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Real Estate Exam: A Comprehensive Guide to Florida Real Estate Licensing, Exercises of Marketing

Harrisburg Area Community College (HACC) - LancasterMarketing

A comprehensive overview of the florida real estate license law (f.s. 475), covering essential topics such as licensing requirements, pre-licensing education, post-licensing education, continuing education, and the application process. It also delves into various aspects of real estate practice, including property transfer, financing, appraising, and different types of real estate sales. Exercises and questions to test your understanding of the material.

Typology: Exercises

2024/2025

Available from 10/31/2024

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Real Estate Exam
1.CH1 - Farming: Licensees concentrate on one type or style of property
or on one particular neighborhood.
2.Farm Area or Target Market: Finding and specializing in a particular
neighbor- hood or type of property.
3.Property Transfer: Includes deeds, mortgages, surveys, appraisals,
contracts, title insurance, floodplains, zoning, buildings codes, finance.
4.Comparative Market Analysis (CMA): A value estimate based on recent
sales of similar properties in thae same neighborhood
5.Broker Price Opinion (BPO): Determine selling price of property.
Licensee takes photos and completes BPO report form provided by the
lender comparing local and regional market information.
6.Difference between CMA, BPO AND Appraisals: - CMA conducted by
real estate agent while Appraisals conducted by licensed appraiser on
behalf of banks
- BPOs are less thorough than appraisals but more analysis than a basic
CMA.
7.Multiple Listing Service (MLS): System that provides an extensive
marketing tool for real estate licensees. Local and state level.
8.Residential Transaction: - The sale of improved residential property of
four units or fewer
- The sale of unimproved residential property intended for use of four
units or fewer
- The sale of agricultural property of 10 acres or fewer.
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1 / 32 Real Estate Exam

  1. CH1 - Farming: Licensees concentrate on one type or style of property or on one particular neighborhood.
  2. Farm Area or Target Market: Finding and specializing in a particular neighbor- hood or type of property.
  3. Property Transfer: Includes deeds, mortgages, surveys, appraisals, contracts, title insurance, floodplains, zoning, buildings codes, finance.
  4. Comparative Market Analysis (CMA): A value estimate based on recent sales of similar properties in thae same neighborhood
  5. Broker Price Opinion (BPO): Determine selling price of property. Licensee takes photos and completes BPO report form provided by the lender comparing local and regional market information.
  6. Difference between CMA, BPO AND Appraisals: - CMA conducted by real estate agent while Appraisals conducted by licensed appraiser on behalf of banks
  • BPOs are less thorough than appraisals but more analysis than a basic CMA.
  1. Multiple Listing Service (MLS): System that provides an extensive marketing tool for real estate licensees. Local and state level.
  2. Residential Transaction: - The sale of improved residential property of four units or fewer
  • The sale of unimproved residential property intended for use of four units or fewer
  • The sale of agricultural property of 10 acres or fewer.

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  1. Other types of sales: - Commercial Sales/Leasing: Analyzing past and future potential income derived from investment propert, including apartment buildings, office, shopping centers. Law knowledge for brokers.
  • Industrial: warehouses and manufacturing facilities. User owners rather than in- vestors. Knowledge in gov. regulartions of land, environment, transportation, etc.
  • Agricultural: Large tracts of land and money. Study of profitability.
  • Business: Listing and sales of businesses, known as business opportunities. Knowledge in financial and balance statements.
  • Property Management: Owners who buy income property as investments and depend on professionals to manage them, called absentee owners. Compensation based on a percentage of the rents collected from tenants. Deal w/locating tenants, rents, payment of taxes, insurance and maintenance.
  • Counseling: Analyzing existing or potential projects and providing expert advice to members of the public based on their personal judgement.
  1. Going Concern Value: Value of a business, includes tangible and intangible income/assets, goodwill.
  2. Appraising: Process of developing an opinion of value of real property, where independent, impartial and objective analysis is made.

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  • Tract Building: Model Center
  1. National Association of REALTORS (NAR): Nation's largest trade and profes- sional association with the goal of preserving the right of individuals to own real property through an exchange of information.
  2. Government Regulation: - Local Level: planning and zoning (possible loca- tions), property taxation, building and health code regulations. Impose moratoriums or temp delays due to environmental concerns.
  • State Level: Developments of Regional Impact (DRI), Department of Environmental Protection (DEP), Department of Economic Opportunity (DEO)...
  • Federal Level: (Money). legislation that affects operation of lending institutions.
  1. CH2 Real Estate License Law F.S. 475: Protects the public by The Department
  • Before, caveat emptor (no express warranty ensuring the condition of the property)

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  1. History of the Law: 1925 - The first Florida Real Estate Commission (FREC) was created to administer and enforce the Law.
  2. Important Terminology: - Commission: Florida Real Estate Commission (FREC)
  • Department: Department of Business and Professional Regulation (DBPR)
  • Division: Division of Real Estate (DRE)
  • License: Issued by the Department
  • Licensee: person to whom permit, registration, certificate, or license is issued by the Department.
  1. Who requires a Real Estate License?: - Performing service of Real Estate (F.S. 475.01)
  • In the state of Florida
  • For another person or entity
  • For compensation, which includes service of value paid, received, expected to be paid or in exchange for the performed service.
  1. Most common services of Real Estate are: A = Appraising B = Buying A = Auctioning R = Renting S = Selling

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  1. The Licensing and Renewal Process: Pre- licensing Post-licensing Continuing Education (CE)
  2. Pre-Licensing Education: 1. Complete Req. SA or Broker education and pass course final exam with 70% or more. 2.Submit app for state exam, payment fee for license 3.Submit electronic fingerprints for background check 4.Pass state examination with 75% or more (inactive license) 5.Obtain employment and file (active license)
  3. Post-Licensing education (first renewal): 1. Complete req SA or broker edu- cation and pass course final exam (75% or more)
  4. Pay renewal fee
  5. Continuing Education (CE): 1. Every two years, 14 hours course and pay renewal fee
  6. Mutual Recognition: - Consists of contractual agreements where a limited number of states recognize the similarity in the content of their mutual education and experience requirements for real estate licensing. These states involve, Alabama, Arkansas, Connecticut, Georgia, Illinois, Mississippi, Nebraska, and Rhode Island.
  • May bypass pre-license req or take 40 questions examination with a 75% or more. Must take all post-licensing and CE.
  1. Initial License Application: Package sent to DBPR must include: 1.Completed license App: SA must send #DBPR RE 1. Must include Full Name and other personal info.

8 / 32 2.Fee Payment: initial license app fee to DBPR 3.Electronic fingerprints: Sent to FDLE and FBI. Retained for 12 months. 4.Supporting Legal Doc: disclose criminal past.

  1. F.S. 455.229(1): All information received by the Department from an applicant, including email, is a matter of public record, except for the following: financial and medical information, school transcripts, examination questions and answers, papers, grades, grading keys.
  2. Application Approval or Denial: - DBPR has 30 days to review app errors, approved or denied within 90 days [F.S. 120.60]
  • If misrepresensation occurs (false statement, omit criminal information), the Com- mission may declare candidate not eligible for license.
  • Approval: If approved, must pass state exam within two years
  • Denial: Notification in writing identifying the reasons and give 21 days to request formal hearing.
  1. Members of the Armed Forces: - Military Veteran/Spouse fee waiver request" form must be sent within 60 months after the veteran had honorable discharge.
  • Military licensees can keep their license without renewing or paying dues or fees for two years after honorable discharge.
  • Professional license
  1. Pre-license education requirement: - Exempt if received a 4-year

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  • If failed, will receive letter with score by category. Must wait at least 24 hours to retake exam. Applicant can schedule appointment to review wrong answers
  1. Sales Associate or Broker Associate Employments: - Employment by a Broker: acts as the broker's agent in performing services of RE. Only one broker at a time and under a registered broker by the Department.
  • Employment by an Owner-Developer: Buys, owens and develops RE. Must reg- ister with the Department, but no license. Acts as the owner- developer's agent in performing services of RE and also for compensation only. Can hire unlicensed to sell property they own with a salary. If by commission or transaction-based, must hire a licensed person.
  1. Licensure and Registration: - Licensure: granting license to practice profes- sion.
  • Registration: placing and keeping on record the name and address of an individual or business. Kept by DRE -SA, BA, and brokers are automatically licensed and registered. But brokerage sties only registered. -Individuals are both licensed and registered while businesses only registered.
  1. prima facie: Having current and valid RE licensed under your name. Provides sufficient proof of a claim.

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  1. Form of license: name, type of license, address, effective and exp date, seal of FL, name of governor and DBPR secretary
  2. Post license (First Renewal) Requirements [F.S. 475.17]: - Take req post-li- censing course
  • Individuals with RE 4-year degree are exempt from it, not attorneys tho (like pre-license req)
  • If missed more than 10% of course, cannot take final exam. Will have to make up hours and take exam within 30 days of original examination.
  • SA First Renewal: 45 hours course prior first exp date. if not, license will void and out of business. And then, retake the 63 hour course again.
  • Broker First Renewal: 60 hours course priot first exp date. if not, license will void and out of business. And then, retake the 72 hour course again.
  1. Continuing Education (CE): - Renewing without completing cont ed is frauda- lent!
  • if not complete, status changes to "involuntary inactive"
  • 14 hours
  • Classroom: Must attend 90% of time, no exam
  • Online: must take 30 question exam with 80% or higher
  1. Attorneys-in-fact: persons who are granted authority under a power of attorney to act for others in some capacity, such as signing a

13 / 32 professions

  • Seek injuctions from court against licensees for failure to follow Department orders.
  • Cease-and-Desist orders against unlicensed parties for violation of rules
  • Citations up to $5,000 per offense
  • Conducts investigations and prosecution of complaints thru Division.
  • Civil penalties $500-$5,
  • Issues and renews all licensees for all professions administered under F.S. 455
  • Applicants screened via F.S. 409 to confirm compliance w/child support obligations
  • If faulty answers, Commission considers it third degree felony and may look for punitive action.
  1. Department Differences: - Department: authority
  • Commission: followed by ^
  • Division: day-to-day operations
  1. Lincesing School and Applicants: - All permits are issued for a two-year period, which expires on September 30th of odd years (like 2025)
  2. The Commission (FREC): Has four powers: -Executive Powers -Quasi-Legislative Powers -Quasi-judicial Powers -Ministerial Powers

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  1. Commission Executive Powers: - Publication of books and newsletters to keep everyone informed of new and important changed in the law and rules.
  • Exercised by the chairperson acting alone or delegated by quorum vote to any other member.
  1. Commission Quasi-Legislative Powers: - Make and pass rules that regulate the operation of licensees. Implement and interpret law.
  • Cannot be delegated, must be a quorum vote.
  • These rules do not require other approval, become effective 20 days after filled with the secretary of state. These cannot be in conflict with the U.S. Constitution.
  1. Commission Quasi-Judicial Powers: - Impose disciplinary action for violations of laws or rules.
  • Authority to deny, fine or place licensees on probation.
  • Cannot be delegated and req quorum vote.
  1. Commission Ministerial Powers: - Record keeping and clerical functions, the Division employees.
  2. Disciplinary Authority of the Commission: If guilty of any violation:

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  • Agent acts oin behalf of and represents the interests of another party.
  • Principal is the employer
  • No need of formal agreement
  1. Special Agent: authorized under the agency law by the employer to perform a single act, one transaction
  2. General Agent: Authorized to perform on continuing basis, limited to a specific business or trade.
  3. Universal Agent: Represents principal at all times, without limitations, by power of attorney
  4. Subagent: - Extension of another agency, party who has been granted authority to act on behalf of another agent (broker)
  5. The Brokerage Relationship Disclosure Act: - Effective October 1st, 1997
  • Specified on F.S. 475.2701 through F.S. 475.
  • Relationship between a broker and the broker's employer in residential RE trans- actions.
  • Violations = administrative/civil penalties
  1. Diclosure Requirements: a broker may be employed by a member of the public in one of the following three different relationships: -transaction broker -single agent
  • nonrepresentation
  1. Written Disclosure: required in single agency and nonrepresentation keep for 5 years and whether transaction

17 / 32 closes or not

  1. Presenting Offers: A broker has a duty to transmit any and all offers to the employer including oral offers or offers made without a binder deposit.
  2. Single Agent: When a broker accepts employment under a single agency agreement, either seller or buyer.
  3. Listing: broker's employment contract that states the terms and conditions that the broker must meet to become eligible for compensation.
  • To find purchaser: entitled for compensation when a ready, willing, and able buyer that has met all of the seller's req.
  • Effect a sale: broker entitled to compensation upon consummation (closing) of the contract.
  1. The Sherman Antitrust Act and the Clayton Act: Federal laws that make it illegal to discuss or establish a uniform price or fee for services in any industry.
  2. Real Estate Settlement Procedures Act (RESPA): Allows brokers to pay re- ferral fees between real estate agents and brokers without disclosure.
  3. CH5 Temporary Shelter: protection for sales associates and customers, but not considered to be a branch office
  4. Advertising: Registered name of brokerage, sales associate's name may ap- pear in addition as registered in DBPR.

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  • Broker put earnest money to escrow account no later than the end of the third business day
  1. Escrow Disputes - Conflicting Demands: Give written notification to Commis- sion (15 days) from last demand.
  • Mediation (written consent): Third party to assist with agreement. Cant impose decisions, completed within 90 days.
  • Arbitration (written consent): Agree in advance to abide to arbitrator's decision. Issues award that can be enforced in civil law suit.
  • Litigation (court action): two options... Bill of Interpleader (no claim) - funds to registry, pending settlement, broker awarded court costs and fees. Declaratory Decree (claim) - money to registry, pending settlement, broker must pay court costs and fees.

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  • Escrow Disb. Order - Requests to the Commission to determine decision. Broker must follow decision by law, can appeal but broker subject to civil damages.
  1. Rental Information: - written contract to get commission
  • 75% refund if the tenant did not like anything offered
  • 100% refund if misrepresentation and 1st degree misdemeanor 1, fine and a year in jail
  1. Change of Employer or Address: Must notify within 60 days and comply with nonresident requirements.
  2. Sole Propietor: Sole Propietor - Business formed by an individual, liable for actions and employees. No filing papers required Sole Propietor Broker - Can register and operate as RE broker if active and valid broker's license. Under their name or trade name.
  3. General Partnership: business with two or more owners who share in both the operation of the firm and the financial responsibility for its debts. Can be orally, written, or implied, no docs needed.
  • Could be for own purposes.
  1. RE Brokerage Partnership: Must have at least one partner licensed as active broker
  • Partnerships have to be registered to DBPR, but if unlicensed cannot perform RE services.
  • If licensed, can perform RE services
  1. Limited Partnership: - At least one limited partner, licensed or