2. 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
3. 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%
4. Getting a License
Application through State
www.MyFloridaLicense.com
Fingerprinting required
www.pearsonvue.com
1-877-238-8232
6. 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
9. Chapter One
Introduction 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
10. 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
11. Chapter Two
License 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
12. 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
13. Chapter Three
License 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
14. 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
15. Chapter Four
Property 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
16. 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
17. 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
18. Chapter Five
Real 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
19. 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 ownership
Continued
20. 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
21. Chapter Six
Legal 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
22. 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
23. Chapter Seven
Sales 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
24. 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 years
Continued
25. 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 account
Continued
26. 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
27. Chapter Eight
Agency 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
28. 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
29. 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
30. Chapter Nine
The 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
31. 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
32. 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
33. Chapter Ten
Residential 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
34. 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
35. Chapter Eleven
Real 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
36. 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 use
Continued
37. 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
38. Chapter Twelve
Investment & 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
40. 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
41. Chapter Thirteen
Real 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
42. 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 foreclosure
Continued
43. Chapter Thirteen Review
Taxable Income:
Net Income
+Reserves
-Interest
-Depreciation
= Taxable Income
Like-kind exchanges and installment sales
defers taxes
44. Chapter Fourteen
Real 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
45. 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
46. 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
47. 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
48. Chapter Fifteen
Real 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”
49. 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 percentage
Continued
50. 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
51. Chapter Sixteen
Sources 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
52. 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
53. 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
54. 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
55. Chapter Seventeen
Real 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
56. 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
57. Chapter Eighteen
Planning 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
58. 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
59. Chapter Nineteen
State & 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
60. 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
61. 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
62. Chapter Twenty
Violations, 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
63. 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 respond
Continued
64. 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
65. 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
66. Chapter Twenty-One
Math
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
67. 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