review

Comparable sales approach: Robin Hood Cost depreciation approach: special purpose buildings Income approach: income div by rate = value

(anticipation) Assemblage is combining and Plottage is the increase in

value Comparative Market Analysis:

Sold Currently on market Expired

Chapter TwelveInvestment & Business Opportunity

Know the advantages and disadvantages in buying investment real estate

Understand risks as they relate to returns Know the difference between real estate brokers

and business brokers

Chapter Twelve Review

Advantages: Good return Tax advantages Leverage Equity build-up

Disadvantages: Illiquidity Management expense

Continued

Chapter Twelve Review

Risk: Business risk: income lower than expenses Financial risk: no funds available

Business Brokers must understand financial data Liquidation Value Approach is unique to business

appraisals

Chapter ThirteenReal Estate Taxes

Distinguish among immune, exempt, and partial exempt properties

Know how property taxes a formulated Know how to appeal tax bills Know how to calculate special assessments Know how to calculate taxable income Distinguish between installment sales and

like-kind exchanges

Chapter Thirteen Review Ad Valorem taxes are real estate taxes calculated in

millage Government properties are immune Churches & non-profit properties are exempt Homestead is partially exempt Greenbelt laws favor agricultural properties with lower

assessed value Non-payment of property taxes cause tax certificate sale Bidding starts at 18% and bids down After 2 years holder of certificate can request tax deed

through foreclosureContinued

Chapter Thirteen Review

Taxable Income: Net Income +Reserves -Interest -Depreciation = Taxable Income

Like-kind exchanges and installment sales defers taxes

Chapter FourteenReal Estate Contracts

Know the essentials of a contract Distinguish among the various types of

contracts Know how contracts can be terminated Know the remedies to a breached contract Understand what the Statute of Frauds is Know what disclosures are required

Chapter Fourteen Review

The Statute of Frauds require certain contracts to be in writing to be enforceable

The Partial Performance Doctrine an oral real estate contract to be enforceable part of the purchase price is paid and the buyer is allowed to move in and/or begin renovations

Contracting persons should be 18 years of age and mentally competent

Continued

Chapter Fourteen Review

Contracts with minors are voidable Must have offer, acceptance, a communication

back Breach of contract can be remedied by:

Liquidated damages give the seller Specific performance Unliquidated damages

Continued

Chapter Fourteen Review Listing contracts:

Open listing Exclusive listing Exclusive right to sell (best) Net listing (can’t gouge seller)

Sales and Purchase Agreement Seller has legal title up to closing Buyer has equitable title up to closing

Required disclosures: Radon gas Lead based paint for homes built prior to 1978

Option Contracts are unilateral

Chapter FifteenReal Estate Finance

Distinguish between lien and title theory Distinguish between notes and mortgages Know the components of a note and

mortgage Understand the foreclosure process Be able to calculate the loan to value ratio Know how to calculate discount points Distinguish between “assumption of” and

“subject to”

Chapter Fifteen Review

Lien theory: property owner has title while bank has mortgage. Title theory bank has title to loan is paid

Mortgagor is borrower, mortgagee is bank Note is an I.O.U. and not recorded Mortgage is security instrument and is recorded LTV is the loan amount as it relates to the value

expressed as a percentageContinued

Chapter Fifteen Review

Discount points are pre-paid interest. Increases lenders yield 1/8% for each point charged

“Assumption of” a mortgage buyer signs new note

“Subject to” a mortgage buyer does not sign new note

First step in a foreclosure is filing a Lis Pendens Equity of Redemption is the right the owner has

to pay off the loan and prevent the foreclosure

Chapter SixteenSources of Mortgage Money

Know the components of the Adjustable Rate Mortgage

Understand the amortization process Distinguish among the different types of

mortgages Understand the underwriting process Understand the secondary mortgage market Know Federal laws that regulates the financial

market

Chapter Sixteen Review

Amortization is payments of principal and interest. More interest than principal but changes each payment

Adjustable Rate Mortgage consists of an index (which changes) and margin (fixed)

Blanket mortgage covers more than on parcel of real estate and needs release provisions to sell individual lots

FHA is an insurance with underwriting guidelines of 31%mortgage payment and 43% total bills

VA is a guarantee based on loan amount

Continued

Chapter Sixteen Review

Convention mortgages require private mortgage insurance on the portion of the loan greater than 80%

Banks are considered intermediaries because of savings and checking accounts

Open market operations is the most effective method the FEDs have to influence interest rates

FNMA was created to purchase the FHA mortgage

Continued

Chapter Sixteen Review

Real Estate Settlement Procedures Act Information booklet within 3 days of app Good-faith estimate of closing cost within 3 days

of app HUD-1 Settlement Statement no later than

closing. Borrower has the right to at lease one day prior to closing to review statement

Applies to federally related residential loans only

Chapter SeventeenReal Estate Closings

Know how to calculate sales commissions Know how to calculate:

Doc stamps on deed Doc stamps on note(s) Intangible tax on new mortgages

Understand how to prorate items Understand who pay closing costs and how

that is determined

Chapter Seventeen Review

Debits: money owed Credits: money received Prorations are items shared Expenses are monies owed outside closing Doc stamp on deed: $0.70/per $100 Doc stamp on note: $0.35/per $100 Intangible tax: $0.002 x new mortgage Mortgages are always debits to sellers and credits

to buyers

Chapter EighteenPlanning and Zoning

Understand the authority of the Planning Commission Understand Florida’s Comprehensive Plan and Growth

Management Act Know how Concurrency Rules affect future

developments Distinguish among the various zoning ordinances Distinguish between a variance and special exception Know the important features of a Planned Unit

Development

Chapter Eighteen Review The planning commission is appointed by

government leaders and made up of ordinary citizens. They have a professional staff

Concurrency rules require the infrastructure to be part of the development plan

Residential zoning: density Commercial zoning: intensity Variance: relief in zoning Special exception: new zoning for specific use PUDs incorporate commercial, residential and other

mixed uses

Chapter NineteenState & Fed Real Estate Laws

Understand the 1968 Fair Housing Act Know the significance of Jones vs. Mayer Understand HUD’s role in the Fair Housing Act Understand the Landlord/Tenant Act Know the provisions of Florida’s Uniform Land

Sales Practice Act

Chapter Nineteen Review

1968 Fair Housing Act prohibits discrimination based on race, color, religion, sex, national origin, familial status, or handicap status

Jones vs Mayer confirmed validity of 1866 Civil Rights Law

Steering: directing persons to or from Blockbusting: inducing persons to sell

Continued

Chapter Nineteen Review

Landlord/Tenant Act allows landlords to co-mingle deposits into person accounts: Pay tenant 5% for use Place surity bond in the amount of deposit

with clerk of courts Florida Uniform Land Sales Practice Act

requires subdividers sell 50 lots or more to provide buyer with public offering statement giving 7 days to rescind

Chapter TwentyViolations, Penalties, & procedures

Know how a complaint is filed Understand the disciplinary process Know what penalties can be imposed by

FREC Know what penalties can be imposed by

state attorney Understand how the recovery fund operates Distinguish a 1st degree from a 2nd degree

misdemeanor

Chapter Twenty Review

The complaint must be legally sufficient The investigation is a gathering of facts Chairperson of FREC appoints 2 members for

probable cause panel Formal Complaint is outline of legal charges with

20 days to respondContinued

Chapter Twenty Review

A hearing can be formal or informal Recommended Order by ALJ with 10 days to

challenge Final Order handed down by FREC with 30

days to appeal to DCA Notice of Non-compliance is minor infraction

with 15 days to correct

Continued

Chapter Twenty Review FREC can:

Suspend up to 10 yrs; fine up to $5,000; revoke license

State Attorney can: Fine and/or incarcerate (violations are criminal)

1st degree misdemeanor up to $1,000 fine and/or 1 year in jail

2nd degree misdemeanor up to $500 fine and/or 60 days in jail

Recovery Fund: $50,000 single judgment $150,000 for multiple judgments

Chapter Twenty-OneMath Common areas: acres in subdivision, number of

offices in a building Cost-depreciation in appraising Income approach: Uncle IRV Gross rent multiplier: VRM Percentage of profit: Made over Paid

Continued

Chapter Twenty One Review

Loan amortization Calculate commission Pro-ration: taxes and rent Closing calculations: doc deed, doc note,

intangible Underwriting: Housing expense ratio Cost per acre and cost per front foot Legal description: calculate sub-sections