Florida Real Estate Exam Cheat Sheet

The 1-3-15-30 Escrow Rule

• 1Sales associate → broker: by the end of the next business day after receiving funds (Saturdays, Sundays, and legal holidays excluded). Rule 61J2-14.009
• 3Broker → escrow account: by the end of the third business day from the date the associate delivers the funds (Saturdays, Sundays, and legal holidays excluded). Rule 61J2-14.008(3)
• 15Broker notifies FREC of conflicting demands: within 15 business daysof receiving the last party's written demand. Rule 61J2-10.032(1)(a)
• 30Broker institutes settlement procedure (EDO, interpleader, arbitration, or mediation): within 30 business daysof receiving the last party's demand. F.S. 475.25

Documentary Stamp Tax Rates

Fractional amounts are always rounded up to the next $100. The $2,450 cap on note stamps applies at a loan amount of $700,000.

Mortgage Math & Finance Numbers

• ›Nonrecurring intangible tax: $0.002 per $1 (2 mills) of new mortgage debt — multiply the exact loan amount, no rounding up (unlike doc stamps). (F.S. 199.133)
• ›Note doc stamps: $0.35 per $100 (rounded up) on the promissory note — see the Documentary Stamp table above for the $2,450 cap.
• ›Discount points: 1 point = 1% of the loan amount(never the sale price). Rule of thumb: each point raises the lender's yield ≈ ⅛%.
• ›LTV and equity: LTV = loan ÷ price (or value, if lower). Equity = market value − total debt.
• ›Monthly interest (amortization): principal balance × annual rate ÷ 12. Interest first, remainder of the level payment reduces principal.
• ›Qualifying-ratio benchmarks: conventional 28% housing expense / 36% total obligations; FHA 31% / 43%.

Cancellation & Rescission Periods

Investment and Appraisal Formulas

• GRM = Sale Price ÷ Annual Gross Rent

  Used to estimate value from rental income.

• Cap Rate = NOI ÷ Property Value

  Measures return on total property value regardless of financing.

• NOI = PGI − Vacancy and Collection Loss − Operating Expenses

  Calculated before debt service. Mortgage payments are not an operating expense.

• Cash-on-Cash Return = Annual Pre-Tax Cash Flow ÷ Total Cash Invested

  Measures return on actual equity invested.

• Proration = Annual Amount ÷ 365 × Number of Days

  Florida exams use a 365-day year unless the problem specifies a 360-day banker's year.

License Law Quick Reference

Brokerage Relationships (F.S. 475.278)

• ›Transaction broker is the DEFAULT. Unless a single agent or no brokerage relationship is established, a licensee is presumed a transaction broker — no fiduciary duties are owed automatically.
• ›Dual agency is NOT recognized in Florida. A licensee cannot be a fiduciary to both sides of the same transaction.
• ›Count the duties: no brokerage relationship = 3 duties · transaction broker = 7 (adds skill/care/diligence, presenting offers timely, limited confidentiality, additional agreed duties) · single agent = 9 (swaps limited confidentiality for full confidentiality, loyalty, obedience, full disclosure).
• ›Transitionfrom single agent to transaction broker requires the principal's written consent (Consent to Transition notice) before the change.
• ›Designated sales associates: nonresidential transactions only, where buyer and seller each have assets of $1 million+ and give written consent.

Florida Homestead Exemption

• ›First $25,000: applies to all taxing authorities including school districts (F.S. 196.031)
• ›Second $25,000: applies to non-school taxing authorities only, for assessed values between $50,000 and $75,000 (F.S. 196.031)
• ›Beginning 2025 tax year: the second $25,000 tranche is adjusted annually for CPI inflation under Amendment 5 (approved November 2024). The adjustment applies only when CPI is positive; the tranche can never fall below $25,000.
• ›Save Our Homes (SOH) cap: annual assessment increase limited to the lesser of 3% or the CPI change (Art. VII §4(c) Fla. Const.)
• ›SOH portability: up to $500,000 of accumulated benefit is transferable to a new homestead; must apply within 2 years (F.S. 193.155)
• ›Non-homestead property assessment cap: 10% per year (Art. VII §4(g) Fla. Const.)

Florida Recording Statute

• ›Florida follows a NOTICE statute under F.S. 695.01 — NOT race-notice.
• ›A subsequent bona fide purchaser for value who acquires property without actual or constructive notice of a prior unrecorded conveyance prevails over the earlier unrecorded deed.
• ›Recording first is NOT required to prevail — only lack of notice matters.
• ›A buyer who has notice of a prior unrecorded deed cannot use the recording act to defeat it, even if they record first.

Legal Descriptions & Measurements

• ›Memorize the chain: 1 acre = 43,560 sq ft · 1 mile = 5,280 ft · 1 section = 1 sq mile = 640 acres · 1 township = 6 × 6 miles = 36 sections.
• ›Quarter-section math:divide 640 by 4 for each quarter. “The NW¼ of the SE¼” = 640 ÷ 4 ÷ 4 = 40 acres. Read descriptions back-to-front: start from the section, then narrow.
• ›Section numberingstarts at 1 in the township's NE corner and snakes west-east by rows to 36 in the SE corner. Section 16 is traditionally the school section.
• ›Florida's reference point: townships and ranges are measured from the principal meridian and base line that intersect in Tallahassee.

Federal Law Quick Reference

• ›Lead paint disclosure: required for all residential properties built before 1978 (42 U.S.C. §4852d)
• ›FIRPTA withholding: 15% of gross sales price withheld by buyer from foreign seller. Exceptions: no withholding if buyer is an individual acquiring as a residence and price is $300,000 or less; reduced 10% rate if buyer acquires as a residence and price is $1,000,000 or less (26 U.S.C. §1445)
• ›IRC §121 exclusion: $250,000 single / $500,000 married filing jointly; must own and use as primary residence for 2 of the preceding 5 years
• ›IRC §1031 exchange deadlines: 45 days to identify replacement property; 180 days to close
• ›TRID Loan Estimate: must be delivered within 3 business days of a complete loan application (12 C.F.R. §1026.19(e))
• ›TRID Closing Disclosure: must be delivered at least 3 business days before consummation (12 C.F.R. §1026.19(f))
• ›ECOA adverse action notice: must be provided within 30 days of a completed application (15 U.S.C. §1691(d))