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Intro to Real Estate Business, Licensing Laws, and FREC Rules
Terms in this set (62)
Sales Associate is an agent of what?
A seller lists their property with whom?
the Brokerage (not sales associate)
Who is ultimately responsible for the Sales Associate?
What is Farm Area?
- One specific geographical location and become an expert in that particular portion.
- Involves maintaining data on each property (when it was built, sale history, marketing time, assessed value, property taxes)
CMA stands for what?
What are two other ways to call this?
Comparative Market Analysis
Also called an
1. Opinion of Value
2. Broker Price Opinion
What is a Comparative Market Analysis?
Informal estimate of a property's value prepared by someone who does not have an appraiser's license
3 types of data that are used to compose a Comparative Market Analysis
1. Comps (similar properties) that have sold recently
2. Comps that are currently on the market
3. Comps that have expired
What is the Planning Commission?
A group of local volunteers asked to give their opinion on a proposed development or project
What is the Planning Commission asked to review before final approval?
Does the Planning Commision hold the power on whether or not a development or project is approved?
Planning Commision has not true power on whether or not the developer will get approved, but it does influence and help if they do.
Ultimately it will be the county commissioners or the city council who will have the final vote and say so
What is a Dedication?
The process of transferring subdivision infrastructure to the local government who will thereafter be responsible for its maintenance
ex: roads, curbs, streetlights
Why do developers use Dedication?
If you are a developer, you don't want to have to come back years from now and fix a pothole, so we dedicate it, make it a public road, and then the government is responsible for maintaining it thereafter
when a contractor/builder buys a lot, builds a house, then tries to resell for a profit
when the future resident buys the lot and hires a contractor/ builder afterwards to construct a home to the owner's requirements
What does Full Disclosure mean?
Sellers, and their real estate agents, must fully disclose and tell prospective buyers about all property defects that materially affect value, but are not readily visible (even if the buyer doesn't ask)
How can a disclosure be given?
Can be written or oral (although written is preferred)
If asked on the exam... when in doubt the answer is to always disclose!
-only exception is if someone died in the house then legally that doesn't need to be
Someone with a broker license, but does not want to be in charge of the brokerage or responsible for all brokerage activities
-Doesn't want to be the broker of record and just wants to sell real estate like the other sales associates in the office
In order to get a Florida real estate license, does one need to be a U.S. citizen or a FL resident?
-must be in US legally
If applicant is not from Florida, then as part of the application they must agree to what?
Irrevocable Consent to Service
What does Irrevocable Consent to Service mean?
It is an agreement that even if the applicant does not live in Florida, legal proceedings can take place in Florida against the applicant in the future if a wrong is committed
An applicant must pass the state exam within how much time of application approval?
Once an applicant passes their first state exam, how long will their license be valid?
18-24 months depending on when you passed
What must be completed before the first sales associate license expires?
Post License Education Requirement
What does the Post License Education Requirement consist of? What happens if this is not completed?
license is declared null and void
What are the requirements to become a broker regarding experience?
Person needs to be active with a broker, or combination of brokers, for at least 2 out of the last 5 years
Does employment and experience with an owner/developer count towards getting a broker license?
Florida has a relationship with how many other states?
What are the Mutual Recognition Rules? (2)
1. Applicant must already have a real estate license from a mutual recognition state
2. Applicant cannot be a Florida resident at any time during the application process
licensure vs registration
People are issued a license
Ex: when you pass a state exam you are issued a license
Brokers are issued a registration
Think of this like a driver's license and your vehicle's registration where the license is for you the person and the registration is for the thing
What is the acronym for the activities that technically constitute what is a real estate service?
What does BAR SALE stand for?
Renting (or rental information list)
All of the following are services of real estate, except
Certain types of people do not require a license
Typical license exemptions include
- Salaried employee at apartment complex (rental office)
- Salaried condo manager
- Anyone court appointed
- 13 Others
What needs to be required in order to lawfully receive a commission?
Technically it is a 4-prong test
i. Performing any service of real estate
ii. In the state of Florida
iii. For someone else
iv. For compensation or the mere expectation of compensation
Basically, the person receiving the compensation must have a real estate license in their home state
If their license is from another state, we can still pay referral fees if they don't travel to Florida to assist but only if they are active in their home state and if they do not come to Florida and try to help
What is the DBPR and what does it do?
Department of Business and Professional Regulation
i. Regulates many licensed industries, not just real estate
ii. Because real estate volume is large, special Division of Real Estate
What does the DRE do?
The Division of Real Estate provides all services required to administer FL license law and handles all real estate matters of the DBPR
What is FREC?
Florida Real Estate Commission
- Supreme authority when it comes to Florida real estate license law
How many people are in the Florida Real Estate Commission (FREC)?
How is the Florida Real Estate Commission (FREC) structured?
Of the 7 total,
5 of them are licensees and 2 are consumer members
Of the 5 licensees 4 of them have to be brokers with at least 5 years' experience
The 5th licensee is either a sales associate or a broker with 2 or more years' experience
How is the Florida Real Estate Commission (FREC) appointed?
appointed to a 4-year term
must be approved by the Florida senate
Cannot serve more than 2 consecutive terms (8 years in a row)
FREC powers and duties can be broken down into 3 main areas. What are they?
1. Executive Powers
FREC executive powers
regulate and enforce license law, establish fees
FREC quasi legislative powers
Create and pass rules and regulations, regulate professional practices, passes laws and rules that people in real estate have to abide by
FREC quasi judicial powers
- To determine violations and administer penalties
- Suspend or revoke licenses and impose administrative fees
- Make determinations of violations
If a licensee is accused of wrongdoing, they will sit in judgment and decide whether or not the licensee is guilty, and if they are what the punishment should be
If a licensee is accused of wrongdoing, they will sit in judgment and decide whether or not the licensee is guilty, and if they are then FREC will a. contact the _________________ for any possible criminal prosecution.
What are the 8 possible statuses of a real estate license?
2. Voluntary Inactive
3. Involuntary Inactive
4. Null and Void
7. Cease to be in Force
License Status- Active
A license is Active if the associate passed the state exam, is employed by a broker, and current with education and renewal requirements
License Status- Voluntary Inactive
a. Voluntary Inactive means a person has passed the state exam, but they are not employed
b. When a licensee decides where to work, their new broker activates their license and the associate becomes Active
c. No requirement to activate license, but must keep up with education and renewal requirements
License Status- Involuntary Inactive
(2 different ways)
Can happen if a licensee fails to timely renew
If an associate has "Lost" their broker
If someone fails to renew their license, how much time do they have to fix it? After this amount of time, what happens to their license status?
They have 2 years to fix it
0-12 months: prove 14 hours of the continuing education requirement, pay the renewal fee and the late fee
12-24 months: prove 28-hour reactivation course and pay the late fee
After 24 months, the license is declared Null and Void
How does one lose a broker?
c. Fail to renew
If an associate has "Lost" their broker then what happens to their license status?
then the brokerage firm and all of the associates who work there have 2 weeks/ a 14-day grace period before any effect is going to take on their licenses
License Status- Null and Void
(two different ways)
if an associate fails to timely complete the post-license education
if a licensee fails to renew, goes Involuntary Inactive and takes no action to save their license (after 2 years)
License Status- Suspended
- the punishment handed down by FREC to a license that violated the rules
-think of it like a forced vacation away from practicing real estate
-Maximum suspension is 10 years
License Status- Revoked
- Ultimate sanction
- Violation must be serious to warrant revocation
License Status- Cease to be in Force
If business address changes, the DBPR must be notified within 10 days
- Basically, how this happens is that the DRE (Division of Real Estate) needs to know your business address at all times and if your business address ever changes, they need to be notified about it within 10 days
If they don't send in notice within 10 days, then licensee will Cease to be in Force
License Status- Cancelled
If the DBPR wants to close down a brokerage, they cancel the brokerage registration
Why would the DBPR want to Cancel or close down a brokerage?
1. Because they lost their broker and did not timely name a replacement
2. If any associates are Active on the day of Cancellation, they shift to Involuntary Inactive
What is the requirement to have Multiple Licenses?
Need to be a broker
What does having Multiple Licenses allow?
Allows a broker to be the broker of record for more than one brokerage simultaneously
What does a Group License allow?
Allows an associate to work for 2 or more projects, provided the ownership is interrelated of affiliated. If the developer decides they want to start another project, perhaps under a different name or different corporate identity, a group license would allow you to sell properties at both projects
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